Lecture 15

1. Lecture 15 Going Beyond Exploration Headlines: Alpha Wildcat Finds Thick Oil Zone! Block 7 Salt Diapir Discovery Well Block 8 Bonanza Basin Courtesy of ExxonMobil L 15 – Beyond Exploration

2. Capture Prime Areas Acquire Seismic Data Wildcat Drilled Process Seismic Data Interpret Seismic Data Assess Prospects Our Exploration Flowchart Management Approved Wildcat Well Identify Opportunities Success Courtesy of ExxonMobil Courtesy of ExxonMobil L 15 – Beyond Exploration

3. Our Assessment Results Alpha Prospect – Main Compartment - Risked 1.0 100 Gas Only 0.8 62 % COS Gas Cap & Oil Leg 0.6 51 % Chance of Finding More Than the Economic Minimum 0.4 Economic Minimum Oil Only 0.2 0.0 0 100 200 300 400 500 Million Oil Equivalent Barrels 62% Chance to find any hydrocarbons 51% Chance to find 100 MBOE 5% Chance to find 400 MBOE Courtesy of ExxonMobil L 15 – Beyond Exploration

4. Block 7 Salt Diapir Discovery Well Block 8 Bonanza Basin Congratulations! A Huge Success Alpha Prospect YOUR exploration well on the Alpha prospect discovered an estimated 325 MBO Alpha Prospect – Main Compartment - Risked 1.0 100 Gas Only 0.8 62 % COS Gas Cap & Oil Leg 0.6 0.4 Economic Minimum Oil Only 0.2 0.0 0 100 200 300 400 500 Million Oil Equivalent Barrels Courtesy of ExxonMobil L 15 – Beyond Exploration

5. Capture Prime Areas Acquire Seismic Data Drill Wildcats Process Seismic Data Interpret Seismic Data Assess Prospects What’s Next? • Exploration would drill one or two confirmation wells to verify there is enough HCs to make some money (Value > Costs) • If results continue to be good, the FIELD would pass on to Development or Production people Identify Opportunities Success Confirmation Well Uneconomic Success To Development Or Production Courtesy of ExxonMobil L 15 – Beyond Exploration

6. Delineation Well Alpha Prospect 6 Months later… A delineation well is completed to the NE An OWC is found at 4500 m – the same depth as in the discovery well The porosity is slightly better – 26% versus 23% in the discovery well Block 7 Delineation Well Salt Diapir Discovery Well Block 8 Bonanza Basin The delineation well has confirmed enough oil to merit field development – EUR now set at 348 MBO Courtesy of ExxonMobil L 15 – Beyond Exploration

7. G&G in Development • Exploration has drilled a discovery and a delineation well. • The ultimate recover for Alpha is estimated to be 338 MBO, • which greatly exceeds the economic threshold of 100 MBO • Can we refine our picture of the distribution of oil at Alpha? • Is the reservoir a single unit, or is it segmented (separate regions to drain)? • How many wells and where should they be drilled? • What sort of facilities (platform?) will we need? • How can we speed-up time to first oil? • What uncertainties remain? Questions: Courtesy of ExxonMobil L 15 – Beyond Exploration

8. We Need More Detail Reservoir Map at the end of Exploration Reservoir Map at the end of Development Courtesy of ExxonMobil L 15 – Beyond Exploration

9. #2 #3 #4 #1 Some Questions … Why did they drill well #3? Why did they drill well #4? Where would you place well #5? Why? Courtesy of ExxonMobil L 15 – Beyond Exploration

10. Data for Development We may need better quality data to address development needs Data Used for Exploration Data Reprocessed or Reshot for Development And Production Courtesy of ExxonMobil L 15 – Beyond Exploration

11. G&G in Production • Production has begun at Alpha. • The initial production rates are as expected. • How should we manage the field so as to maximize our investments? • Can we monitor how oil is being swept out of the reservoir? • What about injection wells and enhanced recovery? • Is there more oil in the vicinity – either at deeper depths or in nearby traps? • Can we build a computer model of the field that matches existing production data? If so, we can test future recovery with different drilling scenarios. Questions: Courtesy of ExxonMobil L 15 – Beyond Exploration

12. FEEDBACK Reservoir Simulation Geologic Model HISTORY MATCH Oil Production Actual in Blue Modeled in Red Production Time INPUT Reservoir Simulation Courtesy of ExxonMobil L 15 – Beyond Exploration

13. The Value of G&G to an Oil Company • G&G work is done to add HC reserves (volumes) • New discoveries • More from discovered producing zones • Additional producing zones • Get the most reserves at the lowest cost • Invest in the right basins • Drill in the optimum locations • Correctly assess what can be recovered • Avoid unnecessary wells Courtesy of ExxonMobil L 15 – Beyond Exploration

14. Let’s Fast Forward a Number of Years • The Alpha field has been producing for 5 years • We want to maximize production Build a Geologic Model Develop a Reservoir Simulation Match Past Production Model Future Production Iterate to Match Production History Courtesy of ExxonMobil L 15 – Beyond Exploration

15. Geophysical Interpretation Stratigraphic Interpretation Structural Interpretation Petrophysical Interpretation A Geologic Model An integration of all geologic, geophysical, petrophysical and interpreted or conceptual information about a reservoir into a single 3D numerical description of that reservoir Courtesy of ExxonMobil L 15 – Beyond Exploration

16. 75 m Sand 50 m 1m Shale Perm 0.1 mD Perm 250 mD A Geologic Model • Each cell can be populated with rock & fluid Properties: • Facies • Porosity • Permeability • Fluid Saturation • Etc. Courtesy of ExxonMobil L 15 – Beyond Exploration

17. Actual Modeled Infill Drilling EOR Base Case Using a Simulation Past Production Future Production Oil Rate Oil Rate Time (yrs) Time (yrs) • How do we use this information? • Field development planning • Field production optimization • Reservoir surveillance Courtesy of ExxonMobil L 15 – Beyond Exploration

18. In Summary • The O&G Industry needs top-notch scientists and engineers to work on a vast array of problems • The assignments are challenging, fast-paced, and multi-disciplined • Often your work is tested in the matter of months • Great Ideas + Good Science -> Success Courtesy of ExxonMobil L 15 – Beyond Exploration