What Are My 3P Reserves?

An Independent Evaluators
Recommendation for
Undeveloped
Reserve Estimates
in Resource Plays

Texas Registered Engineering Firm

F-002950

Disclaimers
Estimated Ultimate Recoveries in this
presentation have been forecasted using a
Stretched Exponential Production Decline
(SEPD) methodology as outlined in SPE
134231 (Valko and Lee).
Proved, Probable, and Possible Reserves
in this presentation are for demonstration
purposes only.
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CONFIDENCE

80% Confidence Interval

P90

P10

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Heat Distribution

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Pop Quiz!
Define Your 80% Confidence Interval
1) How many Barnett Shale wells have produced as of Jan 1, 2014?
P10 _______

P90 _______

2) How long is the Nile River?

P10 _______

P90 _______

3) How many career home runs did Roger Maris have?

P10 _______

P90 _______

4) What was the average WTI oil price @ Cushing in January 2000?
P10 _______

P90 _______

5) How many public airports are in the state of Texas?

P10 _______

P90 _______
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Pop Quiz!
Define Your 80% Confidence Interval
1) How many Barnett Shale wells have produced as of Jan 1, 2014?
P10 _______

P90 _______

__19,823__

P90 _______

__4132 mi__

2) How long is the Nile River?

P10 _______

3) How many career home runs did Roger Maris have?

P10 _______

P90 _______

___275____

4) What was the average WTI oil price @ Cushing in January 2000?
P10 _______

P90 _______

__$27.26___

5) How many public airports are in the state of Texas?

P10 _______

P90 _______
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_ __393____
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Why Didnt Everyone Score 4/5?

P10s and P90s are difficult to
comprehend.
Pre-conceived expectations bias us to a
narrow range of outcomes.

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Development Phase Definition

SPEE Monograph 3 provides guidelines for
necessary sample size to achieve the Mean less
10% with 90% confidence.
< 1 Sample Size
= Early
1 3 Sample Sizes
= Intermediate
> 3 Sample Sizes
= Statistical/Mature
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Example 3P Stick Maps for Each

Development Phase
Early
< 1 Sample

Intermediate
1-3 Samples

Mature
> 3 Samples

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Why is This Important?

Knowing the development phase of the area can impact
how you develop your property.

Source: SPEEs Perspectives on the Fair Market Value of Oil and Gas Interests

No surprises from your reserves consultants.

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CASE STUDIES

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Shale Jan 2000

Bakken Development

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Bakken Heat Map

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Bakken Development - Jan 2012

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Initial Filtering to Area A

Geologic Area of
consistent
Lithology
Thickness
Porosity
Permeability
Fluid Type

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Area A EUR Bubble Map

Anticline performance
indicates separate
geologic area.

Poorer performance as
Bakken thins to SW.
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Filtering to Analogous Rock

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Area A Distribution

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Area A EUR Distribution by Vintage

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Filtering Out Older Vintage

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Area A EUR Distribution by

Operator

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Filtering Out Anomalous Operators

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Area A Distribution (Filtered)

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Aggregate to Total Number of

Locations
n = 35

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Area A Distribution (Filtered)

Statistical / Mature
> 3 Samples

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Area A - 3P Undeveloped Reserves

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Bakken Development - Jan 2012

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Initial Filtering to Area B

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Area B EUR Bubble Map

Sweet Spot?
Or Better Operator?
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Area B Operator Bubble Map

One operators
performance indicates
variance in rock/fluid
properties is the cause of
poorer wells surrounding
acreage B.
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Area B EUR Bubble Map

Removing wells in
better geologic area.

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Area B Distribution (Filtered)

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Aggregate to Total Number of

Locations
n = 35

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Area B Distribution (Filtered)

Intermediate
~ 2 Samples

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Area B - 3P Undeveloped Reserves

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Bakken Development - Jan 2012

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Initial Filtering to Area C

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Area C EUR Bubble Map

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Area C Distribution (Risked)

105,000

3.0

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Aggregate to Total Number of

Locations
n = 35

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Area C - 3P Undeveloped
Reserves

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Let the Debate Begin!

Aggregate Proved to Total Number of
Analogous Locations?
Include PDP in Aggregation?
Case by Case Considerations

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Effect of Aggregation on Smaller

Well Counts
n = 35

n=6

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SUMMARY AND
CONCLUSIONS

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Consider P90 and P10 in Your

Expectations

The Nile River is

4132
miles long!
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You Will Drill a Distribution!

Connected
Pore Space

Source: EOG

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Conclusions
Your 3P Reserves are directly related to the
development phase of the geologic area.
Early, Intermediate, Statistical/Mature

Your 3P Reserves are directly related to the

sample size of human dependencies.
Drilling, Completion, and Development Practices

Your 3P Reserves are directly related to the

number of analogous locations in the
development plan.
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THANK YOU!

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Contact Us
Haas Petroleum Engineering Services, Inc.
Registered Firm # F-002950
2100 Ross Ave, Ste 600
Dallas, TX 75201
(214) 754-7090
haas@haasengineering.com
www.haasengineering.com
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