American Oil and Gas Reporter - February 2021 - 58

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to confidently predict properties such as p-impedance and density
at a correlation of 0.88 and 0.70, respectively, providing results
that are at or above the upper threshold for prediction from traditional inversion techniques. These methods can predict with
higher accuracy, at a higher resolution, and faster than traditional
inversion methods. Machine learning is also being used to
identify patterns in seismic, such as notoriously hard-to-find salt
structures in offshore settings. The practical implications of
these workflows are better reservoir characterization to find
higher-quality pay and more efficient completion designs.
Overall, the big new thing is creating tools that fuel better
decision making and are more widely accessible to more key
players. The major pieces required to create these tools include
a vast inventory of G&G data in legacy basins and an innovative
approach to processing using machine learning that results in
outcomes that are far more valuable than the sum of their parts.
We think these tools will allow for better decision making and
resource allocation, which will really be the key driver in
success for unconventional plays moving forward.

Q:

In keeping, how can operators better evaluate
and analyze their existing leaseholds in established resource plays to gain new perspectives on
infill development and ultimately add upside value
and recoverable reserves?
MAYER: In the current economic environment, unconventional
plays require a precise balancing act of managing costs and
highly informed decision making on where to most efficiently
allocate resources. The days of true resource plays and mass indiscriminate development are, in all likelihood, behind us. In
order to survive, operators will need to be laser-focused on
which assets are most likely to yield a high return on investment.
The good news is that insightful decision making is more
accessible than ever, especially to smaller operators that may
not have the staff or lead time that historically has been required
to build full-scale geologic models and simulations.
One of the major barriers to effective infill development of
existing assets is the uncertainty regarding the detrimental
effects of well interference. This type of analysis can be done
through full-scale models using precise completions, fracturing
and monitoring data. But the real innovation is the growth of
generalized visualization and interpretation modules that can
perform the same analysis using more commonly available
datasets in a fraction of the time. This is the type of interpretive
data that big players have always had access to, so making it
easier to generate and more broadly available helps to level the
playing field in the decision making space.

Q:

What does the data generally tell us about
production performance over time in the
major shale basins? Are we seeing distinctive trends
regarding productivity and decline patterns? What
do they imply about the way forward in these plays as
commodity prices recover?

58 THE AMERICAN OIL & GAS REPORTER

MAYER: One trend we are seeing develop at varying levels
across multiple unconventional plays is simultaneous increases
in well completion costs, initial production rates and decline
rates. This has a tangible impact on project net present values,
which place a higher value on quicker returns on investment,
but also means that future gains in oil prices may be less
effectively capitalized on by existing wells.
An unconventional play such as the Delaware Basin might
be poised to take advantage of this new development for a
couple of reasons. The biggest factor is that Permian plays tend
to produce significantly higher volumes of water than many
other unconventional plays, and as the common water disposal
target formations are becoming overcharged, the price of water
disposal is steadily increasing. If these newer trends shift more
of the production to the first couple of months, effectively
shortening the life of the well, then that also leaves less time
necessary to produce and then dispose of higher water volumes.

Q:

What about conventional reservoirs? Are there
basins where conventional development has
a strong economic rationale as prices continue to recover? Could we see an uptick in conventional exploration any time soon?

MAYER: Onshore U.S. conventional development is likely to
continue to remain fairly close to its current trajectory. Unlike
unconventional plays, where dynamic economic conditions could
potentially open access to innumerable price-sensitive reserves,
the driving limitation of conventional plays is diminishing reserves.
However, many regional players who have carved out profitable
niches in conventional reservoirs using a variety of techniques to
enhance production, such as horizontal infill drilling in existing
fields or EOR flood operations, will continue apace.
One development concept that may see an upside if economic
conditions turn more favorable lies at the fringes between conventional and unconventional reservoirs. " Halo " plays, marginal
areas of conventional plays that have been left undeveloped due
to poor reservoir quality, can be more efficiently exploited now
using various drilling and completion techniques learned from
unconventional shale operations.
Two areas where we see a lot of potential for halo plays
include the clastic reservoirs in the Powder River and DenverJulesburg, which are both Cretaceous basins with similar characteristics and extensive development histories. The rich data
history in these legacy basins will help to identify the most productive formations and facies. There potentially may be dozens
of lower-quality paralic deposits surrounding historic fields in
these basins that could develop into productive trends.
Another development concept that may play an increasing
role moving forward is offshore conventional projects. While
this would rely not only on favorable economic conditions but
also on favorable regulatory and leasing conditions, some promising opportunities are still available in U.S. offshore areas. The
Artic National Wildlife Refuge North Slope play has the potential
to rival the Prudhoe Bay Field, and in state waters on the Gulf
Coast, there are promising indications of an ultradeep play in
the Wilcox that could lead to a huge discovery.
❒



American Oil and Gas Reporter - February 2021

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2021

Contents
American Oil and Gas Reporter - February 2021 - 1
American Oil and Gas Reporter - February 2021 - Cover1
American Oil and Gas Reporter - February 2021 - Cover2
American Oil and Gas Reporter - February 2021 - Contents
American Oil and Gas Reporter - February 2021 - 4
American Oil and Gas Reporter - February 2021 - 5
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American Oil and Gas Reporter - February 2021 - Cover3
American Oil and Gas Reporter - February 2021 - Cover4
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