Evaluation of Undeveloped Reserves in Resource Plays of Undeveloped Reserves in Resource Plays Samantha Meador, P.E., SPEE Director. WHAT is a RESOURCE PLAY ? ... •Shale acts as

Evaluation of Undeveloped Reserves in Resource Plays

Samantha Meador, P.E., SPEE DirectorSamantha Meador, P.E., SPEE Director

WHAT is a RESOURCE PLAY ?

Accumulation of hydrocarbons known to exist over a large areal

expanse

Believed to have a lower geological and/or commercial development risk

Another question may be:

What are the characteristics of a Resource Play ?

SPEE has defined ‘Tier 1 Criteria’

• Exhibits a REPEATABLE Statistical Distribution of EURs

• Offset Well Performance is Not a Reliable INDICATOR of PUD Performance

• CONTINUOUS Hydrocarbon System which is REGIONAL in Extent

• Hydrocarbons are Not HELD in place by hydrodynamics

Depositional Environments that Frequently Include Resource Plays

Shale Gas Reservoirs

Tight Gas Reservoirs

Tight Oil Reservoirs

Coalbed Methane Reservoirs

Basin Centered Gas Systems

Shale Gas

•Shale acts as both the Source and the Reservoir

•Unlike Coalbed, most of the gas occurs as free gas

•Nano-darcy to micro-darcy permeability

•Production is achieved only through large hydraulic fracture stimulations

Estimating Undeveloped Reserves in a Resource

Play

PRMS

• Reserves represent the part of Resourceswhich are Commercially recoverable and have been Justified for development.

• Reserve Categories Signify Risk or Uncertainty NOT Commerciality.

SPE PRMS Definitions

R E S E R V E S

P R O V E D P R O B A B LE P O S S IB LE

C O N TIN G E N TR E S O U R C E S

P R O S P E C TIV ER E S O U R C E S

TOTA

L PE

TRO

LEU

M IN

PLA

CE

CO

MM

ER

CIA

LSU

B-C

OM

MER

CIA

L

DIS

CO

VER

ED

UN

DIS

CO

VER

ED

U N R E C O V E R AB LE

1P 2P 3P

P R O D U C TIO N


Most LikelyMost LikelyP 50P 50

Downside or Downside or ConservativeConservative

P 90P 90 P 10P 10

Upside or Upside or OptimisticOptimistic

Certainty IncreasesCertainty Increases


R E S E R V E S

P R O V E D P R O B A B LE P O S S IB LE

C O N TIN G E N TR E S O U R C E S

P R O S P E C TIV ER E S O U R C E S

TOTA

L PE

TRO

LEU

M IN

PLA

CE

CO

MM

ER

CIA

LSU

B-C

OM

MER

CIA

L

DIS

CO

VER

ED

UN

DIS

CO

VER

ED


1P 2P 3P

P R O D U C TIO N


The only difference between The only difference between Proved, Probable, and Proved, Probable, and Possible Reserves Possible Reserves isis

UncertaintyUncertainty

Most LikelyMost LikelyP 50P 50

Downside or Downside or ConservativeConservative

P 90P 90 P 10P 10

Upside or Upside or OptimisticOptimistic

Certainty IncreasesCertainty Increases

•Identify Analogous Wells

•Create a Statistical Distribution for Analogous Wells

•Determine the Number of Drilling Opportunities or Well Count

•Prepare a Monte Carlo Simulation

•Calculate Proved, Probable, Possible Reserves

Estimating Undeveloped Reserves in a Resource Play

As a practical matter, resource plays will encompass more than

100 completed wells in the accumulation

•Continuous regional HC system areal extent

•Statistical Models require minimum 100 wells


1P

2P

3P

RESERVE BOOKING CATEGORIES

P90

P50

P10

Cumulative

Probability

PROVED RESERVES

PROVED Plus PROBABLE RESERVES

PROVED Plus PROBABLE

Plus POSSIBLE RESERVES

Reserve Estimate

0

100

P1

P2

P3

PRMS Probabilistic Reserve Categories

Statistics Define Categories

1 P1 P90% of the time, 90% of the time,

the well will the well will recover this recover this

volume or morevolume or more

Statistics to Define Categories

There is a 50/50 There is a 50/50 chance of recovering chance of recovering either more or less either more or less

reserves. This is the reserves. This is the MOST LIKELY case.MOST LIKELY case.

2 P2 P

Statistics to Define Categories

3 P3 P

Only the top 10% of Only the top 10% of the wells will the wells will recover these recover these

reserves or morereserves or more

• How Many Wells Must I Drill To Achieve A Probability of Success of 80 Percent?

• Success is Defined as a 30% ROR

Probabilistic Reserves for Decision Making

Single well results:

EUR 108mboROR= 30%

PPss = 48.7%= 48.7%


PPss = 62.4%= 62.4%


PPss = 69.0%= 69.0%


PPss = 76.8%= 76.8%


PPss = 88.0%= 88.0%


0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100 110WELL COUNT

PRO

BA

BIL

ITY

OF

SUC

CES

S

80%P80%Pss

28 Wells28 Wells


• How Many Wells Must I Drill To Achieve A Probability of Success of 80 Percent?

• Success is Defined as a 30% ROR.

• For an Area in this Resource Play, Drilling 28 Wells Will Provide an 80 Percent Probability of Success.


• How Does the Answer Change if Management wants a 90% Ps?


0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100 110WELL COUNT

PRO

BA

BIL

ITY

OF

SUC

CES

S

90%P90%Pss

63 Wells63 Wells


• How Does the Answer Change IF Management Wants a 90 Percent Ps?

• To Achieve the Same ROR (30 Percent) Now Requires Drilling 63 Wells For a 90% Ps.


Now we understand what

characterizes a Resource Play, and

the importance of a Statistical

Approach for decisions.

Now consider how to Define the

Project

Defining a Project

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

Z Z O O O Z Z

Z Z O X O Z Z

Z Z O O O Z Z

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

1 Year Results 1 Year Results Reserves FocusReserves Focus

Defining a Project

Z Z Z Z Z Z Z Z Z Z Z Z Z Z


Z Z O O O Z Z Z Z O O O Z Z

Z Z O X O Z Z Z Z O X O Z Z

Z Z O O O Z Z Z Z Z O O O Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z O O O Z Z Z Z Z Z

Z Z O X O Z Z

Z Z Z Z Z Z O O O Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z O O O Z Z Z Z Z O O O Z Z





Reserves FocusReserves Focus

Defining a ProjectZ Z Z Z Z Z Z

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z O O O Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z O X O Z Z Z Z Z Z Z Z Z

Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z

Z Z O X O Z Z Z Z Z Z Z Z Z Z Z O X O Z Z

Z Z O O O Z Z Z Z Z Z Z Z Z Z Z O O O Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z




Z Z Z Z Z Z Z Z Z O O O Z Z Z Z Z O O O Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z O O O Z Z Z Z Z Z Z Z O O O Z Z Z Z Z Z Z Z O O O Z Z

Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z

Z Z O O O Z Z Z Z Z Z Z Z O O O Z Z Z Z Z Z Z Z O O O Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z O O O Z Z Z Z Z O O O Z Z Z Z Z Z Z Z Z





Z Z O O O Z Z Z Z Z Z Z Z Z Z Z O O O Z Z

Z Z O X O Z Z Z Z Z Z Z Z Z Z Z O X O Z Z

Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z

Z Z Z Z Z Z Z Z Z O X O Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z O O O Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

Reserves FocusReserves Focus

Defining a Project








Development Area and Reserves FocusDevelopment Area and Reserves Focus

Defining a ProjectZ Z Z Z Z Z Z Z Z Z Z Z Z Z




























Development Area and Reserves FocusDevelopment Area and Reserves Focus

Defining a ProjectZ Z Z Z Z Z Z Z Z Z Z Z Z Z







Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

Z Z O O O Z Z

Z Z O X O Z Z

Z Z O O O Z Z

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z








Multi Year Results Multi Year Results Resource FocusResource Focus

Defining a ProjectZ Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z Z Z O O O Z Z

Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z Z Z O X O Z Z




Z Z Z Z Z Z Z

Z Z Z Z Z Z Z

Z Z O O O Z Z

Z Z O X O Z Z

Z Z O O O Z Z

Z Z Z Z Z Z Z

Z Z Z Z Z Z Z








Resource FocusResource Focus

Defining a ProjectZ Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z

















































Resource FocusResource Focus

Unconventional Resource Plays offer opportunities in Project Objectives:

•Business Objectives•Access to Capital•Track Record in Resource Plays

Defining a Project

Thank YouQuestions?

Evaluation of Undeveloped Reserves in Resource Plays of Undeveloped Reserves in Resource Plays Samantha Meador, P.E., SPEE Director. WHAT is a RESOURCE PLAY ? ... •Shale acts as

Documents