Gas Reserve Estimation of Offshore Producible Shut-in Leases in the Gulf of Mexico A Report (1976) / Chapter Skim
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PRINCIPAL FINDINGS
PRINCIPAL FINDINGS
Pages 23-37
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From page 23... ...
If neither of these conditions is present, the reserves are designated as probable. The FPC report describes the term proved reserves to mean "the estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in the future from known natural oil and gas reservoirs under existing economic and operating conditions" (FPC II: page 4)
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From page 24... ...
Thus, in using the term physically producible gas, no consideration is given either to the economics of extraction or the time required to recover the gas. (It may be noted that the amount of physically recoverable gas will not be the same as that of gas in place, because the former depends upon the nature of the mechanism driving the gas and whether the gas is associated, non-associated, or solution gas.)
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From page 25... ...
Electrical spontaneous potential exceeding 20 negative millivolts beyond the shale base line. If mud conditions prevent a 20 negative millivolt reading beyond the shale base line, a gamma ray log deflection of at least 70 percent of the maximum gamma ray deflection in the nearest clean water bearing sand may be substituted.
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From page 26... ...
Depending upon the usage of the term in an oil or gas lease, the economic criteria for achieving paying quantities differ. For purposes of keeping a lease in force after expiration of the primary term, paying quantities refers to the production sufficient to yield a return in excess of operating costs without regard to cost incurred in the drilling of the producing well or in the acquisition of other capital equipment.
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From page 27... ...
Relevant comment on misleading economic implications of the terms producible shut-in and paying quantities is offered in the FPC report: "It is obvious from the staff investigation that very few of the wells on producible shut-in leases are capable of being produced. Almost all the wells were temporarily abandoned or plugged and abandoned after qualifying as'a well capable of producing in paying quantities.1 These wells were initially temporarily abandoned by having cement plugs spotted in accordance with USGS regulation and were left with underwater casing stubs extending above the sea floor with marking buoys extending to the sea surface.
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From page 28... ...
On occasion, one of the temporarily abandoned wells is situated at the planned location of a platform, Great difficulty can be encountered in positioning the platform in exactly the correct spot over the well, so it is rare when an expendable hole can be utilized in this manner. After a platform is set, the operator will often drill all the wells in his program without completing any of them as a producer.
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From page 29... ...
Estimates can be expected to vary considerably from one competent investigator to another owing to the lack of factual information about many of the factors on which estimates are based. Atwater, Carter, Miller, and Heffner, commented on estimate variation in their report as follows: "There is no way to develop sufficient high quality data on a hydrocarbon reservoir so that two competent appraisers will independently produce the same estimate of reserves.
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From page 30... ...
. The major controlling factors of thickness and areal extent of the offshore gas-bearing reservoirs in this highly fractured area, when only a few wells are available to supply data, must be based on extensive extrapolation of structural and sedimentational conditions, guided by experience in the area.
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From page 31... ...
In the FPC report, sand thicknesses less than nine feet were not included unless they had been tested, whereas in some instances the consultants included sands as thin as two feet. Sand bodies separated by shale stringers were sometimes grouped into a single reservoir and sometimes treated separately.
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From page 32... ...
These uncertainties, reflect reasonable and rational differences in the interpretation of available data. The high and low estimates for each reservoir thus present a more realistic picture of the uncertainties associated with the determination of physically producible gas.
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From page 33... ...
019 187 752 60,365 FPC estimate la too high because of planlneter error and Inadequate data. Atwater claimed that using IES as only available data, no way to assign any type of gas reserves to any sand numbers between 7880-8120 where FPC had large quantities.
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From page 34... ...
Estimator Range Proved Probable Total Percent FPC FPC Best 1,073,421 386,853 1,460,274 100.0 Atwater High Best Low 410,047 318,882 240,225 186,140 132,348 86,398 596,187 451,230 326,623 30.8 Keplinger High Best Low 603,711 441,161 348,577 340,249 209,876 189,430 943,960 651,037 538,007 44.6 Table 5. Estimates of recoverable gas for 33-lease representative sample of producible shut-in leases.
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From page 35... ...
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From page 36... ...
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From page 37... ...
37 The outstanding point shown by the foregoing data is that for almost all individual leases the FPC estimates are higher (in certain cases markedly so) than those of either of the two consultants.
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