Evaluating Unconventional Reservoirs: The Questions We Need to Answer

Abstract North America has embraced unconventional gas reservoirs as the solution to declining conventional production, and today virtually every E&P company has some unconventional gas reserves or resources in their portfolio. As North America demonstrates success in our unconventional reservoirs, interest in unconventional opportunities is spreading to basins throughout the world. However, as unconventional opportunities grow and develop, the consistent evaluation of unconventional resources and reserves is becoming a major issue for our industry. The newness of many unconventional plays means historical trends are limited. In addition, no two unconventional plays are the same and variations within a play can yield substantially different results. Evaluators and their clients need to consider many issues in order to determine the real value of an unconventional opportunity. Early and regular discussion between clients and their independent evaluators ensures that the right questions are being asked and those questions are answered as efficiently as possible. While it is important that evaluators provide an independent opinion of resources and reserves, this opinion is weaker when it fails to take into account all the relevant information possessed by the client.