An Update on Demonstrating "Reliable Technology" - Where are We Now?

Abstract

This paper presents a study of how the oil and gas industry has approached the demonstration of a ЉReliable TechnologyЉ since the emergence of this as a formal reserves term in the US Securities and Exchange Commission's (SEC) modernized reserves regulations in late 2008. The paper summarizes the different technologies and the approach to reliability demonstration described in recent technical literature. It also investigates the target element of the reserves estimation procedure, such as expanding the Proved Area.Through a review of published technical papers and other documents, this paper examines the industry's different views of demonstrating a Љreliable technology.Љ Sidle and Lee (2010a) proposed the scientific method as an approach to demonstrating the criteria were satisfied. Industry literature examples of seismic technology (to determine Proved Area) and numerical reservoir simulation (to determine recovery factor) are analyzed. Additionally, we examine the SPEE Monograph 3 (2010) procedure to understand the logic used to support reliability and compare it to the scientific method approach. This examination includes how the demonstration of analogy is important to estimate the resulting PUD reserves when technologies to define Proved Area are being considered. This is then compared to other examples of predictable commercial productivity of undrilled areas that do not meet the SPEE Monograph 3 (2010) requirements.As industry seeks new technologies and approaches to demonstrating reliability, the status of how others have addressed these issues is valuable guidance. In providing both recent demonstration approaches and proposed technology, this paper provides a good reference on both what is currently being done to establish a proposed reliable technology and how this technology can be validated. BackgroundWhen the U.S. Securities and Exchange Commission (SEC) published their updated oil and gas reserves disclosure regulations, Modernization of Oil and Gas Reporting (2008), the term Reliable Technology was introduced. The regulations provided the definition of Reliable Technology: Љa grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.Љ 1. State what the proposed reliable technology will contribute to the reserves estimation. 2. Determine how well the science that provides the basis for the proposed reliable technology works in theoretical (perfect) situations. 3. Test the technology to validate (or invalidate) the hypothesis and demonstrate that the requirements for a reliable technology have been met. 4. Document the results, including: a. Define the conditions needed to achieve reliability. b. Explain how to quality control the input data. c. Explain how to identify misapplication of the technology.The paper concludes with an example, discussed below, of applying this approach.

Combining Physics, Statistics, and Heuristics in the Decline-Curve Analysis of Large Data Sets In Unconventional Reservoirs

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