Uncertainty in oil reserve analysis results from both sources of error in an analysis and the affects of changing production technology. This uncertainty can be constrained by analyzing reserves within the context of a geologic play. The geologic plays are based on categorization of geologic heterogeneity, which corresponds to engineering parameters.
Monte Carlo simulation can be used to combine the effects of both error in reserve analysis and the affects of changing production technology. When this approach is used within a geologic play framework, the resulting reserve probability distributions can accommodate geologic uncertainty and quantify reserve variability potential (RVP). Calculating the RVP of a individual reservoir is a three step process. First the OOIP/acre values for a given play are fit to a general probability distribution function. Second, play probability distribution functions are fit for reservoir recovery efficiencies at various stages of reservoir development Finally, the delerministically calculated average OOIP/acre for individual reservoirs is applied with the play volumetric and recovery probability distributions, to generate RVP distributions. The 50th percentile reserve value and the 10-90 percentile range is the RPV, and this describes the reserve uncertainly.
This method allows more accurate reserve estimates and bridges the gap between advocates of deterministic versus probabilistic reserve estimation. Geologic assurance is built into the RVP, and engineers are thus better able to assess risk in reserve calculations. Applying the concept of RVP also eliminates the need to categorize reserves as proved, probable, and possible by modeling reserves as a continuum.