Oil and Gas Reserves Estimates: Recurring Mistakes and Errors

Abstract

Abstract Although most petroleum reserves estimates are prepared by qualified reservoir engineers and geoscientists, there continue to be recurring mistakes and errors in estimates of reserves. This statement is not intended to be presumptuous in any regard, but is based upon observations made by the authors over many years as independent petroleum consultants for both publicly-owned and private exploration and production companies. This paper presents and discusses the most common mistakes and errors associated with reserves estimates. In addition, guidelines are offered that, if followed, may help reduce the chance of such errors occurring. It is the intent of this paper to focus on mistakes made in the preparation of reserves estimates rather than to discuss potentially incorrect applications of petroleum reserves definitions. It is clearly not the intent of this paper to interfere with the necessary judgment the reserves evaluator must employ in preparing reserves estimates. It is inevitable that adherence to applicable reserves definitions must be recognized in any discussion of recommended practices regarding the estimation of petroleum reserves. A generalized definition of reserves without regard to categories or authorship is: Reserves are estimated remaining quantities of hydrocarbons to be commercially produced from a known accumulation as of a given date under specified definitions and economic conditions.