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Lecture 14

Should we drill Alpha?. Should we drill Beta?. Beta. Alpha. Lecture 14. Prospect Analysis. Objectives & Relevance. Objective: Introduce the types of considerations necessary to get a prospect ready for management approval. Relevance:

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Lecture 14

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  1. Should we drill Alpha? Should we drill Beta? Beta Alpha Lecture 14 Prospect Analysis Courtesy of ExxonMobil

  2. Objectives & Relevance • Objective: • Introduce the types of considerations necessary to get a prospect ready for management approval • Relevance: Demonstrate some the tasks that go into determining the size of the ‘prize’ and the risk associated with a prospect Courtesy of ExxonMobil

  3. Overview of Prospect Analysis Given the geologic framework and the results of our data analysis, our next task is to analyze and assess viable prospects: • Analyze prospect elements • Source, Migration, Reservoir, Trap, Seal • Consider the most-likely scenario • Consider other cases - the range of possibilities • Assess the prospect • What volumes of HCs can we expect? • Will it be oil or gas? • Risk the Prospect • What is our level of confidence that all the prospect elements work? Courtesy of ExxonMobil

  4. Geologic Framework Prospect Definition Prospect Assessment Data Analysis Outline } • Define prospect elements • Estimating trap volume • HC Type • Assessment • Risk Prospect Definition Prospect Assessment Courtesy of ExxonMobil

  5. Correctly Placed Wells A “Container” From Which Oil & Gas Can Be Produced A “Kitchen” Where Organic Material Is Cooked Outline • Define prospect elements • Estimating trap volume • HC Type • Assessment • Risk Reservoir Trap Seal “Plumbing” To Connect the Container to the Kitchen Migration Source Courtesy of ExxonMobil

  6. Draupne Shale organic rich serves as a source rock Immature Immature Heather Shale Sognefjord Shale both organic poor Oil Generation Immature Immature Oil Generation Oil Spill Point Facies Change Gas Generation Fault Leak Point Gas Generation HC Generation & Expulsion oil & gas from the Draupne, gas from coals in the Brent Brent Sandstone acts as a reservoir HC Migration into Brent carrier beds and up faults HC Fill & Spill late gas displaces early oil A Real HC System Unconformity Courtesy of ExxonMobil

  7. Alpha Beta Oil Fill & Spill Overburden Seal Reservoir Oil Migration Source Basement Oil Generation 18 Ma Most-Likely Scenario Sea Water Courtesy of ExxonMobil

  8. Alpha Beta Overburden Oil Migration Seal Reservoir Oil Migration Source Basement 10 Ma Oil Generation Most-Likely Scenario Sea Water Courtesy of ExxonMobil

  9. Alpha Beta Sea Water Overburden Oil Migration Seal Reservoir Oil & Gas Migration Source Basement Oil Generation Present Gas Generation Most-Likely Scenario Courtesy of ExxonMobil

  10. Beta Alpha Oil Oil Most-Likely Scenario 18 Ma Map of the Reservoir Unit Courtesy of ExxonMobil

  11. Beta Alpha Oil Oil Most-Likely Scenario 10 Ma Map of the Reservoir Unit Courtesy of ExxonMobil

  12. Beta Alpha Gas Oil Oil Most-Likely Scenario Present Map of the Reservoir Unit Courtesy of ExxonMobil

  13. Exploration’s Task Identify Opportunities Capture Prime Areas Acquire Seismic Data Drill Wildcats Process Seismic Data Interpret Seismic Data Success Failure Assess Prospects Confirmation Well • Volume • HC Type • Assessment • Risk Uneconomic Success To EMDC or EMPC Drop Area Courtesy of ExxonMobil

  14. Outline • Define prospect elements • Estimating trap volumes • HC Type • Assessment • Risk How Much Could Be In Alpha & Beta? Let’s start an exercise Courtesy of ExxonMobil

  15. Exercise 12 – Parts 1 - 6 We will do some quick estimates using a series of simplifying assumptions Courtesy of ExxonMobil

  16. How can we get a rough estimate of the cross-sectional area? Height 1 Height 2 Base 2 Base 1 Consider This …. Let’s say our trap in cross-section view looks like this…. Courtesy of ExxonMobil

  17. Beta Alpha r r h r From Area to Volume Volume of a Cone = 1/3 Π r2 * h Consider the trap to be approximately ½ a cone Do Steps 1 - 6 Courtesy of ExxonMobil

  18. Outline • Define prospect elements • Estimating trap volumes • HC Type • Assessment • Risk From Our Data Analysis: • DHI Analysis • AVO Analysis • HC Systems Analysis Courtesy of ExxonMobil

  19. Oil or Gas??? • Should there be a difference in seismic response (AVO) between an oil-filled reservoir and a gas-filled reservoir? • Model response with different rock & fluid properties • If there should be a difference, which fluid type does the seismic data support? • Extract amplitudes from near- and far-angle stacks • From our basin modeling & HC systems analysis, which fluid type should we expect • What did the source generate • What did the trap leak or spill Quantitative Qualitative Courtesy of ExxonMobil

  20. 10% Porosity 20% Porosity 30% Porosity Gas Oil Brine Model Seismic Responses - Input Courtesy of ExxonMobil

  21. Model Seismic Responses - Output 10% Porosity 20% Porosity 30% Porosity Offset Offset Offset Courtesy of ExxonMobil

  22. Gas Oil Brine Shale Model Seismic Responses - Output AVO Crossplot 0.4 10% 0.2 20% Slope 0.0 30% -0.2 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2 0.3 Intercept Courtesy of ExxonMobil

  23. Questions??? Our Most-Likely Scenario Many times the seismic data will give us clues! • How can we verify this scenario? • To what level are the traps filled with oil & gas? • What would be the value ($) if our scenario is correct? • How much more/less HC could there be? • How risky is this prospect (chance that we are totally wrong)? Courtesy of ExxonMobil

  24. Seismic Line Across ‘Alpha’ Alpha Fluid Contact? Gas over Oil? Fluid Contact? Oil over Water? Courtesy of ExxonMobil

  25. Outline • Define prospect elements • Estimating trap volumes • HC Type • Assessment • Risk Deterministic Assessment Probabilistic Assessment Courtesy of ExxonMobil

  26. Types of Assessments Once a lead has been high-graded into a prospect, we have to assess its potential value • Deterministic Assessment • One value for each parameter • One final number, e.g., 200 MBO • Probabilistic Assessment • A range of values for each parameter • A range of outcomes, e.g. 200 ± 50 MBO Courtesy of ExxonMobil

  27. Scenarios & Probabilities Scenario 1 Scenario 2 Alpha Alpha Gas Cap & Oil Leg Gas Only 40% Chance of Occurrence 20% Chance of Occurrence Scenario 3 Scenario 4 Alpha Alpha Oil Only Low Gas Saturation 30% Chance of Occurrence 10% Chance of Occurrence Courtesy of ExxonMobil

  28. Deterministic Prospect Assessment To Assess a Prospect, We Assign Numbers to the Parameters related to HC Volumes In our exercise, we have assumed the all oil case (Scenario 3) Unrisked means everything in the HC System has worked! Courtesy of ExxonMobil

  29. Scenario 1 Oil & Gas 162 MBO 97 GCF 178 MOEB Scenario 2 Gas Only 0 MBO 515 GCF 86 MOEB Scenario 3 Oil Only 288 MBO 0 GCF 288 MOEB Scenario 4 Low Gas Saturation 0 MBO 0 GCF 0 MOEB Uneconomic Assuming 100 MOEB is needed to make prospect economic Alpha Prospect Assessment Results Oil Gas Oil-Equivalent Million Barrels Oil Billion Cubic Ft Gas Million Oil Equivalent Barrels 6 GCF = 1 MBO Uneconomic Courtesy of ExxonMobil

  30. Area Min ML Max HC Sat. Thickness Net:Gross Porosity FVF Recovery 12 20 27 Probabilistic Assessment • The Goal is to Get A Number and a Range of Possible Outcomes • We Input a Range of Values for Each Assessment Parameter • usually minimum, most-likely, maximum Courtesy of ExxonMobil

  31. Unrisked Results Alpha Prospect – Unrisked 100% 100 80% 60% Excedance Probability 40% Economic Minimum 20% 0% 0 100 200 300 400 Million Barrels of Oil 50% Chance of finding 200 MBO or more 75% Chance of finding the economic minimum Courtesy of ExxonMobil

  32. Outline • Define prospect elements • Estimating trap volumes • HC Type • Assessment • Risk 25% Risk How Confident Are We? 75% Chance of Success Courtesy of ExxonMobil

  33. 9 Key Elements of the HC System Source Quality Reservoir Presence Trap Quality Source Maturation Reservoir Quality Seal Adequacy HC Migration Biodegra- dation Not Low Gas Saturation • A team of experts consider these key elements for each prospect. • They rate the chance of success (COS) for each on a scale of 0 to 1 Courtesy of ExxonMobil

  34. Highest Risk Some Risk COS for Alpha • Alpha’s biggest risk is that the fault does not seal. • There is also some risk that the trap holds low gas saturation and that reservoir quality is poor } Some Risk • Reservoir Presence • Reservoir Quality • Trap Quality • Seal Adequacy • Source Quality • Source Maturation • HC Migration • Not Low Gas Saturation • Biodegradation - - - - 1.0 - - - - 0.85 - - - - 1.0 - - - - 0.8 - - - - 1.0 - - - - 1.0 - - - - 1.0 - 0.9 - - - - 1.0 chance of success (COS) 0.61 Courtesy of ExxonMobil

  35. Risked Probabilistic Assessment Results Alpha Prospect – Main Compartment - Risked 1.0 100 Gas Only 0.8 61 % 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 72% Chance to find any hydrocarbons 58% Chance to find 100 MBOE 5% Chance to find 400 MBOE Courtesy of ExxonMobil

  36. Exercise 14 – Part 7 In the exercise we will use • A COS of 61% • An economic minimum of 100 MBOE What Would You Propose to Management about Drilling Alpha & Beta? Courtesy of ExxonMobil

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