SPE Lecture: Type Wells Used to Reliably Estimate Proved Reserves Using Decline Curve Analysis Method

Oil well decline curve analysis (DCA) is used to estimate remaining reserves throughout the world. DCA is an empirical method: it requires historical production data; no simulation models are needed. It is also easier to apply, since some operators may not have the resources nor data available to construct models. Sometimes the producing oil field volumes are “too small” to justify data collection.

However, using DCA requires the estimator to exercise experience and judgement. More often than not, a more severe decline is used to estimate remaining “Proved” 1P Reserves. This estimate may significantly underestimate the company’s future cashflow and profitability. And future development activities can become uneconomic because the cash from future production is less than the development and operating costs.

Year on year Proved Reserves upgrades are a symptom of chronic underestimation. Using oil field case study examples, a type well method is shown to provide compliant “Proved” Reserves estimates. This systematic and easy to apply method relies less on subjective judgement, and can be applied to both producing and future wells. An important benefit of this approach is more stable reserves figures year on year, allowing the business to more reliably estimate future cashflow and profitability.

Speaker: Dr. Martin Soh

Martin Soh is an upstream energy professional delivering reservoir modelling, monitoring and production solutions to oil and gas companies in Australia and around the world. He helps customers economically increase production and ultimate recovery of hydrocarbons by challenging long held beliefs and implementing alternative ideas and innovations. He has a PhD (Distinction) from The University of Western Australia.