Prospect generation basically unchanged but perhaps speedier with digital databases

Oct. 10, 2005
The basic process of evaluating crude oil and natural gas resources and generating developmental or exploratory prospects in an attempt to turn those resources into recoverable reserves has remained essentially unchanged since petroleum prospectors began drawing upon geological and geophysical sciences early in the 20th Century.

The basic process of evaluating crude oil and natural gas resources and generating developmental or exploratory prospects in an attempt to turn those resources into recoverable reserves has remained essentially unchanged since petroleum prospectors began drawing upon geological and geophysical sciences early in the 20th Century.

Even today, some longtime petroleum geologists, geophysicists, petrophysicists, or reservoir engineers do not utilize the many computer-based geologic databases and mapping software programs, the well log interpretation and imaging programs, the economic and decline-curve analysis programs, and the multistate leasehold, well-event, and production databases that can be licensed or that are accessible through the internet.

Many continue to be successful by gathering, integrating, and interpreting geological, geophysical, and engineering data in trusted and proven time-worn ways. At the same time, it is fair to say that the number of geoscientists in this group gets smaller every year.

Typically, a geoscientist starts the prospect development process by reviewing base maps covering areas with well-established oil and-or gas production or recent wildcats. He accumulates well logs, test information, production data, and scout tickets from multiple sources; he studies seismic and gravity data, if available; he reviews leasing and permitting activity.

In short, he searches out whatever pieces of information he believes to be pertinent, with the goal being to build a comprehensive database that can be used to prove or disprove his working theory.

Regardless of the specific work flow a geologist might follow, the inspiration for most exploratory tests originates in a limited number of ways. For example, the idea might be based upon:

• A geologist’s experience in an area.

• Oil and gas well drilling reports.

• Company announcements or articles in industry trade journals.

• Transferring and applying new technological capabilities in areas with proven production.

Evolving market conditions or logistical factors, such as high wellhead prices or construction of new transportation or processing infrastructure, respectively, might make previously marginal prospects economic to pursue.

Geoscientists who continue to have success in seeing their concepts evaluated through the drill bit do so in part because years of experience have imbued them with a thorough understanding of the significance of specific pieces of evidence and of the factors that must align in specific areas or geological formations in order for an economic accumulation of oil or gas to exist.

The continuing evolution of technology used in the gathering of geologic, geophysical, and well-logging data has also played a role in helping petroleum geologists sustain their effectiveness. Better data, be they digital or hard copy, can significantly improve the chance of making a commercial discovery.

The acceptance and use of emerging exploration technologies has occurred piecemeal as individual earth scientists have learned about new capabilities and adapted them to their personal prospect-development work flows.

In general, geologists working for major integrated companies have had the first access to new technology followed by independent E&P company geologists and independent geologists and geological consultants. In large part this has been due to the cost of the technology and the data. As costs decrease, more and more geologists are allowed access to these new capabilities.

Emergence of computers

Advances of petroleum data storage, management, and retrieval tools and analytical methods have been integral to the exploration technology-development continuum.

Yet for most of the past century, the databases that guided decisions about whether to drill given exploratory wells consisted of hard copy formats of the geological, geophysical, and engineering data compiled to define each prospect.

Even with better exploratory data, the task of developing exploratory prospects in a strictly hard-copy data environment was, and is, beset with the potential for unexpected delays. Simply gathering the hard-copy data desired to define and evaluate a prospect still can take days or weeks, with no guarantee that all the seismic data, well logs, or production histories wanted to define a prospect ultimately can be acquired.

In addition, leasing, permitting, and drilling data available in hard-copy formats frequently are several months old, forcing prospect developers to spend precious time vetting and updating key information. Obtaining hard-copy data quickly can be a tenuous proposition.

Likewise, integrating and correlating data by hand also can be time-consuming in a hard-copy work flow, to the point that gaining an edge over the competition in an active area can be especially difficult.

The trend among major companies after World War II to begin storing exploratory data on electronic media so computers could be used to integrate and analyze geological, geophysical, and well-control data represented a new phenomenon in the prospect-development process and helped sustain the fundamental advantages of major-company data management and retrieval capabilities over those of independent earth scientists.

That disparity began to diminish in the late 1980s and early 1990s with the emergence of personal computers (PCs) and introduction of more powerful PC software for storing, managing, and retrieving geological, geophysical, well-history, and production data. Yet the relatively high cost of PC-based data management and retrieval technology effectively restricted the use of most PC data technology to explorationists working for major companies or large independent E&P firms.

Nevertheless, ongoing advances in the memory capacity and processing speed of PC hardware and introduction of better software continued to bring down costs. By the mid-to-late 1990s, these improvements, coupled with new communications capabilities enabled by the internet, brought extremely advanced data storage, management, and retrieval capabilities within reach of essentially any geologist or geophysicist equipped with a desktop or laptop computer, the right software and data licenses, and internet access.

When used in tandem, these computer-based exploration tools can bring unprecedented speed and effectiveness to almost any prospect-generation work flow.

Online tools and services

A wide range of electronic data and analytical tools has become available via the internet-some through licensing arrangements and others free to the public-that enable geoscientists to access and better manage, integrate, manipulate, and visualize electronic geological, geophysical, petrophysical, and engineering data.

Exploration data and tools available through service company web sites include geological mapping services, well log image retrieval, well test information, and production analyses.

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The web site of a provider of online geological structure maps includes well data, survey data, a database of formation tops, and log raster images (Fig. 1). Another service company web site provides up-to-date data about permitting activity, leasing, well completions, and production, and product pricing information in a map or tabular format (Fig. 2).

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Many well log libraries have begun expanding their lists of available data to include digital well logs, drilling and completion information, and production data while continuing to offer conventional hard-copy logs, scout tickets, lease and base maps, and production data. Also, oil and gas agencies in some producing states, notably Wyoming and Utah, have established web sites where a wide range of permitting, leasing, drilling, completion, production data, and well log images may be acquired (Fig. 3).

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A wealth of information is also available at no cost through many internet search engines. This information includes, among other things, field studies, new technology developments, play concepts, and academic research. internet search engines allow geoscientists to put together large volumes of supporting data in a matter of a few hours of online research time.

Data from these oil and gas web sites may be integrated and analyzed much more quickly than hard-copy data, and results may be visualized as interactive custom maps, cross-sections, log plots, cross-plots, or spreadsheets. In addition, the software for accessing and using these online capabilities may be loaded onto a laptop computer and carried to well sites or other remote locations anywhere in the world, where the data and analytic tools can be integrated into the work flows of individual geoscientists or small asset teams, no matter where they are located.

These online electronic data and analytic capabilities may be selected and combined to not only help speed the correlation and analysis of oil and gas data but the decision-making process as well, at a fraction of the cost required only a decade ago. Key characteristics of prospects or reservoirs may be defined by selecting and extracting specified values from the accessible data, thus compressing the time required to reach a quality conclusion about an area or prospect being studied.

In addition to prospect generation, the online data may be mined and analyzed to support acquisitions, infill drilling, field extensions, or secondary or tertiary recovery projects. For example, users can extract reservoir properties from well log data such as gross and net pay, porosity and permeability, and average water saturation. In fact, many of the online information services allow essentially instant access to details about a specific well or field through multiple displays, including maps, cross sections, and spreadsheets.

Geoscientists have the flexibility to decide which of the many available pieces of software or online geo-data and analytic tools they want to integrate into their prospect-development work flow because most of the management and analysis software programs allow the user to import disparate geological, geophysical, and well-control data from a wide variety of data sources and vendors.

One operator’s uses

Calvin Resources was formed in 1984 to explore for and acquire oil and natural gas assets and has participated in the drilling of more than 70 wells in the East Texas Salt basin as well as one of the first true coalbed methane tests in Texas.

In addition to generating, evaluating and financing exploratory prospects and development projects with partners, the company also has supported a number of companies as a consultant on acquisition and divestiture of producing properties, due diligence, geologic studies, and geologic database development.

Calvin Resources has been using licensed PC based software and online geologic databases and analytic products and services as part of its prospect-generation and consulting services work flows for about the past 10 years and has continued to move toward utilizing an increasing amount of digital data. However, obtaining and using hard-copy information is still a vital part of the process.

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The company currently holds software licenses with companies providing computer-based and online exploration and evaluation capabilities, including geologic mapping and 3D geologic visualization (Fig. 4), economic and decline curve analysis; multistate leasehold information, well-event and production data; and geologic structure maps, well log images, and support data covering the East Texas basin.

The work flows supported by these online products and services to generate exploration and development recommendations essentially are no different from the processes used by most geoscientists for at least the past 50 years.

Data acquisition is usually the primary time-consuming element in the process.

Typically, acquiring, integrating, and analyzing online geological, geophysical, and well data occur in a fraction of the time required in a hard-copy data work flow. This means a geoscientist not only can acquire and review more data in a shorter time but in some cases also can reach an initial go/no-go decision in less time than is required to round up hard copies of all the data he wants to see.

The necessity of starting with a quality database cannot be overemphasized. Starting with a poor quality database can easily lead to erroneous decisions.

A simple example would be having the wrong cumulative production assigned to a key well or accurate cumulative-production data assigned to the wrong reservoir. However, once the digital database is in place and the geologist is comfortable with the quality of the data, the ability to create multiple maps and isopachs or cross sections to evaluate a number of different scenarios can be very helpful in the decision-making process.

Compressing the time necessary to do these tasks can allow a geoscientist to look at an isopach interval he wasn’t certain would have importance or to map reservoir properties he previously might have overlooked. It also can give the geologist the ability to step back and look at larger geographic areas to see how well his concept fits with the wells or fields on trend.

The ability to reach decision points sooner can be a significant advantage in the highly competitive environment in which we are currently operating. Foreshortening the time necessary to reach a decision to acquire a leasehold in a prospective area can mean the difference between owning the leases and drilling a successful well or simply watching trade publications for the results of a well drilled by a competitor.

The time savings created by the use of digital data can result in a more thorough iterative process, more data being considered, more exploratory or developmental ideas pursued, and more decision points reached in a much shorter period of time. In some cases, the total time savings can amount to months on a single project.

Another advantage of utilizing digital data and the internet that saves both time and money comes when the geologist decides that he has a viable prospect and begins to seek industry partners for financing the project. The ability to communicate the pertinent aspects of the project electronically can save hours of travel time and the associated costs, and also allows the geologist to narrow the field to companies that have genuine interest in the prospect.

Yet each new online, digitized geologic database and analytic product or service must be weighed in terms of its cost and what it contributes to the prospect-development process. Some products and services provide redundant data or capabilities, and the ease of integrating and manipulating data from various sources can be uneven. Deciding which software programs, online data sources, and services are the most cost-effective, have the most utility, and help create the most value are very important decisions for each geoscientist that chooses to go that route.

Even the most useful digital databases and services still function only as tools. They do not fundamentally change the process of prospect generation.

The most important part of the equation always will be the person utilizing the tools and his or her ability to analyze the data, to visualize what the data are indicating, and to understand what makes a drillable prospect or economically viable acquisition.

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The author
John C. Griffiths is president of Calvin Resources Inc. and has more than 30 years experience in resource management, generation, evaluation, and financing of exploratory and development projects and asset evaluation for acquisition or divestiture. He began his career as an exploration geologist for Texas Oil & Gas Corp. in Houston in 1975. He has generated or evaluated exploration, development, and acquisition projects in many geographic areas including the Ark-La-Tex, Mississippi-Alabama-Florida, Texas Gulf Coast, South and West Texas, South Louisiana, Kansas, Oklahoma, Montana, Wyoming, and Southeast Colorado. He has a BS in geology from the University of Texas.