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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: Salt'n'Peppa who wrote (412)	12/6/1998 8:46:00 PM
From: Salt'n'Peppa	Read Replies (3) \| Respond to of 15703

Geology 101: A free lesson from a geologist. A very good question was put to me in a private message by a confused person. He asked how they came up with an estimate of 1.2 billion BOE and why it has now been upped considerably. Following is a highly simplified explanation of the steps involved. I am missing many technical details intentionally. The purpose of this is to give everyone an idea of what is involved, not to baffle everyone with technical crap. The 1.2 billion BOE was an original estimate, based on seismic interpretation of the play. Keeping it simple, it is calculated using the following steps: We have an idea, based on seismic, of the area and shape of the potential reservoir and also of the thickness. This gives us an estimate of the volume of rock, in 3-D, that is the reservoir. Studies of other wells in the area give clues as to the expected porosity in the target formation (Temblor sand, in this case), which is the tiny spaces between individual sand grains. From this, volumetric calculations give us an estimate of the total pore-space within a reservoir rock. This total pore-space is combined with pressure data (pressure is created by the huge volume of rock above the reservoir) to give an estimate of the total volume of fluid that can be contained, under pressure (a compression factor comes into play) within that space. This is the potential reserves that you read about, or "fluid in place". Finally, a recovery factor is applied to the total reserves, to give us an estimate of recoverable reserves, or how much of that oil/gas "down there" can we get "up here". Permeability is the key here... i.e. how well a fluid can flow through the rock to get to the wellbore. This recovery factor is obviously a lot higher for gas than oil, because gas will flow through the microscopic pore-spaces better than the more viscous oil. For example, if we have 1 million barrels of oil at depth, we may be able to recover 50% of it, without resorting to fancy secondary and tertiary recovery methods. If we have 1 TCF (trillion cubic feet) of gas, we may be able to recover 90% of it. Gas is also far more compressible than oil, so a reservoir of a given size will be able to hold a far, far greater volume of gas (as we see it at the surface) than oil. The reason recoverable reserve estimates have now been bumped by 2-8 times at ELH is at least three-fold. 1: The pressures we saw downhole were far greater than calculated and expected - obviously, as the rig burned down!!! This means that the same volume of rock can now hold more gas than originally thought, much more, since the gas can be squeezed that much more. It also may indicate a greater recovery factor. 2: Actual drilling data and rock samples collected whilst drilling give accurate numbers for reservoir porosity, permeability and size. These were clearly better than expected. 3: Everyone was expecting light oil, based on geochemical studies of the area (I think they said 28-42 API, for those that are interested). What we have found is gas ==> more compressible, greater reserves, greater ultimate recovery. This is why the flare that we are seeing can burn with such intensity for so long and not even be a "drop in the bucket" compared to what is still down-hole. This is why everyone is so excited. The skeptics are saying, we don't know what's down there, and they are right. The question being asked by the experts however is not "is there anything there?", but "we know there is a lot of gas down there. Is there 1TCF or 10TCF?". I hope this answers your question. Regards, Rick Brown.