Residuum Energy, Inc. specializes in locating and mapping subtle reservoir features. The presence of subtle permeability barriers and faults complicates development of a reservoir. If undetected, isolated reservoir compartments, or areas of enhanced permeability could adversely impact an asset development plan or enhanced recovery project. Compartment isolation commonly arises from the existence of small faults and stratigraphic pinch outs. Seismology, the current tool of choice, has proven to be relatively ineffective in delineating these subtle features. Enhanced permeability will occur along small faults and the associated fracture zone. Both of these situations can result in poor well location, misdirected horizontal wells, early breakthrough of injected fluids, and sub-optimal flood pattern conformance. Ultimately, lost reserves and poor economic performance will result.
The recent convergence of theory and technology shows that both of these situations arise from the effects of small recurrent movements of faults originating well below the reservoir interval. The result is a complex of high angle faults each having less than 15m of vertical displacement. Episodic movement also provides the mechanism for localizing reservoir facies.
In terms of sequence stratigraphy, subtle structures active during deposition affect accommodation space and so control the location of reservoir facies. We have detected the presence of subtle structural complexes in many of the continental basins we have studied. We have also shown that the patterns of highs and lows have unfailingly predicted the location of so-called stratigraphic traps.
Ten years in development and testing, Residuum Energy, Inc. has proprietary software and procedures that can detect and map subtle, sub-seismic reservoir characteristics. Utilizing new, powerful data cleaning and data mining methods, detection is achieved through cost effective analysis of existing databases. High resolution arises from simultaneous analysis in both in the spatial and frequency domains of the complete data array. If available, high quality magnetic data can be used to project results into undrilled areas.
Our analysis in several intra-cratonic basins has detected the presence of a set of common, subtle, and mostly sub-seismic, structural features that either form traps or provide substrates upon which stratigraphic traps are constructed. We can extrapolate our result to other basins because, based on a review of the literature and from first principles, we can understand the reasons for their expected occurrence.
Residuum Energy, Inc., through its proprietary procedures, is able to detect and map low amplitude structural features in such basins. We have developed procedures to rapidly determine the timing of movements over all structures and simultaneously over all horizons. Now we are able to "see" the resident low amplitude structures through the application of our proprietary technologies.
This is accomplished by exploiting the databases that now exist for such basins. Well- based information (stratigraphic, engineering, and production data) can be combined with other sources of commonly available information (such as gravity, aero magnetic, and seismic) to yield a database with rich potential for understanding future hydrocarbon potential. The well-based data has much higher inherent resolution when compared with seismic data.
The key is a mathematical "set of maps" (a 3D array) that must be internally consistent so that the structure contour map of one interval is consistent with information on all other tops higher or lower in the section.
Assessment has six basic steps:
Any information related to the drilling and completion of an oil well, such as: tops of formations encountered, reservoir intervals, well log data, status of the well and production history must be assembled into a single or a series of linked databases. Commonly this information is present in electronic form in many places and in many formats. Some of the information may be solely in the form of paper copies. A first task then is to assemble data into one or more formats that are ready for analysis. This may include scanning of hard copy data or even manual data entry. This "data exploration" phase will also allow us to better delineate the potential problems.
We have pioneered the quantitative, systematic analysis of spatial information aimed at, among other things, producing superior structural frameworks at all scales. This can only be done by simultaneous analysis of the ensemble of formation tops and reservoir intervals. Ambiguities present at one or another horizon can be resolved by comparing structural behavior across a large number of stratigraphic horizons.
Residuum Energy, Inc. has automated, computer-driven procedures to quickly and efficiently detect inconsistencies in a large 3D matrix that may contain thousands of wells and hundreds of formation tops, reservoir intervals, and associated data. Once detected, these errors can be investigated by review of the data source or our software will provide a "best fit" solution.
The aim of the mapping specialist is, of course, to produce a map that most resembles the actual configuration. However, a wide variety of contour maps can be constructed that honor the data. Unfortunately there is not enough information at any single stratigraphic level to distinguish which map of the many possible solutions best mirrors reality. The task of the spatial analyst is to objectively reduce the number of possibilities into a small enough number that data external to the analysis, such as geophysical, production, etc., can be used to choose the version closest to reality.
The technique called "Structural Congruency Analysis" has been developed and refined by Residuum Energy, Inc. With this procedure, a simultaneous three-dimensional structural analysis of the entire geologic section allows faults to be distinguished from folds, stratigraphic or tectonic bundles can be defined, and the existence and the configuration of subtle structures of low relief can be determined. In addition undrilled prospective areas can be highlighted.
Another procedure "Structural Evolution Analysis" performs a different three- dimensional structural analysis by defining the fundamental structural states of an area and determining the rate of evolution from one state to another through time. This procedure is formally a "self training classifier" in that it independently determines the number of fundamental structural states, defines each state as a map, and determines the structural influence.
The product of this analysis is a series of structure contour maps, each representing a different fundamental basin configuration. Any stratigraphic top can be considered to be a mixture or blend of one or more of such maps. The procedure provides the proportions or, the "influence", of each fundamental map at each stratigraphic top, thereby relating in an objective manner the change in structural configuration through time.
Finally, data from other disciplines is analysed using a variety of data mining procedures and this data is melded onto the stratigraphic/structural synthesis. These data include cumulative production of hydrocarbons and water, fluid and gas analyses, pressure information as well as qualitative information such as completion dates, drilling technology, well logs, electrofacies from logs, etc. These data are analyzed with respect to each other as well as with respect to the mapped structures.
Residuum Energy, Inc. welcomes clients interested in a business strategy targeting growth through the effective application of "intelligence" derived from the diligent analysis of existing data. If you are interested in pursuing this strategy please contact us to arrange a full technical presentation at your convenience.
The ratio between producing and dry holes near an intersection is biased because one discovery well leads to additional drilling nearby. If we assume that the simple ratio of dry holes to total wells drilled were an accurate reflection of the probability of a dry hole in that structural setting then there would be only an 11% chance of drilling a dry hole, a POS of 89%. Thinning the data by using only producing wells that are about a mile apart the POS declines to 82%. A more detailed study using field outlines and accounting for regulatory well spacing requirements should be undertaken to rigorously determine the probability of success for each horizon of interest.
For the purpose of this demonstration a POS of 33% was used for the Madison, Duperow, and Red River formations. For the Deep Gas prospects a POS of 17% will be used.
Lognormal probability distributions of single well recoveries were built for each of the four study horizons, Madison, Duperow, Red River, and Deep Gas. (Figures 1-4) The data used for these distributions are the result of a sever year drilling program in North Dakota from 1991 through 1997. Single well expected reserves were estimated by taking the mean of these distributions. They are shown on each figure and listed for convenience in Table 1, Column H and I. Initial production rates were also estimated from the same database and for economic sensitivities were determined to be generally proportional to the size of the reserves being drained. Expected rates are also listed in Table 1, Column J and K.
Lognormal probability distributions of single well recoveries were built for each of the four study horizons, Madison, Duperow, Red River, and Deep Gas. (Figures 1-4) The data used for these distributions are the result of a sever year drilling program in North Dakota from 1991 through 1997. Single well expected reserves were estimated by taking the mean of these distributions. They are shown on each figure and listed for convenience in Table 1, Column H and I. Initial production rates were also estimated from the same database and for economic sensitivities were determined to be generally proportional to the size of the reserves being drained. Expected rates are also listed in Table 1, Column J and K.
Costs for land, drilling, facilities, and pipelines were based on the most recent experience in North Dakota. Mineral leases for land in North Dakota, where not held by production, are generally available by means of a four year primary term lease at a cost of $20 to $ 40 per acre. Generally, leases from multiple landowners are required to secure enough acreage for a well spacing unit although some sections, 640 acres, are available as single leases. Land costs of $40 per acre for the appropriate spacing unit were used for this evaluation. These costs along with drilling, facility, pipeline, and abandon/reclaim are listed in Table 1. The timing of these investments is shown to the left.
Using the costs outlined above an economic sensitivity analysis was done. By varying the reserves a graph of Net Present Value discounted at 10% was prepared for two oil price scenarios, $15 and $18 per BBL. Gas price was held constant at $2 per MCF. Posted price for oil in North Dakota is currently $2.00 below West Texas Intermediate with no penalty for sour crude. Gas is currently selling at $3.75/MCF with the price set by sales at the Chicago City Gate. No price escalation or cost inflation was used in this evaluation. The result of the analysis is shown in Figures 6-9. Included in this analysis is the benefit of a 15 month exemption from the North Dakota Oil Extraction Tax for new wells completed after April 27, 1987 as provided in the state tax code.
In order to demonstrate the economic viability of an exploration program in the Williston Basin and take into account individual horizon probability of success with multiple target wells an economic model of a six prospect exploration program was built. The program involves drilling six deep wells over a two year period with production starting in years two and three. The program and result is outlined in Table 2. Total wells, investment, reserves, Rate of Return, and Net Present Value for each prospect and the total program are shown in Tables 3 and 4 for $15 and $18 per BBL respectively.
Analysis of both single well and program drilling economics indicate robust Rates of Return and Net Present Value. The modeled program yields a finding and development cost of $3.15 per BOE. Although ratios such as cost per bbl can be extremely misleading, when viewed together with the favorable Rate of Return and Investment Efficiency of these prospects it indicates a strong justification for undertaking a more comprehensive geologic and engineering analysis of the area.
Neal J. Broussard, Jr. MS, PE, President, has 20 years of petroleum industry experience in drilling and completion strategy, exploration and development planning, asset management, enhanced recovery and economic evaluation. He is an experienced user of slant and horizontal drilling strategies. He is a strong advocate of using geological data in engineering analysis.
Robert Ehrlich, Ph.D., Chief Scientist, is a noted authority in mathematical geology, reservoir heterogeneity, multiphase flow, pattern recognition, image and classification analysis. He comes to Residuum after a productive 30-year career in academia. He has published over 130 papers in refereed journals. He was editor of the journal Mathematical Geology for six years. He has consulted with most major oil companies and many smaller companies.
Michael D. Dropkin, Vice President, specializes in quantitative map analysis and been a key person in development of new data mining algorithms. He has a strong background in structural geology and has worked on projects on most continents. Dropkin is responsible for the quality and on-time completion of projects.
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