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Reservoir Volumetrics©

Data Room Services and Solutions by Kostro&Friedel Pte. Ltd. (K&F)

K&F offers a range of data room and assetevaluation centric services and solutionsas part of a techno-commercial advisoryfor the oil and gas industry. The pro-prietary Reservoir Volumetrics© soft-ware allows to screen fields with multiplereservoirs for hydrocarbon volumes in-cluding concise uncertainty assessment.

Hydrocarbon volume due-diligence is a vitalcomponent of any M&A activity, includingdata room visits or asset screenings. It is

key to understand initial and remaining hydrocarbonvolumes and distributions as well as potential up-side and focus areas for future developments. Assuch it represents a major ingredient to any techno-commercial valuation. In a data room environment,fast turnaround time can provide a major competitiveadvantage towards a successful bid. Moreover, im-proving the level of understanding of an asset and cer-tainty of the underlying assumptions will ultimatelyraise the level of confidence in the outcome of the val-uation process.

Reservoir Volumetrics© provides a fast and efficient software system for estimating hydrocarbons-in-place vol-umes. Designed primarily for screening stage assessments, it focusses on simplicity of parametrisation and aimsto produce results and deliverables in the shortest possible time. It features conventional tank model algorithmsbut compensates for a lack of detailed geological mapping by efficient uncertainty evaluation using Monte-Carlosimulation. It also offers the possibility to break fields into individual and potentially correlated reservoir units.

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Step 1 Parameterisation

•Statistical analysis of well log data (if available)

•Fluid property generation using Reservoir – Fluid System© if no data available

•Database setup in MS Excel data docket

Step 2Computing Core

•Multi-tank model with built in Monte-Carlo Solver

Step 3 Postprocessing

•Interactive viewing

•Reporting (MS PowerPoint and Word)

Reservoir Volumetrics©: A simple 3 step process, Figure A

Reservoir Volumetrics© uses a simple three step process to generate a range of deliverables, as shown in thefigure above. The first stage parametrises a simple data docket, requiring only a minimum of reservoir and fluiddata. As part of it, a geologist would typically analyse available well log and other static data to derive reservoirquality estimates using a statistical approach including data fitting. The data is then processed and evaluated ina second stage. In-bedded in a modern software environment, the system features sophisticated post-processingcapabilities including automated report generation in the third stage.

Reservoir Volumetrics© is intended to replace conventional spread-sheet based due-diligence and screeningtools. It emphasises statistical input data analysis as well as fully probabilistic assessment for Hydrocarbons-Initially-in-Place as the base case. It delivers auditable and transparent deliverables and results that can be efficiently up-dated at any point of the evaluation process.

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Overview

Reservoir Volumetrics© is designed for data room applications and asset screenings with minimum data re-quirements and very short time line. It is not intended to replace full mapping or modelling, but instead providesprobabilistic screening results within days.

Parametrisation. Data is required for thefollowing categories:

t Reservoir configuration,t Reservoir quality,t Areal fluid distribution,t Fluid properties,t Reservoir development status.

The data is extracted and tracked in a ded-icated data docket, that can be readily up-dated, reviewed or audited.Typical data sources are well log data orgeomodels. Fluid properties required canbe derived from fluid testing reports orsimulation models. Alternatively, K&F 'sReservoir–Fluid System© can generatethese.

Functionality. Using a multi-tank volumet-ric algorithm, an asset can be subdividedinto reservoir units, such as fault blocks.Volumetric estimates will be derived forall type of hydrocarbons, i.e., oil, associ-ated and non-associated gas or conden-sate (Figure B).Any parameter estimate, such as porosityor net-to gross ratio, can be input as a dis-tribution function rather than a single de-terministic value. It includes dependen-cies to consider correlation between inputparameters. This enables probabilisticassessment, which, alongside the reser-voir development status, can be trans-lated into the conventional resource clas-sification scheme (Figure C).Available official volumetric estimates aretracked and used for benchmarking ofthe results, including an analyse regard-ing potential variability (gains and losses)on a reservoir unit level (Figure D).

P50 Hydrocarbons-Initially-in-Place (HCIIP) estimate, Field Level, Figure B

STOIIP (MMstb)

0 200 400 600 800 1000 1200

Undiscovered

Sub-Commercial Discovered

Commercial Discovered

Proved

1P

Probable

2P

Possible

3P

Contingent PIIP

1C 2C 3C

Prospective PIIP

L/B/H

Classification of Volumes Oil Initially in Place

Oil-Initially-in-Place (STOIIP) by resource category, Field Level, Figure C

Gains Losses

ST

OIIP

(M

Mstb

)

1250

1300

1350

1400

1450

1500

1550

BLOCK 2

BLOCK 3

BLOCK 6

BLOCK 7BLOCK 8

BLOCK 10

BLOCK 11

DISCOVERY X

PROSPECT Y

Offset STOIIP

BLOCK 2

BLOCK 3BLOCK 6

BLOCK 7

BLOCK 8

Due Dilligence STOIIP

Breakdown of Gains and Losses in STOIIP

1250

1300

1350

1400

1450

1500

1550

Benchmarking of screening STOIIP against book values, Field Level, Figure D

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Probabilistic Volumes. The parametrisa-tion and computation of volumes is bydefault fully probabilistic with built-inMonte Carlo simulation.That allows to derive high (P10), mid (P50)and low (P90) estimates for oil and gas in-place volumes on reservoir unit and fieldlevel (Figure E). Full distribution and sta-tistical assessment is available as well.In parallel, correlation coefficients help todetermine the sensitivity ranking of theinput parameters with respect to the vol-umetric estimates (Figure F).

Post-Processing. The volumetric equationssolved in the software package are thesame used in typical spreadsheet applica-tions. Here, a spreadsheet is also still thecommon data docket and repository.Implemented in a modern softwareenvironment, the system features au-tomated post-processing capabilitiesto minimise general time requirementsand turn-around duration. This includesresult viewing, report generation andresults export.

With deliverables and results readily avail-able, due-diligence of in-place volumes canbe concluded and proceed to the next step:from screening to evaluation and eventu-ally bid submission. Reservoir Volumet-rics© provides an assessment of remainingHydrocarbons-in-Place (Figure G).During a more detailed evaluation the re-sults can then be complemented with addi-tional mapping or modelling activities, forexample, to have a preliminary look into po-tential infill well locations.

Kostro&Friedel Pte. Ltd.Offices inHamburg, GermanyKuala Lumpur, Malaysia

Contact details for Kostro&Friedel Pte. Ltd.Email: mail@kostro-friedel.com

www.kostro-friedel.com

Comparison of STOIIP P10 - P50 - P90

STOIIP Percentile (%)

90 50 10

ST

OIIP

(M

Mstb

)

0

200

400

600

800

1000

1200

1400

1600

1800

BLOCK 1

BLOCK 2

BLOCK 3

BLOCK 4

BLOCK 5

BLOCK 6

BLOCK 7

BLOCK 8

BLOCK 9

BLOCK 10

BLOCK 11

BLOCK 12

DISCOVERY X

PROSPECT Y

P90/50/10 STOIIP estimates and breakdown, Reservoir Unit Level, Figure E

Correlation Coefficient

-0.2 0 0.2 0.4 0.6

Oil Formation Volume Factor

Initial Water Saturation

Gross Thickness

Area Oilzone

Porosity

Vertical Net to Gross

Area Net to Gross

-3.7 %

-5.6 %

11.2 %

12.6 %

17.4 %

24.7 %

24.8 %

Significance Boundary

Tornado Chart Probabilistic STOIIP

Tornado Chart with parameter sensitivity, Reservoir Unit Level, Figure F

P50 STOIIP (MMstb)

10 100 1000

Cum

ula

tive O

il P

roduction N

p (

MM

stb

)

0.1

1

10

100

BLOCK 1

BLOCK 2

BLOCK 3BLOCK 4

BLOCK 5 BLOCK 6

BLOCK 7

BLOCK 8

BLOCK 9

BLOCK 10

BLOCK 11

BLOCK 12

1

5

1015

2025

3040

5060

Recovery Factor:

Current Oil Recovery Factor by Subunit

Benchmarking of current recovery vs P50 STOIIP estimate, Reservoir Unit Level, Figure G

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