I have just had another go at this, including saturation and also shrinkage (both of which FARJOY didn't use)
But have also increased the net pay to 36M as per FAR's ANNs.
Still very healthy, and all still whilst under the tight hole, and again if you consider enhanced recoverability could drive recovery up to as much as 70%;
Calculations and assumptions sourced here;
http://undervaluedequity.com/mobile/Estimating-Oil-and-Gas-Resources.html
Investing in Oil and Gas - ... Estimating Oil and Gas Resources
After acquiring seismic data a visualisation of the underground structures can be created in terms of areal extent and thickness. Subsequently we can estimate the theoretical quantity of oil and/or gasin place.
The formula for estimating oil and gas resources is as follow:
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Recoverable Cubic Meters of Hydrocarbons in place (RCMHIP) = A x NP x P x RF x HS x SF |
A = the Area of the structure (in square meters)
This is the maximum area that is expected to contain oil or gas, estimated from the visualisation created by the data from the seismic data.
NP = the Net Pay (in metres)
The net pay is an interpretation of the average thickness (vertical height) that would hold the hydrocarbons. Sometimes it is quoted as a net-to-gross ratio; then you have to calculate the net pay yourself (i.e. when the net-to-gross ratio is 1-to-15 and the depth is 3000 metres, then the net pay is 200 metres).
P = the Porosity (as a fraction)
Typical porosity of the oil or gas bearing sandstone ranges between 1% and 40%, with most common levels at around 15% to 30%.
Permeability, which is the ability of the hydrocarbon to flow through the voids, is also important but is incorporated in the recovery factor.
RF = the Recovery Factor (as a fraction)
The recovery factor is the proportion of oil or gas that is recoverable from the reservoir. For oil fields typical recovery factors are between 10% and 40%, and up to 70%, while for gas it commonly ranges between 50% and 80%.
HS = Hydrocarbon Saturation (as a fraction)
Hydrocarbon saturation represents the proportion of oil present with water (found in all reservoirs in varying levels of saturation). The hydrocarbon saturation is estimated by well logs (detailed records of the borehole) with typical levels of 50% to 90%.
SF = the Shrinkage Factor (as a fraction)
The shrinkage factor shows the reduction in oil volume recovered on the surface. The shrinkage factor for oil commonly ranges from 0.50 to 0.95.
For gas the Formation Volume Factor (FVF) is used, which is the inverse of the SF. Due to reduction in pressure at the Earth's surface, gas expands from 50 to 350 times its original volume, depending on depth and composition of the gas. Hence a gas expansion factor is used, changing the equation for estimating the possible recoverable cubic meters of hydrocarbons (gas) to: A x NP x P x RF x HS x FVF!
In order to calculate the Recoverable Oil in Place (ROIP) you have to multiply the RCMHIP with factor 6.29. The 6.29 factor represents the number of barrels of oil in a cubic metre.
By multiplying the RCMHIP by 35.3 the equation equals the number of cubic feet of gas (as used in gas reservoirs). Keep in mind that for calculating the Recoverable Gas in Place (RGIP) you have to use the Formation Volume Factor (FVF) instead of the Shrinkage Factor (SF) in the formula.
The veracity of the assumptions in estimating oil and gas reserves can only be established once an exploration well has been drilled. The first confirmation will be if there are any hydrocarbons present. Testing of the reservoir will establish the quality of the reservoir (porosity and permeability) and the net pay zone. To confirm the areal extent of the reservoir will probably require the drilling of one or more appraisal wells.
Important note: Always keep in mind that resource and reserve estimation is an inexact science, depending on the amount of information available, the quality and the correct interpretation of that information. Remember that although the reported numbers must be as accurate as possible, mistakes are easily made.
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