Reliable Technologies Combine To Establish Reasonable Certainty for Reserves Estimates
Authors: Carpenter Chris 
Published: December 2023

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This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 210358, “Establishing Reasonable Certainty for Reserves Estimates by Using a Combination of Reliable Technologies,” by Keshav Narayanan, SPE, Peter Gale, SPE, and J.P. Blangy, SPE, Woodside Energy, et al. The paper has not been peer reviewed.

The Petroleum Resources Management System
(PRMS) and many regulatory agencies require what is termed “reasonable certainty” for Proved Reserves estimates. The guidance provided by the PRMS or the US Securities and Exchange Commission (SEC) for establishing reasonable certainty is general in nature because of the difficulty in explicitly describing all possible scenarios and also allows leeway to use new technologies in the future. The complete paper addresses the complex challenge of establishing reasonable certainty in reserves and resource assessments and discusses how multiple reliable technologies may be used in concert to establish reasonable certainty for reserves estimates through the flexibility provided by the PRMS.

Introduction
The authors write that a common response to many questions seeking clarification on reserves-related matters is that “it depends.” Likewise, regarding the question of what constitutes reliable technology, the answer depends on the specific circumstances and the data being considered. The use of reliable technology as a method to improve certainty in the estimates of oil and gas reserves was formally recognized in the 2008 modernization of oil and gas reporting. The PRMS issued in 2007 and further updated in 2018 also recognized the use of appropriate technologies that can lead to more-reliable estimates of reserves. However, the SEC or the PRMS guidelines also seem to recognize that it might not be possible to prescribe a definitive approach that could work for any set of circumstances. They broadly describe the framework for what constitutes reliable technology and how it can be used to establish reasonable certainty. Operators have an obligation to use a scientific method to build a robust case to justify categorization of volumes.

Previous Research
Previous work reviewed how the industry, in the years from 2008 to 2016, had been using reliable technologies for reserves estimates and how industry practitioners were demonstrating and describing that these applications were consistent with the SEC and PRMS guidelines. The material surveyed by previous researchers can be grouped into the following broad themes:
- Seismic applications, which establish water contacts downdip of well controls and explore how seismic amplitude processes can be relied on to improve probability of geologic success
- Dynamic simulations, which investigate when reasonable certainty can be demonstrated when simulation models are used
- Unconventional applications, which include how reasonable certainty should be established when booking proved, undeveloped reserves (PUD) away from well control
- SEC comment letters, which can require registrant companies to more-clearly spell out the demonstration of reasonable certainty
- Applications of multiple reliable technologies increase confidence in free-water level determined by use of pressure data or seismic amplitude shutoffs, seal-capacity analysis, well logs, pressure data, and seismic to support proved reserves estimates