Study Group: Semi-Submersible Drilling Rig Experts

GLG News^SM Analyses by this Study Group's Leading Experts(?)

Seismic While Drilling is Emerging as a Practical Tool to Reduce Drilling Cost

August 17, 2009

Analysis by:Fred Aminzadeh, Owner and Senior Advisor,

Analysis of:Seismic-while-drilling technology advance hailed | www.ogj.com

Nick Snow, Washington Editor of the Oil and Gas Journal reports of a breakthrough in practical implementation of the seismic while drilling technology. Technology International Inc. of Kingwood, Tex., has developed a breakthrough borehole imaging system that is nearly commercial, according to the DOE. SeismicPulser system provides more accurate geosteering for oil and gas discoveries, facilitating field development and improving well economics.

Seismic technology contributed to successful sub-salt drilling in the GOM

July 28, 2009

Analysis by:Fred Aminzadeh, Owner and Senior Advisor,

Analysis of:BP Heralds Gulf of Mexico Prospects | online.wsj.com

Oil and Gas Journal reported a successful appraisal well drilling by BP PLC. This well was drilled in a previously untested southern segment of Mad Dog field in the Gulf of Mexico. The 826-5 well was drilled on Green Canyon Block 826 about 100 miles south of Grand Isle, La. The well found 280 net ft of hydrocarbons in the objective Miocene hydrocarbon-bearing sands. In 2008, BP drilled the A-7 well in the western part of the field, with 275 ft of net pay.

Largest discovery in California in 34 years

July 24, 2009

Analysis by:Fred Aminzadeh, Owner and Senior Advisor,

Analysis of:Oxy adds California gas-condensate giant | www.pennenergy.com

HOUSTON, July 23 -- Occidental Petroleum Corp. has drilled six wells in an apparent giant gas-condensate field in California’s San Joaquin basin that has an estimated 150-250 million boe recoverable. The discovery identified a new play concept that Oxy officials compared with an offshore deepwater structure. They said the concept is prospective underneath Oxy’s giant Elk Hills field southwest of Bakersfield and indicated it may be exploitable by other operators in the basin.

Iraq's Tough Fiscal Terms for Oilfields Rejected by the Industry - Except BP

July 1, 2009

Analysis by:Robert Hinkel, Chief Operating Officer,

Analysis of:Oil Companies Reject Iraq's Contract Terms | online.wsj.com

The "service contracts" recently offered by the Iraqi government for oil companies to develop their huge resources represent some of the most difficult issues for the global oil companies to face.  The fact that BP accepted the contract, despite only taking a $2/bbl margin that is oblivious to oil price changes, suggests that they are taking a long-term view of the Iraqi opportunities for the fact is that a project like this, no matter what the size, cannot compete on a profitability basis in BP's global opportunity portfolio.  In fact, oil companies have always feared and resisted these types of contracts since they do not allow the oil companies to book reserves under the normal regulatory and financial systems in the US and elsewhere.

Reserves vs. Resources

June 30, 2009

Analysis by:Dennis Fagerstone, Consultant,

Analysis of:Estimate Places Natural Gas Reserves 35% Higher | www.nytimes.com

This article correctly states that new technology has opened many areas in the US and worldwide for natural gas development. The 35% increase, however, is for resources, which is very different than reserves. These resources must be proven to be commercialy feasible for development before classification as reserves. At natural gas prices below $6/mmbtu, only 20-30 % of these resource plays in the US are commercial at present development cost levels. The quality of these unproven supplies must also be confirmed by drilling and testing. Adequate natural gas prices will be necessary to support development and conversion of this gas to reserves. 

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