Oil and Gas Exploration Terminology

We’ll discuss the some key Oil and Gas exploration terminology, the basin / play concept, and the USGS National Oil and Gas Assessment.

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Exploration Terminology

In the search for new oil and gas discoveries, the exploration function includes multiple disciplines: geologists, geophysicists, scientists and engineers of all types.

Orchestrating this variety of capabilities into a coherent and effective team requires a common and easily understood analysis and execution model, like the game plan of a sports team.

Historically the exploration game plan focused on defining a single exploratory well, called a prospect. During the first half of the 20th century, a broader perspective became prominent, called the basin–play model.

Here are some important terms used by exploration departments today in analyzing where to search for oil and gas.

The basin is the term for an entire complex of petroleum source rocks, carrier beds and migration conduits, and traps that contain the reservoirs. A sedimentary basin often contains multiple plays with several different types of traps, all charged from a common source rock.
A play is a group of prospects in a basin all having similar geologic origins— a family, if you will, of geologically similar traps.
A prospect is defined as a location with a consistent set of geological criteria and conditions. When combined with related economics, a prospect can justify capital investment for an exploratory well.
A field is a geographical area in which one or more oil or gas wells produce. A field may refer to surface area only or also to the underground productive formation(s). A single field may include several reservoirs separated either horizontally or vertically.
The reservoir is a porous and permeable underground formation containing natural accumulations of producible hydrocarbons. The accumulation is confined in a trap by impermeable rock or water barriers and is characterized by a single, natural pressure system.

Prospects and fields in a play have similar configurations and structural histories. Fields making up a play contain reservoirs that exhibit similar geologic patterns, and ultimately similar recoverable reserves.

It is clear today that the most important decision in exploration is not which prospect to drill, especially with costly commitments and/or front-end bonuses.

Instead, the key decision is which new play to enter.

The economic consequences of choosing a bad play can be serious to a medium-sized oil company or E & P operator, or financially disastrous to a smaller firm.

Reservoir Basins

A basic rule of thumb in exploration is that the best place to find new oil or gas is near where it already has been found. That is precisely where the industry looks, for sound business reasons. The financial risk of doing so is far lower than that associated with drilling a rank wildcatin a prospective, but previously unproductive area.

A wildcat is defined as a new well that is drilled that is at least 10 miles away from another productive location.

Most successful E&P companies limit exploration budgets to those basins and plays where they have a history or can come up with a technical competitive advantage.

Every seismic result, well, log or core sample improves an operator’s understanding of the geology and geophysics of the basin. The common term for this extensive collection of information is a basin study.

To quote one successful international explorationist,

“Basin studies are kept forever….regimes come and go but the rocks never change.”

What is a Play?

Plays are defined by the structured information on the subsurface geology. As discussed in our Origins of Oil & Gas lesson, geologists describe five key attributes that control the occurrence of oil or gas in any play, including:

source rock
timing
migration
reservoir
trap

These attributes are thought to be generally independent of each other. While the millions of wells drilled around the world have yielded immense amounts of geological information, the data provided by any well bore is unique to that well. Seismic analysis and modeling techniques help the geologists infer from the visible well logging results the portion of the reservoir that is still invisible to them.

The probability that each key attribute is favorable can now be estimated by geologists from all the geological and geophysical information about (and across) the play. This set of consistent data and interpretation helps improve the probability of success of the next wildcat well.

USGS National Oil and Gas Assessment

The U.S. Geological Survey (USGS), in collaboration with the Minerals Management Service (MMS), has developed the National Oil and Gas Assessment, a scientifically based, objective analysis of reserves.

In 2010-2011 the MMS was reorganized. Revenue collection was transferred to the Office of Natural Resources Revenue which resides under the Dept. of the Interior. The Bureau of Ocean Energy Management (BOEM) manages the development of offshore resources, and the Bureau of Safety and Environmental Enforcement (BSEE) enforces regulations.

You’ll find links to the USGS, MMS (now BOEM and BSEE), and National Oil and Gas Assessment in the program notes.

USGS geologists develop geological and geophysical theories for occurrence and distribution of resources rather than just conducting inventories of discovered oil and gas resources.

During the 1990’s, the USGS and MMS employed the play concept in carrying out several assessments of remaining onshore and offshore US oil and gas resources. The beauty of play analysis is that it ties statistical success of oil and gas exploration and development to geological expertise.

Unconventional resources and shale are also analyzed as specific plays using different analytic methods.

Each play is described in narrative form in sufficient technical detail to allow a complete and consistent analysis, and to allow comparison among plays and provinces.

The databases are now available to the public, at no charge.

In the US approximately 700 plays have been identified by the 1995 survey done by the US Geological Survey (USGS), still providing a wide choice, and risk profile, in potential wildcat drill sites for the explorationist.

We’ll provide a link to this study in the program notes as it is still referenced today.

US Geological Survey Circular 1118