Q.1> What will be the basic information a company need to get into a farmout agreement for joint venture with another company ?
Q.2> What should an exploration geologist ask in farmout meetings?
Q.3> What are the general causes of well failure ?
Q.4> I want to ask you about Hydrocarbon Indicator or Direct Hydrocarbon Indicator , how can we clearly identify DHI in geophysical maps ?
Thanks for sending me your questions.
Farming out is a process of a sales pitch in which an oil company likes to share their geological ideas and sell out their business model to another interested oil company who wishes to invest. Your questions will depend on which side of the table you are sitting, i.e, buyer or seller!! Seller would definitely try to demonstrate their geological model in a very positive manner with an optimistic approach for the success of the venture and would make every effort to convince the buyer that the investment would not only be safe but would be profitable.
If you shall be buyer or trying to Farming-In your company then you should be extra careful and attentive about every aspect of geology and business model and should need to ask all critical questions for health of your investment, to verify if the provided data and other information would have correct.
There are experts from finance, legal and corporate side of each company that would have to be taking care of their respective issues as an integrated team before reaching to any decision whereas technical experts would have to ensure the precision and quality of seismic data and interpretation including validity and integrity of leads and prospects, verify petrophysical interpretation and ensure if the base of interpretation correct, check and quality control of selection of volumetric parameters and its validity, ensure that presence of valid working petroleum system in one source rock or others, should be able to know reasons of failures of wells in the basin etc.
Wells are generally failed either due to geological reasons or technical reasons; technically reasons means if the well could not reach to the target reservoir zone for any reason or mud weight was inappropriate for reservoir that had damaged the reservoir.
Geological reasons are numerous and one has to dig out only after a thorough analysis of all relevant geological, seismic, drilling, well testing and completion data.
Reasons of prospect failure could be several; a prospect can be a failure if source rock was not thermally mature to provide hydrocarbon to the trap or never reached to the trap due to absence of adequate and efficient migration pathways, or well may be dry due to absence of good quality reservoir rock, or due to failure of seal rock, or due to early migration and late stage trap building, or due to post accumulation structuration and deformation of trap, or seismic interpretation was made on incorrectly processed seismic data or done on poor quality data or misleading interpretation of seismic. There could be other reasons and combination of the reasons I mentioned above.
Direct hydrocarbon indicators are identified on seismic data; bright spot, flat spots, gas chimney etc are direct hydrocarbon indicators on 2D and 3D seismic and you can always map each one of them on seismic.
Hope, this answer may help you.