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Uncertainties impacting reserves, revenue, and costs (view source)
Revision as of 17:32, 10 January 2014
, 17:32, 10 January 2014→Combining distributions
However, a graphical shortcut is readily available for combining any three lognormally distributed factors. This procedure is quick and can be performed manually. The example shown in Table 2 uses area of drainage, average net pay, and hydrocarbon recovery factor. Other variables important in development evaluations include initial flow rate (IP), decline rate, wellhead prices, and costs.
However, a graphical shortcut is readily available for combining any three lognormally distributed factors. This procedure is quick and can be performed manually. The example shown in Table 2 uses area of drainage, average net pay, and hydrocarbon recovery factor. Other variables important in development evaluations include initial flow rate (IP), decline rate, wellhead prices, and costs.
[[File:Rose_time-value-of-money_1.jpg|thumb|'''Table 2.''' Calculation of means (see Figure 2)]]
[[File:Rose_time-value-of-money_1.jpg|thumb|'''Table 2.''' Calculation of means (see [[:Image:Charles-l-vavra-john-g-kaldi-robert-m-sneider capillary-pressure 2.jpg|Figure 2]])]]
Note that multiplying the three ''P''<sub>90%</sub> values for area, net pay, and hydrocarbon recovery does not yield a ''P''<sub>90%</sub> value for reserves; in fact, it gives a product corresponding to 98.7%! Similarly, multiplying the three ''P''<sub>10%</sub> values gives a reserves product that corresponds to ''P''<sub>1.3%</sub>, not ''P''<sub>10%</sub>.
Note that multiplying the three ''P''<sub>90%</sub> values for area, net pay, and hydrocarbon recovery does not yield a ''P''<sub>90%</sub> value for reserves; in fact, it gives a product corresponding to 98.7%! Similarly, multiplying the three ''P''<sub>10%</sub> values gives a reserves product that corresponds to ''P''<sub>1.3%</sub>, not ''P''<sub>10%</sub>.