Relationship Between Proved Reserves And Exploratory Effort
Authors: Arps J.J. , Mortada M. , Smith A.E. 
Published: December 2007

This exploration model provides an analytical method for predicting potential recoverable hydrocarbon reserves in mature geological potential recoverable hydrocarbon reserves in mature geological basins or areas. Incorporated are two basic features associated with exploration: the decline in effectiveness of drilling and the future growth of newly discovered reserves. The model has numerous applications in planning and evaluating exploration activities.

Introduction
Methods of forecasting trends in discovery rates and potentially recoverable hydrocarbon reserves have potentially recoverable hydrocarbon reserves have varied widely in the past. Definitions of proved reserves have been adopted by most concerned organizations, but definitions for future potential, "prospective", "probable", or "possible" reserves have not been standardized as extensively as may be desired. However, the two basic methods for estimating potential reserves employ fundamentally the same approaches as those for estimating proved or blocked-out reserves. In the volumetric methods for estimating potential reserves during the early stages of exploration in a geological basin or area, an estimate of the total cubic miles of potentially petroliferous sediments is multiplied by a unit recovery factor per cubic mile, based on an analogy with factors for more maturely developed basins or areas. A well defined example of the use of volumetric methods as a basic approach to estimating potential reserves is presented in a 1968 report by the Potential Gas Committee. Methods for estimating future potential reserves for a geological basin or area in more mature stages of exploration are analogous to performance methods used for estimating proved reserves during the later life of a reservoir. Past trends in exploration performance are used, in effect, to delineate the most performance are used, in effect, to delineate the most likely trends in the future that relate to estimates of ultimate recovery from incremental exploratory efforts. The exploration performance method, as presented in this paper, incorporates two important considerations to illustrate how they can and should be included to produce more meaningful results. The first consideration, well known to petroleum engineers, is the concept of an "economic limit". Production decline curves, when used to estimate Production decline curves, when used to estimate remaining reserves, are not extended beyond the economic limit of operation, which is the production rate that will yield a net revenue from crude oil or natural gas sales equal to the incremental cost of operating a well, lease, or field. Similarly, a forecast of potential ultimate economically recoverable reserves must include the determination of a realistic economic limit based on incremental costs of exploratory effort. The second consideration makes full use of the AGA and API reserve classifications and statistics. Data from these sources permit an evaluation of:the declining effectiveness or decay of new field reserves discovered by incremental exploratory footage drilled, andthe growth of reserves in previously discovered new fields.
The effectiveness of exploration is derived from the first-year estimates of proved reserves discovered in new fields and the exploratory proved reserves discovered in new fields and the exploratory footage drilled during the corresponding discovery year. Growth of new field reserves is illustrated by the fact that each new field discovered originates its own continuing stream of additions to first-year reserve estimates through reserve changes during subsequent years.
JPT
P. 671