Chapter 1

Introduction to reservoir engineering

and volumetric equation
Resources Classification Framework.

2
原始藏量(或儲量)及蘊藏量之關係

Reserves (蘊藏量)
＝ Original petroleum in place(原始
藏量或儲量)
× recovery factor(採收因子)
原始藏量(或儲量或資源量)及蘊藏量
估算法

類比法(Analog method)

體積法(Volumetric method)

油層模擬法(Simulation method)

物質平衡法(Material balance method)

生產遞降法(Decline trend analysis)

礦區狀態與蘊藏量(或資源量)估算法
A B C D E F
礦區狀態 第一口
井完井
生產運作

未鑽井期 開發期 生產期 遞 降 期 棄井

累積生產量
生產圖 累
生 積
產 生
率 生產率 產
量

時間

估算方法 類比法
體積法
動態分析
模擬法
物質平衡法
遞降法
 各種蘊藏量估算法之不確定性
估算方法 類比法
體積法
動態模擬
模擬法
物質平衡法
遞降法

估算範圍
最 真正採收量
終
採 估算採收範圍
收
量

評估不確定性
高

不
確
定
性
低
 類比法
類比法適用於礦區未開始鑽探的探勘時期
(缺乏地質及工程資料)。

利用礦區鄰近的其他礦區已完井的相關資
料，而估算出該礦區的資源量/蘊藏量。

由於缺乏資料，所以估算出來的蘊藏量的
估計值不確定性相當大，不同評估者之間
所得之結果差異性會很大。
 體積法

利用所獲得的礦區地質及工程上的資料(包
括面積、油層厚度、孔隙率、含水飽和度
及採收率等)，計算含石油及天然氣的體積，
估計油氣礦區的資源量/蘊藏量。
 物質平衡法
此法利用礦區的工程資料（例如，生產量、
地層平均壓力及石油與天然氣之特性等），
由物質平衡所導出的計算式，估算礦區的
資源量及蘊藏量。

物質平衡法所得的結果可信度頗高。
 生產遞降法

若礦區已生產某一時間之後，整個礦區的生產量
開始下降而遞降時，可根據礦區的遞降生產資料
（產率隨時間之變化），繪製生產遞降曲線圖，
並用外插法延伸該曲線，可得未來的產率與時間
之預測。估算出石油或天然氣的蘊藏量。
 數值模擬法

當礦區含有較多的地質上的資料以及各種生產資
料時，則可以使用數值模擬法。

利用流體在地層中流動方程式的數值解，先進行
歷史資料調諧後，而估算未來的生產率隨時間之
變化。
 各種蘊藏量估算法之不確定性
估算方法 類比法
體積法
動態模擬
模擬法
物質平衡法
遞降法

估算範圍
最 真正採收量
終
採 估算採收範圍
收
量

評估不確定性
高

不
確
定
性
低
體積法計算蘊藏量(Reserves)

OOIP = [A*h* Ф*(1-Sw)]/Bo

where
OOIP = 石油現地總量(Original oil in place,OOIP)
A =面積
h =油層厚度
Ф =孔隙率
Sw =含水飽和度
Bo =地層體積因子

Reserves = OOIP*Rf
where
Reserves =蘊藏量
Rf =採收率
Determination of oil and gas in place

15
Equation 2.97 is widely known as the equation for the
volumetric estimate of original oil in place. It is often referred to
as the volumetric equation, and this method is essentially
related to a static description of the reservoir. Described in
later chapters, other methods are routinely used by reservoir
engineers that involve dynamic oil and gas production
information.

The volume of hydrocarbons in the reservoir is also expressed

in barrels per acre-feet (bbl/acre-ft) as follows:

16
 Sources of data and methodology
Sources of reservoir data used to estimate oil or gas in
place include
geophysical, geological, log, and core studies.
Also, reservoir limit tests are also conducted to identify
reservoir boundaries.
The areal extent of a reservoir can be wide ranging, from
very small fields that barely produce for a short time to
giant fields capable of producing millions of barrels of oil
a day for decades.
The thickness of a reservoir can vary from less than a
foot, sometimes referred to as a stringer, to hundreds of
feet. Initial oil saturation is found from the known connate
or interstitial water saturation as obtained from electric
logs. Initial oil or gas saturations in commercial fields
usually range between 70% and 90%. 17
Example 2.9. Estimation of original oil in place
(OOIP) in a reservoir based on minimum data.

Calculate the original oil in place in an

undersaturated oil reservoir in reservoir
barrels per acre-feet and in stock-tank
barrels per acre-feet. The interstitial water
saturation (Sw) is 21% PV, and the initial
oil formation volume factor (Boi) is 1.18
rb/stb. The porosity value (0.1679) for the
reservoir from Example 2.2 will be used.

18
Solution: Original oil in place per acre-ft, OOIP', is obtained
by simply dividing Equation 2.96 by (A, in acres)(h, in feet),
as shown in the following:

19
 Original gas in place (OGIP)
A similar equation can be used to estimate
the original gas in place (OGIP) in a gas
reservoir. In this case, Equation 2.96 takes
the following form:

20
 Original gas in place (OGIP)
Natural gas remains in the subsurface in a highly compressed state,
as the prevailing pressure is much higher than atmospheric
pressure. Once produced at the surface, it would expand
significantly. Gas in place, in terms of standard cubic feet (scf), can
be estimated when the gas formation volume factor is known.
Hence, Equation 2.99 is modified to take the following form:

Note that 1 bbl = 5.615 ft3,hence Equation 2.100 is

modified to conform to the unit of gas formation volume
factor in reservoir barrels per cubic feet under standard
conditions.
21
Example 2.10. Estimation of the original gas in
place in a dry gas reservoir.

Calculate the original gas in place in a dry

gas reservoir. The following data is given:

22
 Petroleum reserves
A distinction must be made at this point between
original hydrocarbon in place and reserves in an oil or gas field.

Two reservoirs may have the same oil in place but very different
reserves. The actual volume of petroleum that can be optimally
recovered from a reservoir is tied to the estimation of oil and gas
reserves.

Reserves could be quite high in the case of a dry gas reservoir

where near-ideal conditions exist, ranging as high as 80% or more
of the initial gas in place (IGIP).

However, reserves could be much lower in the case of oil reservoirs.

Oil reserves may vary from low single digits to 60% of the original oil
in place, depending on oil and rock characteristics, natural drive
mechanisms, and efficiency of improved or enhanced oil recovery.

24
 Petroleum reserves
Fields with quite low reserves are categorized as marginal, and they
would only be developed using resource-intensive technologies
when market conditions indicate a high demand for crude. A case in
point is certain enhanced oil recovery processes described in
chapter 17, which become viable only at certain oil price levels.

Equation 2.97 serves as a basis to estimate oil reserves when the

residual oil saturation and oil formation volume factors are known
with some degree of confidence at the end of the producing life of
the reservoir. The ultimate oil recovery and reserves can be
estimated based on the following general equation:

25
 Petroleum reserves
Residual oil saturation can be estimated from petrophysical
studies of core samples obtained from the reservoir.
In fact, reserve estimates are strongly influenced by a
myriad of technical and nontechnical issues. These include
geologic complexity, reservoir drive mechanism,
technological innovation, petroleum economics, government
policy, and environmental issues. In essence, petroleum
reserves are defined as follows:

Depending on the increasing probability of finding

hydrocarbon accumulations and commercial viability for
production, petroleum reserves can be classified and
reported as possible, probable or proved, which are
discussed in chapter 15.
26
 Recovery efficiency
The recovery efficiency is defined as the ratio of
recoverable oil volume over original oil in place.

An expression for recovery efficiency for oil reservoirs is

provided in Equation 2.50.

27
 Recovery efficiency
Based on a multitude of field studies, correlations for estimating
recovery efficiency have been developed that may be used as a
guide for newly discovered reservoirs where actual production data
is either unavailable or insufficient.
Chapter 8 explains estimation of recovery efficiencies as influenced
by reservoir drive mechanisms.

28
 Recovery efficiency – API Correlations
Depletion or solution drive oil reservoir at bubble point
API correlation for recovery efficiency for solution gas drive reservoirs (sands,
sandstones, and carbonate rocks) is given by the following equation:

where
ER = recovery efficiency, % original oil in place at bubblepoint,
o = porosity, fraction of bulk volume,
Swi = interstitial water saturation, fraction of pore space,
Bob = oil formation volume factor at the bubblepoint, rb/stb,
k = absolute permeability, darcies,
).lob = viscosity of the oil at the bubblepoint, cp,
Pb = bubblepoint pressure, psia, and
Pa = abandonment pressure, psia.

The correlation is based upon the following:

*Bubblepoint and abandonment pressures
*Rock properties such as porosity, permeability, and oil saturation
*Fluid properties such as viscosity and oil formation volume factor at the bubblepoint
Since the correlation is applicable to depletion drive reservoirs, recovery above the bubblepoint needs to be
added to determine the total recovery.

29
 Water drive oil reservoir

Recovery efficiency for water drive reservoirs (sands and sandstones)

is given as follows:

where
ER = recovery efficiency, % original oil in place,
Boi = initial oil formation volume factor, rb/stb, ).
lwi = initial water viscosity, cp,
).loi = initial oil viscosity, cp, and
Pi = initial reservoir pressure, psia.
The correlation is based upon the following:
*Initial and abandonment pressures
*Rock properties such as porosity, permeability, and oil saturation
*Fluid properties such as viscosity and oil fluid volume factor at the initial pressure
For both correlations, the constants and exponents in the equations can be adjusted for the
reservoirs being evaluated.

30
Example 2.11. Calculation of petroleum reserves-data
requirements.

In the gas reservoir described in

Example 2.10, what would be the
minimum information required in order
to estimate the reserve? Make
necessary assumptions.

31
 Key points-volumetric estimations and petroleum reserves
The key aspects related to volumetric estimation of oil and gas in place, as well
as petroleum reserves, can be summed up as follows:

The original oil and gas in place in a reservoir can be estimated from a
basic knowledge of a few reservoir characteristics. These include reservoir
area and average thickness, average porosity of the formation, and the
saturation of petroleum fluid in the rock pores.

However, the volumetric estimate is only an approximation for a newly

discovered field. Better accuracy is achieved when several wells are drilled,
and the reservoir production history becomes available. Various techniques
are employed to assess rock properties in locations of the reservoir where
there are no wells.

The petroleum reserve concerns the portion of oil and gas in the reservoir
that can be economically produced under government regulations. Reserve
of an oil or gas field depends both on technical and nontechnical factors.
These include rock and fluid properties, technological breakthroughs,
demand for oil and gas, and environmental issues, among others.
32
 Fundamentals of
Volumetric Methods
The volumetric method for estimating the
original hydrocarbon in place is given by
the following relationship:

OHCIP = Bulk Volume (Area x Thickness) x Porosity x Saturation

Formation Volume Factor

33
List of the necessary data to perform a volumetric estimate
of original hydrocarbon in place

Field and lease maps

Structure and isopach maps
Openhole and cased-hole logs
Core analysis
Porosity and permeability, with cutoff values
Elevations of oil/water and gas/water contacts
Water saturation, with cutoff values
PVT properties of reservoir fluids, including formation volume factor and
solution gas/oil ratio
Area, thickness, oil/water contact, and gas/oil contact data is gathered from
structure and isopach maps, well logs, seismic studies, and core analysis
(chapter 3).
Porosity and saturation with cutoffs are obtained from well logs and core
analysis (chapter 2). The cutoffs should be determined by considering the
minimum effective formation permeability to allow commercial production.
Formation volume factor data is obtained from laboratory tests and correlations (chapter 3).

34
 Associated Oil Reservoir
-- Oil reservoir with a gas cap
For an oil reservoir with an associated gas cap, the volumetric
equation to estimate the original oil in place is given below (Equation
2.95 from chapter 2):

where
A = reservoir area, acres,
h = oil zone thickness above the transition zone, ft,
o = reservoir porosity, faction,
Swi = irreducible or connate water saturation, fraction of pore
volume, and
Boi = initial oil formation volume factor, rb/stb.
This equation is frequently referred to in the literature as the stock-
tank barrels of oil initially in place (STOIIP) equation.

35
 Associated Oil Reservoir
-- Oil reservoir with a gas cap

The transition zone extends from above the 100% water

saturation to the irreducible water saturation. This height
depends upon the reservoir rock and fluid properties. If
the transition zone is substantial, oil can be produced
from an upper portion of the transition zone with an
acceptable water cut. In that case, the original oil in
place of the producible transition zone can be calculated
using average thickness, oil saturation, and porosity of
that producible transition zone.

36
 Associated Oil Reservoir
-- Oil reservoir with a gas cap
Solution gas in the original oil

where
Gsi = solution gas in place, scf, and
Rsi = initial solution gas/oil ratio, scf/stb.

Gas in place in the gas cap:

where
G GC = gas in gas cap, scf, and
m = volume of gas cap/volume of oil zone.

37
 Example 9.1 --Oil reservoir without a gas cap
The original oil in place and solution gas in the oil are calculated by using
Equations 9.2 and 9.3, respectively. Since there is no gas cap, the gas in
place in the gas cap is zero (m = 0).

Example 9.1. Using the data given below, calculate the original oil in place
and gas in solution. What would be the maximum initial reservoir pressure
expected in this case?

Drainage area, acres, = 160.

Average oil zone net thickness, ft, = 50. Average porosity, %, = 30.5.
Initial oil saturation (fraction) = 0.78. Oil specific gravity, °API, = 33.
Gas specific gravity = 0.66. (Air = 1.)
Solution gas/oil ratio at b.p., scf/stb, = 385.
Size of gas cap = 0.15.
Reservoir temperature, of, = 170.

Solution: The bubble point is first calculated based on the Standing

correlation presented in chapter 3):
38
 Since a free gas cap is present, the initial reservoir is either at or below the bubble
point. The formation volume factor is obtained by Equation 3.69:

Using Equation 2.96 in chapter 2, the original oil in place is estimated as follows:
OOlP = 11.9 MMstb

Gas in solution is calculated based on Equation 9.2:

Finally, the volume of gas in the gas cap is determined by Equation 9.3:

39
 Gas Reservoir
Unassociated gas reservoir
For an un associated gas reservoir (i.e., without an oil zone), the
volumetric equation to calculate the original gas in place, as given in
chapter 2, is as follows:

where
h = gas zone thickness above the gas/water contact, Sgi = initial gas saturation (1 -
Sw), and
Bgi = initial gas formation volume factor, rb/scf.

40
 Example 9.2.

Example 9.2. Using the reservoir data from Example 9.1, calculate
the original gas in place (OGIP) in a dry gas reservoir. The following
data is available related to fluid saturation and PVT properties:
Initial gas saturation, % pore volume (PV), = 78.
Initial gas formation volume factor, rb/scf, = 0.00123-

Solution: An example showing estimation of the initial gas in place is

shown in chapter 2. Similarly, the following can be obtained:
OGIP = 12 bcf

41
 Calculation Methods
Methods used to calculate both stock-tank barrels of oil initially in
place and original gas in place include the following:

Deterministic. Based upon a fixed average value for each

property, as illustrated previously.

Probabilistic. Based upon a range of maximum and minimum

values for each property.

Normally, a simple deterministic method is used. However, the

probabilistic approach is desirable because the reservoir is not
homogeneous, and there is an uncertainty in the data. In recent
times, the probabilistic approach is being used with increasing
frequency.

42
 Deterministic approach
A very simple method is to use average or weighted values of
thickness, porosity, saturation, and formation volume factor, and
apply these to the drainage area of the reservoir.

In the case of a layered reservoir, the original oil or gas in place is

summed for the various layers. However, better results can be
obtained by using Ah (isopach), Aho (isovol), or even AhoS
(hydrocarbon pore volume, isoHCPV) maps.

Computerized mapping programs are commonly available to

produce isopach maps and even to calculate original hydrocarbon in
place. This can save a great deal of time and can enhance accuracy
of the results.

Computer-generated maps should be carefully checked to ensure

geological consistency.

43
The more frequently used method involves
creating separate contour maps for each input
variable with control points. Each map includes a
common grid pattern. Overlays of individual
variable contour maps provide accurate
interpolations for each grid block.

Calculated values of h, hO, hOSw, hOSo, and

hOSg may then be contoured as isopachs,
isovols, isoHCPV, etc. (fig. 9-1).

44
45
Input data for the net oil or net gas pay zones
comes from core and well log analyses.

The net sand isopach maps can be developed

when there are sufficient wells available for
analysis.

A general rule of thumb would be that 5-10

wells (nicely dispersed) are the minimum
number needed to make a reliable map.

The more wells that are available, the better the

isopach map, which will better reflect the
reservoir characterization. 46
The determination of net pay is complicated by a number
of factors:

Directional drilling. A directionally drilled well needs to have log-

measured depths converted to true vertical thickness, which
accounts for the well deviation in addition to the dip and strike of the
formation.

Inadequate porosity and permeability. A porosity cutoff value is

needed for determining net pay. There must be sufficient effective
porosity with formation permeability so that the production rates of
oil or gas, or both, are at commercially viable levels.

Fluid contacts. Location of fluid contacts could differ from well to

well as a result of varying transition zones due to the lack of
hydrodynamic equilibrium or sealing faults, etc.

47
Examples of the volumetric estimates of oil and gas
shown earlier were based on single values of reservoir
properties.

In reality, these estimates are based on a number of wells

present in the reservoir. A large field may have hundreds
of wells, and a multitude of reservoir data obtained from
these wells is utilized in volumetric calculations.

Data obtained from the dry wells is also incorporated to

have better control on reservoir thickness, fluid saturation,
and other properties.

48
Volumetric estimates of the hydrocarbon in place were traditionally performed
with the aid of a planimeter. This was used to measure the area under each
contour on a map of the volume of hydrocarbon per unit area (bbl/ft'' or
bbl/acre).

With the advent of digital computing, such tasks are carried out with relative
ease within a short period of time. Relevant data obtained from each well is
entered, including the well location, depth, dip, formation thickness, water
saturation, and the oil formation volume factor, among others.

This leads to the development of a contour map of the oil volume. The plot is
similar to what is shown in Figure 9-2, where the contours are in barrels per
acre (bbl/acre) or similar units.

Next, the total area under each contour is determined. A suitable numerical
algorithm, such as Simpson's rule or the pyramidal rule, can be employed to
calculate the total volume of hydrocarbon in place .

49
50
 Probabilistic approach
There is never enough well, log, and core data available
to accurately determine the average input values, such
as porosity and fluid saturation.

Unlike the deterministic method, which uses average

properties of the wells to calculate the original oil or gas
in place, the probabilistic approach assigns a range of
values for each variable.

These values range from a minimum to a maximum, with

some statistical distribution to compute the probability of
possible answers.

51
 Probabilistic approach
Reservoir parameters such as porosity, net thickness, and hydrocarbon
saturation are found to fall in certain quantifiable probability distribution
patterns.

These patterns could be triangular, random, normal, or lognormal, among

others.

It is a common practice in the industry to utilize a Monte Carlo simulation

based on distributions of reservoir properties.

This simulation is used in order to generate a large set of values for the
sought result, such as the oil in place, and then assign a range of probability
values to it.

It is recognized from experience that various reservoir parameters used in

probabilistic analysis frequently follow lognormal distribution.

52
 Probabilistic approach
It is customary to report predicted answers
for the 10%, 50%, and 90% cumulative
probabilities. The technique needs a
sizeable amount of data, which is not
available early in the life of the reservoir.

53
Probabilistic approach (Stochastic Approach)
No industry standard exists for stochastic reserves
estimation.
General practice is to use continuous probability density
functions (PDFs) and combine these distributions to
generate a PDF for reserves.
The input PDFs (e.g., triangular) are combined either
analytically (Capen 1992) or by random sampling (Monte
Carlo simulation).
By central-limit theorem, the resultant (reserves)
distribution approaches lognormal, regardless of the type
of input variables.
Therefore, analytical techniques assume reserves to be
lognormal. Monte Carlo simulation requires a large
number of iterations for stable results.
54
 Probabilistic approach
(Stochastic Approach)
Because it provides a range of reserves values with
associated probabilities, the stochastic method often is
the preferred procedure for volumetric calculations.
It enables business decisions in the ever-present
uncertainty context, providing a good understanding of
risk and potential reward.
The methodology first gained acceptance among North
Sea operators in the 1960s and 1970s, but is now more
widely used.

55
 Deterministic-Based Volumetric Method

A  h    1  S w 
石油蘊藏量＝  RF
Bo
A  h    1  S w 
天然氣蘊藏量＝  RFg
Bg

56
 機率性體積法計算蘊藏量
機率性法
A, h,Φ, Sw, Bo, Bg, RF, RFg含不確定性，有一機率
分佈機率

57
機率性體積法—蒙地卡羅模擬
A  h    1  S w 
Ng   RFg
Bg

58
機率性體積法—蒙地卡羅模擬 (cont.)

59
機率性體積法—蒙地卡羅模擬 (cont.)
（3）產生亂數—介於0與1之間
在累積機率圖裡找一相對之A, h, ψ, Sw, Bo, Bg, RF,
RFg之值

A  h    1  S w 
(4)利用 Ng   RFg 得到一個Ng之值
Bg

(5)重複（3）及（4）很多次（例如：5000次）而得
到很多的Ng之值（例如：5000個Ng值）

60
機率性體積法—蒙地卡羅模擬 (cont.)

61
 Examples
Stochastic reserves calculations that use
the exact analytical solution for oil field
“KK” are shown in Table 2.

62
 Assuming lognormal distribution
For simplicity in calculations, the input variables were
assumed independent and lognormally distributed,
defined by P90 and P10 parameters.
The other parameters, P50, mean, and standard
deviation (SD) listed in the table were calculated.
The resulting (untruncated) UR distribution, also
lognormal, had a relatively narrow spread of P90 at 22.5
million bbl and P10 at 81.8 million bbl, with a mean at
48.7 million bbl.

63
For this field, the economic cutoff was 30 million bbl and
the plausible maximum was 200 million bbl.
The original distribution was truncated to honor these
constraints.
The truncated distribution, which was no longer
lognormal, had P90, P10, etc. values that were different
from the original values.
The expectation curves for the untruncated and truncated
distributions in Fig. 8 show the differences.
As expected, the truncated distribution had a smaller
dispersion (spread).
Fig. 9 shows the probability density graph of the
truncated distribution.
64
65
66
 probabilistic approach differs from the
deterministic method
The probabilistic approach differs from the
deterministic method as follows:

The probabilistic result is a statistically significant

distribution of the possible answers.
An S-curve plot of all the results assigns a
probability to each of the possible answers.
Predicted results are usually reported for the 10%,
50%, and 90% cumulative probabilities.

67
 probabilistic approach differs from the
deterministic method

The confidence envelope surrounding the probabilities

depends on the number of possible answers (i.e., on the
number of simulations).
The analysis typically takes 500 to 10,000 simulations to
generate a smooth S-curve.
Variables are confined to limited ranges, often with a most-
likely value.
Random numbers are used to assign precise values for
each input variable.
A different set of random numbers is used for each
successive calculation.

68
 Risk Analysis
體積法計算天然氣蘊藏量
開啟Risk Analysis程式

開始＞程式集＞Palisade Decision Tools ＞@RISK3.5 for Excel{32-bit}

檔案＞開啟舊檔（或 檔案＞開新檔）

鍵入A,H,,Sw,Bg,及RF資料以及計算Reserves
Title 之鍵入
輸入各常數
Area
插入＞函數＞@RISK＞RiskTrigen >
Left x = 0.4
Middle x = 0.50.
Right x = 0.7
Bottom％ = 5
Top％ = 95％

69
 Trigen（0.4,0.5,0.7, 5, 95）

0.4 0.5 0.7

Thickness
插入 > 函數 > @Risk > Risknormal >
Mean = 4
Standard deviation = 1

Porosity
…………………

71
跑 @RISK
> 選擇 Output Cell (G3-G5)
> Click Add the Selected Cells as @RISK outputs

> Click Display Input by Output table

=> Show if Input by Output Window

> Click Simulation Setting

=> Simulation Settings Windows

-- Iterations / # Iteration = 1000
-- Sampling / Sampling type = Monte Carle
--
--
--
Click OK

72
Click Simulation
=> showing results windows
& statistic windows

>Click Data
>Click Result > Report to worksheet…
□ statistics
□ Data
> Click ok
=> Save on Book4 worksheet
>click show main @ RISK window
> click Reserves

> click Graph

73
 Home work
Exercise 9.1 (p.380) in
(A) Abdus Satter, Ghulam M. Iqbal, James L.
Buchwalter, Practical Enhanced Reservoir
Engineering: Assisted with Simulation
Software, PennWell, Tulsa, OK 2008.

74
 Decision-tree approach
Another stochastic technique is the decision-tree
approach in which risk-based discrete
probabilities are used to estimate reserves.
There also is the parametric or three-point
technique, which involves approximation and for
which input distributions of unspecified type are
allowed.
There are several versions of this technique. Both
decision-tree and parametric methods were
developed before the advent of modern computer
technology and are seldom used in today’s
corporate environment.
75
 The results from stochastic calculations

The results from stochastic calculations are summarized

generally by a descending (reverse) cumulative
probability function commonly known as expectation
curve.
For risk analysis in exploration, also for developments in
high-cost areas, reserves distribution may have to be
truncated to honor the economic cutoff.
Generally, an upper truncation to honor the maximum
plausible reserves is applied also.

76
77
78
Probabilistic approach

79