A New Unitization Parameter - Displaceable Hydrocarbon Value
Authors: Luttig John E. , Frazier Kenneth W. 
Published: December 2007

American Institute of Mining, Metallurgical and Petroleum Engineers, Inc.

Abstract
In unitizations for joint ventures, probably the most difficult and time-consuming probably the most difficult and time-consuming efforts are spent in determining what has come to be called the unitization parameter. These parameters, necessary to describe each party's parameters, necessary to describe each party's interest, have been many and varied since the first unitization. They have encompassed such items as surface acres, productive acres, production, bottom-hole pressure, well costs, production, bottom-hole pressure, well costs, acre-feet, etc. Our industry has constantly strived to determine the most equitable parameter, which up to now has been considered parameter, which up to now has been considered acre-feet. This paper cites a unique case that goes a step beyond acre-feet to a parameter called displaceable hydrocarbon value. It is developed by relating movable hydrocarbons to net productive feet. Although this case determines productive feet. Although this case determines equities at original reservoir conditions, there is no reason that this same concept could not be used as a unitization parameter under any reservoir conditions to give a truer picture of equality among parties. picture of equality among parties

Introduction
Unitization is the exchange of limited property rights for an undivided interest in a property rights for an undivided interest in a larger property. Since this exchange must be negotiated many common ground is a starting point. Consequently, there is no reason that point. Consequently, there is no reason that an equity parameter for unitization have anything whatever to do with the problem. It matters only that the unitization negotiators attempt to satisfy the demands of all operators concerned. Nevertheless, a trust is implied to the negotiators. This implication is that they must do their utmost to be equitable to all parties concerned; so the negotiators are parties concerned; so the negotiators are limited to assessing and placing a value on the individual property rights of every interest owner. By placing or assessing a value on each individual property, the first step is taken to finding this common point.
It is natural that early efforts along these lines were single in scope. Very early unitization formulas employed surface acres or wells, or a combination of both. Interspersed with these was the use of production as an equity parameter. In many cases, production gave a participant more value in the unit when, in reality, on the basis of contribution, he should have had less. All of these are probably still in use or can be considered still valid under certain conditions.
As economics and the strength of engineering technique began to exert themselves more and more in the role of unitization, the formulas have become more elaborate and sophisticated. Today it is common for unitization equities to include formulas in more than one part or phase and they almost always use at least one true-value parameter. Such a parameter is acre-feet, parameter. Such a parameter is acre-feet, which equates to the individual tracts a closer approximation of their value.
The authors believe that the ultimate unitization formula should weigh the value of each tract by its actual contribution to the value of the unit. Although such a formula would be an absolute equity, its formulation probably is impossible to achieve by negotiation. Presented here is a solution, based on this logic, to a specific problem of equity determination. It is a fundamental advance of the acre-feet concept, and is unique because of its simplicity. To an acre-feet map, we have added a displaceable hydrocarbon map, thereby making the simple advance from acre-feet to displaceable hydrocarbon volume as a measure of ownership. Displaceable hydrocarbon volume is the simplest description of hydrocarbon recovery potential of the reservoir at any place.