Estimated Ultimate Recovery (EUR)

Introduction

When it comes to the oil and gas industry, one of the most important metrics used to evaluate the potential of a well or a field is the Estimated Ultimate Recovery (EUR). EUR is a crucial factor in determining the economic viability of a project and plays a significant role in investment decisions. In this article, we will delve into the concept of EUR, its calculation methods, and its importance in the oil and gas industry.

What is Estimated Ultimate Recovery (EUR)?

Estimated Ultimate Recovery (EUR) refers to the estimated total amount of hydrocarbons that can be recovered from a well or a field over its entire productive life. It is an essential metric used by oil and gas companies to assess the potential of a reservoir and make informed decisions regarding exploration, development, and production.

The EUR is typically expressed in barrels of oil equivalent (BOE) and takes into account both oil and gas reserves. It represents the cumulative production from a well or a field, including both the initial production and the decline in production over time.

Calculating Estimated Ultimate Recovery (EUR)

There are several methods used to calculate the Estimated Ultimate Recovery (EUR) of a well or a field. The choice of method depends on various factors, including the type of reservoir, the available data, and the level of uncertainty.

1. Decline Curve Analysis

Decline Curve Analysis (DCA) is one of the most commonly used methods to estimate EUR. It involves analyzing the production history of a well or a field and extrapolating the decline in production over time. The decline curve is typically generated by fitting a mathematical model to the production data.

By analyzing the decline curve, engineers can estimate the ultimate recovery by extrapolating the decline in production to the point where it becomes economically unviable to continue production. This method is particularly useful for mature fields with a significant production history.

2. Material Balance Method

The Material Balance Method is another widely used technique to estimate EUR. It involves analyzing the pressure and volume changes in a reservoir to determine the amount of hydrocarbons in place. By comparing the initial hydrocarbon volume with the cumulative production, engineers can estimate the remaining recoverable reserves.

This method is particularly useful for reservoirs with limited production history or when decline curve analysis is not applicable. It relies on the principle of conservation of mass and requires accurate data on reservoir pressure, fluid properties, and rock properties.

3. Reservoir Simulation

Reservoir Simulation is a more advanced method used to estimate EUR. It involves creating a computer model of the reservoir and simulating the fluid flow and production behavior over time. By inputting data on reservoir properties, well locations, and production strategies, engineers can simulate different scenarios and estimate the ultimate recovery.

This method is particularly useful for complex reservoirs with multiple wells and heterogeneous properties. It allows engineers to evaluate different development strategies and optimize production techniques.

The Importance of Estimated Ultimate Recovery (EUR)

EUR plays a crucial role in the oil and gas industry for several reasons:

• Investment Decisions: EUR is a key factor in investment decisions. It helps companies assess the economic viability of a project and determine the potential return on investment. By estimating the ultimate recovery, companies can evaluate the profitability of a well or a field and make informed decisions regarding exploration, development, and production.
• Reserve Reporting: EUR is used to report reserves to regulatory bodies, investors, and stakeholders. It provides a standardized measure of the potential hydrocarbon reserves and allows for comparison between different projects and companies. Accurate estimation of EUR is crucial for compliance with reporting standards and regulations.
• Field Development Planning: EUR is essential for field development planning. It helps companies optimize the production strategy, determine the number and location of wells, and design the infrastructure required for production. By understanding the ultimate recovery, companies can make informed decisions regarding reservoir management and maximize the value of their assets.

Case Study: EUR in the Permian Basin

The Permian Basin, located in West Texas and Southeastern New Mexico, is one of the most prolific oil and gas regions in the United States. The estimation of EUR in the Permian Basin has been a topic of great interest due to its vast reserves and economic significance.

Using a combination of decline curve analysis, material balance method, and reservoir simulation, engineers have estimated the EUR of the Permian Basin to be in the range of 70 to 100 billion barrels of oil equivalent (BOE). This estimation takes into account the recoverable reserves from both conventional and unconventional reservoirs.

The accurate estimation of EUR in the Permian Basin has played a crucial role in attracting investments and driving the development of the region. It has provided companies with the confidence to invest in exploration and production activities, leading to a significant increase in oil and gas production in recent years.

Conclusion

Estimated Ultimate Recovery (EUR) is a vital metric in the oil and gas industry. It represents the estimated total amount of hydrocarbons that can be recovered from a well or a field over its entire productive life. By using methods such as decline curve analysis, material balance method, and reservoir simulation, engineers can estimate the ultimate recovery and make informed decisions regarding exploration, development, and production.

EUR plays a crucial role in investment decisions, reserve reporting, and field development planning. It helps companies assess the economic viability of a project, comply with reporting standards, and optimize production strategies. Accurate estimation of EUR is essential for the success of oil and gas projects and the overall growth of the industry.