October 31, 1975 - Gerald R. Ford Presidential Library and Museum

The mailing lists used by FEA were incomplete and omitted operators
accounted for the remaining production which is about 1 percent for
crude oil and 3 percent for natural gas.
The usable schedules have been expanded to benchmark totals to
account for nonresponses, unusable schedules, and the incomplete mailing
list. .
Special Audit of Operator Responses
FEA realized early in the survey procedure that the quality of
response from operators was below expectation. A computer editing
procedure was established and telephone calls were made by engineers.
geologists, and junior professionals to operators to clarify and validate
out-of-range responses.
FEA determined that it should conduct a more intensive examination
of operator responses to better assess the quality of data being submitted.
National Analysts worked with FEA in selecting a sample of
operator field reports for special field-audit. A tabulation indicated
that there were 14,451 operator field reports indicating the operator
produced over 20,000 barrels of crude oil or 100 million cubic feet of
natural gas in 1974.
From these reports National Analysts chose a sample of 1,806 units
The sampling procedure is described in Appendix C of the initial report.
Time and available resources precluded personal interviews and an
alternative procedure was adopted. FEA selected 32 large operators to
be visited by FEA auditors. These 32 operators accounted for 729 of the
1,806 sample units. FEA contracted with Control Data Corporation to
survey the remaining operators by telephone.
Noteworthy results of the special field audit are indicated below:
Question: Were the estimates of proved reserves made by an engineer
or geologist?
Ninety-four percent of the crude oil, 96 percent of the associated
gas, and 95 percent of the nonassociated gas estimates of proved reserves
were made by engineers or geologists. These estimates were prepared by
updating an earlier reserves estimate in about 80 percent of the cases.
Question: What was the principal methodology used to make the
reserve estimate?
Fifty-seven percent of the audit reserve estimates were made by
using decline curve analysis, 31 percent by the volumetric method, 7
percent by material balance calculations, and 5 percent by other methods.
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