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
A knowledge of net pay is important for the volumetric estima-
tion of hydrocarbon resources, a practice that underpins the value
of the petroleum industry. Yet, there is no universal definition of
net pay, there is no general acceptance of its role in integrated
reservoir studies, there is no recognized method for evaluating
it, and there are disparate views on how to make use of it. Partly
for these reasons, net-to-gross pay constitutes a major source of
uncertainty in volumetric reserves estimates, second only to gross
rock volume. With the aim of improving this unsatisfactory state of
affairs, I chart a critical path of net-pay understanding and appli-
cation to dispel some of the unhelpful myths that abound within
the industry and replace them with a defensible rationale to guide
the quantification of net pay (thickness). Central to this process
is the identification of net-pay cutoffs, themselves the subject of
much controversy over the years. The approach is data-driven, in
that it uses what we know, and also fit-for-purpose, in that it takes
account of reservoir conditions. The outcome is a sounder basis
for incorporating net pay into volumetric estimates of ultimate
recovery and thence hydrocarbon resources.
Introduction
Net pay is a key parameter in reservoir evaluation because it
identifies those penetrated geological sections that have sufficient
reservoir quality and interstitial hydrocarbons to function as sig-
nificant producing intervals. Through interpolation, it contributes
to the estimation of a meaningful in-place volume, against which
recovery efficiency can be usefully assessed. Thus, net pay is
central to the static volumetric method of estimating ultimate
recovery. Moreover, it demonstrably facilitates reservoir simula-
tion because nonreservoir rock does not need to be character-
ized in the same way that reservoir rock does. Yet, there are no
industry-standard definitions of net pay. Indeed several diverse
protocols were identified by Worthington and Cosentino (2005).
Moreover, there are no generally accepted procedures for its
incorporation into reservoir models as a basis for resource esti-
mation. These matters were articulated by Caldwell and Heather
(2001) as follows.
Despite net pay being a fundamental input into not only
volumetric reserves calculations, but also well test analysis and
predictive calculations, there is surprisingly little in the way of
insightful guidelines on different computational methods and
their strengths and weaknesses.
This paper examines where we are in terms of quantifying net
pay using determined formation properties and it promotes an
improved methodology that does not have the drawbacks of tra-
ditional approaches. A specific aim is to reduce subjectivity, so
that different subsurface teams can deliver more closely aligned
net-pay estimates. This is achieved by scoping out a framework for
accommodating solutions to the net-pay problem. These matters
are especially important during the early stages of field life, when
uncertainty in estimated petroleum resources is greatest.
Copyright 2010 Society of Petroleum Engineers
Original manuscript received for review 28 May 2009. Revised manuscript received for
review 13 May 2010. Paper (SPE 123561) peer approved 5 June 2010.
812
Petroleum Resources
A subsurface petroleum discovery occurs where there is confirma-
tion through drilling and downhole measurements of sufficient
movable hydrocarbon volumes to be of potential interest as an
exploitable resource. Historically, the terms resources and total
resources have been taken to include all hydrocarbon volumes
in the subsurface: discovered and undiscovered, recoverable and
unrecoverable, remaining and produced, economic and uneco-
nomic, commercial and noncommercial. However, as used here,
the term resources relates to estimated recoverable hydrocarbon
volumes, pursuant to the Petroleum Resources Management Sys-
tem (Society of Petroleum Engineers et al. 2007).
There are three classes of resources. The term prospective
resources applies to the exploration stage in that it admits undis-
covered (potentially) recoverable volumes. The term contingent
resources notionally relates to the appraisal stage by including
only discovered recoverable volumes, but these may be economic
or uneconomic. The term reserves relates to the development
stage. It includes only those volumes that are discovered, remain-
ing (in the subsurface), recoverable, and commercial. Commercial-
ity means that the hydrocarbon volumes are economically exploit-
able and that there is a commitment to produce. The commitment
is manifested through a development plan. Progression through the
resource classes is governed by project maturity. To progress from
prospective resources to contingent resources requires a discov-
ery. To progress from economic contingent resources to reserves
requires a commitment to develop in real time.
The estimation of discovered petroleum resources is summarized
in Table 1. Geology-based methods can contribute to estimates of
contingent resources or reserves, according to project maturity. By
their very nature, production-based methods lead to estimates of
reserves. This paper is set within the context of geology-based meth-
ods, in particular the widely used static volumetric approach.
Formation Thicknesses
The total thickness of a designated evaluation interval either along
hole or in true vertical space is termed gross thickness. The term
net thickness indicates that some of the gross thickness has been
removed. There are three types of net thickness: net sand, net reser-
voir, and net pay. Their interrelationship is summarized in Fig. 1. It
can be seen that net pay is notionally a subinterval of net reservoir,
which is, in turn, a subinterval of net sand. These thicknesses are
used along hole for completions purposes and often in true vertical
space for volumetric computations. In practice, their identification
is effected simultaneously within net-pay subroutines. However,
although this terminology is in widespread use within the indus-
try, it is applied neither consistently nor rigorously (see the later
subsection, Abuses of Net Pay).
The identification of net sand, net reservoir, and net pay reflects
the nested nature of these subintervals, all of which are evaluated
at a wellbore. Essentially, net sand is a potential reservoir rock: for
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
must be able to store fluids and allow through-flow to a degree
that would permit a significant contribution to productivity at well-
bores. Beyond these requirements, net pay contains hydrocarbons
October 2010 SPE Reservoir Evaluation & Engineering
 TABLE 1ESTIMATION OF DISCOVERED PETROLEUM RESOURCES

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)
(uncalibrated)
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
etay
Pa y tion-evaluation exercise.
R ock Sand and Reser
ReserRveserv
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
evaporites,
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

 Pay
Tight Sand
Permeable Sand
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
might influence the establishment of interpretive algorithms and
thence degrade their application over net reservoir and net pay.
Moreover, if there is no separation of net reservoir and net pay
from the gross thickness, it will be necessary to characterize the
nonreservoir rock to the same degree as the reservoir rock. Given
that core analysis of poorer quality rock is more expensive than for
reservoir rock, it is a challenge to envisage this happening as part
of the evaluation of conventional reservoirs in any cost-conscious
culture. Note that these protocols do not imply that only the better
quality rocks should be sampled for core analysis purposes. In fact,
unbiased sampling of the net-sand interval is a prerequisite for the
identification of net reservoir and thence net pay. However, once
net reservoir has been identified, only those data that relate to net
reservoir are admitted in order to establish core-derived interpre-
tive algorithms. Some measurements, such as relative permeability
data, will have specific applications to net pay.
The identification of net pay and the associated elimination
of nonreservoir rock form the basis for a more meaningful ini-
tialization of a reservoir simulator. This statement is rooted in
the adoption of dynamically-conditioned cutoffs for delineating
net-reservoir and net-pay intervals. It is important to note that the
traditional practice of defining net pay using static cutoffs, which
demarcate intervals with sufficient hydrocarbon-filled porosity,
has been refined here through the use of dynamically-conditioned
cutoffs, which demarcate intervals with potentially exploitable
hydrocarbon-filled porosity. This refinement is in accord with the
contemporary approach to net-pay quantification within the context
of integrated reservoir studies (Cosentino 2001). Although there is
a point of view that simulation is a catch-all that can account for
nonreservoir rock as well as reservoir rock, our recent experience
has confirmed that if net pay is systematically quantified, the per-
formance of dynamic reservoir models is demonstrably improved
in terms of more readily attainable history matches.
The net-pay concept is open to challenge specifically in the case
of tight gas layers that release hydrocarbons into adjacent perme-
able beds when a sufficiently large pressure differential has been
established through primary depletion (Fig. 2). Because those tight
gas sands may not be incorporated within net pay at the wellbore,
it can be argued that late onset recovery from those sands renders a
net-pay protocol meaningless. The rebuttal to this argument calls for
a return to basics. Net pay can be measured only at a wellbore and
this has to be done in light of the recovery process. In a vertical well,
it is a measure of the thickness of hydrocarbon-bearing reservoir
rocks whose constituent fluids express themselves significantly at
the wellbore. Late-onset recovery occurs in response to changes in
fluid properties within the reservoir system. It is initiated away from
814
RF=0%
RF=110%
the wellbore and the depleted permeable layers provide a conduit
to the well. Thus, a permeable layer can show an inflated recovery
factor, in some cases greater than 100%, but this does not negate the
net-pay concept, provided that the underlying recovery mechanism
has been recognized. An alternative approach might have been to
distinguish between early production and late production as the
deliverables of different recovery mechanisms. However, even if
this is done, it should not impact perforating decisions.
It is worth substantiating the preceding comment that net pay
can be measured only at a wellbore, specifically within the context
of using seismic-attribute mapping to estimate net pay in interwell
regions. Order-of-magnitude differences in seismic vertical resolu-
tion compared to well logs (e.g., 3040 m vs. 0.51.0 m) inhibit
the required correlation(s) between net pay and seismic attribute(s),
which should strictly be effected at the seismic resolution scale.
Partly as a consequence, such geophysically-driven correlations
admit wide ranges of uncertainty that can encompass the complete
ranges of depth-averaged reservoir properties (at the seismic reso-
lution scale). With these limitations, a geophysical deliverable is
not a measurement of net pay: it is at best a broad net-pay indicator.
Although such an indicator can be useful in favorable situations,
the potential benefit is weakened where reservoir thickness is
below seismic vertical resolution.
How Is Net Pay Quantified?
The earlier literature referred to the picking of net pay according
to how it was to be used, so that the intended method of application
influenced how net pay was identified [e.g., Snyder (1971)]. Today,
this exercise is largely automated, with the possible exception of
single-well completions where decisions have to be made on the
spot. Net pay is quantified through the use of petrophysical cutoffs
that are applied to well logs. Cutoffs are limiting values of forma-
tion parameters that remove noncontributing intervals. The role and
application of cutoffs in integrated reservoir studies have been dis-
cussed previously (Worthington and Cosentino 2005; Worthington
2008). Traditionally, a shale volume fraction, Vsh, cutoff is used to
identify net sand. A porosity, $, cutoff is then applied to net sand
to delineate net reservoir. Finally, a water saturation, Sw, cutoff is
applied to net reservoir to define net pay. Thus, net pay is nested
within net reservoir and this, in turn, is nested within net sand.
Perhaps the biggest argument that has been made against
the introduction of cutoffs is the arbitrary nature of historical
approaches. It is true that there is no generally accepted method of
identifying cutoffs. It is also true that certain rules of thumb have
existed in the petroleum industry for more than 50 years and that
some authors have even advocated generally-applicable cutoffs
for sandstones, on the one hand, and for carbonates, on the other
October 2010 SPE Reservoir Evaluation & Engineering

Dynamically-conditioned
porosity cutoff
0.5
( k )
(a)
log k Vsh
Vshc
log kc
(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
been data-driven, and these have formed the basis for an improved
protocol by avoiding the use of industry defaults and generic
specifications. Further guidance can be gleaned from the answers
to the following key questions:
Do we believe that a reservoir can be characterized solely in
terms of its ability to store hydrocarbons?
Yes: we can use static net-pay cutoffs.
No: we must use net-pay cutoffs that also take account of
reservoir dynamics.
Do we believe that all hydrocarbon-bearing rocks have the
same reservoir character?
Yes: we can use generic net-pay cutoffs.
No: we must establish net-pay cutoffs for each identified rock
type.
Do we believe that all hydrocarbon-bearing reservoirs are
produced through the same drive mechanism?
Yes: we can use a universal approach to the generation of net-
pay cutoffs.
No: we must condition our net-pay cutoffs to the drive mecha-
nism.
If the answer to these three questions is no, the identification of
net pay has to be conditioned dynamically and be fit for purpose
(i.e., it must take account of flow criteria, rock type, and deple-
tion mechanism). Note that the identification of net reservoir is an
integral part of this process.
The application of these principles (of flow criteria, etc.) in
quantifying net reservoir and thence net pay calls for an exami-
nation of porosity and permeability, k, as represented within a
conventional core data set. This should be undertaken in light of
the recovery mechanism and with appropriate data partitioning
(e.g., on the basis of facies type) and honoring of scale (e.g.,
from core to log). This approach has been described more fully by
Worthington and Cosentino (2005). In essence, there are several
October 2010 SPE Reservoir Evaluation & Engineering
1
Absolute permeability
cutoff
Endpoint kro (Swirr)
0
(b) log (air permeability, mD)
Sw
Swc
c
key stages. Central to this process is the concept of a reference
parameter, which is a parameter that allows the limit to flow to
be identified for a particular reservoir (sub)unit and for a given
depletion mechanism. Parameters that can be quantified through
downhole measurements are tied back to the reference parameter
so that a reference-parameter cutoff can be related to cutoffs for
properties that can be determined from well-log analysis. This
process is handled synergically (i.e., all log-applicable cutoffs are
tied back directly or indirectly to the same reference parameter so
that all cutoffs have a hydraulic significance).
Specify an evaluation interval in a well.
Select a reference parameter, such as a reservoir quality
indicator, (k/$)0.5, for primary depletion or endpoint relative per-
meability to oil in the presence of water, kro(Swirr), for waterflood
depletion (Fig. 3).
Establish any data partitioning for the segregation of (hydrau-
lic) rock types and thence the reduction of data scatter in analytical
crossplots of reservoir parameters.
Identify a value of the appropriate reference parameter [e.g.
(k/$)0.5 ; k (S )] that corresponds to the lower limit of hydraulic
ro wirr
behavior of the rock over a partitioned fraction of the evaluation
interval (Fig. 3). If in doubt, select the most all-encompassing
lower limit that is compatible with the principle. Adopt this limit-
ing value as a reference cutoff.
For the partitioned data set for each (hydraulic) rock type, relate
the reference cutoff to a corresponding value of a conventional core
analysis parameter such as porosity or Klinkenberg-corrected air
permeability taking due account of scale where feasible. Adopt this
corresponding value as a dynamically-conditioned cutoff.
Using the principle of synergic cutoffs (Cosentino 2001),
relate the dynamically-conditioned cutoff to corresponding cutoffs
of log-derived porosity (where required), shale volume fraction,
and water saturation, so that all cutoffs become dynamically con-
ditioned (Fig. 3).
815
 70

Reservoir Quality Index (mD)0.5

60

50

40

30

20

10

0
0.000 0.050 0.100 0.150 0.200 0.250
Porosity

1.0
0.9
0.6
Shale volume fraction

0.8
0.5
0.7

Water saturation
0.4
0.6
0.3
0.5
0.2
0.4
0.1 0.3
0.0 0.2
0.000 0.050 0.100 0.150 0.200 0.250
Porosity 0.1
0.0
0.000 0.050 0.100 0.150 0.200 0.250
Porosity

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
the partitioned data set. If the lower depth limit of the evaluation
interval is a sharply-defined hydrocarbon/water contact (HWC)
or a hydrocarbon-down-to level, and there is no perched water
or intraformational interval with high capillarity, the resulting net
reservoir and net pay will be very similar. They will not be the same
because of the inexactness of interpreted reservoir properties and
their interrelationships. However, the use of dynamically-condi-
tioned synergic cutoffs minimizes the impact of any disparities.
Obtain average log-derived porosity and (porosity-weighted)
water saturation over the net-pay thickness(es) of each partitioned
interval.
Integrate the data from all partitioned intervals to obtain an
overall net pay.
Repeat the process for all wells in the project database.
A worked example is shown in Fig. 4. Further tangible examples
have been provided by Worthington (2008). The process has also
been tracked by Egbele et al. (2005), though with different cutoff
parameters for identifying net pay.
If the available core data include special core analysis, there are
other approaches that can be adopted. For example, if Dean-Stark
extracted water saturations are available, it is possible to ground
truth the use of composite cutoff parameters such as bulk volume
water (the product of porosity and water saturation). Capillary
pressure measurements can be used in conjunction with conven-
tional porosity and permeability data to ascertain the critical poros-
ity and permeability values for which the pore throats are too small
to allow hydrocarbons to enter the rock during migration. This
analysis contributes to net reservoir, rather than net pay, because
it is concerned with the issue of reservoir potential for a given res-
ervoir fluid regime. Yet again, relative permeability measurements
can be used to identify the respective endpoint water saturations
(i.e., irreducible water saturation and the critical water saturation at
which hydrocarbons do not flow). The former is used to quantify a
reference parameter for waterflood depletion in Fig. 3b; the latter
can be used to guide the selection of a water saturation cutoff. For
further discussion of the evaluation of net pay during secondary
depletion, see Cobb and Marek (1998). If there are no core data
available, recourse has to be made to a static analysis of cutoffs
[e.g., Joshi and Lahiri (1998)] or to an informed use of analog
discriminators. Neither of these approaches should be viewed as
a satisfactory alternative.
The preceding methods have to be varied for certain types of
reservoir. These include laminated reservoirs, discrete stacked
reservoirs, naturally fractured reservoirs, tight gas reservoirs, and
coalbed-methane (CBM) reservoirs.
Laminated Reservoirs. Sand/shale sequences constitute the big-
gest cause of overlooked pay in the world today (Worthington
2000). The problem is rooted in the inability of standard logging
tools to resolve individual sand laminae. A partial solution is to
use an electrical micro-imager to identify the laminae and a tensor
resistivity tool to quantify the resistivity of the sands. The evalu-
ation of sand porosity can be problematic because of inadequate
spatial resolution and uncertainty associated with the application
of shale corrections to porosity tools. Where core has been recov-
ered, and the thickness of the sand laminations is greater than the
diameter of horizontal core plugs, the evaluation of sand porosity
can be groundtruthed by judicious selection of core-plug loca-
tions. Otherwise, it is usually necessary to draw cautiously upon
some kind of volumetric model for shaly sands [e.g., Thomas
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
and a conventional porosity-vs.-permeability transform to estimate
laminar porosity (Fllo et al. 1998). This approach reverses the
usual practice of estimating permeability from porosity. A further
complication is whether a minimum sand thickness is required
in order to qualify as (recoverable) pay. Note that laminated res-
ervoirs are unlikely to show the same recovery as an equivalent
thickness of massive sand with the same intrinsic properties. This
is especially true during flooding operations, and it brings out the
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
(George and Stiles 1978).
Discrete Stacked Reservoirs. Where multiple stacked reservoirs
are separated by intraformational mudstones or shales of equivalent
or smaller thickness, the determination of net pay can use a single
set of (dynamically-conditioned) cutoffs and be referred to an
overall gross thickness. However, the concept of a gross evaluation
interval breaks down where stacked reservoir units are separated
by very thick mudstones or other impermeable sediments, perhaps
more than an order of magnitude thicker than the reservoir units
themselves. Here, net-to-gross pay will be misleadingly low.
Instead, each unit should be regarded as a discrete reservoir zone
and net-to-gross pay should be evaluated for each zone at each
well. If the reservoir units are not congenital (i.e., they have been
generated by diverse depositional systems), different sets of cutoffs
may be needed for each unit. In any case, the reservoir units should
be mapped separately.
Naturally Fractured Reservoirs. Natural fractures are hydrauli-
cally distinct from fractures induced by wellbore activity. The latter
act as localized extensions of the borehole wall. As such, their
presence leads to a better well efficiency over the affected intervals.
On the other hand, natural fractures can serve as regional conduits
that enhance the transmission of fluids to the wellbore from remote
rock volumes within which intergranular permeability exercises
the major control on fluid flow. Note the distinction between this
situation and late-onset production from tight gas layers discussed
earlier. Here, the matrix system can accommodate potential pay
and it may allow flow into a wellbore directly but the rock is not
penetrated by a well so net pay cannot be measured; in contrast, the
tight gas layers are penetrated by a well but there is insignificant
capability to flow into the wellbore directly, so measured net pay
is zero. A key parameter for naturally fractured reservoirs is the
ratio of intergranular transmissibility to fracture transmissibility for
a hydraulic unit. Where this ratio is high, the fractures augment the
intergranular flow and the net-pay concepts, as outlined above, are
applicable. In other words, the well-log scale is appropriate for net-
pay evaluation. Where the transmissibility ratio is low, the reservoir
cannot function without the fractures, which dominate fluid flow.
Here, reservoir performance is governed by the effective scale of
the fracture network, and this can be much greater than the well-log
scale. Therefore, what can be measured at the wellbore provides
only a partial insight into reservoir performance. On this basis,
such a naturally fractured reservoir is better analyzed dynamically
at the reservoir scale. Downhole activity reduces to the imaging
of fracture occurrence in conjunction with inflow analysis based
on production logs, and it is beneficial in guiding completions. Of
course, many reservoirs lie between these two extremes. In such
cases, dynamically-conditioned net-pay concepts should be used
alongside fracture identification: net pay will include intervals that
show good intergranular character regardless of the fracture density
[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
be taken where natural fractures have been blocked through min-
eralization because the sealed fractures can compartmentalize the
reservoir, with considerable reductions in recovery.
Tight Gas Reservoirs. It has long been recognized that traditional
methods of reservoir evaluation can break down in tight sands
[e.g., Brown et al. (1981)]. There are four aspects that impact
October 2010 SPE Reservoir Evaluation & Engineering
the quantification of net pay. The first is whether conventional
core analysis can be undertaken in tight gas sands with the same
accuracy is in conventional reservoir rocks and, if so, whether the
data are as useful. For example, in poor quality rock, conventional
air permeability can be orders of magnitude greater than the true
effective permeability to gas at irreducible water saturation. The
second question is whether logging tools are capable of delivering
accurate parametric values of physical properties that are known to
be related to reservoir properties. In other words, does the tightness
limits? The third issue is whether conventional log-analysis models
are appropriate to tight formations, which are often characterized
by high capillarity and a high pore surface area. Finally, there
is the matter of cutoff selection and whether the cutoffs allow
all potentially recoverable volumes to be represented, given that
tight reservoirs can be markedly heterogeneous and consequently
recovery factors can be highly variable. The key is to approach
data acquisition and analysis in a fit-for-purpose manner [e.g.,
Bennion et al. (2000)]. Experience has shown that where there
is doubt, one should retain rather than exclude hydrocarbon vol-
umes. This discussion also points to the challenges of shale-gas
and basin-centered-gas reservoirs, where the very low interparticle
permeabilities underscore the need to take full account of reservoir
stimulation in assessing net pay.
CBM Reservoirs. A CBM reservoir is unusual in the sense that it
constitutes both the source rock and the reservoir rock. Coal seams
can be recognized with standard logging tools as having a low
gamma ray response, low density, high neutron porosity, and high
resistivity, even though they are often water-wet. Gas is adsorbed
onto the internal structure of the coal, and this phenomenon allows
substantial quantities to be stored. The gas can be released only
when the reservoir pressure has dropped to a critical desorption
pressure, which is attained through water production. CBM res-
ervoirs often have comparatively low matrix permeability. Gas is
transmitted through a cleat network, which is usually a system of
orthogonal joints. The key to characterizing CBM reservoirs is to
identify the effectiveness of the cleat network because, without a
well-developed cleat system, coal seams are unlikely to produce
gas at economic rates. The identification of net pay in CBM reser-
voirs is in its infancy. Dipole sonic image logs have discerned the
development of a cleat network, but they do not deliver quantita-
tive information about potential producibility. That information
can come only from formation tests of pressure, produced fluids,
and effective permeability [e.g., Schlachter (2007)]. However, it
is likely that the optimum exploitation strategy will be based on
multilateral wells (Maricic et al. 2008), and this means that net pay
concepts will have to be modified for a horizontal well setting (see
subsection on horizontal wells below).
How Is Net Pay Used?
Historically, the main reason for determining net pay has been to
obtain a value of net-to-gross pay for the calculation of hydrocar-
bons in place. It has long been recognized that the distribution of
resources in a reservoir is better understood if net pay is analyzed
for each depositional unit in turn [e.g., Finley (1985)]. This is not
equivalent to saying that net pay should be quantified by using
rock-type-specific cutoffs. It is more concerned with how to
interpolate net pay at the field scale after it has been quantified at
discrete wells. Net pay appears within a net-to-gross pay term in
the following equation for estimating hydrocarbons in place and
thence ultimate recovery under primary depletion:
EUR = [(GRV N/G1 $1 Sh 1) / B1] RF, . . . . . . . . . . . . (1)
where EUR is the estimated ultimate recovery (standard condi-
tions), GRV is gross rock volume (reservoir conditions), N/G1
is net-to-gross pay fraction (reservoir conditions), $ 1 is average
porosity over net-pay interval(s) (reservoir conditions), Sh 1 is
average porosity-weighted hydrocarbon saturation over net-pay
interval(s) (reservoir conditions), B1 is formation volume factor
817
(reservoir conditions/standard conditions), and RF is recovery fac-
tor (fraction) to economic limit (standard conditions).
The use of this equation is rooted within the culture of geo-
logical unit correlation and layer averages. It is most commonly
applied during the early stages in the life of a field, although it
does persist in reserves audits and related quick-look evaluations.
The advent of geocellular models has led to a different culture.
Grid cells are populated with net-to-gross reservoir and porosity
data. The precise approach depends on the coarseness of the grid.
For example, net-to-gross reservoir might only be allowed values
of zero or unity for fine grids. Porosity will usually have to be
averaged to obtain the single value to be assigned to a cell that
is intersected by a wellbore. Hydrocarbon saturation is assigned
through a saturation-height function that ideally has been estab-
lished at the vertical grid-cell scale using net-reservoir inputs. The
saturation-height function takes account of the variation of Sh not
just with the properties of a reservoir rock but also with its height
above the equilibrium pressure surface associated with the base of
the hydrocarbon column. Net pay can be interpolated only after
this has been done. Volumetrics are addressed by grid cell and
then aggregated for each reservoir unit. For an oil reservoir unit,
the volumetric algorithm can be written as
STOIIP = (BRV N/G2 $2 Sh 2) / B2, . . . . . . . . . . . . (2)
where STOIIP is stock-tank oil initially in place (standard conditions)
and, for each grid cell, BRV is bulk rock volume (reservoir condi-
tions), N/G2 is net-to-gross reservoir fraction (reservoir conditions),
$ 2 is average porosity over net-reservoir interval(s) (reservoir condi-
tions), Sh 2 is computed hydrocarbon saturation over net-reservoir
interval(s) (reservoir conditions), and B2 is formation volume factor
(reservoir conditions/standard conditions).
The summation of BRV across all grid cells equates to GRV.
In computing BRV, the base of the system should be taken to be
an HWC where present. Where a cell is bisected by the contact, it
is more representative to average porosity over the whole cell and
assign that average porosity as a single value to the truncated grid-
cell volume. Depending on project maturity, RF could be derived
subsequently from simulation based on the geocellular model.
Although the use of net-reservoir as opposed to net-pay cutoffs
is partially self-compensating through different parametric aver-
ages, the introduction of geocellular models does lead to different
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
intervals, Eq. 1 excludes the water leg and the lowermost part of
a transition zone as well as perched water intervals and zones of
high capillarity. On the other hand, Eq. 2 can include all of these
intervals in the parametric averaging process. With this in mind,
the benefits of using synergic cutoffs, which reduce the disparity
between net-to-gross reservoir and net-to-gross pay, are evident
from a comparison of Eqs. 1 and 2.
Contemporary methods of 3D reservoir modeling can accom-
modate a greater degree of reservoir complexity in the form of
net-to-gross reservoir and porosity distributions, and also satura-
tion vs. height variability. Several key stages can be identified in
the context of integrated reservoir studies. An approach to using
net pay is described below for a deterministic geocellular applica-
tion, although it can easily be adapted for geostatistical models.
It assumes that net-pay criteria have initially been established
using core data. As always, net-pay concepts are intertwined with
those of net reservoir. For simplicity, the following description
assumes that all wells are vertical. Special procedures are required
for deviated wells (see deviated wells subsection), and these are
programmed into commercial software packages.
Once net reservoir has been identified using cutoffs estab-
lished at the core scale, (re-)establish petrophysical algorithms over
net-reservoir intervals, taking due account of rock-typing issues.
These algorithms describe porosity vs. permeability relationships
and also include the Archie equations (or shaly-sand variations)
for estimating water saturation.
818
Scale up these relationships to the well-log scale where
feasible [e.g., by applying a moving average (over an interval that
matches the spatial resolution of the principal porosity log) to con-
ventional porosity and permeability core data and regressing the
resulting smoothed data to establish an upscaled relationship].
Apply these relationships to logs over net-reservoir intervals.
Evaluate porosity and water saturation and (thence) estimate
permeability.
(Re-)establish the criteria for net-reservoir delineation at the
well-log scale.
Average the interpreted data over the net-to-gross reservoir
fraction of each grid cell along every well.
Establish saturation vs. height function(s) at the grid-cell scale.
Populate the geocellular model with net-to-gross reservoir,
porosity, and permeability, taking due account of any reservoir
zonation and the protocol for cell truncation.
Apply the saturation/height function(s) to those cells with a
nonzero net-reservoir fraction.
Identify net pay using dynamically-conditioned cutoff(s) for
hydrocarbon saturation.
Compute hydrocarbon pore volumes by grid-cell aggregation
and by reservoir zone if appropriate.
Transpose to surface conditions using (cell-specific) forma-
tion volume factor(s).
Undertake sensitivity studies to investigate ranges of uncer-
tainty, which will be quantified primarily by the scatter of regressed
data trends.
Estimate petroleum resources either through reservoir simula-
tion or through analog recovery factors.
Iterate as more data become available.
This process is illustrated schematically for conventional reservoirs
in Fig. 5.
Other uses of net pay are to evaluate infill-drilling potential
(Yeager et al. 1996), to target zones for formation stimulation
(Kessler et al. 2000), to identify perforation intervals (Grieser
et al. 2001), to aid in the interpretation of well-test data (Spivey
and Pursell 1998), to guide the design of fluid-injection programs
(Hunter et al. 1990), to initialize reservoir simulators more effec-
tively (Schoeling and Mark 2000), to sharpen reserves estimates
(Holtz and Hamilton 1998), to reduce risk in highly complex res-
ervoirs (Martin et al. 1999), and in equity redetermination, which
is often based on in-place volumes and for which the procedures
are usually proprietary.
Discussion
Abuses of Net Pay. The literature contains numerous abuses of net
pay as a component of reservoir evaluation. The principal abuses
are summarized here. It is important to recognize them as such
because they contribute to the perpetuation of some of the myths
that surround the subject of net pay and therefore they illustrate
the confusion that prevails in the industry and which this paper is
directed at eradicating. For example, the practice of correlating net
pay with permeability mixes net-pay and net-reservoir criteria. The
identification of net thickness using cutoffs based on porosity/per-
meability character, fluid-injection profiles, and pore-throat size
actually delivers net reservoir but it is sometimes described as net
pay. Again, the concept of a gross pay with net pay as a subset
has little logical foundation. Moving on to volumetrics, there is still
considerable usage within the industry of the rule-of-thumb net-res-
ervoir cutoffs (sometimes erroneously called net-pay cutoffs) of 0.1
md for gas reservoirs and 1.0 md for oil reservoirs. Although these
have provided useful fall-back positions, they need to be superseded
by a data-guided culture for improved reservoir description. Yet
again, the volumetrics equation (Eq. 1) is sometimes presented as
containing net-to-gross pay but with porosity and hydrocarbon satu-
ration averaged over net-to-gross reservoir, another example of mix-
ing concepts. At the most basic level, distinguishing reservoir from
nonreservoir has been equated to identifying sand and shale, which
actually constitute net sand and nonsand, respectively. The use of a
consistent terminology would remove some of these abuses, but the
deep-seated problem is confusion about the underlying concepts.
October 2010 SPE Reservoir Evaluation & Engineering
 Define rock types
Establish net reservoir using
core data
Evaluate porosity, Sw and permeability
(Re-)establish net reservoir at
well-log scale
Populate geocellular model
with net-to-gross reservoir,
porosity, and permeability
Identify net pay
Undertake dynamic sensitivity studies
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
conditioning merits further comment. Permeability is pivotal to
this process. In many field databases, the permeability data are air
permeabilities that may or may not have been corrected for gas-
slippage effects through a Klinkenberg correction. If no correction
has been applied, the data are arbitrary because they depend on the
average of the upstream and downstream flowline pressures used
in the laboratory. There have been many cases in which these pres-
sures have not been reported. Therefore, where several contractors
have been used across a database and these pressures vary between
laboratories, the data cannot be integrated. The Klinkenberg cor-
rection avoids these problems, but it remains an air permeability
based on flow across the entire pore cross-sectional area. This
measurement condition is not prohibitive provided that the hydrau-
lic character of an oil-bearing water-wet rock can be diagnosed
meaningfully through Klinkenberg-corrected air permeability. If
October 2010 SPE Reservoir Evaluation & Engineering
(Re-)establish petrophysical
algorithms
Scale up relationships
to well-log scale
Apply relationships to logs over net
reservoir intervals
Average interpreted data over net
reservoir fraction of each grid cell
Establish saturation-vs.-height
function(s) at grid-cell scale
Apply saturation-vs.-height function(s)
to cells with a net reservoir fraction
Compute hydrocarbon pore volumes
by grid-cell aggregation and by
reservoir zone
Transpose to surface conditions
using (cell-specific) formation
volume factor(s)
this is the case, the use of an air permeability term as a composite
reference parameter can be accommodated. However, the industry
should be encouraged to move towards effective permeability,
specifically the (endpoint) permeability to hydrocarbons at irreduc-
ible water saturation. The implications have been exemplified by
Cobb and Marek (1998). At the very least, a subset of preserved
samples should be measured for effective permeability so that cor-
rection factors can be investigated for converting conventional
air permeability to pseudo-effective permeability.
Vertical Wells. Up to now, the discussion has been set notionally
within the context of vertical wells and horizontal, homogeneous,
and longitudinally isotropic layers. These simplified conditions are
shown in Fig. 6a, for which net-to-gross pay is specified as unity
for simplicity. Here MD is along-hole measured depth, TVD is true
vertical depth, MT is the measured thickness of a layer along the
819
 Reference Datum
Caprock
MD TVD MD
TST NP MT TVT = TVD T NP
MT
Shale ODT
FWL
(a) (b)
MD TVD MD
NP
NP
TVT MT TVT MT
TVDT
(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
(i.e., MT transposed into a vertical plane), TVT is the true vertical
thickness of the layer (i.e., the thickness of the layer measured in
a vertical direction), and TST is the true stratigraphic thickness
of the layer. In Fig. 6a, MD = TVD, provided that these use the
same depth reference datum. Moreover, MT = TVDT = TVT =
TST. With these simplified conditions, net-to-gross reservoir and
net-to-gross pay can be appropriately referenced to MT, TVDT,
TVT, or TST without distorting net reservoir and net pay.
Fig. 6b shows a vertical well fully penetrating a dipping layer for
which TST is the same as in Fig. 6a. Here, MD = TVD and MT =
TVT = TVDT, but TVT > TST. Net-to-gross reservoir and net-to-gross
pay can be referred to TVT or TST for 3D geological modeling pur-
poses, depending on how the modeling is to be performed. Although
net reservoir and net pay can be inflated relative to Fig. 6a by referral
to TVT rather than TST, net-to-gross ratios do not materially change
as a consequence. This is an important observation because it is a
net-to-gross ratio that is entered into the volumetric equations (Eqs.
1 and 2). Note that if a dipping layer is transversely (relative to bed-
ding) anisotropic, directionally-measured log parameters can become
a function of the degree of dip, so the impact of cutoffs can be changed
and this can alter the resulting net-reservoir and net-pay intervals and
thence the corresponding net-to-gross ratios.
Deviated Wells. A deviated well that fully penetrates a horizontal,
homogeneous, and longitudinally isotropic layer is shown in Fig.
6c. TST is the same as before. Here, MD > TVD and MT > TVT
= TVDT = TST. Net reservoir and net pay are unchanged when
referred to TVT or TST.
Where a deviated well penetrates dipping layers, the analysis
becomes more complex. For simplicity, these considerations are
confined to cases where the azimuth of the dip (measured from
the horizontal) is in the same vertical plane as the azimuth of the
deviation (measured from the vertical). Even with this restric-
tion, it is necessary to distinguish between cases where a well is
820
TVD MD TVD
TVT = TVDT TST NP MT TVT = TVDT
(c)
TVD
TVDT
deviated downdip (Fig. 6d) or updip (Fig. 6e). In Fig. 6d, MD >
TVD and MT > TVDT > TVT > TST. Net-to-gross reservoir and
net-to-gross pay can be appropriately referred to TVT or TST in
3D geological modeling. TVDT takes account only of borehole
deviation and does not accommodate bedding dip. Fig. 6e shows
the particular case where a deviated well penetrates an updipping
layer at right angles (i.e., deviation = dip). For the depicted case,
TVT > MT = TST > TVDT. Here, net reservoir and net pay will
be inflated relative to Fig. 6a when referred to TVT, but the cor-
responding net-to-gross ratios are materially unchanged, with the
caveat that anisotropy is a potential influence on resistivity and
sonic logs in all deviated wells and thence on interpretive deliv-
erables. The situation becomes even more complex in the general
case where the deviation and dip azimuths are in different vertical
planes. The way in which these issues are accommodated within
a volumetrics exercise depends on the 3D modeling method. For
further discussion of subsurface geological mapping methods see
Tearpock and Bischke (1991) and Boak (1992).
Horizontal Wells. For simplicity, this discussion assumes hori-
zontal beds. Along-hole net pay is the penetration length measured
in the wellbore of those reservoir rocks containing a supracritical
volume of hydrocarbons that can express itself at the borehole
face. Horizontal wells often target net-pay zones that have been
pre-identified in vertical wells (Fig. 7). Therefore the concept of
net pay in vertical wells is not directly transposable to horizontal
wells. For this reason, some authors have distinguished between
vertical-well net pay and horizontal-well net pay [e.g., Lemos
et al. (2006)]. This distinction is appropriate, not least because
the criteria for accepting an interval as net pay will change with
rotation from vertical to horizontal wellbores because of formation
anisotropy. Moreover, it is often assumed that a vertical well taps a
laterally extensive net-pay unit of given thickness with consistent
hydraulic properties. This perception has to be changed for hori-
zontal wells, where the along-hole net-pay penetration length is no
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
Vertical
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.

Acknowledgments
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.

Conclusions
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