Difficult Times, Call for Determined Action

By Jeff Foster
President and Chief Executive Officer, MicroSeismic, Inc.

The current oilfield market is creating challenges for all operators and service companies. Life at MicroSeismic is no different, but MicroSeismic is fortunate to have strong investors actively supporting the company through these market conditions. Recently we made changes to our organization to manage the lower well completion activity and uncertainty of our customers’ 2016 capital spends. After a difficult reduction in workforce, our focus is to preserve the team through short-term sacrifices by the whole organization while we aggressively work new ideas that generate business.

Going forward, the market remains very challenging, but our short-term priorities remain unchanged. First, we are partnering with our customers to develop field-specific solutions that impact completion programs in today’s environment. Second, we are cross training our people and advancing technology. Third, we remain ready to service the industry and have the critical mass to deliver multiple surface or downhole projects today and can grow when activity increases. Our forward thinking attitude allows the team to be flexible as we continue to pursue operational excellence and develop world-class technology to enhance completions.

Recently, we held our 6th Annual User Forum, which was an all-day technology exchange among 40+ operators who discussed what they have learned from microseismic with their peers. It is an energizing event because it emphasizes the need to develop and share technology during these difficult times. Feedback from some of the attendees included:

  • From a major E&P - “I believe microseismic is a key technology to developing unconventional wells even in today’s market because it is the only tool that measures the direct result of the stimulation.”
  • From a mid-sized E&P - “Microseismic is essential to developing unconventional wells even in today’s environment because it affects plans for many subsequent wells.”
  • From a small E&P - “Microseismic is a key technology because basic answers of frac height, well spacing, and stage spacing are still worthwhile in new areas.”

One of our key takeaways from the Forum is the need for both geoscientists and engineers to understand the stress distribution in the reservoir to enhance wellbore placement and completion design. As a result, one of our goals is to broaden our capabilities and value over the long-term by extending the analysis of microseismic data to extract a mapping of the stress regime as revealed by the failure mechanisms of the frac events.

When the market does turn, we propose that industry will not return to business as usual. Different business models and new technologies are required in order to emerge as a strong highly differentiated competitor. Based on our customer feedback and the eventual upturn in the market, MicroSeismic is preparing for recovery by protecting our core, remaining a resource for our customers and further developing a technology that we invented and that we wholeheartedly stand by.

Jeff

Pump and Pray

By Peter M. Duncan, PhD
Founder & Co-Chairman, MicroSeismic, Inc.

I ended my December Blog with the admonition that when we pass by a gas pump it should trigger a prayer for a little price stability so we can get back to work. As I sit writing this, oil is flirting with a $30/bbl price against a surging US dollar, the Dow is off 1,200 points since the end of the year and the majors are announcing more layoffs. Ouch!! No prayers being answered here I am afraid.

Mentioning “pray” takes me back 10 years to the early days of MicroSeismic when we were performing our first frac monitoring jobs. Back in those “ancient” times, frac jobs were often pumped into the entire 3,000 foot lateral, which might be an open hole or a cased hole with 3 to 5 zones of perforation. Operators referred to this method of stimulation as “pump and pray”. The industry soon learned that such an approach was not very effective. Natural zones of weakness soaked up all the treatment and left most of the wellbore unstimulated. Microseismic data was fundamental to revealing what was happening at the reservoir. We could see that the events were concentrated in just a few spots along the wellbore.

Since that time the industry has learned to treat the well a small portion at a time, using different techniques to isolate a few hundred feet of wellbore into a single treatment interval or stage. Modern laterals are often divided into 20, 30, 40 or even more stages so that the well is stimulated more completely along its entire length with the expectation that it will then more likely drain the reservoir over its entire length. Older wells that were treated with fewer stages offer an opportunity for re-frac’ing with the intention of filling in between the zones that were frac’ed originally. Diverting the re-frac into new rock is a challenge that has not been completely solved and many re-frac’s have been attempted with what can only be called a return to “pump and pray”. Microseismic data has shown that such open-hole re-stimulations, even when some diverters are used, are only reaching the heel-ward third of the well. Once again microseismic data is revealing what is really happening in the subsurface, tearing down the old models so that we can move forward where innovation is required.

Inevitably we come back to the importance of innovation in the face of any challenge, be it technical or economic. As it is often said, “necessity is the mother of invention”. So this month, I would like to encourage you, every time you see a gas pump, to “pray” for inspiration to solve the challenges we face …. and maybe just a little more patience.

The Age of Cost-Saving Technologies

By Jeff Foster
CEO & President, MicroSeismic, Inc.

Trials bring opportunities, and in 2015 there have been multiple trials for the oil and gas market.   As the year end approaches, I want to reflect on the solutions that will help our industry adapt to lower commodity pricing.  I see opportunities to advance technology for unconventional resources long into the future.

Despite headwinds from the market, our resilient team at MicroSeismic, Inc. (MSI) continued to evaluate what our customers need most – reduced cost of their horizontal completions and maximization of oil recovery – and aggressively improved solutions for the E&P companies. Here are the top five resulting technologies MSI advanced in 2015:

  1. Production Prediction: Most in the industry knows that reservoir models are not reliable for predicting production from unconventional wells. MSI has developed a solution that enables reservoir models to move from theoretical data to use actual  microseismic data to predict accurate production. We are continuing to build proofs of our methodology, and our unique workflow has been applied to several projects in the Permian, Eagle Ford, Woodford, and Marcellus with excellent results. This technology’s greatest benefits to our customers include the ability to evaluate wellbore spacing using predicted pressure depletion maps and analyze the effectiveness of treatments without waiting for production data. For more information on how this analysis works, view our Improving Production Forecasting for Shale Reservoirs webcast.
  2. Auto Moment Tensor Inversion: Auto MTI captures how the rock broke during treatment: the size and orientation of each fracture for every single event. This automated processing technique allows us to develop a more robust and accurate map of microseismic events because it accounts for the focal mechanism of every event in the entire catalog, rather than using a small group of events to represent the whole. In real time,  we can inform operators  whether they are fracturing out of zone as well as identify potential geohazards based on the specific focal mechanisms determined by the AutoMTI process. For more information on how Auto MTI works, read “Automatic MomentTensor Inversion Enables Rapid Real-TimeTreatment Optimization” published by The American Oil & Gas Reporter. 
  3. Microseismic Depletion Mapping: MSI has developed a methodology to use microseismic data observed around the depleted well during fracturing of a nearby well to estimate the size and shape of the drainage volume. Understanding the depletion zone and drainage volumes allows our customers to better design future wells to maximize the productivity from every well. One of the advantages of this approach is the ability to map the depletion zone without relying on pressure measurements in nearby wells. This is important for designing the development plan – particularly wellbore spacing and the number of wells required to optimally develop a field. For more information on how this analysis works, view our Using Depletion-Zone Microseismicty to Understand Producing Volumes webcast series.
  4. PSET® Downhole: MSI has extended the patented PSET processing workflow used in surface microseismic to downhole processing. This method eliminates analyst P&S picking bias and offers a more robust and reliable imaging solution that allows for increased event detection. The result is a more accurate event map and the opportunity to integrate this into the Completion Evaluation workflow, ultimately allowing operators to make better post-job completion decisions.   For more information on this processing technique, view our PSET Downhole webcast.
  5. Profitable Refracturing: Operators face challenges trying to refracture wells profitably. Monitoring of refracturing treatments often shows microseismic activity that is concentrated only at the heel of the well, suggesting a considerable length of the well is often left unstimulated by refracturing. Many have tried to solve this problem by pumping diverters or using mechanical isolation to move the stimulation down the lateral, but our tests have shown these techniques to be largely unsuccessful. MSI has developed a new technique that makes refracturing truly profitable. This alternative refracturing method increases the efficiency of the treatments considerably, at no additional cost compared to other common refracturing methods. For more information on our study of refracturing, view our Geomechanics of Refracturing webcast series.

In 2016, MSI will continue to aggressively advance our technology, focusing on understanding reservoir development. Customer feedback has motivated us to pursue a microseismic solution for understanding relative production per stage and pressure depletion over the entire well. When our customers ask “If we do X (change this completion parameter, change this well spacing, etc.), what will be the outcome?” - we aim to answer.

We are using microseismic insights to enhance our predictive capabilities and find the best possible solutions for lowering completion costs while standing by our core brand – seeing wells better. Our plan is to go deeper with our clients who believe in, understand, and are willing to pursue new technology.

Jeff

That was a year!

By Peter Duncan, PhD
Founder & Co-Chairman, MicroSeismic, Inc.

As I sit in my office anticipating the holidays, the family time, the good eats, I don’t feel the least bit sad that 2015 is almost over. Frankly, this has been a terrible year for our industry in general and MSI in particular. We have been stripped of probably 4 or 5 years of revenue growth from our business and endured the pain of “right-sizing” our staff levels proportionately. Right now it looks like we will enter the New Year with the rig count below 700 and oil trading below $40, setting us back to where we were in 2008.

But let’s look at this from another perspective. Take this quote from Mike Binnion, CEO of Questerre Energy. Mike writes a semi-regular blog with a Canadian oil industry focus that I always enjoy reading. In his December 8 blog he makes the following observation: “Since 2008/09 America has revolutionized the world by changing the global energy paradigm. They did it with disruptive innovations in fracking technology. They have fueled their recovery from the financial crisis while at the same time being the only G20 country to meet Kyoto targets. Many in the US are calling hydraulic fracturing a green technology as a result.”

It’s interesting that one of the first fund-raising presentations I ever made on behalf of MSI and our frac monitoring business was at a greentech venture conference back in 2006. Frac’ing was not nearly so well known a process back then and shales were still largely George Mitchell’s playground. I felt distinctly out of place. But what Mike says rings true. America now imports less than 50% of its hydrocarbons once again. The use of natural gas to generate electricity is helping us reduce our carbon footprint. Cheap energy is fueling a rebound in our economy. Unemployment is down. And I can now fill my gas tank for $30 instead of $50. The success of our industry has put money in almost everyone’s pocket, but has cost a lot of my colleagues their jobs. We are victims of our own success.

In 1973 there were lineups at the pump, gas shortages and rationing all over the country, and reputable predictions that we would be out of hydrocarbons by the end of the decade. You almost had to take out a mortgage to fill your tank. Gas prices jumped 36% in 1 year. Amazingly, in constant dollars, it costs less to fill your tank today than it did then. So while we celebrate the passing of 2015, allow a little time to applaud and give credit to what the industry has achieved. Every time you fill up at the gas station, see a sign advertising gas at under $2/gallon or simply drive by a gas pump, let that trigger a reminder of what got us through that crisis to where we are today – oil industry innovation. Then pray for a little price stability so we can get back to work.

Accurate modeling improves early production predictions

Microseismic, Inc. and Peregrine Petroleum are featured in the November issue of World Oil Magazine with an article discussing how a new method of reservoir modeling offers operators the ability to accurately forecast well production and reservoir drainage for nearby wells.

Read the article

Elementary, my dear Watson

By Peter Duncan, PhD
Founder & Co-Chairman, MicroSeismic, Inc.

I think it was sometime in the summer of 2004 that I was visiting a friend of mine, Larry Oldham, in Midland when I first appreciated the power of microseismic monitoring. At that time Larry was CEO of Parallel Petroleum, a publicly traded E&P company he had founded 20 years earlier. Larry and I had worked together over the years, including drilling many wells together. Over coffee I asked Larry if he had ever microseismically monitored a frac. Larry got kind of excited, went over to his desk where, after shuffling some papers around, he found a CD. It turned out he had just received the data on the CD, the result of monitoring a frac of an Abo well in New Mexico. He popped the CD in his pc and started the playback. What I saw literally blew me away. Here on the screen I was watching a time lapse representation of the progression of the frac away from the well in the form of dots representing the hypocenters of the microseismic events created as the rocks fractured. I was watching a movie of the cracking of the reservoir rocks more than a mile below the earth’s surface. I was in geophysical heaven. I asked Larry what he had done with the movie. “Well, I showed it to my Board and they were fascinated”, was his reply. So I asked him if he were going to monitor any more wells and he said, “Why should I? I already have the movie.”

And therein, in a nutshell, is the biggest hurdle we have faced in growing the frac monitoring market. To a geophysicist the elegance of “seeing” a representation of the frac growing in time is enough to justify the effort and expense of doing the monitoring. But the CEO of an oil producer needs to get more than a science buzz out of his spend, he needs to see either more hydrocarbons or less drain on the budget. As another engineer put it when I told him we had reduced hypocenter uncertainty by 50%, “So what?” Time and time again as we have made advances in our ability to image the stimulation more accurately or more completely, the geophysicists have proclaimed amazement but the engineers have been unimpressed.”So what?”

Over the past few years we have taken the analysis of microseismic data through a number of developments. We started with the location of the events which we found we could image more accurately and more efficiently most of the time with surface or near surface arrays. Next we realized that surface arrays allowed us to unravel the focal or failure mechanism of the rock fractures. This led to better estimates of subsurface stress magnitudes and directions which in turn allowed us to represent the stimulation as an array of scaled and oriented fracture planes rather than simple dots. Next we found we could upscale the network of fractures into an enhanced permeability model. These models are unscaled unless we can calibrate through a history match with production, but nevertheless represent the relative performance of the frac job to a high degree of accuracy. However, while the answers have been ever more elegant and complete they have still elicited a “So what?”

Finally, as a last step, we have found that we can drop the enhanced permeability model into a production simulator and predict the production of a given stage, well or pad. We have demonstrated the truth in these predictions by successfully matching our predictions to the producing history of wells we have monitored. At last we have reached a result that is not met with a “So what?” Most of the time an operator must wait at least 6 months before he knows if he has drilled a P10 or a P90 well. We now believe we can give a reliable adjudication of that metric within a few days of finishing the completion. Our observations are no longer reported in terms of “the number of events”, or the half length of the frac, or the SRV in acre-feet. Rather, we conclude that this well or stage will produce 50% more hydrocarbons than that other well or stage, and with proper calibration we can even state that result in BOE.

Lately I have been watching a TV series starring Benedict Cumberbatch, entitled “Sherlock”. It is one of several instances of the current resurgence of interest in the Sherlock Holmes franchise. What is it that makes this quirky detective so enduringly popular? Certainly he seems to see everything. His observation skills are legion. But then his assistant Watson is no slouch at observation either yet he never seems to “connect the dots”. It remains to Holmes to relate these observations to outside events, to turn data into actionable knowledge that solves the case. “Elementary, my dear Watson” is what he says, but it is anything but elementary. Microseismic monitoring has been all about elegant observations. “Seeing” the rocks break is fascinating but it is not enough to justify another dataset, watching another episode if you will. Predicting production, now that is actionable knowledge and while not elementary it may prove fundamental to making microseismic monitoring truly valuable.

Microseismic Monitoring: from descriptive to prescriptive

By Peter M. Duncan
Founder & Co-Chairman

It seems to me that microseismic monitoring of hydraulic fracture reservoir stimulations has topped out after growing for the last 10 years or so. I believe that today something much less than 10% of the wells frac’ed are being monitored. Monitoring is seen as “nice to have” rather than “need to have”. This is an issue of value proposition. Microseismic event location plots, pictures and movies have proven useful for detecting mechanical issues in the completion, for detecting the reactivation of pre-existing faults and joints and for mapping out the morphology of the stimulated rock volume (SRV), but analysis of the data has been largely qualitative. Issues related to event location uncertainty, event detectability and the complexity of the geomechanical processes that govern the frac’ing have led to inconsistent and sometimes contradictory results when the analyses have been made more quantitative. For example, microseismic derived SRV’s usually produce estimates that greatly exceed the actual production. If the technology is to gain wider acceptance and application, a more rigorous quantitative interpretation workflow must be developed, one that is validated with outside, independent data. Furthermore, we need to get beyond simply describing what the stimulation achieved and begin predicting how changing treatment parameters will change the treatment results and even prescribing what parameters should be used on any given well to achieve a better completion.

That all sounds pretty neat, but how do we judge “better”? In the past we have used such things as number of events or the areal or volumetric extent of the microseismic cloud as a measure of success, but of course the real measure of success is “more hydrocarbons for less dollars”. So I believe that we need to be able to predict production from the microseismic data, and we need the ability to predict how changing the treatment parameters will change that production so that we can prescribe the best set of parameters or at least demonstrate the sensitivity of the production to various treatment options.

At MSI we have been working on just such a workflow and have actually gotten to the point where we can estimate production from a model solely derived from the microseismic data. This workflow involves building a discrete fracture network (DFN) model from the microseismic event set, estimating what portion of the DFN gets propp’ed, estimating the permeability of frac’ed system by calibrating the model with historical production. Recently we built such a model from one well of a 4 well set and then successfully predicted the production on the 3 other wells on the same pad. Such a “blind test” is exactly the validation we need to establish the credibility of microseismic data in general and this workflow in particular.

The next step is to be able to predict how changing treatment parameters will change how the rocks respond. A simple way to do this is to calibrate the rock properties of a 2-D frac model with the microseismic data. That is, we adjust the rock properties until the modeled treatment overlays the microseismic cloud. Then we can run the calibrated model with new treatment options and catalogue the results. However, we, and most other people, recognize the shortcomings of the 2-D models for unconventional reservoir rocks. New, more geomechanically sophisticated models of fracturing are starting to be available. These too require some sort of local rock and stress property calibration. We are approaching such a calibration by searching for the range of parameters that causes the more complex model to match what the microseismic monitoring data observed at the treatment well. We can test the validity of the predicted DFN by doing a blind test like the one that validated the production prediction, but this time we will test the predicted DFN with the one actually observed at other wells nearby the calibration well. Once we are satisfied with the calibration, we permute the treatment parameters and catalogue how the stochastic model responds. The DFN model that results is submitted to a reservoir simulator and the production differences for different treatment options can be estimated. It’s early days for this workflow but the initial results are encouraging.

In the meantime we have made a huge step forward on getting a more useful and believable analysis product out of microseismic monitoring, namely an estimate of production, and we have moved a little closer to that vision of a world where every frac is monitored.

MicroSeismic, Inc. Identified As One Of The Hottest At URTeC

By Rip Stringer
VP, Sales & Marketing

The near 100° temperatures outside didn’t prevent our MicroSeismic team from being noticed as one of the hottest companies and technologies at the Unconventional Resource Technology Conference (URTeC) this week in San Antonio.  Read More here.

URTEC 2015 3 sm

At MicroSeismic we enjoy participating at URTeC.  The conference is an integrated event for unconventional resource development teams with a focus on superior science and technology.  This is a great platform for MicroSeismic, as it directly reflects our team and our focus.  We are an integrated group of petroleum geologists, geoscientists, and multi-disciplined oilfield engineers.  Our superior science and microseismic technology are a rope that ties unconventional resource development teams together.

Our presentations this year included:

  • The Refrac Equation: Maximizing Results with Microseismic”,
  • “Real Actions:  Saving Production Costs in Real-time”,
  • “From Diagnostic to Prescriptive Solutions:  How Microseismic Can Provide Estimates of Early Production”
  • “Microseismic When Every Penny Counts. 

We also presented two epaper’s at the conference:

  • “Stimulated Rock Volume and Estimated Ultimate Recovery”
  • “Use of Automatic Moment Tensor Inversion in Real Time Microseismic Imaging” 

Our presentations and papers reflect MicroSiesmic’s continued efforts to advance microseismic technology to the benefit of our industry and your unconventional resource development teams.

We dedicate our multi-discipline team to maximize your return on investment, increase your production, and reduce your field development costs.  Whether combined with drilling data to optimize well spacing, landing zones and sweet spots, or completion data to optimize stage spacing, perforation strategies and completion techniques, or geology, geoscience, and reservoir data to improve reservoir modeling and increase ultimate recovery, microseismic provides a technical rope that ties your unconventional resource development teams together.

Working together in this economically challenging environment can help maximize your investment dollars. 

To view some of the presentations highlighted above, sign up to view our webcasts on-demand by clicking here.

No Walls.

By John Blake
HR Director

For the better part of the last decade, MicroSeismic has pushed for completions evaluation solutions that are beyond mere “dots in a box.” To do that effectively, we have to treat our people that way. Large companies tend to define boxes and keep people in them: “you are an X and you do what an X does, and so shall it be for all eternity.” If people try to leave their boxes, the shock troops appear to help show them back to their spots. It’s neat and organized, but it stifles creativity and slows evolution to a snail’s pace. Instead of an inventive, entrepreneurial process, progress becomes a continual refinement of what is known. That’s not necessarily a bad thing; it’s just a different mission than we are on.

At MicroSeismic, we don’t put people in boxes. People who join our team bring a box with them on day one that is filled with the sum total of the knowledge and skills they have acquired over their careers. We don’t see that box as the definition of what that person is and will forever be - it’s a mere snapshot at the moment in their career of where their path crossed ours. We see that box as a platform to stand on, as the person develops and grows, reaching for new heights. We don’t wall people in who demonstrate a willingness and ability to think and learn outside their box, we encourage it and reward it.

There is comfort for some residing in a well-defined box. It is absolutely scary, even terrifying, for those not accustomed to testing their limits and reaching for more than they are comfortable with. Yet it is that fear that must be looked in the eye and spat upon for our mission to be accomplished. Our people have never been and will never be dots in a box. We want our people to stand on the shoulders of giants to find the next big thing. To do that, they must be allowed to step up on their box and reach.

How to win in today’s market?

By Jeff Foster
CEO & President

Currently, operators and service companies are revisiting their strategies attempting to determine how to manage cash and maximize return on capital. We can not know how long the market will remain at this level, but, we are all focused on utilizing our best resources – people, assets and technology to improve ROI at $50-60/ bbl. Operators are continuing to assess how to use technology to more effectively drill and complete wells. At a certain point, our industry will reach maximum efficiency. For example, we are nearing the maximum reduction in drilling days per well, without significant capital investment in new technology. To win in today’s market, refocusing our aim on how to more effectively utilize investments is a must.

In unconventional resources, we know many completion stages are not producing the oil or gas as expected. Therefore, technical resources at MicroSeismic, Inc. are reviewing old completion data with the operators to determine how to lower cost and improve the production from each stage. Here are a few examples:

  1. Geophysicist team: We are utilizing the microseismic array for active seismic imaging before and after fracturing while acquiring microseismic data during fracturing. This will provide additional insight and validation of the stimulated zones by combining microseismic and active seismic imaging.
  2. Drilling and completion team: We are collaborating with other service companies to correlate rock properties determined from drilling data to microseismic results. This allows the completion engineer to confidently design an effective perforation strategy to maximize the number of clusters within a given stage, creating a fracture and thus contribute to production.
  3. Completion team: We are developing an interactive correlation between industry frac models such as Gohfer, Frac Pro, etc. and microseismic events to improve the geomechanical interpretation of the fracture. This improves the understanding of the frac geometry and how to optimize the pump rates and fluid type in the field.
  4. Reservoir team: We are advancing from monitoring the hydraulic fracture and describing the stimulated rock volume (SRV) to prescribing how to optimize the completion in real time, understand the permeability enhancement from the productive SRV (amount of proppant in place), and impact to EUR from production forecasting.

Operators need to correlate the data from technology and be equipped to make changes real time to improve the effectiveness of their field development. At MicroSeismic, our strategy is to provide evaluation of hydraulic fractures correlated with other data from the drilling and completion cycle to increase our customers’ NPV.

To learn more about how to win in today’s market, sign up for our free monthly webcast series by registering here.

GeoConvention 2015 – Creating opportunity through technology development and quizzing

By Jaclyn Townsend
Marketing Manager, MicroSeismic, Inc

Two weeks ago in Calgary the the Canadian Society of Petroleum Geologists (CSPG), Canadian Society of Exploration Geophysists (CSEG) and the Canadian Well Logging Society (CWLS) collectively hosted GeoConvention 2015 – New Horizons. The Convention brought together 2,700 earth science professionals from North America and around the world. Although the attendance was a bit lower compared to the past few years, the sense of a downturn, in a seemingly unpredictable market, did not appear to be as omnipresent to our neighbours to the North. In fact, based on papers and posters presented at the Convention, the Canadian market appears to be thriving by creating opportunity through technology development.

Supporting the overall theme, MicroSeismic announced the release of its latest technology, AlertArray™ during the Convention. AlertArray is a real-time seismicity network, which offers operators a single solution alternative to monitor seismicity during hydraulic fracturing and fluid injection operations. The announcement of this new technology comes in light of new mandates and orders, specific to Canada, such as the AER Subsurface Order No. 2.

Also garnering attention was the SEG Challenge Bowl. Hosted by Peter Duncan, MicroSeismic, Inc.’s Founder & Co-Chairman, the coveted event challenges emerging geoscience students who participate in an action-packed geoscience quiz, testing their scientific knowledge. Each year teams composed of geoscience students from around the globe compete for a grand prize - an all-expense-paid trip to the SEG Annual Meeting; held in New Orleans later this year. The winning team at GeoConvention will represent Canada in an International competition against the reigning SEG teams from around the world! The event continues to grow every year with Challenge Bowls held worldwide, and supports emerging geoscience students growth in knowledge while having fun!

geo convention 2015
Thanks to all our clients, partners and friends who stopped by our booth. We hope to see you again next year!

What is Completion Optimization?

By Sudhendu Kashikar
Vice President, Completions Evaluation

What is completion optimization?  Very simply it is achieving higher rate of return on your investment.  In other words, it is improving recovery while lowering finding costs.

As an industry, we have done a phenomenal job of optimizing completions.  The Figure shows the rig count and cumulative production from 2007 in the four large oil producing basins.  

cum oil production

 

Essentially the rig count has remained flat, around 1200 rigs, since 2012.  However we have seen a significant increase in production over the same period.  We have increased the production per active rig consistently in each of the unconventional basins.  We see very similar results in other basins. We have achieved this through several innovations and advances in technology such as:

  • Pad drilling – This allowed us to reduce the time required to drill with new and efficient rigs along with improved drilling practices.
  • Longer laterals – The average length of the horizontal wells has increased, while reducing the number of days required to drill these laterals
  • Well-placement – The use of geosteering has increased the length of the wellbore placed within the target formation, boosting production from individual wells
  • Completion techniques - New completions are using more stages, with higher proppant volumes achieving better formation coverage and improved recovery

We should be very proud of our achievements.  However we cannot stop here.  Even without the recent drop in oil / gas prices, there is a need to continue to reduce D&C costs and improve recovery.  The challenge then is: how can we achieve this with oil and gas prices that are half of what they were last year.   

I believe microseismic will play a larger and more important role in helping us push the boundaries of completion optimization.  How exactly can microseismic help in achieving this?  It will come from reframing the questions we are trying to answer. 

We have been focused on answering the question: “Where did the proppant go?”  This is not the only question we should be asking.  The question we should be asking is, how much permeability enhancement have we achieved within the Stimulate Rock Volume (SRV) and Productive-SRV® (P-SRV). Ultimately it is the permeability enhancement that allows us to produce hydrocarbons from these very tight shale reservoirs.  We can have two wells with the same volumetric SRV / P-SRV, however the production can and is often very different from those two wells.  This comes down to the permeability enhancement realized or achieved within the P-SRV / SRV volume.

Understanding and being able to quantify the permeability enhancement within the stimulated regions will help us achieve the next leap in completion optimization. Understanding and quantifying the permeability enhancement from hydraulic fracturing will enable us to:

  • Predict future production
  • Predict stage level production contribution
  • Identify regional sweet spots
  • Improve refracs

At Microseismic Inc., we continuously strive to answer the difficult questions, invent new methods and techniques to provide intelligent solutions.  We have developed new techniques that enable us to answer the above question: where and how much permeability enhancement have we achieved as a result of hydraulic fracturing?   It is this understanding that allows our clients to move from diagnostic to prescriptive use of microseismic data and thus achieve the next leap in completion optimization.

Kash

You Can Thrive at $55

By Rip Stringer
Vice President, Sales & Marketing

I Can’t Drive 55.  Those of us who were working in the industry during the 80’s will remember the huge boom and bust cycle created by a similar sequence of events to today.  A surge in oil production outside of the Middle East, much of which came from the US, caused prices to decline 67% from November of ‘85 to March of ’86.   In the decade leading up to the price crash the US passed the Highway Energy Conservation Act creating a maximum speed limit of 55 MPH on US roads.  Some of us may remember exceeding this speed limit to Sammy Hagar’s ’84 rock anthem - Can’t Drive 55. 

Today North American E&P operators are stepping up their game.  The crash in oil prices has required the development of unconventional resources to become more efficient than ever.  Operators have slashed activity, abandoning unprofitable development plans that rely heavily on a statistical approach.  Their focus is now turning to a stage by stage-specific stimulation treatment, with the ability to make accurate real-time decisions and assure every dollar invested leads to a profitable return.  They intend to “Thrive at $ 55” in reference to the recent oil price range. 

Successful companies are adapting to today’s new economics quickly.  They are not waiting for commodity prices to return to previous highs; rather operators are assuring they remain competitive in this new reality. These operators are using the reduced activity to not only cut their service costs, but also focus on using new technologies to develop completion techniques to improve the production and the ultimate recovery of their wells.  Using real data, operators are making engineering decisions on the spot to improve their wells performance and reduce costs.   

A key technology component operators are incorporating into completions operations is real-time hydraulic fracture monitoring.  MicroSeismic has taken hydraulic fracture monitoring beyond a service that describes what happened during a stimulation treatment.  Our Completions Evaluation Services provide proven prescriptive recommendations to improve completion performance.  With these recommendations come predictions of production rates and estimated recoverable reserves without waiting for months of production data for an accurate prediction of results.

Our customers are using real-time fracture monitoring of their stimulation treatments to assure new rock is being stimulated, staying within the treatment zone, and avoiding costly geohazards and faults.  Watch our upcoming webcast to learn more about improving production in real- time.

Using microseismic monitoring results coupled with our Completions Evaluation Services, allows customers to determine how much of their stimulated reservoir volume will be productive. 

MicroSeismic is dedicated to helping oil and gas operators maximize return on investment through completions optimization and reducing costs.  We will help you Thrive At $ 55.

Rip

AlertArray™ - How it works

By Ganesh Murdeshwar
Vice President, Canada

If you are an operator working in the Kaybob area of the Duvernay in Alberta, you've probably heard of AER Subsurface Order No. 2! If you haven't, it basically means this - any well completed using hydraulic fracturing in this zone must be monitored for seismicity, with a network sufficient to detect a 2.0 magnitude event within five km of any such well.

The order came in response to a 4.4 magnitude event, felt in the town of Fox Creek on January 22nd, and it's the first time the Alberta Energy Regulator (AER) has mandated this type of monitoring.

It caught a lot of operators by surprise.

While the imposition of these new monitoring requirements does add some overhead, it shouldn’t be too complicated or expensive!

As a direct response to the AER order, MSI has started the development and installation of a permanent seismicity monitoring solution we call AlertArray™. This array will cover the entire ~14,000 sq km area affected by the AER order, which is roughly the size of the State of Connecticut!

MSI has designed a sophisticated hybrid network, blending sondes with seismometers to provide the best possible detection, location, and magnitude accuracy. The hybrid approach is unique, since many arrays only use a network of seismometers to implement seismicity monitoring.  While solely using seismometers can work, it does come with some significant challenges.

For example, we find that seismometers (the instruments themselves) can be quite delicate. To ensure that they make it to the field safely, we have our technicians carry them in their arms during the trip out to the field!

Additionally, a seismometer can also be easy to setup - too easy.  If you're not conscientious about the installation process, you can just plunk one on the ground, cover it with something, and call it a day.  Unfortunately, in that situation, the sensitivity of the instrument can be a real problem - temperature fluctuations and ground noise can wreak havoc with detecting that all-important event signal.

Instead, MSI use the mentioned hybrid approach for all of our seismicity monitoring arrays, including AlertArray. The primary instrument used within the hybrid system is our tried and true BuriedArray® sonde. The system is bulletproof. I mean that literally - I think you could shoot one with a bullet and it would still work.  These sondes are outstanding at detecting and locating events.  At 5 m deep, the system is isolated from temperature variation and surface noise, which correlates to reliable detection and location for even the smallest events. 

However, there is a catch.  Sondes have frequency characteristics that can result in increased uncertainty in resolving the magnitude of larger events. To address this concern, MSI seismicity monitoring networks use at least one seismometer, or comparable broadband instrument, to calibrate large magnitude detections.  AlertArray, specifically, has two for redundancy. 

For maximum performance, the seismometers are installed in a metal vault, about 1m deep, placed on a leveled concrete pad, and placed firmly on undisturbed ground. The seismometer is covered in sand to provide thermal coupling with the ground, and the vault is filled with insulation and locked under a water proof cover.

With the hybrid approach, we can be sure that the sensitivity of the system is protected and that the instruments will be there when we need them. 

At MSI we go to great lengths to ensure that we give our clients the best and most reliable detection technology, and our seismicity network is no exception

I hope you enjoyed getting a peek "under the covers" of our detection technology!

Ganesh

A Tale of Two Prices...

By Peter Duncan
Founder & Co-Chairman

With apologies to Dickens, I must start by saying this is just the worst of times, this “winter of our despair”. There is no “best of times” about it, no “spring of hope” in sight. We are cast in a tale of two prices, the price of oil that we had become comfortable with and the new price that is but half.

For those of us who have been in the industry for a decade or two, there is a certain déjà vu about the whole scene. We know that our industry tends to run in cycles and that we will return to some sense of normalcy in due time whether it is six months or 16. For the newer folks, that assurance is of small comfort when there are mortgages due and student loans to service.

Like most of our peers, we have had to reduce our staff. This is an incredibly hard thing to do. After years of selecting the best and the brightest and then training them in the MSI way, we have tried to tell too many, way too many, that our workload and our cash flow cannot sustain our staff level. And while we have said goodbye to a number of friends and colleagues, we have had to be sure that we retain a cross section of the enterprise’s skills, such that we can continue to look after our client’s needs, continue to improve our technical offering and be prepared to catch the tide of business when it begins to flow once again.

I believe the actions we have taken while painful, have met those goals. We have cut deeply across the board but have retained all the core skills in microseismic frac monitoring data acquisition, imaging, and analysis that our clients have come to depend upon. We have maintained a capacity that is fully twice what our current activity level is, and believe we can grow as the market demands. Furthermore, we have retained a disproportionate size in our development group, recognizing that we are a technology company and that technology development is the key to our future market share. Nor have we backed off our strategy with regards to Completions Evaluation. We continue to emphasize a methodology that not only describes what the frac treatment achieved in the most complete and accurate fashion but also prescribes how to get a better frac for the same or less spend. We recognize that in a time of low commodity prices, such a service will be seen as even more valuable since we are all driven to get more out of each and every dollar of CAPEX.

Tough times often bring new opportunities or make us recognize ones that we overlooked in the hurly burly of everyday hustle. For us, an enhanced sensitivity to induced seismic events has opened an opportunity to extend our permanent reservoir monitoring solution to a play-wide seismicity monitoring array we call AlertArray™. We have already deployed small versions of this in California, England, and Canada. Now we are mounting a program that will result in a ~14,000 sq km array that will continuously monitor for induced seismicity in Alberta covering the entire Kaybob play. We believe that the seismicity monitoring network, AlertArray, allows us to offer a low-cost alternative to monitoring each completion in a wide range of areas.

Two other new-old opportunities that are gaining momentum for us are monitoring of refrac’s which benefit from having the infrastructure already in place and a re-emergent downhole monitoring market where our full waveform imaging approach is attracting attention.

Returning to Dickens, it may seem right now that we have “nothing before us”, but I firmly believe we in fact have “everything before us”. Microseismic technology remains the only tool to accurately see how the reservoir responded to the stimulation. We have much to do to really apprehend the knowledge of the reservoir that each microseismic dataset contains. It is with a renewed sense of urgency and mission that we plunge into the months ahead, determined to bring to our industry ever more understanding of frac’ing and reservoir performance. And when the thaw in the business comes, MSI will be here, stronger than ever and even better prepared to help our clients produce more hydrocarbons for less dollars.

Peter

Refrac'ing: Embracing a multi-disciplinary approach for improved well performance

By Sudhendu Kashikar
VP, Completions Evaluation

Refrac’ing – simple enough in concept, and a good bargain to boot.  But, just like frac’ing a well, not all re-fracs are created equal.  The treatment and the returns (incremental production) can vary dramatically.   So like most good deals, if it sounds too good to be true then it probably is! 

That’s not to say that refrac’ing does not provide real opportunities to yield a high return on the investment.  Significant progress is being made in understanding the various aspects of candidate well selection and job design to ensure an optimal refrac.  Quantifying the resulting incremental EUR remains challenging but is certainly feasible. Experience has shown that refracs in general provide significant boosts in production rates and ultimate recovery, often reaching rates achieved through the original frac.

Also, it is not unusual for a refrac to be an order of magnitude less expensive than the alternative of drilling and completing a new well.

All of this raises several questions: Could we have designed and frac’ed the original well better? Wouldn’t it be better if we could perform the stimulation much more effectively the first time?  Isn’t there a better way to design the original completion and hydraulic fracturing program that will yield higher and sustainable long-term production – thus reducing the need for refrac?    Can we improve the design of the original completion with refracs in mind?

There is no doubt in my mind that the answer to all is an unqualified YES, but will require an interdisciplinary approach to design, execute and analyze the completion performance.   We need better data collection during the drilling and completion phases.  Data that will help us improve our understanding of the nuances and interconnections between the geology, stress, well placement, completion hardware and hydraulic treatment parameters. Current practices do not enable such data collection and integration. As an industry we have convinced ourselves that unconventional wells are statistical in nature, and that we need to operate in “factory mode” to improve drilling and completion efficiencies.  We have routinely sacrificed data collection in favor of perceived monetary efficiency.  When data is collected, it is often done on different wells or pads.  Sometimes we have the production log on one well, fiber optic data on a different well, and microseismic data on yet another well.  While we can show significant reduction in cost and time required to drill and complete wells, it has come at a steep price.  The limited or often non-existing data hinders our ability to make forward looking changes to effect well performance and NPV.  The cookie cutter “factory mode” approach inherently limits our ability to engineer the designs and make adjustments to improve the performance of each and every well. 

Yet the technology is out there that enables just such data integration and completions evaluation in Real Time!

At MicroSeismic we are continuing to develop new methodologies to enable an interdisciplinary approach to improve well performance.  We are working closely with reservoir engineers, geomechancis experts, geologists, geophysicists, and frac design engineers to enable operators in making a improvements in their well performance.  We are building calibrated 3-D geomechanical and reservoir models, developing techniques to understand and quantify the permeability enhancement with PermIndex™, undertaking advanced geomechanical simulations, and developing methods to quantify and compare frac performance with FracRx™.  We have embraced the interdisciplinary approach to understanding hydraulic fracture performance and are working closely with our customers to help them achieve significant improvements in performance.

Kash

Does Brand Really Matter?

By Jaclyn Townsend
Marketing

Two weeks ago MicroSeismic, Inc. (MSI) kicked off “Brand Awareness Week” internally, in order to align the Company with our brand standards, tactics and to educate employees about the importance of a brand.

Many people associate the term “brand” with a specific logo, and while part of that is true, a brand means so much more. A brand has two important purposes – to set expectations and to deliver results, which can heavily account for a customer’s final decision to choose one product or service over another.

With the launch of “Brand Awareness Week,” we wanted to have some fun!  In addition to reminding the company about our brand standards and our core values, we sprinkled in some thought provoking activities. In one activity we took submissions from employees on “What the MSI brand means to you.” Our folks got really creative and submitted art, poetry, and even a rap song! 

We also hosted the “MSI Brand Bar.”  At the end of a work day, an area was setup where employees were challenged with a blind taste test between two very well-known beer brands. Results from the “MSI Brand Bar” taste test are below:

  • 55% of participants preferred beer 1 over beer 2; however 63% of them actually liked the taste of beer number 2 better
  • 45% of participants preferred beer 2 over beer 1; 22% of them liked beer number 1 better
  • Overall, 50% of participants did not choose their beer preference based on taste
 IMG 5169  IMG 5166

So what does all this mean? Well, it’s highly likely that taste is not the only thing going on in brand preference. The “Brand Bar” proved that brand is not always about the actual product/service, but rather, can be attributed directly to perception or awareness.

At MSI, we’ve spent over 10 years building our brand – focusing on excellent customer service, unparalleled technology advancements, and the utmost in safety and environment. Now that we have such a strong base, it is our responsibility as a company to live up to that reputation and to continue to build our brand so that the market knows instantly what it is that MicroSeismic, Inc. stands for.

To achieve our vision and mission, and to continue to build value with our brand, we must aspire to live our core values – Mastery, Service, and Innovation. That’s what it comes down to.

So yes, brand does matter. But it’s what you put into it that really matters.

Jaclyn

The Journey & The Way

By John Blake
Director, Human Resources

Most, if not all, of the posts you read in these pages talk about the solutions, the targets, and perhaps even the “end-game” of what MicroSeismic does to help support our customers in achieving their respective objectives in the oilfield.  Most of what I do every day is more focused on what that journey looks like “under the hood” while on the path to those destinations.  While there are tangible milestones that all can see as we push the technological boundaries of what we know, there is no “end point” to having an engaged workforce, or one that is hell-bent on continuing the journey Peter Duncan started us down more than twelve years ago.  There certainly is never an appropriate moment to declare victory, when our people somehow, magically, have mastered the ability to move any immovable object or stop any irresistible force, where we pack up our tools and declare it a day.  Today is no different.

In the years since the company was founded, our journey has taken multiple paths, any one of which could have been deemed “completed” at one time or another and the adventure ended prematurely.  But we haven’t stopped, in fact, we have chosen time and again to continue despite the odds.  In the beginning, simply proving that surface microseismic wasn’t snake oil peddled at the county fair was paramount.  Once well-down that path, we then had to overcome the stigma of being a disruptor in the marketplace, where the slings and arrows of our detractors sought to sway us from our objective, all the while those same detractors were secretly seeking, and failing, to catch up with us. 

That path diverged a third time and we now find ourselves in perhaps the most crucial part of our journey.  A recent Halliburton press release described the current US market as a “raging bonfire that is burning up a lot of the dead wood.”  What most forget in the midst of the conflagration is that the path is not always well-lit, well-trodden, nor easy to navigate.  Pain and misery are part of the journey.  Without them, there is nothing to overcome, and any eventual declaration of victory one day would be hollow, meaningless. These obstacles exist in our journey and they define it.  The weak capitulate, and their journey is over.  We choose to roll up our sleeves.  We choose to use the bonfire as a means to light our way.  We choose to be.  We have never accepted the alternative. That is the MicroSeismic Way.

John

Is MicroSeismic Building Value? Market Studies Say Yes.

By Sarah Groen
VP Strategic Marketing

At MicroSeismic, Inc. (MicroSeismic), we truly believe that optimization of hydraulic fracturing on a large scale is key to the growth of our industry. We are passionate about promoting this idea, and all the suppliers in the market helping to achieve it. To do our part, we commit to living by our Core Values: Mastery, Service & Innovation. A focus on these values means better services and technology for the industry and the ability to push towards our vision. To measure our progress against this commitment we recently gathered a wealth of market data and thought we’d share some highlights.

The findings posted here come from three separate studies – the Welling Study on Hydraulic Fracturing & Fracture Mapping, a study commissioned by MicroSeismic and administered by a third party, and a more informal survey of the 65 attendees at our recent MicroSeismic User Forum. The results from all the studies show that microseismic as a technology is gaining more traction in the market place and that MicroSeismic, Inc. as a company continues to improve and excel.

Here are the top 10 highlights:

  1. Most operators now truly believe that microseismic technology can help to improve the effectiveness of completions.survey image2
  2. 93% of User Forum attendees believe the microseismic market is growing. Engineers and small and large independents showed the most optimism.
  3. Despite current commodity prices, 81% of the User Forum attendees plan to monitor between 1 and 15 wells in 2015. Where there’s value, there’s a way!
  4. In all three studies, the market data shows that operators are most interested in learning about frac geometry, SRV, and Productive-SRV® when undertaking a microseismic project.
  5. In the Welling Study, MicroSeismic was rated as #1 in fracture mapping for best real-time capabilities, turnaround time for deliverables, track record, and overall value.  Focusing on our second core value, “Service” means getting the work done right, on time, and with the best service possible for our clients. That hard work is clearly paying off!
  6. MicroSeismic has by far the highest customer satisfaction ratings of any supplier, according to the Welling Report. 78% of respondents ranked MicroSeismic as a 9 or 10 in “likely to recommend,” and no respondents rated the company below a 7 of 10.welling image
  7. In the third party survey on brand recognition and awareness, MicroSeismic was rated as statistically similar in brand awareness with Schlumberger and Halliburton – and as the highest rated independent microseismic provider. MicroSeismic was also rated the leader in surface microseismic by 80% of all respondents.

    blind study

  8. As a company, we pride ourselves on “Mastery” – continually improving, year over year. This year at our User Forum, clients rated our services 6% higher than in 2014 across all three focus areas: Field Operations, Innovative Technology, Analysis & Interpretation.
  9. In the Welling Study, MicroSeismic was shown to have the highest “Penetration Ratio” of any supplier – meaning of those operators that are aware of MicroSeismic, a very high percentage have used our services and continue to come back. If you like our services and technology, help us spread the word by sharing our latest webcast!
  10. Last but not least, we focus on our core value, “Innovation,” every day by listening to our clients and developing technologies they need, and are willing to pay for. In the third party study, MicroSeismic was rated #1 in Technology Innovation amongst all the independent providers.

To learn more about our vision - a world in which every completion is optimized - visit our Completions Evaluation page, watch a recent webcast, or contact me at sgroen@microseismic.com.

Sarah

One Year at MicroSeismic, Inc.

By Sudhendu Kashikar
VP Completions Evaluation

How quickly time flies - particularly when you are having fun!  It’s not what one would expect to hear in today’s environment.   But, my first year at MSI has been a fun and exciting adventure.  

I joined MicroSeismic’s team to help crystalize and bring to market the Completions Evaluation initiative.   The thought process was very simple – make better use of microseismic data to improve field economics, optimize completions and achieve higher productivity from each and every unconventional well, while at the same time reducing exploration and development costs. What I didn’t know a year ago was that the path we decided to follow would bring us to a position where we are able to address the industry’s most critical issues in the current low commodity price environment.  I believe we have a significant head start, compared to most of our competitors, in addressing these challenges, partly from our vision and largely from the hard work and innovation of all our team members.

We started with a goal of creating, describing and quantifying the proppant filled Discrete Fracture Network and Productive Stimulated Rock Volume (Productive-SRV®).  We did this successfully, and validated our results with production data. The next step was to use the Productive-SRV to perform comparative analysis of various treatment parameters – with a goal to identify the completion design and the most effective treatment plan that would yield the best production.  Again we successfully achieved this.  We now routinely make recommendations on various completion and treatment options along with appropriate wellbore spacing for optimal field development.  This is a big step forward for a company that started with a few geophysicists!

But we can’t stop here. Our goal is to be more prescriptive than descriptive.  It is certainly important to accurately describe what happened, but it is more important to prescribe what changes should be implemented to improve recovery and field economics.  We need to match historical production data and predict future production potential of every well – thus allowing operators to decide on the option with the highest ROI.

This is exactly what we are currently developing with better than expected initial results.  We have developed methodology to quantify the permeability enhancement in the rock impacted by hydraulic fracturing.  This information, combined with other rock and fluid properties, allows for rapid production history matching and future production predictions.   We are developing tools to quantify the impact of changes in completion design on production, and ultimate recovery.  This is exactly what operators are looking for in today’s environment – tools to help them evaluate various options that will result in reduced lifting cost and increased ultimate recovery.

Looking back – we certainly managed to make significant strides in our ability to help operators optimize their exploration and field development.  However, we have just scratched the surface; there are many more innovations around the corner.  Even in today’s tough environment I can see the silver lining.  We are vigorously working with our customers to improve their bottom lines, while delivering solutions to their most critical challenges at the appropriate times.

Kash

Microseismic a Focus at Hydraulic Fracturing Technology Conference

By Jaclyn Townsend
MicroSeismic, Inc.

Last week SPE hosted its annual technology conference, which focused on hydraulic fracturing, in the Woodlands, Texas. The conference included a dynamic mix of sessions that featured unconventional resources technologies and hydraulic frac demos. The audience included E&P companies, oil and gas investors, suppliers and service companies. It’s quite the event for those who are all about the frac!

This year microseismic applications were a hot topic among conference goers and in technical conference sessions.

In a paper given by Pioneer and Baree & Associates, there was a discussion around how microseismic and production history is yielding interesting history matches and being used to determine permeability.  In addition, it was mentioned that real-time microseismic can be helpful in determining how to place proppant.   

J.R. Augustine from Marathon also stated, “…creating more propped fracs is the key to more frac surface area and higher production.”

Statements and key findings like those mentioned above, show that higher production for fewer dollars is what most operators are after these days – and that they’re willing to use technology to get there.

At MicroSeismic, Inc. we offer proven real-time solutions that help make oil production more efficient and ultimately, more profitable. Services like FracRx™ can help operators optimize treatment and improve production by understanding how the fracture area grows in relation to the treatment. Our newest service, PermIndexTM helps operators to better understand permeability and to predict IP and EUR earlier in the life of the well.

Peter Duncan recently did an interview in the Bakken where he says it all, “We actually can give the oil company and the operator a very precise image of where they have fractured the rock in real-time so it can help them go back in and make sure that they harvest every molecule of oil that they can for the least amount of money.”

In a time when every penny counts, it’s evident that operators are looking for technologies like microseismic to help save money and increase production and efficiency.

Jaclyn

Breaking Records and Sharing Ideas

By Marketing
MicroSeismic, Inc.

It was a packed house on January 22nd as MicroSeismic hosted its 5th Annual User Forum. Nearly forty different E&P companies were represented, which amounted to record attendance and participation. MicroSeismic’s clients were able to exchange ideas and best practices in an open environment pertaining to the development of unconventional assets utilizing microseismic.

Speakers from Anadarko, Chevron, Encana, Peregrine Petroleum, RSP Permian, and Texas A&M, just to name a few, packed the day’s agenda. Keynote speaker, Larry O’Donnel from Rockwater Energy, discussed factors that drive the cost of fluids operators use for their treatment wells, and how to turn it into a revenue stream. Encana also gave a well-received presentation on how microseismic plays a major role in calibrating geomechanincal models.

During the Forum, clients had an opportunity to vote for which technologies they think MicroSeismic should develop next. The results ranged from wanting a solution for integrating microseismic frac and geomecahnical models, to more downhole solutions. All in all, Microseismic received validation that our strategy for technology development is headed in the right direction and that the work we are doing for Completions Evaluation is paying off. Other highlights include:

  • Round table luncheons – each participant was able to choose a topic of interest and was seated at that topic table for lunch. Many fruitful conversations abounded!
  • Discussion on using microseismic to constrain frac models and reservoir models – one client presented results from MicroSeismic’s reservoir simulation showing excellent history matching and in range EUR production. Clients also expressed interest in using microseismic to constrain fracture models. If you are interested in working with us to continue to develop these models, please reach out to Sarah Groen at sgroen@microseismic.com
  • Open discussion around the current state of the market and how microseismic can best be used to save costs. The use of microseismic to better understand refract programs was discussed, as well as the avoidance of costly geo-hazards in real time, as well as finding the optimum number of stages for each well to find the balance between cost and benefit. For more information on this, check out the January webcast by Peter Duncan – MicroSeismic: When Every Penny Counts.

MicroSeismic would like to thank all of the presenters and attendees for making this such a great event for all who attended. We look forward to welcoming all our clients to the event again next year.

2015 MSIUserForum A packed house at the 2015 MicroSeismic User Forum.

2015 MSIUserForum2Round table luncheons featuring a different topic at each table.

Cheers,

The MSI Marketing Team

Skiing the Double Black Slope of the WTI Curve

By Sarah Groen
VP Strategic Marketing

Seems like we haven’t found an answer to the question we posed back in October – how low will oil prices go? Since then prices have continued to fall precipitously as evidenced by the skier zooming straight down the WTI curve in the below graph. Apparently the analysts are feeling quite humorous these days!

exhibit-17-sgblog

For the rest of us, a quick adjustment to this new reality is top priority. 2015 is likely to be a year of continued low commodity prices until inventory and oversupply realities work through the market.

As such, we are at the beginning of a steep drop in rig count and have also seen a corresponding drop in horizontal well permits in the US from October to November. At $50 - $60 WTI the average capex cut required to balance most oil and gas operators’ budgets is between 35% and 45%.

exhibit-17-sgblog

With these clearly leaner times, both operators and service companies are looking to operate more efficiently. At MicroSeismic we are focused on finding ways to help our customers save money through this market contraction. Our new FracRxTM service along with our Productive-SRV® analysis helps operators to make the most out of the wells that they do complete this year – helping to avoid unnecessary stages, excess pumping, and ill placed wellbores. In addition, we are now offering a focused solution for refrac’ing for those operators choosing to focus on re-stimulating already existing wells.

Check out this month’s webcast on January 22nd to hear Peter Duncan speak more on how microseismic technology can help operators save money. Click here to register.

The good news for us all is that challenging times inevitably bring opportunities! Let’s make the most of this market together.

Best,

Sarah

Cheers to a New Year and a Raised Standard

By Rushida Patel
Marketing, MicroSeismic, Inc.

In analyzing the responses from a recent market study that MicroSeismic sponsored, I found that the majority of respondents are not aware that MicroSeismic offers downhole monitoring services. We’re out to change that because though downhole is a relatively new service for MicroSeismic, we’ve made incredible progress and have developed a more accurate, less subjective, and more valuable approach to downhole monitoring.

The traditional approach for downhole monitoring is based on picking individual arrival times of compressional (p) and shear (s) waves. With thousands of data points acquired during monitoring picking becomes tedious and time consuming and there can be significant subjectivity in the results based on who’s doing the picking.  Though it’s an accepted method in the industry and does give valuable results, we’re striving for a better solution.

Over the last several months, MicroSeismic has completed a few projects using its new PSET® Downhole technology, including a project that combined PSET Downhole along with surface results. This presented a more complete picture of what happened during the frac.

What’s so different about it? Well to start off, this new technology can identify more events, more accurately than the p&s picking method I mentioned earlier. How? It uses the full waveform and aligns them to locate events rather than relying on the p&s wave arrival times alone (only part of the waveform). This allows for detection of smaller events that may have otherwise been missed due to weak signals or noise. The use of the full waveforms also means that a computer can perform much of the monitoring and analysis on its own, eliminating the subjectivity factor in the results by removing analyst bias.    

The plus-side of downhole imaging doesn’t stop there. Once event uncertainties (whether or not there is really an event there) become too high, i.e. over the decided threshold, it’s excluded from data-set. Hence, imaging will produce higher certainty results overall and will be more reliable for microseismic based analysis such as FracRx® and Productive SRV® calculations that help operators optimize completions and increase production.

This quarter you will hear a lot more from us on PSET Downhole as we work to promote technology awareness and the benefits it provides to E&P companies and investors. In the current state of the industry, operators are looking for ways to make every penny count. This year, our resolution is to help the industry keep costs under control while optimizing production using MicroSeismic’s services. What’s your New Year’s Resolution?

Cheers!

Rushida

MicroSeismic, Inc. - 2014 Year in Review

By Jeff Foster
CEO & President, MicroSeismic, Inc.

2014 was a huge development year in the oil and gas industry in the area of unconventional resources. This year was marked by improved efficiency, breakthrough technology and dramatic change. At MicroSeismic, Inc. (MSI) we also focused on efficiency and breakthrough technology. In 2014, we expanded our offerings to help our clients maximize asset value through real-time completions optimization. Whether avoiding a geo-hazard while monitoring a stimulation or improving a frac design in real time, the result for our trusted partners was a higher return on investment. Let’s review key highlights from the year:

  1. Reaching one million hours without a lost time incident
  2. Commercializing FracRxTM  and PermIndexTM to advance our completions optimization in real-time
  3. Completing the company’s first acquisition – the asset purchase of downhole microseismic equipment from Reservoir Imaging, Inc.
  4. Commercializing a differentiated method of downhole processing through PSET® Downhole
  5. Conducting four simultaneous real-time jobs under one BuriedArray®  without sacrificing quality (22 wells, 445 stages, 1,202 pump hours, and 89 real time monitoring days)
  6. Building a multi-disciplinary team including geomechanical, reservoir engineering, completions engineering, seismology, geophysical, and business expertise
  7. Launching a new strategy to take the company to the next level – driving from descriptive results to prescriptive solutions
  8. Contributing to a “Better Frac, Better World” through advancing microseismic technology and participating in volunteering events for Habitat for Humanity, JDRF, Ronald McDonald House, and the SEG Foundation
  9. Fitting nearly 20 under privileged children with hearing aids and helping to drastically improve their quality of life through our Gift of Hearing Program
  10. Growing international business through a joint service partnership in Argentina and  conducting real time operations in the Australian outback
  11. Successfully delivering a combined surface and downhole imaging project for a client that highlighted the project in its quarterly investor report

As the holidays approach, we celebrate the successes we’ve had as a company in 2014. MSI stands firm on these accomplishments which serve as a strong foundation in this challenging commodity price environment. I thank our employees for their hard work and commitment to safety and service quality, as well as our loyal clients who help us continue to drive the message around microseismic and the enormous benefits it brings with it.

Jeff

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