From Potential to Proved
RESOURCE PLAY BOOKINGS
March 27, 2012
Calgary, AB
Mike Morgan, P. Eng.
Slide 1
Reserves/Resource Classification System
Slide 2
Drill to De-risk
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Initial pilot wells (hopefully) discover the presence of hydrocarbons
Initial tests/completions establish productivity
Delineation wells establish reservoir size and place bounds on recovery
Repeated success and commerciality converts resources into reserves
Required distance between the wells depends on the geology
As with conventional reservoirs, you would hope that the reservoir
size isn’t delineated by a single well.
Slide 3
Potential Resources
• Are there hydrocarbons?
• The geology of the WCSB is well known, we know it contains
hydrocarbons and traps and, best of all, it is large
• Numerous studies, both public and private, have identified formations
with interesting hydrocarbon shows and thermal histories
• The public record is uniquely extensive and complete, nearly
everything from core samples to production data is available for data
mining
• Lots of potential!
Slide 4
Extent of Triassic Sediments in the WCSB
Panek 2000
Slide 5
Burial History at 10-35-71-13W6
Ness 2001
Slide 6
Contingent Resources
• Are the results commercially interesting? This means productivity is important.
• Economics should be solid to add major bookings. Regulators are asking for
clarity as to whether or not resource is economic and one would expect little
value from an uneconomic resource.
• Use a radius away from tested wells for lands within a fairway.
• Resource assignments based on average performance of wells in region. Select
best estimate contingent using expected behavior (may need to estimate minimum
and maximum bounds).
• Check resulting volumetric recovery for the assumed well and frac spacing.
Slide 7
Extent of Triassic Sediments in the WCSB
Panek 2000
Slide 8
Montney Fairway – IP per Frac
Slide 9
Montney Fairway – IP per Frac
Slide 10
Montney Contingent Resource
Slide 11
Regional Averages Must be Declustered
Upper Montney
Declustered Average Rates (2011)
Lower Montney
Declustered Average Rates (2011)
1,400
1,400
1,200
1,200
1,000
1,000
Rate (Mcf/d/frac)
Rate (Mcf/d/frac)
Test Rate
800
Peak Month
600
800
Test Rate
600
Peak Month
400
400
Peak Quarter
200
Peak Quarter
200
0
0
0
1,000
2,000
3,000
4,000
5,000
6,000
Moving Window Width (m)
7,000
8,000
9,000
10,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Moving Window Width (m)
These plots represent area weighted averages. They are made by overlying a series of grids,
each with a different spacing, on a region of interest. Calculate the average within each grid
box, then average all boxes that contain data. Each box will have the same weight, but each
well will have a different weight.
Slide 12
Many Models will Match Early Data
Slide 13
Reserves
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•
•
•
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Plays must demonstrate commerciality and repeatability
Significant reserves booking between control points, if all data is good
Establish minimum and maximum bounds, establish best estimate reserves (2P)
Select 1P reserves between the minimum and the best estimate
3P between best and maximum estimate
Applied type curves developed from older wells to new/proposed wells
Slide 14
Suffield Shallow Gas URR/Section
1980
1985
1990
1995
2000
2010
Looking at one of Canada’s original resource plays, we can see that 25 years of technology
have incrementally added URR, but have not fundamentally changed the picture
Slide 15
Shallow Gas Geostatistics
Slide 16
1,400
7,000
1,200
6,000
1,200
6,000
1,000
5,000
1,000
5,000
800
4,000
800
4,000
600
3,000
600
3,000
400
2,000
400
2,000
200
1,000
200
1,000
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
0.00
2.00
4.00
8.00
10.00
12.00
14.00
16.00
18.00
Drilling Density (wells/section)
7,000
1,400
7,000
1,200
6,000
1,200
6,000
1,000
5,000
1,000
5,000
800
4,000
800
4,000
600
3,000
600
3,000
400
2,000
400
2,000
200
1,000
200
1,000
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Drilling Density (wells/section)
14.00
16.00
18.00
Reserves (MMcf/well)
1,400
Reserves (MMcf/section)
Reserves (MMcf/well)
Drilling Density (wells/section)
6.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Reserves (MMcf/section)
0.00
Reserves (MMcf/section)
7,000
Reserves (MMcf/well)
1,400
Reserves (MMcf/section)
Reserves (MMcf/well)
Shallow Gas – URR as a function of Drilling Density
18.00
Drilling Density (wells/section)
URR per section URR Per Well
Slide 17
Reserves
• Rate of return must exceed 10% (reasonable expectation of economic
development for small decreases in prices)
• A halo of proved and a further halo of probable. The offset distance of this halo
will depend on the reservoir.
• Assignments based on local offset control (not regional).
• Do a volumetric check of recovery
• Allowance must be made for interference, using simulation if boundaries have not
yet been seen.
• Reservoirs will be drilled up past the point that wells interfere with each other.
Slide 18
Montney Proved Reserves (Green)
Slide 19
Montney Probable Reserves (Purple)
Slide 20
Beaverhill Lake URR/Section
Slide 21
References
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R. Panek. The Sedimentology and Stratigraphy of the Lower Triassic Montney Formation in the Subsurface
of the Peace River Area, Northwestern Alberta. MSc Thesis, 2000.
S. Ness. The Application of Basin Analysis to the Triassic Succession, Alberta Basin: an Investigation of
Burial and Thermal History and Evolution of Hydrocarbons in Triassic Rocks. MSc Thesis, 2001.
Slide 22