In the last quarter-century, financial options such as "calls" and "puts" on publicly traded stocks have become an integral part of managing stock portfolios. The seminal work on financial options was done by Black and Scholes, published in 1973, and Merton, also published in 1973. Merton and Scholes shared the 1997 Nobel Prize in economics for their work. In recent years, the concepts of valuing options have been expanded from financial options to what are called "real" options in project evaluation. Financial options include "calls" in which the owner of the option has the right, but not the obligation (thus, an option), to purchase a stock at a specified strike price.
Shale gas is becoming increasingly important globally. The nature of these reservoirs pose special considerations in reserves estimation. What follows was written in 2001 and needs to be updated based on current experience. Nonetheless, some of the considerations mentioned remain appropriate. As reported in mid-2000, natural gas produced from shale in the US has grown to be approximately 1.6% (0.3 Tcf annually) of total gas production.
Discovered resources of heavy and extraheavy crude oil are estimated to be approximately 4,600 billion bbl, two-thirds of which are in Canada and Venezuela. Bitumen and tar sands are excluded from this estimate. Published data on reserves estimates (RE) from this resource by primary drive mechanisms are sparse. Meyer and Mitchell estimated worldwide ultimate recovery from heavy and extraheavy crude oils to be 476 billion bbl, which is 10% of the Briggs et al. estimate of the discovered resource initially in place. Estimated primary reserves estimates (RE) ranges from 8 to 12% oil-in-place (OIP) for the Orinoco area of Venezuela, where stock-tank gravities range from 8 to 13 American Petroleum Institute (API).
Tight gas is the term commonly used to refer to low permeability reservoirs that produce mainly dry natural gas. Many of the low permeability reservoirs that have been developed in the past are sandstone, but significant quantities of gas are also produced from low permeability carbonates, shales, and coal seams. Production of gas from coal seams is covered in a separate chapter in this handbook. In this chapter, production of gas from tight sandstones is the predominant theme. However, much of the same technology applies to tight carbonate and to gas shale reservoirs. Tight gas reservoirs have one thing in common--a vertical well drilled and completed in the tight gas reservoir must be successfully stimulated to produce at commercial gas flow rates and produce commercial gas volumes. Normally, a large hydraulic fracture treatment is required to produce gas economically.
In-situ combustion processes are largely a function of oil composition and rock mineralogy. Laboratory studies, using crude and matrix from a prospective in-situ combustion project, should be performed before designing any field operation. A more recent and more accurate kinetics model has been developed. Only two reactions are used, but in addition, the geometry of the reacting residual fuel in the pore spaces is taken into account, as indicated in Figure 1. LTO can be described as oxygen addition to the crude oil.
Heavy oil is defined as liquid petroleum of less than 20 API gravity or more than 200 cp viscosity at reservoir conditions. No explicit differentiation is made between heavy oil and oil sands (tar sands), although the criteria of less than 12 API gravity and greater than 10,000 cp are sometimes used to define oil sands. The oil in oil sands is an immobile fluid under existing reservoir conditions, and heavy oils are somewhat mobile fluids under naturally existing pressure gradients. Unconsolidated sandstones (UCSS) are sandstones (or sands) that possess no true tensile strength arising from grain-to-grain mineral cementation. Many heavy oil reservoirs are located in unconsolidated sandstones.
A typical tank battery contains two or more tanks and usually has a capacity equal to four days production. The suggested setting and connection plan for a typical tank battery is shown in Figs. 1 and 2. The pipeline connection in the tank should be located directly below the thief hatch and a minimum of 12 in. It should be equipped with a valve and sealing device immediately adjacent to the tank. Pipeline valves should be checked frequently for leaks. Drain connections should be located immediately above the tank bottom in the side of the tank or in the tank bottom immediately adjacent to the side.