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What is the best way to estimate your 3P reserves? President of Haas Petroleum Engineering Services Thad Toups gave this presentation on Haas' internal analytics and auditing methodology.
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Texas Registered Engineering Firm F-002950
Texas Registered Engineering Firm F-002950
What Are My 3P Reserves?
An Independent Evaluator’s Recommendation for
Undeveloped Reserve Estimatesin Resource Plays
Disclaimers
• Estimated Ultimate Recoveries in this presentation have been forecasted using a Stretched Exponential Production Decline (SEPD) methodology as outlined in SPE 134231 (Valko and Lee).
• Proved, Probable, and Possible Reserves in this presentation are for demonstration purposes only.
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CONFIDENCE
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80% Confidence Interval
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P90 P10
Heat Distribution
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1) How many Barnett Shale wells have produced as of Jan 1, 2014?
P10 _______ P90 _______
2) How long is the Nile River?
P10 _______ P90 _______
3) How many career home runs did Roger Maris have?
P10 _______ P90 _______
4) What was the average WTI oil price @ Cushing in January 2000?
P10 _______ P90 _______
5) How many public airports are in the state of Tex as?
P10 _______ P90 _______
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Pop Quiz! Define 80% Confidence IntervalYour
Pop Quiz! Define 80% Confidence Interval
1) How many Barnett Shale wells have produced as of Jan 1, 2014?
P10 _______ P90 _______ __19,823__
2) How long is the Nile River?
P10 _______ P90 _______ __4132 mi__
3) How many career home runs did Roger Maris have?
P10 _______ P90 _______ ___275____
4) What was the average WTI oil price @ Cushing in January 2000?
P10 _______ P90 _______ __$27.26___
5) How many public airports are in the state of Tex as?
P10 _______ P90 _______ _ __393____
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Your
Why Didn’t Everyone Score 4/5?
• P10s and P90s are difficult to comprehend.
• Pre-conceived expectations bias us to a narrow range of outcomes.
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Development Phase Definition
• SPEE Monograph 3 provides guidelines for necessary sample size to achieve the Mean less 10% with 90% confidence.
• < 1 Sample Size = “Early”
• 1 – 3 Sample Sizes = “Intermediate”
• > 3 Sample Sizes = “Statistical/Mature”
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home
Example 3P Stick Maps for Each Development Phase
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Early < 1 Sample
Intermediate 1-3 Samples
Mature > 3 Samples
Why is This Important?
• Knowing the development phase of the area can impact how you develop your property.
• No surprises from your reserves consultants.
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Source: SPEE’s Perspectives on the Fair Market Value of Oil and Gas Interests
CASE STUDIES
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Bakken Shale – Jan 2000 Bakken Development
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Bakken Heat Map
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Bakken Development - Jan 2012
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A
B
C
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Initial Filtering to Area A
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home
A
Geologic Area of consistent
LithologyThicknessPorosityPermeabilityFluid Type
Area A EUR Bubble Map
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home
A
Anticline performance indicates separate geologic area.
Poorer performance as Bakken thins to SW.
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Filtering to Analogous Rock
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home
A
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Area A Distribution
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home
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Area A EUR Distribution by Vintage
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home
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Filtering Out Older Vintage
home
Area A EUR Distribution by Operator
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Filtering Out Anomalous Operators
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Area A Distribution (Filtered)
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Aggregate to Total Number of Locations
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1
2
3
n
n = 35
Area A Distribution (Filtered)
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> 3 Samples
Statistical / Mature
Area A - 3P Undeveloped Reserves
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Bakken Development - Jan 2012
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A
B
C
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Initial Filtering to Area B
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home
B
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Area B EUR Bubble Map
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B
Sweet Spot? Or Better Operator?
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Area B Operator Bubble Map
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One operator’s performance indicates variance in rock/fluid properties is the cause of poorer wells surrounding acreage B.
B
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Area B EUR Bubble Map
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home
Removing wells in better geologic area.
B
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Area B Distribution (Filtered)
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Aggregate to Total Number of Locations
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1
2
3
n
n = 35
Area B Distribution (Filtered)
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home
~ 2 Samples
Intermediate
Area B - 3P Undeveloped Reserves
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Bakken Development - Jan 2012
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A
B
C
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Initial Filtering to Area C
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home
C
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Area C EUR Bubble Map
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home
C
Area C Distribution (Risked)
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105,000 3.0
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Aggregate to Total Number of Locations
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1
2
3
n
n = 35
Area C - 3P Undeveloped Reserves
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home
Let the Debate Begin!
• Aggregate Proved to Total Number of Analogous Locations?
• Include PDP in Aggregation?
…Case by Case Considerations
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Effect of Aggregation on Smaller Well Counts
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n = 35 n = 6
SUMMARY AND CONCLUSIONS
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Consider P90 and P10 in Your Expectations
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The Nile River is 4132
miles long!
You Will Drill a Distribution!
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Source: EOG
Connected Pore Space
Conclusions
• Your 3P Reserves are directly related to the development phase of the geologic area.– Early, Intermediate, Statistical/Mature
• Your 3P Reserves are directly related to the sample size of human dependencies.– Drilling, Completion, and Development Practices
• Your 3P Reserves are directly related to the number of analogous locations in the development plan.
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THANK YOU!
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Contact Us
Haas Petroleum Engineering Services, Inc.Registered Firm # F-002950
2100 Ross Ave, Ste 600Dallas, TX 75201(214) 754-7090haas@haasengineering.com
www.haasengineering.com
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