Finding new ways to envision an old field is the secret to oil and gas success, especially in times of dramatically changing business, technological, capital, and regulatory conditions. Welcome to an interview with Shane Matson, BlueJacket Energy. He discusses his experiences with geology and also with recent developments with public and private equity in the petroleum sphere.

What is your name and relation to geosciences?

Shane Matson – I work as a petroleum geoscientist with focus on the Paleozoic reservoirs of Mid-Continent. The word geoscientist is used here as my experience in industry has been geophysics heavy integrating subsurface methods with 2D seismic, 3D seismic and potential field data. My first employer was Ceja Corporation in Tulsa, Oklahoma. Ceja is a fascinating privately held multi-generational company. Founded in the early 1920's by A.G. Oliphant, the company has had an in-house seismic crew since the late 1940's. In my time at Ceja I had a wild schedule. The company was in the beginning stages of a 100-mile 3D shoot focused on the Mississippi tripolitic reservoirs along the Highway 60 Trend. I spent half my time with the seismic crew surveying and hustling jugs, half my time in the office interpreting the 3D patches and half my time drilling horizontal Mississippi wells. Looking back on those years 2003 to 2006 I see how fortunate I was to have my career foundation built on seismic prospecting and horizontal field development. And the group I worked with was a dream team. Seasoned geoscientists and engineers tasked with keeping new talent within the lines but open to our field and data based observations. Ron Haveman and I spent a lot of time in the field drilling horizontal wells. The early horizontal wells had no MWD gamma ray available so we had to rely on well site geology to fine tune our landing for intermediate casing. Due to the discreet nature of the tripolite deposits we did not have much of a margin of error. Ron built a device to digitize the geolograph data (this was years before Pason hit the main stream). The first well Ron and I drilled together flowed 700 BOPD up 7" casing with a natural completion.

Where did you get your start as a geologist?

I have always been around industry and my family has deep roots in the science of geology and the petroleum business. The geo-spark for me occurred in my early 20's when I was leading horse pack trips and working general ranching operations for the Colorado Outdoor Education Center. The property is adjacent to the Florissant Fossil Bed Monument. It seems like everywhere I went there were old copper mines and curious igneous outcrops. The owner of the ranch was a true naturalist and opened my eyes to the geological complexities of the area. In my mid-20's I moved to Fayetteville, Arkansas and enrolled as a Geology Major at the University of Arkansas. The UA was such a great place to study geology. Access to Paleozoic outcrops is just amazing. Oil prices were at a historical low and the department was small and focused on solid foundation of field methods. Many of the professors had been with the UA for 25+ years and regardless of specialization had taken a keen interest in the stratigraphy of the Ozark Plateau. Every week we were out somewhere on the Ordovician Mississippian or Pennsylvanian section. Sometimes all three in a single afternoon. A typical Friday afternoon involved walking to Dickson Street for Happy Hour. On our way we would put our hands at the Mississippian Pennsylvanian contact. I am confident there are few geology programs in the world that can boast that sort of "field work".

How have plays changed in the last 5 years?

I think a better period to look back to is 2008 to 2017. Gas prices were surging in 2008 with the major horizontal gas plays being well established. Little consideration was given to horizontal exploitation of tight oil reservoirs with the obvious exception being the Bakken. With the collapse in gas price in 2009 industry began shifting focus to tight oil plays. My observation. As the Bakken became crowded industry took interest in the Mississippian deposits of the Mid-Continent and landrush ensued. I think many geologists look back on this period and realize the complexities of the Mississippian reservoirs, particularly those near the Pennsylvanian unconformity, are significant. A lot of interest was placed on the higher porosity intervals found typically at or near the Penn unconformity and the results proved economically challenging. In the absence of a trap the higher porosity rock is typically water bearing. It is curious to see the emergence of the "Lower Osage" play in Northern Oklahoma. This is the rock several companies focused on in the early 2010's. The "Lower Osage" play is a highly fractured deposit of interbedded dense cherts, siliceous limes and limestones. As the price volatility has decreased recent advances in stimulation have opened up this rock to be a regionally extensive play.

What are you currently working on, and what makes you excited about it and its potential?

In January 2017, I started BlueJacket Energy LLC with Ron Haveman and Carl Vandervoort with prospect generation as the business focus. Most will recall 2017 to be a challenging year particularly February. As the wheels of industry proceeded to come off we recognized the need to shift our focus from prospect generation and leverage our skillset to assisting companies navigating turbulent waters. At $27/barrel oil companies did not need prospects. Rather they needed help in identifying low hanging fruit and reservoir optimization. For BlueJacket this required a change in our expectations and focusing on building new relationships with companies and digging into their assets. As the price of oil improved and stabilized these same companies have begun looking for new growth opportunities.

What do you see as directions for the future?

Understanding the changing landscape of capital is critical to success. All capital has expectations but not all capital risk profile. The short-cycle liquid reservoirs are going to dominate geologists work in the United States. The large independents will have positions held and will begin to move into full field development. The capital and time required for full field development of stacked systems will be immense and long and the profile of companies financially structured to do full field developments will evolve. The geoscience team will need to embed with the drilling, completion and production engineering team. A decade of work is in front of us and the information coming out of development phase will be incredible. Geologists will have the opportunity to learn a great deal about reservoir dynamics that will be applicable on a global scale in the next decade. I think the private capital will find a new niche. Having largely been out of alignment with public and private equity backed companies the private capital will find opportunities investing in multi-section to single section ideas that have the benefit of high science (3D, modern logs, core) but lack the size and repeatability larger companies require. Through all of the activity of the past decade and what will be accomplished in the coming decade a lot of rocks will have been picked up and new opportunities will abound.

What are the main new tools that geologists need?

The geological tools remain the same. A curious mind and ability to describe observations are critical. Trips to the outcrop, continuing education in subsurface methods, reservoir engineering, seismic attributes and geospatial analytics are important to start early and maintain through ones career. Being a supportive part of a team will be critical. Geologists are collaborative by nature and successful companies will structure geocentric teams with overlapping and complimentary skillsets. Ideal teams will include specialists in geomatix, subsurface, geophysical and drilling and completion operations.

As I mature in the business I recognize the value in having a solid foundation in the work that preceded today. The giants left behind valuable gifts in their writings, both technical and personal. Taking time to read the work of the great geologists and oil finders of the past century. A.I. Levorson, Lewis Weeks, Mike Benedum, Waite Phillips, H.V. Foster….these were among the biggest of the giants and their work is as relevant today as it was 100+ years ago. Read the old stuff. It is amazing what was accomplished by the early petroleum geologists.