Any oil and gas deal, whether it is acquisition, divestment, greenfield, brownfield, or out of left field, usually involves a data room, where rich seams of proprietary information can be mined for a limited period. However, this physical data room, as opposed to a virtual version where data are downloadable, is the bane of due diligence.
Some may recall caffeine-fueled assignments to paw through boxes brimming with confidential documents that allegedly held the financial secrets of a potential acquisition. The process is expensive; can be a logistical nightmare of travel arrangements, visas, and inoculations; and is always stressful because of time pressure. Data rooms are migraine inducing.
The priority of the petrophysicist on a data-room team is to access digital data for all wells—for example, logs, wireline formation pressures, and deviation surveys for depth conversion. Often neglected are the log headers themselves, which provide data on tool setup, bottomhole temperature, mud properties, and the casing program and present the logging engineer’s comments. Gathering data is less straightforward if they are in an unfamiliar language or are vintage (noncombinable tools with unfocused measurements requiring more runs). These factors require translation, tool response modeling, and increased depth matching, adding time, cost, and potential for error.
Petrophysicists audit the hydrocarbons in place by reviewing previous studies to confirm the all-important trinity of porosity, water saturation, and net pay claimed by the seller. The appropriateness of the saturation-height function in the geomodel is checked for the assumed hydrocarbon and rock type, or merely to ascertain that one was used at all. Proposed fluid contacts must be verified, no mean feat when faced with structure maps showing only oil-down-to (ODT) and water-up-to (WUT) depths, with the contact possibly being anywhere in between. Some companies assume that the fluid contact is halfway between ODT and WUT, which is a completely arbitrary approach.
In these digital days, almost everything needed to carry out petrophysical due diligence can be downloaded for off-site analysis. However, there are places where it is illegal to take data out of the country, so physical-data-room attendance is compulsory. In these instances, as in the past, the petrophysicist’s briefcase might hold color pencils, a ruler, tracing paper, chart books, and maybe a planimeter, a strange device for measuring areas within mapped contours. Yet painful memories suggest that the most important piece of equipment one should take along to a data room is probably a bottle of aspirin.
This Month's Technical Papers
Recommended Additional Reading
SPE 166152 Diagnosing Pressure-Dependent Permeability in Long-Term Shale Gas Pressure and Production Transient Analysis by Fabián Vera, Texas A&M University, et al.
SPE 167300 A Holistic Approach to the Screening Stage of Shale-Gas Resources by Mike Navarette, Halliburton, et al.
SPE 167311 Understanding Reservoir-Quality Indicators in a Marginal Marine Environment: Integrating Advanced Wireline Measurements in the Niger Delta by Chiara Cavalleri, Schlumberger, et al.
SPE 167811 Identification of Reservoir Analogs in the Presence of Uncertainty by M.L. Perez-Valiente, Repsol, et al.
|Bob Harrison, SPE, is a consultant petroleum engineer. He worked for more than 20 years with British Gas and Enterprise Oil. Harrison’s major interest is in rapid, accurate screening of oil and gas assets. He holds a BS degree in electrical engineering from the University of Manchester; an MS degree in petroleum engineering from Imperial College, London; and an MBA degree from Cranfield University. Harrison has edited textbooks on formation evaluation and has published more than 20 technical papers. He serves on the JPT Editorial Committee and is a Technical Editor for SPE Reservoir Evaluation & Engineering, for which he also serves as Review Chairperson.|
Bob Harrison, SPE, Consultant Petroleum Engineer
01 August 2014
Life After 5: How Tight-Oil Wells Grow Old
Production data from the oldest horizontal wells in the three largest oil plays in the US show that annual decline rates remain relatively high for a long period of time. This challenges assumptions held about production after 5 years and directly affects reserve and ultimate recovery estimates.
EIA: US Crude & Renewables Will Coexist For Decades To Come
While renewable energy sources are poised to see major growth, possibly displacing natural gas as the top source of electricity in the US, hydrocarbon production will remain above or near current historical highs until at least 2050.
ExxonMobil: Another Guyana Discovery, Ups Recoverable Reserves, Adding a Drillship
Guyana continues to strengthen its reputation as the world’s fastest growing offshore exploration hotspot.
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