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EP00
Volumetrics
&
Uncertainty Management
EP00 - Introducing the E&P Business
p296
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EP00
Terminology
STOIIP (GIIP)
The volume of oil (gas) in an accumulation in a reservoir but corrected to the
volume it would occupy at surface temperature and pressure
Ultimate Recovery (UR)
UR = STOIIP (GIIP) x Recovery Factor
Reserves
Volume of oil or gas that remains at a specified date to be produced
commercially from a field or area under prevailing economic conditions
Reserves = Ultimate Recovery - Cumulative Production
p297
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EP00
Why Volumetrics?
Knowing value of business
Depreciation and Net Income calculation
SEC reporting requirement
Reserves Review (ARPR)
Equity Determination
Prospect Evaluation / Ranking
Asset Management
Production Forecasting
Field Development Planning
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EP00
Groups Resource Portfolio Build-up 1.1.2000
PRODUCE DEVELOP APPRAISE EXPLORE
+/- 6 yrs to Prod
n
ACQUISITIONS & DIVESTMENTS
Undiscovered
SFRc
*
[bln boe]
Discovered
SFRc
*
Expectation
Undeveloped
*
Proved
Undeveloped
*
Proved
Developed
*
*
bln boe
Externally Reported Figures
Yearly
Production
Undiscovered
Outside
Portfolio
Maturation Process needs to deliver ** bln boe/yr
+/- 10 yrs to Prod
n
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EP00
Objectives
At the end of this session you should be able to:
List sources of uncertainty and ways to
understand/manage them
Use the STOIIP/GIIP expectation curves
State the general justification of Appraisal
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EP00
What do we need to know. ?
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EP00
STOIIP and GIIP Equation
( )
o
o
o
o
B
S
G
N
GRV
STOIIP
o

=

p299
( )
g
g
g
g
B
S
G
N
GRV
GIIP
g

=

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EP00
Uncertainties in Volumetric Estimates
OWC?
Shale Out?
GOC?
Erosion?
DIP?
Seismic?
More Faults?
Fault Position?
STRUCTURAL
Dip Error
Seismic Error
Fault Position
Additional Faulting
STRATIGRAPHIC
Rock Development
Erosion
ACCUMULATION
Position Contacts
Possible Gas Cap
PROPERTIES
Porosity
Saturation
Net/Gross
Formation Volume Factors
p307
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EP00
Dip Uncertainty
20
Base Case
25
Minimum
15
Maximum
Seismic dip error 7 Dipmeter dip error 2
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EP00
Top reservoir uncertainty
Conger Garden Banks, GOM
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EP00
Fault Position Uncertainty
20
Base Case
20
Minimum
20
Maximum
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EP00
North Cormorant Block IV : Development Strategies
0 1 2 km
Annex B - 1978
(1974-75, 2D seismic)
1983-84
3D seismic
North Cormorant
Platform
Oil producer
Water injector
Abandoned with H/C
Suspended with H/C
Planned producer
Planned injector
9
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7
1
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0
0
0
9
5
0
0
O
D
T
9
4
9
5
9
5
0
0
6
2
5
6
5
2
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EP00
Sunrise-Troubadour
Woodside
MOST LIKELY CASE - Fully Connected
INTERMEDIATE CASE - Large Compartments
WORST CASE - Small Compartments
Compartmentalisation Uncertainty
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EP00
Fault Dip Uncertainty
60
Base Case
70
Minimum
50
Maximum
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EP00
Fluid Contact Uncertainty
Base Case
Minimum Maximum
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EP00
Uncertainty in top reservoir map
3 development scenarios after appraisal
Draugen Field, Norway
2 2
2
1
1
1
O
W
C
O
W
C
O
W
C
1
6
0
0
1
6
0
0
1
620
1
6
2
0
O
W
C
1
620
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2
0
O
W
C
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6
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16
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1
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1600
1
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0
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1600
1
6
2
0
O
W
C
10 PRODUCERS
10 INJECTORS
8 PRODUCERS
10 INJECTORS
15 PRODUCERS
15 INJECTORS
OWC 1638MSS
1600 CONTOUR VALUE, MSS
0 2 4
BASE CASE LOW CASE HIGH CASE
Uncertainty with Fluid Contacts
SHELL OU P.E. DEPT THE HAGUE
WOMBAT FIELD
CONTOUR MAP
TOP X SAND
0 1 km
Date: June 1996
Report No: 31-422
Author: L.B. van Dijk
Draw No: 12
all depths in m below sea level
N
GDT 2040m
OUT 2060m
ODT 2085m
WUT 2115m
2000m
2050m
2100m
well C
2115m
well A
2017m
well B
2060m
line of section
A
A
A
A
2000m
2050m
2100m
2150m
Well
C
Well
A
Well
B
WUT 2115m
ODT 2085m
OUT 2060m
GDT 2040m
all depths in m below sea level
Cross-Section A-A
WOMBAT FIELD
Uncertainty with Fluid Contacts
Well
C
Well
A
Well
B
Well
C
Well
A
Well
B
Well
C
Well
A
Well
B
Well
C
Well
A
Well
B
CASE 1: GOC=2040m & OWC=2115m
CASE 2: GOC=2040m & OWC=2085m
CASE 3: GOC=2060m & OWC=2115m
CASE 4: GOC=2060m & OWC=2085m
Uncertainty with Fluid Contacts
N
CASE 1: GOC=2040m & OWC=2115m
N
N
N
GIIP=1.3 million m3 : STOIIP=42 million bbl GIIP=1.3 million m3 : STOIIP=21 million bbl
GIIP=2.4 million m3 : STOIIP=14 million bbl
GIIP=2.4 million m3 : STOIIP=35 million bbl
CASE 2: GOC=2040m & OWC=2085m
CASE 3: GOC=2060m & OWC=2115m
CASE 4: GOC=2060m & OWC=2085m
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EP00
Net/Gross Uncertainty
Measured
Maximum ? Minimum ?
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EP00
Combined Uncertainties
60
Base Case
70
Minimum
50
Maximum
20
25
15
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EP00
Combining Uncertainties
p
STOIIP
p>x
STOIIP
p
p
p
p
p
GRV
N/G

S
o
1/B
o
p308
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EP00
Expectation Curve
1.0
0.5
0
STOIIP (MMm
3
)
0 50 100 150
Low
STOIIP
High
STOIIP
Medium
STOIIP
p309
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EP00
Reporting Volumes
Shell
Low or Proved P85 not Minimum or Worst
Medium P50 = most likely or base case
High P15 not Maximum or Best
Expectation = (Low + Medium + High)/3
Be careful: no consistent use in industry
some call High P85 & Low P15
some take P10 & P90, or even P0 & P100
some use min & max, or downside & upside
Some use proved, probable, possible
Also no precise definition on what is taken as proven
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EP00
Ultimate Recovery Estimates vs. Time
Time (not to scale)
Prospect
Evaluation
Explore Resource Management
Appraise Devel.
Planning
Proj.
Exec.
Devel.
Drlg.
U
l
t
i
m
a
t
e

R
e
c
o
v
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E
s
t
i
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a
t
e
s
1st hole dry
Discovery
A A A
D D D
Cumulative
Production
P
85
P
15
Abandon
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EP00
a sample of fields, P10s & P90s vs P50
0
200
400
600
800
1000
1200
1400
0 200 400 600 800 1000 1200 1400
P50, MMBOE
P
9
0

o
r

P
1
0
,

M
M
B
O
E
P10
P90
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EP00
Soon dots will be shown in the oval; how many ???
What is your P50, P90 & P10 estimate ??
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EP00
How many dots are there in total oval do you think ?
You can only see through a small peephole
What is your P50, P90 & P10 estimate ??
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EP00
Actual ?? 160 dots
+/- 30% : 110 - 210
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EP00
What can we do about the uncertainties
Reduction of static uncertainty
High quality seismic, PSDM
Appraisal drilling (& logging, coring)
Use of analogues
Reduction of dynamic uncertainty
Core analysis, Production testing
Extended production performance (pilot), 4D seismic
Use of analogues
Managing uncertainty
Quantifying possible ranges through modelling
Identify possible up/downsides & fall-back options
Phased development, keep options open
$$$
$$$
$$$
VOI ?
VOI ?
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EP00
Appraisal
The objective of Appraisal Activities is to:
Reduce Uncertainty
p313
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EP00
Appraisal
Information obtained through appraisal is aimed at
answering:
How much oil and gas is there?
Where is it?
At what rate and how much in total will it produce?
p315
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EP00
Appraisal Activities
All forms of data gathering
Examples:
Drilling wells
Logging and testing
Reprocessing seismic
Obtaining additional seismic or 3D seismic surveys
etc.
p315
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EP00
No info
With info
Devmnt
(mid case)
Hi Case
Mid Case
Low Case
50
80
-20
50%
25%
25%
EMV= 0.25 x 80 + 0.5 x 50 + 0.25 x -20= 40
Hi Case
Mid Case
Low Case
50
100
50%
25%
25%
Hi Dev
Mid Dev
No Dev
0
EMV= 0.25 x 100 + 0.5 x 50 + 0.25 x 0= 50
Info value= 50-40=10 , cost of info needs to be less !
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EP00
1.0
0.5
0
STOIIP (MMm
3
)
0 50 100 150
Uncertainty Reduction with Appraisal
post
appraisal
negative
post
appraisal
positive
before
appraisal
economic
minimum
P90
P10
P50
Range before appraisal
Range after appraisal or
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EP00
Resource Characteristics Tree
Structural
Extent
Heterogeneity
Continuity
Aquifer
Probability
Development
Scenarios
Too small
10%
Large enough
90%
Unfavourable
50%
Favourable
50%
Good
60%
Poor
60%
Good
40%
Poor
40%
Weak
100%
Strong
0%
Weak
50%
Strong
50%
Weak
30%
Strong
70%
Weak
100%
Strong
0%
NPV 1 0 NPV 2 UR 3 NPV 5 NPV 6 NPV 4 0
27% 0% 9% 9% 8% 19% 18% 0% 10%
Depl.
10
wells
N/A Water
Inj.
EOR? Water
Inj.
Depl.
20
wells
Depl.
20
wells
N/A N/A
0
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EP00
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EP00
Schooner Field, Shell Expro UK SNS
Reservoir uncertainty scenarios
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EP00
Sub-Surface Uncertainty Tree
Uncertainty
Sand/Shale
Porosity
Permeability
Compartments
Fault
transmissibility
Shale Kv
Models
Low High
None
Yes
Low Geocap
ML
None
P50 Geocap
Dynamic Uncertainty
ML
Large
High Geocap
ML
None None None Multi
No
ML
No
ML
No
ML
No
ML
No
ML
No
ML
No
ML
No
Low
No
High