Oil and Gas Exploration in the United States, 1998

Introduction to Aspects of Reserve Growth

Chapter A of

Geologic, Engineering, and Assessment Studies of Reserve Growth

U.S. Geological Survey Bulletin 2172–A
Introduction to Aspects of Reserve Growth

By James W. Schmoker, Thaddeus S. Dyman, and Mahendra Verma

Chapter A of

Geologic, Engineering, and Assessment Studies of Reserve Growth

Edited by T.S. Dyman, J.W. Schmoker, and Mahendra Verma

U.S. Geological Survey Bulletin 2172–A

U.S. Department of the Interior

U.S. Geological Survey
U.S. Department of the Interior

Gale A. Norton, Secretary

U.S. Geological Survey

Charles G. Groat, Director

Version 1.0, 2001

This publication is only available online at:

http://geology.cr.usgs.gov/pub/bulletins/b2172-a/

Manuscript approved for publication June 25, 2001

Published in the Central Region, Denver, Colorado

Photocomposition by L.M. Carter

Edited by L.M. Carter

Any use of trade, product, or firm names in this publication

is for descriptive purposes only and does not

imply endorsement by the U.S. Government
Contents

Overview ................................................................................................................................................... 1

Reserve Growth ....................................................................................................................................... 1

Preview of this Volume........................................................................................................................... 1

Acknowledgments................................................................................................................................... 2
1

Overview

Since the early 1970’s, potential petroleum-supply crises 

have been related to political events that disrupt the flow of 

imported oil. Twice in the last three decades, the routine of daily 

living in the United States has been changed by politically 

induced reductions in the supply of foreign oil.

A second but less publicized type of potential petroleumsupply crisis relates to fundamental geologic limitations on the 

world supply of oil and natural gas. Thus far, this concern has 

remained theoretical. However, world demand for oil and gas is 

predicted to continue to rise, and much petroleum (especially 

oil) has already been produced. Petroleum is a nonrenewable 

resource on the time scale of human activities. 

Some people expect that in as short a time as one or two 

decades, geologic constraints rather than political constraints on 

the volumes of oil remaining to be discovered and on the rates at 

which oil can be produced will lead to a more or less permanent 

oil-supply crisis. Other observers point out that similar forecasts 

of gloom and doom have been with us almost since the beginning of commercial oil production. Such forecasts, they say, 

have proved to be poorly founded and will continue to be poorly 

founded because of a chronic tendency to underestimate (1) the 

abundance of oil in the ground, and (2) the pace and extent of 

technology advancement in the petroleum industry. 

This debate is complex and emotional, and it certainly cannot be resolved here. However, we can speak to one data element that is important to the discussion between petroleumsupply optimists and pessimists. That element is remaining 

petroleum reserves—the “inventory” of petroleum that is on 

hand, in the ground, waiting to be produced and sold. The 

remaining petroleum reserves of a country or of the world 

depend upon the difference between the volume of oil and gas 

that has been discovered in commercial accumulations and the 

volume that has been produced. Volumes produced are in general reasonably well known, but volumes of petroleum that have 

been discovered and can be economically recovered are difficult 

to estimate, as discussed in the following section. As a result, no 

one really knows how much petroleum has already been discovered but not yet produced. For the world, the magnitude of this 

uncertainty is on the scale of many hundreds of billion barrels of 

oil or (for gas) oil equivalent.

Reserve Growth

Since 1977, operators of oil and gas fields in the United 

States have been required to submit an annual report to the U.S. 

Department of Energy, Energy Information Administration, that 

includes production figures and a careful estimate of remaining 

reserves for each field they operate. These sequential annual 

reports show that, at all stages in a field’s development history, 

the estimate of remaining reserves (and thus of field size, which 

equals cumulative production plus remaining reserves) is more 

likely to be too low than too high. In other words, as years pass, 

successive estimates of field size tend to increase. This phenomenon is referred to as reserve growth (also known as field 

growth, reserves appreciation, or oil-field reserve appreciation). 

Factors that contribute to reserve growth include:

• Delineation of additional oil and gas in-place, through 

areal extensions of fields and development of new pools and reservoirs within fields.

• Higher recovery percentages of the oil and gas in-place, 

resulting from infill drilling and the application of improved 

technology and advanced engineering methods.

• Revisions of reserve calculations (commonly upward), 

based on experience gained in the course of developing and 

operating a field.

Reserve-growth patterns of individual United States fields 

are highly variable. Indeed, the sizes of some fields are 

observed to decrease through time (negative growth). For 

United States fields taken as a whole, however, reserve growth 

is strongly positive and is a major component of remaining 

United States petroleum resources. Assessments of the remaining oil and gas potential of the United States and of the world 

are strongly affected by the assessor’s models and forecasts of 

future reserve growth.

Preview of this Volume

Much work remains to be done before reserve growth is 

adequately understood. The reports that will be collected as 

chapters of this bulletin deal with a variety of aspects of reserve 

growth and contribute to an important area of study. These 

papers are presented with the goal of improving our ability to 

understand and forecast future reserve growth. 

Two chapters focus on petroleum resource assessments. 

One chapter by J.W. Schmoker and T.S. Dyman analyzes trends 

in results of four successive U.S. Department of Interior (U.S. 

Geological Survey and U.S. Minerals Management Service) estimates of technically-recoverable natural gas resources, of which 

reserve growth is an important component, with a view toward 

better understanding the U.S. gas-resource base in the context of 

the next few decades. The second chapter by R.C. Crovelli and 

J.W. Schmoker presents an analytic probabilistic method for estimating future reserve growth of oil and gas fields. Like other 

U.S. Geological Survey reserve growth models, the method utilizes the age of fields as a surrogate for the activity that generates 

reserve growth. The advantage of this new method is that 

reserve-growth forecasts are developed and presented as probability distributions rather than single (point) estimates. 

Introduction to Aspects of Reserve Growth

By James W. Schmoker, Thaddeus S. Dyman, and Mahendra Verma
2 Geologic, Engineering, and Assessment Studies of Reserve Growth

Three chapters interpret reserve-growth patterns in three 

very different sets of oil and gas fields. The first chapter by 

M.E. Tennyson analyzes the reserve-growth trends of 12 large 

California oil fields whose resources have continued to appreciate well past the ages at which most fields no longer show significant increases in ultimate recovery. Growth of reserves in these 

fields is due to increases in recovery factor achieved by development of enhanced recovery (steam flooding) technologies. The 

second chapter by T.S. Dyman and J.W. Schmoker tests well 

production parameters such as annual and cumulative production from a variety of areas and formations as tools to quantify 

and understand the heterogeneity of reservoirs. Examples 

include the Northern Great Plains Cretaceous shallow biogenic 

gas accumulation and the Morrow gas accumulation in the Anadarko Basin. If the assumption is made that reservoir heterogeneity as indicated by well production parameters correlates with 

the degree of reservoir compartmentalization, then a ranking of 

well production parameters for a group of fields might be interpreted as a ranking of opportunity for reserve growth from infill 

drilling. The third chapter by J.W. Schmoker presents and interprets production and reserves data for giant (larger than 100 million barrels of oil) U.S. oil fields. Giant fields account for a very 

small fraction of the total number of oil fields discovered in the 

U.S., but their importance to U.S. reserve growth—past and 

future—vastly exceeds their numerical proportion.

Two chapters address some of the geologic controls governing reserve growth. In one chapter by T.C. Hester, a logbased method for evaluating natural gas production potential in 

poor quality sandstone reservoirs is explained. The application 

presented is for the shallow biogenic gas accumulation in shaly 

sandstones of Cretaceous age in the northern Great Plains. This 

accumulation is known to exist, but production potential and 

potential reserves are very uncertain. The second chapter relates 

selected sedimentologic, diagenetic, lithologic, and tectonic 

characteristics of both clastic and carbonate reservoirs to production data. Such geologic parameters affect reservoir quality 

and might ultimately be used to characterize the potential for 

reserve growth. 

Acknowledgments

This Bulletin represents work funded by the U.S. Geological Survey, Denver, Colo., the U.S. Department of Energy, 

National Energy Technology Laboratory (NETL), Morgantown, 

W. Va. (contract No. DE-AT26-98FT40032), and Gas Research 

Institute, Chicago, Ill. (contract No. 5094-210-3366 through a 

Cooperative Research and Development Agreement with 

Advanced Resources International (ARI), Arlington, Va.). 

We appreciate the manuscript reviews by Katharine Varnes, 

Paul Lillis, Timothy Klett, Vito Nuccio, Curtis Huffman, Robert 

Crovelli, Christopher Schenk, and Mitchell Henry of the U.S. 

Geological Survey, Denver, Colo. We also wish to acknowledge 

the technical guidance of Richard Parker and Charles Brandenberg, Gas Research Institute, Chicago, Ill., William Gwilliam 

and Charles Komar, U.S. Department of Energy, National Technology Laboratory, Morgantown, W.Va., and Vello Kuuskraa, 

ARI, Arlington, Va. Lorna Carter, U.S. Geological Survey, 

reviewed manuscripts for editorial standards and clarity of 

expression, and formatted them for this bulletin.

Published in the Central Region, Denver, Colorado

Manuscript approved for publication June 25, 2001

Edited, photocomposition by L.M. Carter