Reserves to production ratio (R/P) is equivalent to the inverse of an exponential decline rate which is commonly used to forecast production rates. For a tank type gas reservoir, adding wells will increase the pool's producing rate and reduce the reserves life and R/P. Therefore, R/P indirectly represents the amount of development. For this analysis the optimum R/P is the value which results in the highest present value.

An approximation of present value for a single pool is represented by a single equation which takes into account the number of wells in the pool, initial productivity, capital cost per well, decline rates, discount factors and the netback received. A second equation has been derived to calculate the optimum R/P or the amount of development, which will yield the maximum present value. The results from these equations are not precisely the same as those determined by the cash flow model, but they are useful for checking sensitivities to various input parameters. The equations show that every pool has a unique maximum present value which is dependant on pool size, productivity, capital cost, number of wells, etc. However, the R/P at which the maximum present value occurs is only dependant on the ratio of individual well productivity to its capital cost (q/c). The equations also show that the optimum R/P decreases for pools with higher q/c ratios. This dependency to q/c ratios suggests that the optimum R/P for recently discovered pools will likely be lower than for older pools of equivalent reservoir quality because of improvements to the q/c ratio. New producing techniques such as horizontal wells and the utilization of an established infrastructure have increased productivity relative to the capital invested.

The optimum R/P's have been determined for a number of pools using the equations and these results have been compared to values derived from a cash flow model.

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