With the price of oil hovering well over $100 a barrel, some in the industry are exploring ways to revisit conventional oilfields using technology that emerged during the unconventional oil boom, with a goal of earning a rapid return on investment while prices remain favorable.
“The price of oil is up. People are looking for diversity. Everybody is looking for prospects,” said Thomas Bowman, of TBD Oil Corp. “There is a whole market out there looking for conventional plays because they are less expensive and they can be done.”
Bowman and Steve Zody of Zody Geoscience LLC, spoke at AAPG’s recent “Conventional Oil and Gas Exploration – Revisited” webinar.
Conventional prospects are increasingly appealing, given today’s oil price, as they can produce fast oil and fast gas – unlike a roughly two-year waiting period with an unconventional play, Bowman explained.
Furthermore, by applying new or improved technology developed during the era of unconventional oil, including 3-D seismic, unconventional drilling techniques, innovative applications and a myriad of additional well logs, conventional fields are showing tremendous promise.
“My objective is to convince everyone that our current unconventional knowledge has improved our conventional knowledge,” Bowman said, “and conventional prospects are not that hard to find.”
Remembering Conventional Plays
In the 1980s, about 62 percent of global oil production came from carbonates and 37 percent came from sandstones. Shale was not even in the game. Yet in 2018, 59 percent of U.S. crude oil production and 69 percent of U.S. natural gas production came from “tight” resources, according to the U.S. Energy Information Administration.
And today, “it’s interesting and fun to see that we are actually pivoting back to the conventional style of exploration,” Zody said.
All indications point toward an increase in global oil consumption in 2022 at or above pre-pandemic levels, and oil from conventional fields could become the new, low-hanging fruit.
“Global energy demand is continuing to rise, and hydrocarbons will provide the bulk of that energy supply for decades to come,” Zody said. “Despite all the background stuff about energy transition, even if today is your first day in the oil and gas industry, I think you can expect a long and rewarding career.”
For those whose experience has been limited to unconventional oilfields, Zody said it is worth the time to revisit the fundamentals of conventional oilfields, including source rocks, migration pathways, permeable and porous reservoirs and viable traps. He reminded that there are many types of conventional plays, from deltaic to shelf sand plays and basinal channel and tidal flat plays, to name a few.
“There are plenty of areas and opportunities to go look for conventional oil and gas reserves,” he said.
“And, don’t forget the rocks,” he said, stressing the value of fieldtrips and studying outcrops, geological surveys and sample cores from repositories. “They will really help you visualize what you are trying to do in the subsurface. And, well logs are probably going to be your best friend going back to conventional oil and gas exploration.”
Revisiting Bypassed Pay
For a conventional play, bypassed pay is an ideal area in which to concentrate, as a formation drilled in the 1990s when oil prices fluctuated between $15 and $20 a barrel could contain a lot of bypassed pay.
Bowman added, “How many times have you heard drillers or mud loggers say we always have a show in the shallow section? Source rocks have lost a tremendous quantity of hydrocarbons and they are trapped in conventional formations.”
Now that the economics have completely reversed, it makes sense to go back and look at some of those zones, said Zody.
“There are plenty of things that have been drilled through in these shale plays that operators had no interest in whatsoever. Go back and reevaluate those,” he said.
He encouraged looking at low-resistivity pays as well as determining if all productive zones were completed or perforated. By introducing modern completion techniques and methods, an uplift in production could come in relatively short order.
Regional and multiple maps will play an important role in determining trends and possibilities.
“I’d say maps, maps and more maps,” said Zody. “A single map is probably not going to be enough to sell your deal.”
Zody encouraged mapping for porosity and hydrocarbon pore volume in addition to incorporating petrophysical parameters and production history. Estimated ultimate recovery and initial potential maps also may be helpful.
“See what fits together. See what makes sense and start putting your story together,” he said. “If you’re fortunate, hopefully you’ve got some 3-D seismic and you can add seismic attribute characteristics in there to further bolster your prospect and your story.”
Zody also advises taking a second look at available data with a scrutinizing eye, as modern, digital databases don’t capture all important data. Overlooked information can include perforated zones and drill-stem tests that can be found in old well cards.
Referring to an 1893 well card from the Geological Survey of Ohio, Zody read aloud, “This card says, ‘oil and gas were found in sufficient quantity to throw oil over the top of the derrick.’ It’s kind of fun to get a historical perspective from some of these things.”
“Don’t be satisfied with just dumping data in your mapping program and touching the button and taking what comes out as gospel. Use your imagination, put it together, see if it makes sense and hopefully you come up with a hidden gem among the dry holes,” Zody added.
Finding analogous fields will also play an important role in exploration.
“Know the depositional relationships, sequence stratigraphic relationships, and 3-D seismic is always helpful. It might not be enough information to merit drilling a well, but it could be enough to propose a seismic program and narrow down the area you want to explore in,” he added.
Perseverance pays off. Zody used an example from the Southern Michigan Trenton/Black River play in the Albion-Scipio Field, which was discovered in 1957, producing more than 135 million barrels of oil. Operators continued to explore and drill the area but found nothing significant until 1983 when the Stoney Point Field was discovered and produced approximately 15 million barrels. Then, in 2008, after several small 3-D seismic surveys were conducted, the Napoleon Field was discovered, procuring more than 11 million barrels, and several producing fields then followed.
“If you’ve got evidence, don’t let negative data points always influence your thoughts going forward,” Zody added.
Making Use of Unconventional Technology
Bowman urged explorers to make good use of technology developed or perfected for unconventional plays. Unconventional plays have provided a better understanding of shale in terms of regional geology, basin analysis, source rocks, petroleum systems and detailed formation analysis. They have also given rise to a multitude of 3-D seismic surveys, horizontal wells, hydraulic stimulations and permeability enhancements, not to mention the importance of teamwork, he added.
“The quality of 3-D seismic data is hands down better than what we’ve ever had access to in the past. And we are using it for small fault and unconventional plays when there is a huge amount of information for conventional targets,” he said. “At one time when we were playing the Gulf Coast, we had 15,000 square miles of 3-D looking for conventional targets, and then no one wanted to do that anymore.”
Today, seismic data has high-fold, wide azimuth 3-D, significantly better for subsurface imaging and “perfect” for conventional prospecting, Bowman said.
“All of this new technology, new logs, new applications, things that we developed for unconventional systems come right back and apply very well to conventional systems,” he said. “Unconventionals also have brought us amazing drilling uptake where we are drilling 20,000 feet down and out in seven days, which can also be applied back to conventionals.”
“Vast returns in today’s price environment is very, very important,” he added.
During the unconventional boom, it was realized that source rocks expelled 70 percent of oil and 30 percent of gas when hydraulically fractured, Bowman said. “Where did it go? It goes up. I think people forget that it goes up into shallower targets,” he said.
Operators have drilled 351,549 horizontal wells in the United States and roughly 36,000 along the Gulf Coast – most in the Eagle Ford formation.
“All of those wells have gone through shallow targets above the source rock and into targets that most of those source rocks have expelled hydrocarbons into,” he said.
And, most have logs or correlation information for mapping with “phenomenal” detail, Bowman added.
Turning Problems Into Opportunities
He believes orphan wells are a good place to start for prospecting new conventional plays. For example, Texas has 8,100 listed orphan wells.
“Some people would argue that’s a bad thing,” he said. “Are they concerns or targets of opportunity?”
If one applies Quad Neutron measurements, it is possible to see the actual pay.
“That’s taking an old, orphan well that produced 15,000 barrels in a deeper zone, going back and cleaning out, running a log and running this pulse neutron and getting a direct indication of the hydrocarbons,” Bowman said.
Having recently put together a 50-well package from orphan wells, Bowman said, “the Railroad Commission of Texas was more than happy to have someone take on the plugging liability to put this field together. Some wells might produce 10,000 to 20,000 barrels, but there are no drilling costs. You have taken something that would possibly be a detriment to the environment, and you have made something out of it with the application of new technology.”
He sees great potential for conventional plays in the Austin Chalk formation. Sitting above the Eagle Ford formation, the Austin Chalk has been a major producing field for Texas and Louisiana.
It was discovered in the 1920s and began significantly producing in the 1950s with vertical wells.
Because much of the formation is naturally fractured, the vertical wells that tapped into those fractures had good shows in the 1980s. Horizonal wells were successfully drilled in the 1990s.
Approximately 5,700 wells have been drilled in the Austin Chalk with a phenomenal amount of production, Bowman said, and the latest uptick began in 2016 with additional success from conventional plays.
Bowman explained: Roughly 36,000 wells – most of which had shows – were drilled in the Eagle Ford.
“What can we do now that we didn’t do then? The application of the unconventional technology is what will bring you something here,” he said.
Currently, there are 787 new producing Austin Chalk wells and 388 active permits. These wells produce on order of 20-30 BCF.
“The Austin Chalk has made 1.5 billion barrels of oil and 7.5 TCF of gas. There is probably no end to extending this opportunity,” Bowman said. “It continues to give up hydrocarbons and it’s technology driven. It’s understanding those reservoirs. This is unconventional technology improving traditionally conventional reservoirs. You’re using that knowledge and pushing it forward.”