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American Association of Petroleum Geologists EXPLORER, April 1993

Statistics Indicate Patterns-- Historical Data Aids Search for Oil

By Kathy Shirley
APPPG EXPLORER Correspondent
Keywords: Statistics, Exploration, Smackover, Norphlet, Haynesville, Arkansas, Louisiana, Alabama, Florida

Introduction
With all the whiz bang technology available to eplorationists today it's easy to forget how important basic historical information can be in moving an exploration play forward.

Compiling large volumes of historical numeric data from a play and integrating it with geologic data into simple models can "project the past into the future," thereby helping to outline future exploration strategies.

M. Ali Khan, an engineer with the Division of Oil and Gas of the Department of Conservation for California, likened it to water witchers.

"These witchers are not quacks," he said. "They are using their previous experience of where they have found water to predict where they are likely to find it in new areas."

Data and Trends
In 1991, while "between jobs," Khan conducted just such a statistical-geologic study for fields producing from the Norphlet, Smackover, Buckner and Haynesville formations in Arkansas, Louisiana, Mississippi, Alabama and Florida using data that was publicly available.

He said that combining statistics, economics and geology within an exploration trend could show the pattern developing and thus direct future efforts.

ARKLA_MAFLA TREND

"The numbers alone can sometimes be misleading - but combined with geologic information, statistics can be an important tool in directing exploration," he said.

A little historical perspective in a 55-year-old trend - where there are 325 fields in a 400-mile long, 250-mile wide region with ultimate recoverable reserves of 1.6 billion barrels of oil and 9 trillion cubic feet of gas - can certainly be worthwhile.

Khan was amazed to discover the vast amount of data in the public domain through state and federal agencies - if someone is willing to dig for it. He collected data from all the states encompassed by this trend and then went in search of maps, logs and statistical books all over Houston.

When none of the municipal or university libraries in the Houston area had any of this information, Khan contacted Houston-based Geological Consulting Services (GCS) for help in getting a map of the Norphlet, Smackover, Buckner and Haynesville plays.

The company not only provided the map - it allowed Khan to work in their offices and complete his study.

Projections
The fields in this trend are divided into nine geographically separate groups. The first group was discovered in 1937 and the last one in 1979. The groups were discovered progressively, first from west toward east along the depositional strike and then downdip, he said.

As with virtually all petroleum plays, 80 percent of all reserves were discovered within the first five years in only 21 percent of the fields. The net present value of these 21 percent of the fields is 88 percent of all the fields.
"Everyone knows this is how an exploration play develops, but the ability to project discovery patterns, combined with the ability to discern between the early phase when most of the larger fields are discovered and the mature phase when smaller fields are found, can be important in establishing exploration strategies," Khan said.

Pinpointing the "sweet spots" in an exploration play can be valuable in two ways.
First, geoscientists can go back to these traditional sweet spots and apply new techniques and creative thinking to increase reserves.

Then the favorable geologic parameters of the sweet spots can be applied in other areas of the play or even similar, but unrelated plays to increase reserves.

The statistical-geologic study of the Norphlet, Smackover, Buckner and Haynesville plays showed that 67 percent of the reserves were on the downdip side of a fault system that runs through most of the Gulf Coast "like a railroad," Khan said. However, it wasn't until 1990 that Ernest Mancini with the University of Alabama determined that this was all one huge fault system.

"Exploration in these trends should have been like following Interstate 10," Khan said. "But everyone tends to work around one area until some company jumps out and extends the trend."

The company that looks at the statistical history of a trend to help evaluate exploration targets can step out to new areas and get cheaper leases, larger lease blocks and the luxury of working the area alone for at least a while, he said.

"When the producing region is extended to new limits," Khan said, "the clock turns back to the early phase of exploration with larger fields and, thus, larger reserves."

And Away It Goes
His study indicated that the Norphlet, Smackover, Buckner and Haynesville trend could extend into Florida and offshore Florida to the east and South Texas and Mexico to the west.

"This trend is open-ended in both directions. It would be foolish to make any predictions, but the numbers do show a substantial chance for success in extending the trend."

In addition to helping determine new exploration targets, statistical studies can be invaluable in assessing the economics of a trend. For example, by dividing the trend into early and mature phases a company will get more meaningful economic figures than if all the fields were averaged together. Despite the basic nature of statistical studies, many companies have overlooked the value of this information, Khan said.

"During the good times, companies often didn't do these historical studies because they were drilling so many wells - there just wasn't time," he said. "Now, with all the layoffs and tight budgets, this type of study is falling through the cracks."

But now that so many of the producing regions in the United States have entered the mature phase, looking back might not be a bad way of viewing the future.