Reserves Realities: Interview with Ron Harrell

New regulations, new technologies in unconventionals and also deepwater/sub-salt, along with new controversies have made it more important than ever to update your knowledge, skills, and understanding with respect to reserves estimates. Ron Harrell, a recognized expert in reserves estimates, addresses the issues in an interview in anticipation of the AAPG / DPA  Reserves Forum of Experts, and a Short Course, October 31 – November 1, in Houston.

Ron Harrell

Ron Harrell

Morris Adelman, noted Petroleum Economist, once said: “To predict ultimate reserves, we need an accurate prediction of future science and technology”.  As most of our global oil and gas resources are now to be found in deep, high pressure subsea locations or in terrestrial regions overlying virtually impermeable, petroleum-rich source rocks, Adelman’s statement rings loudly true. However, we cannot wait as we have an immediate and ongoing need to make reliable resource assessments with the science and technology available now and collectively learn how to interpret physical, geophysical, geochemical, engineering, rock mechanics and various stress measurements derived from log, core and cuttings analysis.

In my opinion, many of the widely advertised “Shale Oil & Gas Conferences” have simply become platforms from whereupon widely heralded “shale oil and gas producers” often parade their success stories before a varied audience comprised of producers, investors service providers and financial analysts. What the professional evaluation community needs are serious workshops/forums attracting reserves evaluators to participate in “open kimono” meetings where our concerns can be openly discussed and promising solutions are offered. We can also hope that some of the more successful producers will relax some of their “confidentiality” limitations to permit their most competent evaluators to share their experiences. I believe a rising tide of reserves “best practices” will, over time, lift everybody’s boats.

The 2007 Petroleum Resources Management System (PRMS) definitions were jointly created by SPE, WPC, AAPG, SPEE and SEG. The principles upon which these definitions are based remain valid today but the definitions need to be updated in recognition of the challenges facing evaluators of  so-called “unconventional resources” which can essentially be defined as self-sourcing reservoirs – principally clastic source rocks. Indeed, the PRMS defines a reservoir as having “moveable hydrocarbons”. This definition may need to include a phrase something like “post stimulation” in recognition of the source rock formation becoming a reservoir only after creation of fractures or flow paths to enable the moveability of liquids and/or gas.

Unfortunately, we reserves evaluators remain somewhat “fogged-in” with only limited material knowledge of these “new” reservoirs especially those with sparce production history. Our volumetric assessments of reservoir pore volume are questionable, recovery factors are often only a guess and material balance methods are useless without knowledge of current reservoir pressures. We have learned to become content with “connecting-the-dots” decline curve methods hoping that long-term performance will bear out our mathematically-derived projections – often relying on the “b” factor of the day.

The comfort we reservoir engineers once had in geologist-prepared structure maps, net pay isopach maps (isochore maps to some), fluid contacts  and reasonably well defined formation parameters of porosity, saturations and permeability profiles is no longer available for source rock reservoirs.

There has never been a time in my life where it is more important for petroleum engineers and geologists to meet together, not to just brag about our successes, but to share our mutual concerns and admit our lack of understanding about oil and gas reserves produced from source rocks. We need to add to this mixture, experts in geochemistry, rock mechanics and seismologists among others, to share their knowledge. Come join us and be prepared to share your relevant experiences – the good, the bad and the sometimes ugly.

Last 5 posts by Susan Nash

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