Month: July 2009

A permeable rock that may contain oil or gas in appreciable quantity and through which petroleum may migrate. For rocks to contain oil and gas they must have two important properties: (1) a place to store the oil and gas, namely the pores. The more pores the more oil or gas that can be contained in the rock which is measured in terms of a rock’s porosity. Porosity is expressed as the volume percent of the rock that contains open space and can range from 5 to 30%. (2) Permeability – The pores must be connected so that the oil and gas can move through the rock, which is known as the rock’s permeability. Permeability is measured in thousandths of a darcy or millidarcys. Sandstone and carbonate rocks are generally the most porous and permeable rocks

Reservoir risk can be appraised according to the reservoir pressure, which is analyzed by a pressure survey. One of the basic principles of a natural gas reservoir is if you remove one cubic feet of gas from a reservoir that is 100 cf in volume you have taken out 1% of the volume and the pressure should thus drop by 1% because the pressure is linear with the volume. After 5 years if you have taken out 1/3 of the gas from a 15 year field the usual pressure will have dropped equally by 1/3 of the original pressure, so that after 5 years a competent operator would know how much gas he has left in his field. After one year the operator should do a pressure survey then carry out another one annually to see the drop in pressure and just as importantly to establish the trend. If you have an initial pressure of 2000 PSI and after 5 years you have 1500 PSI the operator should conclude that he has 15 years worth of gas left. Reservoir risk can either be borne by the developer or be part of a force majeure clause depending on the strength of the strength of the negotiating parties in a GSA.