Equity Determination

The nature of the E&P industry is such that few substantial hydrocarbon resources are developed by an operator who is the sole equity partner. For this reason many E&P fields become the subject of an equity determination, and it is also common to revert, at least once, to a re-determination, through the development phase of the resource.

There are many bases for determining equity. Weatherford has many years experience in the analysis of reservoir and production data, which can help establish a company position, or counter-position. In addition, Weatherford is unique among independent consultancies in the measurement and audit facilities it can provide in the area of standard and special core analysis. Weatherford can especially help your company's equity position in the following areas:

Fluid Contacts

Fluid contacts are usually inferred from core data, logs, wireline formation tester (WFT), or well tests. Weatherford has recognized expertise in the detailed analysis of data from all of these sources:

• Weatherford regularly carries out SCAL and specialist studies, as well as auditing standard commercial labs and measurement procedures.
• Weatherford's staff have a long history in the analysis of log and WFT data, and have unique expertise in the interpretation of WFT data and "apparent" contacts
• Weatherford has a strong position in well testing due to our many years experience of writing software and having analyzed hundreds of well tests from throughout the world.

Reservoir Compartmentalization

Many hydrocarbon reservoirs have a significant number of faults which act as barriers to flow. These can sometimes be seen on seismic data, but very often they can only be inferred from interpretation of well test or production data. Misinterpretation of reservoir compartmentalization has a very serious effect on reserves, and many fields under perform their expectations due to compartmentalization. Weatherford has expertise in the analysis of test and production data, and in the interpretation of such data in compartmentalized reservoirs. This has resulted in carrying out studies of such reservoirs, developing software to analyze production data, and in the development of training courses presented to the industry.

Complex Fluid Distribution

In some reservoirs the behavior of hydrocarbon fluids themselves can be very complex. This is commonly the case in gas condensate and volatile oil reservoirs where the fluids are known as near critical, but it can also be the case in gas or black oil reservoirs. When the determination of equity is dependent on fluid properties, expert understanding of the fluid properties is essential. Weatherford's staff have substantial expertise in PVT analysis which can maximize the client's understanding of complex fluid systems, and in addition to consulting in PVT have developed state-of-the-art software incorporating equation of state techniques.

Permeability and Porosity Cut-Offs

The volume of the "net" reservoir which is considered exploitable is very dependent on the cut-offs applied to porosity and permeability. In many instances unrealistic values are attached to cut-offs, resulting in inappropriate stock tank oil or gas initially in place (STOIIP or GIIP) and reserves. These values are often chosen on the basis of knowledge or correlation. Weatherford has carried out core analysis studies which determine reasonable cut-offs based on measurement and fluid dynamics, and has shown that there can be significant error associated with other techniques. This expertise can be applied in the determination of cut-offs in equity studies.

Petrophysical Parameter Determination/Validation

To correctly interpret logging data it is very important to incorporate the results of core-derived properties, since the core is the only true representation of the reservoir rock. Of critical importance to an equity study involving petrophysical data is the estimation of the cementation and saturation exponents, the so-called "m" and "n" exponents. In many instances these parameters are determined in an inappropriate manner, or by incorrect interpretation of laboratory experiments which are easily systematically flawed. Weatherford has much expertise in the analysis of third party laboratory data, where detailed analysis can be made to determine the correct values of "m" and "n" which should be used in log analysis. Results of studies carried out by Weatherford show that very significant errors in STOIIP and reserves can be expected unless a correct methodology and interpretation is used to establish these petrophysical parameters.

Reservoir Modeling

In most North Sea fields, STOIIP and reserves are determined by establishing static and dynamic reservoir models respectively. In both instances Weatherford has in-house expertise and software to build and run such models. Weatherford's staff have significant expertise in reservoir simulation, whether involving history matching or predictions. This expertise can be used to enhance your company's position in an equity dependent on reserves, or in the role that selected reservoir sectors or compartments may contribute.

Production Modeling

When an equity determination involves the issue of reserves, then the production system often plays as important a role as the reservoir. The significance of reservoir modeling is well accepted by the industry; production performance modeling using production simulators, is increasingly being recognized as an effective tool to model the production system. Using both reservoir and production simulators is the most effective method of modeling the recoverable fluids from the total system, which comprises reservoir and production systems. Weatherford has significant expertise in both reservoir and production simulation; this has been demonstrated through successful consulting projects and, in the latter case, successful development of the WellFlo^® and ReO^® software production simulation and optimization tools.

Recent Equity Determination Projects

Weatherford has participated on the expert's team in two large equity re-determinations in the North Sea in the recent past.

• A joint Weatherford and Scott Pickford team worked on the Saga operated Snorre field, with Weatherford providing the reservoir engineering and core analysis expertise to the equity team.
• For the second equity, Weatherford provided quality review and expert advice on the core based measurements in the equity database, a key to determining the in place volumes.