In the depths of the oil bust of 1998, a small group of managers, scientists, and venture capitalists recognized the signs of an impending energy shortage. They decided to address the challenges of finding more hydrocarbons with a revolutionary new approach, applying pattern recognition technology developed by Chroma's scientists against the unique requirements of the E&P industry. The irony of the last two decades was, the more successful the E&P industry at expanding production and lowering costs, the more certain an energy shortage would follow.
The law of depletion and price elasticity of supply and demand has finally caught up with the global economy, and the second energy shortage is here. This time, however, the last decade of cheap energy has increased global demand from 55 million barrels per day, in 1975, to more than 80 million per day, and has led to consolidation with leading E&P companies reducing investment in exploration and new technology. Moreover, success in finding and producing hydrocarbons over the last 25 years has depleted more than 500 billion barrels of oil and natural gas that would otherwise be available for discovery and production today. This is equal to all the hydrocarbons produced from the beginning of the oil industry to the date of the first energy crisis.
To address this shortage, we realized a radical new approach to find and develop oil was required, as the oil easy to find using existing technology has largely been discovered and depleted. We focused on a system that would enable an interpreter to see oil invisible today since the anomalies that are the basis of a play concept are lost in noise or effectively hidden by the overwhelming amount of data generated in a standard seismic survey. In this way, interpreters could find wholly new discoveries in areas otherwise considered barren.
The Company created a technology based on the principles underlying how nature, with a single strand of DNA, can encode a complete organism from a simple one-cell bacteria to a complex human being. As such, we named our technology "ImageGenetics" and filed patents worldwide covering all its uses, from seismic analysis to face and speech recognition and tumor identification in medical images.
The Company first demonstrated its biologically inspired approach by recognizing and isolating an apple in a bowl of fruit, a challenge that has eluded the top research universities and leading technology companies for the last three decades of intensive research.
Following the initial demonstration, we retained a team of oil industry experts and visualization software engineers. Working with PGS, the leader in marine seismic image acquisition, and other key E&P companies, we then adapted our core technology to the needs of the oil industry.
Wallace Pratt is often credited with coining the phrase "oil is found in the minds of men". He was, of course, entirely correct. The process of exploring or mining a dataset such as this begins with the geologist first creating a mental image or model of what the prospect should look like geologically. He then imagines how that geology will express itself in the seismic data. With this process in mind, the next step involves using ChromaVision to browse the pattern database for patterns that best illuminate the target geology in the data. Fine tuning of the imagery leads to a play template that creates the most meaningful isolation and visualization of the target. ChromaVision can then be set to scan the entire dataset to illuminate all the regions of the data that match the template to some specified tolerance thereby creating a set of leads.
This scanning or datamining is incredibly efficient, turning a job that used to take weeks while being fraught with pitfalls, into one that is relatively objective and takes a matter of hours. Different play concepts will result in different templates and different sets of leads. The extracted leads may then be put through the process of qualification to determine if they are drillable prospects. The analysis includes a detailed study of the lithologic structure of the lead, volumetrics and economics using whatever analog data are available from nearby fields.
Peter M. Duncan, Executive Vice President, Consulting, PhD, University of Toronto. Peter began his career as an exploration geophysicist with Shell Canada before joining Digicon Geophysical, first in Calgary then in Houston. In 1987, he helped Digicon found ExploiTech Inc, an exploration and production consultancy. He was named President of ExploiTech when it became a subsidiary of Landmark Graphics in 1989. In 1993, he was one of three founders of 3DX Technologies Inc., an independent oil and gas exploration company where he served as Vice President and Chief Geophysicist until March 1999. Most recently, he served as Vice President of Technical Services for Continuum Resources International.
Paul Huff, Executive Vice President, Operations, BS, Colorado School of Mines, Paul has had extensive experience in the oil & gas business, having worked for PGS, the leading seismic acquisition and processing company, and Shell Oil Company. At PGS, Paul was Senior Vice President in charge of worldwide data processing operations and was responsible for the introduction and rollout of the first broadly implemented on-board processing in the oil industry. Paul manages our processing operations in Houston.
Robert Wentland, Executive Vice President, Technology Development, MS, Kansas University, Bob began his career by spending 16 years working for Shell Oil. His experience at Shell covered the full breadth of Geophysics including both technical and leadership positions in software development, seismic data acquisition, processing, and interpretation. The interpretation work included exploration new ventures and drilling operations in major oil provinces both domestically and worldwide. After leaving Shell, he joined Vital Images, a medical imaging company, to manage the development of VoxelGeo, widely considered the most advanced 3-D seismic visualization software in the oil industry. Bob is responsible for adapting Chroma's pattern recognition technology to solving geoscience problems and manages the Chroma Energy software development office in Boulder, Colorado.
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