In 1995, the Clayoquot Sound Scientific Panel submitted a report with 170 recommendations that fundamentally changed forest management as it had been traditionally practiced in the Sound. The Scientific Panel's report represents an early case study of ecosystem-based management (EBM) implementation. The recommendations were adopted by industry, government, and other participants with hopes that this would end the vociferous conflicts that had come to characterize Clayoquot Sound. British Columbia's Provincial government was committed to working with industry, First Nations, forest workers, and local communities to make the changes happen. However, the implementation was not accomplished easily or cheaply, and it was not an unmitigated success, at least from the perspective of industry. In addition to summarizing the history of the process, this article discusses outcomes of EBM implementation in Clayoquot Sound in terms of planning for environmental values before timber, using ecological rather than administrative boundaries, and engaging participants early and throughout the planning process. With emphasis on implications from an industry perspective, the authors recommend approaches that balance the strengths and challenges inherent in ecosystem-based management in British Columbia.

Techbits An SPE workshop titled “Application of the SPE Petroleum Resources Management System (Unconventional Resources),” was held 14 November, the day after the 2013 SPE Unconventional Resources Conference and Exhibition–Asia Pacific in Brisbane, Australia. The workshop attracted 83 participants from nine countries and speakers from the exploration and production sector, the finance sector, service companies, consultancies, and academia. The goal of the workshop was to highlight the challenges faced by the industry in estimating unconventional resources. The SPE-PRMS, published in March 2007, endeavors to encompass the full life cycle of all types of petroleum resources. Since 2007, the industry has experienced remarkable growth in unconventional resources. Unconventional plays challenge the fundamental conventional definitions of reserves and resources estimation, including the definitions required to demonstrate a discovery and commerciality. Within the investment and regulatory community, the growth and importance of unconventional reserves and resources have fueled discussion on the credibility and dependability of oil and gas estimates. To assist in the application of the SPE-PRMS, a second document called Guidelines for Application of the Petroleum Resources Management System was published by SPE in 2011. Based on discussions I have noted in the industry, it seems there is a need for further clarification in the interpretation and application of the PRMS. The workshop gave an opportunity to gauge participants’ perception of the SPE-PRMS. A survey was sent to the 83 participants; 37 responded. The results of this small survey are set out below. The demographics and experience level of the respondents were not captured and, therefore, the results are conditional. The comments are the author’s interpretation of the survey results. As with all surveys, it is possible that how the respondents answered questions may apply to a broader population. The goal here, though, is to provoke discussion and debate that could contribute to future improvements in the SPE-PRMS. The survey asked the participants to indicate agreement, disagreement, or neutrality to a series of statements. Respondents’ answers were intended to provide insight into how clear the SPEPRMS is, how well understood it is, and respondents’ level of confidence in it. Ideally, interpretation and implementation of the SPE-PRMS in estimating reserves/resources is independent of the reserve estimator. The first two survey statements endeavor to gauge the perception of consistency between reserve estimators in estimating conventional and unconventional reserves.

Confidence in publicly disclosed reserves and resources is critical to the investment community and the reputation of the oil and gas industry. This paper introduces a commonly utilised industry concept for reviewing reserve estimates in a format that non-professionals can use with confidence. Surveys (McMillan 2014) have indicated a perception that the Society of Petroleum Engineers – Petroleum Resources Management System (SPE-PRMS) lacks consistency and repeatability and treats conventional and unconventional resources differently. This is discussed in detail in this paper, along with an explanation of the confusion caused by these differences. The oil and gas industry is still endeavouring to understand how to treat unconventional resource estimations and this paper endeavours to capture areas of contention and risks in relation to reported reserves. Reserves Confidence Metric (RCM) is presented as a method for rating confidence in publicly disclosed reserves. RCM, which is derived from the reserves to production ratio, can be used for any reserves standard or guideline. It is a simple metric, which any organisation or individual with limited knowledge of reserves can apply to identify reserves that require further information or should be used with caution. As an example, RCM is applied to Queensland’s publicly disclosed 2P reserves for all conventional and unconventional Coal Seam Gas (CSG) resources.

Management An article published in the April 2014 JPT (McMillan 2014) discussed an SPE workshop survey regarding confidence in the SPE Petroleum Resources Management System [SPE-PRMS (2007)]. This survey identified issues regarding the believability of publicly disclosed reserves and resources. The survey also concluded that the interpretation of the SPE-PRMS in relation to unconventional resources is not consistent among reserve estimators. Critical to the integrity of our industry is confidence in publicly disclosed reserves. These reserves often come with limited supporting data and, therefore, tools need to be developed to enable the users, who may have limited technical knowledge, to identify estimates that should be used with caution or require additional supporting information. McMillan (2017) proposed a modified version of the reserves-production ratio, called the Reserve Confidence Metric (RCM), to gauge confidence. Poor confidence does not mean the reserve estimates are wrong; it means that the estimates are to be used with caution or further information is required. The SPE-PRMS presents a resource classification framework where reserves are the discovered recoverable volumes (contingent resources) for which the entity claiming commerciality has demonstrated a firm intention to proceed. The reserves are further characterized by the “range of uncertainty” generating a low, best, and high estimate referred to as proven reserves (1P), proved plus probable reserves (2P), and proved plus probable plus possible reserves (3P). 1P is often referred to as the banker’s case; 2P as the investor’s case; and 3P as the investor’s upside potential. Because reserves estimates are influenced by economic factors, the timing of a project’s production is integral to its valuation. McMillan (2017) demonstrated that reserves post-20-years had negligible impact on a project’s economics. RCM, which is derived from the reserves-production ratio (RPR) and reserves life index (RLI), ranks 2P reserves estimates as good confidence if the ratio is less than or equal to 20 years. Otherwise it is ranked as poor confidence. In the case of the RCM ranking of 1P reserves, 10 years is proposed as the pivot point. The RCM ranking is summarized in Table 1. RCM often registers poor confidence when the producing field is in the commissioning phase. In the case of undeveloped reserves, RCM will always be ranked as poor confidence. Having a rank of poor confidence requires the user to either use this information with caution or seek further clarification. RCM can be applied at any reserve level: country, lease, field, well, and reservoir. The following are examples of applying RCM[2P] to production areas located in Queensland, Australia. All the reserves and production data presented are available from the Queensland State Government website (Department of Natural Resources and Mines, Queensland Government 2016).

The first well drilled (Tarbat 1) was plugged and abandoned over the Hutton Sandstone after an on-depth, mechanically sound DST flowed 1080 BWPD 1% oil. Tarbat 2 was drilled 7 years later, the Hutton DST flowed 2037 BOPD and no water. This talk discusses how a valid DST test can be misleading and encourages a discussion regarding a Surat basin oil project where a re-evaluation of seismic and exploration well’s DSTs has justified a 3-D seismic which has changed the area's prospectivity.