1. 10/18/20161 Reserves Estimation and Classification

2. 10/18/20162 Introduction Field reservoir engineer is responsible for the estimation and classification of reserves. Estimation techniques: material balance calculations sweep efficiency analysis decline curve analysis reservoir simulation All reserves estimates involve some degree of uncertainty.

3. 10/18/20163 Why Reserve Estimates? Measure effectiveness of exploration and development. Budgeting for drilling and facilities. Unitization. Purchase / sale of properties. Bank loans. Taxation. Government policy and planning.

4. 10/18/20164 Definition Reserves are estimated quantities of crude oil, condensate, natural gas, natural gas liquids, and associated substances anticipated to be commercially recoverable: - from known accumulations, - under existing or anticipated economic conditions, - by established operating practices, and - under current or anticipated government regulations.

5. 10/18/20165 Original Oil and Gas In place Calculation Volumetric OOIP or OGIP = (Rock Volume) x (Porosity) x (1 – Water Saturation)/ ( Formation Volume Factor )

6. 10/18/20166 Original Oil and Gas In place Calculation Material Balance Expanded volume of Volume volume of = withdrawals - of original injected reservoir fluids fluids

7. 10/18/20167 Recovery and Efficiency Calculations Recovery factors : STB/acre-ft and MCF/acre-ft Recover efficiencies: fractional recovery of OOIP or OGIP Methods of estimation: - analogies - correlations - water flood design charts - material balance programs - reservoir simulation

8. 10/18/20168 Analogy Method The analogous reservoirs should be similar to:. Drive mechanism. Permeability and porosity. Well spacing and pattern. Size. Relative volumes of oil, gas and aquifer. Degree of permeability and porosity heterogeneity. Net-to-gross sand ratio. Production practices. Depositional environment and trapping mechanism. PVT properties Recovery factor adjustments are made to compensate for differences between the analogous reservoirs and the reservoirs being evaluated.

9. 10/18/20169 Correlations Depletion Drive Gas Reservoirs: Rec. Efficiency =1 - Pa Zi / Pi Za Depletion Drive Oil Reservoirs: 1.During under saturated stage: Rec. Efficiency = Ce(Pi-Pb)Boi/Bob Where: Ce=(SoCo+SwCw+Cp)/So 2. During saturated stage: Er = 0.41815 ( Φ(1-Sw)/Bob)˙¹ x (k/1000μob)˙¹(Sw)·³(Pb/Pa)˙² Water Drive Gas Reservoir: Er=(1-PaZi/PiZa) + ((PaZi/PiZa) EvEd) Where: Ed=(1-Swi-Sgr)(1-Swi) Sgr= 0.62 -1.3 Φ

10. 10/18/201610 Waterfloods Mobility Ratio M = (Krw/μw) x (Kro/μo) Recovery Efficiency Er = Ea x (Swb – Swi)/(1-Swi) Areal sweep efficiency, Ea, from a homogenous 5-spot water flood for a certain M can be obtained from charts.

11. 10/18/201611 Ultimate Recovery Volumetric with Recovery Efficiency: Ultimate Recovery = Er x OOIP or OGIP( from volumetric) Material Balance with Recovery Efficiency: Ultimate Recovery = Er x OOIP or OGIP( from material balance)

12. 10/18/201612 Decline Curve Analysis Ultimate recovery is the sum of cumulative recovery to date and remaining reserves. Remaining reserves can be calculated with decline curve analysis.

13. 10/18/201613 Reservoir Simulation Reservoir simulation incorporates a comprehensive application of physical laws governing multiphase fluid flow in porous media. Reservoir simulation can be summarized in three-step process: 1. Setting up mathematical equations that describe fluid flow. 2. Solving the Mathematical equations. 3. Setting up the numerical model.

14. 10/18/201614 Reserves Classification Reserves are estimated quantities of crude oil, condensate, natural gas, natural gas liquids, and associated substances anticipated to be commercially recoverable: - from known accumulations, - under existing or anticipated economic conditions, - by established operating practices, and - under current or anticipated government regulations Dr.Helmy Sayyouh

15. 10/18/201615 Reserves Classification All reserves estimates involve some degree of uncertainty, depending on : The amount and reliability of geologic and engineering data available at the time of the estimates. Interpretation of these data

16. 10/18/201616 Milestones in Reserves Definitions 1944: Frederic Lahee ( API ) 1955: Frederic Lahee ( WPC ) 1960: American Petroleum Institute 1962: Jan Arps ( SPE ) 1965: SPE 1972: V.E. Mckelvey (USGSurvey) 1981: SPE 1985: SPE 1987: SPE World Petroleum Congress(WPC) Dr.Helmy Sayyouh

17. 10/18/201617 SPE-Endorsed Definitions of Reserves Reserves in General 1. Known or discovered accumulations. 2. Estimated volumes: crude oil – condensate – natural gas – natural gas liquids – associated substances such as sulfur and carbon dioxide. 3. Based on interpretation of geologic and engineering data. 4. Commercially recoverable under economic, operating and regulating condition. 5. Time dependent ( production ). 6. Involve degree of uncertainty. 7. Subject to revision.

18. 10/18/201618 Methods of Classifying Reserves 1. Ownership: Total – Gross – Net 2. Recovery Mechanism: Primary - Improved 3. Degree of Uncertainty: Proved – Probable – Possible 4. Development Status: Developed – Undeveloped 5. Productive Status: Producing – Non-producing

19. 10/18/201619 Ultimate Potential Ultimate Recovery Reserves Unproved Reserves Proved Reserves Future Additions Cumulative Production Possible Reserves Probable Reserves Proved Undeveloped Proved Developed

20. 10/18/201620 Proved Reserves Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which can be recoverable: - in future years - from known reservoirs - under exiting economic and operating conditions. A confidence level of 90 to 100% is required.

21. 10/18/201621 Proved Reserves Proved reserves must have: The area of a reservoir which includes - that portion delineated by drilling and defined by GOC and / or OWC - the adjoining portions not yet drilled but economically productive The facilities to process.

22. 10/18/201622 Proved Reserves Proved reserves have been divided into: Proved Developed Reserves: are expected to be recovered through exiting wells with exiting equipment and operating methods. Proved Undeveloped Reserves: are expected to be recovered from new wells on undrilled acreage or from exiting wells where a major expenditure is require for recompletion.

23. 10/18/201623 Probable Reserves Probable reserves are less certain than proved reserves and they are more likely to be recovered than not under mid-trend economic conditions. A confidence level of 50 to 90% is required. Probable reserves have been divided to: Class 1 : Reserves representing the primary recovery from the delineated area of a known reservoir.

24. 10/18/201624 Probable Reserves Class 2: Reserves representing the primary recovery which depends on: a. Lateral extension of the reservoir beyond the limits assumed for proved or probable class 1 reserves due to up dip or down dip extensions. b. Undrilled fault blocks adjacent to the delineated area of a known reservoir. c. Direct or diagonal offsets to spacing units having proved or probable class1 reserves.

25. 10/18/201625 Probable Reserves Class 3 : Reserves representing the primary recovery dependent upon the development of new reservoirs ( not yet produced or tested ) within the area of assigned proved reserves. Class 3 reserves occur in a new reservoir overlying or underlying a proved reservoir.

26. 10/18/201626 Probable Reserves Class 4 : Incremental reserves where an alternate interpretation of actual or anticipated performance or volumetric data indicates more reserves than can be classified as proved or probable class1 to 3. Class 5 : Additional quantities likely to be recoverable through the application, expansion or modification of improved recovery techniques.

27. 10/18/201627 Possible Reserves Possible reserves are less certain than probable reserves and can be estimated with a low degree of certainty. Insufficient to indicate whether they are more likely to be recovered than not under high-trend economic conditions. A confidence level of 20 to 50% is required. Possible reserves have been divided to: Class 1 : Reserves representing the primary recovery from the delineated area of a known reservoir.

28. 10/18/201628 Possible Reserves Class 2: Reserves representing the primary recovery which depends on: a. Lateral extension of the reservoir beyond the limits assumed for proved or probable class 1 reserves due to up dip or down dip extensions. b. Undrilled fault blocks adjacent to the delineated area of a known reservoir. c. Direct or diagonal offsets to spacing units having proved or probable class1 reserves

29. 10/18/201629 Possible Reserves Class 3 : Reserves representing the primary recovery dependent upon the development of new reservoirs ( not yet produced or tested ) within the area of assigned proved reserves. Class 3 reserves occur in a new reservoir overlying or underlying a proved reservoir.

30. 10/18/201630 Possible Reserves Class 4 : Incremental reserves where an alternate interpretation of actual or anticipated performance or volumetric data indicates more reserves than can be classified as proved or probable class1 to 3. Class 5 : Additional quantities likely to be recoverable through the application, expansion or modification of improved recovery techniques.

31. 10/18/201631 Problems in Reserve Classification Frontier Areas 1. No analogous reservoirs. 2. Sparse subsurface control. 3. Remote from market. 4. High operating costs. Heavy and Extra Heavy Crude Thermal stimulation is required and its response is highly variable. Dr.Helmy Sayyouh

32. 10/18/201632 Possible Future Development in Reserve Classification Matrix to describe geologic uncertainty and feasibility of commercial extraction. Inclusion with reserves of geologic and engineering bases for estimate Quantification of probabilities associated with reserve classifications.