Introduction to Exploration

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Introduction to Exploration

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www.ektinteractive.com

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Introduction to Exploration

Oil 101: Introduction to Exploration

Hi, and welcome to Oil 101, the podcast.

My name is Doug Stetzer and Im content and community manager for EKT
Interactive.

As we continue our Oil 101 - Microbes to Market coverage, we will be discussing the
Exploration part of upstream.

This content is taken from our Upstream e-learning modules which were developed
by industry experts with decades of experience.

More content on this topic is available in the free members content library at
www.ektinteractive.com. And well be sure to put relevant links to our Upstream,
Midstream, and Downstream overviews in the program notes.

The complete Exploration module provides an overview of exploration operations. It

also explores the origins of oil and gas, obtaining oil and gas leases, an explanation of
reserves and more...

We also include some historical perspective on this function of upstream.

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Introduction to Exploration

Exploration Overview

This brief overview of exploration includes segments on exploration processes, some

historical perspective including an explanation of hydrocarbons, and finally well
discuss the basin-play concept.

There are 4 key steps to summarize the oil and gas exploration process:

First is understanding and evaluating the geologic setting, called a play

Next is obtaining access to the potential reserves, usually in the form of a
lease
The third step is determining where to drill and completing a successful
discovery, or wildcat well
Finally, additional hydrocarbon reserves can be added to the portfolio of
an oil company using guidelines set by the Society of Petroleum
Engineers (SPE) and the US Securities and Exchange Commission (SEC)

Historical Perspective

Lets back up and give some historical perspective.

So what exactly are fossil fuels and how did they form?

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Introduction to Exploration

Oil and gas are composed of hydrocarbons, a mixture of hydrogen and carbon atoms,
formed millions of years ago.

Early hydrocarbon discoveries were usually traced from natural seeps at the earths
surface.

When searching beyond obvious seeps, developments in the science of seismology

added necessary tools and analytics to improve success in oil and gas exploration.

The introduction of refraction technology to find salt domes with oil and gas potential
in the US Gulf Coast began in the 1920s.

Seismic advances during World War II continued the innovation that aided the
search for oil.

Advances in computing power since the 1980s saw development of 3-D seismic
surveys, leading to more accurate and realistic imaging of the subsurface.

3D technology increased the use of seismic data for oil and gas production, as well as
exploration.

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Introduction to Exploration

The Basin-Play Concept

As you can probably imagine, the primary purpose of exploration is to discover new
accumulations of hydrocarbons, called reserves.

Oil and gas are composed of hydrocarbons, a

mixture of hydrogen and carbon atoms, formed
millions of years ago.

An important development in exploration progress was more conceptual than

technological.

The basin-play concept was developed in Canada in the early 1970s and still used
today.

A basin is a very large geographic area containing sediments formed in a similar

geological age. An example would be the Permian Basin in West Texas.

A play is a location, or group of locations, with oil and/or gas potential within a basin.

Within a play, the indication of potential for faults or traps become drilling targets,
called a drilling prospect.

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Introduction to Exploration

Prior to the play concept, exploration risk analysis concentrated on a single prospect,
often without technically considering its relationship to other similar prospects.

Today, the play concept gives explorationists the ability to leverage successes and
reduce risk across numerous wells, reservoirs and fields as they explore for new
hydrocarbons, and enhance existing oil and gas accumulations.

Exploration is very iterative.

Every lease investment in a play and well drilled to define the size of the reservoir
improves exploration success.

Data from both positive and negative wildcat wells helps delineate the discovered
reservoir and every additional well and downhole measurement improves
understanding of the field.

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Introduction to Exploration

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