Accepted Manuscript

Determining permeability cut-off values for net pay study of a low-permeability clastic
reservoir: A case study of the Dongying Sag, eastern China

Tian Yang, Yingchang Cao, Yanzhong Wang, Keyu Liu, Chen He, Shaomin Zhang

PII: S0920-4105(19)30269-4
DOI: https://doi.org/10.1016/j.petrol.2019.03.030
Reference: PETROL 5880

To appear in: Journal of Petroleum Science and Engineering

Received Date: 29 November 2018

Revised Date: 18 February 2019
Accepted Date: 9 March 2019

Please cite this article as: Yang, T., Cao, Y., Wang, Y., Liu, K., He, C., Zhang, S., Determining
permeability cut-off values for net pay study of a low-permeability clastic reservoir: A case study of
the Dongying Sag, eastern China, Journal of Petroleum Science and Engineering (2019), doi: https://
doi.org/10.1016/j.petrol.2019.03.030.

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 ACCEPTED MANUSCRIPT

Determining permeability cut-off values for net pay study of

a low-permeability clastic reservoir: a case study of the
Dongying Sag, Eastern China
Tian Yang 1, 2*, Yingchang Cao 3*, Yanzhong Wang 3, Keyu Liu 3, Chen He 4, Shaomin Zhang 3

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1. State Key Laboratory of Oil and Gas Reservoir Geology and Exploitation (Chengdu University of Technology), Institute of

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Sedimentary Geology, Chengdu 610059, China

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2. Shandong Provincial Key Laboratory of Depositional Mineralization & Sedimentary Minerals, Shandong University of

Science and Technology, Qingdao 266580, Shandong, China

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3. LABORATORY OF DEEP OIL AND GAS (China University of Petroleum (East China)), Qingdao 266580, P. R. China
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4. Zhong Sheng International Petro-Chemical Group Co., Ltd., Shengli Oil Field, Shandong Province, 257100
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Abstract: Net pay cut-off values are key parameters in the evaluation of both conventional and
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unconventional reservoirs. However, there is no widely accepted method for determining net pay cut-off values.
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The low permeability turbidite reservoirs in the middle part of the third member of the Shahejie Formation (Es3z)

in the Dongying Sag are taken as an example; the net pay permeability and porosity cut-off values are determined
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according to detailed core descriptions, thin section analyses, porosity and permeability test, mercury injection
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analyses, and well test data. Taking economic benefits into consideration, the concept of a net pay permeability
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cut-off value refers to the minimum permeability of a clastic reservoir that can produce hydrocarbons and meet

the minimum economic benefits under the availability of existing technologies. The proposed methodology of this

work is based on balancing the cost and income, and considers related parameters such as the cost of well drilling,

investment in surface construction, operational cost, oil price, and oil production. The net pay permeability cut-off

* Corresponding author.
E-mail address: tianyang9645@gmail.com (T. Yang), caoych@upc.edu.cn (Y. Cao).
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values of reservoirs with different thicknesses of development intervals are calculated based on the constraint of

the oil price at $50/bbl. Then, the net pay porosity cut-off values are calculated following the pore-throat structure

analyses. The proposed method and the net pay permeability and porosity cut-off values for the low permeability

reservoirs in this article are acceptable since fit for purpose principle and data available principle have been

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considered. Meanwhile, this method enables the dynamic evaluation of reservoirs at any burial depth.

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Keywords: Net-pay permeability cut-off; Economic limit initial rating of oil; Reservoir evaluation; Low

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permeability reservoir; Dongying Sag

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1 Introduction

Net pay is a key parameter in both conventional and unconventional reservoir evaluations (Worthington,
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2005, 2008, 2010, 2011, 2017; Masoudi et al., 2014; Worthington and Majid, 2014). The nature and role of net
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pay have been clarified on the basis of host-rock characteristics and how hydrocarbon accumulation is modelled
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(Worthington, 2010). The geological perception is that net pay refers to the portion of a rock that contains
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hydrocarbons, while the engineering perception is one of a rock that contains and produces hydrocarbons

(Worthington, 2005). To some extent, the term “net pay” could more appropriately be designated “net
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hydrocarbons” because economic decisions often extend beyond single well completions (Worthington, 2010).
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However, there is no general agreement on how net pay should be delineated. Hence, net pay has been

incorporated within integrated reservoir studies in different ways (Worthington, 2010; Mahbaz et al., 2011;

Masoudi et al., 2014). Generally, the concepts of net pay (good-quality, hydrocarbon-bearing reservoir rock), net

reservoir (good-quality reservoir rock), and net sand are intrinsically related. Net pay is quantified through the use

of petrophysical cutoffs, which include shale volume fraction (Vsh) cut-offs, porosity or permeability cut-offs,
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water saturation (Sw) cut-offs (Worthington, 2005, 2008, 2010, 2011; Worthington and Majid, 2014). Cut-offs are

the lower limit values of formation parameters that remove non-contributing intervals (Worthington, 2010).

Traditionally, a Vsh cut-off is used to identify net sand. A porosity or permeability cutoff is then applied to net

sand to delineate the net reservoir. Finally, a Sw cut-off is applied to the net reservoir to define net pay.

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History has demonstrated that there is no single universally applicable approach to the identification and

application of cut-offs (Worthington, 2008). In a literal sense, cut-offs may be viewed as limiting values of

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specific parameters (porosity, permeability, oil saturation, etc.) or groupings of parameters defining what is to be

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considered ‘pay’ in an economic sense (Mahbaz et al., 2011). There are numerous methods to calculate cut-offs,

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including production tests, empirical statistics, minimum effective pore-throat radius calculations,
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distribution-function curve analysis, oil-bearing occurrence analysis, irreducible water saturation tests, relative

permeability analysis, drilling-fluid invasion analysis, porosity-permeability crossplots, capacity simulation

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experiments, and comprehensive analysis (Hobson, 1954; Rockwood et al., 1957; Geng et al., 1999; Guo, 2004;
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Cao et al., 2009; Wang et al., 2009; 2010; Zhang et al., 2010; Wang et al., 2011; Bouffin and Jensen, 2010;
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Worthington, 2005, 2008, 2010, 2011, 2017; Masoudi et al., 2014; Worthington and Majid, 2014). It should be
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noted that cut-off values are not constant values and depend on the minimum expected permeability, viscosity and

economic factors (Mahbaz et al., 2011). The entire processes of cut-off selection should be driven by the available
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data and fit for purpose rather than by imported concepts (Worthington, 2005). Therefore, cut-offs should have a
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dynamic significance in both time and space (Worthington, 2011). The dynamic significance of cut-offs means

that the cut-off values are influenced by the characteristics of reservoirs, viscosity of flow, temperature and

pressure of a stratum, thickness of development intervals, effects of fractures, stage of depletion, existing

economic factors and so on (Geng et al., 1999; Guo et al., 2004; Xiang et al., 2005; Wang et al., 2009; Yu et al.,

2000; Reng et al., 2005; Li et al., 2009; Mahbaz et al., 2011; Worthington and Majid, 2014). As mentioned above,
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there is still no general procedure for identifying and applying cut-offs (Worthington and Cosentino, 2003). When

considering the dynamic significance of cut-offs, the burial depth of a reservoir and the oil price are also very

important factors to determine the cut-off values (Mahbaz et al., 2011; Worthington and Majid, 2014). Therefore,

empirical statistical methods that calculate the net pay cut-off values without considering the dynamic significance

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of cut-offs are inapplicable (Mahbaz et al., 2011; Worthington and Majid, 2014).

Porosity cut-off values have been widely applied in conventional reservoir evaluations (Worthington, 2005,

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2008, 2010, 2011; Masoudi et al., 2014). However, in low-permeability reservoirs, the relationship between the

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porosity and permeability is very different for reservoirs with different kinds of pore-throat structures. The same

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permeability may correspond to different porosities for reservoirs with different kinds of pore-throat structures
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(Nelson, 2009; Mahbaz et al., 2011). Therefore, the permeability, which determines the flow properties of a low

permeability reservoir, is a more accurate parameter than the porosity for evaluating the quality of a reservoir
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(Worthington, 2005; Mahbaz et al., 2011). However, cut-off values for the permeability are often selected using
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rules of thumb or practical experience (Worthington, 2005); therefore, a method that is more accurate, in
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accordance with the actual formation conditions, and considers the economic benefits to calculate the net pay
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permeability cut-offs of low permeability reservoirs is lacking.

2 Meaning of net pay permeability cut-offs

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The concept of net pay means that a reservoir contains and produces hydrocarbons (Worthington, 2005).
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Thus, Sw cut-offs are usually used to determine the limit of net pay. However, if economic decisions are the

original source of the net pay concept (Worthington, 2010), the reservoirs that contain and produce hydrocarbons

cannot guarantee economic benefits because the costs of well drilling, investments in surface construction,

operational costs, etc., are also very important factors that determine the final economic benefits (Yu et al., 2000;

Reng et al., 2005). In addition, the oil price is also a dominant factor for determining the final economic benefits.
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Even with a relatively low oil price, some reservoirs with a high oil saturation may not yeild economic benefits.

Therefore, the net pay should consider a balance between the cost and income. To guarantee economic benefits,

the cut-off values of oil production can be calculated with constraints of the oil price and total cost budget (Yu et

al., 2000; Reng et al., 2005). The cut-off value of oil production is the initial rating of oil under economic limits,

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which means the production of hydrocarbon can meet the minimum economic benefit under existing technologies

(Yu et al., 2000; Reng et al., 2005). After the initial ratings of oil under economic limits (i.e., the amount of oil to

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obtain economic benefits) are known, the permeability cut-off values calculated in this situation can guarantee

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economic benefits. These permeability cutoff values can be regarded as the net pay permeability cut-off values in

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this study.
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3 Datasets and geological settings

The Dongying Sag is a sub-tectonic unit located in the southeastern part of the Jiyang Depression in the
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Bohai Bay Basin, East China (Fig. 1a, b). The Dongying Sag is a Mesozoic-Cenozoic half-graben
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rift-downwarped basin with lacustrine facies directly deposited on Palaeozoic marine sediments (Cao et al., 2014;
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Wang et al., 2014). The Dongying Sag is bounded to the north by the Chenjiazhuang-Binxian Salient, to the south
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by the Luxi Uplift and Guangrao Salient, to the west by the Linfanjia and Gaoqing Salients, and to the east by the

Qingtuozi Salient (Fig. 1c). This NE-trending sag covers an area of 5,850 km2 with a faulted northern margin and
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a gentle southern margin. This sag is further subdivided into several secondary structural units, including the
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northern steep slope zone, the middle uplift belt, the Niuzhuang, Boxing, Lijin, and Minfeng subsags, and the

southern gentle slope zone (Zhang et al., 2014).

The Eocene Shahejie (Es) Formation is the main source rock and reservoir of the basin, and it consists of four

sub-members from the base to the top: Es4, Es3, Es2, and Es1 (Fig. 2). During the deposition of the middle part of

Es3 (Es3z), the basin subsided rapidly and reached its maximum depth as a result of intense tectonic movements.
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Vast amounts of detrital materials were transported into the basin and were preserved as source rocks and

turbidites in the trough zone (Wang et al., 2013; Yang et al., 2015) (Fig. 1). The low-permeability turbidite

reservoirs in the middle of the third member of the Shahejie Formation in the Dongying Sag have been

extensively researched based on sufficient testing data (Yang et al., 2016, 2018a, b). These reservoirs are

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dominated by fine-grained sandstones, and fractures are not common (Yang et al., 2018a). The effects of the

lithology and fractures on the net pay permeability cut-off values are relatively weak. Therefore, these low

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permeability turbidite reservoirs provide a very good case study to establish a method to calculate net pay

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permeability and porosity cut-off values for low permeability reservoirs under the constraints of different types of

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pore-throat structures, initial ratings of oil under economic limits, and thicknesses of development intervals. The
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available research dataset includes detailed data of core descriptions, thin section analyses, porosity and

permeability testing, mercury injection analyses, and well test data.

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4 Methodologies
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The workflow for calculating the net pay permeability and porosity cut-off values of low permeability
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reservoirs is shown in Fig. 3. Taking the cost budget and oil price into consideration, the relationships between the
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initial rating of oil under economic limits (qomin) and burial depth at different oil prices are established. Following

core and well log observations, which are comprehensive and contain well test data in addition to permeability
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and porosity test data, the relationship between the daily liquid production per unit thickness (qlave) and the
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corresponding average permeability can be established. The net pay permeability cut-off values of the reservoir

with different thicknesses of development intervals can be calculated, which will be clearly stated in section 4.3.

After the pore-throat structures analysis, the relationships between the permeabilities and porosities of reservoirs

with different pore-throat structure types will be summarized. Therefore, the net pay porosity cut-off values of

reservoirs with different pore-throat structure types can be calculated based on the relationship between the
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permeability and porosity.

4.1 Calculation of the initial rating of oil under economic limits

To calculate the initial rating of oil under economic limits, the properties of low permeability turbidite

reservoirs, the production cost, and the oil price are taken into consideration. The initial rating of oil under

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economic limits is calculated according to Formula (1) (Yu et al., 2000; Reng et al., 2005), which is designed

based on the cost and income balance principle, which means that the accumulated cost is equal to the

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accumulated income in the duration of the evaluation. The accumulated cost includes the cost of well drilling (K0),

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the investment in surface construction (Ib), and the operational cost of a single well (C0). At the same time, the

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coefficient of oil and water wells (β) should also be considered because water wells are only an expense and do
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not generate income. Therefore, the accumulated cost throughout the duration of the evaluation can be

summarized as the numerator of Formula (1). The accumulated income relies on the production of oil and the oil
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price (m). The commodity rate of oil (α0), time rate of annual production (τ0), annual composite decline rate (η),
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composite tax rate (γ), resources tax (n), and oil cost per ton (p) are important parameters used to determine the
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accumulated income. After removing the oil cost and resources tax, the net income is determined by the initial
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rating of oil (qomin). The key parameters are established and combined with the actual production and operational

situation of the oil field. Using the low permeability turbidite reservoirs in Es3z as an example, the key parameters
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for calculating the initial rating of oil under economic limits are given in Table 1. The initial rating of oil under
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economic limits is closely related to the oil price and drilling depth. At the same oil price, the initial rating of oil

increase with an increase in the drilling depth (Fig. 4). At the same drilling depth, the initial rating of oil under

economic limits decreases with an increase in the oil price (Fig. 4).
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Formula (1)

In Formula (1), the key parameters are defined as follows: qomin: initial rating of oil under economic limits,

ton/day; K0: drilling cost of a single well, $/meter; H: well depth, metre; Ib: investment of surface construction,

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million $; β: coefficient of oil and water wells, decimals; C0: operation cost of a single well, million $; i: increase

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rate of operating costs, decimals; t: evaluation duration, year; τ0: time rate of annual production, day; α0:

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commodity rate of oil, decimals; η: annual composite decline rate, decimals; m: oil price, $/ ton; γ: composite tax

rate, decimals; n: resources tax per ton oil, $/ ton; and p: oil cost per ton, $/ ton.

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4.2 Relationship between daily liquid production per unit thickness and the average permeability
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Taking the low permeability turbidite reservoirs in Es3z in the Dongying Sag as an example, a single layer
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well-test interval or multilayer well-test interval with a depth difference of less than 10 metres is selected based on
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parameters such as the reservoirs burial depth, daily liquid production, formation pressure, temperature, and
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quality of oil and water, which are obtaining from well test data. According to core observations and well logging

analyses, the total thickness of the reservoir in the well-test intervals can be calculated. Combined with the daily
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liquid production from well test data, the daily liquid production per unit thickness can be calculated (Table 2).
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The average permeability of the well-test intervals can be calculated using permeability testing data after
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removing abnormal permeability data caused by tight carbonate cementation, high mud matrix contents, and

fracturess (Table 2). Driven by the available burial depth data of the well test intervals, the well test reservoirs can

be subdivided into four intervals from shallow to deep: 2700-2900 m, 2900-3100 m, 3100-3300 m, and 3300-3500

m. The fitting function for the daily liquid production per unit thickness and the average permeability of different

burial depth intervals can be determined (Fig. 5). There are logarithmic positive correlations between the daily
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liquid production per unit thickness and the average permeability in different burial intervals (Fig. 5). The daily

liquid production per unit thickness increases with an increase in the average permeability, but the amplitude of

this increasing trend decreases gradually. This phenomenon indicates that the liquid production of reservoirs may

be more strongly influenced by the permeability when the permeability of the reservoir is relatively low. The

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correlation curves intersect with the abscissa (Fig. 5), which means that reservoirs cannot produce liquid when the

permeability is very low. The intersect moves to the left when the burial depth increases (Fig. 5), because the

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pressure of the reservoirs becomes stronger with an increase in the burial depth; thus, the reservoir’s ability to

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produce liquid with the same permeability increases as well (Guo, 2004).

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4.3 Net pay permeability cut-off values
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An oil price of $50/bbl is selected to calculate the initial rating of oil under the economic limits of reservoirs

at 2800 m (the middle burial depth of the reservoir ranges from 2700-2900 m), and it is determined to be 5.17
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tonne/days (Fig. 4, Table 3, a). Based on the actual thicknesses of the development intervals (i.e., 5 m, 10 m, 15 m,
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and 20 m), using reservoirs with an oil saturation of 100% as an example, the daily liquid production per unit
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thickness calculated from the well test data is 1.03 tonne/days/meter, 0.52 tonne/days/meter, 0.34
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tonne/days/meter, and 0.26 tonne/days/meter. The relationship between the daily liquid production per unit

thickness and the average permeability for reservoirs in the depth range from 2700- to 2900 m
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(Y=2.6516*ln(x)-4.5187, R2=0.90) was used to calculate the net pay permeability cut-off values of reservoirs with
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development interval thicknesses of 5 m, 10 m, 15 m, and 20 m; the corresponding cut-off values are 8.12 mD,

6.68 mD, 6.26 mD, 6.06 mD, respectively (Fig. 6, Table 3, a). The net pay permeability cut-off values at 3000 m,

3200 m, and 3400 m represent the middle burial depths for reservoirs with ranges of 2900-3100 m, 3100-3300 m,

and 3300-3500 m, respectively (Fig. 6, Table 3, b-d). The fitting function between the net pay permeability cut-off

values and burial depths with the same development interval thicknesses can be determined. Therefore, the net
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pay permeability cut-off values with a given development interval thicknesses are clear at any burial depth (Fig 6).

The net pay permeability cut-off values decrease as the burial depth increases because the pressures with a

reservoir become stronger with an increasing burial depth; therefore, the reservoir’s ability to produce liquid with

the same permeability increases as well. The net pay permeability cut-off values should be higher when the

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thicknesses of the development intervals are thinner at the same burial depth. When the thicknesses of the

development intervals are less than 10 m, the net pay permeability cut-off values are much bigger than those when

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the thickness of the development intervals are more than 10 m at the same burial depth.

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4.4 Net pay porosity cut-off values

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Using mercury injection data, the pore-throat structures are classified according to the ranges of the
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displacement pressure (Pd) and median capillary pressure (P50) (Wang et al., 2014; Yang et al., 2016). First, the

reservoirs are classified into six types according to the displacement pressure (Pd): IA (Pd≤0.05 MPa), IB (0.05-0.1
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MPa Pd), IIA (0.1-0.5 MPa Pd), IIB (0.5-2 MPa Pd), IIIA (2-5 MPa Pd), and IIIB (Pd >5 MPa). Second, each type is
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further divided into six units according to the median capillary pressure (P50): P50≤0.3 MPa, 0.3-1.5 MPa P50,
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1.5-5 MPa P50, 5-20 MPa P50, 20-40 MPa P50, and P50>40 MPa. If the P50 datum of a sample is not in accordance
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with the overall characteristics of the unit, then the sample is assigned to the lower unit (Wang et al., 2014; Yang

et al., 2016). According to the above principles, the low permeability turbidite reservoirs in Es3z in the Dongying
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Sag are subdivided into three broad types and six subtypes. Then, the relationship between the ratio of the
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permeability to the porosity (K/Φ) and the permeability (K) for each type of reservoir was calculated (Fig. 7). The

ranges of the permeability and the ratio of the permeability to the porosity corresponding to various types of

reservoirs are summarized in Table 4. Reservoirs with different kinds of pore-throat structures have the same

power function relationship between K/Φ and K. This finding indicated that the permeability of low permeability

reservoir is controlled by the pore-throat structure. However, reservoirs with different kinds of pore-throat
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structures have different permeability ranges (Fig. 7).

According to the ranges of K/Φ and K, for low permeability reservoirs with different kinds of pore-throat

structures, the distribution of net pay permeability cut-off values is used to differentiate reservoirs with different

kinds of pore-throat structures. Then, the net pay porosity cut-offs values can be calculated using the power

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function relationships between K/Φ and K for different kinds of pore-throat structures (Fig. 8). The net pay

porosity cut-off values for low permeability clastic reservoirs decrease with an increase the burial depth. At the

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same burial depth, one net pay permeability cut-off value corresponds to different net pay porosity cut-off values

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for reservoirs with different kinds of pore-throat structures (Fig. 8b-d). Reservoirs with relatively poor pore-throat

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structures are characterized by high net pay porosity cut-off values (Fig. 8b-d).
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5 Results and discussion

The original concept of net pay refers to rocks that contain and produce hydrocarbons (Worthington, 2005).
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However, there are some reservoirs that exhibit hydrocarbon filling at relatively high porosities and permeabilities,
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but they become low permeability reservoirs or tight reservoirs following complex diagenetic evolution as the
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burial depth increases (Yang et al., 2016). These reservoirs contain hydrocarbons but have difficulties producing
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hydrocarbons (Liu et al., 2012). For reservoirs exhibiting hydrocarbon filling after experiencing complex

diagenetic evolution, reservoirs containing hydrocarbons can produce hydrocarbons. Therefore, whether rocks
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contain or produce hydrocarbons may not be a good index for evaluating the quality of a low permeability
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reservoir. If economic benefits are taken into consideration, the amount of hydrocarbons produced represents a

better index. As a result, the cut-off values used to determine the economic benefits should be closely related to

the hydrocarbon production threshold value, which is the initial rating of oil under economic limits (Yu et al.,

2000; Reng et al., 2005). Thus, the concept of net pay and the cut-off values used to calibrate net pay should be

constrained by the initial rating of oil under economic limits. Low permeability reservoirs with different origins
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may be appropriately evaluated using the net pay permeability and porosity cut-off values based on the initial

rating of oil under economic limits.

There are still some shortcomings of this method for calculating the net pay permeability and porosity cut-off

values of low permeability reservoirs in this article; although fit for purpose and data available principles have

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been obeyed in calculating cut-off values. First, we assume that the reservoirs have an oil saturation of 100% as an

example to calculate the net pay permeability and porosity cut-off values because of the lack of oil saturation data.

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In a real situation, the oil saturation may be much smaller than 100%, which means greater daily liquid

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productions are needed to yield economic benefits. Therefore, the real net pay permeability and porosity cut-off

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values may be larger than the outcomes of this article. More accurate net pay permeability and porosity cut-off
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values will be possible when accurate oil saturation values are available. Second, the relationship between qlave

and the average permeability are summarized for every 200 m interval because of the limited well test data (Fig.
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5). Formation pressure may be different for reservoirs with different burial depths (Mahhaz et al., 2011), the
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relationship between qlave and the average permeability may also be different for different formation pressures
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(Worthington, 2005, 2017). Therefore, the relationship between qlave and the average permeability may be more
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accurate if the thicknesses of intervals are less than 200 m, which may be feasible when sufficient data are

available. As a result, the corresponding outcomes of the net pay permeability and porosity cut-off values will be
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more accurate. Third, the permeability values of the selected samples from testing are for the ambient-condition
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air permeability, which can be orders of magnitude greater than the true effective permeability, specifically the

permeability to hydrocarbons at irreducible water saturation (Worthington, 2010). In addition, the subsurface

effective permeability is smaller than the ambient-condition air permeability (Worthington, 2017). Therefore, the

ambient-condition air permeability values are different from the actual permeability values under burial conditions.

However, correction factors can be investigated to convert the conventional air permeability into the
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pseudo-effective permeability (Worthington, 2010). At the same time, it is possible to establish a stress-correction

factor for the ambient-condition core permeability that can be modified as perceptions of the effective reservoir

stress mature (Worthington, 2017). Therefore, the ambient-condition air permeability values can yield very

important information about the subsurface effective permeability. Fourth, the well test data in the study area

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come from vertical wells. Therefore, the related net pay permeability and porosity cut-off values are suitable only

for vertical well evaluations. Horizontal well net pay permeability and porosity cut-off values should not be

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handled in the same way (Worthington, 2010). Finally, there are some other factors, such as the fluid pressure

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gradient, wettability, and viscous/capillary force ratio, which may affect the net pay permeability and porosity

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cut-off values; however, these other factors are not taken into consideration in this study. However, the proposed
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method and the resulting net pay permeability and porosity cut-off values of low permeability reservoirs in this

article are acceptable, since fit for purpose and data available principles have been considered.
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6 Conclusions
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The concept of a net pay permeability cut-off value refers to the minimum permeability of a clastic reservoir
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that can produce hydrocarbons and meet the minimum economic benefits under the availability of existing
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technologies.

The workflow for calculating the net pay permeability and porosity cut-off values is as follows: (1) establish
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the relationships between the initial rating of oil under economic limits (qomin) and the burial depth at different oil
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prices, (2) build relationships between the daily liquid production per unit thickness (qlave) and the corresponding

average permeability, (3) calculate the net pay permeability cut-off values of the reservoir with different

thicknesses of development intervals, and (4) calculate the net pay porosity cut-off values following a pore-throat

structure analysis.

In addition to the lack of oil saturation data, the accurate relationship between the daily liquid production per
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unit thickness and the average permeability and the relationship between the ambient-condition air permeability

values and actual permeability values under burial conditions remain unclear for the low permeability reservoirs

in the study area. However, the proposed method and the results of the net pay permeability and porosity cut-off

values of the low permeability reservoirs in this article are acceptable, since fit for purpose and data available

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principles have been considered.

Acknowledgements

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The research was co-funded by the National Natural Science Foundation of China (Grant No. 41802127,

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U1762217), the National Science and Technology Special Grant (Grant No.2016ZX05006-003), the Natural

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Science Foundation of Shangdong Province (Grant No. ZR2018BD010), the China Postdoctoral Science
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Foundation (Grant No. 2017M622314), and the Qingdao Postdoctoral Researcher Applied Research Project

(Grant No. BY20170202). The Shengli Oilfield Company, SINOPEC is thanked for providing all the core samples
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and some of the geological data from the Dongying Sag. Three anonymous reviewers and executive editor
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Subhash Ayirala are thanked for their thoughtful and constructive comments.
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Tables
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Table 1. Data for calculating the initial rating of oil under the economic limits of the low-permeability turbidite

reservoirs in Es3z in the Dongying Sag (Based on Geological Scientific Research Institute of Shengli Oilfield Co.
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Ltd)
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Table 2. Data of the daily liquid production per unit thickness and average permeability of the low-permeability

turbidite reservoirs in Es3z in the Dongying Sag. qlave: daily liquid production per unit thickness.

Table 3. Data for calculating the net pay permeability cut-off values with different thicknesses of development
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intervals of the turbidite reservoirs in Es3z in the Dongying Sag (oil price $50 /bbl). (a) Burial depth ranges

from 2700- to 2900 m; (b) burial depth ranges from 2900- to 3100 m; (c) burial depth ranges from 3100- to

3300 m; (d) burial depth ranges from 3300- to 3500 m. Note: H0: thickness of development interval; LH0:

daily liquid production per unit thickness; qomin: initial rating of oil under economic limits; Kcuttoff: net pay

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permeability cut-off values.

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Table 4. Range of K and K/Φ of different pore structures of low permeability turbidite reservoirs in Es3z in the

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Dongying Sag. K: permeability; Φ: porosity

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Figure Captions
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Fig. 1. (a) The position of Bohai Bay Basin in China. (b) Location map showing the six major subbasins of the
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Bohai Bay Basin (c) Structural map of Dongying Sag. The area in the green line is the study area (After Liu
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et al., 2014). N-S cross-section (A’-A) of the Dongying Sag showing the various tectonic-structural zones and
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key stratigraphic internals.

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Fig. 2. Generalized Cenozoic Quaternary stratigraphy of the Dongying Sag, showing the tectonic and sedimentary
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evolutionary stages and the major petroleum system elements.

Fig. 3. Workflow for the net pay permeability and porosity cut-off values analyses. K0: the cost of well drilling; Ib:

investment in surface construction; C0: operational cost; K: permeability; Φ: porosity; qomin: initial rating of

oil under economic limits; qlave: daily liquid production per unit thickness.
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Fig. 4. Relationship between the initial rating of oil under economic limits and drilling depth at different oil prices

in the low permeability turbidite reservoirs in Es3z in the Dongying Sag.

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Fig. 5. Relationship between the daily liquid production per unit thickness and average permeability of the low

permeability turbidite reservoirs in Es3z in the Dongying Sag.

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Fig. 6. Relationship between the net-pay permeability cut-off values and burial depth with different development

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interval thicknesses in the low permeability turbidite reservoirs in Es3z in the Dongying Sag.
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Fig. 7. Pore-throat structure types and their porosity-permeability relationships for the low permeability turbidite
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reservoirs in Es3z in the Dongying Sag.

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Fig. 8. Net pay porosity cut-off values of different pore-throat structures with different thicknesses of development
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intervals for the low permeability turbidite reservoirs in Es3z in the Dongying Sag. Kcuttoff: net pay

permeability cut-off value; Φcuttoff: net pay porosity cut-off value.

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Table 1 Data for calculating the initial rating of oil under economic limits of low permeability

turbidite reservoirs in Es3z in the Dongying Sag (Based on Geological Scientific Research

Institute of Shengli Oilfield Co. Ltd)

Drilling cost of Investment of surface Operation cost of The annual Evaluation Barrel
single well construction (million the single well composite Time rate duration conversion
($/meter) $) (million $) decline rate (year) coefficient

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233.87 9.68 13.27 0.1 0.92 6 7.3
Coefficient of oil Increase rate of Resources tax of per Oil cost of per Commodit Composite
and water wells operating costs ton oil ($ /ton) ton ($ /ton) y rate tax rate

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1 0.05 1.94 111.85 0.98 0.12

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Table 2 Date of daily liquid production of per unit thickness and average permeability of low

permeability turbidite reservoir in Es3z in the Dongying Sag. qlave: daily liquid production of per

unit thickness. Note: t/d- tonne/days; t/d/m- tonne/days/meter.

Bottom Numb Daily

Top depth of Average Thick
Form depth of er of liquid Oil testing
Well well test permeability ness/ qlave /t/d/m
ation well test layers/ producti conclusion
interval /m / mD m

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interval /m Mpa on /t/d

He 4 Es3z 2780.4 2787.8 12.32 3 7.4 13.30 1.80 oil layer

Shi 114 Es3z 2731.8 2735.9 23.91 2 4.1 19.70 4.80 oil layer

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He 158 Es3z 2770.3 2775 5.97 2 4.7 4.76 1.01 water layer
He 130 Es3z 2779.6 2785.5 10.52 2 5.9 10.10 1.71 oil layer

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Liang 49 Es3z 2836 2839 297.83 1 3 35.40 11.80 oil layer
He Xie171 Es3z 2842.5 2852.1 40.11 2 9.6 33.60 3.50 oil layer
He 157 Es3z 2860.7 2862.6 40.79 1 1.9 6.93 3.65 oil layer

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Liang 81 Es3z 2862.6 2867.9 5.63 1 5.3 0.88 0.17 dry layer
Niu 48 Es3z 2879.2 2881.2 17.55 1 2 7.70 3.85 water layer
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He 140 Es3z 2975.5 2979 101.18 1 3.5 33.00 9.43 oil layer
He 155 Es3z 3003.8 3009.6 4.67 2 5.8 10.40 1.79 oil layer
He 159 Es3z 3045.2 3051.4 10.64 1 6.2 6.39 1.03 oil layer
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Shi 130 Es3z 3049.5 3054 17.58 2 4.5 5.37 1.19 oil-water layer
Shi 128 Es3z 3055.1 3060 5.19 1 4.9 3.40 0.69 oil-water layer
He 2 Es3z 3075.2 3080 22.10 1 4.8 22.50 4.69 oil-water layer
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Shi 11 Es3z 3128.4 3135.4 4.23 3 7 3.04 0.43 oil-water layer

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He 149 Es3z 3138 3143.4 4.07 3 5.4 0.64 0.12 oil layer
He 143 Es3z 3158.6 3165.4 40.04 3 6.8 22.21 3.27 oil layer
Shi 133 Es3z 3162.4 3170 4.39 2 7.6 14.14 1.86 oil-water layer
He 139 Es3z 3227.6 3232 10.37 1 4.4 14.19 3.23 oil-water layer
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He 156 Es3z 3243.8 3249.5 2.36 2 5.7 0.18 0.03 dry layer
Niu 107 Es3z 3272.2 3281.1 3.37 3 8.9 9.20 1.03 oil layer
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Niu 11 Es3z 3314 3320 0.71 2 6 1.77 0.30 oil-water layer

He 162 Es3z 3296.3 3300 26.01 1 3.7 9.20 2.49 water layer
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Niu 89 Es3z 3298.8 3304.1 1.05 1 5.3 2.92 0.55
water layer
Shi 117 Es3z 3301 3308.3 6.20 2 7.3 5.55 0.76 oil layer
Shi 3 Es3z 3345.4 3353 0.52 1 7.6 0.45 0.06 dry layer
Shi 4 Es3z 3406 3410 2.29 2 4 8.50 2.13 oil-water layer
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Table 3 Data for calculating the net-pay permeability cutoff values with different thickness of

development intervals of turbidite reservoirs in Es3z in the Dongying Sag (oil price 50 $/bbl). (a)

burial depth ranges from 2700-2900 m; (b) burial depth ranges from 2900-3100 m; (c) burial

depth ranges from 3100-3300 m; (d) burial depth ranges from 3300-3500 m. Note: H0: thickness

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of development intervals; LH0: daily liquid production of per unit thickness; qomin: initial rating of

oil under economic limits; Kcuttoff: net-pay permeability cutoff values; t/d: tonne/days; t/d/m:

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Table 4 Range of K and K/Φ of different pore structures of low permeability turbidite reservoirs in

Es3z in the Dongying sag. K: permeability; Φ: porosity

Type of pore-throat structure K/mD K/Φ Pd, MPa P50, MPa

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ⅠA >30.6 >1.52 0.02-0.05 0.26-0.61

ⅠB 13.9-183.34 0.68-7.85 0.06-1 0.16-1.26

0.15-0.5 0.48-4.41

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ⅡA 0.15-34.3 0.016-1.54

ⅡB 0.037-1.95 0.0056-0.12 0.15-2 2.84-22.35

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ⅢA 0.013-0.96 0.0027-0.058 0.8-4 17.36-74.12

ⅢB <0.11 <0.011 3-8 47.8-73.53

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Highlights
The concept of net-pay permeability cutoff in low permeability reservoirs.

The determination method of net-pay permeability cutoff values.

The determination method of net-pay porosity cutoff values.

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