A lot of people think seimic is pretty definitive. Seismic is basically the study of sound as it passes through different rocks. The harder the rock, the faster the speed of sound, softer rocks, lower velocity. And a hell of a lot of other properties, amplitude, phase shift etc. But enough of complications. Essentially you are looking at a panel of the earth as if you see a highway cut through a hill and see the different rock layers.
In the exploration phase it tells you where a target might be. Oil and gas can found only in certain geological structures where it can be capped and trapped. If those conditions aren't there, no oil or gas. Just as important, it can tell you where not to drill. There is no need to drill an additional well on the other side of a trapping fault line. I have seen many beautiful structures that came up dry because the capping was fractured letting the oil out, or because it was laid down too long after the oil was formed. Looked great but no cigar.
For MEL, if this well looks commercial, the next logical step would be to shoot a 3-D survey over it to delineate the extend of the structure. Much cheaper than drilling wells until you run out of the good stuff. 3-D gives you a cube of the earth that you can slice, dice and analyse how the different layers look. 2-D seismic, which MEL currently uses, can only look in one vertical plane without see what is immediately to the sides.
Hopefully, we are sitting om a several square kilometer structure with multiple pay sands.
MEL Price at posting:
49.5¢ Sentiment: Buy Disclosure: Held
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