Presentations available online
Reserves Reporting Rules Explored
A recent Geoscience Technology Workshop (GTW) in Houston, “Geological Aspects of Estimating Petroleum Resources and Reserves,” examined the contributions, challenges and responsibilities of geoscientists in
estimating resources and reserves.
The 2½-day session, chaired by AAPG members John Sneider and Creties Jenkins,
addressed practical issues regarding the application of definitions, guidelines
and rules provided by the Petroleum Resources Management System (PRMS) and the
U.S. Securities and Exchange Commission (SEC) for the reporting of resources
Ten different technical sessions focused on the geologists’ role, work process and interactions with other disciplines, highlighted by John
Lee’s keynote address (“Where Are We Headed in Reserves Reporting?”), which encouraged AAPG members to take an active role in developing guidance
for the application of SEC and PRMS standards See commentary.
The GTW concluded with eight breakout sessions that addressed key issues raised
during the technical sessions.
The 10 technical sessions were:
- Reporting Standards (chaired by John Etherington), which focused on the three
standards widely applied in estimating resources and reserves: the PRMS
classification, SEC disclosure requirements and the SPE auditing process.
- Ethical Issues (Pete Rose) reviewed ethical principles, considered the
consequences of ethical failures, discussed the influence of bias on
decision-making and concluded with an examination of ethical conflicts in
- Role of the Geoscientist (John Ritter) concentrated on the geologists’ responsibility to understand risk and uncertainty, provide input to the
estimation process, quantify upside potential and set appropriate policy
direction for assessments conducted by governmental organizations.
- Quantifying Uncertainty (Gary Citron) focused on incorporating risk and
uncertainty in valuing acquisitions, and examining the results of probabilistic
aggregation versus arithmetic summation for various projects.
- Petrophysical Aspects (William Price) explored the use of net pay cutoffs, the
application of well test data, the impact of new technologies and the role of
uncertainty and ethics in making assumptions and calculations.
- Geophysical Aspects (Bob Hardage) addressed questions regarding the value and
limitations of seismic data, the constraints that should be applied during
interpretation, and practices and pitfalls in the use of attributes.
- Geological Mapping (Dan Tearpock) presented three ways to contour the same net
isochore data (by hand, computer mapping, geocellular modeling) and discussed
the impact of the differences between the resulting maps.
- Geocellular Modeling (Jeffrey Yarus) presented the key uncertainties in the
model building process, the mechanics of model building and its effect on
recovery factors, and a case study showing how combining stochastic and
deterministic techniques can improve reserves estimates.
- Engineering Perspectives (Ron Harrell) included three reservoir engineers who
discussed best practices in reserves evaluation and reporting, common
geological issues that affect reserves assessments and a technique that
combines well performance and pressure data to quantify reserves.
- Unconventional Reservoirs (Creties Jenkins) focused on evaluation issues unique
to tight gas sands, shale gas, heavy oil, oil shale and the quantification of
risk versus reward in these types of reservoirs.
The breakout sessions that followed concentrated on eight key questions raised
during the technical sessions:
- What recommendations can be made regarding clarifications/updates to the 2007
PRMS definitions and the 2009 SEC modernized rules?
- How do we establish reliable technology for estimating SEC proven undeveloped
- How do we conduct credible look-backs of project performance?
- How can we reconcile deterministic and probabilistic methods?
- What are the unique aspects of unconventional reservoirs that need to be
- What are the ethical implications of reporting under the modernized SEC rules?
- How do we achieve full integration of engineering and geoscience technologies?
- Should the AAPG consider developing geological reserves and resources
estimating and auditing standards?
Presentations from both the technical and breakout sessions are available on the
AAPG Search and Discovery Web site at www.searchanddiscovery.net.
Based on GTW’s popularity and the many ideas that were generated, additional GTWs focused on
similar topics are being planned.