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| Field Results Report | Tech Transfer Track |
Technology Is Key - But Only One of the Drivers - For Petroleum Production
In the "oil patch," what worked yesterday may not work tomorrow. And even when the technology is viable, it must be considered in conjunction with other factors if its effects are to be optimized, according to speakers at the 2nd Annual Emerging Technologies Energy Conference (ETEC '98).
In addition, for some technologies, such as waterfracs using minimum proppants, there are questions as to why they even work at all. "As we learn more and more, we realize we know less and less," noted Ray Walker, team leader and staff engineer at Union Pacific Resources Company.
Walker was one of many speakers who participated in four joint vendor/producer case study presentations during the November 12 conference in New Orleans. The annual one-day event was sponsored by PTTC and the Independent Petroleum Association of America. PTTC was responsible for the afternoon session, which was moderated by PTTC Vice Chair Leo Schrider, from Belden & Blake Company, and PTTC Board member Mike Gatens, from MGV Energy.
In addition to the case studies, a special presentation was given by Jed DiPaolo, senior vice president of global business development at Halliburton Energy Services. He said that technology, particularly advances in computing power and telecommunications, is still essential to increase reserves and reduce costs. "However," he noted, "if you only focus on technology, you'll see only step changes, not quantum leaps."
DiPaolo stressed that independents must instead think of "tech-in-omics," the blend of technology, integration, and economics. "But I don't mean the traditional integration of tasks or processes; I mean the integration of technology," he said. One example is "smart wells" that combine technologies, such as horizontal wells using downhole sensors in the casing walls, frac fluid, or even the cement.
Another application of new technology is the increasing use of "waterfracs," in which liquids are pumped into reservoirs, minimizing the use of proppants. In the Carthage Field in East Texas-the source of two percent of the nation's natural gas supply-Union Pacific Resources Company (UPR) pumped more than 160 waterfracs in 1997, saving the company $4.5 million.
Despite its success, "We still don't know why waterfracs with minimum proppants work," said Walker, suggesting that it could be a combination of several elements-debris, residual cracks, or the fluid itself-that help increase production.
While most technologies are used to increase production in mature fields, Edge Petroleum Corporation in Houston has invested heavily in 3-D seismic and visualization technology to decrease exploration costs. By using high-end workstations to perform sophisticated voxel (3-D volume rendering) analysis. This technology is a crucial element in interpreting large data volumes. Edge enjoyed a 73 percent drilling success rate on 101 onshore exploratory wells drilled in 1997.
Edge Petroleum President James Calaway said that his company is using software that can instantly show in 3-D what previously needed to be analyzed line-by-line. As a result, Edge can quickly sum up a field's potential. Moreover, "the data 'talks' to the geologist," eliminating the potential for human misinterpretation, he said.
DiPaolo sees plenty of new opportunities for independents. "As service companies understand technology more, independents can implement new technologies previously beyond their grasp," he said. But, DiPaolo cautioned independents, "Don't get enamored with just technology. You must integrate it. And you must commercialize it."
Calaway also urged independents not to take a passive role in integrating new technology and encouraged them to "make technology a competitive advantage to make better decisions, faster." As testament to Edge's success with software from Landmark Graphics, Calaway concluded, "We have not been beaten in a while" in buying high-potential acreage from group seismic shoots.
The ETEC '98 case study presentations were: "Controlling Water Production/ Coning" by Mark Swisher (Aviara Energy) and Andrew Wojtanowicz (Louisiana State University); "Waterfracs Reaping Results in Tight Gas Sands" by Ray Walker (Union Pacific Resources Company), Jeff Wilkinson (BJ Services), and Jonn Thompson (Halliburton Energy Services); "Advanced Seismic and Visualization Technologies" by James Calaway (Edge Petroleum Corporation) and Bill Matthews (Landmark Graphics Corporation); and "Horizontal and Underbalanced Drilling" by Jeff Vickers (GeoResources) and Brian Varcoe (United GeoCom Drilling Services).
Copies of the case study presentations are available on PTTC's website at www.pttc.org.
In response to the current crisis in the exploration, production, and service sectors of the domestic petroleum industry, PTTC will structure most, if not all, of its planned 1999 activities to address "survival" needs of the industry. PTTC's action plan for US independents was developed during a December 6 joint meeting of its Board and regional directors in Salt Lake City.
"Everyone involved with PTTC is keenly aware of the crisis facing this industry, and many believe it is the most severe depression in decades," said PTTC Chair Robert Nance, president and CEO of Nance Petroleum in Billings, Mont. "We will dedicate the organization's resources and activities to helping individual producers and companies survive," he said.
Since late 1997, crude oil prices have been dramatically lower than those in previous years. Although some advances in technology have helped reduce costs, the price of crude oil remains at historic 50-year lows, when adjusted for inflation.
In many regions of the country, much of the existing oil production is uneconomic to produce at current prices. "Failure to take immediate and substantial action to remedy the current emergency situation will lead to significant segments of the US production industry shutting down, with a resultant loss of jobs, revenue, and future energy supplies," noted J.C. "Chris" Hall, president of Drilling and Production Company in Torrance, Calif., and immediate past chair of PTTC.
The Industry Action Crisis Plan will keep PTTC's regional technology workshops focused on survival methods such as improving cost efficiencies and identifying "best practices" for operating under economic crisis conditions. These activities will be targeted, as much as possible, to address specific needs of producers in each region.
In addition, PTTC plans to compile a national report addressing the effect of the crisis on the US petroleum industry. It will aggregate the statistical evidence and insights from studies on this topic developed by other organizations involved in the petroleum industry.
For more information, call 1-888-THE-PTTC
Detailed overviews of some of the most pertinent PC-based petroleum exploration and production software programs are now available on a new CD-ROM developed by PTTC.
Showcasing more than 50 exploration and production (E&P) software packages available for demonstration at PTTC's regional resource centers, PTTC's Petroleum E&P Software Sampler v1.0 includes a range of packages, from lower-end programs priced at just a few hundred dollars, all the way up to state-of-the-art applications. The CD-ROM presents analytical information in an easy-to-use format that is searchable, according to each program's key features, applications, capabilities, and price ranges.
Intended primarily for petroleum geologists, geophysicists, and engineers, the sampler was developed for PTTC's national program by Sandra Mark, from its Rocky Mountain Resource Center. Mark is one of the industry's leading experts on E&P software for independents.
"This sampler is the latest result of our expanded marketing and communications efforts to serve domestic independents-particularly in the times of crisis conditions. This CD-ROM provides them with one more tool to more cost-effectively find and produce oil and natural gas," said PTTC Executive Director Deborah Rowell.
Published in November 1998, the sampler includes a trial version of software and geological utilities from Rockware Scientific Software, Inc., which sponsored production of the CD-ROM. Companies and organizations whose software packages are highlighted on the sampler include: Digital Formation, Dowell Schlumberger, Fekete Associates, Gemini Solutions, GeoGraphix, GeoPlus, Integrity Software, Interpretive Imaging, Kansas Geological Survey, Lufkin Industries, Merak, Neuralog, Resources Engineering Systems, Rockware Scientific Software, Scientific Computing Applications, Seismic Micro Technologies, Theta Enterprises, and the US Department of Energy's National Petroleum Technology Office.
A new CD-ROM developed by the US Department of Energy's (DOE) National Petroleum Technology Office is now available. The CD-ROM, published in November, contains more than 20 programs, database applications, and model documentation files that are available at no charge to the oil and gas industry. BOAST '98, the newest version of DOE's popular BOAST software, debuts on the CD-ROM. In addition, it features an installation program that describes the software and assists users in installation. A list of DOE software is also available at www.npto.doe.gov/software/software.html.
To obtain a complimentary copy of the CD-ROM, contact Herb Tiedemann, NPTO technology transfer officer, 918-699-2017, htiedema@npto.doe.gov.
A new report paints a picture of an industry in trouble; a growing threat to national security; and the sizable loss of income to individual royalty owners, states, and the federal government. The report, "A Battle for Survival: The Real Story Behind Low Oil Prices," was issued by the Interstate Oil and Gas Compact Commission (IOGCC) on December 7 during its Annual Meeting.
"We have a very real threat that the heart of our oil industry, the independent producers, may be entirely forced out of business, with the loss of as much as 25 percent of our domestic production," said Wyoming Governor Jim Geringer, 1998 IOGCC chairman. The report surveyed 24 states and relied heavily on information from government sources and news accounts of industry activity. It noted that the vast majority of oil-producing states have seen income from oil production cut in half as prices have fallen and operators shut in wells that are no longer profitable. "Nearly 11,000 jobs have been lost nationally as oil field service companies and producers cut back. This loss of infrastructure will further hamper the industry's ability to bounce back when oil prices climb," the report noted.
For more information, log onto www.iogcc.oklaosf.state.ok.us.
In response to a late-summer request by the US Department of Energy's Natural Gas and Oil Technology Partnership, PTTC helped identify qualified independent producers to serve on industry review panels for the national labs. Volunteers were sought to provide the independent producer's perspective in two R&D areas-drilling, completion, and stimulation; and oil and gas recovery.
The Partnership's review panels meet annually to assess progress in ongoing projects, evaluate new R&D project proposals, and provide industry input on funding and research priorities. Several of the candidates PTTC recommended were ultimately selected as review panel members for the national labs.
For information about the Partnership, check out www.sandia.gov/ngotp.
In a first for PTTC or its regional resource centers, the West Coast workshop, "OPEC Oil Pricing and Independent Oil Producers," held on October 22 in Los Angeles, was simultaneously broadcast on the Internet.
The format of the webcast allowed producers from anywhere in the world to watch and listen to the workshop live-and even ask questions via e-mail that speakers answered during the event.
"This event embodies the spirit of PTTC-it uses technology to transfer information important to the petroleum industry, with the ability to reach a broad audience in a flexible cost-effective way. Great job, PTTC!" noted Shawn Devlin, vice president of production for Viking Resources, Inc. A member of PTTC's North Midcontinent Producer Advisory Group, he logged on from Wichita, Kan.
For those who missed it, the entire event was videotaped and can be downloaded from the resource center's web site at www.usc.edu/webcast/pttc/index2.html. The webcast was optimized for use with a 28.8 Kbps Internet connection. Users must first install the RealMedia Player on their computers if they do not already have it.
Featured presentations included "World Petroleum Life Cycle," "OPEC World Energy Model," "Pricing and Production Strategy for Exhaustible Resources," "Crude Oil Prices, the Global Market, and OPEC," and "Crude Oil Pricing and What Can Be Done About It?" The resource center also webcast its December 11 workshop, "Reservoir Management for Independent Producers," which also can be downloaded from the website.
A new "Guide for Professional and Ethical Conduct" for PTTC was approved by the Board of Directors during its December 6 meeting in Salt Lake City. The one-page document addresses standard ethical behavior, service, quality, professionalism, confidentiality, referrals, copyrights, and cooperation, among other issues. It was developed to guide those involved with PTTC in their professional interactions with others. These groups include members of the Board of Directors and its committees, producer advisory groups, regional and national headquarters staff, and contractors.
"These PTTC representatives are dedicated professionals, who recognize their responsibility to PTTC and those it serves in carrying out the organization's Mission," the guide notes.
"Most professional societies and trade organizations have some sort of ethical conduct guidelines," said PTTC Executive Director Deborah Rowell. "Although PTTC actions have always been consistent with its mission and goals, it helps to have an approved guide for everyone to follow," she noted.
The guide can be found at www.pttc.org/orgindx.htm#Ethical. Call 1-888-THE-PTTC to have a copy sent to you.
Over the next 12 months, we'll be bombarded with articles and ads focusing on the promise of the "new millennium." And sadly, it will be difficult for our industry to get excited about anything on the horizon that stretches beyond the next billing cycle.
Independents have one immediate concern-survival. If, and only if, we can weather today's crisis and learn from the experience, then we'll be able to focus on the promise that the new millennium might bring.
It's difficult enough during a healthy business environment to stay on the cutting edge of the information revolution but, during crisis times, it's nearly impossible. That's why PTTC recently launched its Industry Crisis Action Plan to help independents survive this severe depression.
Using its regional resource centers, technology workshops, and referral services, PTTC is focusing on survival methods for independents. For instance, PTTC's E&P Software Sampler v1.0 (see story on page 1) reduces the amount of time spent searching for the right software solutions. Other time-savers are PTTC's Case Study Digest and Best of PTTC Workshops volume, which summarize pertinent technological information from regional programs. And PTTC's network of websites provides information organized by regional significance and serves as a vital education tool.
Above all, it's important to remember that even the best technology tools are of little use unless independents have cost-effective access to them to address specific problems and opportunities. Through its diverse programs, PTTC aims to serve as the "bridge to solutions" for independent producers-a goal which is even more critical in today's crisis environment.
Deborah Rowell, PTTC's executive director since its establishment in 1994, earned recognition in November as a Certified Association Executive (CAE) by the American Society of Association Executives (ASAE). The certification is the highest professional achievement available from ASAE, a 24,000-member association representing managers of leading trade associations and professional societies in the US and abroad.
Recognition as a CAE demonstrates high levels of knowledge and leadership in association management. ASAE's certification process included a comprehensive exam covering a wide range of issues. Rowell, who has nearly 16 years association management experience with PTTC and the Independent Petroleum Association of America, joins slightly more than 10 percent of ASAE's membership who have attained this level of achievement.