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What We're Learning Now Will Pay Off in the Future

One of the challenges in a downturn is moving quickly enough to take advantage of opportunities and to adapt to changing times.

Success in a downturn requires knowledge of the opportunities, the techniques and technologies that can be deployed for maximum positive impact.

This report lists some of the emerging insights and lessons learned from current AAPG education department events, courses and research conferences.

To start, the tools and techniques we tend to use in a shale play boom are different than in a decline. First and foremost, in the unconventional boom we saw activities escalate on a massive scale, starting with leasing and reconnaissance geology, to an "ops tempo" that was staggering – horizontal wells were drilled to assure that leases were held by production.

The drilling frenzy did not abate until later in the game, as prices fell and it became more difficult to acquire capital.

Now, the focus is on reservoir optimization and finding ways to take advantage of opportunities:

Identify underperforming assets that could be good acquisition candidates.

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One of the challenges in a downturn is moving quickly enough to take advantage of opportunities and to adapt to changing times.

Success in a downturn requires knowledge of the opportunities, the techniques and technologies that can be deployed for maximum positive impact.

This report lists some of the emerging insights and lessons learned from current AAPG education department events, courses and research conferences.

To start, the tools and techniques we tend to use in a shale play boom are different than in a decline. First and foremost, in the unconventional boom we saw activities escalate on a massive scale, starting with leasing and reconnaissance geology, to an "ops tempo" that was staggering – horizontal wells were drilled to assure that leases were held by production.

The drilling frenzy did not abate until later in the game, as prices fell and it became more difficult to acquire capital.

Now, the focus is on reservoir optimization and finding ways to take advantage of opportunities:

Identify underperforming assets that could be good acquisition candidates.

Perhaps the first thing that comes to mind in a downturn is to seek distressed properties. It's simple as a concept – but technically it's not simple at all, and it's easy to make a mistake if one does not understand the geology or the latest engineering lessons learned.

Assess and evaluate opportunities to purchase and to sell.

All the obvious candidates never seem to make it to the market. So in a downturn like this it's important to be able to look at more subtle differentiators. This is a case where data mining techniques can be quite useful. However, which are the attributes that make most sense? And, how can we assure ourselves that our data set is relevant and not corrupted with flawed or incompatible data?

Geologists who know how to take and refine data sets and then to identify opportunities will do well.

Form new geologist-engineer teams.

What are the engineering realities geologists need to know? What are the geology realities engineers need to know?

We think we know – until we actually talk to each other. Good communications can help in many different stages of exploration and development.

For example, they can help to avoid geohazards when geosteering, select the proper drilling fluids, understand where and how to use certain frac fluids and how to design an effective waterflood that will help recover the petroleum remaining in a fractured carbonate, or in a stratigraphic trap consisting of fluvial deltaic sand bodies.

Combine geochemistry and geomechanics for innovative completions, extensions and workovers.

A few examples include new acidizing procedures in carbonate reservoirs, or determining the location of lobes in deep marine clastics/turbidite reservoirs.

Investigate the real reasons for production decline.

"We lost pressure" and "it went to water" are viable reasons, but there are often unexpected reasons, many of which have to do with ill-advised attempts at cost-savings. For example, a failure to implement a good corrosion-control program or to use biocides could result in scale, slime and the generation of hydrogen sulfide, resulting in production declines. Poor understanding of the reservoir pressures and temperatures also could result in paraffin build-up.

Geologists are sometimes far from production discussions, they should be actively involved in production discussions, because their insight into the reservoir fluids, the behavior of gas, fracture networks and pore architecture can be valuable.

Clean up your data.

More is not always better.

Problems with nomenclature and incompatible log data can completely corrupt the study – this is especially the case in formations that consist of laterally discontinuous units, such as a granite wash. Data mining techniques vary, and the research design needs to be more rigorous than ever. Otherwise, you run the risk of making very dangerous and bad decisions based on flawed data and misguided algorithms.

Petrophysics.

Logs, cores and even mud logs tend to be cut during downturns. It's a mistake. The more information you can glean, the more likely you are to gain insights about the rock properties and the fluids in the formation.

Conclusion

Now more than ever, geology matters. New techniques and technologies are only successful if we understand the nature of the rocks themselves, along with the structure and behavior of reservoir fluids.

The lessons learned during a boom and a subsequent downturn may be painful and expensive, but it's best to think of them as investments in the future. They will pay off, particularly if we keep an open mind, communicate across disciplines and are willing to think, dream and be bold.

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