Review - SPEE Monograph 4

Society of Petroleum Evaluation Engineers publication covers reserves estimation in low permeability (unconventional) reservoirs. Treatment covers state-of-the-art decline curve analysis and different approaches to numerical modeling. ‘Commercial’ considerations out-of-scope.

Published in 2016, Monograph 4 (M4) from the Society of petroleum evaluation engineers, ‘estimating ultimate recovery of developed wells in low permeability reservoirs’ is a 300 page follow-up to the 2011 Monograph 3 on reserve evaluation in resource plays and reflects the intervening shift from exploration to development.

Introductory chapters cover geology, drilling and completions but curiously, M4 ‘largely ignores’ the commercial aspects of unconventional wells and stops short of ‘fully addressing [the] assignment of developed [...] reserves.’ M4’s focus is on technical factors of evaluation.

M4’s ‘technical factors’ are less the complex process by which shale gives up its gas or oil, than with the range of empirical methods that have become standard practice. ‘Classical’ decline curve analysis (DCA), practiced for decades on conventional reservoirs, is ‘still the most widely used method’ for unconventionals.

Numerical models are presented as alternatives to DCA. These fall into two camps, full scale modeling à la reservoir simulator and rate-transient approaches à la well test. The meat of M4 therefore lies in an in-depth look at each of these approaches, authored by recognized specialists in each field.

The popularity of the empirical approach is undoubtedly largely due to a key distinction between shale gas reservoirs and tight oil plays. To quote M4, ‘While some tight oil plays produce directly from shales, similar to gas plays, most tight oil is produced from low permeability siltstones, sandstones […] that are associated with the shales from which the oil has been generated.’ The shale/tight distinction is important as is the fact that while drilling and completions may target one formation, ‘adjacent lithofacies may be supplying hydrocarbons.’ Further complexity comes from considerations of the completion method, said by some to ‘define the reservoir.’

M4 does touches on commercial aspects of tight oil development citing Southwestern Energy’s super-low F&D costs. M4 includes sections on ‘data considerations’ that enumerate the plethoric amount and types of data that could usefully be gathered and analyzed by the evaluator. Whether this is done in practice in the context of factory drilling is moot.

M4 concludes with chapters on quantifying uncertainty in evaluations and worked example problems for three US plays. M4 is a thorough treatise on the intricacies of tight reservoir evaluation. In view of the complexity of the subject and the lack of a ‘commercial’ dimension, it is not a cook-book for reserves reporting.

See also our 2012 editorial on modeling shale gas.

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