The Oil Business According to Steve!
Oil & Gas from Cradle To Grave: The Prospect
L. Bruce Railsback, Department of Geology, University of Georgia
Recently I was reflecting on the complexities of the oil and gas business: seismic data, geologic mapping, oil and gas royalty ownership, horizontal drilling, production facilities, refining … the list goes on!
“Why so complicated?” Well, it’s a high tech, high finance, high risk and high reward industry. The bottom line is that it just is (complicated).
“But is there a way to bring it down to common terms for the common man?” Well, I’m a common man with a common vocabulary, so here we go … The Oil Business According To Steve!
The Prospect
Before the first well is drilled, it all starts with an idea, “The Prospect.” Typically an oil and gas geologist will create maps depicting what he thinks the earth looks like underground. He uses any and all information available … rock formations as seen on the surface, seismic data from pulses vibrated through the ground, information gathered from previous wells drilled in the area … to create a “picture” (map) of what he thinks is underground. It’s a collision of science, art and luck. Every year the science component increases as we apply new technology to the oil and gas industry.
Although overly simplified, the picture above (borrowed from Professor Bruce Railsback, Department of Geology, University of Georgia) represents a map that the geologist generates to show where he thinks oil and natural gas is trapped underground. As you can imagine, once a geologist has developed a map depicting a “prospect”, he quickly puts it under lock and key away from competitors! It’s like mining for gold … once you’ve got your prospect in mind, you don’t want to let anyone else know about it until you secure the rights to explore.
“So what exactly is a ‘Prospect’?” Prospect simply refers to a prospective drilling location or an untapped oil and natural gas reservoir.
After the prospect is identified, it’s on to the next step … “The Economics”. More to follow …