play guides, summary - 5a

© 2002 PetroSkills LLC, All Rights ReservedINSERT FILE NAME – Insert on Master Slide

Chapter 10Chapter 10Play ExercisePlay Exercise


Play ExercisePlay Exercise

Cenomanian sandstone on Cenomanian sandstone on anticlinal closures related to:anticlinal closures related to:Turtle structures occur where thick

sediments deposited in areas of early salt withdrawal form residual highs following later peripheral salt withdrawal

Salt domes have negative gravity anomalies, whereas turtle structures have positive ones, due to the lack of a salt core. P. 10-2

Cenomanian SS Play 101Larger Oil fields

Oil (MBBL)

Oil m3 Gas BCF Gas m3 Oil equiv Mbbl

Oil Equiv m3

4 6 0.95 6 0.23 7 1.115 21 3.34 24 0.92 25 3.976 45 7.15 30 1.15 50 7.95

Total 72 11.44 60 2.3 82 13.03Smaller oil fields NoneLarger Gas fields

Oil (MBBL)


Oil Equiv m3

1 0 0 42 1.61 7 1.112 2.8 0.445 127 4.87 24 3.823 6 0.095 56 2.14 10 7.95

Total 3.4 0.54 225 8.62 41 6.52Smaller Gas fields

Oil (MBBL)


Oil Equiv m3

13 0.2 0.03 5 0.19 1 0.1616 0 18 0.69 3 0.48

Total 0.2 0.03 23 0.88 4 0.64

Still Smaller fields – 9,14,15


Chapter 11Chapter 11Selling Your Play or Prospect Selling Your Play or Prospect


Selling Your ProjectSelling Your Project

Meet minimum economic parametersMeet minimum economic parametersClarity of purpose Clarity of purpose -- businessbusiness rationalrationalAlignment with organizational goalsAlignment with organizational goalsNeeds and criteria of your customersNeeds and criteria of your customersSupport from the rest of the organizationSupport from the rest of the organizationMultiMulti--disciplinary approachdisciplinary approachStateState--ofof--thethe--artartBalance detail and enough dataBalance detail and enough dataWell planned presentationWell planned presentationClearly articulated recommendationsClearly articulated recommendationsP. 11-1


Communicating With the OrganizationCommunicating With the Organization

Most of organization doesnMost of organization doesn’’t understand t understand explorationexploration

Some “magic” applied to exploration“Don’t live in real world”

Share conclusions to allay these fearsShare conclusions to allay these fearsAlways plan presentationsAlways plan presentations

Present findings based on their needsSpare the details (unless asked)

Keep customer in mindKeep customer in mind

P. 11-2


Presenting Your CasePresenting Your Case

General structureGeneral structureWhat you will sayThe messageWhat you told them

Plays and prospects Plays and prospects -- 2 questions2 questionsExplain Explain whatwhat you numbers meanyou numbers mean

Mean reservesRange of reservesAdequacyMinimum economic size

P. 11-1


Assessment Presentations Assessment Presentations Regional mapsRegional maps

Structural trendsSource rock distributionLithologic trendsExisting production/facilities

Ownership of playOwnership of playPlay maps (see article by Dave White) Play maps (see article by Dave White)

Adequacy boundariesProspect mapsProspect maps

StructureReservoir isopachWell and seismic controlEnvironmental reconstructionCross section(s)Type log

P. 11-2

P. 11-10+


Chapter 12Chapter 12Play Workshop Play Workshop


Horst Basal Sandstone PlayHorst Basal Sandstone PlayAnalogue playAnalogue playFive major oil fields larger than 50 10Five major oil fields larger than 50 1066 bbl (8 10bbl (8 1066 mm33) have ) have

been found 50 miles (80 km) to the west in a basal Upper been found 50 miles (80 km) to the west in a basal Upper Cretaceous sandstone on a parallel horst.Cretaceous sandstone on a parallel horst.

The average field size is 365 10The average field size is 365 1066 bbl (58 10bbl (58 1066 mm33) oil) oil--equivalent.equivalent.

The oils have an average API gravity of 35The oils have an average API gravity of 35oo and an average and an average associated GOR of 450 ftassociated GOR of 450 ft33/bbl (80 m/bbl (80 m33/m/m33).).

Producing depths average 7500 ft (2290 m), and reservoir Producing depths average 7500 ft (2290 m), and reservoir temperatures are185temperatures are185ooF (85F (85ooC). C).

The reservoirs have very good water drivesThe reservoirs have very good water drivesThe probable source rock, the Upper Cretaceous shales The probable source rock, the Upper Cretaceous shales

stratigraphically overlying the sandstone, average 1.9% stratigraphically overlying the sandstone, average 1.9% TOC, the available samples being mostly immature.TOC, the available samples being mostly immature.

P. 12-2


Horst Basal Sandstone PlayHorst Basal Sandstone PlayPlay detailsPlay detailsAssess using a Assess using a minimum counted field size of 50 10minimum counted field size of 50 1066 bbl (8 bbl (8

x 10x 1066 mm33)) oiloil--equivalentequivalentSeismic coverage is excellent, and all prospects of this size Seismic coverage is excellent, and all prospects of this size

or larger have probably been mappedor larger have probably been mappedThe presence of the basal sandstone on this horst block is The presence of the basal sandstone on this horst block is

not fully assured but seems quite likelynot fully assured but seems quite likelyEven though there is analogous production to the west, Even though there is analogous production to the west,

consider this as a new playconsider this as a new playAssessment of the largest prospect (cut by the cross Assessment of the largest prospect (cut by the cross

section) gives a mean unrisked value of 2400 10section) gives a mean unrisked value of 2400 1066 bbl (380 bbl (380 101066 mm33) oil) oil--equivalentequivalent

The play area encompassing the mapped structures is 1800 The play area encompassing the mapped structures is 1800 sq. mi. (4660 sq. km).sq. mi. (4660 sq. km).

P. 12-2

P. 12-3


Niger Delta, Growth Niger Delta, Growth -- Fault PlayFault Play

Assess the ultimate potential of the onshore NigerAssess the ultimate potential of the onshore NigerDelta at a simulated early exploration stage when the discoverieDelta at a simulated early exploration stage when the discoveries s

comprise a truly representative fieldcomprise a truly representative field--size distribution including the size distribution including the largest field.largest field.

AssumptionsAssumptions•• Production has been found at 24 fields having EUR's greater thanProduction has been found at 24 fields having EUR's greater than 10 10

10106 6 bbl (1.6 10bbl (1.6 1066 cu m) in Paleocene through Pliocene regressive cu m) in Paleocene through Pliocene regressive sandstone reservoirs overlying and interbedded with marine shalesandstone reservoirs overlying and interbedded with marine shales s and underlying nonmarine sandstones (see map and cross section).and underlying nonmarine sandstones (see map and cross section).

•• Traps are anticlinal rollovers on the downdropped sides of downTraps are anticlinal rollovers on the downdropped sides of down--toto--basin growth faults, together with related fault closures.basin growth faults, together with related fault closures.

•• Possible source rocks include both the deep underlying shales, Possible source rocks include both the deep underlying shales, with extensive vertical migration up faults, and some of the shawith extensive vertical migration up faults, and some of the shales les interbedded with the reservoirs. interbedded with the reservoirs.

•• Of the 60 prospects drilled, Of the 60 prospects drilled, 24 are significant oil fields24 are significant oil fields equal to or equal to or larger than the minimum assessment size, and larger than the minimum assessment size, and 36 are 36 are ““drydry””..

P. 12-4

The map shows the wide distribution of both discoveries and dry The map shows the wide distribution of both discoveries and dry tests tests within the belt of structures as known at this time. within the belt of structures as known at this time.

••Each fault arc represents one prospectEach fault arc represents one prospect..••Onshore play area is 18000 sq. mi. (47,000 sq. km).Onshore play area is 18000 sq. mi. (47,000 sq. km).••The oilThe oil--equivalent EUR's of the 24 discovered oil fields are listed.equivalent EUR's of the 24 discovered oil fields are listed.••The total discovered GOR (associated & dissolved gas / oil) is The total discovered GOR (associated & dissolved gas / oil) is

estimated to be 1500 ftestimated to be 1500 ft33/bbl (267 m/bbl (267 m33/ m/ m33). A few of the ). A few of the ““drydry”” tests tests appear to be nonassociated gas, which is uneconomic at this stagappear to be nonassociated gas, which is uneconomic at this stagee

Assume that significant nonassociated gas fields will be found Assume that significant nonassociated gas fields will be found at at greater depths where the future gasgreater depths where the future gas--field size distribution can be the field size distribution can be the direct energydirect energy--equivalent of the oilequivalent of the oil--field size distribution. Ignore field size distribution. Ignore possible NGL.possible NGL.

••Average oil recovery efficiency is estimated to be 42.5 percent.Average oil recovery efficiency is estimated to be 42.5 percent.•• Common producing depths range from 5000 to 11500 ft (1500Common producing depths range from 5000 to 11500 ft (1500--3500 3500

m).m).••The The ““smallest uncounted sizesmallest uncounted size”” for the smallfor the small--field assessment is field assessment is 1.0 1.0

101066 bbl (0.16 10bbl (0.16 1066 cu m).cu m).

We will not assess possible stratigraphic or other playsWe will not assess possible stratigraphic or other plays

P. 12-4

P. 12-6

Horst PlayHorst Play

0.40


Chapter 13Chapter 13Perspectives Perspectives

P. 13-2

‘Creaming’

Chance of

Adequacy

Field Size

(106

BBL)

P. 13-3


Year of Discovery

Middle Jurassic Play, UK, Norway, & Denmark

77% of Reservesin Eight Years !

Dis

cove

red

Vol

umes

(MM

BO

E)

30000

25000

20000

15000

10000

5000

01968 1973 1978 1983 1988 1993 1998

Oseberg

Gullfaks

NinianSleipnerStatfjord

Brent

Beryl

P. 13-7

Terkin, et al, 2001

P. 13-7

P. 13-4

P. 13-6

Bowen Basin

P. 13-8

Permian Basin

1.7% of the 4,014 fields, 60% of reserves

1.3% of the hydrocarbon, 70% of the fields

P. 13-9

P. 13-10

165 prospects45 fields120 dry holes

28% 28% better better than than randomrandom

63% 63% better better than than randomrandom


Assessing assessmentsAssessing assessments

Measures:Measures:1.1. Sum of Sum of riskedrisked mean reserves = mean reserves = RESERVES RESERVES

FOUNDFOUND2.2. Sum of Sum of mean reservesmean reserves (unrisked) for (unrisked) for

successful prospects = successful prospects = RESERVES FOUNDRESERVES FOUND3.3. Average Frequency of reserves found = ~ Average Frequency of reserves found = ~

P45P454.4. Number of fields found = sum of all Number of fields found = sum of all

prospect adequaciesprospect adequacies5.5. Key risk factor foreseen for 2/3 of failed Key risk factor foreseen for 2/3 of failed

prospectsprospects

P. 13-11


Assessing an AssessmentAssessing an Assessment Modified From Rose 1987Modified From Rose 1987

Unranked predrill predictions differed from Unranked predrill predictions differed from postdrill results by +/postdrill results by +/-- 10X10XOn average only slightly overestimated.On average only slightly overestimated.Discovery probabilities underestimatedDiscovery probabilities underestimatedVolumeVolume--factor predictionsfactor predictions

worst - recovery factor, intermediate - productive area, best - net pay thickness

50% of the dry prospects, assessors 50% of the dry prospects, assessors foresaw key geologic risk factorforesaw key geologic risk factorRisking the mean rather than the minimumRisking the mean rather than the minimum

P. 13-11

Rose, 2001

P. 13-12


Risk Aversion TechniquesRisk Aversion TechniquesFrom Rose, 1992From Rose, 1992

FarmoutFarmoutBottom hole/ dry hole Bottom hole/ dry hole contributionscontributionsPromoting partnersPromoting partnersDrilling in to Drilling in to ““optionsoptions””

P. 13-10

Reserves vs. PredictionsReserves vs. PredictionsDowney, 1998Downey, 1998

P. 13-12


Biases Affecting DecisionsBiases Affecting DecisionsFrom Rose, 1992From Rose, 1992

Framing effectsFraming effectsPrior accountsPrior accountsConsistent reference frameConsistent reference frameSuccess probabilitySuccess probabilityInaction vs wrong actionInaction vs wrong actionGroup process vs individualGroup process vs individualPersonal familiarityPersonal familiarity


Ways People ThinkWays People Think

Don't pay attention to historyDon't pay attention to historyCausality easily jumped toCausality easily jumped toRespond to praiseRespond to praiseSensitive to external rewards and Sensitive to external rewards and punishmentpunishmentDesperately seeking meaning in Desperately seeking meaning in our livesour lives


Common Corporate BehaviorsCommon Corporate BehaviorsFrom Rose, 1992From Rose, 1992

More attention to dry holes than reservesMore attention to dry holes than reservesDomination by orthodox playsDomination by orthodox playsDelays and extra data gatheringDelays and extra data gatheringComplicated decision chain Complicated decision chain --authoritarian, little local authorityauthoritarian, little local authorityConservative economic indicatorsConservative economic indicatorsShort term referenceShort term referenceInflated costsInflated costs


Unocal ExperienceUnocal ExperienceAlexander and Lohr, 2000Alexander and Lohr, 2000

Written Written guidelinesguidelines are importantare importantContinued Continued oversightoversight of assessment is required for of assessment is required for consistency consistency Needs to be risk analysis Needs to be risk analysis trainingtraining for both the for both the technical staff as well as managementtechnical staff as well as managementEvaluation Evaluation softwaresoftware should be standardized, should be standardized, accessible and adaptableaccessible and adaptableUnderstanding about Understanding about dependencydependency between between variables is essentialvariables is essentialProject Project resultsresults should be charted and understoodshould be charted and understood

P. 13-12


Conoco ExperienceConoco ExperienceLeivelle, 2000Leivelle, 2000

Many of the methods currently utilized Many of the methods currently utilized undervalueundervalue new exploration conceptsnew exploration conceptsMethods ignore or do not fully consider:Methods ignore or do not fully consider:

1. Whether risks and uncertainties are associated with the play concept or are prospect specific

2. Value of information derived from an exploration program in resolving play concept risks and uncertainties

3. Value of information derived from companies’ activities4. Presence of multiple decision points during the execution of

an exploration program5. Amount of follow-up potential that could be accessed given

the play concept works

P. 13-13


BP ExperienceBP ExperienceYeilding, et al, 2000Yeilding, et al, 2000

Reservoir prediction in exploration may be Reservoir prediction in exploration may be enhanced by following six axioms:enhanced by following six axioms:

1. Acquire the right data2. Use all available data3. Work the problem at a variety of spatial and

stratigraphic scales4. Apply multiple tools/methodologies and geologic

disciplines5. Carry multiple models to quantify or qualify

uncertainty6. Use new data to update/exclude models

P. 13-13


Pete RosePete Rose’’s Experiences ExperienceRose, 2000Rose, 2000

Prospectors have begun to recognize that Prospectors have begun to recognize that they have three main professional they have three main professional responsibilities:responsibilities:

1. To identify geologic anomalies that have an enhanced likelihood of containing commercialhydrocarbons

2. To measure them, by estimating chance of success, and reserves

3. To be professionally objective - to recognize that if the estimates are biased, portfolio-value is not optimized and the firm is damaged

P. 13-13


Pete RosePete Rose’’s Futurings FuturingRose, 2000Rose, 2000

Future Tasks for Exploration Risk AnalysisFuture Tasks for Exploration Risk AnalysisManagement intuition is generally inferior to risk analysisGeotechnical excellence depends upon constant, informed scrutiny of the exploration portfolioObjective comparisons of geotechnical forecasts vs. results - only way to achieve professional improvement of predictive performanceConsequences of competitive sealed bidding – “the winner’s curse”

P. 13-14


Pete RosePete Rose’’s Futuring s Futuring -- 22Rose, 2000Rose, 2000

Recognizing that exploration is a longRecognizing that exploration is a long--term activity term activity plagued by shortplagued by short--term disruptions. Managers should term disruptions. Managers should resist resist shortshort--term reorganizationsterm reorganizations and departmental and departmental ““tweakingtweaking””BalancingBalancing

centralized control of exploration and financial “muscle” withdecentralized accountability, motivation, and risk aversion

Assisting companies to utilize Risk Analysis for Assisting companies to utilize Risk Analysis for New PlaysNew PlaysHelping managers to understand how much value they Helping managers to understand how much value they usually surrender in return for usually surrender in return for ““comfortable riskcomfortable risk””

P. 13-14


Course ObjectivesCourse ObjectivesBest available methodsBest available methods

Trap volumetrics and HC charge for prospectsPotential field number and size for plays

Quantify all geologic risks/uncertaintiesQuantify all geologic risks/uncertaintiesForms, guides for making judgmentsForms, guides for making judgmentsInsights for:Insights for:

Assessing assessmentsAvoiding pitfallsHighgrading exploration opportunitiesPlanning selectively

P. 13-14


Course ObjectivesCourse Objectives

Provide knowledge and Provide knowledge and unique toolsunique tools

pre-drill assessment of potentially recoverable oil and gas volumesexploration prospects and plays

Focus on geologic concepts Focus on geologic concepts for assessmentfor assessment P. 13-14


2 Key Questions2 Key QuestionsAre any commercial O & G Are any commercial O & G fields presentfields present??

What is probability?

How much O & G is How much O & G is presentpresent??

Most likely amountRange of reserves expected P. 13-15


Any fields present?Any fields present?Probability of meeting Probability of meeting minimum economic limitminimum economic limitAdequacy of basic Adequacy of basic controlscontrols

SourceReservoirTrapRecoverability P. 13-15


How Much O & G?How Much O & G?

Several methods usedSeveral methods usedVolumetrics & HC Volumetrics & HC charge recommended charge recommended for for prospectsprospectsField number and size Field number and size recommended for recommended for playsplays

P. 13-15


Prospect AssessmentProspect Assessment

SuccessSuccess -- meeting or exceeding meeting or exceeding minimum economic sizeminimum economic sizeSteps in assessment process Steps in assessment process

Define minimum economic sizeSelect ranges for individual factorsCombine factors to derive assessment curveEstimate adequacy of achieving minimum economic size P. 13-16

Nobody is perfect!Nobody is perfect!

play guides, summary - 5a

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