FUNDAMENTALS OF MIDSTREAM

INTRODUCTION TO EXPLORATIONOIL 101

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Hi, and welcome to Oil 101, the podcast.

My name is Doug Stetzer and Im content and community manager for EKT Interactive.

As we continue our Oil 101 - Microbes to Market coverage, we will be discussing the Exploration function of upstream.

This content is taken from our Upstream e-learning modules which were developed by industry experts with decades of experience.

More content on this topic is available in the free members content library at www.ektinteractive.com. And well be sure to put relevant links to our Upstream, Midstream, and Downstream overviews in the program notes.

1. Intro to Exploration1

EXPLORATIONThis Exploration overview includes:Exploration ProcessesHistory of ExplorationWhat are HydrocarbonsThe Basin-Play Concept

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This brief overview of exploration includes segments on exploration processessome historical perspective including an explanation of hydrocarbons, and finally well discuss the basin-play concept.1. Intro to Exploration2

Key Steps in Exploration

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There are 4 key steps to summarize the oil and gas exploration process:1. Intro to Exploration3

The PlayStep 1:Understand and evaluate the geologic setting, called a play.

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First is understanding and evaluating the geologic setting, called a play,1. Intro to Exploration4

Obtaining a Lease

Step 2:Obtain access to the potential reserves usually in the form of a lease.

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Next is obtaining access to the potential reserves usually in the form of a lease,1. Intro to Exploration5

Drilling a Wildcat Well

Step 3:Determine where to drill and complete a successful discovery or wildcat well.

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The third step is determining where to drill and completing a successful discovery or wildcat well.1. Intro to Exploration6

Recognizing ReservesStep 4:Add additional hydrocarbon reserves to the oil company portfolio using guidelines set by the Society of Petroleum Engineers (SPE) and the US Securities and Exchange Commission (SEC).

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Additional hydrocarbon reserves can finally be added to the portfolio of an oil company using guidelines set by the Society of Petroleum Engineers (SPE) and the US Securities and Exchange Commission (SEC).1. Intro to Exploration7

What are Fossil Fuels?Oil and gas are composed of hydrocarbons, a mixture of hydrogen and carbon atoms, formed millions of years ago.New slide

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So what exactly are fossil fuels and how did they form?

Oil and gas are composed of hydrocarbons, a mixture of hydrogen and carbon atoms, formed millions of years ago.1. Intro to Exploration8

Early hydrocarbon discoveries were usually traced from natural seeps at the earths surface.Early Hydrocarbon Discoveries

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Early hydrocarbon discoveries were usually traced from natural seeps at the earths surface.1. Intro to Exploration9

Developments in the science of seismology added necessary tools and analytics to improve success in oil and gas exploration.Introduction of Seismology

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When searching beyond obvious seeps, developments in the science of seismology added necessary tools and analytics to improve success in oil and gas exploration.1. Intro to Exploration10

The introduction of refraction technology to find salt domes with oil and gas potential in the US Gulf Coast began in the 1920s.Refraction

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The introduction of refraction technology to find salt domes with oil and gas potential in the US Gulf Coast began in the 1920s.1. Intro to Exploration11

Seismic advances during World War II continued the innovation that aided the search for oil.

Advances in computing power since the 1980s allowed for development of 3-D seismic surveys.

3-D technology increased the use of seismic data for oil and gas production as well as exploration. Seismic Goes 3-D

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Seismic advances during World War II continued the innovation that aided the search for oil.

Advances in computing power since the 1980s allowed for development of 3-D seismic surveys leading to more accurate and realistic imaging of the sub surface.

3-D technology increased the use of seismic data for oil and gas production as well as exploration. 1. Intro to Exploration12

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Free eBooks include:History of OilUpstream FundamentalsMidstream Fundamentals Downstream Fundamentals Business Processes/Risk ManagementIndustry Trends

Learn More!Add link in Camtasiahttp://www.ektinteractive.com

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This podcast episode is brought to you by EKT Interactives Oil 101 - a free Introduction to oil and gas. Within this free, members-only content area youll find eBooks on oil and gas industry fundamentals, relevant articles on key oil and gas topics, and a growing body of digital learning content.Claim your free membership and join the Oil 101 learning community at www.ektinteractive.com today.1. Intro to Exploration13

Exploration - Finding ReservesThe primary purpose of exploration is to discover new accumulations of hydrocarbons, called reserves.

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As you know, the primary purpose of exploration is to discover new accumulations of hydrocarbons, called reserves.1. Intro to Exploration14

The Basin-Play Concept

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An important development in exploration progress was more conceptual than technological.

The basin-play concept was developed in Canada in the early 1970s and is still used today. 1. Intro to Exploration15

What is a Basin?A basin is a very large geographic area containing sediments formed in a similar geological age like the Permian Basin in West Texas.

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A basin is a very large geographic area containing sediments formed in a similar geological age. An example would be the Permian Basin in West Texas.1. Intro to Exploration16

What is a Play?A play is a location, or group of locations, with oil and/or gas potential within a basin.

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A play is a location, or group of locations, with oil and/or gas potential within a basin.1. Intro to Exploration17

The indication of potential for faults or traps become drilling targets, called a drilling prospect.Drilling Prospects

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Within a play, the indication of potential for faults or traps become drilling targets, called a drilling prospect.1. Intro to Exploration18

Before the Play ConceptPrior to the play concept, exploration risk analysis concentrated on a single prospect often without technically considering its relationship to other similar prospects.

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Prior to the play concept, exploration risk analysis concentrated on a single prospect often without technically considering its relationship to other similar prospects.

1. Intro to Exploration19

Play Concept - Reducing RiskToday, the play concept gives explorationists the ability to leverage successes and reduce risk across numerous wells, reservoirs, and fields as they explore for new hydrocarbons and enhance existing oil and gas accumulations.

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Today, the play concept gives explorationists the ability to leverage successes and reduce risk across numerous wells, reservoirs, and fields as they explore for new hydrocarbons and enhance existing oil and gas accumulations.

1. Intro to Exploration20

An Iterative ProcessExploration is very iterative.

Every lease investment in a play and well drilled to define the size of the reservoir improves exploration success.

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Exploration is very iterative.

Every lease investment in a play and well drilled to define the size of the reservoir improves exploration success.1. Intro to Exploration21

Reservoir DelineationData from both positive and negative wildcat wells helps delineate the discovered reservoir and every additional well and downhole measurement improves the understanding of the field.

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Data from both positive and negative wildcat wells helps delineate the discovered reservoir and every additional well and downhole measurement improves the understanding of the field. 1. Intro to Exploration22

There's More?This Intro to Exploration material was taken from ourOil 101: Introduction to Oil and Gascourse.

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Thanks for listening, and we hope youve learned a few things about the Exploration function of upstream in the oil and gas industry. 1. Intro to Exploration23

EKT Interactive staff have provided oil and gas training since 1986.

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Thanks, and well see you next time.241. Intro to Exploration