an offshore exploration drilling review
TRANSCRIPT
An Offshore Exploration Drilling review Exploration Day – 20/11/2019
Linda Janssen – Geoscientist
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Outline
❑ Exploration wells
❑ Overview
❑ Success ratios & POS
❑ Volumes & Depth
❑ Mean Success Volume
❑ Depth forecasting at target level
❑ Success ratios and depth accuracy
❑ Cost
❑ Planned vs. actual drilling days
❑ Conclusions and lessons learned?
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Exploration wells 2005 - 2018
126 Exploration wells with EBN participation:
❑ Onshore 34
❑ Offshore 92
Primary targets:
❑ Rotliegend (66)
❑ Bunter (35)
❑ Other: Chalk, RijnlandGroup, Jurassic, Zechstein, Carboniferous (25)
Primary targets
Operators*
CK KN JU RB ZE RO DC Total
Dana 2 2 5 2 1 12
Neptune 1 10 14 4 29
NAM 5 23 28
ONE-Dyas 2 6 5 13
Petrogas 0
TAQA 2 3 5
Total 1 1 3 5
Tulip 1 1
Vermilion 2 1 4 7 14
Wintershall 3 4 9 2 18
Total 7 2 4 34 6 66 6 126
*including predecessors
25(20%)
66(52%)
35(28%)
34(27%)
92(73%)
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Success per target
❑ 60 years after Groningen the Rotliegend still is the most important (and successful) target
Primary target
Wells drilled
Technical Successful
Success Ratio
Other* 25 14 56%
Bunter 35 20 57%
Rotliegend 66 47 71%
Total 126 81 64%
*Other = Chalk, Rijnland Group, Jurassic, Zechstein, Carboniferous
**Assuming an estimated average recovery factor (RF) of 75% (based on 85% RF for Rotliegend and lower RF for other targets)
***Post drill expected recoverable immediately after drilling
Expectation (POSg*MSV)
(bcm)
EXP * 75% Recovery Factor**
Post Drill* Expected
recoverable(bcm)
Volume ratio
Volume Ratio
(including 75% RF)
Volume / successful
well
29,6 22,2 13,2 45% 59% 0,94
37,6 28,2 12,7 34% 45% 0,63
64,4 48,3 42,5 66% 88% 0,90
131,6 98,7 68,5 52% 69% 0,85
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Success?
With sufficient wells we should find Σ Expectation:
Too optimistic on POSg, MSV or both?
EXP (Expectation) = Mean Success Volume
(MSV) * Probability of Success (POSg)
*NB: oil in BCM GE
126 exploration wells Volume (bcm)
Σ Expectation (MSV*POS) 132
Σ EXP * 75% RF 99
Post drill expected recoverable* 69
∆ volume -30
69%
*Note: Post drill expected recoverable immediate estimates
after drilling
Pre-drill Expectation (POSg*MSV)
Post-drill Expected Recoverable
Number of wells
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Creaming curve Offshore
0
200
400
600
800
1000
1200
0 100 200 300 400 500 600 700 800
Cu
mu
lati
ve G
IIP
(N
m3
)
# exploration wells
Offshore
Offshore: not (yet)
creaming off
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Success ratio and POSg
→ Success ratio is larger than POSg
(*until 2018)
In other words: we are more successful than we expect!
All wells (126)
Technical success ratio (81 out of 126 successful)
64%
Commercial success ratio(69 wells producing, development incl. expected developments)
55%
Average POSg (pre-drill) 53%
0
5
10
15
20
25
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20052006200720082009201020112012201320142015201620172018
Nu
mb
er o
f ex
plo
rati
on
wel
ls
PO
S &
Su
cce
s ra
te (
%)
Year
Average POSg and success ratio
Successful wells Dry holes Avg POS/yr
Success ratio/yr Success rate all 126 wells
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Success ratio and POSg
POSg grouped in classes of ~20% for 126 wells
Conclusion still the same:
❑ all POSg’s are underestimated
❑ Average success ratio is higher than POSg range
But: Higher POSg means higher EXP, but since we find less than ΣEXP →
MSV too optimistic?
EXP (Expectation) = Mean Success Volume
(MSV) * Probability of Success (POS)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0-25% 26-40% 41-60% 61-80% 81-100%
Act
ual
su
cces
s ra
tio
(%
)
Postdrill success ratio vs. predrill POS
POS
10
38
28
34
16
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Outline
❑ Exploration wells
❑ Overview
❑ Success ratios & POS
❑ Volumes & Depth
❑ Mean Success Volume
❑ Depth forecasting at target level
❑ Success ratios and depth accuracy
❑ Cost
❑ Planned vs. actual drilling days
❑ Conclusions and lessons learned?
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Let’s recap…
With sufficient exploration wells we should find the Expectation volume, but we only find 69%
Too optimistic on POSg, MSV or both?
POSg
❑ POSg is often underestimated → we are more often successful than we expect!
MSV
Potential reasons for too optimistic MSV:
❑ Positive skew
❑ Uncertainty in depth forecasting at target level
EXP (Expectation) = Mean Success Volume
(MSV) * Probability of Success (POSg)
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126 exploration wells Volume (bcm)
Σ Expectation (MSV*POS) 132
Σ EXP * 75% RF 99
Post drill expected recoverable* 69
∆ volume -30
69%
Success Volume
Potential reasons for too optimistic MSV
EBN’s prospect database shows:
LSV (P90) = 0,4 x MSV
P50 = 0,86 x MSV
HSV(P10) = 1,8 x MSV
We find 69% of our predrill Expectation estimates or ~P60
(HSV values will drive the Mean to high end, i.e. MSV > P50 and certainly >>P70)
→ Positive skew does not explain the difference
*NB: oil in BCM GE
Most – if not all – prospect volumes are positively skewed
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Volume prediction
UnderpredictedOverpredicted
∆ v
olu
me
(b
cm
)
❑ Bias observed towards being overpredicted
❑ EBN is currently studying in detail which parameters (porosity, net/gross, time depth conversion etc..) control the overprediction phenomena
126 exploration wells Volume (bcm)
Σ Expectation (MSV*POS) 132
Σ EXP * 75% RF 99
Post drill expected recoverable* 69
∆ volume -30
69%
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Forecasting reservoir depth
13% of well targets come in shallow
60% come within 25m depth error
27% of well targets come in deep
De
lta
re
serv
oir
de
pth
(m
) a
ctu
al
-p
rog
no
sed
❑ Top reservoir depth is often under/over predicted
❑ 40% of the wells come in >25m shallower or deeper than prognosed
❑ Coming in too deep may have effect on:
❑ Column height
❑ Possibly on spill point
❑ But, unlikely to explain 31% lower volumes
What is the reasons that more wells come in deep than
shallow?
Effect on success ratio?
Optimistic MSV related to depth forecasting?
Delta reservoir (m) = prognosed depth top reservoir vs. actual depth top reservoir (drilled)
Shallower than prognosed
Deeper than prognosed
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Forecasting reservoir depth (bias?)
❑ There is a bias in the depth errors towards being deep to prognosis
❑ Most depth errors caused by uncertainty in time-depth conversion
❑ An explanation can be given by the selection bias; structural highs are more likely to be selected for drilling in the portfolio ranking process (Hoetz, G. EAGE,
2016)
Why biased estimates?Selective sampling*: bias
* Structural height is an important selection criterion
For more detail: Hoetz, G. Observations from systematic depth conversion reviews and its impact on the drilling portfolio, EAGE 2016
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Bunter and Rotliegend
Wells Successful Ratio
Bunter 35 20 57%
Rotliegend 66 47 71%
Total 101 67 66%
Average success ratio is 64% (81/126 wells)
Shallow and deep wells below average success ratio (but, limited population of wells)
101 wells (RB, RO)
15/26 (58%)
deep successful
6/13 (46%)
shallow successful
NB: 1 well did not reach its target
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Bunter and Rotliegend101 wells (RB, RO)
15/26 (58%)
deep successful
6/13 (46%)
shallow successful
NB: 1 well did not reach its target
46/61 (75%)
successful
Conclusion:
Wells with good depth prognosis have a higher technical success ratio
Wells Successful Ratio
Bunter 35 20 57%
Rotliegend 66 47 71%
Total 101 67 66%
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Discovered resources: all wells
Remember….
Discovered resources vs. EXP of 69% for all wells
*NB: oil in BCM GE
*Note: Post drill expected recoverable immediate estimates
after drilling
Pre-drill Expectation (POSg*MSV)
Post-drill Expected Recoverable
Number of wells
EXP (Expectation) = Mean Success Volume (MSV) * Probability of Success (POS)
126 exploration wells Volume (bcm)
Σ Expectation (MSV*POS) 132
Σ EXP * 75% RF 99
Post drill expected recoverable* 69
∆ volume -30
69%
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Discovered resources: Depth error <25 m
Expectation vs. post drill expected recoverable for wells with depth error <25m:
Conclusion: Better estimate of depth uncertainty may result in better volume predictions (69% → 75%)
78 wells (depth error <25 m) Volume (bcm)
Σ Expectation (MSV*POS) 68
Σ EXP * 75% RF 51
Post drill expected recoverable* 45
∆ volume -6
75%
*NB: oil in BCM GE
Pre-drill Expectation (POSg*MSV)
Post-drill Expected Recoverable
Number of wells
*Note: Post drill expected recoverable immediate estimates
after drilling
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Outline
❑ Exploration wells
❑ Overview
❑ Success ratios & POS
❑ Volumes & Depth
❑ Mean Success Volume
❑ Depth forecasting at target level
❑ Success ratios and depth accuracy
❑ Cost
❑ Planned vs. actual drilling days
❑ Conclusions and lessons learned?
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Cost: Drilling days
❑ Comparison based on drilling days (planned vs. actual); tested and dry
❑ Does not take into account deviated vs. vertical holes, etc.
❑ Indicative only!
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
220%
-60
-40
-20
0
20
40
60
80
100
120
140
160
180
200
220
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121
Day
s o
ver/
un
de
rru
n
Pe
rce
nta
ge o
ver/
un
de
rru
n (
actu
als
vs A
FE)
Individual wells
Over/underrun drilling days: planned vs. actual
> 50% (23)
+ 15% - +50% (34)
-20 - + 15% (52)
< -20% (14)
Days over/under
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Cost: planned vs. actual drilling days
Costs
❑ Total drilling AFE’s 2005 -2018 €2,1 billion (includes onshore wells)
❑ Total spend estimation ca. €2,7 billion
Planned vs. actual drilling days
❑ 53% of the wells > 110% planned days
❑ 23% of the wells < 90% planned days
❑ 47% between -20 and +20% planned days
❑ On average 29% more drilling days than planned
❑ In total 126 wells took 4,8 years longer than budgeted for 23,3 rig years
No correlation between targets coming in deep or shallow and overrun on drilling days (R=0,14)
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Conclusions & lessons learned (1)
Success ratio & POS
❑ ΣEXP (POS*MSV) is overestimated – only ~69% of predrill estimates found
❑ Average POSg underestimated by ~11% compared to technical success ratio
❑ → We are more often successful than we expect
❑ → Commercial success ratio (55%) close to average POSg (53%)
❑ → MSV may be overestimated
Depth & volumes
❑ 40% of the wells come in >25m shallower or deeper than prognosed.
❑ There is a bias in depth forecasting towards being deep to prognosis
❑ Wells with a good depth prognosis have a higher technical success ratio (for Bunter and Rotliegend targets)
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Conclusions & lessons learned (2)
Drilling days and costs
❑ On average 29% more drilling days than planned
❑ Only 47% of the wells is drilled in the bandwidth of 80-120% of planned drilling days
❑ Total drilling AFE (dry/tested) of € 2,1 bln, real cost estimated of ~€ 2,7 bln
Recommendations
❑ Proper post-drill well analysis, we must learn from our mistakes
❑ Peer reviews
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-20
-15
-10
-5
0
5
10
15
20
-100
-80
-60
-40
-20
0
20
40
60
80
100
Depth prognosis error per well per year with moving averageSh
allo
w t
op
rogn
osi
s (m
)D
eep
to
pro
gno
sis
(m)
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Mo
ving
average
Take home message
We are improving depth forecasting due to technical improvements, there is hope for improving our volume predictions in the future!
energisingthe transition