2019 AAPG Annual Convention and Exhibition:

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A Corporate Strategy for Reducing Dry Holes and Improving Resource and Reserve Estimates

Abstract

Reserve estimates, both before and after the bit, require accurate maps. Well post-mortem studies conducted for wells drilled in the North Sea and Gulf of Mexico over the last 30 years suggest that 50 to 65% of the dry holes drilled by industry failed as a result of trap or seal failure. Further review indicates that many of these dry holes were drilled on the basis of interpretations or structure maps that were not accurate and often geologically invalid. Since a significant percentage of dry holes were dry holes because they were drilled on bad maps, then adapting a strategy that ensures that the subsurface interpretations and maps are accurate can reduce the number of dry holes by 25 to 50%. We propose a three-part strategy that companies can employ to reduce dry holes and improve pre and post drill estimation of resources and reserves. This strategy will help companies make better decisions, reduce dry holes, and should help avoid the need to write-down reserves. 1) Training A common management complaint is that many interpreters today do not understand their maps. Interpreters who do not understand their maps are very likely to make bad maps, and bad maps cause dry holes and result in incorrect estimates of reserves and resources. Companies need to provide their interpreters with the specific training they need to ensure that they can make high quality geologic interpretations and maps. Additionally, all geoscientists should be trained in the fundamentals of reserve and resource estimation and have familiarity with the Petroleum Resource Management System (PRMS). 2) Pre-drill reviews and audits Before making a decision to drill a well, the interpretations and maps should be subjected to a pre-drill review process. The review should first ensure that all elements of the petroleum system have been defined for the prospect. Then the structure maps that are the basis for the well and the resource estimate should be subjected to a pre-drill audit, which is essentially the same as a well post-mortem, minus the cost of the dry hole. 3) Pre-well reviews Whether the well is a success, or a failure, companies should conduct a post-well review. The review should examine what the well revealed about the petroleum system and whether the targets came in as predicted. This paper will define the strategy for reducing dry holes and improving resource and reserve estimates, and the pre and post well audit process will be discussed.