-JC-PT6S -63-C>2

fundamentals and Applications of the

Monte Carlo Method
By E. STOIAN*
(16th A71n'/url Technical llIeeting, The Petroleum Society of C.l_ill"

ABSTRACT
Perhaps no industry is more vitally concerned with risk
than the oil and gas industry, and few professional men
other than petroleum engineers are required to recommend higher investments on the basis of such uncertain
and limited information. Tn recent }'ears, the number of
methods dealing with risk and uncertainty has grown
extensh-el}' so that the classical approach, using analytical procedures and single-yalued parameters, has undergone a significant transformation. The use of stochastic "ariables, such as those frequentl,r encountered in the

oil industry, is now economically feasible in the eyuluation of an increasing number of problems by the applica~
tion of Monte Carlo techniques.
This paper defines the Monte Carlo method as a subset
of simulation techniques and a combination of sampling
theory and numerical analysis_ Briefly, the basic technique of Monte Carlo simulation inyob.-es the representation of a situation in log-ical terms so that, when the
pertinent data are inserted, a mathematical solution becomes Jlossible. Using random numbers generated by an
"automatic penny-tossing machine" and a cumulatiye freQuency distribution, the beha'\'iour pattern of the particular case can be determined by a process of statistical experimentation_ In practical applications, the probabilistic
data expressed in one or several distributions may pertain
to geological exploration, discover).' processes, oil-in~place
e\'aluations or the productivity of heterogeneous reserYoirs. The great variety of probabilit).' models used to
date (e..[_, normal, log-normal, skewed log~normal, linear,
multi-modal, discontinuous, theoretical, experimental) confirms a broad range of experimental computations and a
g-enuine interest in realistic representations of random
impacts encountered in practice.
Emphasis in this paper is directed to the salient characteristics of the Monte Cado method, with particular reference to applications in areas related to the oil and ,gas
industry_ Attention is focused on reservoir engin{'erin~
models. Nevertheless. management facets of the oil and
gas business are considered alan,!! with other applications
in statistics, mathematics, physics and engineering. Sample size reducing techniques and the use of digital com
puters are also discussed.

Calgm'y, May, 1.?65)

The Monte Carlo method embarked on a course of

its own when calculations using random numbers
were s}'stematical!:r considered as a di::itinct topic uf
studJ' by S. Wilks (19441The picturesque name of Monte Carlo originuted al
the Los Alamos Scientific Laboratory with von N eumann and Ulam (194--1) as a code for cla~sified worl{
related to the simulation of neutron behaviour.
The novelty of the Monte Carlo method lies chiefly
in the unexpected approach. l\Iore specifically, the
Ile'wne~s relates to the suggestion that many relationships arising in non-probabilistic contexts can be
evaluated more easily by stochastic experiments than
by standard anal:rtical methods. This, in effect. is the
von Neumann - Ulam concept.
The difficulty of accepting Monte Carlu solution::!
as ans\...er::! in science and engineering is, independent
of legal supedicial aspects, not to be underestimated.
Certain signg, however, are promising. Indeed, the
Monte Carlo techniques have received considerable
publicity in the paRt fifteen yean.; and the method haH
recently attained a statLl~ of preliminar.r acceptance,
Extensive references exist on both general and :;pecific topics (1, 2). The Monte Carlo method, however,
is still unfamiliar to those direct1)r concerned with
potential applications. More particularly. the method
is seldom Llsed by petroleum engineers (3, 4). This
paper has been prepared to stimulate intereRt in the
Monte Carlo method and its applications in the oil nnd
gas industry. The intention is to present a deal' picture of the method and its tools in order to provide
a "feeling" foL' recognition of applications as they occur in practice.
DEFINITION

INTRODUCTION

HE Monte Carlo method may have originated

with a mathematician wishing to know ho\\o" many
gteps a drunkard would have to take to get a specified distance away from a tavern, assuming that
each of his steps had an equal probability of being
cast in any of the four principal directions. This lead~
to the classic concept of "random walk" which has
great problem-solving potential.
Another classical principle is associated with Buffon (1773), who observed that if a plane is ruled
with parallel and equally spaced lines, and a needle
just long enough to reach from one line to the next is
thrown at random, the probability that the needle
crosses a line is 2/.". This leads to the important discover~r that one can evaluate a definite quantity by a
completel~r random process.

'''''Oil u?ld Gas COlllimuation Board, Calgary, Alta.

120

The Monte Carlo method may be defined <"8 a means

of design and study of a stochastic model which simulates, in all essential aspects, a physical OL' mathematical proces.s. Basically, the method is one of numerical integration. As a combination of gampling theoLT
and numerical analysis, the fi'1onte Carlo method is a
special contLibution to the science of computing, Briefly, Monte Carlo is a practical method which HotVCH
problems by numerical operations on random numbel"S, Some experts apply the name Monte Carlo only
to cases that are best illustrated by the use of probabilistic techniques to solve nonstatistical mathematical problems, Other experts reserve the Monte Carlo
de5ignation onlJr for calculations implementing sophisticated variance-reducing techniques.
Statistical sampling procedures and must llumel'ical
experiments of a stochastic nature (i.e., involving a
seL of ordered observations) are now included in the
Monte Carlo method, and it is in this context that
the name "I\'ionte Carlo" will be used,
The Journal of Canadian Petroleum

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Concept of

BASIC TECHNIQUES.

The important st~p-s in ~ lV~onte Carlo calculation

are:
.(l)-Selecting or designing a probability model by
statistical data reduction, analogy 01' theoretic.al considerations.
(2)-Generating random numbers and corresponding random variables.
(3)-Designing and implementing variance-reducing techniques.

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SALIENT CHARACTERISTICS

Drawing from various publications (1, 2). the salient characteristics of the Monte Carlo method appear
to be as follows;
(I)-The Monte Carlo' method is associated with
probability theory_ However, whereas the relationships -of probability theory have been derived from
theoretical considerations of the phenomenon of
.chance, the Monte Carlo method uses probability to
find answers to physical problems that maJ~ or may
not be related to probability.
(2)-The application of the Monte Carlo method offers a penetrating insight into the behaviour of the
s~ystems studied. Frequently, problems become deceptively simple. In this sense, effective Monte Carlo
techniques are self-liquidating.
(3)-The results of Monte Carlo computations are
treated as estimates within certain confidence limits
rather than true or exact values. Actually, all meaningful physical measurements are expressed in this
way. In many cases where relationships in a model
cannot be evaluated at all because of either mathematical or practical considerations, Monte Carlo techniques can be used to obtain approximations.
(4)-As in any other method, there is a need for
adequate basic information; data for the implementation of the Monte Cado method, however, may be
obtained b~r standard rlata processing procedures.
(5)-The method is flexible to the extent that the
intricacies of a problem. as may be reflected by either
a great number of parameters or complicated geometry, do not alter its basic character; the penalty
paid for complexity is increased computing time and
costs.
(6)-A practical consideration is that the iterative
calculations necessary for attaining a certain level of
confidence can be distributed among several computers, working simultaneously in one or more places.
(7)-The l\ionte Carlo solutions are approximate,
however, they can be up-graded commensurately with
the time and money allocated to the problem.
(8)-The Monte Carlo method's purely numerical
character requires careful scrutiny of all results.
(9)-Solutions of the Monte Carlo method are
numerical and apply onbr to the particular case studied_
RANDOM NUMBERS

In the application of the Monte Carlo method it is

necessary to repeatedly generate random numbers.
Today. there are no difficulties in the generation
of the random numbers required by the petroleum
engineer. For reasons of completeness, however, randomness will be defined and sources of random numbers briefly reviewed.

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Ran~omness

The idea of mathematical randomness is that "in

the long run" such-and-such conditions will "almost
always" prevail. By way of illustration, in the long
run approximately half of the tosses of a true coin
would be -heads. Statisticians associate randomness
with probability. The "intuitive" school states that
randomness must be defined with reference to "instantaneous" probability and not to what ,~'ill happen
"in the long run." The proponents of the "frequency"
theory define both randomness and probability in
terms of the frequency hypothesis of equal probabilities. The "short term" and the "long run" may be assumed to be two facets of probability; namely, the
subjecti,'e and objective probabilitYl respectively..

Att1"ibutes of Pseudo-Random.. Numbe1s

Most processes of generating random numbers are
cyclic. If the cycle is relatively long for a specific application) however, the sequence can be considered
"locally random" for all practical purposes. This concept is very profitable in that we can use simple
processes to generate pseudo-random numbers for
practical applications. To qualify for pseudo-randomness, sequences must comply with certain requirements. Some of these are ~
(a). In any sequence, the digits used in the numbers must be distributed with uniform density; Le_.
they must be iu roughly equal quantities.
(b). Successive digits must be uncorrelated; i.e.
no digit should tend to follow any other digit.
(c). There must be no correlation between successive numbers_
Tests of randomness apply to the generating process
rather than the randomness of the sequence. Common
tests are: (a) Frequency; (b) Serial; (c) Poker; and
(d) Gap Tests. Additionally, there are independence,
normality and chi-square tests.

SOU1ce of Random Sequences

Random numbers may be obtained bi: (a) a physical process, (b) "look-up" in a formal table and (c)
digital computers.
Physically, random numbers may be produced by
the following: (a) flipping of a coin; (b) roll of a
dice; (c) draw of a card; (d) spinning of a wheel
of chance, e.g., roulette; or (e) using a randomizing
machine, e.g. combination of electric motor - numbered disc - instantaneous flash.
The simplest way of obtaining random numbers is
by reference to formal tables l some of which are the
result of compound u randomization. The random
numbers thus produced ma)r be visualized as being
generated by two roulette wheels arranged in series
so that the first wheel controls the arrangement of
symbols on the second wheel and the second wheel
determines which of its positions will be recorded.
Electronic computers can generate pseudo-random
numbers internally (2). One of the simplest methods
Uses a binar~' digital machine to evaluate the equation:

,':

',.

(Eg. 1)

where:
R n is the nth random number;
random number;
Ie

Rn+l

is the (n+l)th

is a constant multiplier - preferably an odd I=0wer

of five;
is usually tl:e nlnnter of binary di~its in the
macl:ip..e ,mrd.
.

t,. ...~.'-. .'.

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Technology, July

September, 1965, Montreal

121

~~:~ ...

To obtain a landom number, RII+J, it is necessary

only to multiply K by R,. and retain the least significant half of the product. Starting with an odd R..,
one will run through 2:\'-" numbers before repetition
sets in.
Alldiliullal method::; include the "middle-of-thesquare" method, multiplicative and additive congruential rnethod~, and numerous recursive schemes.
RANDOM VARIABLES

Petroleum ellgineers are familiar with cumulative

frequenc.}' plots or histograms of physical variables
such a~ porosity, permeabilit}r and flo\v capacity. Random variables may be obtained from these and similar cumulative fl-equenc.y or probability distributions,
F (r.P), using random numbers according to the technique of "random sampling":
(1 )-For a ~et of numbers CPI, ep~ . . ., ordered by
increasing (or decreasing) size, a cumulative frequency curve is c:onstruc.ted to represent F(ep) versm; cp. F(ep) .'iimply represents pel' cent of samples, say porosit.y, smaller (or greater) in size than
the corresponding attribute ep read from the curve.
In pmctice, F(ep) may be represented by an equation.
or preferably by a table of paired values. Less conventional forms of probability representations are
free-spinning dials or pie charts \:ith markers, cutout patterns and c~tegory bar plots.
(2 )-A random number is drawn by procedures already revie\... ed and entered in the F lep) versus
plot on the cumulative probability scale F(). A~
probability cannot be greater than 100 per cent or
unity. the l'Jlndom numbers are entered as probability
values in the range 0 - 1.0 (e_g. a four-digit random number such as 5018 will be simply entered as
0.5018; FigUTC 1).
(3)-The ep value conesponding to the F (ep) entered is the desired random variable (e.g., ep = 9.6
per cent; FiYll1"e 1),
ProbafJilify FU'/lcliun,c;

Probability functions and representations vary

greatly in origin. form, accuracy, reliability and confidence. This valiety reflects an intensive t.:oncerll for
simulating the l'andom impacts encountered in prat.:tice. [f dabl Jlos~e~'S a. proved definite mathematical
distribution, such as normal, log-normal, binomial 01'
Poisson, it i~ advantageous to use a well-studied relationship rather than the empirical frequency distribution de\"eloped in a particular ca:-;e. Finding mathematicai relationships to represent distribution::;, however, may prove to be time-consuming, bothersome or
beyond the needs of the petroleum engineer. In fact.
the Monte Carlo method is particularly suited to ca:-;es
where the frequency C:lIrve does not conform to any
well-known or analytically manageable distribution.
The analysis of field and laboratory data (e.g., pro~
ce~sing of exploratioll ~tatistics or c.ore anaI:',rges) to
arrive at experimental distribution::. is essential to
the development of many Monte Callo models_ A }l~
troleum engineel', however. can develop excellent statistlLal and pl"Obabilistic models using data ~mpple
mented by experienc.e and personal judgment. Use of
intuitive probabilities in Monte Cado experiments
can bE:' very instructi\"c.
Di:)i:ributions L1~ually serve to determine the per
cellt frequency of items greater in size than a :iP~
cific value of the attriLute," but may ahw be put to
::;omewhat uncoll\entional use:3-, such a::;:
122

(a). Tracing flow paths of particles of displacing

fluid.
(b). Determining the outcome of exclusive "yes-no"
decisions regarding states (e.g., producer, dry well);
designating the amount of time spent in each of several possible .states or sets of states (e.g., dLilling,
flowing, on pump).
(c). Introducing correlated or c:hained pl'OCeSHCs
(e.g" flow of fluids through porous medial.
(d I. Assigning position or mapped characteristicH
through random coordinates, as well as accounting for
interferences in terms of occupied space and blocleed
channels (e.g., assigning permeability; "yes-no" concept of fluid displacement from pores).
MONTE CARLO SIMULATION

The Monte Carlo simulation model c:an be viewed a!-l

an experimental device:
(1 )-A single run is synon)mous with an experiment, and the output constitutes an observation. An
experiment. run or "his tor}" refleet~ the outcome of
an individual case le.g., the history of an individual
oil company \\jthin the frHrnework of un economic sy.';tern l. Branching techniques and sequential sampling
may be usefuL
(2 I-If a sufficiently large number of obsen:lltions are averaged, the integrated outcome "in the
long run" represents the expected :o;olution. The square
root of the average deviations squared will be called
standard deviation. It usually ~erves as a criterion for
terminating the iterations.
A complete sequence of gteps in a simulation comprises: (al design, model building and testing, (b)
gathering of input data. (c) strategic (Le., designing the experiment) and tactical planning, (i.e., determining the amount of testing); (d l implementation
of the simulation, (e) analysi~ and appraisal of results and (f J recommenllations.
Coordination between simulation and analytical
techniques, in many cases, provides for economy.
VARIANCE-REDUCING PRoceDURES

Monte Carlo simulation must be repeated many

times to plovide "expected !-iolutions." The accllrac:,\'
of ~olutions !mpl'Oves only a~ the square root of the
number of experiments: to double the accuracy of the
expected answer, one mmit quadnlple the numbel' of
trials. Therefore, it b important to find W.l)'S of
increasing the efficiellcy of the :'lampling process.
[n general, the amount of calculation can be reduced by using relative rather than absolute values.
In certain cases, the actual process may be replaced
b.\! something le::;s erratic that will yield an accuraLe
answer more Quickly. A judicioLis reformulation of the
problem can prove L1seful provided that the "qu icle"
answer i~ rebteu in a known manner to the solution
of the origi nal problem.
Typical \'aL'iance-rcoucing tec:hniqucs BI'C briefly
l'eyiewed.
Importance SalJlplit!(J

Thb

i~

a :3tandard variallce-I'cduc:ing procedure Ctlllof drawing samples from a distribution,

other than that suggested by the problem,
F(1J), and applying weighing factors to correct the
final ~ulution for haYing used a distOlteri or bia:'ll'd
~bting
F' (r.P),

The Journal of Canodian Petroleum

:distribution.. F"(</ must be selected iu such a way

as to' .reduce the sampling effort substantially. Moreave.!" a single distorte.d distribution "may
used simultaneously to represent two or more random
processes. - Multi-stage sampling is related to importance sampling.

be

R1.U3S1.'an Roulette and Splitting

In this case, "uninteresting" samples are "killed"

b}r a supplementary game- of. chance and "interesting"
samples ate split into refined samples by a process
of independent branching to more than make up for
the samples eliminated.

Use of Expected Values

In cases where there is ~ mixture of analytic and
probabilistic aspects of a problem, one may calculate
analytically that part which is easy and "Monte Carlo"
that which is difficult.

C01'relation and Regression

The narne "swindle" was adopted to describe the
use of correlated variables in Monte Carlo calculations.. Hammersley and Morton (3) described "negatively correlated" variables in the Buffon experiment.
They used two needles rigidly fixed in the form of a
Cross and, assuming twice as much labour as that
involved in tossing and recording a single needle, demonstrated that to obtain the same level of accuracy
One needs to expend 12.2 times less work. Similarly,
three needles will reduce the work by a factor of 44.3
and four needles by 107.2. An equilateral triangle
lnay be used in the same ,';.ray. The gains that can be
obtained by procedures of statistics are even greater.
In other cases, two or more solutions may be involved
simultaneously and 'we can simplify the calculation
by analysing -differences only (e.g., comparison of alternative policies)_
Systematic Sampling
In this procedure, the amount of sampling for each
region is determined explicitly. This approach is used
frequently in the fil'st stage of a multi-stage sampling
process. Double systematic sampling is a particular
form of the above.
St'ratified or Quota Sarnpling
This is a combination of importance sampling and
systematic sampling. Each region is assigned a fixed
number of samples in order to minimize the variability of the solution (e.g_, proportional to the product
of the relative size of the subregion and its standard
deviation). Stratified sampling is equivalent to breaking the region investigated into several parts and applying standard Monte Carlo methods to each part
independently. In terms of costs, stratified sampling
is preferable to importance sampling.
Variance-reducing techniques are well treated in
the literature of statistics_ However, the greatest
gains are made by exploiting specific features of the
particular problem rather than by routine application
of general procedures.

SCRIPT, CSL, SIMPAC, SOL, GPSS). Convenient

instructions are provided in the latter for organization of input'statistics, generation of _random numbers, sampling from distributions, simulating _experiment time and testing to determine the "last run. 1l
Monte Carlo simulation, howevel', requires careful
planning, and competence is needed if computers are
to be used profitably.
The running time is dependent on the nature. of
the particular problem, implementation of variancereducing procedures, initial guess, and accurac:~r reqUired. The 'N-....." convergence law implies that if an
additional significant figure is desired in a l\ionte
Carlo calculation, the machine time must be increased
by a factor of 100. Round-off and truncation errors
have little effect on the accuracy of Monte Carlo solutions. An accuracy of about 10 - 20 per cent is usually attainable without excessive labour_ lVlost experiments may be processed in 30 - 45 minutes on a large
machine, although a few applications may reqUire in
excess of 2 - 4 hours of computer time.
ApPLICATION AREAS

The application of the Monte Carlo method should

be given consideration in cases where:
(I)-Solutions are sought for physical processes
that are either entirely or partially stochastic and the
outcome seems to depend, in some important wa)r,
upon probability.
(2)-Actual physical experimentation would be expensive, time-consuming or hazardous.
(3)-Analytical solutions are prohibitivel)' cumbersome or, indeed, impossible.
(4)-Discrimination between important and insignificant features of a problem is desired; frequently, an analytical treatment is clearly indicated follO\\.~
ing a Monte Carlo experiment_
(5)-Scattering of data and complexity of geometr)'
cannot be accommodated in any other model without
making defeating assumptions regarding the inherent
variation in some important input parameters_
(G)-Experimental data are insufficient and must
be "patched upJl with assumptions arising from theoretical and intuitive considerations.
(7)-An aggregate behaviour is involved in some
implicit fOI'm in a .dynamic, uncertain environment
such that a macroscopic solution is indicated.
(8)-A measure of effectiveness, success 01' equivalent is to be determined for a planned operation relative to its behaviour in an entirely random fashion_
(9)-Probabilistic data corresponding to months of
ac.tual experience must be obtained quickh~ and cheaply.
Many "rigid" calculations can be modified or extended to become standard applications of the Monte
Carlo method, but the latter should, by no means, be
considered a truly general method_ In a few situations, the Monte Carlo method is.the only feasible
one_

USE OF COMPUTERS

ApPLICATIONS IN MATHEMATICS

l\ionte Carlo is a computer-based method because

it requires a great number of iterative calculations_
Applications are relatively easy to program in either
conventional (e.g., FORTRAN, ALGOL, ACT) 01' special simulation languages (e.g., GEMS, SPS-l, SIr.!-

The indiscriminate application of !'rlonte Carlo tech:

niques in mathematics can lead to stepped-up numerical activity, which in turn may render the solution
uneconomical. Thus, Monte Carlo is a method of last
resort for mathematicians, and it is used primarily in

Technology, July - September, 1965, Montreal

123

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multidimensional problems requiring approximate

solutions at a "single point" rather than over the enti re spd.ce.
In addition to educational illustrations, such as the
multiplication of fractions b:~r playing cards and evaluating integl'uls by thro\ving darts, s.Jme Monte Carlo
applications in mathematics, of int.erest to the petroleum engineer, would include:
(a). I\:Iatrix inversion (e,g.. solving systems of
equations).
(b). l\oIultiple integration (e.g., oil-in-place calculations) .
(c). Solving second-ordel' differential equations in
h\:o independent variables (e.g., Laplace equation of
fluid flow in homogeneous porou~ media).
(d)' Solving partial differential equations (e.g., un::;teady-state flow equation for Darcy flow of a slightly compressible liquid).
(e). Ev~'!.luating integration con'3tan~s in two~di
mensional problems (e.g., de~ermining field gradients
at the edge of an eiectrode in a fuu r-electrode field by
Schwartz-Christoffel transformation).
(fl. Anabrsis of generation and transmission of er1'01'S (e.g., measurements).
The i\'1onte Carlo method's simplicity should not be
o,,~rlooked. By way of an illustration, the Laplace differential equation may be solved by "random walk"
experiments. A "particle" begins a random walk from
an interior point, and when it reaches the boundar}r
the history is terminated with a score equal to the
boundary value, The solution at the interior point is
the arithmetic mean of the scores obtained by a sufficiently great number of ,mlks, Similarl.y. in solving
a partial differential equation, one computes the state
of affairs at a certain time by stopping the random
walks following a fjxed number of steps corresponding to th~t time.

ApPLICATIONS TN STATISTICS

:Monte Carlo techniques are widely used in the statistical design of experiments, and mayor may not
be connected \....ith techniques referred to as sequential, multiplex and inverse sampling. Typical applications include; con-elation of )andom valiables; study
of interdependent events; branching processes fol' design of new equipment and analysis of failure patterns; quality control and scheduling of maintenance.
ApPLICATIONS IN OPERATIONS RESI::ARCH

The .Monte Carlo method introduces a new dimension of flexibility in many OR analJfses. Single-valued
input variables, such as mode, median or mean. are
replaced by distribution:) expressing the situation in
a more meaningful manner and providing room for
"optimistic" and "pessimistic" limits, Monte Carlo
techniques extend the procedures for solving the following classes of problems:
(a), Linear programming: mixing problem using
random variables.
(b). Resource allocation: proration to markets; allocation of work to pl"oces~ing machines; ~tocl( distribution.
(c). Optimization: warehouse location; shortest
route problem and k-th best route through a networiL
(d). Inventory: decision rules; inventory control
and procurement.
(e L Transportation and merging: simulation and
control of traffic and highway merging and congestion; flow through networks.
(0. Queuing or waiting line theory: terminal operation of trucks, buses and ~hips; determination of
peak demands.
(g). Analysis of type PERT (Program Evaluation
and Re"ie\.... Technique).
(hl. Dynamic programming: maximum time - rate
of return; multif'tage and Markoff renewal processe~.

ApPLICATlONS IN PHYSICS
ApPLICATIONS IN THE OIL AND GAS INDUSTRY

The follo\"r'ing are t.ypical applications

Carlo techniques:

of 'Monte

(1 )-Collision, diffusion, absorption and reflection

of neutrons; nuclear reactions: cascades.
(2 )-Radiant heat-transfer through absorbing anJ
emitting media (e.g., combustion and shock-wave
processes in gas dynamics).
(3 )-Neutron transport and particle transmission
through matter (e.g., shielding).
('ell-Absorption of "gamma" radiation (e.g., well
scintillation counters).
(5'l-Transmission of a disturbance or signal
through a material or region against impediment by
random irregularities imbedded in the medium (e.g.,
transmis!-:ion of pressure disturbances in the ptesence
of lenses and barriers).
(G I-I\:Iacroscopic description of multi-phase fluid
flow through deformable porous media (e.g., retention
by filters 1.
(7 )--Calculations of molecular flow rates through
~mall channels of complicated shape.

.J. "V. Gibbs (1876) introduced the stochastic method in statistical mechanic~ through the hypothesis
that the average random walk over the time is similal to the average over the phase space. On this basi!i.
Ihermodynamic quantities were determined by integrating over thp ensemble of phase ~pace (e,g., ga:;
c.ompres~ibility factor),
T24

.Many ~'lonte Carlo techniques developed in other

fields, especially statistics and operations reseul'ch.
are applicable either directly or in modified form to
the oil and gas indu~try.
Generally, weighted a"erages are llsert to eXl)l'e~1i
resen'oir properties. Determinidtic solutiolls require
cuntroversial assumptions regarding the types of averages to be used in calculations. The Monte Cal'io
method circumvents the need fOl" averaging, as il ~arn
pies directlJ' from distl'ilmtions. In addition, the
.i.\'1onte Carlo method treats the solutiollH with continuing cognizance of the limiting ranges of accuracy
and reliability. In any case, failure to a}Jply Monte
Carlo techniques does not avoid an inherent prolmbility aspect; jt merely transfers uncertainty in a dil'guised form to some other f;tage of deci:;ion,
The probability that a variable has a certain v"lue
but may val"~! between certain limitti often arise...; in
oil and gas evaluations (<1). :Monte Carlo technique.,;
can be u:::ed in multival"iable correlation~ and applied
011 distribution!-i instead of :-jingle-valued parameters.
ProbablY the most valuable information made available by these technique." would be a Imnwh.!clge or
the oYer-ali variability of final results,
j1!Ionte Carlo techniques can be u~ed ill illtegl'HtiollH
uver multi-dimensional spaces (e.g.. oil and gas-inplace calculations). If desired, Monte Cal'lo integration may be refined by introducing multivariate prollhbility fund ions (e.g.. distribution of formation water
The Journal of Canadian Petroleum

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saturation as a function of porosity, permeability andstructural position).

Available historical or experimental data are very
important and should be u;ed ,~herever possible. "Personal probabilities" should not be underestimated,
howeve:r;, when recommended by mature and experienced engineers.
ApPLICATIONS IN OIL AND GAS EXPLORATION AND
PROPERTY ACQUISITION

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Nature) using well the deck of cards in her possession, responds to the search for oil and gas b~r signals
that are partially random. Exploration for oil a.nd
gas therefol'e involves many uncertainties. Each elemental assumption in the exploratory search involves
its own degree of llncertainty_ Together. these assumptions p:1rramid to a total uncertainty of critical
proportions. The uncertainty is not really related to
the determination of the success ratio of a company
with infinite resomces, which can conduct exploration on such a large scale that it can rely on 'longrange" average results; nor is the problem simply to
decide whether to drill a well or not. The problem
seems instead to be that of the operator with limited
. funds ''''ho wishes to explore a particular basin and
seeks a decision from an individual and specific point
of view. This is so because it is well knmvn that operators proceeding in a prudent manner have drilled
as many as twentJ' unsuccessful prospects although
the industry-wide success ratio in the area was as
high as one discovery in five trials.
Monte Carlo tl2!chniques can be used profitably in
simulations of exploratory programs to focus the attention on critical "reas (5): Although not a substitute for the undertaking of ,,,'orthwhile risks, the
Monte Carlo method assists in the following:
(I)-Reduction of the number of possible exploration programs to a manageable size.
(2)-Application of statistical and personal probabilities to change a decision from one of uncertainty
to one of assumed risk.
Typical applications in exploration are:
(I)-Tracing the history of an individual oil compan]! by branching processes and sequential sampling
from appropriate probability functions. Individual experiments can be terminated following attainment of
a fixed number of ,'eutures, a certain level of economic
- stabilit]r, an amount of profit, a merger or bankruptcy. This would include individual "random walks."
(2)-Bidding models on the basis of the particular
company's policy regarding returns and utilit,}, probability of discovery, likely competitors and their bidding patterns. The model would be useful in the determination of the calculated risk toward the acceptance of a particular bid.
(3)-Preparation of stochastic models of the discover}' process, including:
(a). Calculation of the number of prospects to drill
in a particular basin so that there will be a reasonable statistical probability of obtaining production
in at least one prospect.
(b). Dete-rmination of type of hydrocarbon upon
discovery (I.e., gas or oil)(c). Calculation of the size of oil or gas discovery,
using appropriate distributions_
Cd). Calculation of "extension" and secondarJ' recovery reserves by drawing relative appreciation
factors from distributions Ustratified" by "year
since discover}'."
TcchnologYI July - Sep~ember, 1965, Montreal

Some applications in property acquisition are as

follows:
(I)-Use of sequential investment models, based in
part on uexperience" piobabilitJ.' distributions and
landom waiting time between possible acquisitions, to
formulate decisions regarding the rejection of marginal deals and preparations in expectation of attractive deals.
(2)-Optimal selection of investments involving
uncertain returns so that the total funds available for
investment will not likel.y be exceeded and the average
variance for the total investment will remain below
some preassigned level.
(3)-Selection of investments to minimize the variance of a sum of rates of return subject to the constraint that the average rate of return exceeds some
preassigned level. This may require the application of
modified dynamic programming techniques.
(4)-Determination not only of the most likely rate
of return for a particular investment, but also of the
~hances of intermediate rates of return or even of
total loss. Investments! costs, market values and prices
are expressed in terms of distributions.
(5)-Sampling from Bayesian distributions and
analysis of individual, personal probability beliefs.
The experiences which can be gained through realistic simulations may explain the abundance of business games conducted by many organizations today.

'-.

,
,
'

'

..

k~: .. :
~;:...'

.~.

ApPLICATIONS IN RESERVOIR ENGINEERING

Chalkey, Cornfield and Park (6, 10) described the

measurement of porosity by a stochastic method as
follows; a pin is thrown on a photomicrograph of a
section of the porous material, and a "hit" is scored
if its point falls in a pore. If the experiment is repeated many times in a random manner, the -ratio
of "hits" to "throws' approaches the value of porosity.
Similarly, if a needle of length I is dropped a great
number of times on a photomicrograph enlarged n
times! and counts are made of the number of times
the end points fall within a pore, h, as well as of the
number of times the needle crosses the perimeters
of the pores, c, then the specific surface s may be
computed from:
' ,
4oi>c
5=---n

Ih

(Eq. 2)

This is considered to be the best method of determining the specific surface (6),
Warren and Skiba (7) studied an idealized miscible displacement process in a three-dimensional heterogeneous medium by means of experimental computation based on a Monte Carlo model. In their study,
displacement processes were described in terms of the
probability of "residence time" of "mathematical"
particles representing input fluid.
In recent years, the mathematics and application of
statistical and Monte Carlo techniques have received
increased attention in mineral sciences (8, 9).
According to Collins (6), if a mathematical theory
of flow through porous media is possible at all, it
must take the form of a statistical theory describing
the macroscopic features of the flow, in the sense of
the "ergodic hypothesis" of Gibbs. Several investIgators (l0, 6) have heated this problem in terms of
random walks of a "drunkard '''ithout or with 'some
memory;" Le., with or without autocorrelation. The
randomness of a porous medium, however, has yet to
be successfully represented.
125

",.

l'"

..

".

Warren and Price (11) studied the effect of the disposition of heterogeneous permeabilities on single-

TABLE

POTOsit)' CWlIlrlali,'e FrequCllcy Distribution

phase flow for a known permeability distribution function. They compared pl"obabilistic permeability solutions fOi' radial flow between concentric cylinders with
permeabilities calculated on the basis of arillnuetic,
geometric and harmonic means, as well as of the
median and the mode.

F(~j

~O

57
6.9
78
85

Oil-i?/-Place Calculations

0.1l0
0.239
0.306
0.389
0.500
0.581
0.697
0.807
1.000

96
10.3

The determination of oil or gas in place provides

an ideal setting for the Monte Carlo approach. A computer program was prepared to calculate the oil-inplace and applied to the Judy Creek Beaverhill Lake
pooL The input consisted of:

TABLE

The porosity. {P, was introduced as a cumulative frequency function and jH shown in Table I and Figure
1_ The formation water saturation, 8 . . . , was expressed
by five distributions, The effect of structural position on the \\'ater saturation wa::; not considered in
this ca~e. Formation water saturation distribution~
therefore account only for the porosity \'ariation and
are shown in Tables II to VI. They are the result of
an "educated interpretation" of the "scattering" of
data in a l/J-S .. plot. An alternative would have been
to use simple dala proces!iing procedures to alTi\'e
fit statistical distributions. Stratified sampling according to structura! position and type of porosity
was considered. but. in the intere;;;t of simplicity, was
not implemented, A :iequential sampling technique,
howevel', was employed. First, a pseudo-random number was generated and the porosity drawn from its
distribution. A second random number was entered
in the appl'opriate fOI-mation water distribution. depending upon the porosity value sampled by the first
random number. Corresponding porosity and formation water values were used to calculate the oil-inplace using the exprelision:
~

13.3
14 l

h ([eeU = 70
(SPE Standard Symbol's)

A (acres) = 27.000
Bot (fnction) = 1.<110

llii

lEg.

7758 Ail" ( l - S".iIl",

,?j

The results uf the Monte Carlo {~xperiment are

shown in Table VII. The expected N, following 1,090
experiments, equals 819,763 10 6 STB. Using average
properties, i.e., = 9.3 per cent and S" = 16 per
cent, one obtains 812_372 lOr. STE_ The application of
this lVlonte Carlo technique, therefore, while by-passing the need for selecting the type of averages to be

Formati(Jrt lVa/er FrequtJlf:Y Distrib,ll;ol/:

Porosity Rallf!e: :1.0-5::
F,(S" )

""

:::O~

Ftl1ll' 0

s;:
G

"

./

~55

385
,11.5
44.5
47.0

used in calculation, seems to provide realistic results_

Differences between evaluations using various "average.:-" and Monte Carlo techniques can be computed
for any desired cut-off Multi-modal frequency diHtributiolls reflecting several sy.sterns m~,y be. treated
either compoundly or .separately, Additional data may
be produced by "random walk" techniques (e.g.. a.ssuming porosity 'pr.ltential" surfaces) or, \vhere resel'VOil- information is incomplete, by sampling from distributions_
Conventional splitting and weighing technique!'; may
be used for sampling from distributions to some fixed
amount of item~ (e.g., volume represented per Imm~
pie), These are applicable to either single- 01" multiple~liample lipaces. Although rejection of samples affects the probability functions. in pl'actice thili may
not be significant.

.~

.. Ell

,,/

~~
w

>

,J /

>

po. Ci>l11

"

Figul'e 1.- Pm'o8tfy CUlJIulative Fl'equ611cy

Di,'itrib!ftion.

---

~c

:5

;:/

/'

..----~

/,,0/ /

,
POR051TY

126

"

~,

0.006
0.021
0.086
0.2\9
0.501
0.754
0.913
0.974
1.000

"

20.5
Z3.5
26.5
29.5
32.5

,
~

[1

Vi

0'

"

PE"~EA8111TT

mil

"

'00

Figure 2.-Penllcability CUlHulative Fretllw/1CY

DisfJi.butiolls.
The Journal of Cl::lnodion Petroleum

'/

. ~~(:~<;
~c~:.'''::

TABLE III

TABLE

F,(S.)

13.5
15.9
18.3
20.7
23.1
25.5
27.9
30.3
32.7
35.5

0
0.006
0.Ql8
0.041
0.083
0.284
0585
0890
0949
1000

TABLE

~:;;:.~

,.>

Formation Walef Frequency Distribution;

Formation Water FTequency Distribution;

POTOSUy Range: 5.3-7.6

S. (%)

;;;:._:~:':_'

Porosity Range: 9.9-12.2

~.

S.. (%)

7.0
8.9
10.8
12.7
14.6
16.5
18.4
20.3
22.2
24.0

IV

0.017
0.044
0.189
0.439
0.669
0.806
0.898
0.956
1000

TABLE

Formation Waler Frequency Di.'ilribwion;

Porosity Range; 7,6-9.9

VI

,..

FOT11wJion Water Frequency Dislribution;

Porn.'iity Range: 12.2-14.4

5..(%)

F,CS,J

S.(%)

9.7
118
13.9
16.0
18.1
20.2
22.3
24.4
26.5
28.4

0
0.01I
0.031
0.060
0.145
0.371
0.684
0.912
0.974
1000

5.1
6.8
8.6
10.3
12.1
13.8
15.6

F,(S,,)

0
0.027
0.086
0.214
0.457
0.629
0.810
0.888
0.936
1.000

17.3

19.1
20.8

. -::

.,:~
.~
"

j
TABLE

VII

OIL-IN-PLACE CALCULATION BY A MONTE CARLO TECHNIQUE

Expected

Experiment
n

Porosity

Fonnation
Water

Oil-in-Place

Oil-in-Place

~(%)

S, (%)

N(MMSTB)

:ENjn(MMSTB)

10
20
30
40
50
60
70
80
90
100

13.4
8.8
14.2
14.4
5.6
5.7
14.2
10.3
8.0
5.8

12.9
19.3
11.3
13.7
19.3
19.7
15.4
22.0
23.4

1217.651
737.2,0
1310.395
1293085
425.127
479.882
1I88.813
905.860
645.354
460.447

823.032
774.251
799.850
808.604
790.657
812.068
799.383
811.405
800.999
7911I7

275.212
301.351
304.773
325.986
315.583
316.727
328.290
326.595
322.565
326.405

200
300
400
500
600
700
800
900

10.4
11.2
13.4
143
10.4
5.7
13.6
7.5

17.6
16.8
113
119
13.7
27.6
10.3
26.4

892.440
968.747
1232.252
1312.445
935.m4
127.020
1264.661
577.540

833.400
838.692
819.106
826.402
819.129
824.285
823.709
82I.I74

325.827
314.459
318.590
317.283
317.503
319.679
319.795
318.735

22.0

679.361
778.989
626.699
1260.481
1027.008
887.212
641785
004.052
228.109
648.883

823.625
823.465
823.171
821.I56
820.745
820.275
820.026
818.568
818.324
819.763

317.379
316.755
316.889
317.612
316.893
316.996
317.319
316.962
317.353
316.792

1000
1010
1020
1030
1040
1050
1060
1070
1080
I090

Technology~

27.6

8.4
8.8
7.7
14.3
12.4
10.1
7.9
9.5
3.4
7.6

July - September, 1965, Montreal

15.0
22.2

15.5
20.2
15.4
22.1
16.5
35.3
18.3

Standard
Deviation

S(MMSTB)

f:

127

Productivity

TABLE

As a second illustration of the application of the

Monte Carlo method, a simple, single-phase, steadystate radial flo,,," problem ,",'as developed. The productivity index was calculated on the aS8umption that
the absolute horizontal permeability varies in a radial
direction away from the ,vellbore, but that the drainage area could be approximated bJr concentric zones,
rJ ~ rJ-I, within ' ... hich the permeabilitJr, ki, is uniform.
The permeabilities, k j , were obtained by sampling
from distributions of the core analJrsis data of either

the well,

~iodel

1, or the pool, Model 2. In iVIodel 1, the

assumption was made that the lateral permeabilit}r

val'iation is of the same order of magnitude as that of
the horizontal permeability for depth intervals cored
in the welL Model 2 assumed that the lateral permeability variation is evaluated by all samples tested
in the pool and would therefore be more readily applicable to cases identjfied by thin payor lack of
stratification_ The "depths" of the individual rings
were assumed to be either independent of permeability, "Geometry a":
(Eq..1)

or dependent upon both permeability size and jumps,

"Geometry b":

=
2:

r
Ri-l R j + i

r.. -

((/. 61

r,,

PRODUCTIVITY INDEX DAT,\

Pool: Leafiand Vking

P,

B"

~o

h avg.

k avg.

2,~A7

psig

~ 0.289

.r

(using k ""16.1

= 160 acres per wellassumed:

r,.
r.

~Vdl:

[,

12-16-10-55
11.6 feet

0,066

1,490 rl~cl
- 0.263 feet
~

A\rcragc of six: productivit)r

tC!;ts:
0.291
J
J (using k) ~ 0,132

8.06 Old

(core anal)rsis; footage

weighted)

tiO}IS.4 or ,j and 6, depending on the model. The model

permeability is calculated from:

!;-",

IOIr (r.. /r.. . \

('1. /l

1: r _1_ log (_r,_)

1 k;
r,1

Table X contains partial results of the productivity

index calculations.
The expected permeability, k,.~I" wa~ l:alculated from:
n

log (!;-l + l~
lClg (kJrl + U
An individual experiment is c.onducted by drawing r
pseudo-random numbers and obtaining permeability
values from appropriate distributions. The cumulative
frequency distribution for the pool, Leafland Viking,
and '...ell, 12-16-40-55, are shown in Table V[II and
Figure 2. Ring boundaries are calculated from Equa-

TABLE

VIII

Permeahiliry Cumu{a/ir'e Freql(e1lcy

126

Avcra~e of eleven productivil\' test5 in two wcll.,;::

(core analysis; footage

weighted'l
k clltoff
0.1 md

:::: kill

using R" = 1; R"'_I = 1 and where R i is the largest of

Well k (md)

Average f1owin~ pre~surc

durin~ productivity test!>:
p". = 2183 p<:.i~.

1.450
0.4 ep.
7.5 feet
6.28 md

The average pool pay thieknes~ and ten rings (Le.,

r = 10) weL'e used in all case~.

where
C is a proportionality factor determined from:
C

IX

Pool k (md)

Di~rrilmlioll

F(k)

0.10

0.10

Oll

O.I~

O.ll

0.12

0.18

0.22

0.16

0.26

0.3:1

0.23

0.3B

0.4.

0.37

O.5B

0.55

0.76

O.q.

0.66

2..10

1.95

0.77

1LOa

7.50

O.BB

100.00

100.00

LaO

(Eq. S)

The produeti\'ity index

equal~:

J (STB/D/psil =
~

0.00307 kIll h_
B II (LII log (r,,/r.1

(Eq.9)

As expected from an inspection of FiguJ'e 2, the calculated permeabilit)r and produeti"it~.. indices are higher \"'hen using the permeability distribution for the
pool (i.e., Model 2). The e.ffect of geometry Hppenr~
to be negligible. Differences between core Hnalysi::l
and actual productivit)r te~t~ cannot be reconciled by
serial flow models used in the Monte Carlo calculation and must be explained by well stimulation 01' lacle
of stabilization during tests.
CONCLUSIONS

By its ve.ry nature, the oil and gas industry is

frequently concerned with stuchastic rather than l'igidIy defined environments.
The methodology of Monte Carlo techniques is now
well under::;tood and can, in certain cases, offer the
alert industry definite adnlIltages. Cooperation between engineers, mathematicians. statisticians, economists and computer personnel i::; needed ill order to
grasp the full scope of the possibilities, as well a~
identify and implement the applications, of the Monle
ea rio method.
Although by no means an answer to all pt"Oblem:->,
i\!Ionte Carlo techniques should be adopted as a di~
tinct component in a company's repertoire of tools.
The Journal of Canadian Petroleum

"

"

'

TABLE

PRODUCTIVITY INDEX CALCULATION BY A JV:ON1E CARLO TEChNIQUE

.:.-

ft-Icdel2

1l1cdell
"Georneir}' a"

Experiment
n

k" xr
(md)

1. .... " ..
2 .........
3 ........
4 .......
5 .......
6 ...... , ..
7 .........
8 .........
9 ...... .. .
10 .........

j; (bbl(

"GeomeiTY a"

"Geomefry b"

(bbl(
day(p,i)

.j;

k,,:o:p
(md)

j; (bbl(
day/psi)

"Geometry b"
Irexi

j; (bbl(
day(psi)

day/~si)

k""I'
(md)

0.233
0.322
0.448
0,462
0.442
0.435
0.391
0,465
0.435
0,491

0.0025
0.0034
0.0047
0.0049
0.0047
0.0046
0.0041
0.0049
0.0046
0.0052

0.232
0.320
0.459
O,4eO
0.455
0.440
0.396
0.469
0.439
0.508

0.0025
0.0034
0.0049
00051
0.0048
0,0047
0.0042
0.0050
0.0046
0.0054

LI50
0.783
0,603
0.590
0.513
0,486
0,452
0,455
0,482
0,448

0.0122
0.0083
0,0064
0.0062
0.0054
0.0051
0.0048
0,0048
0.0051
0.0047

0,357
1.240
0.872
0,769
0.698
0.604
0,564
0.523
0,482
0,472

0.0038
0.0131
0.0092
0.0081
0.0074
0.0064
0,0060
0.0055
0.0051
0.0050

20 .........
30 ..... ".
40 ....... '
50 .........
60 .........
70 ...... .. .
80 .... ... ..
90 ..... .. ".
100. , .......
1I0., .... '"
120 ........ ,

0.380
0.342
0.353
0.345
0.338
0.348
0.349
0.350
0.336
0.329
0.320

0,0040
0.0036
0.0037
0.0037
0.0036
00.037
0.0037
0.0037
0.0036
0.0035
0.0034

0.391
0.356
0.359
0.349
0.346
0.357
0.357
0.353
0.340
0.332
0.323

0,0041
0,0038
00038
0.0037
0.0037
0.0038
0.0038
0.0037
0.0036
0.0035
0.0034

0,488
0,471
0.501
0.516
0.544
0.525
0.515
0.505
0.534
0.540
0.561

0.0052
0.0050
0.0053
0.0055
0.0058
0.0056
0.0055
0.0053
0.0056
00057
0.0059

0,462
0,401
0.418
0.501
0.476
0,466
0.495
0,475
0,466
O,4N
0.48<1

0.0049
0.0042
0.0044
0.0053
0.0050
0.0049
0.0052
0.0050
0.0049
0.0050
0.0051

126 .........
127 ........ ,
128 ....... '
129 ......
130 ...... ..
131. ...... ..
132 ... , , ....
133 ........
134 ... " ....
135 ... ._-.- -

0.316
0.318
0.317
0.315
0.314
0.316
0.315
0.315
0313 '
0.312

0.0033
0.003i
0.0034
0,0033
0.0033
0.0034
0.0033
0.0033
0.0033
0.0033

0.319
0.320
0.319
0.317
0.316
0.319
0.318
0.318
0.316
0.315

0.0034
0.0034
0.0034
0.0034
0.0033
0.0034
0.0034
0.0034
0.0034
0.0033

0.562
0.559
0,559
0.563
0.565
0.564
0.563
0,565
0.5f.5
0.5('2

0.0059
0.0059
0.0059
0.0060
0.0060
0.0060
O.OOED
O.OOEO
O.OOED
0.0059

0,482
0.481
0,480
0.482
0.482
0,482
0,480
0.487
0,486
0.483

0.0051
0.0051
0.0051
0.0051
0.0051
0.0051
0.0051
0.0051
0.0051
0.0051

(md)

.' .
~.-

~<.

--

.0 : ' , . '
.~

';

.;
ACKNOWLEDGMENTS

,
(I

.,
,1

:,
i

The author expresses his appreciation to the Oil

and Gas Conservation Board, Calgary, for permission
to use its computer facility. Special appreciation is
extended to fifess,"s. G. D. Hnlbert for completion of

several Monte Carlo programs, - N _ Collins for selection of specific applications and E. J _ Morin for reviewing the manuscript. The opinions expressed in
the paper, hOlrl'ever, al'e entire!)' those of the author.

REFERENCES

(1) Householder, A. 5., Editor: ".i.Vlonte Carlo IVlethod,"

p?'oc6cdings of June 29 - July 1, 1949, Sl'mposiunl,

National Bureau of Standards, Vitashington, 1951,
42 p.
(2) Meyc1, H. A_, Editor: "Symposium on Monte Carlo
Methods," John Viriley and Sons, New York, 1956,
:3iD p.

(3) Ham?lZcl'slcy, J. llf., and Jllo1"ton, If.. IV., "A New

Monte Carlo Technique: Antithetic Variates," Proceedings of the Camb?'idge Philosophical Society,
1956, pp. 449 - 475.
(4) Walstrom, J. E_, ';A Statistical .i.Vlethod for Evaluating Functions Containing Indeterminate Variables
and its Application to Recoverable Reserves Calculations and Vilater Saturation Determinations,"
Com.puten in the iIJine?'al IndU8trics, Stanford University Publications, 1964, pp. 823 - 832.
(5) Kuufm.an, G. 111., UStatisticai Decision and Related
Techniques in Oil and Gas Exploration:' PrenticeHall, Inc., Englewood Cliffs, New York, 1963, 307 p.
Technology. July

-I September,

1965. Montreal

(6) Collins, R. E., "Flow of Fluids Through Porous :i\rlaterials," Reinhold Publishing Corporatioll, New York,
1961, 270 p.
(7) JVal"J"en, J. E., and Skiba, F. F.J ui\faeroscopic Dispersion,'J Society of Petroleum Engineers Journal,
September, 1964, pp. 215 - 230.
(8) Hazen, S. Hr' J /7-., "Statistical Analysis of Sample
Data for Estimating Ore," Bureau of i\Iines, Vrashington, 1961, 27 p.
(9) Hewlett, R. F_, rlSimulating Mineral Deposits Using
Monte Carlo Techniques and Mathematical Models,"
Bureau of Mines, Washington, 1964, 27 p.
(10) Scheidegger, .A. E., "The Physics of Flow Through
Porous Media," University oj To-ronto Press, 1963,
313 p,
(11) Wan'en, J. E., and Pl-ice, H. 8., "Flow in Heterogeneous Porous Media," Society oj Pet"oleu7n Enginec?,s JOU?7u,Ll, September. 1961, pp. 153 - 169.

Eliador' (Doren Stoian is manager,

data processing, at the Oil and Gas
Conservation Board in Calgory, Alberta.
Previously, he worked as a speciol studies and reservoir engineer for the .same
orgonization, as an instructor at the
Univer.sity of Alberta in Edmonton, ond
in vorious capacities in Fronce, Germany, Austria and his native country,
Roumania. He holds a B.S. degree in
mechanical and petroleum engineering
from the Technical University of Hanover, Germany, and is active in several
engineering, computer ond doto pracessing societies.

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