RRRRReeeeesssssererererervvvvvoir Engoir Engoir Engoir Engoir Engininininineeeeeering for Gering for Gering for Gering for Gering for GeeeeeolooloolooloologggggistsistsistsistsistsArticle I – Overview by Ray Mireault, P. Eng., and Lisa Dean, P. Geol., Fekete Associates Inc..

Welcome to the first article in a seriesintended to introduce geologists toreservoir engineering concepts and theirapplication in the areas of Corporate ReserveEvaluation, Production, Development, andExploration.

Topics covered in the series are:• Article 1: Overview• Article 2: COGEH Reserve

Classifications• Article 3: Volumetric Estimation• Article 4: Decline Analysis• Article 5: Material Balance Analysis• Article 6: Material Balance for Oil

Reservoirs• Article 7: Well Test Interpretation• Article 8: Rate Transient Analysis• Article 9: Monte Carlo Simulation• Article 10: Monte Carlo Simulation (cont.)• Article 11: Monte Carlo Simulation (cont.)• Article 12: Coalbed Methane

Fundamentals• Article 13: Geological Storage of CO2

• Article 14: Reservoir Simulation

The format for each article will generally be tointroduce the concept(s), discuss the theory, andillustrate its application with an example.

ARTICLE DEFINITIONS AND USESARTICLE DEFINITIONS AND USESARTICLE DEFINITIONS AND USESARTICLE DEFINITIONS AND USESARTICLE DEFINITIONS AND USESCOGEH, the Canadian Oil and Gas EvaluationHandbook, Reserve Classifications provide aCanadian standard reference methodology forestimating reserve volumes according toreserve and resource category. There havebeen many recent changes in an attempt toachieve a “global standard” in order to ensurethe public release of accurate, understandablereserve and resource estimations andclassifications.

Volumetric Techniques are used to indirectlyestimate Hydrocarbons in Place (OOIP andOGIP) from estimates of area, thickness,porosity, water saturation, and hydrocarbonfluid properties. Analogue or theoreticalestimates for hydrocarbon recovery are thenapplied to estimate recoverable hydrocarbons.These techniques are utilized prior to theacquisition of sufficient production data toallow a more rigorous determination ofreserves and resource estimates. Thesemethods are therefore primarily used forevaluating new, non-producing pools and theevaluation of new petroleum basins.

Decline analysis techniques extrapolate thehistorical performance trend to an economic

production limit or cutoff to forecast theexpected ultimate recovery (EUR). Themethod plots the production rate throughthe production history (time) and recordsthe production rate decline as cumulativeproduction increases (Figures 1.1 and 1.2).

In theory it is only applicable to individualwells, but in practice extrapolations of groupproduction trends often provide acceptableapproximations for EUR. Two keyassumptions are that past trends representthe full capability of the producing entity and

Figure 1.1. Traditional decline analysis - Rate vs. Cum. Prod.

Figure 1.2. Traditional decline analysis - Rate vs. Time.

that the trends and operating practicescontinue into the future. Deviations fromtheoretical performance can help identifywells and areas that are underperforming.Well workovers to resolve mechanicalproblems or changes in operating practicescan enhance performance and increaserecovery. The presence of pressuremaintenance by an aquifer may make thismethod inappropriate to use. This techniqueis also more rel iable than volumetricmethods when sufficient data is available toestablish a reliable trend line.

Material balance techniques are used toestimate hydrocarbons in place (OOIP andOGIP) from measurements of f luidproduction and the resultant change inreservoir pressure caused by thatproduction. The technique requires accurateestimates of fluid properties, productionvolumes, and reservoir pressure. Estimatesfor hydrocarbon recovery, based on fluidproperties and analogue producing pools/formations, are then applied to estimaterecoverable hydrocarbons. These methodsare more reliable than volumetric methodsas long as there is sufficient data to establishthe relationship.

Well tests and the subsequent pressuretransient analyses are used to determinefluids present in the reservoir, estimate wellproductivity, current reservoir pressure,

permeability, and wellbore conditions frommathematical flow equations and dynamicpressure bui ldup measurements. The

technique requires that a well be producedfor a period of time and then shut-in for anappropriate length of time. Analysis inputs

Figure 1.3. Horizontal well model.

Figure 1.4. Flowing material balance.

include fluid viscosity, rock properties, netpay thickness of the producing interval, andthe mechanical configuration of the wellbore.An adequate buildup provides informationon the reservoir flow pattern near thewellbore, identifies restricted reservoirs,and can sometimes infer the geometric shapeof the well’s drainage area (see Figure 1.3).

Rate transient analysis (RTA), also know asadvanced decline analysis is a relativelyrecent development that uses well flowingpressures to characterize well and reservoirproperties and estimate inplace volumes. Thistechnique has been made available by theintroduction of SCADA (SupervisoryControl and Data Acquisition) data capturesystems that generally provide the frequencyof flow and pressure information requiredfor real-life application (flowing materialbalance and type curve analysis – see Figures1.4 and 1.5). Since pressure information canbe captured without shutting the well in andwithout the loss of cash flow, the frequencyof “testing” can be significantly increased andchanges in operating performance identifiedmore quickly than is practical withconventional testing.

Monte Carlo simulation is used to deal withthe uncertainty in every input parametervalue in the volumetric equation. Instead ofa single number, it allows the geologist toprovide a value range for areal extent, paythickness, porosity, water saturation,reservoir pressure, temperature, f luidproperties, and recovery factor. Multiple(typically 10,000) iterations are run togenerate a probable range of values for in-place and recoverable hydrocarbons (Figure1.6). The simulation is especially applicableto play and resource assessments.

Numerical reservoir simulation uses materialbalance and fluid flow theory to predict fluidmovement through three-dimensional space.The inputs of geometric shape of thedeposit, the rock, and fluid properties mustbe determined from other methods to dealwith the nonuniqueness of the forecasts.However, it has the abi l ity to visual lyintegrate the geological and geophysicalinterpretation with the analytical approachto reservoir analysis (Figure 1.7).

Although different techniques are used indifferent situations, a major purpose ofreservoir engineering is to estimaterecoverable oil or gas volumes and forecastproduction rates through time. Forecasts ofproduction rate and cumulative volumes area key input for the following:

• Exploration play assessment,• Development drilling locations,

Figure 1.5. Blasingame typecurve analysis.

Figure 1.6. Visualization of results.

Figure 1.7. Pressure profile from numerical model.

• Accelerated production from aproducing pool,

• Rank and budgeting of potentialexploration and developmentexpenditures,

• Corporate reserve evaluations.

The different techniques also have differentapplications at different times in the life of afield or prospect. For example, the initialstages of exploration may require volumetricestimates based upon analogue data due tothe lack of existing well information andestimating volumes with Monte Carlosimulation. Volumetric estimates based uponactual well data may be the next step afterexploration drilling and testing has provensuccessful. As development and productioncommence, SCADA frequency productionand pressure measurements can be obtainedfor RTA analysis . Monthly productionvolumes provide the data for material balanceand decline analysis techniques.

As production continues, the accuracy andreliability of the estimates obtained fromRTA, material balance, and decline analysisincreases. Integrating all the techniquesprovides more reliable answers than relyingsolely on any one method. In addition,integrating the techniques can lead toadditional hydrocarbon discoveries and/orincreased recovery from knownaccumulations.

Articles two through nine address the maintopics of reservoir engineering. Theremaining articles will focus on play typesthat are presently of interest to the industry.Included in this group of plays are coalbedmethane concepts and interpretation(Figures 1.8 and 1.9), tight gas, shale gas, andan overview of secondary and tertiary oilrecovery methods.

Figure 1.8. Historical rates vs. time.

Figure 1.9. Drainage area and permeability.