SPE Economics & Management
Volume 2, Number 2, October 2010, pp. 86-91

Summary

The petroleum industry's lack of understanding of physical properties and the physics controlling production from many important resource plays limits its ability to model and forecast with confidence production and reserves from these resources in many cases. While measurement technology and modeling accuracy is improving, the industry is often forced to resort to empirical methods that lack the usual validation required for high confidence in results. This paper analyzes some of the procedures in common use for forecasting and identifies some limitations in the techniques. Advances in the industry's ability to forecast future production (and thus estimate reserves) more accurately in resource plays will impact financial forecasts, perceived asset values, and accuracy of reserves disclosed to the public.

© 2010. Society of Petroleum Engineers

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History

• Original manuscript received: 8 January 2010
• Meeting paper published: 24 February 2010
• Revised manuscript received: 17 February 2010
• Manuscript approved: 20 April 2010
• Version of record: 11 October 2010