Energy Sources, 27:463483, 2005

Copyright Taylor & Francis Inc.

ISSN: 0090-8312 print/1521-0510 online
DOI: 10.1080/00908310490441872

Uncertainty Analysis of Production Decline Data

ZSAY-SHING LIN
CHANG-HSU CHEN
Department of Resources Engineering
National Cheng Kung University
Tainan, Taiwan

G. V. CHILINGAR
Environmental Engineering Department
University of Southern California
Los Angeles, CA, USA

H. H. RIEKE
Department of Petroleum Engineering
University of Louisiana at Lafayette
Lafayette, LA, USA

SUMIT PAL
Superior Energy Services
Broussard, LA, USA
Decline rate-time equations, including uncertainty characteristics of production data,
were developed to estimate the probabilistic reserves and production life of hydrocarbon reservoirs. The uncertainty characteristic, or residual function, is a statistical
distribution of the difference between field data and the deterministic production decline curve. The reserves may be estimated directly by summing the production rates,
including the residual function, which is referred to as the summation method. Alternatively, other equations for estimating the probabilistic reserves and production
life are also derived, based on the integration of the decline time-rate equations that
include uncertainty. This is referred to as the integration method. In both methods,
Monte-Carlo simulation is used. The uncertainty analysis is applied to the production
data from two gas fields located in Taiwan: the Chinshui and the Tiechenshan gas
fields. In the case studies, production data for the Chinshui gas field shows an exponential decline, whereas the Tiechenshan gas field exhibits hyperbolic decline. The
residual function for the Chinshui gas field is a normal distribution with a mean of
zero. In the Tiechenshan gas field, the residual function approximates a normal distribution. Thus, the determined probabilistic reserves for both fields also have a normal

Received 27 June 2003; accepted 21 July 2003.

Address correspondence to G. V. Chilingar, 101 S. Windsor Blvd., Los Angeles, CA 90004,
USA. E-mail: gchiling@usc.edu.

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distribution. The range of reserves, which is defined as the difference between proven
and mean reserves, is estimated using both summation and integration methods. The
Chinshui gas field is 10.6% of mean reserve value, whereas for the Tiechenshan range
of probabilisitc reserves of value is 8.9%. The methods derived in this study are more
accurate than those determined by the conventional probability method where the
range of reserves depends on the assumed ranges of the parameters used. A set of
new decline curves equations in residual form, instead of conventional equations of
decline curves, are derived. In addition, the equations of cumulative production in
residual form are derived. A new method based on the equations of decline curves
in residual form and those of cumulative production in residual form are developed
(uncertainty analysis method). Case studies with conventional decline curve analysis,
probabilistic decline curve analysis, and a new method of uncertainty analysis are
presented. The results of the three methods are compared and discussed.
Keywords decline curve analysis, gas field, probabilistic reserves, Taiwan, uncertainty analysis

Oil and gas are currently the most important energy sources worldwide and have a
significant influence upon global economic development. In the 1970s and 1980s, oil and
gas supply shortages resulted in economic disorder. Hence, many nations have invested
heavily in exploration for oil and gas to stabilize the energy supply. Knoring et al. (1999)
pointed out that an exploration strategy applied in a region is reflected in the results of
exploration, and defined either as the history of the regional reserve accumulation or the
oil and gas field discoveries. Prospecting for oil and gas has risks and high cost, but huge
profits are assured if the exploration is successful and the price of oil is above $25 per
barrel.
In addition to oil and gas prospecting, petroleum companies purchase and develop
producing oil and gas fields at discounted prices to maintain or increase reserves. Reserve
information is critical to this kind of investment since the recoverable reserves are directly
related to the sales value of oil and gas producing properties. The accumulation of
exploration results over time is quantified using the sequence and tempo of economic
discovery, reserve forecasting, and reserve estimation data. The reserve accrual is achieved
by field appraisal. The goal of predicting the validity of the production decline curve
information is a precondition of control. Control here is understood as the means by
which the uncertainty in the decline curves is accounted for. A new set of decline curve
equations that incorporate uncertainty analysis are used to formulate optimum reserve
estimation.
All reserve estimates involve some degree of uncertainty or probability distribution,
depending mainly on the amount of reliable data (e.g., geological, geophysical, engineering, and production) available at the time of the estimate and on the interpretation
of these data. The uncertainty of reserves can be classified into proved and unproved
reserves. Unproved reserves are further sub-classified into probable and possible reserves
(SPE/WPC, 1996).
Proved reserves are defined as those quantities of petroleum that can be estimated
with reasonable certainty to be commercially recoverable from a given date forward
and under current economic and operating conditions and government regulations. In
general, these quantities of oil and gas have an existence probability greater than 85 to
95%. Thus, a symbol for proved reserves can be P90 . Probable reserves are the quantities
of recoverable hydrocarbons whose data are similar to those used for proved reserves,
but lacking in certainty. Probable reserves, denoted by P50 , are generally considered to
be those that have a probability for overall reserves to be produced greater than 50%.

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465

Possible reserves, denoted by P15 , incorporate more uncertain data that indicate
possible reserves to be less likely than probable reserves to be commercially recoverable.
Possible reserves usually have a probability for overall reserves to be produced over 15%.
The aim of this study is to use the uncertainty characteristic of production data and
decline curve analysis to estimate probabilistic reserve and production life. Production
data were analyzed from two gas fields (Chinshui and Tiechenshan) in Taiwan. Both deterministic and probabilistic methods were employed and the results from these analyses
were compared.

Production Data Analysis with Uncertainty

Forecasting future production for reserve estimates is the most important part of the
economic analysis of exploration and production expenditures. Capen (2001) pointed
out that treating reserves probabilistically provided necessary information for reservoir
managers to plan future exploration and development. Decline curve analysis, using
production data, is a powerful and convenient tool for forecasting the future production
from wells, leases, or reservoirs. However, there are several assumptions that should
be made before analyzing the production decline data with any degree of reliability.
These assumptions include: (1) Production must have been stable over the period being
analyzed; that is, a flowing well must have been producing with a constant choke size
or constant wellhead pressure. This indicates that the well must have been producing
at a capacity under a given set of conditions. (2) Observed production decline should
truly reflect the reservoir productivity and not be the result of external causes, such as
change in production conditions, well damage, production controls, or equipment failure.
(3) Stable reservoir conditions must prevail in order to extrapolate the decline curves
with any degree of reliability (Ikoku, 1984).
Three types of production decline curves have commonly been used, including constant percentage (exponential), hyperbolic, and harmonic decline. Garb (1985) pointed
out that the three types of decline curves can be generalized by the hyperbolic decline
equation. In considering the uncertainty of production data, the following three types of
decline curves are expressed as:
qt (hyp) = qi (1 + bDi t)1/b + r

(1)

qt (exp) = qi eDt + r

(2)

qt (har) = qi (1 + Di t)1 + r

(3)

where qt (hyp) is defined as the half year production rate at time t for hyperbolic decline,
qt (exp) is defined as the half year production rate at time t for exponential decline, qt (har)
is defined as the half year production rate at time t for harmonic decline, and r is a
residual and referred to as the r-function, which is a function of time. It is the difference
between the production data and the calculated data from conventional decline curve
Eqs. (1), (2), or (3) with r = 0. In terms of probability distribution, the r-function is
close to a normal distribution because it is based on regression analysis. In uncertainty
analysis, the r-function is a statistical distribution.
In a declining stage, a field or reservoir will produce until the production rate reaches
an economic limit, which is based on the product price expressed as a production rate
at that price. Based on the fact that revenue is balanced with operation cost and taxes,

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the economic limit production rate (qa ) is calculated as follows (Ikoku, 1984):
qa =

opc
Gp (1 Tx )

(4)

where qa is the production rate at the economic limit under present-day existing economic
condition, kscm/hy, Gp is the produced gas price, $/kscm, Tx is the tax fraction, and opc
is the producing costs, $.
If qa is known, the production rate from qi to qa , can be calculated by using Eqs. (1),
(2), or (3), all of which consider uncertainty. The cumulative production from qi to qa ,
or the reserves, can be numerically estimated by summing the average production rate
and multiplying it by the time interval. This calculation is referred to as the summation
method.
The time, taken from qi declining to qa , is called production life (ta ). In numerical
calculations, the production life can be obtained by increasing time, t, in Eqs. (1), (2),
or (3) with r = 0, until the production rate declines to qa . Alternately, the production
life (ta ) can be calculated by rewriting Eqs. (1), (2), and (3) as follows:



b
qi
1
1
(5)
ta(hyp) =
bDi
(qa r)
ta(exp) =

ln(qi /(qa r))

D

(6)

ta(har) =

[(qi /(qa r)) 1

Di

(7)

The above equations can be used to estimate the production life with uncertainty. In
addition to using Eqs. (1) through (3) directly, cumulative production or reserves can be
calculated by integrating Eqs. (1), (2), and (3) with respect to time, t:
 ta
 ta
 ta
1
qt (hyp) dt =
qi (1 + bDi t) b dt +
rdt
(8)
0




ta

0
ta


qt (exp) dt =


qt (har) dt =

ta

ta

qi eDt dt +

ta

rdt

qi (1 + Di t)1 dt +

(9)

ta

rdt

(10)

Other forms of the cumulative production equations for the hyperbolic decline
(Np(hyp) ), exponential decline (Np(exp) ), and harmonic decline (Np(har) ) can be obtained
by carrying out integrations on the left sides of Eqs. (8), (9), and (10):


 (1b) 
qa
qi
1
+ rta
(11)
Np(hyp) =
(1 b)Di
qi
qi qa
+ rta
D
qi
qi
=
ln
+ rta
Di qa

Np(exp) =

(12)

Np(har)

(13)

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467

where
n


r=

i=1

ri
,

and r is the average residual function, ri is the residual or r-function (sampled randomly
during Monte Carlo calculations), and n is the number of data points in the production
lifespan.
If the r-function is zero, then the above equations are the same as those in the
conventional decline curve equations (Garb, 1985). The above equations are for estimating
the cumulative production from qi (t = 0) declining to qt (t = t). For estimating the
reserves, q, (at t = t) should be replaced by qa (t = ta ). This calculation is called the
integration method.
In using the above uncertainty equations to analyze the production decline data, the
parameters in the rate-time equations should be estimated by making the time-rate equation best fit the production data as in deterministic decline curve analysis. The production
rate residues, which are functions of time, are then calculated from the difference between
rate-time equation and production rate data. The probability distribution or a probability
density function for the production rate residuals is obtained and used in the calculations
of reserves and production life. The Monte Carlo simulation is conducted with these
calculations.

Case Study of the Chinshui Gas Field

The Chinshui gas field in Taiwan has been producing since December of 1961. Production
rate data was collected semi-annually (half year, hy) from December of 1961 to December
of 1998 (Figure 1). The production rate for the Chinshui gas field reached a peak by
December of 1973, and the declines in the production data after December of 1973 were
used to perform production analysis.

Figure 1. Production data for the Chinshui gas field in Taiwan.

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Deterministic Decline Curve Analysis

A regression analysis was used to fit three types of time-rate equations (exponential,
hyperbolic and harmonic declines) using the production data of the Chinshui gas field.
The objective function in the regression analysis was a summation of the residual squares
between the regression curve and the production rate data. The objective function value
from the harmonic decline curve was found to be 4.1 109 (kscm/hy)2 , which is greater
than the objective function value from the exponential decline curve (Figure 2) or the
hyperbolic decline curve. Both the residual square values from the exponential and hyperbolic decline curves were found to be 2.72 l09 (kscm/hy)2 . The harmonic decline
curves were thus excluded from further analysis. The hyperbolic decline curve was also
excluded because the b value was negative (0.034866), and gives an undefined value
for q. The production data from the Chinshui gas field exhibits an exponential decline.
The set of parameters obtained for the exponential decline curve in regression analysis
was: qi = 126,976 kscm/hy and D = 0.03238 1/hy (Figure 2). The time rate equation
can be expressed as follows:
qt = 126976.6e0.03238t

(14)

In the above equation, the initial production rate (at t = 0), which corresponds to
December 1973, is about 126,977 kscm/hy. To simplify the future prediction, the initial
time was set at the time of the last data point in December 1998. The decline curve
equation can be rewritten as follows:
qt = 25146.97e0.03238t

(15)

Figure 2. Field data with best-fitted exponential decline curve for the Chinshui gas field.

Uncertainty Analysis of Production Decline Data

469

The initial time (t = 0) in Eq. (15) corresponds to December 1998. The initial production
rate (qi ) is about 25,147 kscm/hy.
If the economic limit production rate of 5,000 kscm/hy is used in the production
life equation, Eq. (6), with r = 0, then the production life of the Chinshui gas field
is 24.93 years (i.e., 49.86 half years (hy)), from 1999 to 2024). Using Eq. (12) with
r = 0, the reserves or cumulative production (declining from qi = 25,146 kscm/hy to
qa = 5,000 kscm/hy) is estimated at 6.22 105 kscm. Similarly, if the economic limit
production rate is assumed to be 3000 kscm/hy, the estimated reserve is 6.83 105 kscm
and the production life of 32.8 years. The smaller the economic limit production rate,
the larger are the reserves and production life estimates. In this case study, an economic
limit production rate of 5,000 kscm/hy is used.
Probabilistic Decline Curve Analysis
In the probabilistic analysis, the probability distribution of parameters in rate-time equation is assumed and given. From the above deterministic analysis for the Chinshui gas
field, the basic parameters of exponential time-rate equation are: qi = 25,146.9718
kscm/hy, D = 0.032384 1/hy. These values were used as the most likely values in a
triangle distribution. The variation in these parameters is assumed to be 10%. The
production life and reserves can be calculated using the Monte Carlo simulation from
Eq. (6), with r = 0, and Eq. (12), with r = 0, respectively. The results presented in
Figure 3 show that gas reserves for the Chinshui gas field are in the range of 546,978
kscm (P90 ) and 703,800 kscm (P10 ) (Figure 3). The mean reserve (P50 ) is 624,168 kscm,
and the estimate reserves with the highest probability are 644,036 kscm. The Chinshui gas field has the capability to produce gas for another 45.5 to 54.7 half years (or
22.7 to 27.4 years) (Figure 4). The estimated production life with highest probability is
49.9 half years (or 25 years) (Figure 4). The above calculations assume that the variation in these parameters is 10%. If both the qi and D parameters vary 5%, 15%, and
20%, then the range for the reserves (Figure 5) and production life (Figure 6) increase
with the increase in the varying range of these parameters. The percent of variation is
arbitrary.
In the above calculations, both the qi and D parameters vary in a range between
5% and 20%. In the prediction data, the initial production rate (qi = 25,146.97 kscm/hy)
is known and fixed. If the variation in the D value is in the range of 10%, then the
reserve estimate is between 575,133 kscm and 675,846 kscm, and the production life is
between 46.11 hy and 54.19 hy. Performing the simulation with variations of 5%, 15%,
and 20% for the D value, the reserves (Figure 7) and production life (Figure 8) increase
with increasing range of the parameters. Again, the percent of variation is arbitrary.
Uncertainty Analysis
Uncertainty analysis requires a residual function that can be derived from the difference
between the production rate from the rate-time equation and the actual production rate.
In terms of probability distribution, the residual function (or r-function) for the Chinshui
gas field is a normal distribution with a mean of zero and a standard deviation (qstd )
of 7,378.645 (Figure 9).
Equation (12) can be used to estimate production life with r being zero or nonzero. Using Eq. (12), the production life is 49.6 half years with r = 0. When Eq. (6),
with r being non-zero, is used, the estimated production life is in the range of 14 half

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Figure 3. Reserves estimated from probability analysis for the Chinshui field.

Figure 4. Production life estimated from probability analysis for the Chinshui gas field.

Uncertainty Analysis of Production Decline Data

471

Figure 5. Range of estimated reserves by varying the initial production rate and decline rate for
the Chinshui gas field.

Figure 6. Range of estimated production life by varying the initial production and decline rates
for the Chinshui gas field.

years (P90 ) to 81 half years (P10 ) with a mean of 44 half years (P50 ). The production
life result from uncertainty analysis shows that the production life distribution is not a
normal distribution and that the ranges of the production life are wide (Figure 10). The
fact that the calculated production life has a non-normal distribution and is unreasonably
wide is due to the log-function included in Eq. (6). Alternatively, the production life for
the Chinshui gas field is estimated by increasing time, t, in Eq. (2) until the calculated
production rate declines to the economic production limit rate. The production life is
49.6 half years.
In probabilistic reserves estimation using uncertainty analysis, production rates, declining from qi (= 25,147 kscm/hy) to qa (= 5,000 kscm/hy) for each half year interval
between the initial time to production life, can be calculated using Eq. (2) and/or Eq. (12)

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Figure 7. Range of estimated reserves by varying the decline rate for the Chinshui gas field.

Figure 8. Range of estimated production life by varying the decline rate for the Chinshui gas field.

including an uncertainty or an r-function. In the summation method, using Eq. (2), the
summation of the production rate per half year in half year intervals indicates probabilistic
reserves in the range of 561,074 kscm (P90 ) and 694,920 kscm (P10 ) with a mean of
628,038 kscm (Figure 11). The ranges of estimated reserves are 10.6% of the mean
reserves.
In the integration method, the reserves of the Chinshui gas field can also be calculated
using Eq. (12). The probabilistic reserves estimation can then be obtained by Monte Carlo

Uncertainty Analysis of Production Decline Data

473

Figure 9. Probability distribution of residuals for the Chinshui field.

Figure 10. Probability of production life by using derived equation in uncertainty analysis for the
Chinshui field.

simulation. In this case, the proven gas reserves (P90 ) are estimated to be 547,229 kscm,
the probable gas reserves (P50 ) are 613,401 kscm and the possible gas reserves (P10 ) are
679,423 kscm (Figure 12). The range of probabilistic reserves (about 10.6% of the mean
reserve) estimated from Eq. (12) is almost equal to that calculated from Eq. (2).
In the above uncertainty analysis, the residual function or uncertainty characteristic
is calculated from production data and used in the probabilistic reserves. In contrast, the
parameter variations are assumed to be arbitrary in probabilistic decline curve analysis.

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Figure 11. Probability density function for the reserves estimated by using the summation method
in uncertainty analysis for the Chinshui gas field.

Figure 12. Probability density function for the reserves obtained by using the integration method
in uncertainty analysis for the Chinshui gas field.

Uncertainty Analysis of Production Decline Data

475

Figure 13. Production data for the Tiechenshan gas field in Taiwan.

Case Study of the Tiechenshan Gas Field

The Tiechenshan gas field in Taiwan has been producing since June of 1965. Data for
the production rate was collected from June of 1965 to December of 1998 in half-year
intervals (hy) (Figure 13). The Tiechenshan gas field production rate reached a peak by
June of 1977. Decline in the production after June of 1977 was adopted for performing
the production analysis.
Deterministic Decline Curve Analysis
Regression analysis was used to fit the three types of time-rate equations, in order to
evaluate the Tiechenshan gas field production data. The objective function values from the
harmonic decline curve [7.13 l010 (kscm/hy)2 ] and exponential decline curve [4.93
101 ((kscm/hy)2 )] were greater than the residual squares from the hyperbolic decline
curves [4.05 109 (kscm/hy)2 ] (Figure 14). The production data for the Tiechenshan
gas field is of the hyperbolic decline type. The parameters obtained for the hyperbolic
decline curve were: qi = 744,967 kscm/hy, b = 0.32637 and D = 0.058259 1/hy. The
time rate equation is as follows:
qt = 744967[1 + (0.32637)(0.058259t)]1/0.32637

(16)

In the above equation, the initial production rate (at t = 0), which corresponds to
June of 1977 is 744,967 kscm/hy. The production rate at the end of the production data
(December 1998) is 119,480 kscm/hy. In estimating the reserves, Eq. (11) should be
applied twice because of the characteristics of the equation and is explained as follows.
First, Eq. (11) is used to estimate the cumulative production (Np1 ) from qi (= 744,967
kscm/hy on December 1977) declining to the economic production rate limit of 30,000
kscm/hy. Next, Eq. (11) is used again to estimate the cumulative production (NP 2 ) from

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Figure 14. Field data with best-fitted hyperbolic decline curve for the Tiechenshan gas field.

qi (= 744,967 kscm/hy on December 1977) declining to the end of the production

(production rate = 119,408 kscm/hy on December 1998). The future economic cumulative
production (reserves) is the difference between NP 1 and NP 2 . The same procedure should
be followed to estimate the production life. The future production life for the Tiechenshan
gas field is 54.45 half years from June 1999 to June 2026. Thus, the reserves were
estimated, using Eq. (11) with r = 0, at 3.35 106 kscm.
Probabilistic Decline Curve Analysis
From the above deterministic analysis for the Tiechenshan gas field, the basic parameters of hyperbolic time-rate equation are: qi = 744,967 kscm/hy, b = 0.32637 and
D = 0.058259 1/hy. These values are used as the most likely values in the triangular distribution. Variation in parameters is assumed to be 10%. The production life
and reserves are then calculated using a Monte Carlo simulation using Eq. (5) with
r = 0 and Eq. (11) with r = 0, respectively. The results show that the gas reserves
(Figure 15) for the Tiechenshan gas field range from 771,348 kscm (P90 ) to 5,952,543
kscm (P10 ). As shown in Figure 15, the mean reserves (P50 ) are 3,365,106 kscm. The
Tiechenshan gas field has the capability to produce gas for another 20.93 to 34.4 years
(Figure 16). The production life with highest probability is 27.3 years (Figure 16). If
both the qi and D parameters vary by 5%, 15%, and 20%, then the range of reserves
(Figure 17) and production life (Figure 18) increase with increasing variance range of the
parameters.

Uncertainty Analysis of Production Decline Data

477

Figure 15. Estimated reserves using probability analysis for the Tiechenshan gas field.

Figure 16. Estimated production life using probability analysis for the Tiechenshan gas field.

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Figure 17. Range of reserves estimated by varying the initial production rate, exponent parameter,
and decline rate for the Tiechenshan gas field.

Figure 18. Range of estimated production life by varying the initial production rate, exponent
parameter, and production decline rate for the Tiechenshan gas field.

In the above calculations, the qi , b, and D parameters vary from 5% to 20%. The
initial production rate (qi = 744,967 kscm/hy) is known (fixed). If only the D value
varies and the simulation is performed with variations of 5%, 15%, and 20%, then the
range of reserves (Figure 19) and production life (Figure 20) increase with increasing
range of variance in the parameters.
Uncertainty Analysis
The residual function (r-function) for the Tiechenshan gas field is a normal distribution
with a mean of zero and a standard deviation of 30,710 (Figure 21).
Equation (11) can be used to estimate production life with r being zero or non-zero.
The production life is 98.9 half years from Eq. (11), with r = 0. When Eq. (11) has a

Uncertainty Analysis of Production Decline Data

479

Figure 19. Range of estimated reserves by varying the production decline rate for the Tiechenshan
gas field.

Figure 20. Range of estimated production life by varying the production decline rate for the
Tiechenshan gas field.

non-zero value, the estimated production life ranges from 13.3 half years (P90 ) to 123.7
half years (P10 ), with a mean of 63.0 half years (P50 ). The distribution of production
life, obtained using the uncertainty analysis, is not normal and the production life range
is wide (Figure 22). The reason that the calculated production life has a non-normal
distribution, which is unreasonably wide, and is due to the inclusion of log-function in
Eq. (11). Alternatively, the production life for the Tiechenshan gas field is estimated
by increasing the time, t, in the time-rate Eq. (1), until the calculated production rate
declines to the economic limit. The production life is 98.9 half years.
In estimating the probabilistic reserves using uncertainty analysis, the production
rates declined from 119,408 kscm/hy at the end of production (December 1998) to qa

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Figure 21. Probability distribution of residuals for the Tiechenshan gas field.

Figure 22. Probability distribution of estimated production life using the derived equation in uncertainty analysis for the Tiechenshan field.

(= 30,000 kscm/hy, for each half-year interval during the production life). The probabilistic reserves can be calculated using Eq. (1) and/or Eq. (11), including an uncertainty
or r-function. By summation method, using Eq. (1), the summation of the production
rate per half year in half-year intervals is the probabilistic reserves, which are in the
range of 3,003,424 kscm (P90 ) and 3,585,426 kscm (P10 ) with mean of 3,291,043 kscm
(Figure 23). The range of estimated reserves is 8.9% of mean reserves.

Uncertainty Analysis of Production Decline Data

481

Figure 23. Probability density function for the reserves estimated using the summation method in
uncertainty analysis for the Tiechenshan gas field.

Using the integration method, the reserves of the Tiechenshan gas field can also be
calculated using Eq. (11). The probabilistic reserves can be estimated by using Monte
Carlo simulation. In this case, the proven gas reserves (P90 ) are estimated to be 3,060,223
kscm, the probable gas reserves (P50 ) are 3,349,927 kscm, and the possible gas reserves
(P10 ) are 3,640,635 kscm (Figure 24). The range of probabilistic reserves (about 8.9%
of the mean reserves), estimated from Eq. (11), is almost equal to the range calculated
from Eq. (1).

Summary and Conclusions

The decline rate-time equations, including the uncertainty characteristics of the production
data, in uncertainty analysis have been derived. The uncertainty analysis was made using
two case studies of gas fields in Taiwan. The findings can be summarized as follows:
(1) Equations for the summation and integration methods in the uncertainty analysis
were derived and used to estimate the probabilistic reserves and probabilistic
production life.
(2) Uncertainty characteristics, or residual function, were derived from the production data and used in estimating the probabilistic reserves and probabilistic production life. There is no need for an arbitrary guess for the parameters to be
varied as in the conventional probabilistic reserves estimations.
(3) Uncertainty analysis was made using two case studies of gas fields in Taiwan
(Chinshui and Tiechenshan). The production data from the Chinshui gas field
shows an exponential decline, whereas the Tiechenshan gas field exhibits a hyperbolic decline.

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Figure 24. Probability density function for the reserves estimated using the integration method in
uncertainty analysis for the Tiechenshan gas field.

(4) The range in reserves (difference between proven reserves and mean reserves),
estimated using both summation and integration methods for the Chinshui gas
field, was 10.6% of mean reserves value. In the Tiechenshan gas field, this range
was 8.9%.
(5) The methods presented in this study seem to be better than the conventional
probability method in which the range of reserves depends on ranges assumed
for the parameters used.

Nomenclature
b
D
Di
GP
Np(exp)
Np(har)
Np(hyp)
opc
qa
qi
qt (exp)
qt (har)
qt (hyp)

exponent, dimensionless
decline rate, 1/half year (or 1/hy)
initial decline rate, 1/half year
gas price, $/kscm
cumulative production for exponential decline, kscm
cumulative production for harmonic decline, kscm
cumulative production for hyperbolic decline, kscm
operation cost, $
economic limit production rate, kscm/hy
initial production rate, kscm/ half year
production rate (kscm/half year) at time t for exponential decline
production rate at time t for harmonic decline
production rate at time t for hyperbolic decline, kscm/half year

Uncertainty Analysis of Production Decline Data

r
t
ta(exp)
t(har)
t(hyp)
Tx

483

residual function or r-function

time, half year
production life of exponential decline, hy
production life of harmonic decline, hy
production life of hyperbolic decline, hy
tax, fraction

References
Capen, E. C. 2001. Probabilistic reserves! Here at last? SPE Reserv. Eval. & Engr. 4(5):387394.
Garb, F. A. 1985. Oil and gas reserves classification, estimation, and evaluation. J. Petrol. Techn.
37(4):373390.
Ikoku, C. U. 1984. Natural Gas Reservoir Engineering, New York: John Wiley & Sons, 503 pp.
Knoring, L. D., Chilingar, G. V., and Gorkunkel, M. V. 1999. Strategies for Optimizing Petroleum
Exploration, Houston, TX: Gulf Publ. Co., 323 pp.
SPE/WPC. 1996. Draft reserves definitions. J. Petrol. Techn. 48(8):694696.