This paper is the third paper in a three part series which collectively presents a new practical method for probabilistic reserve evaluation under the recently released Modernization of Oil and Gas Reporting Rules by the Securities and Exchange Commission (SEC) (SEC 2009). This paper is focused on a methodology to validate the new stochastic booking method outlined in the first two papers of the series. When major changes are contemplated for key systems within a company it is critical to evaluate those changes prior to implementation. Moving to a new method of reserve evaluation and reporting could potentially have major implications for almost any oil and gas company. Internal uses of the reserve report as well as legal requirements of disclosure to regulatory agencies and governing bodies elevates the need to understand the scope of the modifications before they are adopted.
This paper presents an approach wherein the evaluator can test the proposed probabilistic methods against the actual field data. The test is used to predict the repeatability and reliability of the results. In essence, it applies an empirical approach to insure the technique meets the SEC requirement to be considered a reliable technology. When this approach is conducted over independent units of time and distinct spatial areas the repeatability of the answers supports the robustness and confidence needed to meet the requirements of the Modernized Rules.
Theoretical Proved Undeveloped (PUD) bookings were created using the new stochastic method for specific locations for a prior time period; those results were compared to actual post production proved developed producing (PDP) well estimated ultimate recovery (EUR) results for the same locations. Results for a specific case history are presented. The PDP results are in aggregate slightly greater than the aggregated PUD bookings. The new method constitutes a reliable technology and this paper outlines an approach to test the method prior to implementation in a company's work flow.