worth a read

Hi guys. Thought some may find these stats and facts interesting...I particularly like the second last paragraph. The rate for hitting commercial oil or gas using 3d seismic is now over 50%,and thats before the drill bit makes its first turn. After high pressure HC's and multiple oil traces are found surely the chances are much greater than 50 %. I like those odds compared to return.


But science and technology quickly developed to improve the industrys ability to determine what lies belowground. Seismic technology uses the reflection of sound waves to identify subsurface formations. A crew working on the surface sets geophones at intervals along a straight line. Then a loud noise is created at the surface. The noise moves throughout the ground and reflects off of underground formations. How quickly and loudly that sound is reflected to the geophones indicates what lies below ground. This process is repeated many times. Different types of formations reflect sound differently, providing a picture of the types of rocks that lie below. If the geophones are laid out in straight lines, the results are called two-dimensional seismic. If they are in a grid pattern, the result is called three-dimensional seismic. Reading 2D seismic images to find possible traps and reservoir rocks was as much art as science. Today, sophisticated technology and high-speed computers help geo-physicists process massive amounts of seismic data. From these data, they can develop 3D underground maps that significantly improve the industrys ability to locate possible oil or gas deposits. But until a well is drilled, it is impossible to know for certain whether the resource is there, whether it is oil or gas, and whether it can be recovered in commercial quantities.

Drilling costs
Once a company identifies where the oil or gas may be located, it then begins planning to drill an exploratory well. Drilling a well is expensive; shallow offshore wells or deep onshore wells can cost more than $15 million each to drill. Aggregate capital costs for exploration and development of some deep water oil and natural gas projects can exceed $1 billion during a period of as much as seven years before production first occurs. [1]

And costs keep increasing. The costs of major oil and gas production projects have risen more than 53 percent in the past two years, and no significant slowing is in sight, according to a new benchmark index developed by IHS and Cambridge Energy Research Associates (CERA). [2] Companies must analyze all of the available information in determining whether, and where, to drill an exploration well.

Drilling location
Before the technology advances of the past few decades, the best place to put a well was directly above the anticipated location of the oil or gas reservoir. The well would then be drilled vertically to the targeted oil or gas formation. Technology now allows the industry to drill directionally from a site up to 5 miles (8 km) away from the target area. Computers on the drilling rig and steering equipment in the drill-bit assembly enable guiding the wellbore with such accuracy that it can target an area the size of a small room more than a mile underground. This directional drilling technology means that the industry can avoid placing wells in environmentally sensitive areas or other inaccessible locations, yet still access the oil or gas that lies under those areas. Advanced drilling technologies, linked with satellite communications, mean that an engineer can monitor and guide drilling operations in Peru, in real time, from an office in Houston.

Drilling process
In simplified terms, the drilling process uses a motor, either at the surface or downhole, to turn a string of pipe with a drill bit connected to the end. The drill bit has special teeth to help it crush or break up the rock it encounters to make a hole in the ground. These holes can vary in diameter from a few inches to approximately 2 ft (0.6 m), but are usually in the range of 8 to 12 in (20 to 30 cm). While the well is being drilled, a fluid, called drilling mud, circulates down the inside of the drill pipe, passes through holes in the drill bit, and travels back up the wellbore to the surface. The drilling mud has two purposes:

To carry the small bits of rock, or cuttings from the drilling process to the surface so they can be removed.
To fill the wellbore with fluid to equalize pressure and prevent water or other fluids in underground formations from flowing into the wellbore during drilling.
Water-based drilling mud is composed primarily of clay, water, and small amounts of chemical additives to address particular subsurface conditions that may be encountered. In deep wells, oil-based drilling mud is used because water-based mud cannot stand up to the higher temperatures and conditions encountered. The petroleum industry has developed technologies to minimize the environmental effects of the drilling fluids it uses, recycling as much as possible. The development of green fluids and additives is an important area of research of the oil and gas industry.

Finding oil
Even with the best technology, drilling a well does not always mean that oil or gas will be found. If oil or gas is not found in commercial quantities, the well is called a dry hole; it will be plugged with cement. Sometimes, the well encounters oil or gas, but the reservoir is determined to be unlikely to produce in commercial quantities.

Technology has increased the success rate of finding commercial oil or gas deposits. In the United States, for example, dry holes still accounted for 12% of all wells drilled in 2006. But this compares with 37% in 1973, 32% in 1983 and 26 percent in 1993. For wells seeking new deposits of oil or gas, or exploratory wells, technology has decreased the dry hole rate from 78% (only 22% of wells finding commercial quantities of oil or natural gas) in 1973 to 49% in 2006. [3] The use of better seismic and drilling technologies means fewer wells are required to add to the world's oil and gas supplies.

New and better technology has made it possible for the industry to continue finding oil and gas with fewer wells, less waste, less surface disturbance, and greater efficiency.

Fingers crossed )