What are my 3P Reserves? Haas Petroleum Engineering Services

transcript

Texas Registered Engineering Firm F-002950

What Are My 3P Reserves?

An Independent Evaluator’s Recommendation for

Undeveloped Reserve Estimatesin Resource Plays

Disclaimers

• Estimated Ultimate Recoveries in this presentation have been forecasted using a Stretched Exponential Production Decline (SEPD) methodology as outlined in SPE 134231 (Valko and Lee).

• Proved, Probable, and Possible Reserves in this presentation are for demonstration purposes only.

Haas Petroleum Engineering Services, Inc.

CONFIDENCE

80% Confidence Interval

P90 P10

Heat Distribution

1) How many Barnett Shale wells have produced as of Jan 1, 2014?

P10 _______ P90 _______

2) How long is the Nile River?

P10 _______ P90 _______

3) How many career home runs did Roger Maris have?

P10 _______ P90 _______

4) What was the average WTI oil price @ Cushing in January 2000?

P10 _______ P90 _______

5) How many public airports are in the state of Tex as?

P10 _______ P90 _______

Pop Quiz! Define 80% Confidence IntervalYour

Pop Quiz! Define 80% Confidence Interval

1) How many Barnett Shale wells have produced as of Jan 1, 2014?

P10 _______ P90 _______ __19,823__

2) How long is the Nile River?

P10 _______ P90 _______ __4132 mi__

3) How many career home runs did Roger Maris have?

P10 _______ P90 _______ ___275____

4) What was the average WTI oil price @ Cushing in January 2000?

P10 _______ P90 _______ __$27.26___

5) How many public airports are in the state of Tex as?

P10 _______ P90 _______ _ __393____

Why Didn’t Everyone Score 4/5?

• P10s and P90s are difficult to comprehend.

• Pre-conceived expectations bias us to a narrow range of outcomes.

Development Phase Definition

• SPEE Monograph 3 provides guidelines for necessary sample size to achieve the Mean less 10% with 90% confidence.

• < 1 Sample Size = “Early”

• 1 – 3 Sample Sizes = “Intermediate”

• > 3 Sample Sizes = “Statistical/Mature”

Example 3P Stick Maps for Each Development Phase

Early < 1 Sample

Intermediate 1-3 Samples

Mature > 3 Samples

Why is This Important?

• Knowing the development phase of the area can impact how you develop your property.

• No surprises from your reserves consultants.

11Haas Petroleum Engineering Services, Inc.

Source: SPEE’s Perspectives on the Fair Market Value of Oil and Gas Interests

CASE STUDIES

Bakken Shale – Jan 2000 Bakken Development

Bakken Heat Map

Bakken Development - Jan 2012

Initial Filtering to Area A

Geologic Area of consistent

LithologyThicknessPorosityPermeabilityFluid Type

Area A EUR Bubble Map

Anticline performance indicates separate geologic area.

Poorer performance as Bakken thins to SW.

Filtering to Analogous Rock

Area A Distribution

Area A EUR Distribution by Vintage

Filtering Out Older Vintage

Area A EUR Distribution by Operator

Filtering Out Anomalous Operators

Area A Distribution (Filtered)

Aggregate to Total Number of Locations

n = 35

Area A Distribution (Filtered)

> 3 Samples

Statistical / Mature

Area A - 3P Undeveloped Reserves

Initial Filtering to Area B

Area B EUR Bubble Map

Sweet Spot? Or Better Operator?

Area B Operator Bubble Map

One operator’s performance indicates variance in rock/fluid properties is the cause of poorer wells surrounding acreage B.

Area B EUR Bubble Map

Removing wells in better geologic area.

Area B Distribution (Filtered)

n = 35

Area B Distribution (Filtered)

~ 2 Samples

Intermediate

Area B - 3P Undeveloped Reserves

Initial Filtering to Area C

Area C EUR Bubble Map

Area C Distribution (Risked)

105,000 3.0

n = 35

Area C - 3P Undeveloped Reserves

Let the Debate Begin!

• Aggregate Proved to Total Number of Analogous Locations?

• Include PDP in Aggregation?

…Case by Case Considerations

Effect of Aggregation on Smaller Well Counts

n = 35 n = 6

SUMMARY AND CONCLUSIONS

Consider P90 and P10 in Your Expectations

The Nile River is 4132

miles long!

You Will Drill a Distribution!

Source: EOG

Connected Pore Space

Conclusions

• Your 3P Reserves are directly related to the development phase of the geologic area.– Early, Intermediate, Statistical/Mature

• Your 3P Reserves are directly related to the sample size of human dependencies.– Drilling, Completion, and Development Practices

• Your 3P Reserves are directly related to the number of analogous locations in the development plan.

THANK YOU!

Contact Us

Haas Petroleum Engineering Services, Inc.Registered Firm # F-002950

2100 Ross Ave, Ste 600Dallas, TX 75201(214) 754-7090haas@haasengineering.com

www.haasengineering.com

What are my 3P Reserves? Haas Petroleum Engineering Services

Data & Analytics