ORIGIN AND OCCURRENCE OF OIL 51
the ability if a material to support the process of charge transport.
Archie's law describes the relationship between resistivity (electrical), porosity, fluid saturation, and the cementitious nature of the
rock. In petroleum reservoir evaluation, this data has significant
impacts and consequences for the extraction of oil and hundreds of
millions of dollars may be at risk and subject to the interpretation
of this data.
The current trend for reservoir evaluation is for fuller disclosure
to provide investors with a better understanding of the underlying
risk factors and range of uncertainty in reserve values and production forecasts.
For example, a company may have exploration potential that
can represent a significant upside, but the hydrocarbons associated with the reservoirs cannot be included within the constraints
of the securities exchange rules for standard reserve evaluations.
Evaluators cannot create reserves. It is recommended that a separate report be published that evaluates potential reserves and provides an independent opinion as to the upside exploration potential
for undrilled lands. This value reporting concept advocates providing the investor with more than the minimal information required
for public disclosure. For example, a reserve may be stranded due
to a lack of facilities. No economic value is given, however, there is
value to the investor who has a long-term plan and can wait several
years for the infrastructure to be developed. In fact, to some extent,
annual reports and press releases are value reporting. An independent report would provide greater certainty to the investor and a
firmer share price to the oil company.
2.4.3 New Evaluation Technology
Straight-line methods of evaluation (i.e. decline analysis) have limited applicability. In particular, decline analysis assumes pseudo
steady-state flow of crude oil from the well. Many models are
developed with this in mind, but the objectives of the study are
not always clearly defined before any work begins. It is easy to fall
into the trap of building a model that attempts to incorporate every
aspect of a crude oil gathering system so that everyone can use
it to forecast any possible scenario. The result is usually a model
that is always waiting on more data, or one that is so complex and
demanding of input data — especially revisions — that the quality
of the model suffers to satisfy the quantity of input data.
the ability if a material to support the process of charge transport.
Archie's law describes the relationship between resistivity (electrical), porosity, fluid saturation, and the cementitious nature of the
rock. In petroleum reservoir evaluation, this data has significant
impacts and consequences for the extraction of oil and hundreds of
millions of dollars may be at risk and subject to the interpretation
of this data.
The current trend for reservoir evaluation is for fuller disclosure
to provide investors with a better understanding of the underlying
risk factors and range of uncertainty in reserve values and production forecasts.
For example, a company may have exploration potential that
can represent a significant upside, but the hydrocarbons associated with the reservoirs cannot be included within the constraints
of the securities exchange rules for standard reserve evaluations.
Evaluators cannot create reserves. It is recommended that a separate report be published that evaluates potential reserves and provides an independent opinion as to the upside exploration potential
for undrilled lands. This value reporting concept advocates providing the investor with more than the minimal information required
for public disclosure. For example, a reserve may be stranded due
to a lack of facilities. No economic value is given, however, there is
value to the investor who has a long-term plan and can wait several
years for the infrastructure to be developed. In fact, to some extent,
annual reports and press releases are value reporting. An independent report would provide greater certainty to the investor and a
firmer share price to the oil company.
2.4.3 New Evaluation Technology
Straight-line methods of evaluation (i.e. decline analysis) have limited applicability. In particular, decline analysis assumes pseudo
steady-state flow of crude oil from the well. Many models are
developed with this in mind, but the objectives of the study are
not always clearly defined before any work begins. It is easy to fall
into the trap of building a model that attempts to incorporate every
aspect of a crude oil gathering system so that everyone can use
it to forecast any possible scenario. The result is usually a model
that is always waiting on more data, or one that is so complex and
demanding of input data — especially revisions — that the quality
of the model suffers to satisfy the quantity of input data.