Prediction of Resource Volumes at Untested Locations Using Simple Local Prediction Models

Abstract

This paper shows how local spatial nonparametric prediction models can be applied to estimate volumes of recoverable gas resources at individual undrilled sites, at multiple sites on a regional scale, and to compute confidence bounds for regional volumes based on the distribution of those estimates. An approach that combines cross-validation, the jackknife, and bootstrap procedures is used to accomplish this task. Simulation experiments show that cross-validation can be applied beneficially to select an appropriate prediction model. The cross-validation procedure worked well for a wide range of different states of nature and levels of information. Jackknife procedures are used to compute individual prediction estimation errors at undrilled locations. The jackknife replicates also are used with a bootstrap resampling procedure to compute confidence bounds for the total volume. The method was applied to data (partitioned into a training set and target set) from the Devonian Antrim Shale continuous-type gas play in the Michigan Basin in Otsego County, Michigan. The analysis showed that the model estimate of total recoverable volumes at prediction sites is within 4 percent of the total observed volume. The model predictions also provide frequency distributions of the cell volumes at the production unit scale. Such distributions are the basis for subsequent economic analyses.