Who wants to be a millionaire?

By Terry Jbeili
Chief Operating Officer

MSI 1million logo FINALOr, more to the point, who doesn’t?  In this case I’m not thinking about the dollar denomination, although millions of these would be welcome in any fiat currency.  I’m actually referring to an important milestone that every service company in the oil and gas sector strives for:  A million hours worked without a lost time incident (LTI).

MicroSeismic Inc. proudly crossed that milestone in November, clocking in 1,024,808 hours worked with ZERO lost time incidents. 

This achievement is first and foremost thanks to the diligence and focus of our people.  It’s also thanks to the work ethic we’ve established at MSI: living and communicating a Safety First culture throughout the organization.  Our crews work around the clock in often times severe conditions, exposed to the elements day and night.  Any incident that requires medical attention no matter how small qualifies as a recordable incident (yes even something as innocuous as an insect bite).  And if there is lost time as a result, it becomes a LTI. 

The rate is factored on the number of lost time cases reported per 100 equivalent full time employees [for the mathematically inclined it’s calculated as # incidents X 200,000 / Number of Hours] and is reported on industry networks such as ISNetworld to which we subscribe.   Last year in our industry sector the LTI rate was 0.9, which is a great result given the hours worked.

The industry has come a long way in the way safety is addressed.  Gone are the days when, as a young wireline field engineer, my team and I would think it normal to work literally days in the field with little to no sleep – it was almost a badge of honor.  It was also terribly unsafe.   That was over 30 years ago.  Today the checks and balances the industry has put in place are such that achieving an absolute zero LTI rate is not only feasible, but expected, and maintainable - as MSI has proven over the last two years. 

It’s about instilling and applying good practices.  At MSI we learn from our clients, from each other and from industry experts through formal training.  We start each project day with a safety meeting and end the day with a safety review.  We work hard at proactively communicating with our clients and our colleagues safety related issues specific to the project and conditions.    We also learn from our mistakes through non-conformance reporting and corrective actions and effective communication.  We try hard not to be complacent as routine sets in.  And above all we watch out for one another and STOP unsafe practices.

At MSI we’re passionate about Service – and good, reliable service is all about getting things done safely and right the first time. 

Kudos team MSI!

Terry

2009 to 2014: A Shale Retrospective

By Mike Mueller
VP, Technology & Development

As we come to the close of another year, let’s consider the trends in shale technology and business, with a special look at the microseismic market.

At year-end 2014, we see the continued rapid expansion of the ‘shale gale’ plays threatened by the first significant oil price correction since the Great Recession of 2008-9. During the preceding 5 years, the American oil business witnessed an unprecedented expansion of shale oil and gas drilling and production. This led to the astonishing addition of almost one million barrels per day per year, taking the country from around 5.5 million barrels per day to over 9, and from around 50 billion cubic feet gas production per day, to almost 80. This rapid increase in oil and gas production was the most significant in American history.

The first consequence of shale drilling on such a large scale was the collapse of gas prices at the beginning of this period due to the relatively isolated position of the North American gas market. The market became over supplied by 2011 and the gas price collapsed from over $11/mcf to under $2/mcf, before recovering to today’s $4/mcf. The gas supply revolution inspired a complete rethinking of the role of American gas-derived industrial feedstock manufacturing and the rapid conversion of coal fired electricity generation to gas fired. Capital investment in gas-supplied industries has soared. The coal to gas electrical generation conversion allowed the US to reduce carbon emissions growth by more than 10% and put America close to Kyoto Protocol compliance.

Until the third quarter of 2014, oil prices remained relatively stable above $90/barrel despite the rapid growth in American production. Since oil (vs. natural gas) is a worldwide commodity US production at first had a marginal impact on the global market.  At the same time, economic growth outside of China was sluggish following the Great Recession, and the dollar remained stable against the basket of developed country currencies. However, in Q3 2014 the strength of American economic growth, in combination with sluggish growth elsewhere, fueled a rapid rise in the strength of the US dollar against the tradable currencies and a fear in the market that oil supplies may be too high. The result has been a very rapid bear market in which oil prices have fallen over 30%. It’s not clear that the bear market in oil price has hit bottom. It is also not clear that US oil production is the cause of the bear market as too many other factors influence world oil prices. This is in contrast to the clear relationship between US gas production and the gas price collapse in 2010-11. Perhaps 2/3 of the oil price correction is due to currency effects and lowered demand, and 1/3 due to supply effects.

The US shale revolution was enabled by horizontal drilling and high-volume hydraulic fracturing in combination with the market incentives that private mineral ownership brings. Despite societal concerns about carbon emissions and water consumption, the “shale gale” has sustained itself over the past 5 years. The big trends are: the evolution of the various shale plays from exploration and appraisal into full-bore development, the rapid adoption of pad drilling as the fundamental unit of shale play development, and the pads hosting increasing number of wells. Lateral lengths are routinely at 5,000 feet and greater, and stage counts in these laterals are routinely now at 40 and counting. Testing of fluid chemistry and proppant type has been accompanied by sophisticated multi-lateral stage sequencing at pre-drilled pads.

A key challenge with all the shale plays is the rapid decline of production after the wells are put online. First year decline curves are routinely more than 50% and can approach 90%. This is due to the tight nature of the shales accessed through stimulation and the highly variable amounts of stimulated fracture area and volumes of stimulated reservoir rock accessed by the treatment. A key to understanding this is provided by large footprint microseismic monitoring enabled by surface and near-surface acquisition systems that are larger than the pads being drilled and completed. By seeing, in an unbiased way, the entire pad-wide response to the drilling and completion activity, it is possible to directly observe the fracture area and volume of reservoir rock accessed by the completions. Microseismic monitoring had begun before the shale revolution as a downhole observation well based method with great detail over a small footprint, but the trend over the last 5 years towards large area monitoring from surface methods means a holistic understanding of the development programs’ effectiveness at producing the operator’s acreage. We now have the big picture in hand.

So, where do we go from here? With the bear market in oil price hinting at the first downward trend in shale activity in 5+ years, the impact of poorly producing pads will become a key to each shale play’s ability to deliver positive development program cash flows. The ability to see how effectively an operator has accessed the shale volumes under each pad will allow data-driven determination of low vs high producers at the time of completion. Perhaps it is time to rethink the statistics based, factory mindset development of 100s of pad drilling units - accepting the low producers that don’t return planned cash flow - and implement data-driven, deterministic production prediction and mitigation at the time of completion. It’s time to make all that drilling and completions activity smarter, and the production consistently higher.

Mike

From Firefighting to Performance: Advantages of an Uncertain Market

By Kash Kashikar
VP, Completions Evaluation

Management expert Peter Drucker once defined innovation as “the act that endows resources with a new capacity to create wealth.”  This will be evident in the coming months as the industry tackles the uncertainty in the oil prices.  Companies that continue to innovate will come out of this much stronger and in a better position for rapid growth when the price rebounds.

There is no shortage of gloomy outlook for the unconventional shale oil industry in the media.   Further declines in oil prices could certainly dampen the growth, but the most productive basins for shale oil and gas will remain profitable even if oil prices remain at today’s levels.

Let’s consider the numbers:  1) Shale gas production has grown 51 percent per year since 2007, and proved reserves have increased five-fold since then, according to the U.S. Energy Information Administration (EIA).  2)The United States has gone from averaging 5 million barrels per day of total crude oil production in 2008 to 8.7 million barrels per day in September 2014—and the EIA now projects it will top 9.5 million barrels per day in 2015. Shale production accounts for the lion’s share of the increase. 3) Technological innovation is paying off as wells become more efficient.

The silver lining in this tough market is that the industry is now switching from firefighting mode to performance mode.  At lower commodity prices, the industry can no longer absorb in-efficiencies in drilling, completion and production. Companies will continue to focus on safety and will work towards becoming more efficient, rather than hoping for a recovery in commodity prices. This process will enable operators to control costs, maximize operating efficiencies, apply world-class technologies, optimize well performance, and ultimately, enhance recovery.  It affords service providers a unique opportunity to work with operators in providing innovative technical solutions that help reduce costs, improve operational efficiencies, and achieve higher production and EUR. 

I expect to see a three pronged approach by the operators: increased focus on production optimization to boost production from existing wells, re-completion or re-frac’ing of existing wells to tap into by-passed zones, and increase in completion optimization on new wells to achieve higher IP and EUR per well.

As the oil and gas industry continues to transition to new frontiers, I believe that Microseismic Inc. is in a good position to stay at the forefront of change. We are committed to our vision - a world in which every completion is optimized through real-time monitoring and evaluation. In 2014, we took some major steps toward achieving that vision, and we are excited about the possibility of building on that success in 2015 and beyond. As we continue to roll out our innovative Completions Evaluation Services, we provide operators enhanced tools for real-time optimization of their completions. FracRx™ precisely evaluates treatment geometry and helps optimize fluid and proppant volumes for every stage of every well. PermIndex™ is available to determine system permeability further helping operators understand stage-by-stage production variability and adjust treatment parameters to maximize productivity per stage. The need for performance is here and we are delivering it today.

Kash

 

How price and technology have fueled the shale revolution: more was more; now, is less more?

By Mike Mueller

VP Technology & Development

The enabling technologies in the shale revolution are horizontal drilling and hydraulic fracturing. As the revolution has progressed, the focus has been on applying more and more of these two technologies. From this, the industry has progressed from drilling a single lateral with a moderate amount of hydraulic fracturing stages along that lateral, to multi-laterals from a single surface location, called a pad, and dozens and dozens of fracturing stages in each lateral. Further, the laterals are longer, now often more than one mile in length, and the stage fluid and proppant volumes and rates continue to go up. The thinking regarding hydraulic fracturing is ‘more is more’.

Other key supporting technologies include geosteering and high-spec rigs with the ability to skid. Geosteering, an ongoing, precise bit direction control process, is used to ensure the laterals stay in the proper shale zone.  High-spec and skid capable rigs were developed, allowing for more efficient and automated drilling on multi-lateral pads. Today there is almost no drilling down time between laterals on the pad by eliminating rig disassembly and utilizing skidding in any direction. The pad size and number of pads are reduced minimizing footprint.

These technologies are applied in a shale development world where operators acquire large acreage positions and, once appraisal drilling has resulted in an appropriate D&C plan, factory-mode drilling typically is utilized. Several rigs are simultaneously deployed and a deep pad inventory must be continuously prepared to minimize rig nonproductive time. The overall approach fuels the ‘more is more’ mindset.

Ultimately these shale development technologies became possible due to the stimulus of high and rising crude oil prices since 2002 with the exception of the recession in 2008-9.

The challenges of highly variable initial production (IP) from pad to pad and large production decline rates, often 75% or more in the first year, mean that, to continue to grow production, the drilling schedule must remain full. The economics of this situation is often understood in terms of IP, but a recent Reuters review of the shale plays finds that the estimated ultimate recovery (EUR) is a much better driver for understanding shale economics. “From a financial standpoint, rapid decline rates are not a problem. What matters is the EUR. Still, it remains notoriously tricky to predict ultimate production accurately from initial flow rates because there is so much variability and the data is not readily available.” John Kemp, Reuters.

Now, the industry is entering the latest rendition of its time-worn price cycle challenge. In recent months, crude prices have come down some 25% from the low $100s to the $70s. While it is currently believed that most North American shale oil plays will remain cash positive and close to recent activity levels above $70 oil, clearly profit margins will be significantly reduced.

The question of technology utilization will become even more important to continued success: will ‘have to have’ technologies such as horizontal drilling and hydrofracturing remain, while perceived ‘nice to have’ and emerging support technologies get deferred or cancelled? Should shale drilling and completion activity soften due to the oil price correction; the role of hydrofrac monitoring (HFM), as the best tool industry has to understand the reservoir volume accessed or fracture area created due to stimulation, will increase in value. HFM tells us that not all stimulation results in the same or even similar reservoir access or fracture area outcomes even when wells and pads are completed with the exact same plan.

This variability is routinely revealed with MSI’s BuriedArray® HFM service utilizing pad to full-acreage scale monitoring with a single array. With MSI’s BuriedArray, operators have the opportunity, in real-time, to see their variable reservoir access and mitigate or plan later redevelopment to improve development effectiveness. Further, microseismic pointsets are then analyzed stage-by-stage with FracRx™ to precisely evaluate treatment geometry and optimize fluid and proppant volumes. PermIndex™ is available to determine system permeability further helping operators understand stage-by-stage production variability. The role for optimizing reservoir access is ultimately a continuous one!

Mike

SEG Denver - What a show it was

By Peter Duncan
Founder & Co-Chairman

I am writing while sitting in our booth at the 9th Congresso de Exploracion y Desarrollo de Hidrocarburos in Mendoza, Argentina. It is a congress put on every 3 years by the Argentinian Institute of Petroleum and Gas. This year the theme is Rompiendo Paradigmas – unraveling paradigms. The emphasis is on unconventionals and their placein Argentina’s future as you might well imagine. There are more than 1,200 in attendance and it is turning out to be quite a show.

But what I really wanted to talk about is the SEG in Denver last week. It was a great show and our team pulled out all the stops to make it a success. There were more than 8,500 attendees and we were one of 372 exhibitors. MicroSeismic had a great booth location on the main aisle just inside one of the two entrances, so we had lots of traffic. Our booth had many attractions – great talks going continuously, 3 neck massage stations with professional masseurs to ease the weary conventioneer, and a football autographed by Peyton Manning as our give-away. That football was very popular and I think I could have sold it 10 times over at a hefty price.

We featured back to back technical talks in our theater highlighting our recent advances. I believe we set new records for attendance at these talks as every time I looked all the chairs were full and many more stood around the theater. Great job presenters! Thanks for the effort you put in getting ready for these important presentations.

We also had 4 papers accepted in the technical sessions. Congratulations to Leo, Robert, Alek and Jon for getting papers accepted for inclusion in the program. There were a record number of submissions for this year’s show and many, many papers are typically rejected. Acceptance is a validation of the importance of your work and the clarity of your communication.

Two highlights of the convention for me were the World Finals of the SEG Challenge Bowl and the Past President’s Jam session. At the Challenge Bowl the team from Poland, winners of the Eastern European Regional contest, prevailed with the Latin American Champions from Colombia coming in a very close second. Third and fourth places went to Nigeria and Italy so it was truly an international affair.

The Jam is an open party that MSI sponsors every year. It comes right after the President’s Reception and serves as a fundraiser for the SEG Foundation. The band is made up of SEG’ers and you might be surprised just how good the music is; everything from jazz to rock and roll to rockin’ blues. The dancing went on until 11:00, and we raised $6460 for the Foundation. Another job well done.

The SEG Annual Meeting and Exhibition is an important show for the industry in general and MicroSeismic in particular. There were many, many folks talking about microseismic monitoring in their booths. I came away well convinced that we are still leading the way in innovative ways to make microseismic data relevant to our clients primary goal – producing more hydrocarbons for less dollars spent.

Peter

Making a Mile High Difference at SEG 2014

A Recap of SEG 2014 from a Marketer’s Point of View

By Jaclyn Townsend
Marketing, MicroSeismic, Inc.

This week marked SEG’s 84th Annual Meeting held in the Mile High City of Denver, Colorado. Several thousands of attendees piled into the Denver Convention Center to engage with booth vendors and to hear the latest and greatest about the newest technologies, case studies and accomplishments in the industry.

As a marketer, my first inclination is to find out who is proclaiming what and if it’s providing the answers to the industry’s needs. Interestingly enough, I found myself saying “What’s the difference?” more times than not. Proclamations like “being the best” or “having the most advanced solution” or “being the most reliable” or “improving your data” (I could go on) were splattered all across the trade show floor. But where is the value with these types of bold statements, where is the real difference?

Over time, I have found that operators want to know how all the fluff that marketers proclaim actually helps them, or how these bold statements can ultimately save them money and improve their production. That’s the bright, shining star that operators and E&P companies are looking for – how can what we do benefit them.

As I perused the show floor, I saw lots of features and fewer benefits to the customer. It was quite overwhelming to see the heaps of marketing tactics not living up to their full potential, in my opinion. However, there were several gems in the crowd who actually did make impactful statements on how they could provide value to their customers. Statements like “Saved $1 million+” and “Increased Production by 50%” and “Optimized Production in the Permian” are some that still stand out to me and, undoubtedly so, stood out to operators and customers as well.

Over at the MicroSeismic booth, we focused on our benefits related to our Completions Evaluation Solutions and how they are making a difference. Our theme for SEG was “Relax & Experience the Difference, The MicroSeismic Way,” which focused on what really sets us apart backed by proven results. In one example we showed how we helped an operator increase EUR by 55,000 bbls/well and save the same customer $1 million/well in completions cost.  With this type of information readily available at our booth, we were able to provide our visitors with real answers that have helped real customers.

SEG2014-for-web

As the show continued in full force, MicroSeismic made several other differences at this year’s SEG Annual Meeting. MicroSeismic presented 5 SEG oral presentations, 25 booth presentations and offered a free lunch and learn by Dr. Leo Eisner. Peter Duncan, Founder & Co-Chairman of MicroSeismic, was recognized with the Virgil Kauffman Gold Medal for his contributions to excellence in geoscience and the differences he’s made over the last several years. MicroSeismic also sponsored the Presidential Jam and provided volunteers to help benefit the SEG Foundation – this year the event raised over $6,000 for students! 

As another SEG comes to a close for MicroSeismic, my biggest takeaway is how important it is to focus on value for the client, whether it be in marketing materials, developing new technology, or providing customer service – this is especially important to an industry looking for answers and not just a bunch of data. I’m looking forward to a prosperous 2015 and another exciting SEG Annual Meeting in New Orleans next year. Thanks to everyone who made this year’s SEG a success for MicroSeismic. See you next year!

Jaclyn

Delivering Prescriptive Completions Optimization

By Kash Kashikar
VP Completions Evaluation

This is an exciting month – MicroSeismic will be attending and exhibiting at the SEG Annual Meeting in Denver and the SPE ATCE conference in Amsterdam - both held during the same week. Considering the industry is against a back drop of falling oil prices, it’s certainly going to be an exciting ride ahead.

Looking at the SPE ATCE technical programs, I noticed there are 14 sessions dedicated to unconventional reservoirs.  That’s 31% of all sessions held at the Annual Meeting of Petroleum Engineers!  The topics range from completion technology, to fracture diagnostics, to reserves estimation.  It is intriguing that the 1st session at the SPE ATCE is on “Integrated Workflows: Geophysics and Fracture Characterization.” The SPE is discussing geophysics?  Shouldn’t this belong to the SEG sessions in Denver?  Similarly, the SEG Annual Meeting also has several sessions devoted to unconventional reservoirs.  The focus is mainly reservoir and rock characterization and the estimation of permeability.  How fitting that the development of unconventional resources has led to a geophysical session in an engineering focused annual meeting (SPE), and the geophysical community is discussing hydraulic fracturing and reservoir permeability estimation. 

This goes to show how our industry is adapting to the complexity of unconventional resources and the need for integrated analysis.  To fully understand the variability in unconventional reservoirs, to optimize the completion, maximize recovery and to do so while reducing the finding and lifting costs, will require serious innovation and a multi-disciplinary approach. The industry had come to accept the large variability in the shale properties and the impact on the resulting fractures and productivity.   Understanding these variations and engineering the completion and hydraulic fracturing program to address these variations will be paramount to future success and is evident in the various talks at the SPE and SEG annual events.

This integrated approach becomes more critical in the face of falling oil prices.  While one could achieve a commercial well with minimal engineering and customization of the frac program at higher oil prices, doing so at significantly lower commodity prices will be very difficult if not impossible.  There is an urgency to not only diagnose the effectiveness of the completion design and the hydraulic fracture treatment, but also to improve our modeling and predictive capabilities. We need to understand how treatment parameters such as volumes, rates and proppant concentration impact the resultant fracture network, which part of this fracture network is contributing to short and long-term production, and how to maximize the productivity of every stage.  Gaining this understanding will enable us to better design future completions that will yield higher production and ultimate recovery at a lower price per barrel.  MicroSeismic’s FracRx™ and PermIndex™ are designed to help diagnose the frac treatment and prescribe options in relevant time for improving production and ultimate recovery.

MicroSeismic’s focus is to help customers maximize their asset value and increase production through optimized stimulation treatment and improved understanding of the reservoir. To learn more about these methods and how to perform prescriptive completion diagnostics, visit us at our booths at SPE ATCE (booth 743) and SEG (booth 338). We look forward to engaging with you!

Kash

Oil in Limbo: How Low Can You Go?

By Sarah Groen
VP Strategic Marketing

Well that was fast! Eighteen months of sustained high oil prices made a pretty quick turnaround over the past month. WTI fell to $81/bbl today from $95/bbl just a month ago. On Tuesday the drop in crude price was the single largest daily fall in more than three years. Though the shifting headwinds have been put in place over a few months, it got real in the past two weeks. Is fear and speculation driving the price decline or something more fundamental? Sifting through last week’s presentations and trades, it has become clear that a supply/demand correction is in place. Scares on the international demand front seem to have gotten the snowball rolling. Let’s review how we got here:

  • In September, the European Central Bank surprised investors with a cut in interest rates and new stimulus plans
  • In the first week of October, Saudi Arabia lowered the November official selling price for Arab Light crude to Asia – a move seen by many as initiating a price war
  • Based on the ECB move, lower European consumer confidence, demand declines in Japan, and slower than predicted demand growth in emerging economies, the EIA cut worldwide oil demand predictions on October 7th
  • All the while, production from North America continues to exceed predictions and the production growth is not being offset by geopolitical interruptions – production from Iraq hasn’t suffered from instability and Libya’s production has begun to increase slightly

In historical situations of supply/demand imbalance, the world has looked towards Saudi Arabia to balance the books. This go round, we’re not sure where the Kingdom stands quite yet. We know given supply and demand that the country’s revenue must fall but we don’t yet know if Saudi will choose to take that revenue decline in the form of lower prices or lower production. It looks like the country has a few options:exhibit-17-sgblog

  • Reduce production and support price alone. This doesn’t seem like a likely outcome for Saudi to give other OPEC countries (and political rivals) a gift like this, but it’s an outside possibility.
  • Lead OPEC towards a joint cut in production – something that hasn’t happened since 2008/2009.
  • Hold production and allow prices to fall. The lowering of price to Asia indicates this strategy so far, but even Saudi Arabia has a budget to balance and tumbling prices can’t be sustained by other OPEC members for an extended period. However, on the flip side of the coin – lower prices hurt investment into non-OPEC supplies like shale gas in North America. This is what has led to speculation over a “price war.” Is Saudi sacrificing price in order to maintain market share?

Most of the experts out there are expecting prices to hold within the $80 - $90/bbl range, but even at this range there are wide reaching effects on the North American market. crude-price-outlookMost of the development plays in the US such as the Eagle Ford will remain economic at this price level. Wood Mackenzie stated that 70% of US reserves remain economic at $75/bbl. However, this does cut some of the more exploratory basins out of the picture if prices remain at current levels or decline. We can also expect oil and gas operators to be concerned about cash flow and looking very hard at 2015 capital spend levels.

At MicroSeismic we’ve been pushing all along for more focus and drive to optimize the output of each and every well that is completed. It can be argued that our Completions Evaluation Services are even more valuable to operators during price downturns – with the tools to understand and improve the completion in real-time, our customers are maximizing the amount of recoverable reserves from each well and helping to keep cash flow coming in the door.

Whether limbo continues or prices rebound in a couple quarters, MicroSeismic will be here to help customers continue to add value across the board. If you have any additional insight to share on this topic, please feel free to reach me at sgroen@microseismic.com.

Sarah

Tango, Malbec and MicroSeismic in Argentina

By Terry Jbeili
Chief Operating Officer

Last week MicroSeismic (MSI) announced an exclusive partnership with PanAmerican Geophysical Services (PA) for the joint provision of Hydraulic Fracture Monitoring and Completion Evaluation Services in specific geographical areas like Argentina and Canada.  In practical terms this means that MSI will leverage PA’s acquisition capabilities and strengths in those areas to deliver these services.  Similarly, PA will call on MSI for any processing and analysis of microseismic data they acquire.  From our clients’ perspective, we will operate seamlessly, both operationally and commercially and can be reached locally for any required support. Argentina-YPF-officesPanorama of Buenos Aires from 26th Floor of YPF offices

The roll out of the partnership gave me an ideal opportunity to visit Argentina. I met with our clients in Buenos Aires and Neuquen as well as with UGA Seismic, PA’s local company and now our partner in Argentina. I spent a busy week not only attending to business but also enjoying the local cuisine (yes including the fantastic beef and excellent Malbec) as well as the sights (such as tango dancing in the streets of Buenos Aires). Of course a good deal of the time was spent with clients such as YPF, the national oil company, and other operators. There are quite a few companies and the number is steadily increasing as more international interest and investment takes hold.

Vaca-MuertaIn my discussions with these industry experts, my impression of an Argentina poised for growth in the unconventional plays was certainly validated. The potential is significant. Investment in this sector has been somewhat muted in the past due to regulatory, political and fiscal challenges. However, recent events such as YPF’s exploration agreements with Chevron and Petronas as well as the settlement with Repsol point to a future with strong governance and prospects. The country is eagerly awaiting elections that will be taking place next year. The outcome will no doubt affect the investment environment and economy as a whole. The future certainly feels bright.

Much of this potential for growth will come from the big story in terms of unconventional plays - the Vaca Muerta shale (translated literally as the Dead Cow). La Vaca Muerta was discovered in 2011 by YPF. As of mid-2014, 169 wells have been drilled, the majority by YPF. This shale is truly massive - up to 305 m (1,000 ft) in thickness. Its geological properties vary dramatically over the vertical section. Most of the wells drilled to date are vertical but plans include laterals, so a good understanding of frac height growth and optimum landing zones will be essential to optimizing the development. The projected investment for the Vaca Muerta over the next 35 years is estimated at $16 billion, with $9 billion in operating costs to drill and complete 1500 wells for cumulative production of 750 million boe.

The main challenge we as an industry face is to develop the field safely, effectively and efficiently. This means reducing well costs and increasing productivity per well while addressing environmental concerns relating to fracking operations. We (MSI and UGA) are committed to helping our clients address this challenge. Our advanced Hydraulic Fracture Monitoring and Completions Evaluation Services will deliver not only a stage-by-stage diagnosis of the completion treatment, but also provide information to optimize well and stage spacing. Working closely with our clients we will integrate the results with other contextual information to provide detailed analyses on the reservoir potential and performance.

The future is indeed bright!

Terry

 

 

Where it all begins...

By Peter Duncan
Founder & Co-Chairman

I am spending a great deal of my time these days pondering how we communicate the value of our services to clients. For much of my career, the selling of geophysical services has been based upon improving resolution, reducing turnaround time or reducing price. Most often this turns into selling features of the service rather than the real “value”. How do we know when we are talking about “value”? As long as one can ask “so what does that mean to bottom line?” after the description of the product or service, you haven’t conveyed the value. For example, as we make real-time recommendations to our customers on how to frac their wells, we have to make sure the recommendation comes with a value statement. We can’t just suggest pumping for an extra hour to yield a “bigger” or “more complex” SRV. We must say something like “If you pump an extra hour, it will cost you $100,000 but you will, to a reasonable degree of probability, produce $500,000 in additional hydrocarbons.” Now that’s value!  In point of fact we must be able to put a return for dollar spent on the microseismic services we provide as well. We are again changing the industry by moving microseismic from a descriptive service, telling the operator what the frac looks like, to a prescriptive service, telling the operator how to make a better frac. In this realm we will be expected to quantify results and provide recommendations based on real economic value and return on investment.  That is what FracRx™ is all about.

Having told you where my head is these days, I was brought back to a different reality this morning by a tremendous statistic reported by Geoff Pettinger in our weekly operations meeting.  Geoff told us that we are closing in on having completed one million man hours of work without a lost time incident in the field. That is a tremendous accomplishment and it put me in mind of just how important our field operations are to what we do. All the superior  algorithms  that Dr. Thornton develops and all the ingenious SRV modelling that Jon, Carl and Kash  construct amount to nothing but fantasy if the data going in is worthless. You know ….. “garbage in, garbage out”. “So what does that mean to our bottom line?” you ask.  The value of our analysis is nil if the data going in are not high quality. And what is the value of doing it safely? Priceless! To both us and our clients the cost of unsafe operations is devastating to the bottom line and will put both of us out of business.

This week I will have the privilege of spending a few hours with a fair number of our field folk who are in town for the annual operations roundtable. I will be telling them how proud I am of what they do in the field, how important it is that they continue to be the best in the industry and how valuable it is that they do it safely. The field is where it all begins and we don’t say that enough.

Peter

The MSI Difference

By Mike Mueller
VP, Technology & Development

One of the most endearing aspects of working in a new industry segment, with new products introducing new capabilities into the marketplace, is the opportunity to be in at the start, to create the look, to establish a new way of doing things, to ‘write the book’.

Microseismic monitoring, and the engineering applications that follow from it, is just this sort of new industry. Even better, the commercialization of microseismic monitoring with both downhole and surface recording arrays happened in the same years as the scale-up of hydraulic fracturing across the U.S. and Canada. The new technology met the new need just as the new opportunity exceeded all expectations. The microseismic method is the best tool the industry has to characterize the volume of rock impacted by hydraulic fracturing. In other words: microseismic makes a difference, and MicroSeismic, Inc (MSI) has been an industry leading voice in creating and delivering that difference.

How did MSI get here? It began with the idea that microseismic monitoring could be extended from the established borehole technique to surface recordings. But, this was not proven 10 years ago and it relied on a different approach to detecting and characterizing the microseismic events, it would depend on imaging or seismic migration technology, rather than easy to see and easy to get compressional and shear wave arrival picking used in downhole recordings. MSI uses Passive Seismic Emission Tomography, or PSET, technology to detect and locate the events. This is combined with industry leading anisotropic calibration to ensure events are accurately positioned.

Could microseismic monitoring work from the surface? Could seismic processing techniques to manage noise, and migration techniques to detect and locate the events, work? The difference making came in the form of demonstrations in all of the big shale plays under development along with application of processing and imaging technology that required extending these methods beyond their original implementation in reflection seismology. The acquisition or monitoring geometries developed by MSI included a star like pattern uniquely adapted to the pad style drilling and completions favored by the shale operators. The pioneering realization that off the shelf, commercial seismic acquisition equipment could be used to get this done made the technique affordable. Another approach was the use of permanently installed recording grids that could be scaled to any size monitoring application up to and including field wide scale. With this approach it would now be possible to think of microseismic monitoring as a development tool to understand how effectively a shale operator was accessing the shale oil or gas across all their acreage.

Ultimately, MSI was successful at applying imaging technology to surface recorded data across many shale plays. Detectability from the surface could vary from play to play but was shown to be possible in all geological, drilling and completions circumstances in the shale marketplace. MSI was dramatically extending the microseismic method. MSI was making a difference.

Other new capabilities became apparent once the detectability question was answered and the surface technique was being widely applied. For example, it became obvious that the surface (2D) acquisition geometry, with its wide-azimuth, high-fold, and large aperture wavefield sampling, could readily characterize microseismic event source mechanisms, the way the rock ‘failed’ or moved when undergoing stimulation. This opened up many opportunities in geomechanics and engineering further extending the microseismic method.

With extensive shale market exposure, MSI was able to evaluate shale operator completions approaches, using its deep experience to help optimize stage and well spacing, maximize stimulated fracture area, determine which fractures are propped, predict shale matrix and fracture system permeability, and estimate the reservoir volume where the sustained production would be coming from. These capabilities bring microseismic monitoring into the completions and reservoir engineering domains making a difference to engineering shale play challenges to optimize production.

All of MSI’s monitoring approaches, whether surface or downhole, are available in real-time. With real-time it is possible for the shale operator to see the effectiveness of the frac design and stimulation at the time of completion. This enables the operator to manage the completions plan, to stay in zone, and to avoid geohazards. All this is available during the completion and with the accuracy and transparency operators need to trust and use the results to optimize their production.

Put together, what is the MSI difference? It’s the founder’s creativity, combined with the deepest experience, using the most extensive microseismic toolkit in the business, all focused on the highest value adding questions shale operators have. The MSI difference ensures shale operators are accessing all the hydrocarbons and maximizing production across entire acreage positions and for life of field.

Mike

 

Meeting the Australian Challenge

By Kash Kashikar
VP, Completions Evaluation

I recently presented at Hart Energy’s DUG Australia conference, held in Brisbane.  It was the second year for this event and was very well attended.  DUG Australia brings market-leading insight on unconventional resources – coal seam gas, shale gas and tight sands – and their development in Australia and the Asia Pacific regions. 

The list of speakers was impressive - with CEO’s and senior executives from several resources companies.  The main thread running through out the conference was how Australia's emerging shale and tight-sand plays build on its coal seam gas experience and how operators and service companies from North America can bring their expertise and experience to accelerate the growth of unconventional plays in Australia.

The growth in coal seam gas over the last several years has prompted operators to undertake construction of several LNG trains.  These trains are nearing completion and will start delivering LNG to existing long-term contracts within the next 2 years. However, there is a challenge.  The production from coal seam gas has not lived up to the expectations and is not sufficient enough to fill the LNG trains.  This is prompting operators to look at alternate sources of natural gas. Fortunately, Australia has 3 other sources of unconventional gas – deep coal, shale gas and tight sands.  Each one of these presents a unique set of drilling, completion, exploration and development challenges.  

The industry is meeting these challenges through a combination of local expertise, partnerships and farm-in’s with operators that have experience in developing unconventional plays from North America, Canada and other basins worldwide.  While there are several similarities between Australia’s unconventional plays and prolific basins in North America, there are significant differences.  The stress regime is very different and much more complex than any unconventional basin in North America.  There is limited infrastructure and availability of large drilling rigs and frac equipment, and there is a real sense of urgency in accelerating the time from discovery to commercial production to fulfill the demands of the LNG trains. 

I believe MicroSeismic Inc. is uniquely positioned to help Australian operators accelerate the timeline from discovery to commercialization; to achieve higher asset values and to achieve the production targets.  No single operator or service company has as much microseismic experience in every unconventional basin in the world or as much local experience in Australia as MicroSeismic Inc.  We bring a unique set of experience, knowledge of best practices and the ability to provide an integrated solution in partnerships with our clients.  By working closely with our customers, our workflows and tools allow us to jointly develop an understanding of what really impacts production and how to optimize completions in a timely manner.

MicroSeismic’s focus is to help customers maximize their asset value and increase production through optimized stimulation treatment and improved understanding of the reservoir. To learn more about these methods and how to perform completion diagnostics join us for our free webcast on September 16th. To register, click here.

Kash

MicroSeismic Makes an Impact at URTeC 2014

By Monica Vrana
Sr. Global Events Manager

Last week MicroSeismic attended the 2nd annual URTeC conference which was a unique partnership and multidisciplinary conference between Society of Petroleum Engineers (SPE),  American Association of Petroleum Geologists (AAPG), and the Society of Exploration Geophysicists (SEG). 

In terms of the quality of interaction with attendees and technical session attendance, URTeC is becoming a premiere industry event. URTeC provided operators and service providers alike, a place to interact and discuss pressing issues and best-practices which pose as important factors to the growing shale industry.   MicroSeismic had a strong technical presence at this year’s show. We presented three exceptional papers:

  • Completions Evaluation in the Eagle Ford Shale by Carl Neuhaus
  • Where did the Proppant go? by Jon McKenna
  • Using Microseismicity to Understand Subsurface Fracture Systems and to Optimize Completions: Eagle Ford Shale by Michael Grealy

URTEC Staff

MicroSeismic also announced our latest technology, FracRx™ - Stage-by-Stage Completions Optimization. At a press conference hosted by URTeC, Carl Neuhaus, Completions Evaluation Team Lead at MicroSeismic, Inc., explained how FracRx integrates microseismic data with an operator’s pump and geolocial data to track the growth of the fracture network in all directions and determine how the cumulative fracture area grows with injected fluid volume. He explianed how this information can be used to help operators evaluate the performance of the treatment for each well to more effectively maximize production and reduce costs.

To learn more about FracRx or to hear more about the topics which were presented by MicroSeismic at URTeC, register for our FREE webcasts. On September 16th, our webcast series we will feature FracRx. Here we will discuss how FracRx works and how this new service can help you optimize production for every stage for each well.

We thank all the URTeC attendees who engaged with MicroSeismic, and we hope to see you again next year at URTeC in San Antonio, Texas at the H.B. Gonzalez Convention Center, 20-22 July 2015.

Highlights from URTeC 2014 can be found here.

Monica

How Microseismic Plays a Role in the Worldwide Shale Revolution

By Mike Mueller
VP, Technology & Development

The context in which MicroSeismic (MSI) performs the vast majority of its business is the shale oil and gas business in the US and Canada as well as around the world. Part of the excitement and fulfillment of working in this environment is the newness of the technology – MSI is in the business of creating value for the operators developing shale oil and shale gas trends with new technology -- as well as the tremendous impact that the shale plays are having on the US and world energy outlook.

The facts are astounding: in the previous five years, the Eagle Ford play in south Texas has gone from 50,000 barrels of production per day to just under 1.5 million barrels per day; the Bakken play in North Dakota has surpassed 1 million barrels per day; the Permian Basin of West Texas, one of the industry’s oldest and largest oil producing provinces over the past 80 years, is now approaching 1 million incremental barrels per day of unconventional production. All told, US oil production has risen from 5.5 million barrels per day in 2008 to just under 9 million barrels per day with predictions that this could plateau above 14 million barrels per day over the next ten years. US Gas production has risen from 55 billion cubic feet per day in 2009 to  a rate of 65 BCFPD at the end of 2013 and is expected to reach 80 BCFPD in 2018.

The implications of the US led change in the worldwide energy landscape range from active consideration of US oil and NGL exports to a rewiring of the international geopolitical landscape with fading influence for OPEC and Russia.

So, what do these big trends have to do with an oilfield service provider like MSI? As a participant in the shale revolution, MSI is part of the assurance that the hydraulic fracturing being implemented today happens as it’s expected to happen, that groundwater is not impacted, and that oil and gas extraction is properly characterized wherever frac’ing is happening.

The microseismic method is the best tool the industry has to characterize the volume of rock impacted by hydraulic fracturing.

MSI’s methods allow the operator to not only know where the fractures went, but also where they didn’t go. Where the fractures go is important information for the operators who wish to understand their production, and where they didn’t go is important for the regulators who wish to protect ground and surface water resources. Finding ways to do ever better hydraulic fracture characterization is not only fun and fulfilling; it answers important economic and societal questions surrounding the development of shale resources.

There is another important role that hydraulic fracture characterization with microseismic will help. Beyond the geometry of the hydraulic fracturing – the initial characterization referred to above – is the opportunity to understand and characterize with real field data the depletion of shale reservoirs undergoing production. Not only can microseismic monitoring help in understanding the initial production of a shale well or pad, but methods to estimate the placement of proppant using microseismic information will allow us to estimate how the well will perform over time and how the well’s production will decline. This life-of-well or life-of-field application will ultimately tie microseismic to the two most fundamental aspects of the upstream oil industry – rate and reserves – in the context of the unconventional, shale gale plays.

As part of MSI’s drive to continuously push back the frontiers of microseismic applications, the company recently announced the next generation of its advanced real-time analysis technologies. These new capabilities will help operators understand their fracturing effectiveness in real-time, see how stresses change in their shale reservoirs, optimize stage and well spacing, and achieve a better picture of the accessed reserves and recovery. You may find more about all this by viewing the Advanced Real-Time Webcast by clicking here. Please let us know what you think by contacting us at any time. We look forward to your feedback.

Mike

Understanding Production from Microseismic

By Kash Kashikar
VP, Completions Evaluation

One of the questions I get asked often is “Why is it that on one job, all wells had similar microseismic responses, yet they all produced very differently? For instance, one had 50% more production?”

What does “similar microseismic response” mean?  Does it mean that each stage and each well have the same number of microseismic events? Do we have the same magnitude range for the events? Does it mean that the extent of microseismic activity - measured as distance of the event from the wellbore or stage center - the same on each well; and maybe even each stage?  Did every stage on these 3 wells receive the same treatment?

As I start asking these questions I realize that most users look at microseismic in a very general and qualitative sense.  They are looking at the overall shape of what the industry refers to as the “microseismic cloud”.    No wonder then that all “clouds” look very similar and don’t yield an answer to the question: Why is production different across wells?

To understand why each well produces differently we must look at the microseismic data as a completion diagnostic measurement. We have to frame the questions differently.   We should start asking these questions: How can I quantify the microseismic response?  What is the shape of the fractures as indicated by the microseismic data for each stage? What are the dimensions of this shape on a per stage basis? How do the dimensions differ between the propped and un-propped fractures?  How do these dimensions compare between individual stages in a single well?  How do these dimensions compare between wells?  What can these dimensions tell us about the shape and size of the stimulated and drainage volume? How does this correlate to the wellbore placement and lithology per stage? 

As we start to answer these questions we find that the microseismic response on all wells is actually quite different. There are differences in microseismic responses between individual stages and individual wells.  Digging deeper we can start to establish correlations between the treatment parameters, lithology, well placement, microseismic activity and production.  This requires a significant investigative effort – what I call completion diagnostics. 

At MicroSeismic we have taken a unique deterministic approach and developed a workflow to perform completion diagnostics. It is part of a larger Completions Evaluation initiative. Working closely with our customers, our workflow and tools allow us to jointly develop an understanding of what really impacts production.

MicroSeismic’s focus is to help customers lower F&D costs and increase production through optimized stimulation treatment, improved understanding of the reservoir, and optimized field wide development.  To learn more about these methods and how to perform completion diagnostics, check out our latest webcasts on Completions, by clicking here.

Kash

Completions Evaluation is helping "Crack the Source"

By Mary Ellsion, Geologist
MicroSeismic, Inc.

Last week I attended the American Association of Petroleum Geologist’s Rocky Mountain Section Annual Meeting, held in Denver. The theme of the conference was “Cracking the Source” and many of the technical sessions were focused on unconventional source rocks, structure, and stratigraphy. Because the conference was held in Denver, most of the discussions focused on nearby plays, such as the Bakken in the Williston Basin or the Niobrara in the Denver Basin. I listened in on a very interesting presentation by David Thul on the maturity of the Bakken Shale, and particularly the differences in TOC and thermal maturity between the Upper and Lower Bakken.  This information is particularly useful for oil and gas operators because the Upper and Lower Bakken and even the Three Forks have been lumped together, but they actually have very distinct total organic carbon content and thermal maturity. Understanding the differences between these targets allows operators to make more informed decisions about drilling strategies and completion techniques.

There were also several presentations on the controls of porosity, the types of porosity in the Eagle Ford Shale and Completions Evaluation. My presentation, titled “Completions Optimization in the Eagle Ford Shale” was received very well and was particularly relevant given the topic of the technical session (Advanced Technologies for Visualization and Completion). Preceding my presentation was a case study presented by Newfield Energy correlating microseismic monitoring with other completion techniques such as tracer data. Jon McKenna in the MicroSeismic Denver office also presented on our completions evaluation workflow, and how the workflow can help our customers efficiently optimize completions and save money. Overall the presentation was well received and we had many inquiries about our Completions Evaluation services.

For more information on the topics that were presented by MicroSeismic at AAPG click here.

Lastly, stay tuned for an exciting announcement from MicroSeismic happening next week!

Mary

Perspectives on my first weeks at MicroSeismic

By Jeff Foster, President & CEO
MicroSeismic, Inc.

Joining MicroSeismic (MSI) has been an exciting endeavor.  I am passionate about safety, quality and differentiating technology - all of which are imbedded in the MSI culture.   My first weeks on the job were spent engaging the different teams in the office and field.  The MSI employees are extremely talented with over 60% of our technical team with two or more degrees.  More so, the team is laser focused on delivering real time completions evaluation results to our clients using patented workflow processes.  The value we create for our customers is so much more than just interpreting discrete fracture networks from events.  We are using science to revolutionize the development of unconventional shale to create long term reservoir recovery efficiencies. 

While spending time understanding our customers’ needs and the competitive market, I learned an interesting perspective with which I agree.   A major service company (and competitor) stated that “MSI is ahead of the pack and considered the thought leader in our space.”    Our technology and development teams are building solutions to match our vision – a world in which every frac is monitored.   I believe that MSI is pioneering the way to accomplish this vision through our applied research and our consistent goal to develop answers to solve real customer problems.

More recently, when asked why only 5% of the wells are monitored today, a major E&P company stated at an EAGE conference, ”Give me real time, and I will monitor every frac.”     By the end of year, MSI will be able to complete multi-well, multi-pad projects in real time and after every stage using our microseismic integrated solutions.   These services will provide our customers the answers they need in order to improve their frac designs, treatment and ultimate recovery.

Helping our customers understand what’s really happening when they frac their wells and helping them to improve their EUR through downhole and surface microseismic is a major reason why I joined the MSI team.  The team is continually releasing breakthrough technology.  The initial days with MSI have been impressive.   More to come…

Jeff

Optimizing Well Spacing

By Kash Kashikar, VP Completions Evaluation
MicroSeismic, Inc.

I recently attended the Eagle Ford Well Spacing and Completions Optimization conference.  The meeting was well attended with most of the presentations given by operators.  It is refreshing to see the operators sharing their experience and knowledge to a wider audience.  While the conference was focused exclusively on the Eagle Ford – the overall learnings are transferable to other basins.

There were some common themes and learnings that I took away from the 2 day congress. While a large number of wells have been drilled in the Eagle Ford, it will take another 70,000 wells to fully develop the Eagle Ford.  From all the experience the industry has, it is clear that there are several factors that are consistent across the region. For example – longer laterals generally result in increased production and higher quantity of proppant per foot results in higher EUR.  However, it was acknowledged that there are large variations across the region in rock properties, production and even between wells on the same pad.  This makes it very challenging to estimate the size and shape of the Stimulated Rock Volume (SRV), and further estimating the portion of the SRV that is contributing to production.  This topic was widely discussed – with equally varied approaches presented by different operators.

At MicroSeismic we have taken a unique deterministic approach to estimating the SRV which captures the spatial variation of the fracture density as well as the relative impact on the resulting porosity and permeability in the stimulated region.  This is further refined by computing a sub-set of the SRV volume, which represents the proppant filled fractures.  We call this Productive-SRVTM.  The SRV and Productive-SRV provide an accurate description of the stimulated rock volume and helps define the size and shape of the drainage volume that will contribute to the initial as well as the long term production.  The SRV and P-SRV volumes can be used for production forecasting and history matching and provides an invaluable tool for determining the well spacing and completion optimization.

MicroSeismic’s focus is to help customers lower F&D costs and increase production through optimized stimulation treatment, improved understanding of the reservoir, and optimized field wide development.  To learn more about these methods and how to optimize your treatment design join us for our free webcast on Tuesday July 22. To register, click here.

Kash

E&P Capital Expenditures Growing Faster Than Expected

By Sarah Groen, VP Strategic Marketing
MicroSeismic, Inc.

Though still awaiting Q2 earnings from the energy industry, it seems as if there is still more good news in store for overall industry growth.  According to Barclay’s updated industry spend report, E&P spending growth is set to be higher than previously thought.  Worldwide, E&P spend is expected to reach $712 billion in 2014.  Here at home, even more rapid growth is expected.  E&P spending in the US is expected to rise 9.6% year over year. 

However, despite these predictions, the E&P companies have thus far exhibited a great deal of capital discipline.  Therefore, either the budgets will go unspent, or we are in for a rapid increase in spend in the second half of 2014.

In terms of focus, it still appears that the Permian will remain a hot area of focus over at least the next 18 months.  Horizontal rig count in the Permian has increased 25% year over year.  As this region continues to grow, it should be a big positive for service companies in the area as well.  Pricing for pressure pumping appears to be on the rise and some service companies have indicated the possibility of bringing more capacity online. 

EP-cap-expend

Although the overall market is in a growth phase, it’s important to recognize that horizontal well increases are making up the bulk of the growth.  Horizontal wells now represent 61% of the wells frac’d in the US.  We’re also seeing continued trends towards in favor of oil over natural gas, and towards the development phase of completions rather than exploratory phase.  This last trend supports the continued focus on developing assets efficiently without sacrificing gains in productivity.  Long term hydraulic frac monitoring solutions and insights into the results of each and every frac help to maintain that productivity in a cost effective manner. 

Sarah

 

 

 

EAGE 2014 Recap

By Mike Mueller, VP Technology Development
MicroSeismic, Inc.

During 15-20 June 2014 the European Association of Geoscientists and Engineers held its 76th EAGE Conference & Exhibition 2014 in Amsterdam. The tagline was, “Experience the Energy.” This event features three days of technical presentations along with a conference exhibition floor, preceded and followed by numerous workshops, short courses and field trips. At over 8,000 participants and 350 exhibitors, this is a world-class event. MicroSeismic, Inc. participated with three Technical Program papers; two presented by Carl Neuhaus, “Where is the Proppant? DFN Modeling, Proppant Placement, and Drainage Estimation from Microseismic Data,” and, “A Comparison of Seismicity-Based Permeability Characterization Methods,” and one presented by Robert Cieplicki, “True Amplitude Stacking for Moment Magnitude Estimation of Microseismic Events.”

Microseismic topics continue to receive ample attention from the industry, as judged by the submissions to the Technical Program, resulting in 3 dedicated Technical Program sessions, a Poster session, a Workshop and a Short Course. More and more presentations from the industry and academia now address areas of microseismic hydrofrac monitoring that MicroSeismic, Inc previously pioneered and is the established industry leader in, such as the application of imaging technology to surface and near-surface acquisition geometries, how projects are initialized or calibrated so that microseismic event locating is accurate and reliable, and various applications of microseismic technology, including engineering applications.

An Executive session titled, “Can Resource Plays be Sweet Spotted?” was held on 19 June. This session was intended to question the relative merits of the statistical ‘factory mode’ approach to (shale) resource plays versus a deterministic approach to identity the so-called ‘sweet spots’. Some of the set-up questions addressed: Is sweet spotting achievable with today’s technology? What can be learned and applied about sweet spotting from play to play, and from continent to continent? Can the ‘factory mode’ approach be made more economic? The session panelists included 6 executives and thought leaders from across the industry including operators, service companies, academics and regulators.

Professor Mark Zoback, the Benjamin M. Page Professor in Earth Sciences and Senior Fellow at the Precourt Institute for Energy at Stanford University, commented that microseismic technology, in sensing the impact of the hydrofrac stimulation on the volume of reservoir surrounding the fraced wellbore, is the best technology we have to understand stimulation. Further, the key is to focus on the dominant importance of the rock fracturing mechanism known as shearing. When a stimulated rock fails with a shear mechanism this movement leads to opening or reactivating fractures that are more likely to stay open, with or without proppant. The shear mechanism or movement emits (micro)seismic wave energy that we record and image to provide a quality representation of the stimulated reservoir volume (SRV). Since each microseismic event represents a small fracture, the microseismic cloud or pointset provides a direct way to estimate the total effective fracture area. Hydrocarbon flow rates from the shale matrix into the fractures scales with the fracture area, thus understanding fracture area allows the operator to link microseismic monitoring to production.

MicroSeismic, Inc pioneered the use of microseismic pointsets to predict production, based both on the total SRV as well as on the longer-term Productive-SRV, as Carl Neuhaus presented in the EAGE Technical Program earlier in the week. Additionally, with our advanced surface FracStar, near-surface BuriedArray and Downhole Monitoring methods, MicroSeismic is able to offer the best, unbiased, complete knowledge of the SRV regardless of whether the operator is stimulating their first vertical or lateral in a play, or are seasoned ‘factory mode’ drillers and completers who efficiently move from pad to pad drilling numerous multi-laterals at each. To optimize production the ‘factory mode’ operators require direct knowledge on how well they are able to mobilize and extract the hydrocarbons locked away in the shales they are developing with independent information provided by microseismic hydrofrac monitoring.

Mike Mueller

MicroSeismic's Bottom Line Brings Assistance to Children with Hearing Impairments

By Suzanne Kujawa
Marketing, MicroSeismic, Inc.

In 2013, Greg Burns, VP, Human Resources was contemplating how MicroSeismic, Inc. could become more deeply involved in the various communities where the company’s employees and its customers live and work. He attended the annual conference for the Society of Human Resource Management (SHRM). During the conference, Blake Mycoskie, Founder and Chief Shoe Giver, TOMS articulated a One for One® philosophy that struck a chord with Greg. There an idea sparked around the company’s tag line: Passive Monitoring, Active Listening.

Listening.  How can we help others to better hear the world around them?  After pitching and receiving approval from Peter M. Duncan, Ph.D., Founder and Co-Chair, he went on to research how MicroSeismic could get involved with organizations to help underwrite the expense of hearing aids for under-privileged children.  He found three children’s hospitals in Houston, Denver and Calgary that were a great fit.

MicroSeismic took a unique approach to funding the donations, based off of the TOMS philosophy - for every well it monitors it makes a financial contribution to the Memorial Hermann Foundation in Houston, the Children's Hospital Colorado Foundation in Denver, and the Alberta Children’s Hospital Foundation in Calgary.

During the 2014 SHRM Annual Conference Greg was featured for his work on the Gift of Hearing Program with MicroSeismic. Congratulations to Greg on some well-deserved recognition. At this time, MicroSeismic has underwritten 30 hearing aids. See the video for the full story on how Greg developed his idea of giving below.  This video was featured during this year’s SHRM Annual Conference.

Trnasforming Lives: The MicroSeismic Story

 

Suzanne

Where IS the proppant? Reasons why you should care.

By Jaclyn Townsend
Marketing, MicroSeismic, Inc.

On Monday at EAGE in Amsterdam over 100 people attended the presentation “Where is the Proppant” given by Carl Neuhaus, Completions Evaluation Team Lead at MicroSeismic, Inc.

Here Carl explained how different techniques for modeling proppant were used to evaluate the wellbore and stage spacing intervals for the respective case studies.

So why should you care? The answer is well completion optimization – more production for less cost!

The case study included data acquisition and processing using MicroSeismic’s PSET technology. From there, our team was able to build a Magnitude Calibrated Discrete Fracture Network (M-DFN) which is essentially a map of how and where the reservoir was affected by the treatment. Using reservoir characteristics from the microseismic data further allows mapping of the propped, and therefore productive, portion of the M-DFN.  As a result, proppant placement inside the M-DFN allowed the client to analyze optimum well spacing, optimum completion design (stage length/treatment parameters) and optimum vertical coverage.

Eagle Ford Shale Case Study (EAGE 2014)

Learn more about these particular techniques and what was achieved through the analysis by viewing our June webcast “Completions Evaluation in the Eagle Ford Shale – A Case Study” anytime.  Click here to access the webcast now!

Jaclyn

Microseismic: Essential for Big Oil Success in Shale

By Jaclyn Townsend & Sarah Groen, MicroSeismic, Inc.

In the multi-billion dollar onshore shale gas market, real-time completions evaluation services have become extremely valuable to operators working to ensure profitability for the long term.

A number of big oil companies including Shell, BG, BHP and recently BP earlier this year, have created separate U.S. shale business units in order to manage shale production, accelerate decision-making capabilities and shorten cycle times from drilling through production.   In many formations, operators are combatting high decline curves and are finding that optimizing each stage and each well is key to long-term, field-wide productivity. For many of these companies, microseismic-based completions evaluation, often in real-time, is key in determining how to complete each well. 

Recently in an interview with Rigzone, Rod Skaufel of BHP said that he is seeing “early encouraging results for its use of diversion techniques to improve stimulated rock volume and create a more uniform distribution across clusters.” He goes on to say that, “BHP is using microseismic to examine production data to determine how to get more uniform distribution, and has experimented with shorter frac stages and fewer clusters to get higher rates.

Being able to improve variables like well spacing, frac coverage area, treatment design, and ultimate recovery are essential not only for big oil companies but all production companies alike.  “We're performing microseismic analysis that will provide additional data to help us with our decision-making and management of shut in volumes, spacing and frac design,” says Harold Hickey, President and CEO of EXCO Resources, during EXCO’s Q1 2014 conference call.

Microseismic technology is the only available data that provides deterministic information on what is happening during hydraulic fracturing operations. At MicroSeismic, Inc., we use our best in class microseismic acquisition and processing technologies, combined with our Completions Evaluation technology to support our customers in making decisions on field-wide optimization. Determining ideal well and stage spacing, identifying geo-hazards, identifying fluid and treatment efficiency, and defining what portion of the total stimulated rock volume is propped and productive is valuable information that will contribute to the long term health of unconventional plays.

To hear more about our completions evaluation services, click here to register for our webcast on June 17, 2014 where we will discuss how MicroSeismic played an essential role in determining sophisticated wellbore spacing in the Eagle Ford Shale.

Jaclyn & Sarah

Enabling Improved Reservoir Simulation and Production Forecasting

By Kash Kashikar
Vice President, Completions Evaluation, MicroSeismic, Inc.

Last month I attended the SPE Gulf Coast Section Reservoir Engineering forum. The meeting was very well attended and boasted the largest attendance in the history of the Reservoir Engineering Forum. This highlighted the interest and need for improving our ability to accurately forecast production from individual wells and fields in unconventional reservoirs. The morning session focused on 3 presentations related to shale oil and gas. The presenters covered topics ranging from workflows to utilizing stochastic history matching methods, to the use of complex full physics simulators that have the ability to model geological, fluid flow and fracture network complexity.

While significant progress has been made in our ability to model fluid flow in very complex fracture systems that result from hydraulics fracturing, it was clear that there are still many unanswered questions. Some key questions included the following: What is the nature and complexity of the fracture network? What are the dimensions of the fracture network in play over the life of the well? What is the areal and volumetric extent of the stimulated zone and thus the drainage volume?

Microseismic is the singular measurement that extends beyond the wellbore into the reservoir and the intra-well space. However, today there is very limited microseismic data available to guide any large scale use for proper and rigorous reservoir and fracture network description. To alleviate this lack of measurement beyond the wellbore, stochastic modeling of fracture networks is often used for simulating long term production. The problem is compounded by the fact that production data is only available for a short time period of time – a few months to a few years, while the forecast for ultimate recovery is performed over a time period that is several times larger (10 to 30 years). This leaves us with a very large set of possible models that provide a good history match to the short production history, but significant variation in the potential ultimate recovery.

At Microseismic Inc. we have developed a unique methodology to use the measured microseismic activity to deterministically define a discrete fracture network.  The process relies on basic physics and uses the energy released during fracturing to quantify the size, and orientation of individual fractures.  This description of the Discrete Fracture Network captures the inherent complexity of the fractures and accurately defines the areal and volumetric extent of the fracture network.  The resulting Stimulated Rock Volume thus provides an accurate and rigorous description of the reservoir volume required for the simulation.  Analyzing the size, orientation, and density of the discrete fracture network within the stimulated rock volume provides a mechanism to further constrain critical reservoir properties such as permeability, porosity and stress directions required for long term production forecasts.  As the body of our work at MicroSeismic increases over time, we are able to pull out correlations between microseismic results and production, allowing us to begin to rely more on the deterministic results and less on fuzzy models.

At Microseismic Inc., we are focused on helping customers design, monitor and optimize stimulation treatment and better understand the interaction between the reservoir, the operation, and its impact on field and reservoir economics. We are working closely with our customers across North America and abroad to deliver a better frac and improved production forecasting, each and every day.

Kash

MicroSeismic Wins Best in Show at GeoConvention 2014

By Sarah Groen
Vice President, Strategic Marketing, MicroSeismic, Inc.

Last week several MicroSeismicians from Houston and Denver made the trek to join our friends from MicroSeismic Canada at GeoConvention in Calgary.  Over 4,000 visitors from around the world came to Calgary to discuss the latest topics in geology and geophysics.

We were impressed with the high quality of the technical sessions at this show, with topics ranging from Porous Media Characterization to Learnings from the Horn River.  Our own Paige Snelling was Co-Chair of the session on Induced Seismicity.  In addition to Paige’s position as Co-Chair we had three exceptional papers/posters accepted and presented:

  • The Effects of Faults & Fractures on MicroSeismic in Horn River Basin Shales (Paige Snelling)
  • Where Did the Proppant Go? (Jon McKenna)
  • Real-time MicroSeismic Monitoring in China (Mike Kratz)

The energy on the exhibit floor was great as well.  Our most popular booth presentations were by Mike Mueller, VP of Technology Development, who discussed the latest innovations in microseismic processing and by Kash Kashikar, VP Completions Evaluation, who discussed improving well spacing and stage lengths with our Completions Evaluation Services.   Both of these talks can be found in our webcast archive here.

Last but not least, our booth staff, and especially Monica Vrana (our Senior Events Manager) did an excellent job engaging the crowd.  Our enthusiasm and efforts this year drew 60% more traffic than at the same event last year— and our efforts didn’t go unnoticed.  MicroSeismic won Best in Show for a 20x20 booth!  The award was based on ratings from 10 judges and was based on client engagement, professionalism of booth staff, and look and feel of the booth.

Thanks to all our clients, partners and friends who stopped by and helped to make GeoConvention 2014 a successful event.  We hope to see you again next year!

Sarah