Exploration - The 21st Century Agenda
Chaired By
Oonagh WerngrenOperations Director
Oil & Gas UK
Stimulating Exploration Role of the Regulator
Glen Cayley Senior Advisor
Oil and Gas Authority
Stimulating Exploration
Role of the RegulatorGlen Cayley
OGUK Conference
June 2015
0
50
100
150
200
250
300
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Num
ber o
f Wel
ls in
cludi
ng S
idtra
cks
Exploration Wells
Appraisal Wells
Development Wells
Source: DECC
E&A drilling sharp downward trend
0
5
10
15
20
25
30
35
40
45
50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Num
ber o
f Wel
ls in
cludi
ng S
idet
rack
s
Exploration Sidetracks
Exploration Wells
Source: DECC
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Num
ber o
f Wel
ls in
cludi
ng S
idet
rack
s
Appraisal Sidetracks
Appraisal Wells
Source: DECC
Cost related
2005: 300 wells
2014: 165 wells
Hit Rates, Volumes and finding costs
Following the fall in well count the overall success rates (SR) have slipped
In last 5 years although technical SR >50% commercial SR c. 20% i.e. only 40% of wells with hydrocarbons move to firm developments the rest swelling the stranded discovered undeveloped small pools
Exploration volume yield <100mboe in 2014
Finding cost from <$5/Bbl to >15$/Bbl over 10 year period
Exploration Outcomes Deteriorate
Dry Hole Analysis for c. 100 wells in the CNS/OMF 2003-2013
Objectives: Most target the Jurassic 56%, Post BCU 38% <5% ‘Deep tests’
One third drilled because of some sort of “DHI”: AVO, amplitude, gas cloud, “impedance” etc…
Chance of Success 34% CoS 20-30%
But 40% CoS > 31%: over-confidence in the risking assessment?
3 or 2 risk elements = 87% failed; 1 risk element = 13% failed
Multiple risks in a mature well calibrated play = red flag
DHI’s not Alchemy do the basics
Need to improve top seal, fault seal, reservoir prediction use best available (better) seismic
Exploration Outcomes Deteriorate
There are over 200 small discoveries between 3-15 Mboe
1-2 Bboe hit by soaring drilling and development costs and or access to: Internal and external funding,
Infrastructure
An aligned partnership
Suitable Rigs
Vessels
Crews
Critical Data
Good News ! Seismic costs, Rig rates, Vessel rates have fallen sharply. Other capital costs need to follow. A 30 – 40 % fall together with simpler solutions could unlock significant opportunity/value provide up to 15% of UK future production
Hydrocarbon Maturation
Focus on increased exploration
21st Century Exploration Road Map
Survey barriers to increased exploration
Well Failure Analysis
Frontier Initiatives: Palaeozoic Study
Government funded seismic acquisition
Advanced, Leading Edge Seismic seminar to revive mature exploration, unlock discovered undeveloped, 4D driven infill
14 - 24 Billion Barrels total of which 3-9 Billion Barrels YTF
Rockall Trough4284 line km proposal
Mid North Sea High 10402 line km proposal
Presentation title - edit in Header and Footer 11
Progress in Rockall Imaging
Proactive Collaboration
CNS/MF CNS/Moray FirthPDA Post Drill AnalysisITT Invitation to Tender
New Plays Mapping
1st Pitfalls Conference
2nd Pitfalls Conference
3rd Pitfalls Conference
ITT, contract awards and acquisition
PalaeozoicKick-off
CNS/MF PDA Kick off
Scoping Study
21st Century Exploration Road Map
CNS, NNS Orcadian Basin, and Irish Sea studies
Phase 1 Delivered
Multi Company Seminars, Presentations & Final Report
Seismic Business
Case
£20m awarded
License Round
2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q2 2016 Q4 2016Q1 2016 Q3 2016
Advanced Seismic Technology
13
Seminar 7th September
Invitations from OGA
Geophysical experts
Exploration Managers
MD’s
Location: BP visualisation Suite
Chair Ron Roberts Apache
What can technology unlock? Salt diapirs Palaeocene & Eocene Fulmar Skagerrak plays HPHT – Redevelopment 4D Permian of CNS Carboniferous SNS Is the secret in the acquisition or
processing?
Timing license duration very tight for frontier and difficult geology
Potential to further differentiate frontier and mature areas
Frequency of acreage offerings
Merits of ‘stratigraphic licensing’ with the ‘right to roam’ into fallow horizons on held acreage
Model JOA’s majority versus unanimity
Simpler access to infrastructure model agreements
14
Licensing Issues/considerations
Shoot and process 15,000 km of new regional 2D seismic lines in the Rockall Trough
and Mid North Sea and make it available to industry in Preparation for a licence
round next year.
The joint OGA and industry funded evaluation of the Palaeozoic play (Which ties in to
the seismic)
An analysis of the results of 97 wells in the Central North Sea, leading to greater
understanding of risk and improved stewardship.
15
OGA Exploration Deliverables 2015
A work shop on 3D seismic technology to promote wider understanding of the cost
benefit in the context of MER ( Sept 2015)
Complete engagement with the geophysical Industry and draft new improved data
management and access to data in particular legacy seismic data and consistent well
data
Complete a strategic review of the UK licensing strategy providing improved access
to prospective areas?
16
OGA Exploration Deliverables 2015
Will industry respond by active participation in the 29th round by bidding further 3D seismic and firm wells?
What further steps, fiscal, licence, or regulatory would increase the pace of exploration activity?
What else could be done to support maximising economic recovery accelerating hydrocarbon maturation through exploration?
Is the industry using this time to replenish the hopper of opportunities?
17
Questions for Industry
Exploration Activity, Fiscal Change and Investment Trends – a case for intervention
Brian NottageHannon Westwood
Exploration activity, fiscal
change and investment trends –
a case for intervention
Market conditions
• Oil price
o Steep fall from September last year
o Slight recovery then further downward
pressure
Brent under $64/bbl
WTI under $60/bbl
o ICE forward curve shows slow recovery
Growing consensus around this
• E&P activity levels and investments expected to
fall
o Global rig utilisation falling
o “27 North Sea rigs will be seeking new
contract commitments in the coming
months, nearly one-third of the entire fleet”
(North Sea Reporter)
• Project cancellations/suspensions – UK and
Norway
• Pressure to reduce costs
• Consolidations, asset sales, farm-outs expected
Challenging environment even before the fall in oil price
• UKCS – long term decline in E&A
o 2014 - only 13 of the expected 25 wells
actually drilled (excluding sidetracks)
o Just 8-13 new exploration spuds forecast
for 2015
• High unit costs for Capex and Opex
• Significant cost over-runs and start-up delays
on a number of projects
• Declining revenues for E&P companies as
production continued to fall
• Negative cash flow of £5.3 billion in 2014, the
worst position since the 1970s.
Near-term developments – breakeven analysis
Challenging environment even before the fall in oil price
• UKCS – long term decline in E&A
o 2014 - only 13 of the expected 25 wells
actually drilled (excluding sidetracks)
o Just 8-13 new exploration spuds forecast
for 2015 (depending on oil price)
• High unit costs for Capex and Opex
• Significant cost over-runs and start-up delays
on a number of projects
• Declining revenues for E&P companies as
production continued to fall
• Negative cash flow of £5.3 billion in 2014, the
worst position since the 1970s.
E&A Drilling Activity
• Activity down on UKCS
Decreasing since 2007
8 new starts so far in 2015: 5 exploration
and 3 appraisals (excl. sidetracks)
• Activity up on NCS
Increasing since 2005
• Netherlands stable since 2004
Recent increase
Exploration Performance
• Commercial volumes discovered erratic
year-on-year
• Overall decline in volumes found
• Average commercial discovery size down
from c 50 mmboe to < 20 mmboe
o No significant discoveries (>100
mmboe) since 2008
o Only 28% reserves replacement
achieved
• Overall success rate relatively high and
comparable to Norway
• Commercial success rate declining
Reasons for decline in UKCS exploration1. Lack of funding for exploration/flight of capital
2. Lack of availability of drilling rigs
3. High tax levels and fiscal instability
4. Maturity of the basins and perceived lack of remaining prospectivity and materiality
5. High exploration costs – regulatory response to Macondo, 2010
6. Access to infrastructure
UK E&A Spend
Key Fiscal Changes
• Investment Allowance:
o The allowance will exempt a portion of profits equal to 62.5% of a company’s
qualifying investment expenditure, incurred on or after 1 April 2015, from the
Supplementary Charge
o Available for projects in both new and existing fields.
o Simplify the existing system of offshore field allowances
• Supplementary Charge:
o Reduced from 30% to 20% with effect from 1 January 2015.
• Petroleum Revenue Tax:
o Reduced from 50% to 35% , resulting in a headline rate for PRT-paying fields of
67.5 per cent
o to encourage investment in incremental projects in older fields and extend the life
of key infrastructure needed to make small new discoveries commercially viable.
o With effect from 31 December 2015.
But what about exploration?
• Lack of an effective stimulus for exploration
• Falling exploration levels have resulted in few
commercial discoveries
• Development hopper has not been replenished
• Investment levels will fall sharply despite the
fiscal measures introduced by the Chancellor.
• The government gave an undertaking in the
autumn statement to “consider options for
supporting exploration through the tax system,
such as a tax credit or similar mechanism, in a
way that is carefully targeted and affordable”,
…… but it has yet to deliver.
• The government did confirm the provision of
£20m for seismic surveys, but this will have little
effect
• Exploration is the lifeblood for the long-term
future of the UKCS and more robust action is
needed from both HMT and OGA including:
o An appropriate fiscal stimulus; ca Norway
o State-sponsored seismic and pre-
competitive geoscience in both mature and
frontier areas;
o Early release and more effective sharing of
data and information;
o Clarification of the remaining potential and
prospectivity of the UKCS; and
o Revisions to licensing policy to include a
long-term strategy and regular but more
focussed licence rounds.
• These actions are necessary for the UKCS to
become more competitive internationally for
exploration.
Much needed interventions
0
20
40
60
80
100
120
0
10
20
30
40
50
60
70
Oil
Price
$/b
bl
No. W
ells
Norway E&A Wells
Appraisal Sidetracks
Appraisal Spuds
Exploration Sidetracks
Exploration Spuds
Oil Price (US$)
The consequences of inaction
• Low exploration levels since 2008 have
resulted in few new development
opportunities.
• This has damaged future investment
potential in the UKCS
• Investment spike has run its course – fewer
and smaller projects coming through
• C 3 bn boe and £40 bn of investment are at
risk from continued low exploration levels.
• Future radical fiscal and regulatory changes
still required to stimulate exploration
o prolong the life of the basin
o maximise economic recovery
Hannon WestwoodBrian Nottage
7 Queens Gardens
Aberdeen AB15 4YD
Tel: +44 (0) 1224 619 341
e-mail:
Hannon WestwoodKaren Alford
100 Brand Street
Glasgow G51 1DG
Tel: +44 (0) 141 534 7903
e-mail:
Questions..?
Moray Firth – Central North SeaPost Well Analyses
Christian MathieuTeam Leader, Exploration Road Map Project
Oil and Gas Authority
Moray Firth – Central North Sea
Post well analyses
21st Century Exploration Road Map ProjectChristian Mathieu
Project
Objectives, Time-Line and Status
Moray Firth – Central North Sea
Post well analyses
3521CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
2003 – 2013 Wells (E&A) to be looked at:
150 Exploration main bores + Exploration Side-tracks have been drilled over
this 10 years period by 42 Operating Companies.
Project tried and understood the reasons for failure of the dry wells and a few
“technical” successes.
98 such wells (currently owned by 24 companies) have been reviewed >>> 104
segments successfully analysed.
CENTRAL NORTH SEA
MORAY FIRTH
Project Objectives• Part of the 21st Century Exploration Road Map recommended by ETF (“Exploration
Task Force”) and aligned with Sir Ian Wood Review.
• Project entirely sponsored by DECC / OGA.
• Rigorous well failure analysis in Moray Firth (MF) and Central North Sea (CNS) conducted by DECC / OGA together with Industry. Wells drilled 2003-2013.
• Objectives:
• To fully understand the reasons why a prospect was drilled (i.e. Geological and Petroleum settings)
• To better understand the reasons for success and failure in Exploring MF and CNS during the last 10 years
• To share the main findings with the Industry
• To test the Collaborative Model.
36 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Project Time Line and Status
37 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
• 22 Companies (over 24) opened their “books” during “one to one” workshops
• Summary results for each well / each explored segment gathered into a Post Well Analysis Sheet
• Number of Post Well Analysis Sheets completed = 104 belonging to 97 wells (compared to 98 wells initially
targeted)
• Preliminary findings have been presented at the O&GUK 2nd Pitfalls in Exploration Conference (London,
05th February 2015).
• Multi-companies workshops gathering companies having drilled in the same Geological Basin / Entity to
be held (16th June – 09th July 2015).
• Final report + Final presentations to be delivered September 2015.
Establish
One to
One
meetings
Review PGS
Megasurvey
for
applicability
to Study
Present to
Pitfall
Conference
Recommendations
1st Phase 2nd Phase 3rd Phase Reporting
Gather data from each Company
Review Preliminary
Observations
Conduct workshops (2nd batch)
Peer Reviews = Seminar involving Companies working in the
same Geological Basin / Entity
Detailed Analysis
Report
September
2015
Preliminary Review
of DECC data bases
Identify Key
Companies
Conduct workshops (1st batch)
Gather data from each Company
April May June
2014
July AugustOctober November December January February March
One to One Workshops Multi Companies
Regional Seminars Report writing
Project
Set-up
Presentations
Post well
Analysis Sheet
• Upper section > general information about the well
• Left hand section = pre drill G&G prospect description and pre-drill risking
• Right hand section = Well results
• Right hand columns =
• Basal section: Seismic data and reports used pre- and post-well.
• Summary results + What could have been done differently?
38 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Prospect Name: Block name:
Well Category: License:
Segment name: Spud date:
Segment HC result: End date:
Segment overall COS: 1
Play: Age:
Source Rock:
Trap type:
SOURCE ROCK: Kimmeridge Caly Fm. (Jurassic) PS (%)
M
M
M
M
PS (%)
RESERVOIR: PS (%) U
M
Mini Mode Maxi
118 W
30 50 80 M28 28 28 M
70 70 70 M
DHI: Type: Oil saturation Downdip of crest
Reliability: U
TRAP GEOMETRY: PS (%)
Well Result
Top reservoir (TVDss ft): -6279 -39 M
13.7 -6294 -196 - W
N/A - Strati trap. Belinda discovery ODT used as OWC. - - - M0.462 270 35 -235
100
Seal: PS (%) M
U
M
Fluid: PS (%)
Fluid: Flow: Choke: M
2830 BHP @ -6240 ft TVDss U
70° U
30°-33° U
400 U
P90 P50 P10 Low Best High
58 112 180 6 13.5 16.5 W
- - - Not calculated but gas column assumed 7 10 14 W
Low Best High
17 34 54 1.8 4 5 W
- - - Not calculated but gas column assumed 5 7 10 W
- - - - - - -
- - - - - - -
Yes No
Main Post-Drill versus Pre-Drill Differences:
1 1
2 2
3 3
Date: U:\EMI\Energy Development\LED Area\EXPLORATION\EXPLO ROAD MAP PROJECT\POST WELL ANALYSES_MF_CNS\Post Well Analysis Sheet\1-Completed Post Well Analysis Sheets
Upper Tay sdsts
Fit with structure:
Very low. 1D modelling on 4 neighbouring wells showed that oil and water signatures were similar. 1D
modelling not used for pre-drill de-risking.
DHI post-well interpretation:
Very little emphasis was put on the apparent DHI pre-drill and given the well result there was no follow-up study.
Average at Well
31 Feet
69%
33%
65%
Net Oil Pay = 8ft
above OWC
Permeability / Diagenesis: Good permeability assumed in excess of 1-2 Darcies.
Effective pathways:
HC migration timing:
Palaecocene Sstn carrier beds assumed to be proven. Migration modelling carried out pre-drill did
not address the stratigraphic trap. Trap is possibly underfilled (?).
Timing good
Post drill calculated volumes are not within the pre-drill volumes which were too optimistic. The use of the Belinda discovery ODT was too optimistic and a wider range of possibilities should have been considered.
The seismic stratigraphic approach, although interesting, lead to loss of the overall picture >> the pre-drill volumes were too optimistic.
It is unclear whether improved seismic data would have been beneficial.
Reports and References (Maps…etc…):
3D over the entire block
2 proprietary surveys and Western Geco spec survey
2006 reprocessing by Spectrum
1) Spitfire Exploration Well 21/30-T (20) Geological Prognosis and Evaluation Programme, May 2008
Do the Well Results fit with the Pre-Drill Geological Model?
Inferred Reasons:
Reservoir much thinner than prognosed.
Massive overestimation of volumes in place and corresponding resources.
OWC 196 ft shallow to prognosis.
Likely imperfect bottom and / or lateral seals.
It was incorrect to assume the sands were connected to the Belinda discovery.
Other potential reason would be that necessary hydrocarbon volumes have not migrated into the structure.
Seismic Data Set:
Resources:
2D / 3D ?
Survey name:
Processing / Reprocessing:
SUMMARY RESULTS
Oil / Condensate (MMbbl):
Gas (Bcf):
Oil (MMbbl):
Associated Gas (Bcf):
Dry Gas (Bcf):
Condensate (MMbbl):
Comments
30% RF
70% RF
NB: PGS MC3D WCG2011 is now available on the market.
W
1) Spitfire Post well summary.pdf, 25th Nov 2014
2) 2008 BERR Fallow Blocks Review, 03rd September 2008
Temperature (degC):
Density (API):
GOR (scf/bo):
100
Oil + minor gas cap
In Place Volumes:
HC fi l l (%):
100Including Top, Lateral and Bottom if needed
Horda Fm. top seal and Balder Sstn and intra-formational bottom seals. Proven in nearby wells.
Expected Fluid:
Pressure (psi):
The Spitfire prospect is a stratigraphic trap in the Upper Tay Sandstone Member. This is formed by a
detached sand body that shales-out up-dip to where the Upper Tay interval is shale in Evelyn wells 21/30-12
and 21/30-16 to the west. There is small 4-way dip closure where the sands appear to be “mounded” in the
seismic trace data, interpreted to be caused by a combination of depositional shape and post-depositional
differential compaction.
Top Reservoir at Top Structure (ft TVDss): -6137
Closed area (km2):
Vertical closure (ft):
Gross Rock Volume (km3):
Balder Fm.
0.65
0.45
Oil generation in the deepest part of the Central Graben started during the Maastrichtian and peaked during
Miocene to Pliocene times. Regionally oil and gas charging occurred mainly by upward or via long distance
lateral migration. Extensive distribution of underlying Palaeocene Sstn has provided excellent regional lateral
migration conduits. Migration from the Palaeocene into the Eocene is thought to have been facilitated via
Miocene age faulting. Migration modelling carried out pre-drill but focus on Highs.
Including Presence, Quality
Gross Thickness (ft)
Net To Gross Ratio (%)
Porosity (%)
HC Saturation (%)
Expected Lithology: Interbedded relatively soft claystones and fine to medium grained, friable turbiditic sandstones.
Well Results
Presence:
Quality:
Maturity:
Effective HC kitchen:
Not penetrated but no reason to consider source to be absent in area
Not penetrated but no reason not to consider source quality to be similar than for Belinda and Evelyn discoveries.
Assumed mature due to oil presence in well
Central Graben
Presence, Continuity: Present. Unknown continuity.
Including Presence, Quality, drainage Area…
Kimmeridge source rock present. Good quality with TOC 4-7%.
HC MIGRATION /TIMING: Including Migration Pathways… 0.85
Post Well Analysis Sheet
Spitfire
Exploration Well, P&A
"T" - Spitfire
15ft oil leg
19th June 2008
21/30
P013
27% Number of Segments:
3rd July 2008
Pre-Drill segment description
100
+/'- to prognosisWell Prognosis
Interpreted horizons: Intra-Horland, Horda, Top Tay Sand package (diachronous), Balder and Top
Chalk. Amplitude extraction studies in Top Tay Sand. Well results indicate picking was good.
Target interval is shallow and has little lithology variation so a VoK function was used: Vo =
5558ft/s, k=0.3s-1. Well results indicate this was an optimal solution.
-6240
RESERVOIR
M
DHI
U
Pre-Drill prospect assessment versus Well Results Comparison
Overall Match*
SOURCE ROCK
M
Seismic picking:
Kimmeridge Caly Fm. (Jurassic)
Combination stratigraphic and dip closure
Upper Tay Sandstone Member Eocene
7094 ft
OWC (TVDss ft):
GWC (TVDss ft):
Comments
-6490
-
Comments
Within error
Much higher to prognosis than expected
Not penetrated
Well did not penetrate the crest of the
structure so the 15ft HC column is proven
and the remainder is assumed attic
hydrocarbon
Top Seal Lithology:
Oil No test or samples taken
Bottom Seal Lithology:
Lateral Seal type (fault, facies change…):
Shale, Horda Fm.
Facies change required. It is believed that an imperfect lateral /base sdeal is the cause for
the low hydrocarbon volumes.
Shale, Balder Fm.
25/11/2014 Workshop Date: 25/11/2014
Single
Parameters
Check *
U
M
M
M
M
W
Time to Depth Conversion:
Estimated HC column (ft):
Partly
Is there something which could / should have been done differently?
Comments
Seal Effectiveness (Breaching…)Partly proven as the OWC was found much higher than expected.
Company
(Well Operator):
Company
(License Operator):
Well Name:
Vertical / Deviated:
TD (MD):
TD (TVDss):
Formation at TD:
* Good Match (M)
No Match (W)
Unknown (U)
HYDROCARBON IIP
TRAP GEOMETRY
M
W
YY/ZZ-1
XX
XX
Deviated pilot hole
CHARGE
U
SEAL
W
FLUID
U
RESOURCES
-6769 ft
* Good Match (M)
No Match (W)
Unknown (U)
A few Statistics…
Setting the scene (1/2) 104 segments have been analysed, corresponding to 97 wells: 9 lacking overall Chance of Success (CoS) and/or detailed risking
assessment.
93% Exploration wells – 7% Appraisal wells.
62.5 % of these segments belong to post 20th Round licenses; 28.8 % were drilled on licenses awarded during the Rounds 1st to 7th.
90.4% were dry holes; 8.6% Technical successes; 1% Commercial success
Objectives:
– 38 % above BCU
– 56 % Jurassic
– 2 % Triassic
– 4 % below Zechstein Salt
33 % of the 104 analysed segments have been drilled because of some sort of “DHI”: AVO, amplitude, gas cloud, “impedance indicator”…etc…
Chance of Success
34% of the 98 segments with available pre-drill risking fall within the 21 to 30% CoS (i.e. what you would expect in such mature Basins).
But 40% of these segments have CoS > 31%: this highlights a trend towards over-confidence in the risking assessment.
Number of causes for failure: 3 main reasons = 38.8%; 2 reasons = 48.6%; 1 reason = 12.6%
The main risk was not adequately predicted in 36 %
40 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Objectives Trap types
41 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
• 38 % above BCU
• 56 % Jurassic
• 2 % Triassic
• 4 % below Zechstein Salt
NB: Sum (>104 as several traps are Combined 4 way dip
closure
/ stratigraphic upside)
• 55 % Stratigraphic traps
• 45 % Structural traps
Setting the scene (2/2)
28 %
Purely
structural
Tilted fault
blocks
Downthrown
TerracesStratigraphic
Pinch-out, Channel…
Interpod
Mound,
reef… Injectites
4 way dip
Eocene
PaleoceneUpper Cretaceous
Lower
CretaceousUpper Jurassic
Shallow Marine
Upper
Jurassic
Deep Water
Middle Jurassic
Triassic
RotliegendesDevonian Tertiary
Plays = 23 %
Cretaceous
Plays = 15.4 %
Upper Jurassic
Plays = 52.9 %
Reasons for Failure
Top seal efficiency is well assessed
even when it fails
Source Rock maturity too… except
on Basin margins
Main Reason for Failure (1/4)
Overall Main Reason for Failure
43 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Target Reservoir absent
= 22.7%Reservoir Quality /
Connectivity = 5.4%
Lack of Trap = 17.3%Top
Seal
= 5.4%
Lateral Seal
= 27.3 %
Bottom Seal = 5.4%
Lack of Charge(Migration Shadow….) = 5.4%
Lack of Charge(Mig Pathways) = 6.3%
SR
Maturity
= 2.7%
DHI
(mispicking of Top
Reservoir) ~ 1%
• Seal ~ 38 %
• Reservoir ~ 28 %
• Trap ~ 17 %
• Charge ~ 14 %
Absence of Target Reservoir and Top Seal Failure
are acting effectively as “killing parameters”
Main Reason for Failure (2/4)
Tertiary Plays (Eocene-Palaeocene)
44 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Lack of Trap = 34.6 %
Lateral Seal = 19.2 %Lack of Bottom Seal
= 15.4%
Top Seal = 3.8 %
Target Reservoir absent = 7.7 %
Reservoir Quality = 3.8 %
Migration issue = 7.7 %“DHI” Issue = 7.7 %
Sample size = 24 segments
However, 20 (i.e. 77 %) have been drilled because of some sort of DHI
(AVO, amplitude, gas cloud, “impedance indicator”…etc…)
Another 2 were drilled despite AVO indicated the sands would be wet.
• “When looking at prospects that are solely dependent on AVO it is necessary to examine the pre-
conditioned gathers.
• Match amplitude response to shear log recorded in near by wells.
• Produce and risk the geological model unsupported by AVO. Does the play makes sense without
AVO support?
• AVO responses are modelled outcomes, not unique solutions. They do not eliminate risk.”
Main Reason for Failure (3/4)
Upper Jurassic: Fulmar Fm. in an interpod setting
45 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Limited sample = 7 segments
However all 3 reasons for failure highlight pretty well
what is requested to find such a trap being hydrocarbon
bearing.
Migration effectiveness is the 2nd reason for failure in 5
over 7 cases >> detailed pre-drill Basin modelling
should be carried out
Lateral Seal
= 28.5 %
Lack of Charge
(Migration Pathways)
= 28.5 %
Target Reservoir absent
~ 43 %
Triassic SB Pods
Fulmar segment
Tertiary
Basement
Main Reason for Failure (4/4)
Upper Jurassic Deep water turbidites
(Buzzard, Ettrick, Peterhead…all kind of traps)
46 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Target Reservoir
absent = 29 %
Lateral Seal = 38.7 %
Top Seal
= 12.9 %
Bottom Seal
= 3.2 %
Reservoir Quality = 6.4 %
Lack of Trap = 3.2 %
Lack of Charge
= 3.2 %SR immature
= 3.2 %
Sample size = 27 segments
The search for Buzzard look alike in adjacent Grabens failed;
it was mostly driven by conceptual analogy and on “notional”
prospects.
76.7 % are Stratigraphic traps
Well location
Lower Volgian
Sand Bypass Zone
Selected Interpretation Pitfalls
1) Map cut short
>> does not allow optimal
understanding of the trap
48 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Top Fulmar Depth Map
Partners meeting
24th January 2006
Top Fulmar Depth Map (m TVDss)
TCM 31st March 2006
i.e. decision point
Potential
leakage zone
No way
to understand
the prospect
weak point !!
2) Seismic picking questionable
>> need for other advice (Peer review?)
>> need to improve QC
49 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Pre-drill seismic pickingPost drill interpretation
3) Efficient seal and / or efficient sourcing
pathway ?
50 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
22/13A-1S122/12A-1
22/13A-1S1
22/12A-1
2000 4000 6000 8000 10000 12000 14000 16000
2000 4000 6000 8000 10000 12000 14000 16000
-400
0-3
600
-320
0-2
800
-240
0-2
000
-160
0
-4000-3600
-3200-2800
-2400-2000
-1600
570000 575000 580000 585000 590000
570000 575000 580000 585000 590000
6384
000
6392
000
63840006392000
Zechstein salt
Rotliegend basement
Skagerrak
Fulmar
Prospect
Source Rock =
Kimmeridge Clay Fm
Smith BankSmith Bank
Discovery 1 Discovery 2
WNW ESE
Thickness map of the
Source Rock >
Fulmar prospect outline
Conclusions
Conclusions – 1/2• Underestimation of the physical content of the seismic response:
– Well to seismic ties must be properly done >> impact on choice of the relevant horizon to be picked and / or on reservoir polarity
– DHI type and robustness must be double checked
– When looking at prospects that are solely dependent on AVO:
• seismic data must be properly processed prior to any AVO study
• Produce and risk the geological model unsupported by AVO. Does the play makes sense without AVO support?
– Seismic picking must not cut through valid seismic reflectors. Dual polarity displays should help more rigorous picking particularly in Tertiary or relatively shallow Plays.
– Prognosis of sand presence cannot only rely on “rules of thumb”, particularly when seismic data are poor /fair quality. Re-processing, acquiring new fit for purpose 3D data and rock physics modelling should be undertaken before locating wildcats on poor quality data
• Cognitive bias: Since the “X" discovery was just made, was there some kind of "cognitive bias" which led to a too fast move to drill what was deemed to be an analogue amplitude feature / an analogue stratigraphic trap?
• Drilling quality prospects should prevail against drilling as many wells as possible >> food for thought for the new OGA?
• In some instances, the operator was the sole licensee: being not far enough away to assess the prospect this resulted in over-confidence. >> food for thought for the new OGA?
• Access to information: In some instance the lack of access to a well recently drilled updip of the prospect lead to the drilling of another dry well >> food for thought for the new OGA?
52 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Conclusions – 2/2
“Making accurate and unbiased prospect assessment is challenging. So is measuring assessment performance.”*
“Systematic tracking of Exploration results relative to pre-drill predictions is critical for improving both Assessment Performance and Exploration decisions”.*
“All efforts that can assist in delivering accurate, un-biased and consistent assessment will ultimately enhance company exploration performance.”*
In that respect the Post Well Analysis must be part of the full circle Quality Control process to be applied to the prospect assessment.
53 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
* from Charles Stabell
(GeoKnowledge AS)
Thank you for your attention !Thank you to all those who have been sharing with me on these post well assessments:
and cooperation from:
54 21CXRM Project – MF – CNS Post well analyses_Ch.Mathieu_17th June 2015
Progress on the Palaeozoic Study of the North Sea
Robert GatliffDirector, Energy & Marine Geoscience
British Geological Survey
BGS
21CXRM: The Palaeozoic ProjectRobert Gatliff (Director Energy & Marine Geoscience, British Geological Survey), Alison Monaghan (Project Manager) & the Project Team 17/06/15
Talk Outline
BackgroundProject ParticipationTimetableProgressVision
New, Different, Digital, Live, Collaborative & InclusiveNew exploration ....new finds...new developments.....multidisciplinary....data release..... training
• Recommendations and Actions from the Sir Ian Wood Report• Strategy for Maximising Economic Recovery (MER UK)• Increase successful exploration• Improve access to data – efficient access to well & seismic data• An up-to-date readily accessible digital geology of the UKCS• Better use of the expertise of the BGS
• O&G UK, DECC & NERC/BGS - funded consultation with industry• Palaeozoic Project most requested project
• DECC using contract with BGS to initiate project• Additional funding from industry• Collaborative Project across industry and government
Background
Background: British Geological Survey• 40+ years working with DECC (Licensing rounds, Promote, independent analyses,
unconventionals)• National mapping programme and Regional Reports• Joint-Industry Projects (Rockall, Faroe-Shetland Basin, Southern Permian Basin
Atlas, Edinburgh Anisotropy Project, CCS)• NERC Oil and Gas CDT• Co-location with Heriot Watt University• 516 scientists working with more than 40 universities• 70 PhD students• £48.5 million ~50% baseline from the NERC • More than 150 current private sector customers
• 20 bespoke science laboratories • National Geological Repository
Project Participation: Contracts and funding• £525,000 DECC; £100,000 BGS; £50,000 O&G UK
• 45 contracts sent to committed or interested parties
• 27 signed contracts, 9 more returned in signing/negotiation = sponsorship £555,000 giving overall project budget c. £1.18 million
Alpha PetroleumResources
Chevron Upstream MOL OPERATIONS UK Statoil (U.K.)
Antrim Resources Chrysaor Nexen Petroleum U.K. Talisman SinopecApache North Sea ConocoPhillips Origo Exploration UK TGS-NopecAtlantic Petroleum UK Dana Petroleum Parkmead (E&P) Total E&P UK
Aurora Petroleum Dolphin Geophysical PGS Verus PetroleumBayerngas Europe Dong E&P Premier Oil Plc WesternGeco
Limited/ Schlumberger
BG Group Dyas UK Dea UK SNSBP E.ON E&P UK SenergyCairn Energy GDF Suez E&P UK ShellCentrica Energy Maersk Oil North Sea UK Spectrum
Palaeozoic Project – Key Objectives•Searching deeper and wider than the conventional hydrocarbon horizons
•Develop a strong, consistent regional data-set to provide a platform for morespecific oil & gas exploration studies
•Develop new scientific understanding
• that down-risks some of the critical play elements
• that stimulates new ideas for plays and prospectivity
•Provoking
• new data acquisition
• additional analysis and interpretation programmes
•Leading to
• licence activity
• significant exploration well activity
• economic commercial success rates
Timetable
2014-15
2015-16
2015-16
Phase 1: December 2014- March 2015 (DECC funding): Initial projectsPlanning for main projectIP: data access issues
Phase 2: February 2015 – March 2016Main collaborative project with Sponsors
Delivery to Sponsors 2016Open 2017
Timetable continued
Project PreparationOrganising ContractsProject Board and Technical Steering CommitteeContributions from operators
Data, interpretationsContributions from Spec companies
Access to dataPublication of results
Contributions from Service companies/ specialist servicesExpert servicesSoftware
CDA data supplyAcademia
NERC innovation fundingNERC oil & gas CDT
?Contributions from adjacent GeologicalSurveys
TNO/EBN; GEUS; NGU/NPD; GSI/PAD
Data collation Project is developing a consistent regional (digital) dataset to provide a platform for more specific oil & gas exploration studiese.g. stratigraphic tops, biostratigraphy, organic geochemistry, vitrinitereflectance. Focussed on the Carboniferous and Devonian
The underlying digital dataset is a key project deliverable
Strength of the project is to have access to DECC-CDA, BGS, Sponsors etcdatasets
Example of well data locations (core and cuttings) for data collated on source rock organic geochemistry
Project progress – current ongoing work
Central North Sea-Mid North Sea High
• Seismic and well interpretation
• Gravity and density study
• Revision pre-Permian subcrop map
• Well log analysis, source and reservoir rocks
• Source rock geochemistry
• Maturity, burial/uplift, migration and charge modelling
• Regional petroleum systems and tectono-stratigraphic synthesis -between Millennium Atlas and block scale
Orcadian Basin and Irish Sea
Well and seismic data collation and interpretation
Ongoing work – seismic interpretation and agreements
Seismic datasets used Central North Sea-Mid North Sea High area. Wells penetrating Carboniferous or older strata shown.
• Discussions and agreements with seismic companies
• Permissions andconfidentialityagreements for seismicdata - making progress
• Agreement from seismiccontractors for 5 kmresolution grids as ProjectResults
Gravity features in NW
part of study area
ENE (Iapetus) trend dominates
Gravity study aims to delineate
Devono-Carboniferous basins in
areas of variable seismic data
coverage
Carboniferous
half-graben
Major pre-Zechstein fault
Gravity gradient zone
parallel to the Permo-
Carboniferous dyke trend
Oldhamstocks:
basin or granite?
Tweed Basin
Northumberland
Trough
NFF
Stainmore Trough
Intra-Lower Palaeozoic density
variations in the Southern
Uplands (2.69-2.75 g/cc)
G
G
G
G
PFF-trend?
GG
G
G
SUF offset?
Intrusion?
G = Granite NFF = Ninety Fathom Fault PFF = Pressen-Flodden-Ford SUF = Southern Upland Fault
Ongoing work – gravity and density study
Numerous Devonian, Carboniferous basins, highs and platforms in this area
Granites play a major role in basin configuration
Ongoing work – structure, development of Palaeozoic basins
Part of the BGS 1:1 500 000 Tectonic Map of Britain, Ireland and adjacent areas. Pharaoh et al 1996 ©BGS/NERC
Strong control by basement and inherited Caledonidestructures (e.g. Iapetus, Tornquisttrends)
Structural trends and styles vary across the area
Onshore to offshore structures mapped in more detail
Existing maps such as the one below show a relatively ‘blank’ area Seismic, well and gravity interpretation are proving :
Ongoing work – well correlations, palaeogeography
Taking a fresh, evidence-based approach. Key aspects:• Biostratigraphy collated from CDA, Sponsors, BGS core store etcBiostratigraphic data donations/gathering has made a real difference• Integration with seismic on a regional scaleAppreciation of regional basin configuration and ties, rather than block scale• Application of modern stratigraphy and insights onshore-offshore• QC by project Sponsors
•Moving forward on risks, outcomes, focussing studies – different challenges in sub-areas of CNS
•Integrated studies now ongoing e.g. source rock extent, maturity, geochemcharacterisation etc
Ongoing synthesis
Using gravity & seismic data to delineate basins. Source rock
Applying knowledge of proven play to north
Northerly limit of source. Maturity, migration and charge
Source rock –presence, maturity, charge.
Additional Devono-Carb prospectivity?
Timing of maturity, charge vs trap formation. Data quality
Geologically based sub-areas within the CNS with wells penetrating Carboniferous and/or Devonian strata shown, with some key risks/outcomes shown
Using onshore data/ knowledge
Technical Steering Committee (TSC) meetings andfield workshop
TSC meetings wellattended by Sponsors
Field workshop toScremerston Fm -Yoredale Fmsection May 2015
Photo credit: Sarah Hannis
Encouraging collaboration
Technical Steering Committee
SponsorsBGS teamDECC/OGAO&G UK
PresentationsWorkshopsCompany to company discussionsEncouraging feedback, input and QC
One to one meetings BGS-Sponsors
Data donations from Sponsors and others
Delivery of project with new seismic data March 2016: in line with new licensing round
Vision
• First of several studies• Leading to a free-to-use 3D model of UK geology• Regular updates• Encourage more release of data – well logs and seismic data on
the web• Crowd sourcing and wiki style innovations• More sharing and collaboration• Improve UK access to rival that of Norway or the Netherlands• Make the UK an easier place to explore
Exploration - The 21st Century AgendaPanel Session
Chaired By
Oonagh WerngrenOperations Director
Oil & Gas UK