A reserves evaluation is the process of forecasting estimated petroleum volumes, often called future production profiles, anticipated to be commercially, economically and technically recoverable from producing and planned wells in known oil and gas accumulations. The consultant classifies oil and gas reserves as proved, probable and possible. Proved has the highest certainty level that an estimate of ultimate recovery will be reached or exceeded. Probable and possible have relatively lower confidence levels, respectively.
In the upstream petroleum industry, managers base their decisions on reserves numbers derived from technical and economic analyses. Whether it’s estimated petroleum reserves, future production rates or expected net income, management often needs outside reassurances that those figures are reliable. So they turn to Ryder Scott for a comprehensive, reliable reserves evaluation.
Our Reserves Evaluation Techniques
Ryder Scott typically conducts evaluations using one or a combination of techniques as follows: volumetric; well-performance, including decline-curve and rate-transient analysis; mathematical modeling, including the use of material balance and reservoir simulation; and analogy comparing reservoirs with geologic and/or performance similarities.
Team members may include geophysicists, geologists, petrophysicists, petroleum engineers and economists. In some cases, the team uses a complete suite of geological and engineering data. In other cases, all that is needed are well-performance histories. The final step is for the evaluator to cashflow production to generate discounted net present values. Clients regularly ask for different economic runs under various sensitivities to future sales prices or “price decks” and to operating and capital costs.