Best Practices for Reserves Estimation in Unconventional Reservoirs — Present and Future Considerations Tracy HECKMAN, Anadarko Petroleum Corporation Grant OLSEN, Pressler Petroleum Consultants Kerry SCOTT, Pioneer Natural Resources Bernard SEILLER, Total Marcia SIMPSON, EXCO Resources Tom BLASINGAME, Texas A&M University
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Best Practices for Reserves Estimation in Unconventional Reservoirs —
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
Advancement of KnowledgeSlide 2
Estimating Reserves in Unconventional Reservoirs:●It’s early●It’s different●It’s good to learn from others●It’s good to have guidance●It’s good to have a vision
We advance our knowledge by application of mathematics and physical science, trial and error, and observation.
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
Slide 4
It's Early — Horizontal Wells as the Enabler (1/2)
Slide 5
It's Early — Horizontal Wells as the Enabler (2/2)
Slide 6It's Early — Tight Oil Will Dominate in 10-15 Years (U.S.)
From the Authorities: Oil● Tight oil (shale and chalk)
production projected to rise sharply over next decade.
●U.S. Energy Information Administration (EIA) AEO 2013 Early Release Overview.
U.S. Energy Information Administration(AEO 2013 Early Release Overview)
U.S. domestic crude oil production by source, 1990-2040 (millions of barrels/day)
Slide 7
From the Authorities: Gas● Shale gas is projected to be
the most significant U.S. growth play over the next ~30 years.
●Considerable uncertainty in size and economics of shale gas resources.
●Most shale gas wells have been drilled in the last few years, leaving considerable uncertainty regarding long-term productivity.
●U.S. Energy Information Administration (EIA) AEO 2013 Early Release Overview.
It's Early — Lots of Room to Grow (U.S.)
U.S. Energy Information Administration(AEO 2013 Early Release Overview)
U.S. Dry natural gas production by source,1990-2040 (trillions of cubic feet per year)
For many unconventional reservoirs, (particularly shales) it's early in the…●Development life-cycle ●Production life-cycle●Learning life-cycle
We are in a period of significant uncertainty!●Production forecasts and ultimate recovery●Drilling and completion techniques●Optimum well spacing (interference)● Impact on company portfolio of opportunities●Project financing, investor confidence, regulatory harmony
It's Early — There's Uncertainty…Slide 8
"It's Different"(We May Not Know What We Don't Know…)
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
It's Different — DefinitionsSlide 10
Conventional Reservoirs Unconventional Reservoirs (Shale)● Localized structural trap ● "Continuous-type" deposit● External HC sourcing ● Self-sourced HC● Hydrodynamic influence ● Minimal hydrodynamic influence● Porosity important ● Porosity may not be important● Permeability > 0.1 md ● Permeability << 0.1 md● Permeability ≠ f(p) ● Permeability = f(p)● Traditional phase behavior (PVT) ● Complex (HP/HT) PVT● Minimal extraction effort ● Significant extraction effort● Significant production history ● Limited production history● Often late development life-cycle ● Early development life-cycle● Few wells for commerciality ● Many wells for commerciality● Base reserves on volumetrics ● Base reserves on analogs ● Assess entire prospect before drilling ● Prospect driven by drilling ● Boundary-dominated flow (months) ● No boundary-dominated flow
● Traditional reserves methods ● Traditional reserves methods
Slide 11
●Challenges:—No industry standard tech-
niques for assessing uncon-ventional exploration plays.
—Stimulation is the major challenge (cost/technology).
—Fractures (induced or natural) are critical producibility factors.
—Success is judged based on production results.
It's Different — Challenges and Methodology
●Methodology:—Expect the unexpected. Well
performance will vary, despite similar drilling/completion practices, well spacing, etc.
—Unconventional plays are "statistical," many wells must be drilled to assess potential.
—Drilling too few wells is likely to lead to a bad decision.
" It’s Good to Learn from Others "(Industry Survey: Development of "Most Likely"
Production Forecasts from Unconventional Reservoirs)
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
Industry SurveySlide 13
Objective of the Survey:●Collect and communicate industry "Best Practices:"— "Most Likely " forecast (expected technical outcome).— Reasonable " Low Side " forecast.
●Criteria:— Survey of individuals.— Anonymous.— Independent of regulatory classification systems.
Industry SurveySlide 14
Administration of the Survey:●Design:— Designed by project team.— Applicable to unconventional
reservoirs.— Vetted and previewed survey
with all participants.— Focused on current practices in
developed areas.— Intended participants selected
from all facets of E&P sector.●Structure:— Survey delivered by secure,
web-based system.— 13 core questions (rate-time
analysis/forecasting).— 17 optional questions
(confidence/risks/undeveloped reserves/probabilistics). "User name and password…"
"My opinion? Are you sure I'm supposed to have one?"
●Regression Approach:— Automated data fitting using constraints given above.— All results quality-checked, outliers discarded.
●Provide guidance and limits with graphical results:— P50 rate vs. time with observations to generate confident EUR.— Comparison of P10/P50/P90 EURfinal-values.
)( ]exp[
)( )1()(
limexp,
/1hyp,
t*ttDq
t*ttbD
qtq
i
bi
i
[all data obtained from publicly available sources — Dry Horizontal Shale Gas Wells ONLY]
Slide 22
P50 Well Gas Rate Trends:
Comment:Left plot yields time required to estimate EUR (~12-32 months).The "hyperbolic" (or "constant b") flow regime is required to estimate EUR.
Statistical Analysis of Public Production Data[all data obtained from publicly available sources — Dry Horizontal Shale Gas Wells ONLY]
Slide 23
P90/P50/P10 EUR Comparisons: (Modified Hyperbolic Model with 30 year max life)
Comment: Results are “auto-fitted” and should be considered reasonably accurate. Results will vary when data are segregated by geological area, completion practices, spacing, etc. Analyses represent an attempt to quantify the RANGE of values.
Statistical Analysis of Public Production Data[all data obtained from publicly available sources — Dry Horizontal Shale Gas Wells ONLY]
"It’s Good to Have a Vision"(Vision for Reserves Estimation — The Next 10 Years)
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
Slide 25
Models for Production Forecasting:●Most likely scenarios:— Statistical models will remain an alternative to reservoir models.— Analytical and numerical models will focus on SRV/beyond SRV.— Numerical models will use more microseismic and geomechanics.
●Developed Reserves: Decline Curve Analysis (DCA)— (present) DCA models are useful to relate "SRV"-based reserves.— (future) Beyond the "SRV" will require a reservoir model.
●Developed Reserves: Probabilistic Methods— Probabilistic (non-deterministic) reserves can provide insight.— Probabilistic models will account for changes in completions.— Probabilistic approach will continue to evolve...
●Undeveloped Reserves:— Data mining methods will yield insight into EUR trends.— EUR = f(geomechanics, geology, and engineering data ).— Seismic can be/will be used to calibrate geostatistical models.— Geomechanical properties are/will be the weak link.
Vision — Models for Production Forecasting
Slide 26
Integration of the SRV: Fracture Models●Assessment of SRV Architecture:— [need] Modeling of SRV flow (block size + fracture conductivity).— [need] Improved modeling of hydraulic fracture growth models.— [challenge] Geomechanics and formation characterization.
Vision — Integration of the SRV (1/2)
Microseismic
Fracture DistributionModel
Simulation Model
Comment:■ We assume (Darcy) flow physics — and we
force performance to match "old" models.■ We assume we understand the nature of the
(natural and induced) fracture systems.
Slide 27
Integration of the SRV: Matrix Contribution●Matrix Contribution within the SRV:— [need] Storage, transport, PVT for unconventional systems.— [need] Physical experiments — porosity, adsorption, permeability.— [need] Numerical experiments — molecular simulation/up-scaling.
Vision — Integration of the SRV (2/2)
Geology
Nano-Scale BehaviorConcept Model
Comment:■ Need to redefine the fundamentals.■ Need more precise experiments.■ Can we model instead of measure?
Best Practices for Reserves Estimation in Unconventional Reservoirs —
Kerry SCOTT, Pioneer Natural ResourcesBernard SEILLER, Total
Marcia SIMPSON, EXCO ResourcesTom BLASINGAME, Texas A&M University
Slide 29
Summary:This work provides orientation to industry reserves practices via acomprehensive survey — the major conclusion of which is thatindustry will continue to utilize traditional reserves methods (withtighter constraints) while continuing to develop methods/practiceswhich will provide a unique characterization of reserves for un-conventional reservoir systems.
This work also provides a statistical study derived from approxi-mately 25,000 shale gas wells. This work confirms the use of theArps' "modified hyperbolic" model and provides statistical results(EUR's and other DCA results) on a play-by-play basis.
Conclusions:● Industry Survey:— DCA will remain a primary reserves tool (and will evolve).— Definition of simulation models will likely rely more on analogs.
●Reserves Analysis:— DCA is not fully representative (and must be constrained).— Time-Rate-Pressure analyses will become common (e.g., RTA).
Summary and Conclusions
Best Practices for Reserves Estimation in Unconventional Reservoirs —
Present and Future Considerations
End of PresentationTracy HECKMAN, Anadarko Petroleum Corporation
Grant OLSEN, Pressler Petroleum ConsultantsKerry SCOTT, Pioneer Natural Resources
Bernard SEILLER, TotalMarcia SIMPSON, EXCO Resources