1/3 Favor 'Closeology' Approach

Study Shows Analogs Still in Vogue

By KATHY SHIRLEY
EXPLORER Correspondent

Titles and job responsibilities for participants in the analog study ranged from executives to manager to professional staff.

More than 60 percent of the respondents had over 20 years of experience in the industry, while less than 10 percent had less than 10 year's experience.

Where's An Analog?

Where do companies get their analog information? From various sources, according to survey responses.

Some answers: data purchased from third parties, literature searches, databases and consortia studies.

Half the companies interviewed have purchased an analog database system, and five companies are building custom in-house digital analog systems.

"We thought the super majors would have similar in-house analog systems in place, but we were surprised to find that is not the case," Wan said. "None of those (surveyed) companies have an in-house system."

There are likely many reasons for this, Wan said, including:

• The flux in the industry created by mergers and acquisitions.
• Movements of personnel from one project area to another.
• An emphasis on finding and producing oil and gas rather than documenting and compiling data.

"Systematic documenting and codifying information and building a system to house that data would require a major commitment," Wan said. "Most companies indicated they could get the data from public libraries or third party providers." Some even take field trips.

Bonus Inclusion:

Survey participants made several recommendations to improve the application of geological analogs. These include:

 Documenting and publishing best practices.

 Establishing a consortium to fund the creation of a methodology for integrating seismic analog information with outcrop and subsurface geological data and engineering data.

 More education to convince a greater number of production geologists and reservoir engineers that decisions based solely on "closeology" methods may not be optimum.

Is there room in today's high tech information age for good, old fashioned geologic analogs?

Yes. And then some.

That's the finding of a study that asked 23 various companies around the world just how important analogs are to the modern geoscientist.

"We wanted to find out if the concept of geologic analogs is still a favorable approach today and if people are just using seismic data and well log information to do their interpretations, or if we just don't have a handle on how people actually use analogs," said J.C. Wan, director of technology development with Houston-based C&C Reservoirs.

C&C contracted with Quittitut Consulting to assess the real world use and methodology of geological analogs in general, and digital analog systems in particular.

The goal: To determine the merits and effectiveness of the analog approach in exploration prospecting and field development.

Participants were six major oil companies, nine international independents, two national oil companies, four domestic independents and two independent exploration geologists, all covering six countries.

The results:

• Two-thirds of the companies believe that casting a global net to identify the highest quality analogs reduces exploration risk and improves field development decisions.
• One-third of companies favor more of a "closeology" approach to evaluating plays and field development options by looking only at nearby well, reservoir or field data.
• While seismic is often a deciding factor, a significant number of geologists believed analogs provide detail and insight needed for successful exploration and field development.

"We were somewhat surprised that two-thirds of the respondents felt global analog searches were still valuable," Wan said. "We anticipated that people would be more focused on seismic data as the primary tool."

He also said that the mix of participants -- predominately majors and international independents -- likely accounts for this result.

"The survey was somewhat skewed to international players and majors, and international independents are going to have more interest in the global look that analogs can provide," Wan said. "In frontier areas and emerging basins where there isn't as much hard data, companies have to use the 'soft data' analogs provided to mitigate risk."

However, Wan believes global analog studies can be beneficial for domestic companies as well.

"For example, I was in Calgary recently where a geoscientist with a company working on a western Canadian basin coalbed methane project said analogs from a coalbed methane field in Australia had provided important insights for his work," he said. "That's the kind of value analogs can bring to domestic projects."

Other People's Knowledge

According to the study nearly all exploration and production companies use analogs extensively both for exploration and field development. An overwhelming majority of firms said analogs are used in both arenas while a smaller portion of the respondents indicated they use analogs in either exploration or development, but not both.

Some of the interviewees said in almost every situation they can apply other people's knowledge.

"They said it was rare to come up with an entirely brand new idea, and in those rare occasions when a completely new idea is advanced the risk factor automatically ratchets up," Wan said. "So finding information on how a concept or idea has been used in the past can definitely reduce risk."

The survey did indicate that age may play a role in the use of analogs. A significant majority of respondents had more than 20 years of experience, and that group generally valued geological analogs as an important source of information.

"This group recognized that seismic data doesn't tell the whole story and that geologic fundamentals are still important," Wan said. "The outcome of the study might be quite different if a larger number of younger professionals were included."

Exploration and production management and professional staff described the importance of geological analogs in various ways. One response indicated that analogs provide risk reduction via greater decision making certainty -- analogs give geologists and reservoir engineers confidence that their ideas are grounded in reality.

The survey participants also said that analogs:

• Give explorationists insight on the critical elements of a specific play that may be prospective.
• Uncover subtle opportunities that may not be apparent from other techniques or technology.
• Improve predictive capabilities on the upside development potential.
• Help convince management, investors and partners of the commercial viability of a prospect or merits of a field development program.

Survey participants apparently found it difficult to quantify how they use analogs.

"When we asked people which data played a major role in their decision making and if they counted analogs as a key contributor, the initial reaction was negative, but on more reflection they realized analogs were more important than they realized," Wan said.

"It's hard to put a hard dollar figure on how much money this kind of data can save, unlike 3-D seismic, for instance, which people can quantify."

Other Findings

Survey responses also indicated:

• Analogs are often used in new ventures and international projects, but more people are beginning to use them in mature basins for enhanced oil recovery techniques.
• Analogs aren't just for geologists anymore. Reservoir engineers and petrophysicists are starting to use analogs to fill in the data gap.
• Analogs are used in peer review meetings, but are seldom part of look-back or post-mortem appraisals on a project.
• No one within the companies surveyed has codified analog best practices.
• Analogs appear to be used at about the same rate today as 20 years ago, except today there is more detailed data, there is more probabilistic analysis being done and seismic is more often a deciding factor and the real driver in approving projects.

"Today there is such a flood of information that the challenge is not to find information on a specific field or basin but to value rank the information," Wan said. "People have to ask the fundamental question of how much information is enough? When do you stop?

"At some point you are adding incremental value that is not pushing a project forward," Wan continued. "That's the point every oil company struggles with.

"Plus, inaccurate information is worse than no information, so the key is to pinpoint the information you feel is accurate without bias."

• Many participants were concerned about the "abuse" of the large amount of data in the digital world and cited the inability to validity check or corroborate data -- particularly when dealing with geological and reservoir information.
• The quality of the analogs is more important than the quantity -- a reliable and thoroughly studied analog is far more useful than a large number of "case studies" that have lots of empty data points and provide incomplete analysis.
• Analog databases with search engines are a valuable resource that can help geologists lower exploration risk and help reservoir engineers make optimum development decisions.

In general, the interviewees favored the use of digital analog systems because they provide quick and efficient information to support decisions, they are much easier to manipulate and analyze, and they make it easy to make global comparisons via high quality analogs from fields and reservoirs around the world.