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Net PayWhat Is It? What Does It Do?

How Do We Quantify It?

How Do We Use It?
Paul F. Worthington, SPE, Gaffney, Cline & Associates

Summary Petroleum Resources

A knowledge of net pay is important for the volumetric estima- A subsurface petroleum discovery occurs where there is confirma-
tion of hydrocarbon resources, a practice that underpins the value tion through drilling and downhole measurements of sufficient
of the petroleum industry. Yet, there is no universal definition of movable hydrocarbon volumes to be of potential interest as an
net pay, there is no general acceptance of its role in integrated exploitable resource. Historically, the terms resources and total
reservoir studies, there is no recognized method for evaluating resources have been taken to include all hydrocarbon volumes
it, and there are disparate views on how to make use of it. Partly in the subsurface: discovered and undiscovered, recoverable and
for these reasons, net-to-gross pay constitutes a major source of unrecoverable, remaining and produced, economic and uneco-
uncertainty in volumetric reserves estimates, second only to gross nomic, commercial and noncommercial. However, as used here,
rock volume. With the aim of improving this unsatisfactory state of the term resources relates to estimated recoverable hydrocarbon
affairs, I chart a critical path of net-pay understanding and appli- volumes, pursuant to the Petroleum Resources Management Sys-
cation to dispel some of the unhelpful myths that abound within tem (Society of Petroleum Engineers et al. 2007).
the industry and replace them with a defensible rationale to guide There are three classes of resources. The term prospective
the quantification of net pay (thickness). Central to this process resources applies to the exploration stage in that it admits undis-
is the identification of net-pay cutoffs, themselves the subject of covered (potentially) recoverable volumes. The term contingent
much controversy over the years. The approach is data-driven, in resources notionally relates to the appraisal stage by including
that it uses what we know, and also fit-for-purpose, in that it takes only discovered recoverable volumes, but these may be economic
account of reservoir conditions. The outcome is a sounder basis or uneconomic. The term reserves relates to the development
for incorporating net pay into volumetric estimates of ultimate stage. It includes only those volumes that are discovered, remain-
recovery and thence hydrocarbon resources. ing (in the subsurface), recoverable, and commercial. Commercial-
ity means that the hydrocarbon volumes are economically exploit-
Introduction able and that there is a commitment to produce. The commitment
Net pay is a key parameter in reservoir evaluation because it is manifested through a development plan. Progression through the
identifies those penetrated geological sections that have sufficient resource classes is governed by project maturity. To progress from
reservoir quality and interstitial hydrocarbons to function as sig- prospective resources to contingent resources requires a discov-
nificant producing intervals. Through interpolation, it contributes ery. To progress from economic contingent resources to reserves
to the estimation of a meaningful in-place volume, against which requires a commitment to develop in real time.
recovery efficiency can be usefully assessed. Thus, net pay is The estimation of discovered petroleum resources is summarized
central to the static volumetric method of estimating ultimate in Table 1. Geology-based methods can contribute to estimates of
recovery. Moreover, it demonstrably facilitates reservoir simula- contingent resources or reserves, according to project maturity. By
tion because nonreservoir rock does not need to be character- their very nature, production-based methods lead to estimates of
ized in the same way that reservoir rock does. Yet, there are no reserves. This paper is set within the context of geology-based meth-
industry-standard definitions of net pay. Indeed several diverse ods, in particular the widely used static volumetric approach.
protocols were identified by Worthington and Cosentino (2005).
Moreover, there are no generally accepted procedures for its Formation Thicknesses
incorporation into reservoir models as a basis for resource esti- The total thickness of a designated evaluation interval either along
mation. These matters were articulated by Caldwell and Heather hole or in true vertical space is termed gross thickness. The term
(2001) as follows. net thickness indicates that some of the gross thickness has been
Despite net pay being a fundamental input into not only removed. There are three types of net thickness: net sand, net reser-
volumetric reserves calculations, but also well test analysis and voir, and net pay. Their interrelationship is summarized in Fig. 1. It
predictive calculations, there is surprisingly little in the way of can be seen that net pay is notionally a subinterval of net reservoir,
insightful guidelines on different computational methods and which is, in turn, a subinterval of net sand. These thicknesses are
their strengths and weaknesses. used along hole for completions purposes and often in true vertical
This paper examines where we are in terms of quantifying net space for volumetric computations. In practice, their identification
pay using determined formation properties and it promotes an is effected simultaneously within net-pay subroutines. However,
improved methodology that does not have the drawbacks of tra- although this terminology is in widespread use within the indus-
ditional approaches. A specific aim is to reduce subjectivity, so try, it is applied neither consistently nor rigorously (see the later
that different subsurface teams can deliver more closely aligned subsection, Abuses of Net Pay).
net-pay estimates. This is achieved by scoping out a framework for The identification of net sand, net reservoir, and net pay reflects
accommodating solutions to the net-pay problem. These matters the nested nature of these subintervals, all of which are evaluated
are especially important during the early stages of field life, when at a wellbore. Essentially, net sand is a potential reservoir rock: for
uncertainty in estimated petroleum resources is greatest. example, it might be a sandstone that is low in rock-quality inhibi-
tors such as clay-mineral content, loosely referred to as shaliness
in the industry. Net reservoir additionally has supracritical porosity
and permeability, reflecting the requirement that a reservoir rock
Copyright 2010 Society of Petroleum Engineers must be able to store fluids and allow through-flow to a degree
Original manuscript received for review 28 May 2009. Revised manuscript received for that would permit a significant contribution to productivity at well-
review 13 May 2010. Paper (SPE 123561) peer approved 5 June 2010. bores. Beyond these requirements, net pay contains hydrocarbons

812 October 2010 SPE Reservoir Evaluation & Engineering


Foundation Method Class of Resource

Geology-based Static volumetrics Contingent resources (if precommercial) or
reserves (if the resource is economic and
Reservoir simulation there is a commitment to develop)
Production-based Reservoir simulation Reserves
(history matched)
Material balance
Decline-curve analysis

in quantities sufficient for their exploitation to be potentially viable that comprises net reservoir rock containing a significant volume
and beneficial. of potentially exploitable hydrocarbons. There is no standard defi-
This classical terminology is rooted in the onshore history of nition of net pay, even in a semiquantitative sense (Worthington
the oil industry. It is in widespread use, but it remains inexact. Net and Cosentino 2005). Net-pay subintervals are often aggregated
sand would be better described as net potential reservoir, a term to give a total net pay and thence, by ratio to gross thickness, net-
that encompasses, for example, carbonates and fractured basement. to-gross pay. The quantification of net-to-gross pay lies on the
Net reservoir intervals contain rocks that have been identified as critical path to the estimation of ultimate recovery through the
having a useful capability to store fluids and allow them to flow static volumetric method. However, for geological mapping and
(into a wellbore). In this respect, the term static volumetrics is engineering purposes, an aggregated net-to-gross pay is not useful
potentially misleading. Net pay is a descriptor that originates in in itself: an inventory needs to be kept of exactly where the pay
single-well completions onshore, where technical and economic subintervals are located. Moreover, historically, net pay has been
decisions are contemporaneous. The term is strictly a misnomer a major source of uncertainty in geology-based methods of
in multiwell situations, where economic decisions are made on a estimating ultimate recovery.
field scale. A better term might be net hydrocarbons. The adop- There is a body of opinion to the effect that the evaluation of net
tion of this term would decouple the identification of potentially pay is based on somewhat arbitrary criteria and that net-to-gross
exploitable volumes of hydrocarbons from the issue of whether pay, and therefore net-to-gross reservoir, should be fixed at unity
they constitute a stand-alone economic resource. regardless of the nature of the geological succession and the fluids
Terminology issues will merely be recorded here and placed contained therein. If this is accepted, one is essentially stipulating
on hold for the time being. Note, however, that other conventions that the entire evaluation interval comprises good quality reservoir
have been proposed. Some of these were collated and compared rock that contains potentially exploitable hydrocarbons. It is further
by Worthington and Cosentino (2005), who adopted the conven- argued (by others) that an analysis of reservoir dynamics through
tion of Fig. 1 as their reference. This adoption has subsequently a simulator will be sufficient to quantify realistic recoverable vol-
been endorsed by Ringrose (2008). This paper will also adopt the umes. Although it is true that some of the earlier approaches have
convention of Fig. 1. been arbitrary, a more incisive response can be gleaned from the
In terms of the adopted convention, the ratio net-to-gross thick- answers to the following key questions:
ness takes three forms: net-to-gross sand, net-to-gross reservoir, Do we believe that all rocks that host a given hydrocarbon
and net-to-gross pay. It is not appropriate to use the terms net accumulation are functional reservoir rocks?
and net-to-gross without qualifying what they are. Do we believe that all hydrocarbon volumes in an accu-
mulation contribute significantly to the energy of the reservoir
What Is Net Pay? system?
Net pay is a thickness with units of length. Net pay can be mea- Do we believe that all hydrocarbon volumes in an accumula-
sured only at a well. It is a subinterval within the gross thickness tion are potentially recoverable to a significant degree?
If the answer to one or more of these three questions is no, the
identification of net pay has to be an integral part of any forma-
Gross NetNet
N et S a n d NetNet
Net Net
N etNP
Pa y tion-evaluation exercise.
R ock Sand and Reser
oir voioirr
Total Potential Supracritical Supracritical What Does Net Pay Do?
evaluation reservoir porosity and amounts of There is no universal perception of the role of net pay in geology-
interval permeability recoverable based reservoir studies. In essence, the net-pay concept leads to the
character hydrocarbons identification at a well of those sections of a reservoir that will pro-
duce exploitable hydrocarbons. It excludes the rest. Thus, net pay
Subcritical allows recovery efficiency to be evaluated meaningfully against an
hydrocarbons initial hydrocarbon volume that is contained within reservoir rock.
In other words, recovery efficiency is measured against in-place
Subcritical hydrocarbon volumes in rock that will allow reservoir fluids to
porosity and be stored and to flow. Otherwise, estimates of recovery efficiency
permeability can be distorted by the inclusion of noncontributing volumes (in
character nonreservoir rock) that will not be produced. Note that net pay is
e.g. a reservoir property that is measured at wellbores, and its interpo-
lation into the interwell region is founded on what has been seen
in downhole data: it cannot take account of (as yet) unidentified
mudstone, properties and processes away from a wellbore.
unfractured Once net pay and net reservoir have been identified, petrophysi-
basement cal algorithms can be established over these intervals, as appropri-
ate. This means that interpretive equations can be founded exclu-
Fig. 1Interrelationship of net thicknesses. sively on calibrating data from those very same intervals to which

October 2010 SPE Reservoir Evaluation & Engineering 813


Tight Sand RF=0%

Permeable Sand RF=110%

Fig. 2Late onset production from intercalating tight layers with enhancement of recovery factor (RF) from permeable layers.

they are to be applied. Otherwise, data from nonreservoir intervals the wellbore and the depleted permeable layers provide a conduit
might influence the establishment of interpretive algorithms and to the well. Thus, a permeable layer can show an inflated recovery
thence degrade their application over net reservoir and net pay. factor, in some cases greater than 100%, but this does not negate the
Moreover, if there is no separation of net reservoir and net pay net-pay concept, provided that the underlying recovery mechanism
from the gross thickness, it will be necessary to characterize the has been recognized. An alternative approach might have been to
nonreservoir rock to the same degree as the reservoir rock. Given distinguish between early production and late production as the
that core analysis of poorer quality rock is more expensive than for deliverables of different recovery mechanisms. However, even if
reservoir rock, it is a challenge to envisage this happening as part this is done, it should not impact perforating decisions.
of the evaluation of conventional reservoirs in any cost-conscious It is worth substantiating the preceding comment that net pay
culture. Note that these protocols do not imply that only the better can be measured only at a wellbore, specifically within the context
quality rocks should be sampled for core analysis purposes. In fact, of using seismic-attribute mapping to estimate net pay in interwell
unbiased sampling of the net-sand interval is a prerequisite for the regions. Order-of-magnitude differences in seismic vertical resolu-
identification of net reservoir and thence net pay. However, once tion compared to well logs (e.g., 3040 m vs. 0.51.0 m) inhibit
net reservoir has been identified, only those data that relate to net the required correlation(s) between net pay and seismic attribute(s),
reservoir are admitted in order to establish core-derived interpre- which should strictly be effected at the seismic resolution scale.
tive algorithms. Some measurements, such as relative permeability Partly as a consequence, such geophysically-driven correlations
data, will have specific applications to net pay. admit wide ranges of uncertainty that can encompass the complete
The identification of net pay and the associated elimination ranges of depth-averaged reservoir properties (at the seismic reso-
of nonreservoir rock form the basis for a more meaningful ini- lution scale). With these limitations, a geophysical deliverable is
tialization of a reservoir simulator. This statement is rooted in not a measurement of net pay: it is at best a broad net-pay indicator.
the adoption of dynamically-conditioned cutoffs for delineating Although such an indicator can be useful in favorable situations,
net-reservoir and net-pay intervals. It is important to note that the the potential benefit is weakened where reservoir thickness is
traditional practice of defining net pay using static cutoffs, which below seismic vertical resolution.
demarcate intervals with sufficient hydrocarbon-filled porosity,
has been refined here through the use of dynamically-conditioned How Is Net Pay Quantified?
cutoffs, which demarcate intervals with potentially exploitable The earlier literature referred to the picking of net pay according
hydrocarbon-filled porosity. This refinement is in accord with the to how it was to be used, so that the intended method of application
contemporary approach to net-pay quantification within the context influenced how net pay was identified [e.g., Snyder (1971)]. Today,
of integrated reservoir studies (Cosentino 2001). Although there is this exercise is largely automated, with the possible exception of
a point of view that simulation is a catch-all that can account for single-well completions where decisions have to be made on the
nonreservoir rock as well as reservoir rock, our recent experience spot. Net pay is quantified through the use of petrophysical cutoffs
has confirmed that if net pay is systematically quantified, the per- that are applied to well logs. Cutoffs are limiting values of forma-
formance of dynamic reservoir models is demonstrably improved tion parameters that remove noncontributing intervals. The role and
in terms of more readily attainable history matches. application of cutoffs in integrated reservoir studies have been dis-
The net-pay concept is open to challenge specifically in the case cussed previously (Worthington and Cosentino 2005; Worthington
of tight gas layers that release hydrocarbons into adjacent perme- 2008). Traditionally, a shale volume fraction, Vsh, cutoff is used to
able beds when a sufficiently large pressure differential has been identify net sand. A porosity, $, cutoff is then applied to net sand
established through primary depletion (Fig. 2). Because those tight to delineate net reservoir. Finally, a water saturation, Sw, cutoff is
gas sands may not be incorporated within net pay at the wellbore, applied to net reservoir to define net pay. Thus, net pay is nested
it can be argued that late onset recovery from those sands renders a within net reservoir and this, in turn, is nested within net sand.
net-pay protocol meaningless. The rebuttal to this argument calls for Perhaps the biggest argument that has been made against
a return to basics. Net pay can be measured only at a wellbore and the introduction of cutoffs is the arbitrary nature of historical
this has to be done in light of the recovery process. In a vertical well, approaches. It is true that there is no generally accepted method of
it is a measure of the thickness of hydrocarbon-bearing reservoir identifying cutoffs. It is also true that certain rules of thumb have
rocks whose constituent fluids express themselves significantly at existed in the petroleum industry for more than 50 years and that
the wellbore. Late-onset recovery occurs in response to changes in some authors have even advocated generally-applicable cutoffs
fluid properties within the reservoir system. It is initiated away from for sandstones, on the one hand, and for carbonates, on the other

814 October 2010 SPE Reservoir Evaluation & Engineering


Dynamically-conditioned Absolute permeability

porosity cutoff cutoff

Endpoint kro (Swirr)

( k )

(a) (b) log (air permeability, mD)

log k Vsh Sw

log kc

(c) c c c

Fig. 3Schematic process for data-driven identification of dynamically-conditioned cutoffs. (a) Correspondence of reference and
conventional parametric cutoffs for primary depletion [from Worthington (2008)]. (b) Correspondence of reference and conventional
cutoffs for waterflood depletion [from Worthington (2008)]. (c) Synergic quantification of conventional cutoffs [from Worthington
and Cosentino (2005)].

[e.g., Desbrandes (1985)]. However, more recent applications have key stages. Central to this process is the concept of a reference
been data-driven, and these have formed the basis for an improved parameter, which is a parameter that allows the limit to flow to
protocol by avoiding the use of industry defaults and generic be identified for a particular reservoir (sub)unit and for a given
specifications. Further guidance can be gleaned from the answers depletion mechanism. Parameters that can be quantified through
to the following key questions: downhole measurements are tied back to the reference parameter
Do we believe that a reservoir can be characterized solely in so that a reference-parameter cutoff can be related to cutoffs for
terms of its ability to store hydrocarbons? properties that can be determined from well-log analysis. This
Yes: we can use static net-pay cutoffs. process is handled synergically (i.e., all log-applicable cutoffs are
No: we must use net-pay cutoffs that also take account of tied back directly or indirectly to the same reference parameter so
reservoir dynamics. that all cutoffs have a hydraulic significance).
Do we believe that all hydrocarbon-bearing rocks have the Specify an evaluation interval in a well.
same reservoir character? Select a reference parameter, such as a reservoir quality
Yes: we can use generic net-pay cutoffs. indicator, (k/$)0.5, for primary depletion or endpoint relative per-
No: we must establish net-pay cutoffs for each identified rock meability to oil in the presence of water, kro(Swirr), for waterflood
type. depletion (Fig. 3).
Do we believe that all hydrocarbon-bearing reservoirs are Establish any data partitioning for the segregation of (hydrau-
produced through the same drive mechanism? lic) rock types and thence the reduction of data scatter in analytical
Yes: we can use a universal approach to the generation of net- crossplots of reservoir parameters.
pay cutoffs. Identify a value of the appropriate reference parameter [e.g.
No: we must condition our net-pay cutoffs to the drive mecha- (k/$)0.5 ; k (S )] that corresponds to the lower limit of hydraulic
ro wirr
nism. behavior of the rock over a partitioned fraction of the evaluation
If the answer to these three questions is no, the identification of interval (Fig. 3). If in doubt, select the most all-encompassing
net pay has to be conditioned dynamically and be fit for purpose lower limit that is compatible with the principle. Adopt this limit-
(i.e., it must take account of flow criteria, rock type, and deple- ing value as a reference cutoff.
tion mechanism). Note that the identification of net reservoir is an For the partitioned data set for each (hydraulic) rock type, relate
integral part of this process. the reference cutoff to a corresponding value of a conventional core
The application of these principles (of flow criteria, etc.) in analysis parameter such as porosity or Klinkenberg-corrected air
quantifying net reservoir and thence net pay calls for an exami- permeability taking due account of scale where feasible. Adopt this
nation of porosity and permeability, k, as represented within a corresponding value as a dynamically-conditioned cutoff.
conventional core data set. This should be undertaken in light of Using the principle of synergic cutoffs (Cosentino 2001),
the recovery mechanism and with appropriate data partitioning relate the dynamically-conditioned cutoff to corresponding cutoffs
(e.g., on the basis of facies type) and honoring of scale (e.g., of log-derived porosity (where required), shale volume fraction,
from core to log). This approach has been described more fully by and water saturation, so that all cutoffs become dynamically con-
Worthington and Cosentino (2005). In essence, there are several ditioned (Fig. 3).

October 2010 SPE Reservoir Evaluation & Engineering 815


Reservoir Quality Index (mD)0.5







0.000 0.050 0.100 0.150 0.200 0.250

Shale volume fraction


Water saturation
0.1 0.3
0.0 0.2
0.000 0.050 0.100 0.150 0.200 0.250
Porosity 0.1
0.000 0.050 0.100 0.150 0.200 0.250

Fig. 4Worked example of establishing dynamically-conditioned, synergic cutoffs using the method of Figs. 3a and 3c. The
reservoir is an oil-bearing sandstone under primary depletion. The porosity cutoff of 0.075 corresponds to a Vsh cutoff of 0.41
and an Sw cutoff of 0.67.

Apply the cutoffs simultaneously to obtain net pay within can be used to identify the respective endpoint water saturations
the partitioned data set. If the lower depth limit of the evaluation (i.e., irreducible water saturation and the critical water saturation at
interval is a sharply-defined hydrocarbon/water contact (HWC) which hydrocarbons do not flow). The former is used to quantify a
or a hydrocarbon-down-to level, and there is no perched water reference parameter for waterflood depletion in Fig. 3b; the latter
or intraformational interval with high capillarity, the resulting net can be used to guide the selection of a water saturation cutoff. For
reservoir and net pay will be very similar. They will not be the same further discussion of the evaluation of net pay during secondary
because of the inexactness of interpreted reservoir properties and depletion, see Cobb and Marek (1998). If there are no core data
their interrelationships. However, the use of dynamically-condi- available, recourse has to be made to a static analysis of cutoffs
tioned synergic cutoffs minimizes the impact of any disparities. [e.g., Joshi and Lahiri (1998)] or to an informed use of analog
Obtain average log-derived porosity and (porosity-weighted) discriminators. Neither of these approaches should be viewed as
water saturation over the net-pay thickness(es) of each partitioned a satisfactory alternative.
interval. The preceding methods have to be varied for certain types of
Integrate the data from all partitioned intervals to obtain an reservoir. These include laminated reservoirs, discrete stacked
overall net pay. reservoirs, naturally fractured reservoirs, tight gas reservoirs, and
Repeat the process for all wells in the project database. coalbed-methane (CBM) reservoirs.
A worked example is shown in Fig. 4. Further tangible examples
have been provided by Worthington (2008). The process has also Laminated Reservoirs. Sand/shale sequences constitute the big-
been tracked by Egbele et al. (2005), though with different cutoff gest cause of overlooked pay in the world today (Worthington
parameters for identifying net pay. 2000). The problem is rooted in the inability of standard logging
If the available core data include special core analysis, there are tools to resolve individual sand laminae. A partial solution is to
other approaches that can be adopted. For example, if Dean-Stark use an electrical micro-imager to identify the laminae and a tensor
extracted water saturations are available, it is possible to ground resistivity tool to quantify the resistivity of the sands. The evalu-
truth the use of composite cutoff parameters such as bulk volume ation of sand porosity can be problematic because of inadequate
water (the product of porosity and water saturation). Capillary spatial resolution and uncertainty associated with the application
pressure measurements can be used in conjunction with conven- of shale corrections to porosity tools. Where core has been recov-
tional porosity and permeability data to ascertain the critical poros- ered, and the thickness of the sand laminations is greater than the
ity and permeability values for which the pore throats are too small diameter of horizontal core plugs, the evaluation of sand porosity
to allow hydrocarbons to enter the rock during migration. This can be groundtruthed by judicious selection of core-plug loca-
analysis contributes to net reservoir, rather than net pay, because tions. Otherwise, it is usually necessary to draw cautiously upon
it is concerned with the issue of reservoir potential for a given res- some kind of volumetric model for shaly sands [e.g., Thomas
ervoir fluid regime. Yet again, relative permeability measurements and Stieber (1975)]. A noteworthy exception has been the use of

816 October 2010 SPE Reservoir Evaluation & Engineering

minipermeametry to estimate the permeability of the sand laminae the quantification of net pay. The first is whether conventional
and a conventional porosity-vs.-permeability transform to estimate core analysis can be undertaken in tight gas sands with the same
laminar porosity (Fllo et al. 1998). This approach reverses the accuracy is in conventional reservoir rocks and, if so, whether the
usual practice of estimating permeability from porosity. A further data are as useful. For example, in poor quality rock, conventional
complication is whether a minimum sand thickness is required air permeability can be orders of magnitude greater than the true
in order to qualify as (recoverable) pay. Note that laminated res- effective permeability to gas at irreducible water saturation. The
ervoirs are unlikely to show the same recovery as an equivalent second question is whether logging tools are capable of delivering
thickness of massive sand with the same intrinsic properties. This accurate parametric values of physical properties that are known to
is especially true during flooding operations, and it brings out the be related to reservoir properties. In other words, does the tightness
distinction between continuous pay and floodable pay that of the formations take standard well logs beyond their performance
emphasizes the dependence of net pay on recovery mechanism limits? The third issue is whether conventional log-analysis models
(George and Stiles 1978). are appropriate to tight formations, which are often characterized
by high capillarity and a high pore surface area. Finally, there
Discrete Stacked Reservoirs. Where multiple stacked reservoirs is the matter of cutoff selection and whether the cutoffs allow
are separated by intraformational mudstones or shales of equivalent all potentially recoverable volumes to be represented, given that
or smaller thickness, the determination of net pay can use a single tight reservoirs can be markedly heterogeneous and consequently
set of (dynamically-conditioned) cutoffs and be referred to an recovery factors can be highly variable. The key is to approach
overall gross thickness. However, the concept of a gross evaluation data acquisition and analysis in a fit-for-purpose manner [e.g.,
interval breaks down where stacked reservoir units are separated Bennion et al. (2000)]. Experience has shown that where there
by very thick mudstones or other impermeable sediments, perhaps is doubt, one should retain rather than exclude hydrocarbon vol-
more than an order of magnitude thicker than the reservoir units umes. This discussion also points to the challenges of shale-gas
themselves. Here, net-to-gross pay will be misleadingly low. and basin-centered-gas reservoirs, where the very low interparticle
Instead, each unit should be regarded as a discrete reservoir zone permeabilities underscore the need to take full account of reservoir
and net-to-gross pay should be evaluated for each zone at each stimulation in assessing net pay.
well. If the reservoir units are not congenital (i.e., they have been
generated by diverse depositional systems), different sets of cutoffs CBM Reservoirs. A CBM reservoir is unusual in the sense that it
may be needed for each unit. In any case, the reservoir units should constitutes both the source rock and the reservoir rock. Coal seams
be mapped separately. can be recognized with standard logging tools as having a low
gamma ray response, low density, high neutron porosity, and high
Naturally Fractured Reservoirs. Natural fractures are hydrauli- resistivity, even though they are often water-wet. Gas is adsorbed
cally distinct from fractures induced by wellbore activity. The latter onto the internal structure of the coal, and this phenomenon allows
act as localized extensions of the borehole wall. As such, their substantial quantities to be stored. The gas can be released only
presence leads to a better well efficiency over the affected intervals. when the reservoir pressure has dropped to a critical desorption
On the other hand, natural fractures can serve as regional conduits pressure, which is attained through water production. CBM res-
that enhance the transmission of fluids to the wellbore from remote ervoirs often have comparatively low matrix permeability. Gas is
rock volumes within which intergranular permeability exercises transmitted through a cleat network, which is usually a system of
the major control on fluid flow. Note the distinction between this orthogonal joints. The key to characterizing CBM reservoirs is to
situation and late-onset production from tight gas layers discussed identify the effectiveness of the cleat network because, without a
earlier. Here, the matrix system can accommodate potential pay well-developed cleat system, coal seams are unlikely to produce
and it may allow flow into a wellbore directly but the rock is not gas at economic rates. The identification of net pay in CBM reser-
penetrated by a well so net pay cannot be measured; in contrast, the voirs is in its infancy. Dipole sonic image logs have discerned the
tight gas layers are penetrated by a well but there is insignificant development of a cleat network, but they do not deliver quantita-
capability to flow into the wellbore directly, so measured net pay tive information about potential producibility. That information
is zero. A key parameter for naturally fractured reservoirs is the can come only from formation tests of pressure, produced fluids,
ratio of intergranular transmissibility to fracture transmissibility for and effective permeability [e.g., Schlachter (2007)]. However, it
a hydraulic unit. Where this ratio is high, the fractures augment the is likely that the optimum exploitation strategy will be based on
intergranular flow and the net-pay concepts, as outlined above, are multilateral wells (Maricic et al. 2008), and this means that net pay
applicable. In other words, the well-log scale is appropriate for net- concepts will have to be modified for a horizontal well setting (see
pay evaluation. Where the transmissibility ratio is low, the reservoir subsection on horizontal wells below).
cannot function without the fractures, which dominate fluid flow.
Here, reservoir performance is governed by the effective scale of How Is Net Pay Used?
the fracture network, and this can be much greater than the well-log Historically, the main reason for determining net pay has been to
scale. Therefore, what can be measured at the wellbore provides obtain a value of net-to-gross pay for the calculation of hydrocar-
only a partial insight into reservoir performance. On this basis, bons in place. It has long been recognized that the distribution of
such a naturally fractured reservoir is better analyzed dynamically resources in a reservoir is better understood if net pay is analyzed
at the reservoir scale. Downhole activity reduces to the imaging for each depositional unit in turn [e.g., Finley (1985)]. This is not
of fracture occurrence in conjunction with inflow analysis based equivalent to saying that net pay should be quantified by using
on production logs, and it is beneficial in guiding completions. Of rock-type-specific cutoffs. It is more concerned with how to
course, many reservoirs lie between these two extremes. In such interpolate net pay at the field scale after it has been quantified at
cases, dynamically-conditioned net-pay concepts should be used discrete wells. Net pay appears within a net-to-gross pay term in
alongside fracture identification: net pay will include intervals that the following equation for estimating hydrocarbons in place and
show good intergranular character regardless of the fracture density thence ultimate recovery under primary depletion:
[see Aguilera (2003)]. In general, the static volumetric method
is likely to be inadequate as a standalone approach to resource
estimation where fracture flow is significant. Special care should EUR = [(GRV N/G1 $1 Sh 1) / B1] RF, . . . . . . . . . . . . (1)
be taken where natural fractures have been blocked through min-
eralization because the sealed fractures can compartmentalize the where EUR is the estimated ultimate recovery (standard condi-
reservoir, with considerable reductions in recovery. tions), GRV is gross rock volume (reservoir conditions), N/G1
is net-to-gross pay fraction (reservoir conditions), $ 1 is average
Tight Gas Reservoirs. It has long been recognized that traditional porosity over net-pay interval(s) (reservoir conditions), Sh 1 is
methods of reservoir evaluation can break down in tight sands average porosity-weighted hydrocarbon saturation over net-pay
[e.g., Brown et al. (1981)]. There are four aspects that impact interval(s) (reservoir conditions), B1 is formation volume factor

October 2010 SPE Reservoir Evaluation & Engineering 817

(reservoir conditions/standard conditions), and RF is recovery fac- Scale up these relationships to the well-log scale where
tor (fraction) to economic limit (standard conditions). feasible [e.g., by applying a moving average (over an interval that
The use of this equation is rooted within the culture of geo- matches the spatial resolution of the principal porosity log) to con-
logical unit correlation and layer averages. It is most commonly ventional porosity and permeability core data and regressing the
applied during the early stages in the life of a field, although it resulting smoothed data to establish an upscaled relationship].
does persist in reserves audits and related quick-look evaluations. Apply these relationships to logs over net-reservoir intervals.
The advent of geocellular models has led to a different culture. Evaluate porosity and water saturation and (thence) estimate
Grid cells are populated with net-to-gross reservoir and porosity permeability.
data. The precise approach depends on the coarseness of the grid. (Re-)establish the criteria for net-reservoir delineation at the
For example, net-to-gross reservoir might only be allowed values well-log scale.
of zero or unity for fine grids. Porosity will usually have to be Average the interpreted data over the net-to-gross reservoir
averaged to obtain the single value to be assigned to a cell that fraction of each grid cell along every well.
is intersected by a wellbore. Hydrocarbon saturation is assigned Establish saturation vs. height function(s) at the grid-cell scale.
through a saturation-height function that ideally has been estab- Populate the geocellular model with net-to-gross reservoir,
lished at the vertical grid-cell scale using net-reservoir inputs. The porosity, and permeability, taking due account of any reservoir
saturation-height function takes account of the variation of Sh not zonation and the protocol for cell truncation.
just with the properties of a reservoir rock but also with its height Apply the saturation/height function(s) to those cells with a
above the equilibrium pressure surface associated with the base of nonzero net-reservoir fraction.
the hydrocarbon column. Net pay can be interpolated only after Identify net pay using dynamically-conditioned cutoff(s) for
this has been done. Volumetrics are addressed by grid cell and hydrocarbon saturation.
then aggregated for each reservoir unit. For an oil reservoir unit, Compute hydrocarbon pore volumes by grid-cell aggregation
the volumetric algorithm can be written as and by reservoir zone if appropriate.
Transpose to surface conditions using (cell-specific) forma-
STOIIP = (BRV N/G2 $2 Sh 2) / B2, . . . . . . . . . . . . (2) tion volume factor(s).
Undertake sensitivity studies to investigate ranges of uncer-
tainty, which will be quantified primarily by the scatter of regressed
where STOIIP is stock-tank oil initially in place (standard conditions) data trends.
and, for each grid cell, BRV is bulk rock volume (reservoir condi- Estimate petroleum resources either through reservoir simula-
tions), N/G2 is net-to-gross reservoir fraction (reservoir conditions), tion or through analog recovery factors.
$ 2 is average porosity over net-reservoir interval(s) (reservoir condi- Iterate as more data become available.
tions), Sh 2 is computed hydrocarbon saturation over net-reservoir This process is illustrated schematically for conventional reservoirs
interval(s) (reservoir conditions), and B2 is formation volume factor in Fig. 5.
(reservoir conditions/standard conditions). Other uses of net pay are to evaluate infill-drilling potential
The summation of BRV across all grid cells equates to GRV. (Yeager et al. 1996), to target zones for formation stimulation
In computing BRV, the base of the system should be taken to be (Kessler et al. 2000), to identify perforation intervals (Grieser
an HWC where present. Where a cell is bisected by the contact, it et al. 2001), to aid in the interpretation of well-test data (Spivey
is more representative to average porosity over the whole cell and and Pursell 1998), to guide the design of fluid-injection programs
assign that average porosity as a single value to the truncated grid- (Hunter et al. 1990), to initialize reservoir simulators more effec-
cell volume. Depending on project maturity, RF could be derived tively (Schoeling and Mark 2000), to sharpen reserves estimates
subsequently from simulation based on the geocellular model. (Holtz and Hamilton 1998), to reduce risk in highly complex res-
Although the use of net-reservoir as opposed to net-pay cutoffs ervoirs (Martin et al. 1999), and in equity redetermination, which
is partially self-compensating through different parametric aver- is often based on in-place volumes and for which the procedures
ages, the introduction of geocellular models does lead to different are usually proprietary.
estimates of STOIIP by the very nature of the process, and the
potential impact of this cultural change needs to be quantified.
In other words, in computing average properties over net-pay Discussion
intervals, Eq. 1 excludes the water leg and the lowermost part of Abuses of Net Pay. The literature contains numerous abuses of net
a transition zone as well as perched water intervals and zones of pay as a component of reservoir evaluation. The principal abuses
high capillarity. On the other hand, Eq. 2 can include all of these are summarized here. It is important to recognize them as such
intervals in the parametric averaging process. With this in mind, because they contribute to the perpetuation of some of the myths
the benefits of using synergic cutoffs, which reduce the disparity that surround the subject of net pay and therefore they illustrate
between net-to-gross reservoir and net-to-gross pay, are evident the confusion that prevails in the industry and which this paper is
from a comparison of Eqs. 1 and 2. directed at eradicating. For example, the practice of correlating net
Contemporary methods of 3D reservoir modeling can accom- pay with permeability mixes net-pay and net-reservoir criteria. The
modate a greater degree of reservoir complexity in the form of identification of net thickness using cutoffs based on porosity/per-
net-to-gross reservoir and porosity distributions, and also satura- meability character, fluid-injection profiles, and pore-throat size
tion vs. height variability. Several key stages can be identified in actually delivers net reservoir but it is sometimes described as net
the context of integrated reservoir studies. An approach to using pay. Again, the concept of a gross pay with net pay as a subset
net pay is described below for a deterministic geocellular applica- has little logical foundation. Moving on to volumetrics, there is still
tion, although it can easily be adapted for geostatistical models. considerable usage within the industry of the rule-of-thumb net-res-
It assumes that net-pay criteria have initially been established ervoir cutoffs (sometimes erroneously called net-pay cutoffs) of 0.1
using core data. As always, net-pay concepts are intertwined with md for gas reservoirs and 1.0 md for oil reservoirs. Although these
those of net reservoir. For simplicity, the following description have provided useful fall-back positions, they need to be superseded
assumes that all wells are vertical. Special procedures are required by a data-guided culture for improved reservoir description. Yet
for deviated wells (see deviated wells subsection), and these are again, the volumetrics equation (Eq. 1) is sometimes presented as
programmed into commercial software packages. containing net-to-gross pay but with porosity and hydrocarbon satu-
Once net reservoir has been identified using cutoffs estab- ration averaged over net-to-gross reservoir, another example of mix-
lished at the core scale, (re-)establish petrophysical algorithms over ing concepts. At the most basic level, distinguishing reservoir from
net-reservoir intervals, taking due account of rock-typing issues. nonreservoir has been equated to identifying sand and shale, which
These algorithms describe porosity vs. permeability relationships actually constitute net sand and nonsand, respectively. The use of a
and also include the Archie equations (or shaly-sand variations) consistent terminology would remove some of these abuses, but the
for estimating water saturation. deep-seated problem is confusion about the underlying concepts.

818 October 2010 SPE Reservoir Evaluation & Engineering

Define rock types

Establish net reservoir using (Re-)establish petrophysical

core data algorithms

Scale up relationships
to well-log scale

Apply relationships to logs over net

Evaluate porosity, Sw and permeability
reservoir intervals

(Re-)establish net reservoir at Average interpreted data over net

well-log scale reservoir fraction of each grid cell

Establish saturation-vs.-height
function(s) at grid-cell scale

Populate geocellular model

with net-to-gross reservoir,
porosity, and permeability

Apply saturation-vs.-height function(s)

Identify net pay
to cells with a net reservoir fraction

Compute hydrocarbon pore volumes

by grid-cell aggregation and by
reservoir zone

Transpose to surface conditions

Undertake dynamic sensitivity studies using (cell-specific) formation
volume factor(s)

Estimate resources

Iterate as more data become available

Fig. 5Workflow illustrating the use of net reservoir and net pay in a geocellular volumetric approach to the estimation of
petroleum resources in conventional reservoirs.

Dynamic Conditioning of Cutoffs. The process of dynamic this is the case, the use of an air permeability term as a composite
conditioning merits further comment. Permeability is pivotal to reference parameter can be accommodated. However, the industry
this process. In many field databases, the permeability data are air should be encouraged to move towards effective permeability,
permeabilities that may or may not have been corrected for gas- specifically the (endpoint) permeability to hydrocarbons at irreduc-
slippage effects through a Klinkenberg correction. If no correction ible water saturation. The implications have been exemplified by
has been applied, the data are arbitrary because they depend on the Cobb and Marek (1998). At the very least, a subset of preserved
average of the upstream and downstream flowline pressures used samples should be measured for effective permeability so that cor-
in the laboratory. There have been many cases in which these pres- rection factors can be investigated for converting conventional
sures have not been reported. Therefore, where several contractors air permeability to pseudo-effective permeability.
have been used across a database and these pressures vary between
laboratories, the data cannot be integrated. The Klinkenberg cor- Vertical Wells. Up to now, the discussion has been set notionally
rection avoids these problems, but it remains an air permeability within the context of vertical wells and horizontal, homogeneous,
based on flow across the entire pore cross-sectional area. This and longitudinally isotropic layers. These simplified conditions are
measurement condition is not prohibitive provided that the hydrau- shown in Fig. 6a, for which net-to-gross pay is specified as unity
lic character of an oil-bearing water-wet rock can be diagnosed for simplicity. Here MD is along-hole measured depth, TVD is true
meaningfully through Klinkenberg-corrected air permeability. If vertical depth, MT is the measured thickness of a layer along the

October 2010 SPE Reservoir Evaluation & Engineering 819

Reference Datum




Shale ODT
(a) (b) (c)



(d) (e)
Fig. 6Schematic depiction of a well fully penetrating a reservoir unit with a notional net-to-gross pay of unity over the evalu-
ation interval. (a) Vertical well, horizontal layer. (b) Vertical well, dipping layer [NP (net pay) is dashed to show that it becomes
greater when referred to TVT rather than to TST]. (c) Deviated well, horizontal layer. (d) Deviated well, dipping layer, deviation
downdip with azimuths in same vertical plane. (e) Deviated well, dipping layer, deviation updip with azimuths in same vertical
plane: deviation = dip.

wellbore, TVDT is the true vertical depth thickness of the layer deviated downdip (Fig. 6d) or updip (Fig. 6e). In Fig. 6d, MD >
(i.e., MT transposed into a vertical plane), TVT is the true vertical TVD and MT > TVDT > TVT > TST. Net-to-gross reservoir and
thickness of the layer (i.e., the thickness of the layer measured in net-to-gross pay can be appropriately referred to TVT or TST in
a vertical direction), and TST is the true stratigraphic thickness 3D geological modeling. TVDT takes account only of borehole
of the layer. In Fig. 6a, MD = TVD, provided that these use the deviation and does not accommodate bedding dip. Fig. 6e shows
same depth reference datum. Moreover, MT = TVDT = TVT = the particular case where a deviated well penetrates an updipping
TST. With these simplified conditions, net-to-gross reservoir and layer at right angles (i.e., deviation = dip). For the depicted case,
net-to-gross pay can be appropriately referenced to MT, TVDT, TVT > MT = TST > TVDT. Here, net reservoir and net pay will
TVT, or TST without distorting net reservoir and net pay. be inflated relative to Fig. 6a when referred to TVT, but the cor-
Fig. 6b shows a vertical well fully penetrating a dipping layer for responding net-to-gross ratios are materially unchanged, with the
which TST is the same as in Fig. 6a. Here, MD = TVD and MT = caveat that anisotropy is a potential influence on resistivity and
TVT = TVDT, but TVT > TST. Net-to-gross reservoir and net-to-gross sonic logs in all deviated wells and thence on interpretive deliv-
pay can be referred to TVT or TST for 3D geological modeling pur- erables. The situation becomes even more complex in the general
poses, depending on how the modeling is to be performed. Although case where the deviation and dip azimuths are in different vertical
net reservoir and net pay can be inflated relative to Fig. 6a by referral planes. The way in which these issues are accommodated within
to TVT rather than TST, net-to-gross ratios do not materially change a volumetrics exercise depends on the 3D modeling method. For
as a consequence. This is an important observation because it is a further discussion of subsurface geological mapping methods see
net-to-gross ratio that is entered into the volumetric equations (Eqs. Tearpock and Bischke (1991) and Boak (1992).
1 and 2). Note that if a dipping layer is transversely (relative to bed-
ding) anisotropic, directionally-measured log parameters can become Horizontal Wells. For simplicity, this discussion assumes hori-
a function of the degree of dip, so the impact of cutoffs can be changed zontal beds. Along-hole net pay is the penetration length measured
and this can alter the resulting net-reservoir and net-pay intervals and in the wellbore of those reservoir rocks containing a supracritical
thence the corresponding net-to-gross ratios. volume of hydrocarbons that can express itself at the borehole
face. Horizontal wells often target net-pay zones that have been
Deviated Wells. A deviated well that fully penetrates a horizontal, pre-identified in vertical wells (Fig. 7). Therefore the concept of
homogeneous, and longitudinally isotropic layer is shown in Fig. net pay in vertical wells is not directly transposable to horizontal
6c. TST is the same as before. Here, MD > TVD and MT > TVT wells. For this reason, some authors have distinguished between
= TVDT = TST. Net reservoir and net pay are unchanged when vertical-well net pay and horizontal-well net pay [e.g., Lemos
referred to TVT or TST. et al. (2006)]. This distinction is appropriate, not least because
Where a deviated well penetrates dipping layers, the analysis the criteria for accepting an interval as net pay will change with
becomes more complex. For simplicity, these considerations are rotation from vertical to horizontal wellbores because of formation
confined to cases where the azimuth of the dip (measured from anisotropy. Moreover, it is often assumed that a vertical well taps a
the horizontal) is in the same vertical plane as the azimuth of the laterally extensive net-pay unit of given thickness with consistent
deviation (measured from the vertical). Even with this restric- hydraulic properties. This perception has to be changed for hori-
tion, it is necessary to distinguish between cases where a well is zontal wells, where the along-hole net-pay penetration length is no

820 October 2010 SPE Reservoir Evaluation & Engineering

identification of net-pay cutoffs. This approach takes account of
rock type and reservoir depletion mechanism, and it honors scale
Permeability has vertical of measurement. The cutoffs should be dynamically conditioned
component to reflect reservoir quality more completely. The outcome includes
more exact petrophysical interpretations of hydrocarbon-bearing
Interpretive algorithms and intervals and more meaningful reservoir models.
cutoffs may be different Putting these matters together, it has been possible to formu-
late a less subjective method for the identification of net hydro-
carbon-bearing intervals, as a basis for resource estimation and
economic analysis. This is important because, historically, different
approaches to the quantification of net pay have furnished very
Pay Horizontal Pay different estimates. The proposed protocols are appropriate to the
conjunctive application of deterministic and geostatistical methods
to volumetric analysis. The overall benefit is a more meaningful
characterization of the reservoir with a better synergy between
the static and dynamic reservoir models. Thus, the estimation of
reserves through geology-based methods is given a stronger proce-
Fig. 7Concepts of vertical and horizontal pay. dural foundation with a commensurate reduction in uncertainty, so
that an energy company can realize asset value more fully.

longer geologically constrained, but rather becomes a function of
borehole reach. In other words, net pay can be increased simply The author thanks Vivian Bust and Ian Firth for helpful comments
by drilling further. The key limitation is now drilling technology. during the preparation of the manuscript. The author also acknowl-
Of course, the down side is that the extent of the target net-pay edges Gaffney, Cline & Associates for supporting the preparation
volume away from a horizontal wellbore is constrained (e.g., and presentation of the original paper and its progression into the
by overlying and underlying seals), and it is far less likely to pos- peer-reviewed literature.
sess consistent hydraulic properties in a plane orthogonal to the
wellbore axis because of the effects of sedimentary deposition. Put-
ting these matters together, in vertical wells net pay (thickness) is
constrained by geology but the expressive hydrocarbon volume per
unit wellbore thickness extends far from the wellbore. On the other
hand, in horizontal wells, net pay (length) is larger but the expres-
sive hydrocarbon volume per unit wellbore length is geologically
constrained to be closer to the borehole in all but subhorizontal
planes. Therefore, horizontal-well net pay should not be handled
in the same way as vertical-well net pay. In general, although there
are potential complexities of log response in horizontal wells, the
criteria used for horizontal net pay can be simpler in concept, and
they are sometimes based on length counts derived from logging
while drilling. However, it should never be forgotten that horizon-
tal wells provide an opportunity for reservoir description between
vertical wells, with the caveat that targeted drilling of sweet spots
can distort perceptions of overall reservoir quality.

Reservoir Description. For a well penetrating a single reservoir

system with an HWC, net pay exists above the HWC whereas
net reservoir can exist above and below the contact because it is
defined in terms of reservoir quality and not whether the reservoir
rock contains movable hydrocarbons. For dipping layers, a given
net-reservoir subinterval can be below a horizontal HWC in some
places and above it in others. For this reason, net-reservoir mapping
usually incorporates at least part of a water leg where this exists.
Moving upwards through the HWC within net-reservoir rock, net
pay kicks in at a level within the transition zone where the hydro-
carbon saturation attains a cutoff value above which hydrocarbons
can flow in significant quantities. If the net-reservoir criteria are not
satisfied at any depth level above the HWC, because of subcritical
rock quality (e.g., tight zones), there is no net pay. Beyond this, high
capillarity can cause net-reservoir intervals above the transition zone
to be classified as nonpay. Perched water has a similar effect.

The concepts of net pay and net reservoir are strongly interrelated,
with the former thickness a subinterval of the latter. The nature and
role of net pay have been clarified on the basis of host-rock char-
acter and how a hydrocarbon accumulation is to be modeled. In so
doing, it is noted that the term net pay would more appropriately
be designated net hydrocarbons because economic decisions
often extend beyond single well completions.
In the absence of an industrywide protocol for quantifying net
pay, an iterative data-driven approach has been proposed for the

October 2010 SPE Reservoir Evaluation & Engineering 821