The lack of exploration drilling and what that means.

If we are not exploring, with the required exploratory drilling to prove the commerciality of the find, at some point the shareholders will ask why their asset (proven reserves) have been allowed to dwindle.

Does anyone want to hazard a guess as to when exploration drilling will begin, in earnest, again?

The continuing large gap between technical and commercial success rates in very high- risk wells points to a persistent overestimation of volumes pre-drill, with only 15% of discoveries over the last five years in the very high-risk category being deemed commercial. Few companies with significant levels of production have been able to replace produced reserves by exploration alone.

https://www.westwoodenergy.com/news/westwood-insight/the-state-of-exploration-2019/

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(edited)

2 hours ago, Douglas Buckland said:

 at some point the shareholders will ask why their asset (proven reserves) have been allowed to dwindle.

Therein is your problem and many shareholders problems.  It is NOT "their" asset.  It is their  depreciating asset.  They wrongly believe production and profits are never ending without risk in non renewable natural resources.  Works in Ag(somewhat), fishing(somewhat), and forestry.  Everything else?  No. 

As for exploratory?  Africa for sure.  Everywhere else? Oil price is too danged low as the regions to be explored are ocean based for the most part.  These will be explored only when geopolitical tensions get really high as now NATIONS will be involved instead of investors only looking for profit who cannot plop down several Billion in ocean platforms. More exploratory in Brazil/Argentina/Cyprus and... arctic?  Maybe Russia.  Do not see the US/Canada doing any.  Would not be surprised if several of these platforms get sold to China to explore the south China sea which they have grabbed.  Phillipines/Vietnam can't do anything and the USA won't other than posturing as frankly the USA and its populace are tired of defending the world($$$ down the drain) and being reviled for it from foe and allies alike.  Frankly a unipolar geopolitical world is not a good place as complete power corrupts completely.   

Edited by Wastral
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It is not that exploration is not being done. It is just that oil reserves are depleting fast and new reserves are not available as most of it has been already found and nothing more can be found.

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4 hours ago, Bhimsen Pachawry said:

It is not that exploration is not being done. It is just that oil reserves are depleting fast and new reserves are not available as most of it has been already found and nothing more can be found.

That is just utter nonsense, exploration is done totally different today than yesteryear. Todays seismic 3D mapping takes away the need to physically drill to prove a reserve. Offshore is about the last areas of drilling and guessing. This is how they know where to drill in the Permian. They don't plop rigs on pads and guess where there might be oil. A bit of research, and ya can find better explained answers than I can give. My eloquence in jargon isn't the greatest. 🙂

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1 hour ago, Old-Ruffneck said:

That is just utter nonsense, exploration is done totally different today than yesteryear. Todays seismic 3D mapping takes away the need to physically drill to prove a reserve. Offshore is about the last areas of drilling and guessing. This is how they know where to drill in the Permian. They don't plop rigs on pads and guess where there might be oil. A bit of research, and ya can find better explained answers than I can give. My eloquence in jargon isn't the greatest. 🙂

Uh, 3d seismic requires a bore hole....  In fact, requires MULTIPLE bore holes...  The more bore holes, the better the mapping and one reason why older fields are increasing in production and being re-drilled.   So, while technically you are correct that you do not create a bore hole to determine a reserve, in reality you drill a bore hole to determine a reserve still.... a multitude of bore holes.

Sure, you can get ~~~ results from the surface.... but....

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40 minutes ago, Wastral said:

Uh, 3d seismic requires a bore hole....  In fact, requires MULTIPLE bore holes...  The more bore holes, the better the mapping and one reason why older fields are increasing in production and being re-drilled.   So, while technically you are correct that you do not create a bore hole to determine a reserve, in reality you drill a bore hole to determine a reserve still.... a multitude of bore holes.

Sure, you can get ~~~ results from the surface.... but....

The Seismic crew I saw when I was down there in February was surface shaking. Dawson I think was name on side of trucks. Could be 2D but all that ground has been shook over the years. West of 79735 40 miles or so.

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(edited)

1 hour ago, Old-Ruffneck said:

The Seismic crew I saw when I was down there in February was surface shaking. Dawson I think was name on side of trucks. Could be 2D but all that ground has been shook over the years. West of 79735 40 miles or so.

3d seismic requires surface shaking with phone in the bore.  Family members in on that one along with the INS for lateral boring heads. EDIT: They are literally taking pictures AS they bore the hole as the head itself sends out shockwaves which help show what is where. 

Edited by Wastral

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5 hours ago, Old-Ruffneck said:

That is just utter nonsense, exploration is done totally different today than yesteryear. Todays seismic 3D mapping takes away the need to physically drill to prove a reserve. Offshore is about the last areas of drilling and guessing. This is how they know where to drill in the Permian. They don't plop rigs on pads and guess where there might be oil. A bit of research, and ya can find better explained answers than I can give. My eloquence in jargon isn't the greatest. 🙂

True enough, but the only way to actually 'prove a reserve' is to drill it. 3D seismic cannot confirm a find.

As with many technologies, seismic can to 'adjusted' to prove what you want by simply changing the input sonic velocity values through the various rock types. 

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7 hours ago, Wastral said:

Uh, 3d seismic requires a bore hole....  In fact, requires MULTIPLE bore holes...  The more bore holes, the better the mapping and one reason why older fields are increasing in production and being re-drilled.   So, while technically you are correct that you do not create a bore hole to determine a reserve, in reality you drill a bore hole to determine a reserve still.... a multitude of bore holes.

Sure, you can get ~~~ results from the surface.... but....

Are we confusing 'bore holes' with actual wells?

I am fairly certail that 3D seismic offshore is obtained with absolutely no bore holes. The same technology is used onshore although you may drill a hole to bury the shots.

Regardless of the results of the seismic, you must drill an exploration and an appraisal well to 'prove' if the find is commercially viable.

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6 hours ago, Douglas Buckland said:

Are we confusing 'bore holes' with actual wells?

I am fairly certail that 3D seismic offshore is obtained with absolutely no bore holes. The same technology is used onshore although you may drill a hole to bury the shots.

Regardless of the results of the seismic, you must drill an exploration and an appraisal well to 'prove' if the find is commercially viable.

Lets start with the fact that the words 3d seismic mean different things and often used interchangeably?  In fact some are using 4d to differentiate and stop the confusion.  not that there are actually 4 dimensions... The only true difference is technique used to obtain a much higher resolution and confidence ratio.  

Now I could be completely out in left field sniffing daisy's here as I am not involved with offshore enough to look anything but foolish, but I am not aware of offshore platforms using long distance horizontal multi lateral drilling + FRACK to find small pockets of oil as is done onshore.  Rather they are after the large conventional reservoirs of oil.  Finding these reservoirs requires a much lower resolution. 

So, I believe we are talking the same thing as both use gobs of computer power to calculate the reflections, just that the refined results are quite different and the obtaining of the "4th" dimension requires a phone going down the bore hole with the INS(Internal navigation system) and drill head.  It used to be done separately but is now attached to the borehead.

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Drilling long reach horizontal laterals is performed offshore, for exactly the same reasons as it is done onshore....simply FYI.

The terminology is getting somewhat confusing. When you refer to the 'borehead' do you actually mean the drill bit and bottomhole assembly?

Strictly speaking, when an outfit is involved is searching for 'new' oil, onshore or offshore, there are no 'boreholes' of any description available. That being the case, from what you have described, it must be 3D seismic. 4D must only be relevant for newly discovered or mature fields.

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