VAGABOND VENTURE OIL COMPANY SEARCHES FOR FOSSIL FUELS

Session 1

What are we after, how do we find them,and how do we make a profit?

The course outlineBut first, Geology in the News

Winter Term 2012

Chesapeake Energy Corp., one of the oil and gas producers most responsible for the current glut of natural gas supply, said it will reduce drilling activity this year as natural gas prices have reached a 10-year low. Cutting 46 drilling rigs to 23.

The current glut of natural gas partly stems from the U.S. energy industry's success with new exploration techniques, notably hydraulic fracturing of shale formations, or fracking. The boom in new production, plus lackluster demand amid a mild winter, helped drive natural gas prices Friday to $2.343 a million British thermal unit, down 26% month over month and down from nearly $14 in July 2008 as supply has far outstripped demand

Geology in the News

The course outline

Geology in the News

Geology in the News

Week 1: Geology of Coal, Oil and Gas (Don)Week 2: History and processes of exploration (Sandi)Week 3: Engineering of exploration/production (Rocky)

The Course Outline

Week 4: ‘Vagabond Venture Oil Company’ finds 4 prospects (together)

Week 5: ‘Vagabond Venture Oil Company’ drills 2 (together)Week 6: ‘Vagabond Venture Oil Company’ finds & produces two fields: one oil & one gas (together)

Vagabond Venture Oil Company offers you a virtual investment opportunity

Several Ways of Investing in Oil & Gas Projects

1. Invest $’s in the Stock of a Major Oil Company 10 year return on investment = $3-5%

2. Invest $’s in the stock of a Small Oil Company10 year return on investment - $0 to 500%+

3. Invest $’s in the drilling of a single well:10 year return on investment - $0 to 100%X+

4. Invest $’s in the drilling of two or more wells:10 year return on investment - $0 to 1,000%X+

What Vagabonds Oil Company will be offering you

Investing $’s as a Partner* in Vagabonds Oil & Gas

Invest in:1. drilling a single well, dry $ or completed $$

1. Invest a $ amount in an E & P project for a small % of profits or 2. Pay a % of the cost of an E & P project for a larger % of profits

Your investment return = your % of actual project cost

applied to profits

Partner*: you participate in decisions on major deviations from approved $ expenditures

or2. Two of more wells depending on

the results of initial drilling

What you can study in order to make your investment decision

Proposed Location

What you can study in order to make your investment decision

Geological report and map Geophysical report and cross sections

Land-lease report and mapDrilling recommendations &

detailed cost flow chart

Introduction:What Natural Resources Burn?

What are Natural Resources that Burn?

Vegetation: Grass, twigs, wood chunks

Compressed Vegetation: Peat, lignite, coal

Compressed animal remains: Oil and gas

Humans have sought for and fought over these resources from the

beginning of historic time

How are these resources related?

Natural Resources that Burn

How are these resources related?

Today‘s burnable Vegetation: grass, twigs, wood chunks

They all have an organic origin: either from plants or from “animals”

For example: plants

Yesterday’s Vegetation: peat in inland glacial bogs

Long Ago’s Vegetation: lignite in tropical coastal swamps

Very Long Ago’s Vegetation: coal from buried lignite

Peat briefly

Peat hand dug from a glacial bog in Scotland

Commercial peat operation, Ireland

Peat fired electrical generation, Finland

Peat bogs are found today scattered wherethe recent continental glacier covered

much of the Northern Hemisphere

Last continental glacier:Eurasia: area of peat bogs

Last continental glacier:North America: areas of peat bogs

Human landpath

Most Recent Continental Glaciation

Leaving peat; next lignite (low grade coal)

First, let’s look at lignite in Texas

Lignite at or near the surface in Texas

Lignite mining in Texas

Texas lignite: ancient, Gulf of Mexico coastal swamps

Open Pit Lignite Mining, Texas

Huge drag-line crane removing rock covering the lignite layer

Continuous belt conveyer digs up lignite layer and loads lignite into huge dump trucks

Dump trucks move lignite to nearby furnaces to be burned to make electricity

How do we get layers of lignite in layers of sandstone, shale, and limestones?

Lignite layer

Cross Section Cartoon of Occurrence of two layers of Lignite

Lignite layer

Land surface

Sandstone layerLimestone layer

Shale layer

How did all this happen?Let’s look at the present-day Texas coast as a possible modern model

Shale layer

Bays, swamps, & marshes (organic rich mud) = future lignite

Sand = future sandstone

Mud (clay) = future shale

Accumulation of sediments in the Gulf of Mexico An area world famous for Oil and Gas Fields

How do we get several layers of lignite of different ages

Today’s Bays, swamps, & marshes = future ligniteLong time ago location of bay muds & offshore sands & clays

Younger location of bay muds & offshore sands & clays

Today’s location of bay muds & offshore sands & clays

But before considering oil and gas, let’s look briefly at COAL

Natural Resources that Burn

How are these resources related?

Today‘s burnable Vegetation: grass, twigs, wood

They all have an organic origin: either from plants or from “animals”

For example: plants

Yesterday’s Vegetation: peat in inland glacial bogs

Long Ago’s Vegetation: lignite in tropical coastal swamps

Very Long Ago’s Vegetation: coal from buried lignite

Coal briefly

Coal Resources: USA

Why so much soft coal in the central USA?

Lignite

Soft Coal

Hard Coal

Coal Resources: Central & Eastern USA

Let’s look at the geology of North America at the time when soft coal was being formed

Land: ancient North America 290 million years ago

Ancient Appalachian Mountains

Vast area of tropical swamps & marshes

A quick look at geologic time

Today’s soft coal areas

Geologic Time: Last 570 Million Years

570

,000

,000

yea

rsTime of coal formation &building of theAppalachians Mountains

Where does oil & gas fit with thesenatural resources derived from plants?

Time of lignite formation in Texas

Natural Resources that Burn

How are these resources related?

How are coals related to oil & gas?

Generally speaking; Oil & gas are made from minute, marine

animal remains:Coal is made from tropical swamp plant remains.

In both coal and oil & gas: remains must be prevented from decaying:

usually by PROMPT BURIAL by younger sediments!!

Where might large volumes of plant and animal remains be buried quickly?

Let’s look again at the paleo-geologic map of North America 290 million years ago

Land: ancient North America 290 million years ago

Ancient Appalachian Mountains

Area of thick sediment accumulation along rising mountains

In the Appalachian Trough both plant and marine animals were quickly buried giving rise to the coal, oil, and gas fields of PA & WV

App

alac

hian

Tro

ugh

Does this paleo-geologic map account for the oil and gas fields of eastern USA?

Central Texas

Focus on eastern USA

Gray=dry holes!

Focusing now on a recent geological model for oil & gas:

1. generation 2. migration and

3. entrapment

The Gulf of Mexico geosyncline

Geology and Oil & Gas Fields: GOM

Gulf of Mexico geosyncline

Focus on this area

What is a Geosyncline?

Answer: A thick (1000’s of feet) accumulation of rock debris in the ocean at the continental margin

Debris brought to the ocean by rivers and spread along the coast by ocean currents

OceanRocks of the Iberian continental crust

Geosyncline Example:

land

geosyncline

River debris

river debris

A modern example of a geosyncline: The Gulf of Mexico

Example of a Geosyncline:Gulf of Mexico

1. Integration of the debris of several rivers

Modern Sediment

Accumulations

Swamp Muds

Shallow water Sands

Deep water Muds

Affect on the North American Continent by the creation of the GOM geosyncline

Example of a Geosyncline:Gulf of Mexico

Affect on the North American Continent by the creation of the GOM geosyncline

Gulf of Mexico Geosyncline

Oldest part of geosyncline rising

as erosion moves debris into Gulf

Youngest part of geosyncline sinking as

erosional debris is deposited in the Gulf

Hinge Line

rising

Sinking

2. Accumulation of thick layers of debris

New Orleans

Subsurface Cross Sections Gulf of Mexico Geosyncline

Austin

Sun City

Gulf of Mexico Geosyncline

MatureSourceRocks

SandstoneReservoirRocks

2. Accumulation of thick layers of debris

65,

00

0 fe

et t

hic

k

What is a source rock?

Shale: potentialoil & gas sourceRocks

Gulf ofMexico

What are source & reservoir rocks?

rising

Sinking

Hin

ge L

ine

What is an oil & gas source rock?Any rock, usually a shale, that yields oil & gas naturally when squeezed

and heated (buried) .

What is a reservoir rock?Any rock, usually a sandstone or limestone,

that will yield oil & gas (or water) whenpenetrated by drilling

Let’s look for source & reservoir rocks in a typical well in the Gulf of Mexico

Geology and Oil & Gas Fields: GOM

Gulf of Mexico geosyncline

Geology and Oil & Gas Fields: GOM

Gulf of Mexico geosyncline

Let’s look for source and reservoir rocks in a typical well drilled in the Gulf of Mexico geosyncline

Typical layers of shale (gray) & sandstone (yellow) in a geosyncline: e.g. Gulf of Mexico

Let’s look at this portion of the well log

Well drill hole

Sandstone (reservoir)

Shale non-reservoir

Water Oil &/or Gas

Reading a Wire Line Electrical Log

Potential Source Rocks

Reservoir Rocks

Can you read this electrical log?

Depth track: depth below derrick floor

Reading the electric log of the well

How does oil & gas get from the source rock into the reservoir rock?

Reservoir rock

Source rock

Source rock

Top of mature (generating) source rock

Oil & Gas escapes at the surface

Unless there is a trap (fence) in the reservoir rock layer

Typical oil and gas trapsA simple fault trap

Rock Layers can be Broken (faulted)

Fault

Where’s the Oil trapped?

Week 1: Geology of Coal, Oil and Gas (Don)Week 2: History and processes of exploration (Sandi)Week 3: Engineering of exploration/production (Rocky)

The Course Outline

Week 4: ‘Vagabond Venture Oil Company’ finds 4 prospects (together)

Week 5: ‘Vagabond Venture Oil Company’ drills 2 (together)Week 6: ‘Vagabond Venture Oil Company’ finds & produces two fields: one oil & one gas (together)

NEXT WEEK!NEXT WEEK!