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Ali F.

Mangi Altaee

Lesson Outcomes
To explain the reserve estimation by DCA.
To describe the three types of decline curves
To apply the decline curve analysis for reserve

estimation

RESERVES ESTIMATION
"reserves" means different things to different people.
To the banker
the amount of capital retained to meet probable future
demands.
To the oil and gas operator
the volumes of crude oil, natural gas, and associated products that
can be recovered profitably in the future from subsurface reservoirs.

Reserves (SPE & World of Petroleum Congress 1987)


those quantities of petroleum which are anticipated to be commercially
recovered & marketable from known accumulations from a given date forward.

Who are the people in the industry interested to know about


reserves?

companies and individuals responsible for E&P and


operation of oil and gas properties
buyers and sellers of oil and gas properties

banks and other financial institutions involved in the


financing exploration, development, or purchase of oil
and gas properties
agencies with regulatory or taxation authority over oil
and gas operators
investors in oil and gas companies

Why are we concerned about reserve estimation?


potential reserves on undrilled prospects

proved, probable, and possible reserves on prospects being


developed
sizing and design of equipment
opportunities for additional profit from well stimulation
Oil and gas reserves form an oil companys main assets!
It is very important to quantify forms of reserves.
Quantifying of reserves is a complex problem!
limited data
varying interpretation

Reserve estimation
It is an on-going activity during exploration, development
planning, and during production.

Classification of Reserves
Proven reserves

discovered reserves that can be estimated with reasonable


certainty to be recoverable under current economic conditions,
technical conditions and government regulations.
Unproven reserves
those reserves that are based on data similar to that used in the
estimation of proven reserves but technical, contractual, economic
or regulatory uncertainties prevent these reserves from being
classified as proven.

Proven reserves:
1.

Developed reserves are expected to be recovered from existing


wells

2.

Undeveloped reserves are to be recovered from new wells in


undrilled acreage, deepening wells to different reservoirs

Unproven reserves:
1.

Probable reserves are those that have a reasonable probability of


production with technology and profitablity close to those exist today

2.

Possible reserves are those that are not yet discovered, but whose
existence is presumed with reasonable degree of probability.

ULTIMATE RESERVES = proven + probable + possible.

Considerations for proven reserve:


Where significant data are available, particularly fluid production and reservoir
pressure data, and the reservoir drive is known.
Where production and reservoir data are limited but the reservoir is analogous to
reservoirs in the immediate vicinity and same geologic horizon.
Where such data are of sufficient quantity and quality to have established the
reservoir drive mechanism
Where production and reservoir data are limited, but the estimate is supported by
a calculation of the hydrocarbons in place by the volumetric method.
Considerations for probable or possible reserve:
Where significant production data are available, but the reservoir drive
mechanism is uncertain or the magnitude of the reservoir drive is uncertain.

Where production and reservoir data are limited and there are no analogus
reservoirs in the immediate vicinity.
Where production and reservoir data are limited and the estimate is not
supported by volumetric determinations.

Reserve status categories:

1.

Developed reserves are reserves expected to be


recovered from existing wells including reserves behind
pipe.

2.

Producing reserves are reserves to be recovered from


completion intervals open at the time of estimate and
producing to market.

3.

Nonproducing reserves include shut-in and behind-pipe


reserves.

Shut-in reserves are expected to be recovered


completion intervals open at the time of the estimate,
but which have not started producing, or were shut in
for market conditions of pipeline connections, or were
not capable of production for mechanical reasons and
the time when sales start is uncertain.

Behind-pipe reserves are expected to be recovered


from zones behind casing in existing wells, which will
require additional completion work or a future
recompletion prior to start of production.

Reserve status categories:


3. Undeveloped reserves are reserves expected to be
recovered

From new wells on undrilled acreage

From deepening existing wells to a different reservoir

Where a relatively large expenditure is required.

METHODS OF RESERVE ESTIMATION


1. Analogy

Employ no specific well information/ before a


well is drilled.

Least accurate

Dependent on proximity of similar reserves

2. Volumetric calculations

Well been drilled/ log analysis/ information


obtained/ drainage area

Subsurface contour map

METHODS OF RESERVE ESTIMATION


3. Material Balance equation

Enough information available/ FDP has been well


planned & executed

Reservoir is assumed homogeneous

4. Model study/ Reservoir simulation

apply MBE/ reservoir broken up into small parts or


discreet elements.

5. Decline Curve analysis methods

Extrapolation of the trend in performance/ most


widely used.

Decline Curve Analysis


Decline curve analysis is a graphical procedure used for analyzing

declining production rates and forecasting future performance of oil


and gas wells.
Decline curve analysis is a basic tool for estimating recoverable
reserves. Conventional or basic decline curve analysis can be used
only when the production history is long enough that a trend can be
identified.
Decline curves represent production from the reservoir under
"boundary dominated flow" conditions. This means that during the
early life of a well, while it is still in "transient flow" and the reservoir
boundaries have not been reached, decline curves should NOT be
expected to be applicable

Decline Curve Analysis


Decline curve analysis is not grounded in
fundamental theory but is based on empirical
observations of production decline.

Three types of decline curves have been identified;


exponential, hyperbolic, and harmonic
It is implicitly assumed, when using decline curve
analysis, the factors causing the historical decline
continue unchanged during the forecast period.
These factors include both reservoir conditions and
operating conditions.

Decline Curve Analysis


Reservoir Conditions

Operating Conditions

pressure depletion,

separator pressure,

number of producing wells,

tubing size,

drive mechanism,

choke setting,

reservoir characteristics,

workovers,

saturation changes, and

compression,

relative permeability

operating hours, and


artificial lift

Decline Curve Analysis


Good engineering practice demands that, whenever possible, decline
curve analysis should be reconciled with other indicators of reserves,
such as volumetric calculations, material balance, and recovery factors.
It should be noted that decline curve analysis results in an estimate of
Recoverable Hydrocarbons, and NOT in Hydrocarbons-in-Place.
Whereas the Hydrocarbons-in-Place are fixed by nature, the
Recoverable hydrocarbons are affected by the operating conditions. For
example a well producing from a reservoir containing 1BCF of gas-inplace may recover either 0.7 BCF or 0.9 BCF, depending on whether or
not there is a compressor connected at the wellhead.

Decline Curve Analysis


The following "decline curves" from production wells
are commonly used in the DCA:
Production rate vs. time.
Production rate vs. cumulative oil production.
Water cut vs. cumulative oil production.
Gas-oil ratio vs. cumulative production.
Percentage oil production vs. cumulative oil
production.
The (p/z) ratio vs. cumulative gas production.

Decline Curve Analysis

Different ways of data representation for decline curve analysis

Graphical representations of production data

The rate is constant during the early life of the well.


Thereafter, as the reservoir pressure is reduced, the rate begins to
decline.

Number of years
before abandonment

Cumulative production
at time of abandonment

Percentage of oil or water-cut vs Cumulative Production

In situations where the ultimate production rate is controlled by the


amount of water production.
When the value of the oil produced = the cost of disposing of the
produced water, we have reached the point of abandonment.

Reserves: the total production at the time of abandonment

OWC vs Cumulative Production


In bottom-water drive fields, we might plot the location of the oilwater contact in the formation against cumulative oil production.
As the OWC reaches the top of the sand, we know that we have
recovered the crude reserves for this well

Reserve: cumulative production when OWC reaches to the top of the


oil sand

Gp vs. Cumulative Oil Produced, Np

This plot is useful in cases where we know the expected total


gas to be produced.
This information provides an indication as to when the well will
reach its abandonment point.

Oil Reserve corresponds to the cut-off point of expected Gp

Average Reservoir pressure, Pavg, vs Time

Pressure build-up tests or observation well data are used for this plot.

Pavg, over the compressibility factor, z, vs. Gp

The relationship is from the application of the gas law to a fixed volume
container & Material Balance Equation (MBE).

The minimum producing rate is determined by the back-pressure


imposed on the well with or without surface compression.

When the value or this limiting back-pressure is converted to a


value or average reservoir pressure, Pavg, divided by z and plotted
against cumulative production,
An estimate of the ultimate predicable gas reserves may be
obtained

Production rate is by far the most popular dependent


It has the advantage of being readily available and easily
recorded.
The production rate curves normally show a fairly smoothly
declining trend over extended periods when no major changes in
operating procedures are made and no stimulation treatments are
applied.
The economic limit production rate
When a production rate at which a well or field begins to lose
money if production continues. If we incorporate this value into
our rate versus time and rate versus cumulative production
curves, we can extrapolate each trend line to this cut-off point.
We can determine the number of years the well or field will
produce profitably and the cumulative production at the time of
abandonment.

DECLINE CURVE ANALYSIS

Relates production time


1. Exponential Production Decline
2. Hyperbolic Production Decline

3. Harmonic Production Decline


Nearly all conventional decline-curve analysis is based on empirical
relationships of production rate versus time, given by Arps (1945) as
follows:

Where
qt = production rate at time t
qi = initial production rate stb/day
t = time, days
Di = initial decline rate, day 1
b = Arps decline-curve exponent

Exponential Decline

- the simplest type also known as constant percentage decline


q = qi e-Dt
where,
q producing rate at time t
qi initial rate, stb/day
D nominal decline fraction, 1/day
t time, days

Log Rate

Time
Production rate as a function of time: exponential decline

DECLINE CURVE ANALYSIS (contd)


1. Exponential decline

time not necessarily expressed in day. Any unit is


acceptable provided that other units must be consistent.
Conversion to other units can be done:
D1t1 = D2t2

note!!!: Dt term must be dimensionless


Re-expressing the Exponential Decline Curve in terms of
nominal decline fraction, D or time, t
q = qi e-Dt

(1)

D = -[ln(q/qi)]/t

(2)

t = -[ln(q/qi)]/D

(3)

Exponential decline

Cumulative production, Np is defined as the integral from 0


t of qdt
Np =

qdt

(4)

= (qi - q)/D

Equation (4) can also be used to determine the nominal


decline fraction, D from the given production data.
D = (qi - q)/ Np

(5)

Example 1

A well is expected to produce 70 Mstb recoverable reserves


and will be on exponential decline. The initial rate is estimated
to be 100 stb/day and the abandonment rate in this region is 5
stb/day. How long will the well last? Determine its annual
production.
Solution
q = qi e-Dt or

t = -[ln(q/qi)] /D

given: Np = 70,000 stb and q = 5 stb, therefore need to find D?


D = (qi - q)/ Np

= (100 - 5)stb per day / 70,000 stb = 0.001357 /day

D 1 t 1 = D 2t 2
D1 = [D2t2]/t1
= (0.001357 per day)(365 days)/(1 year)
= 0.4954 per year
t = -[ln(q/qi)] /D
= - [ln(5/100)]/ 0.4954

= 6.05 years

Annual Productions: exponential decline

Time
(year)

Rate
(stb/day)

0
1
2
3
4
5
6
6.05

100.00
60.93
37.13
22.62
13.78
8.40
5.12
4.99

100 [e(-0.4954 x 1)]

Production
Cumulative
Annual
(stb)
(stb)
0
0
28,789
28,789
46,332
17,542
57,021
10,689
63,534
6,513
67,502
3,969
69,920
2,418
70,013
92

[100-60.93]/ 0.001357

=28,789 - 0

2. Hyperbolic Decline

predicts a longer well life than is predicted by the exponential


decline model.
q =

qi
[1 + bDit]1/b

where,
b hyperbolic exponent . The value ranges from 0 to 1
Di initial nominal decline fraction, 1/time

Expressing in terms of other variables


Di = [(qi/q - 1]/(bt)

t = [(qi/q)b - 1] /(Dib)
integration of Di to obtain cumulative oil production
Di = {qib/[(1 - b) Np]} [qi1-b - q1-b]

integration of Di to obtain cumulative oil production

Np = {qib/[(1 - b) Di]} [qi1-b - q1-b]


or expressing initial decline fraction in terms of Np.

Di = {qib/[(1 - b) Np]} [qi1-b - q1-b]

Example 2

A well is expected to produce 70 Mstb recoverable reserves and


will be on hyperbolic decline with an exponent of 0.5. The initial
rate is estimated to be 100 stb/day and the abandonment rate in
this region is 5 stb/day. How long will the well last? Determine its
annual production.
Solution
Di = {qib/[(1 - b) Np]} [qi1-b - q1-b]
={1000.5/[(1 - 0.5)(70,000)]} {1001 - 0.5 - - 51 - 0.5}

= 0.002218/day
= 0.8097/year

t = [(qi/q)b - 1] /(Dib)
= [(100/5)0.5 - 1] / [(0.8097)(0.5)] = 8.576 year

Annual Productions: hyperbolic decline

Time
(year)
0
1
2
3
4
5
6
7
8
8.576

Rate
(stb/day)
100.00
50.67
30.54
20.39
14.58
10.94
8.51
6.80
5.57
5.00

Production
Cumulative Annual
(stb)
(stb)
0
0
25,983
25,983
40,341
14,358
49,450
9,109
55,743
6,293
60,352
4,609
63,872
3,520
66,649
2,777
68,896
2,247
70,005
1,109

=100/ [(1 + 0.5(0.002218)(1)(365)](-1/0.5)

[(1000.5)/((1- 0.5)0.002218)] [(100(1-0.5) - 50.67(10.5)]

3. Harmonic Decline

uncommon
predict longer time for recovery (i.e than exponential or
hyperbolic)
a special case of hyperbolic decline (exponent, b = 1)
Flow rate,

q =

qi
Time,

t =

(production)

[1 + Dit]

qi
q

-1

Di
qi
Cumulative Production,

Np =

(Integration of rate, q)

Initial Decline Fraction,

ln
Di

qi
Di =

ln
Np

qi
q

qi
q

Example 3

A well is expected to produce 70 Mstb recoverable reserves


and will be on harmonic decline. The initial rate is estimated to
be 100 stb/day and the abandonment rate in this region is 5
stb/day. How long will the well last? Determine its annual
production.

Solutionq
Di =

ln
Np

qi

t =

qi

-1

Di

= (100 / 70,00) ln (100/5)


= 0.004280 per day
= 1.56 per year

= [(100 / 5) - 1 ]/1.56
= 12.16 year

Annual Productions: harmonic decline

Time
(year)

Rate
(stb/day)

0
1
2
3
4
5
6
7
8
9
10
11
12
12.16

100.00
39.06
24.27
17.61
13.81
11.36
9.65
8.39
7.42
6.65
6.02
5.51
5.07
5.01

100/[1 + (1.56)(1)]

Production
Cumulative
Annual
(stb)
(stb)
0
0
21,963
21,963
33,081
11,118
40,583
7,502
46,253
5,670
50,812
4,559
54,625
3,813
57,902
3,277
60,776
2,874
63,334
2,559
65,640
2,306
67,739
2,099
69,664
1,926
69,958
294
=[100/0.00428] x ln(100/39.06)

Exponential, Hyperbolic and Harmonic Decline


100.0
90.0

exponential

80.0
70.0
60.0
50.0

hyperbolic

40.0
30.0

harmonic

20.0
10.0
0.0
0

10

11

12

13

14