Valuation and Subsurface Geology 799 



valuation on subsurface geology. Assume that one is to evaluate a conven- 

 tional seven-eighths lease on a 160-acre tract with eight wells which are 

 located midway down the flank of a rather steep Gulf Coast anticline and 

 which are producing oil by effective water drive from a sand at —5,000 feet. 



A map is secured showing the location of all the wells on the struc- 

 ture, plus electrical logs of all the wells in the field. A structure map is 

 drawn on the top of the producing formation — where several sands pro- 

 duce, a structure map should be drawn on each sand. This procedure 

 involves carefully picking the sand "top" on each well in the field, which 

 is checked against all obtainable core data to verify that what appears to 

 be top of sand is the first productive sand encountered. After the structure 

 map is drawn, an isopachous map of the producing sand is prepared. This 

 map is based on "effective sand" — from a minute examination of the 

 detailed section (100' = 5") of the electrical log, plus all known coring, 

 core analysis, caliper log, gamma-ray log, drilling-time chart, and any 

 other data obtainable. Shale and/or hard streaks are excluded in order to 

 isopach only the actual producing section. 



After the isopach is drawn, each isopach interval is planimetered to 

 give the actual number of acres situated in that zone of thickness. Thus, 

 the area between the 50- and 45-ft. isopach lines is planimetered and as- 

 sumed to have a sand thickness of 47^ ft. Only a single tract of 160 

 acres is to be valued, and it is found that 48 acres is underlaid by 40 ft. 

 of effective sand, 68 acres by 36 ft. of sand, and 44 acres by 32 ft. of 

 sand. Thus, in valuing the 160 acres, three valuations are made; or, all 

 three segments are combined to get a composite of acre-feet of sand. To 

 composite these figures, multiply 48 x 40 to get 1920 acre feet, 68 x 36 to 

 get 2448 acre feet, and 44 x 32 to get 1408 — or an aggregate of 5776 acre 

 feet of producing sand under the 160 acres (the product of A, acreage, and 

 the T, thickness, of the formula). It is already known that oil fields in 

 this trend can be expected to produce 400 barrels per acre foot. An ex- 

 perienced valuator in the trend thus could estimate around 2,310,400 

 barrels (5776 X 400) of ultimate recovery. 



It is found that when the eight wells on the lease were drilled, no 

 cores were obtained. It is learned that core laboratories ran cores from 

 a well on an adjoining lease; average porosities of 21, 23, and 24 percent 

 were obtained from three cores. The Gulf Company has run porosities, 

 which average 23 percent on most of its wells. Permeabilities averaged 

 550 millidarcys. It is concluded that 22 percent is about the average 

 porosity for the lease being valued, and that permeabilities are satisfac- 

 tory. This conclusion appears to be in line with known porosities in 

 nearby fields producing from the same formation and on strike. 



The next factor in the formula is / (interstitial or connate water). 

 In an older field, the amount, of connate water will probably involve an 

 estimate — as in the early days there were no connate-water determinations. 

 In fact, many then thought connate water did not exist. If no connate- 



