[joeltrout]

$this->bbcode_second_pass_quote('KillTheHumans', '
')
$this->bbcode_second_pass_quote('joeltrout', '
')
I started a thread, Do You Work in the Oil Industry. Very few people actually work in the industry.

[joeltrout]

$this->bbcode_second_pass_quote('HEADER_RACK', '
') We found more oil in the 60's than we ever have and that was before 3d surveying.

[AgentR]

Very few people are willing to both post enough identifying information about themselves to honestly qualify themselves as an expert, while simultaneously continuing casual conversations on PO.com...

I can only see such a pair up of circumstances in the case of someone who works in the industry, but is primarily motivated by the sale of books that they have some interest in.

In the end, its up to the reader to discern bunk and speculation from hard information, as it always is on the internet.

nb... anyone that lives in oil producing areas knows that companies are falling all over themselves trying to produce every last little dribble of oil that they can at these prices. These are guys that have gone through hideous falls in price; its likely they can't make themselves believe that the only future is up.

[threadbear]

Aaron, Do a quick cost benefit analysis and determine for yourself if many oil producers really have that much to gain by exploring, if they're already making big bucks. If the price drops, for whatever reason, they may not recoup much of a yield on their money. If the price remains stable or goes up, they are sure to run into demand destruction and some real competition from alternatives.

[threadbear]

Joel Trout, The problem with any kind of "expert" opinion, is the subject of reserve capacity in many of the Opec nations isn't transparent. The doomers on this forum, could be wildly optimistic for all anyone knows.

[TheDude]

Joel - I noticed/wondered about rdsnt's reply too. I'm guessing that you'd agree with what Deffeyes said in Hubbert's Peak, that you really need to drill a test hole to really know what's down there, and that statistically speaking, after a few dry holes, it's best to give up, given how much money you've spent. Probably this goes without saying but thought I'd bring it up anyway, if only to make another lame appeal to authority.

We used to get the occasional post from WebHubbleTelescope, who's a hardcore stats guy. You might want to dig up some of his posts if you want to really give the noggin a workout. Used to be more industry types here as well; hope they make a comeback.

I have read the Prize - Yergin is a helluva historian if nothing else! I've noticed the "Nontechnical" books from Pennwell before, but balked at the price, which hovers around $50, so hafta be content with Deffeyes and what I can dig up on the web, being an armchair geologist. There are some intriguing scans of old petroleum geology titles on Google Books, too.

[TheDude]

The USGS has the National Oil and Gas Assessment (NOGA) too, if you want to mull over what's been covered.

[joeltrout]

$this->bbcode_second_pass_quote('TheDude', 'J')oel - I noticed/wondered about rdsnt's reply too. I'm guessing that you'd agree with what Deffeyes said in Hubbert's Peak, that you really need to drill a test hole to really know what's down there, and that statistically speaking, after a few dry holes, it's best to give up, given how much money you've spent. Probably this goes without saying but thought I'd bring it up anyway, if only to make another lame appeal to authority.

[BigTex]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('TheDude', 'J')oel - I noticed/wondered about rdsnt's reply too. I'm guessing that you'd agree with what Deffeyes said in Hubbert's Peak, that you really need to drill a test hole to really know what's down there, and that statistically speaking, after a few dry holes, it's best to give up, given how much money you've spent. Probably this goes without saying but thought I'd bring it up anyway, if only to make another lame appeal to authority.

[joeltrout]

$this->bbcode_second_pass_quote('BigTex', '
')
I would imagine this same kind of thing is going on in west Texas.

[BigTex]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('BigTex', '
')
I would imagine this same kind of thing is going on in west Texas.

[rockdoc123]

OK I'll weigh in here. Historically the first large discoveries were all made in a time where there was no seismic or the technology was such that all we got was 100 fold data. Such was the case at Spindletop, arguably the first major discovery in the US and also Ghawar which was drilled on top of a surface exposure of an anticline. Of course you have to drill to find the oil, there is no "remote viewing" of any category that can tell us indirectly if there is oil in a particular structure or not. Seismic capabilites have gone through a number of major advancements. In the seventies we saw 2D seismic with much greater fold, up to 24 fold which by the mid eighties was getting as high as 64 fold and in some cases 128 fold. The fold improves the quality of the seismic image, more subtle traps require higher fold. Another improvement was 3D seismic which we first saw used to any extent in the eighties with great improvements in the late eighties and nineties mainly in the area of acquisition (rather than dynamite, vibroseis trucks were used). There has also been a considerable improvement in signal acqusition (telemetry systems became de riguer in the nineties) and signal processing (prestacked time and depth migrations improve the seismic image in deformed terranes considerably; seismic inversion and processing for amplitudes or acoustic impedance can be direct indicators of porosity and sometime hydrocarbon).
The problem with 3D is it is immensely expensive. Dependant on what detail of data you wish to acquire the cost can run anywhere from $20,000 to $50,000 /km2. So a 200 km2 survery could cost as much as $10 MM. Now if the size of the prize is big then it makes 3D well worthwhile. But if you don't even know there is a subsurface trap present spending $10MM up front becomes an incrediably risky venture. That is why up until not that long ago 3D was mainly used after a discovery had been made as an appraisal tool. More recently 3D is used as an exploratory tool but almost never before a reasonable amount of 2D is acquired, enough to identify potential traps and hence limit the amount of 3D needed.
3D is a great tool but it isn't a panacea. It helps us identify potential traps but it does not (usually) guaranty us that there is porous reservoir in the trap nor that there is source rock present nor that oil generated has moved from the source rock to the reservoir in the trap. As a consequence there are a number of other tools which are used including surface geochemical sampling (the goretex folks are big in this), rockeval analysis of potential source rocks, basin modeling, fluid migration modeling, aeromag (yes we do use it sometimes in conjunction with other information) aero or surface gravity, EM (electromagnetic) studies, radar, remote sensing for analysis of plant types (often indicates subsurface seeps of hydrocarbons) and the list goes on. Basically we use what makes the most sense from a cost/information standpoint. In some cases where drilling costs are relatively small in comparison to the cost of seismic the decision might even be made to drill a well instead of acquiring seismic. Just because 3D was not shot it doesn't mean there is great potential in the subsurface, it might have been ruled out through other means (i.e. no source rock, not deep enough burial, no reservoir etc).
Threadbears comment on why oil companies would continue to explore.....quite simple, they all have limited resources. If you look at most companies their reserve life is in the 10 year range. But that refers to total reserve life. In order to keep production flat, let alone grow it requires that exploration or acquisition continue. Most companies have been pretty good at replacing their production year on year, including the majors. This is no small feet given the amount of production that some of the bigger players have. Most of the oil companies are publically traded, there is no way they would be rewarded by the market for a strategy that just produces everything they have in a blow down mode. The pressure would be on from investors to have them sell their company.

[Dreamtwister]

$this->bbcode_second_pass_quote('joeltrout', '[')This well produced 25,627 barrels of oil in 2007 and at today's prices that is a little over $3.3 million in revenue from an area with numerous abandoned wells.

[joeltrout]

$this->bbcode_second_pass_quote('Dreamtwister', '
')
Yes, I know you acknowleged that these wells weren't going to solve anything, but I thought this quote deserved a second chuckle.

If there really are any cornucopians left on this board, they should pay close attention to this quote. This is those "billions of barrels of untapped reserves" heroes like Yergen keep talking about. millions of wells...just...like...this.

[BigTex]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('Dreamtwister', '
')
Yes, I know you acknowleged that these wells weren't going to solve anything, but I thought this quote deserved a second chuckle.

If there really are any cornucopians left on this board, they should pay close attention to this quote. This is those "billions of barrels of untapped reserves" heroes like Yergen keep talking about. millions of wells...just...like...this.

[joeltrout]

RocDoc will be knowledgeable on the technical aspects but I will share what I have seen both here in California and western Permian Basin.

$this->bbcode_second_pass_quote('BigTex', '
')
Is the quality of the oil coming from a stripper well similar to the quality of the oil that came out of the well when it was younger (generally speaking)?

[KillTheHumans]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('BigTex', '
')
I would imagine this same kind of thing is going on in west Texas.

[jato]

They sure do! But it still hasn't stopped the US from peaking. Oh wait, I can't comment because I am not in the oil industry.

[Aaron]

$this->bbcode_second_pass_quote('', 'N')ot all sources are internet articles.

[Aaron]

Great to see you rockdoc123.