Page 136 - Well Logging and Formation Evaluation

126 Well Logging and Formation Evaluation

9.1 BASIS FOR EQUITY DETERMINATION

Clearly there are different ways to determine equity, based on the
parameters likely to define the ultimate value in the field and what can
easily be measured. These are:

1. Gross bulk volume (GBV). It might be argued (by the party with the
greatest GBV) that the fairest way to divide equity is on the basis of
the total bulk volume of hydrocarbon-bearing rock between certain
horizons. This would have the advantage of being relatively quick and
simple to determine, since the parties would have to agree on only the
seismic interpretation and mapping procedures. However, the other
parties would rightly argue that it is not the rock that has the value,
but only the hydrocarbons that are produced from it. Therefore, as long
as reasonably reliable methods are available to determine the hydro-
carbon production from either side of the boundary, to make a deter-
mination purely on the basis of GBV would be unfair.
2. Net pore volume (NPV). This determination might be justified on the
grounds that it is also relatively simple to determine. However, if the
reservoir quality on one side of the boundary is relatively poor com-
pared with the other, the contribution to production arising from the
poorer side will be relatively less. Also, if one side has a relatively low
relief above the free water level (FWL), then it will contain relatively
less hydrocarbon. Such a determination also makes no distinction
between the relative value of oil and gas.
3. Hydrocarbon pore volume (HCPV). By introducing the saturation,
some of the drawbacks of an NPV basis are removed, but this would
still not take into account the fact that not all the hydrocarbon may be
recoverable (e.g., if it is located in very thin or low-permeability rock),
as well as the relative value of gas and oil.
4. Barrels of oil equivalent (BOE). For this basis, a factor is used to
convert in-situ gas volumes to an equivalent oil volume on the basis
of value. This factor will reflect the local value of gas compared with
oil, bearing in mind the costs of transporting it. Hence it takes into
account the fact that one side may have relatively more gas than the
other side. Note that there are two sorts of gas to be included: the asso-
ciated gas that is produced from the oil and any free gas existing in
the reservoir. Typically the same gas factor will be used for both.
5. Reserves. It might be argued that this is the only fair way to properly
allocate value. However, in practice it may be impossible to agree on