Seismic Crews Step Up the Pace

Activity is Everywhere

Surely, there’s no more exciting industry than oil and gas.

And when a lengthy spell of high prices for commodities sets in, the excitement – and action – ratchets up considerably.

With revenues and profits way high, there’s been more than a bit of complaining that companies aren’t plowing enough of their ample cash into new drilling projects. Still, the drilling action already has revved up considerably, and a look at the current and planned level of seismic activity indicates the drill bits likely will continue spinning for some time yet.

“Across the whole seismic industry, you get the same answer,” said Elaine Buck, marketing manager-North America at WesternGeco. “Activity is everywhere.”

On the land side of the domestic arena, probably the hottest drilling play –the Barnett shale in the Fort Worth Basin is sizzling with seismic activity.

“A third of all U.S. crews have been in the Barnett in the last year,” said Gehrig Schultz, vice president-Eastern Hemisphere at PGS Onshore. “And we’re starting to see activity in look-alike plays like the Fayetteville shale, the Palo Duro Basin (and) the Cherokee Basin in the Oklahoma-Kansas area.

The jobs are small and fast in the Barnett,” Schultz said. “And there’s so many operators out there, you’re jumping all over the place.”

This may only be the beginning for Barnett seismic activity.

“Some say the Barnett goes all the way to El Paso,” said Jim White, president of Quantum Geophysical, which focuses on land and transition zone and currently has 10 crews operating.

Quantum’s parent company, Geokinetics, recently purchased Trace Energy – a sign that mergers in the seismic industry continue.

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Surely, there’s no more exciting industry than oil and gas.

And when a lengthy spell of high prices for commodities sets in, the excitement – and action – ratchets up considerably.

With revenues and profits way high, there’s been more than a bit of complaining that companies aren’t plowing enough of their ample cash into new drilling projects. Still, the drilling action already has revved up considerably, and a look at the current and planned level of seismic activity indicates the drill bits likely will continue spinning for some time yet.

“Across the whole seismic industry, you get the same answer,” said Elaine Buck, marketing manager-North America at WesternGeco. “Activity is everywhere.”

On the land side of the domestic arena, probably the hottest drilling play –the Barnett shale in the Fort Worth Basin is sizzling with seismic activity.

“A third of all U.S. crews have been in the Barnett in the last year,” said Gehrig Schultz, vice president-Eastern Hemisphere at PGS Onshore. “And we’re starting to see activity in look-alike plays like the Fayetteville shale, the Palo Duro Basin (and) the Cherokee Basin in the Oklahoma-Kansas area.

The jobs are small and fast in the Barnett,” Schultz said. “And there’s so many operators out there, you’re jumping all over the place.”

This may only be the beginning for Barnett seismic activity.

“Some say the Barnett goes all the way to El Paso,” said Jim White, president of Quantum Geophysical, which focuses on land and transition zone and currently has 10 crews operating.

Quantum’s parent company, Geokinetics, recently purchased Trace Energy – a sign that mergers in the seismic industry continue.

“Culberson and Reeves counties in far West Texas seem to be a new buzz word for seismic activity,” White added, “and we’ll probably see an uptick there.”

Hot Targets

Schultz noted PGS’ Wichita Mountain Front database is extremely active.

“There’s a lot of deep gas exploration there,” said Jim Bogardus, general manager of mulit-client services at PGS Onshore. “Those are high profile wells and very expensive for domestic onshore. They’re looking at big reserves and initial rates on those wells.”

Bogardus noted the Rockies are big for seismic activity because of the proclivity for gas reserves. But the area has drawbacks for the data gatherers.

“One thing that will restrict our opportunities in the Rockies is the environmental area,” White said. “Every time we try to get work on a particular job, it’s on federal lands, and there’s so many environmental groups to impede seismic activity.

“You have to be cautious, because if you block out a five-month period to shoot seismic and two weeks prior they slap an injunction on you, you’re stuck,” White noted. “You can’t go to work, and it causes havoc, so we’re very selective on the work we’re going after in the Rockies – I’m sure others are looking at the same scenario.”

White noted seismic shooting is in high demand in Canada.

“Canada is hot for seismic acquisition, and one of the things taking place there now is that crews are hard to come by,” White said. “Canada is seasonal, and this summer I expect to see more clients preparing work for doing it in the summertime because they didn’t book their crews in the winter.

“This is different from the way you usually do business up there,” White noted.

The Appalachians also are becoming increasingly alluring to operators, providing still more opportunity for the seismic data gatherers.

“Chesapeake bought CNR and has committed to spending enormous amounts on E&P there over the next 2-3 years,” White said. “This means seismic as well.”

In the past this area was explored by regional players, and now the bigger companies are moving in.

“I think this is a hallmark of things to come,” Bogardus said. “These companies need big reserves for investors, and they clearly think they’re going to get the numbers they need in the Appalachians.”

Gains in the Gulf

It comes as no surprise that the long-prolifically productive Gulf Coast is a hot area. Indeed, it offers a variety of opportunities for operators and data acquirers alike.

“We’re starting to see Gulf Coast operators wanting longer offsets so they can do proper AVO at depth,” Schultz said. “The area is heavily explored down to 15,000 feet, and they’ve been drilling deeper things, but they don’t have the proper AVO at those depths.”

Seismic shooting in the true transition zone, i.e., two miles either side of the beach, is rare these days because of the expense and because people are chasing other things, according to Steve Mitchell, vice president, division manager at Fairfield Industries.

But this is the jumping off place for offshore, where things have definitely picked up in the past year. IHS Energy recently reported the offshore working crew count at 11 compared to seven a year ago.

Seismic data acquisition continues to be active in the shallow water deep gas play even though the jury’s still out on just how good this play might be – despite some successful wells already reported.

The shallow water shelf, in fact, is where the big party is for the seismic companies.

“There’s more shooting going on, more crews working the continental shelf in the shallow water portion from 250 feet of water depth to the beach than in the last several years,” Mitchell said. “We’ve been shooting as hard this year as last year and the year before.”

The closely watched deep shelf gas play Exxon Blackbeard well continues to drill toward an unprecedented 30,000 feet-plus target depth. A successful well at these depths could create a near-stampede for data.

“As soon as we see someone producing sub-30,000 feet,” Bogardus said, “I think you’ll see that just go wild.”

Further out in the deepwater Gulf of Mexico, seismic activity appears to be on the upswing.

“We have two wide azimuth surveys scheduled for ’06 in the Gulf,” Buck said. “And we’ll do another project using our over/under technique to improve subsalt imaging. We also have several multi-client projects scheduled for ’06 in the Gulf.”

(Buck said WesternGeco also has a multi-client shoot scheduled for the Permian Basin in 2006.)

At the Crossroads

Given that a number of the seismic companies are booked through this year and now contracting for 2007, there’s concern about where this is headed in some instances.

“We’re at a crossroads as an industry now,” White said. “Do we increase the number of field crews to meet demand?You can buy equipment, but people are the big problem, so staffing and making it work will be the difficult part.

“As long as the oil companies continue to use lower numbers than current commodity prices in their deal evaluations,” White said, “we’ll still see these activity levels.”

“We believe they still need to beef up drilling prospects, and to do this is going to take seismic.”

In the marine sector there is some need for caution. The word on the street is that the pick up in new vessel construction has the potential to turn the current vessel shortage into an over-capacity situation rather quickly.

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