SLIDE 1
Strategy for Reducing Dry Holes
www.scacompanies.com
- R. C. Shoup
Strategy for Reducing Dry Holes
www.scacompanies.com
A Corporate Strategy for Reducing Dry Holes and Improving Resource - - PowerPoint PPT Presentation
A Corporate Strategy for Reducing Dry Holes and Improving Resource - - PowerPoint PPT Presentation
Strategy for Reducing Dry Holes A Corporate Strategy for Reducing Dry Holes and Improving Resource and Reserve Estimates R. C. Shoup Chief Geologist Subsurface Consultants & Associates LLC www.scacompanies.com Strategy for Reducing Dry
SLIDE 2
SLIDE 3
Strategy for Reducing Dry Holes
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Common Management Complaints My interpreters do not understand the geology of their plays
- r prospects
My interpreters do not understand their maps
Introduction
SLIDE 4
Strategy for Reducing Dry Holes
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Common Management Complaints My interpreters do not understand the geology of their plays
- r prospects
My interpreters do not understand their maps The impact is that there are many Bad Maps
Introduction
SLIDE 5
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Can not properly quantify the uncertainty or provide reasonable resource and reserve estimates with bad maps
Introduction
Can not account for Bad Maps by Increasing the Trap Risk The trap risk for a bad map = 0
SLIDE 6
Strategy for Reducing Dry Holes
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Can not properly quantify the uncertainty or provide reasonable resource and reserve estimates with bad maps Can not account for Bad Maps by Increasing the Trap Risk The trap risk for a bad map = 0
Introduction
So how much do bad maps impact the industry?
SLIDE 7
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Introduction Causes of Dry Holes Investors Beware:
(Bad Maps = Bad Investments)
Strategy Training and Mentoring Pre-well Reviews Post-well Reviews Summary & Conclusions
SLIDE 8
Strategy for Reducing Dry Holes
www.scacompanies.com Multiple Basins Schlumberger 2006 - 2007
Trap & Seal 55% Reservoir 15% Charge 30%
Post-well reviews of 20 Companies
Causes of Dry Holes
North Sea Mathieu, 2015
Trap & Seal 55% Reservoir 28% Charge 14%
Post-well reviews for 98 North Sea wells
Trap & Seal failures account for 55% of the dry holes
SLIDE 9
Strategy for Reducing Dry Holes
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Trap & Seal 54% Reservoir 31%
ExxonMobil Rudolph and Goulding, 2017
Trap & Seal 51% Petroleum System 27% Reservoir 22% Post-well reviews of all 1994 – 2015 ExxonMobil wells
Trap & Seal failures account for 51 - 54% of the dry holes
GoM Tearpock, 2006
Review of Post-mortem results for a number of operators
Causes of Dry Holes
SLIDE 10
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Post-mortem studies indicate two principal causes of dry holes:
Charge and Reservoir Failure ~ 50% Trap and Seal Failure ~ 50%
Causes of Dry Holes
SLIDE 11
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GoM Tearpock, 2006
Map Failure 54%
Reservoir 31% Mechanical 2.5%
Audits of the maps showed most trap and seal failures were map failures
Causes of Dry Holes
SLIDE 12
Strategy for Reducing Dry Holes
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UK Atlantic Margin Loizou, 2003
Poor Trap 65%
Good Trap 26% Fair Trap 9%
Post-mortem reviews for 29 wells drilled in the North Sea 65% of the dry holes were drilled on traps that were poorly mapped
Causes of Dry Holes
SLIDE 13
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Post-mortem studies indicate two principal causes of dry holes:
Failure in the Petroleum System ~ 50% Failure of the map ~ 50%
Causes of Dry Holes
SLIDE 14
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Just how bad are the maps?
Causes of Dry Holes
Post-mortem studies indicate two principal causes of dry holes:
Failure in the Petroleum System ~ 50% Failure of the map ~ 50%
SLIDE 15
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Introduction Causes of Dry Holes Investors Beware:
(Bad Maps = Bad Investments)
Strategy Training and Mentoring Pre-well Reviews Post-well Reviews Summary & Conclusions
SLIDE 16
Strategy for Reducing Dry Holes
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A proposed $5.5 MM well Investors Beware
GENERATED FROM 2D SEISMIC DATA
Presenter's notes: Structure contour map generated with 2D seismic. Is it geometrically valid? Since we are dealing with a 2 dimensional map that is portraying a 3 dimensional surface, it takes more understanding, investigation and analysis to identify geometric problems.
SLIDE 17
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The map was not just wrong, it is geometrically impossible
Investors Beware
GENERATED FROM 2D SEISMIC DATA
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Strategy for Reducing Dry Holes
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- 6000
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The Fault Surface map, had it been constructed, would have shown that the structure was geometrically impossible
Investors Beware
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Strategy for Reducing Dry Holes
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- 6000
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The Fault Surface map, had it been constructed, would have shown that the structure was geometrically impossible The majority of interpreters today do not construct Fault Surface Maps
Investors Beware
SLIDE 20
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Dry Hole
Producing Field
GENERATED FROM 2D SEISMIC DATA
Two separate faults mapped as one, no trap Investors Beware
GENERATED FROM 2D SEISMIC DATA
Presenter's notes: Screw Faults indicate 2 faults have been mapped as 1 fault. Faced with a loss of $5 MM, management asked How can our people make such BAD Maps? Answer: Did not map the fault, picked fault and posted polygons.
SLIDE 21
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10 BCF Remaining Reserves $15 MM ($1.50 / mcf ) Gulf of Mexico Field for Sale 10 BCF Resource $ 5 MM ($0.50 / mcf ) Seller accepts $20 MM Investors Beware
3D Seismic 12 wells
Presenter's notes: This field has been producing for almost a decade, at which time the company sold the field along with several other assets.
SLIDE 22
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No Fault Surface map was constructed Fault Traces are incorrect
The map is wrong
Investors Beware Gulf of Mexico Field for Sale
3D Seismic 12 wells
SLIDE 23
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Seller lost $30 MM
3D Seismic 12 wells
Investors Beware Purchasing company made a fault surface map and integrated it with the horizon. The original fault position was based on a fault shadow, The corrected fault position added >20 BCF Reserves.
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29 wells Limited 2D
Investors Beware
Fault propagation Fold Mapped in Petrel STOIIP = 170 MMBO
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The map was not just wrong, it is geologically improbable
Investors Beware
29 wells Limited 2D
Fault propagation Fold Mapped in Petrel STOIIP = 170 MMBO
SLIDE 26
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Investors Beware
29 wells Limited 2D
Fault propagation Fold Mapped in Petrel STOIIP = 170 MMBO STOIIP = 138 MMBO
STOIIP Overbooked by 30%
SLIDE 27
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STOIIP Overbooked by 30%
Investors Beware
29 wells Limited 2D
Fault propagation Fold Mapped in Petrel STOIIP = 170 MMBO STOIIP = 138 MMBO
SLIDE 28
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Based on the Net Pay Isochore, this reservoir has 6.25 MMBO Reserves You are willing to invest $50.00 / bbl
$312.5 MM
Net Pay Isochore
7 wells 3D data
Investors Beware
SLIDE 29
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Net Pay Isochore 7 wells 3D data
The map is wrong
Investors Beware Based on the Net Pay Isochore, this reservoir has 6.25 MMBO Reserves You are willing to invest $50.00 / bbl
$312.5 MM
SLIDE 30
Strategy for Reducing Dry Holes
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Net Pay Isochore 7 wells 3D data
Corrected Net Pay Isochore indicates 5.5 MMBO Reserves At $50.00 / bbl
$275.0 MM A loss of $37.5 MM
Investors Beware
SLIDE 31
Strategy for Reducing Dry Holes
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Just how bad are the maps?
Investors Beware
Post-mortem studies indicate two principal causes of dry holes:
Failure in the Petroleum System ~ 50% Failure of the map ~ 50%
SLIDE 32
Strategy for Reducing Dry Holes
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Pretty bad Post-mortem studies indicate two principal causes of dry holes:
Failure in the Petroleum System ~ 50% Failure of the map ~ 50%
Investors Beware
SLIDE 33
Strategy for Reducing Dry Holes
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~50% of the dry holes can be avoided if we ensure the structure maps are valid
Post-mortem studies indicate two principal causes of dry holes:
Failure in the Petroleum System ~ 50% Failure of the map ~ 50%
Investors Beware
SLIDE 34
Strategy for Reducing Dry Holes
www.scacompanies.com
Introduction Causes of Dry Holes Investors Beware:
(Bad Maps = Bad Investments)
Strategy Training and Mentoring Pre-well Reviews Post-well Reviews Summary & Conclusions
SLIDE 35
Strategy for Reducing Dry Holes
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Strategy
Any strategy aimed at reducing dry holes and improving resource and reserve estimates must focus on improving the quality and validity of the maps and interpretations
SLIDE 36
Strategy for Reducing Dry Holes
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Training and Mentoring Pre - drill Review Post - drill Review
Strategy
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Strategy for Reducing Dry Holes
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The Crew Change combined with the 1986 and 2015 oil price collapses has left our geoscience workforce under trained and under mentored creating a Capability Gap
$0.00 $10.00 $20.00 $30.00 $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $120.00 $140.00 $110.00 $130.00
2025 2030 1986 2000 2015
Strategy
Oil Price
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Capability Gap Bridging the capability gap caused by this lack of mentoring and training is essential. Failure to do so will significantly increase the industry dry hole count.
Strategy
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Strategy for Reducing Dry Holes
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The impact of the lack of training and loss of best practices was mitigated by advances in technology That technology enabled
- ur industry to maintain its
historical success rates Today’s geoscientists have excellent workstations skills Capability Gap
Strategy
Presenter's notes: The impact of the lack of training and loss of best practices was mitigated by advances in technology. That technology enabled our industry to maintain it’s historical success rates.
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Capability Gap
Strategy
Today’s interpreters accept what comes out
- f the computer as
correct
SLIDE 41
Strategy for Reducing Dry Holes
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This has made us susceptible to the technology trap Maps generated in the Workstation are WRONG Today’s interpreters accept what comes out
- f the computer as
correct
Capability Gap
Strategy
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Capability Gap
Strategy
Managers, you can bridge the gap by providing focused training and mentoring for your staff.
SLIDE 43
Strategy for Reducing Dry Holes
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Capability Gap Managers, you can bridge the gap by providing focused training and mentoring for your staff.
Strategy
Investors, you can mitigate the impact of the capability gap with trained deal screeners
SLIDE 44
Strategy for Reducing Dry Holes
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Focused Training Training that teaches the fundamental skills needed to make valid interpretations and maps of the subsurface is essential Training costs thousands. Dry holes cost millions!
Strategy
SLIDE 45
Strategy for Reducing Dry Holes
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Mentoring
Many of the methods and techniques needed to make valid interpretations and maps are not taught in school, but are passed down from mentor to protégé’
Strategy
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Mentoring
Younger staff need access to experienced individuals who can help them apply the methods and techniques needed to make valid interpretations and maps
Strategy
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Strategy for Reducing Dry Holes
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Pre-Well Reviews
Strategy
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Strategy for Reducing Dry Holes
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Aim Format Reviewers
Ensure that the structural trap exists as mapped Apply a series of audit steps to review the map and interpretation Management or mapping experts, either from within the company, or outside experts brought in The reviewers must know how to make valid maps and interpretations Pre-Well Reviews
Strategy
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Before Management or Investors approve an investment, they need to ensure that the interpretation and maps: Correctly use and honor all of the data
Pre-Well Reviews
Strategy
Presenter's notes: An ethical prospect is a prospect in which all of the data has been used, and used correctly, and has been honored. The maps portray a structure that is geometrically valid in 3-dimensions and properly portrays the structure that has been interpreted. The size and nature of the prospect must be consistent with the regional and trend geology, and finally, the uncertainty and risk have been properly quantified.
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Pre-Well Reviews
Strategy
Gulf of Mexico Gas Field
3D data and 10 wells
Presenter's notes: This slide shows a portion of a map over a gas field in the Gulf of Mexico. This producing horizon consists of an upthrown fault closure with several fault compartments. The map was constructed from 3D data and 10 well penetrations. The map is also unethical in that there are a number of errors in the map that will impact the reserves estimated from the map.
SLIDE 51
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Gulf of Mexico Gas Field
The map does not honor all of the data Pre-Well Reviews
Strategy 3D data and 10 wells
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Strategy for Reducing Dry Holes
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Before Management or Investors approve an investment, they need to ensure that the interpretation and maps: Correctly use and honor all of the data Are geologically valid and are geometrically possible
Pre-Well Reviews
Strategy
SLIDE 53
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Two wells proposed to accelerate production in a field
14,000’ Sand Producer Not completed in 14,000’ Sand 13,001 – 13,250 13.751 – 14.000 14.251 – 14.500 14.501 – 14.750 14.001 – 14.250 13,251 – 13,500 13,501 – 13,750
Proposed Depth Structure Map 14,000 Foot Sand
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22 20
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42
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33 D-1 F/O 13 46 3 31 F/O 33
2,500’
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NR NR
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NR NR
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3D seismic 15 wells
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19
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Strategy
SLIDE 54
Strategy for Reducing Dry Holes
www.scacompanies.com
The map was wrong and geometrically impossible No fault surface maps were constructed
14,000’ Sand Producer Not completed in 14,000’ Sand 13,001 – 13,250 13.751 – 14.000 14.251 – 14.500 14.501 – 14.750 14.001 – 14.250 13,251 – 13,500 13,501 – 13,750
Proposed Depth Structure Map 14,000 Foot Sand
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18 27
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22 20
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42
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33 D-1 F/O 13 46 3 31 F/O 33
2,500’
18 57
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NR NR
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NR NR
- 13987
- 14064
3D seismic 15 wells
- 14162
19
- 14223
- 13972
Strategy
SLIDE 55
Strategy for Reducing Dry Holes
www.scacompanies.com
A pre-well review would have prevented two dry holes
14,000’ Sand Producer Not completed in 14,000’ Sand 13,001 – 13,250 13.751 – 14.000 14.251 – 14.500 14.501 – 14.750 14.001 – 14.250 13,251 – 13,500 13,501 – 13,750
Proposed Depth Structure Map 14,000 Foot Sand
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18 27
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22 20
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42
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33 D-1 F/O 13 46 3 31 F/O 33
2,500’
18 57
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NR NR
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NR NR
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19
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Strategy
3D seismic 15 wells
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Strategy for Reducing Dry Holes
www.scacompanies.com
And allowed the interpreters to make a correct map and identify 3 good locations
2,500’
18 27 18 57
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33 D-1 13 46 31 UTRT 13750 33
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NR NR
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Est 13635
- Est. 13420
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DTRT 14350 UTRT 14195 DTRT 14290
14,000’ Sand Producer Not completed in 14,000’ Sand 13,001 – 13,250 13.751 – 14.000 14.251 – 14.500 14.501 – 14.750 14.001 – 14.250 13,251 – 13,500 13,501 – 13,750
Proposed Depth Structure Map 14,000 Foot Sand
Strategy
SLIDE 57
Strategy for Reducing Dry Holes
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https://scacompanies.com
Webinar: Would You Recommend Drilling a Dry Hole?
Pre-Well Reviews
Strategy
SLIDE 58
Strategy for Reducing Dry Holes
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Before Management or Investors approve an investment, they need to ensure that the interpretation and maps: Properly portray the structure
Pre-Well Reviews
Strategy
Correctly use and honor all of the data Are geologically valid and are geometrically possible
SLIDE 59
Strategy for Reducing Dry Holes
www.scacompanies.com
Investors Beware
29 wells Limited 2D
Fault propagation Fold Mapped in Petrel STOIIP = 170 MMBO STOIIP = 138 MMBO
STOIIP Overbooked by 30%
SLIDE 60
Strategy for Reducing Dry Holes
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- 5000
Front Limb of the fold is not portrayed Investors Beware
STOIIP = 170 MMBO STOIIP = 138 MMBO
Back Limb of the fold is incorrect
SLIDE 61
Strategy for Reducing Dry Holes
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- 5000
Back Limb of the fold is incorrect Front Limb of the fold is not portrayed Investors Beware
STOIIP = 170 MMBO STOIIP = 138 MMBO
SLIDE 62
Strategy for Reducing Dry Holes
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Post-Well Reviews
Strategy
SLIDE 63
Strategy for Reducing Dry Holes
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Compare post-well results to pre-well predictions to determine if the pre-drill interpretation and maps were valid. You can’t re-map every dry hole, but you can quickly check the maps structural validity Predicted depth versus actual Predicted dip versus actual
Post-Well Reviews
Strategy
SLIDE 64
Strategy for Reducing Dry Holes
www.scacompanies.com
Aim Format Reviewers
Minimize systematic bias and improve future interpretations and improve pre-drill interpretations and maps Evaluation team followed by presentation to management Compare pre-well predictions against the results Post-Well Reviews
Strategy
SLIDE 65
Strategy for Reducing Dry Holes
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How close was the actual depth to the predicted depth?
Depth
If the variance > 10% the structure should be remapped Structural Validity Post-Well Reviews
Strategy
SLIDE 66
Strategy for Reducing Dry Holes
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How close was the actual dip to the predicted dip? If the variance > 5% for the strike direction or > 5 points in dip, the structure should be remapped Requires running a FMI
Dip
Structural Validity Post-Well Reviews
Strategy
SLIDE 67
Strategy for Reducing Dry Holes
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Well 7, dipmeter 1.5o Map dip is 3.4o
3D seismic 15 wells
ArcTan Rise Run
Post-Well Reviews
Strategy
Presenter's notes: Here is another example of a geologic map, this one over a producing field. It is a growth fault Rollover Structure Wells 6, 9, and B2 watered out. Will the 3 proposed locations be successful attic wells, or will the be non-economic cement storage facilities?
SLIDE 68
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Corrected Map
3D seismic 15 wells
Well 7, dipmeter 1.5o Map dip is 1.5o Post-Well Reviews
Strategy
Presenter's notes: New interpretation: Northern high is gone. Southern high goes from edge water to bottom water. Proposed Re-Interpretation: 25’ contour vs 50’ contour New interpretation goes from edge water to bottom water.
SLIDE 69
Strategy for Reducing Dry Holes
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Introduction Causes of Dry Holes Investors Beware:
(Bad Maps = Bad Investments)
Strategy Training and Mentoring Pre-well Reviews Post-well Reviews Summary & Conclusions
SLIDE 70
Strategy for Reducing Dry Holes
www.scacompanies.com
Summary
The subsurface interpretations and maps industry rely on for investment decisions are often wrong
UK Atlantic Margin Loizou, 2003 3D Seismic 12 wells
Poor Trap 65%
Good Trap 26% Fair Trap 9%
SLIDE 71
Strategy for Reducing Dry Holes
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Although it is not possible to eliminate dry holes, industry can significantly reduce the number of dry holes it drills with a 3-part strategy of Focused Training and Mentoring Pre - drill Reviews Post - drill Reviews
Summary
SLIDE 72
Strategy for Reducing Dry Holes
www.scacompanies.com
All geoscience staff need training that provides the skills they need to make valid interpretations and maps
Summary
Focused Training
- 14100
- 14200
18 27
- 14033
22
- 14162
20
- 14067
42 19
- 13700
- 13605
33 D-1 F/O 13 46 3 31 F/O
A
33
2,500’
18 57
- 14067
- 14223
NR NR
- 14012
NR NR
- 13987
- 14064
- 13972
2,500’ 2,500’ 18 27 18 57
- 14033
22
- 14162
20
- 14067
42 19
- 13605
33 D-1 13 46 31 UTRT 13750 33
- 14223
NR NR
- 14042
Est 13635
- Est. 13420
- 13987
- 14064
- 14100
- 13900
DTRT 14350 UTRT 14195 DTRT 14290
Incorrect Correct
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Strategy for Reducing Dry Holes
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Mentoring is critical to the implementation of proper interpretation and mapping methods and techniques
Summary
Mentoring
SLIDE 74
Strategy for Reducing Dry Holes
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Although it is not possible to eliminate dry holes, industry can significantly reduce the number of dry holes it drills with a 3-part strategy of Focused Training and Mentoring Pre - drill Reviews Post - drill Reviews
Summary
SLIDE 75
Strategy for Reducing Dry Holes
www.scacompanies.com
Before Management or Investors approve an investment, they need to ensure that the interpretation and maps: Correctly uses and honors all of the data Properly portray the structure Are consistent with the regional and trend geology
Pre-Well Reviews
Strategy
Are geologically valid and are geometrically possible
SLIDE 76
Strategy for Reducing Dry Holes
www.scacompanies.com
Although it is not possible to eliminate dry holes, industry can significantly reduce the number of dry holes it drills with a 3-part strategy of Focused Training and Mentoring Pre - drill Reviews Post - drill Reviews
Summary
SLIDE 77
Strategy for Reducing Dry Holes
www.scacompanies.com
Compare post-well results to pre-well predictions to determine if the pre-drill interpretation and maps were valid Structural Validity
Predicted Depth versus actual Predicted dip versus actual Post-Well Reviews
Summary
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Strategy for Reducing Dry Holes
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