Since a prior paper on analogy for estimating petroleum reserves (Hodgin and Harrell 2006), new dimensions of this topic have emerged. This paper provides updated guidance for analogy use and explains new concepts for the application of analogy in reserves estimation and classification.
Reserves evaluators using engineering and geoscience techniques now have new petroleum-reserves rules that include the use of analogy. In 2007, SPE finalized the Petroleum Resource Management System (PRMS) instructions, and in late 2008, the US Securities and Exchange Commission (SEC) published updated regulations on reserves reporting. Recent papers (Lee 2009; Etherington 2009) provide good summaries of the updated SEC rules and a comparison to PRMS. This paper will provide guidance to aid understanding of and compliance with these rules as related to the use of analogs.
The paper provides interpretations of new analogy-related terminology and the related reserves rules. It also gives examples of how these interpretations can be applied to common reserves-estimation situations where analogy is used. The paper also addresses new concepts concerning how analogies can be shown as valid and can be adjusted for minor differences in the comparison of target field with analogy field.
The recent publication of the US SEC reserves reporting rules, which draw partially from the SPE PRMS, has increased interest in deeper understanding of both these SEC rules and PRMS. This paper will assist those who develop and use petroleum-reserves data in understanding how the use of analogy can contribute to reliable reserves estimates and proper classification. Please note that the opinions expressed in this paper are those of the authors alone. They represent the opinions of neither the US SEC nor its staff members.