Independent oil and gas companies are an integral element of global exploration. From the Gulf of Mexico (GoM), where independents are the largest shareholders, and the US shale plays, where smaller E&P companies continue to lead the way, to the success of UK companies such as Tullow Oil and Heritage Oil in Uganda and Cairn Energy in India, independents are the first movers.

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The Albertine Basin is relatively unexplored but has good hydrocarbon potential. (Images courtesy of ARKeX)

Emerging plays that are proving to be particularly hot areas for independents include the Albertine Graben in Uganda, the Tano Basin in Ghana, the Zagros Mountains in Kurdistan, and new plays in more mature areas, such as the UK and Norwegian North Sea.

Commercial success rates also continue to remain steady despite the growing geological complexities and remoteness of some target regions. A recent 2010 survey by Richmond Energy Partners of 27 mid-cap independents found commercial success rates are approximately one in three. The same survey found that these independents generate US $3 in value from every $1 invested in exploration.

However, despite these successes, the odds still are stacked against independents compared to their more deep-pocketed rivals, the E&P majors.

Independents have an understandably lower resource threshold for exploration and investment and, with frontier regions ever more complex and remote, have to invest in new technologies and take on increased risk in exploration activities.

Furthermore, if proposed US legislation that will increase offshore liability limits comes into force, many independents that do not have the capital to meet new government requirements will have to turn away from the GoM and focus on new frontier regions, increasing the competition.

How can risk be better managed for independents in their oil and gas exploration activities? How can independents better define their acreages for potential licensing?

Seismic

For the majority of independents, 2-D and 3-D seismic continue to be the technologies of choice, both onshore and offshore. It is through seismic and the accurate illu- mination of the subsurface that firm target locations for drilling can be decided upon.

The cost of untargeted seismic over large areas, however, can be extremely expensive and logistically challenging. In areas such as the dense forests of the Democratic Republic of Congo, the mountains of Northern Algeria, or in offshore fields where technologies such as wide-azimuth surveys (requiring as many as four vessels) are becoming increasingly popular, it is not practical to rely solely on seismic and the costs, large-scale infrastructure, lack of targeting, and long turnaround times that accompany it.

New Technologies

It is into this arena that new technologies are emerging – geophysical techniques such as non-seismic data acquisition and geological techniques that focus on the lithological, stratigraphic, and structural elements of target reservoirs.

3-D Image

A 3-D perspective view of gravity gradiometry anomalies exhibits reef geometries and areal extents in Nova Scotia.

One key technology is gravity gradiometry imaging (GGI), which maps the small density variations in underlying rocks by measuring the gradient of the earth’s gravity field. GGI provides an increased signal-to-noise ratio and wider bandwidth than conventional gravity measurements. In addition, its ability to include offline or sideways geology in its datasets also can help reduce the uncertainty in 2-D measurements and provideenhanced interpolation solutions between sparse acquisition lines.

The non-invasive nature of GGI; its ability to qualify vast regions quickly, accurately, and cost-effectively; and the fact that GGI can optimize the design of future seismic surveys are proving particularly attractive to today’s independents.

This optimization of survey planning through GGI helps independents focus on the most efficient solution for enhanced illumination and directs the survey toward the most potentially prospective areas.

GGI In The Field

Several independents are using GGI to better focus timelines, budgets, and future seismic surveys/drilling programs by generating the best available picture of the acreage beforehand.

Forent Energy Ltd. is a Calgary-based oil and natural gas producer pursuing a combination of short-term heavy oil production growth in Western Canada and high-reward pioneering exploration opportunities in Nova Scotia.

The company has used GGI as a cost-effective method to image the subsurface of its Nova Scotia prospect area, leading to the more efficient placement of its 2-D seismic lines and also having minimal landowner impact.

Forent is the largest onshore landholder in Nova Scotia, with exploration rights to 1.1 million acres that are prospective for reef oil in Shubenacadie Basin and shale gas in St. Mary’s Basin.

On behalf of Forent, ARKeX conducted a high-resolution 340-sqmile (890-sq-km) geophysical imaging program in the Shubenacadie Basin during the second half of 2010, consisting of gravity gradiometry as well as magnetic and LiDAR datasets.

The target was the Alton Block, a 740,000-acre petroleum and natural gas holding that encompasses two oil and gas reef-prone fairways on the south portion of the block. The area was described by petroleum consulting company Sproule Associates in 2008 as having “all the parameters required for a viable petroleum system ... and, if delineated through the proposed geotechnical methods, should provide medium- to high-risk exploration targets.”

The program was designed to identify possible subsurface Gays River reefal structures that were anticipated to be hydrocarbon-bearing. Interpretation of the GGI data identified more than 16 anomalies, demonstrating similar geometries to modern reefs and exhibiting areal extents resources assessment. These areas will be delineated further through a 2-D seismic program in 2011.

More than 7,000 miles (11,265 km) away, Tower Resources, a UK-based independent oil and gas exploration company, has been using GGI to improve structural definition within a proposed license area in northwest Uganda along the East African Rift System. Fewer than 200 wells have been drilled to date in the East African Rift System, which covers an area of 887,880 sq miles (2.3 million sq km), pointing to much untapped exploration potential.

In Tower’s case, the GGI data are helping to improve the planning for a 91- to 122-mile (150- to 200-km) 2-D seismic program – to take place in the next few months – by mapping structures in the deeper part of the basin to improve structural definition and assist in identifying a better developed reservoir section.

The airborne GGI survey took place over the Block EA5 Rhino Camp Basin, a 1,124-sq-mile (2,941-sq-km) license area at the northern end of the Albertine Graben. The basin is relatively unexplored but has good hydrocarbon potential, with various analogies to the other producing basins within the Albertine Graben. Covering the whole area through seismic, however, would be a challenge, and an expensive one at that, as it incorporates the Nile River and swamps.

The survey has confirmed the presence of a deep potential source kitchen as well as previously undefined structures. Tower’s board believes that the apparent volume and depth of the kitchen are sufficient to generate enough oil to fill a commercial-sized trap and that the new target area is sufficiently large and well-defined to contain recoverable resource potential of more than 100 MMbbl.

The new insight into the geology and high-resolution measurements that GGI has generated will ensure future seismic work for Tower can be located with greater confidence, with the survey refined to focus on the most prospective areas.

Whether it is applied to licensing, frontier exploration, mature plays, or prospect generation or evaluation, GGI is a powerful de-risking tool and a driving force in independents’ E&P efforts.