User Conference 11/14/13

Forgotten Oil & Gas Study

John D. GraceEarth Science Associates

Long Beach, CA

2013 User ConferenceHosted by Maersk – Houston

November 14, 2013

Goals

• High-grade opportunities for new production from “dead” reservoirs

• Develop methods for mass-batch decline curve analysis

• Identify “non-balancing” movements in field & sand reserve estimates

• Demonstrate “data mining” approach to analysis using GOM3

User Conference 11/14/13

Decline Curve Study

User Conference 11/14/13

Pro

duct

ion

Rat

e

Number of Months On

Last Production Date

Estimated Current Abandonment Rate

Production

Estimated RemainingRecoverable Volume

Statistically EstimatedDecline Rate

Total Volumes & Uncertainty

User Conference 11/14/13

0100

12

9

6

3

0

200300400500

Gas (Tcf) Oil (Million Bbls)

Both oil and gas scaled in BOE

Size/Frequency Reservoir Recoverable Volume

User Conference 11/14/13

0 10 500 20 MMCF

3 BCF

95 BCF

MCF

0

1

2

3

4

Fre

q. (

x 1,

000)

0 10 500 20 MBbls

3 MM Bbls

Bbls

0

500

1,00

01,

500

Fre

q.

Largest Reservoirs Found

User Conference 11/14/13

61 2 43 5

2

6

8

12

10

4

0

Remaining Oil (Million Bbls)

Res

ervo

irs

10 20 40 6030 50 70

20

40

0

10

30

Remaining Gas (Bcf)

Where Was 2012 Production?

User Conference 11/14/13

Where is the Forgotten Oil & Gas?

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Cost Proxies

User Conference 11/14/13 Dot Size Proportional to Remaining BOE

Revenue Proxies - Oil

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Revenue Proxies - Gas

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Decline Methodology

• Studied reservoirs “dead” at end 2009– Applied GOM3 Decline Curve Tool in batch– Process data to find final “regime break” – Apply 4 standard engineering models

• Corrected bias in exponential estimates• Retained confidence intervals for estimates• Picked best model with R2 (R2 0.6)

– Determined “current” abandonment rate

User Conference 11/14/13

Break in Structural Regime

User Conference 11/14/13

Global Prod. Max Break in

Regime

RegimeEstimated

Standard Decline Models

• Exponential rate v time:

• Linear rate v cumulative prod:

• Hyperbolic rate v time:

• If exponential; harmonic; hyperbolic

User Conference 11/14/13

ˆˆˆ bty ceˆˆy a bx

0ˆ

0

ˆˆ

ˆ( )1

ˆ

a

qy

b t t

a

a ˆ 1a ˆ1 a

Models Tried: Picked Best Above Threshold

User Conference 11/14/13

This reservoir does not pass the R2>0.6 criteria

Example: WC49 Field: L04 Sand

User Conference 11/14/13

L04 Sand

L-8 & L-4NM reservoirs (12,919-13,134)Very low & strange production

A and PA-3 reservoirs (13,406-14,308).Comps produced 27 & 28 bcf respectively 6 Bcf

Remaining

371 MMcf Remaining

?

Where’s the Potential in WC49?

User Conference 11/14/13

Plus: Dead but Not Declining

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Look Where Reserves Do Not Balance

User Conference 11/14/13

Found in Reserve Histories

User Conference 11/14/13

6 BBL

4 BBL

34 TCF18 TCF

5 BBL3.6 BBL

17 TCF 32 TCF

Fields Sands

Next steps

• Get input from these presentations

• Complete analysis of Reserve Histories

• Final revisions to numbers & software

• Produce deliverables

• Decide on marketing strategy

User Conference 11/14/13