796 Subsurface Geologic Methods 



geologist who is well acquainted with the general area if he uses only 

 a map and a set of electrical logs; and very many of the valuations are 

 based only on that data. Rather than bemoaning the mistakes in valua- 

 tions, we should marvel that they are so near right and have formed a 

 basis on which the oil and gas business could grow to where its present 

 annual production exceeds the annual national production of coal, iron, 

 copper, gold, silver, and all other metals combined. 



•Figuring the Reserve 



In actual practice the figuring of the reserve by the engineering (often 

 called the volumetric) method involves (1) delineating the reservoir area 

 and thickness, and calculating the acre-feet of gross rock, (2) figuring the 

 amount of pore space in that reservoir, (3) deducting the part of space 

 occupied by water, (4) figuring the oil or gas in place, (5) deducting the 

 shrinkage it will suffer on coming to atmospheric pressure and tempera- 

 ture, (6) deducting the part of oil or gas that will not be recoverable by 

 present methods and will therefore be left in the ground, and (7) deduct- 

 ing the past cumulative production — what has already been produced. 



For oil, these steps are usually expressed in the following formula: 



R = 7758 X A X T X P X (l-I) X S X F 

 in which R is the recoverable reserve. 



The 7758 is the number of barrels of tank-stock oil needed to fill one 

 acre, one foot deep. 



The A is the number of acres in the reservoir. This factor requires 

 the most careful and detailed kind of subsurface geology. Some impor- 

 tant information is almost always lacking, a fact which requires the 

 most thoughtful consideration of what is known and the drawing of the 

 most reasonable inferences. It has been said by some of our most eminent 

 valuation experts that properly dimensioning the reservoir is the greatest 

 single source of error in reserve estimates. 



The T is the thickness of the producing measure. This factor is ordi- 

 narily arrived at from electrical logs, supplemented by such coring or 

 cuttings and core analysis as is obtained from that property or any re- 

 lated property. This procedure always involves the picking of the top of 

 the formation, frequently involves the location of a gas-oil contact, and 

 usually requires the selection of an oil-water contact. Experience in the 

 general area of the property is of commanding importance in the making 

 of these various judgments. There is much to know that is not written 

 in books. An opportunity to see many wells cored and logged, to produce 

 them, and to be intimately acquainted with their entire history — this type 

 of experience, to which geologists with major oil companies are daily 

 exposed, is the best possible teacher in such matters. 



The P in the formula is the porosity. Frequently no information is 

 available from the particular wells — then an estimate for normal porosity 

 in that formation at that depth is used. Often a little core analysis at one 



