CALGARY, Alberta – Michelle Conner, a junior reserves evaluataor with Poukete Engineering, is confident that she has estimated the reserves for one of her clients to 7 decimal place precision.
Reserves estimation is an exact science, after all, so don’t let the word “estimation” throw you off.
The confidence in her numbers stems from the engineering software that she used to forecast declines.
Well, the program that I am using allows me to set the number of decimal numbers to display, so I set it to 7. Once I have the software apply a best-fit decline (which, of course, is the most reliable interpretation, because a computer made it), the EUR numbers show up something like 256.8471085 Mbbl. So to think that a program can figure out how much oil is in the ground all the way down to 7 decimal places is simply incredible. You’d think it was some sort of magic.
Michelle hopes that her client will appreciate her reserves report showing how accurate she was able to estimate how much the client’s reserves (and therefore, future) is worth.
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Michelle, ever heard of the concept of ‘uncertainty analysis’ ? Regardless of how many decimals your computer can handle, the uncertainty of the input data determines the uncertainty of the result. I would guess that even an old-fashioned slide rule would be able to deal with the ‘estimate’.
Oh dear…”…most reliable interpretation, because a computer made it…” and “a program can figure out how much oil is in the ground all the way to 7 places is simply incredible.” Michelle, you are doing great work, and as you gain more experience you will understand more about uncertainty, and the difference between accuracy and precision. It is a wonderful journey, I’m sure you will enjoy it!
Frans and Steve, thanks for commenting. I believe Michelle is now working with a brand new program that estimates reserves to 11 decimal places. Man, oh, man. That’s incredible.