Petroleum Resources Classification

&

Reserves Estimation

Petroleum Resources Classification

&

Reserves Estimation

Resources (Recoverable Resources)Petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward

Resources (Recoverable Resources)Petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward

Undiscovered ResourcesTotal estimated quantities to be recovered from accumulations thatremainto be discovered

Undiscovered ResourcesTotal estimated quantities to be recovered from accumulations thatremainto be discovered

ReservesAticipated to be commercially recovered from known accumulations from a given date forward

Potential ResourcesNot commercially producible at present

HypotheticalMapped prospects

Discovered ResourcesTotal discovered deliverable quantitiesbased on in place volume and recovery factor

Discovered ResourcesTotal discovered deliverable quantitiesbased on in place volume and recovery factor

SpeculativeNot yet been mapped

ReservesPetroleum which are anticipated to be commercially recovered from known accumulations from a given date forward

Proved ReservesEstimated with reasonable certainty to be commercially recovered

Unproved ReservesLess certain to be recovered than proved reserves

Probable reservesMore likely than notto be recovered

Possible reservesLess likely than likely to be recovered

Developed ReservesExpected to be recovered form existing wells

Undeveloped ReservesExpected to be recoveredwith additional capital investment

Reserves Estimation

Existing Producing WellsDeveloped AreasInfill WellsBooster Compression

Undeveloped Areas Primary WellsInfill WellsBooster Compression

Unproved Areas Primary WellsInfill WellsBooster Compression

Reserves Estimation

Calculation Parameters

• Performance Reserves

• Volumetric Reserves

Method

• Deterministic

• Probabilistic

Performance-Based Reserves Calculation

DeterministicDeterministic• Material Balance

• Decline Curved Analysis

• Simulation

ProbabilisticProbabilistic• Apply ranges of performance-based

parameters

• Statistically combined the parameters to obtain a range of reserves and theirprobabilities

Volumetric Reserves Calculation

DeterministicDeterministic

Vol (std. cond.) = Area * Thickness * 0 * (1Vol (std. cond.) = Area * Thickness * 0 * (1--Sw) * RFSw) * RFFVFFVF

RF = Recovery Factor ; 40-70 % for gas5-25 % for oil

FVF = Formation Volume Factor

ProbabilisticProbabilisticSame formula

Apply range of parameters

Obtain ranges of possible outcomes and their associatedprobabilities

Probabilistic Estimation

Probability

90 th percentile10 th percentile

Mean

90 th percentile

10 th percentile

Mean, P50

Proved ?

Probable ?

Possible ?Cum. Probability

ValueValue

Applying Statistics in Reserves EstimationApplying Statistics in Reserves Estimation

Probabilistic estimate is very useful to form an uncertainty range of and estimation.

Its implication is “what the safe side of the estimateand what the outrageous one are”

If statistical method is to be used, each reserve category should be assessed on different basis to reflect its inherent different level of confidence in data from which it is derived.

Criteria in assessing level of confidence is qualitatively spelled out in SPE/WPC definitions.

Reserves Estimation Methods

Existing Producing WellsExisting Producing Wells

• Performance Reserves–– Material Balance Material Balance –– Decline Curve AnalysisDecline Curve Analysis

• Volumetric Calculation–– PerformancedPerformanced--basedbased

Reserves Estimation MethodsExample: Chevron Offshore Thailand

Undeveloped areasUndeveloped areasP5/50/95• Area• Col Height• net pay• Porosity• Saturation

Subsuface Data• Seismic• Core• Log• RFT

3 Point OGOP/OOIP

Benchamas Total Oil Reserves

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0

MMBO

Primary Total Benchamas

Waterflood Total Benchamas

Primary Developed BenchamasP1 Developed P1 Total

P2+P1

P3+P2+P1 P10/50/90•Condensate Yield•Primary Recovery•Secondary Recovery•Geologic Risk

In-house Software

(Crystal Ball)

Example Probabilistic Reserves

Performance-Based Volumetric Reserves Estimation

Parameters measured from real performance

1. Net Pay (ft)2. Recovery (MMscf/ft, BBL/ft)

ProspectsAnalogous Groups• Group A• Group B• Group C...

High-conf. Data

Performance-Based Volumetric Reserves Estimation

Example: Unocal Thailand

Calculated Areas

Mean of Inferred Areas Based on

Geologic Analogies

Volumetric Reserves

Calculation

Change from Volumetric to Performance Control

High Confidence Recoveries

AcquirePerformanceData

SignificantDepletion

Normalized to line Pressure

PerformancePerformance--based Reserve Calculationbased Reserve Calculation

• Plan conceptual platform location

• Group wells by geological features

• Fill high-confidence well data in eachanalogous group of conceptual wells

• Apply constraints

• Establish reserve distributions

• Apply risk factors

Well Dist . Pay Distribution (FT) Rec. Distribution (MMCF/FT PAY) Reserves (IN BCF) Risk Risked Ref. to Map (First

Well Del . Well for

UPR/UPO Plats .)

Grp.*

P10 P18 P50 P82 P90 Swn.'sMean

P10 P18 P50 P82 P90 Swn.'s Mean

P10 P50 P90 Swn.'sMean

Trap Resvr. Source Mig. Seal Other POS

Reserves (Bcf)

1 Red 57 71 126 222 279 151 16.2 18.8 27.3 39.8 46.2 29.7 1.34 3.44 8.83 4.43 0.95 1.00 1.00 0.90 1.00 1.00 0.86 3.792 Red 57 71 126 222 279 151 16.2 18.8 27.3 39.8 46.2 29.7 1.34 3.44 8.83 4.43 0.95 1.

Well Dist . Pay Distribution (FT) Rec. Distribution (MMCF/FT PAY) Reserves (IN BCF) Risk Risked Ref. to Map (First

Well Del . Well for

UPR/UPO Plats .)

Grp.*

P10 P18 P50 P82 P90 Swn.'sMean

P10 P18 P50 P82 P90 Swn.'s Mean

P10 P50 P90 Swn.'sMean

Trap Resvr. Source Mig. Seal Other POS

Reserves (Bcf)

1 Red 57 71 126 222 279 151 16.2 18.8 27.3 39.8 46.2 29.7 1.34 3.44 8.83 4.43 0.95 1.00 1.00 0.90 1.00 1.00 0.86 3.792 Red 57 71 126 222 279 151 16.2 18.8 27.3 39.8 46.2 29.7 1.34 3.44 8.83 4.43 0.95 1.00 1.00 0.90 1.00 1.00 0.86 3.793 Orange 44 55 101 183 232 123 7.7 9.7 17.1 30.0 37.7 20.4 0.54 1.72 5.49 2.50 0.85 1.00 1.00 0.85 1.00 1.00 0.72 1.804 Orange 44 55 101 183 232 123 7.7 9.7 17.1 30.0 37.7 20.4 0.54 1.72 5.49 2.50 0.85 1.00 1.00 0.85 1.00 1.00 0.72 1.805 Orange 44 55 101 183 232 123 7.7 9.7 17.1 30.0 37.7 20.4 0.54 1.72 5.49 2.50 0.85 1.00 1.00 0.90 1.00 1.00 0.77 1.916 Green 56 65 95 139 162 103 8.9 10.7 17.0 27.0 32.5 19.2 0.69 1.61 3.76 1.98 0.65 1.00 1.00 0.85 1.00 1.00 0.55 1.097 Green 56 65 95 139 162 103 8.9 10.7 17.0 27.0 32.5 19.2 0.69 1.61 3.76 1.98 0.70 1.00 1.00 0.90 1.00 1.00 0.63 1.25

Pay Distribution

RecoveryRecovery DistributionDistributionReserves Distribution

Mean * Risk = Risked Reserves

Pay DistributionPay Distribution

LogNormal Probability Distribution

1 2 5 10 20 30 40 50 60 70 80 90 95 98 99

P10

P50

P90

Swansons

10.00

100.00

1000.00

Probability %

Valu

es

ValuesProbability %KeypointsExtraKeysSwansonsMean

kas

Swanson = 150.97Mean = 152.20Slope = 0.27P10 = 56.85P50 = 125.84

696 Wells drilled in B696 Wells drilled in B--10, 11, 12, 13, 12/27 10, 11, 12, 13, 12/27 Net Pay drilled

700

600

500

300

400

feet

feet

200

100

0

696 Wells drilled in B696 Wells drilled in B--10, 11, 12, 13, 12/27 10, 11, 12, 13, 12/27 Net Pay drilled Net Pay drilled

100100

10001000

feet

feet

1010

Platform RollupPlatform RollupLogNormal Probability Distribution

1 2 5 10 20 30 40 50 60 70 80 90 95 98 99

P10

P50

P90

Swansons

1.00

10.00

100.00

Probability %

Valu

es

ValuesProbability %KeypointsExtraKeysSwansonsMean

kas

Swanson = 18.05Mean = 18.84Slope = 0.42P10 = 3.38P50 = 11.79

Sum of Mean

Not Every Mean is equalNot Every Mean is equal

Probability

90 90 th th percentilepercentile10 10 th th percentilepercentile

Geometric MeanGeometric Mean

MedianMedian

Which one is the most Which one is the most confident ?confident ?

ModeMode

Value

Not Every Mean is equalNot Every Mean is equalExample from 696 Well Drilled

GeometricGeometric 115.18115.18

P50P50 115.18115.18

MedianMedian 128.00128.00

ArithmeticArithmetic 139.91139.91 21.5 % over P5021.5 % over P50

Swanson’s Rule

Mean = 0.3*P10 + 0.4*P50 + 0.3*P90When P50/P10 < 5

Locating Conceptualized PlatformsLocating Conceptualized Platforms

Delineation well result Log & RFT

Amplitude Anomaly map & Well tie

Estimate gas&oil volume to justify the setting

Analogous Well DataAnalogous Well DatasourcemigrationtrapreservoirSeal

Constraints• Anomaly map• Infill well• Specific Geological Elements

Reserves DistributionReserves Distribution

P10

P50

90Pe

rcen

tile

Volume

P50 reserve = P50netpay * P50recoveryP10 reserve = P18netpay * P18recoveryP90reserve = P82netpay * P82recovery