The document provides an overview of an onshore oil and gas exploration simulation. Players take on the role of an exploration team tasked with finding and drilling for reserves to maximize return on investment. The simulation involves completing challenges such as identifying sedimentary basins using surveys, bidding on exploration licenses, and partnering with other teams to share risks and costs. Players can earn credibility points for correct decisions which are considered when applying for funds or bidding on blocks. The goal is to learn about the key stages and decisions involved in onshore oil and gas exploration.

1. Introduction to Onshore Exploration

2. Your Challenge TodayYou are an exploration team in charge of a new petroleum exploration area. Your task is to find and drill for new reserves and to maximize return on investment (ROI).You will need to work as a company as well as in partnership with others.You will show your new understanding of exploration and be rewarded through credibility Points.

3. FinancesYou will start with $50 millionYou can apply for more later.Creating ValueProfit is measured by the net value of the oil and gas fields discovered MINUS all costs involved.Winning team has highest ROIROI is calculated as Value created DIVIDED by Funds received.

4. Credibility PointsYou get CPs for doing wellduring the simulationCorrect answers and sensibledecisions are awarded with CPsCPs are a measure of ability and credibilityA team’s CPs are considered when bidding for blocks and applying for funds from the HQ

5. You will learnWhere and how to find hydrocarbons. Various surveys during exploration.Licensing rounds. Farm-in and Partnerships.Drilling rigs and Sub-contractors.Environmental issues.Economically viable volumes. Reducing uncertainty.Team work and negotiation. Critical decision making, analytical skills. Multi-tasking.

6. Oil and Gas Industry Value Chain

7. Loginhttp://login.oilsim.com

8. Main screen

9. MapColumns e.g C1, and C54 Rows e.g. R35 and R163BlockBlocks are divided into smaller cellse g. C57,R73

10. First challengeChallenge: Find three sedimentary basins in the area. Basins are sedimentary rocks in the deep subsurface where oil and gas has been generated.Procedure: Buy and study magnetic and gravimetric surveys; and to submit the coordinates, column and row number for each basin centre.

11. Gravimetric surveysGravimetric surveys show the gravity in the sub-surface. Measured by airborne sensors.Sedimentary rocks have lower densities than the surrounding crystalline rocks. Low gravity means high probability of a basin below.Low gravity are basins. High gravity are crystalline rocks

12. Surveys in OilSim

13. Real gravimetric survey

14. Survey in OilsimGravimetric survey:South-east quadrant

15. Survey in OilSimAll four quadrant surveys in map context.

16. Magnetic surveysMagnetic surveys show similar information as gravimetric surveys. The sedimentary rocks in the basins have a lower concentration of magnetic materials than the surrounding crystalline rocks. Sedimentary basins are the areas with the lowest magnetic field.Basins have low magnetic fieldNon-basins have high magnetic fields.

17. Real magnetic survey

18. Survey in OilSimMagnetic survey:North-west quadrant

19. Survey in OilSimAll four quadrant surveys in map context.

20. Gravimetric survey analysisLocate edges of the continous basin structure (yellow area)Locate the diagonals and thus basin centre

21. Magnetic survey analysisLocate edges of the continous basin structure (purple area)Locate the diagonals and thus basin centre

22. Finding the Midpoint

23. Centre may not be the sameExample:Top basin on both maps Calculate the midpoint between the gravimetric and magnetic centres found= C55 and R105C50R100C60R110

24. Enter decision

25. Centre Midpoint calculation3 centres – one Centre midpoint for each basinExample: C55, R105Solve before deadline. All submissions are evaluated after the deadline (and not before).You may get 0-100 CPs. All three centres must be located to get full credibility points.

26. Solve task 1

27. Task 1 solvedAll teams have submitted their answers. Basin centres are located.Message in Inbox. All teams have answers and CPs awarded.

28. Challenge 2 : license roundSedimentary basins may contain oil and gas.The government has decided to put the blocks around one of the basins on offer.Challenge: Identify the 3 most promising blocks and offer an amount for each of them.

29. Challenge 2 : license roundAny restrictions involved? Yes, you need to watch for Environmentally Sensitive Areas.What are we looking for? Hydrocarbon Prospects. Where do we find prospects? In sedimentary basinsHow do I find them? Interpreting 2D seismic and Common Risk Segment maps.

30. Source and migration2. MIGRATION ROCKwhere hydrocarbons are driven through3. CAP ROCKImpermeable rock that stops migration of hydrocarbons1. SOURCE ROCKwhere organic material is put under sufficient pressure4. PROSPECT

31. TrapsGeological “pockets”, that might contain hydrocarbons.Anticline trap(c) OLFStratigraphic trapSalt dome trapFault trap

32. Environmentally Sensitive Areas

33. Sensitive Rangelands SurveyRed areasYou will not be allowed to bid, drill or operate in any of the red areas. Green areasBlocks in area may be awarded.

34. Common Risk SegmentsIs there a sedimentary basin and a migration route into the prospects in the area?Is there porous reservoir rock in the area, so that the oil or gas can be stored?Is there a sealing rock in the area, so that the oil and gas can be trapped?If all are positive, then greenIf some negative, then orangeIf mostly negative, then red

35. Common Risk SegmentCRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gasSurfaceLayer 3 Eocene1500m below the surfaceLayer 2 Paleocene2500m below the surfaceLayer 1 Cretaceous3500m below the surface

36. 2D Seismic surveysTraps can be found with seismic surveys2D seismic survey is a cross section of the geological layers along either a column or a row.2D seismic surveys are used for locating prospects.

37. Real Seismic

38. Real Seismic

39. OilSim of 2DSeismic UnprocessedProcessedRed is top of the sealing rockGreen is top of the reservoir rockInterpreted

40. Anticlinal traps

41. Fault trapsLeakage

42. Leakage?LeakageSealant rock

43. Order seismic Buy 2D seismic from the survey shopOrder SeismicWhat type of data do you want?Columns or Rows

44. Unprocessed or processed data

45. Interpreted or notOnly buy maximum of 1 block of data at a time to speed up processing

46. Order SeismicIt takes time to process your request View the SeismicRed circles – navigate through the 2D seismic

47. Yellow Square Row 1 from column 1-56Cross-sectionsColumnRowProspect, ReservoirBasin,Source

48. License Round in OilSimMinimum bid is $250KMaximum bid is $7.5MEnter numbers without commas (ex: 250000)You will bid for 3 licenses but each team will only be awarded one licenseHighest bid wins the licenseIf two teams bid the same, the team with the most CP’s gets itRandom license awarded if none of your bids are high enoughSubmit your bid before the deadline!

49. Enter bidsThree different blocks

50. Three bids

51. Example-Block 1123Bid 250000

52. Recap on Challenge 2Study Sensitive Rangelands Survey to see which blocks to avoidUse Common Risk Segment surveys to see which blocks to examine closer (look for green)Buy and study many 2D surveys to identify which ones have the most potential traps, as well as the biggest traps.

53. Solve task 2

54. Task 2 solvedMessage sent to all teams with the resultsCredibility Points are given for prosperity of the blocks you bid forEvery team has got one exploration license

55. Challenge 3 : Exploration DrillingCompany management has reviewed the licence that you were awarded and the potential cost to drill a well.Although the possibility of finding oil is fair, the costs involved are large. They have asked you to spread the risk. Challenge: Farm-out a minimum of 20% on your license and farm-in as much as you can on other good licences.

56. PartnershipsSpread the risk: e.g Investing in other blocks divides the risks amongst all partners, much more preferable than keeping 100% of one field and all the risk.Increase probability of profit: investment in only 1 field which could be a dry prospect is possible, whereas the likelihood of investing in 5 fields which are all dry is unlikely.

57. Challenge 3.1 PartneringAcquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round-can send under “surveys” to possible partnersFarm-out: Get others to invest 20% or more in your licenseFarm-in: Send offers to other teams to buy shares in their viable licences. Submit an offer for each viable licence, with amount offered and share wanted in whole %.

58. Real 3D SeismicShows the subsurface structure in a cube.

59. 3D Seismicin OilSimLayer 3 EoceneLayer 2 PaleoceneLayer 1 Cretaceous

60. Licences

61. Farm-inEnter the total amount and the total % you want to buy

62. Add a message to the seller

63. Press “Send offer”

64. Min bid is $25000 and max is $1250000 per %FinancingWhen a team receives a Farm-In offer to appears under Financing. This is where a team can receive finance or money for a % of their own blocks

65. Farm-inlicense OWNER decides whether to ACCEPT or REJECT the offerPartnerships established every time a license owner accepts an offer.Overview: On the main page, you can see all licenses. 1) licenses you operate, 2) licenses you have invested in, and other licenses.

66. InvestingAll your farm-in offers to other teams are shown under “Investing” on the right-hand side of the homepage . This is where a team offers investments to other teams for a % of their blocks

67. PartnershipsPartners pay a proportional share of all future costs incurred by the partnershipPartners receive a proportional share of the net proceedings from any oil or gas found on the license. The operator team makes all decisions regarding acquiring 3D seismics, drilling of wells and testing of wells. Information: partners in a block can access info about drilled wells and discovered oil and gas fields.

68. Ready to drillClick on drill

69. Choose rigTruck-mounted RigsLight Duty RigsHeavy Duty Rigs

70. Choose RigMax drilling depth is importantRig cost = drilling days * day rate

71. RigsFew: limited number of rigs available.If you get one: start using it within 20 minutes.If you don’t: wait in a queue, if another team is using the rig.Price can change: rig day rates are dynamic.

72. Service providers9 Star quality:Good- costs moreBad: - cheaper, but reliability is low 5 types of providers- Construction and Maintenance , Logistics, Well Services, Camp Services and Analysis

73. Penalties & FinesCertain problems can occur if Service Provider Selection is poor qualityOther penalties can occur if you drill in areas indicated as problematic in the Environmental Impact AssessmentAs in real life, problems can occur randomly and these are also applied with fines levied accordingly.Oil spill control – 5% of overall drilling costs

74. Environmental Impact AssessmentEIA survey: more knowledge about the area.

75. Less probability for drilling problems.

76. Less severe consequences if you run into problemsDrill PositionEIA: enviromental impact analysis shows where not to drill.Place your mouse where to drill

77. Drilling PositionLayer 3 EoceneLayer 2 PaleoceneLayer 1 Cretaceous

78. Drill PositionToo deep for the chosen rig.

79. Estimated cost

80. Drilling Days

81. Drilling ResultProven volume (MBOE) countsTest may increase proven volumeRemember to tick the boxes!

82. TestingOnly if you discover a field – find Oil or GasYou decide whether you want more information about that fieldMore information by doing a production test (and other tests)Tests costs. Tests take 10 days per field. Tests have the same day-rate as the drilling if you use the same providers.

83. Value and ROI Volume Range, e.g. 1-897Proven Reserves e.g. 1

84. Value and ROI Calculation of licence value

85. Sales valueValue Calculation25% of 8 MBOE @ $5012% $39.9MExpected costs ifyou developed thefield (capex) andproducedthe oil (opex)If total expenses arehigher than the salesvalue, the value of thelicense is zero

86. AppraisalFrom Probable volume to proven reserves

87. Narrowing rangesExploration well:0 to 572 MBOE (after drilling)11 to 466 MBOE (after testing)First appraisal well:25 to 333 MBOE (after drilling)34 to 310 MBOE (after testing)Second appraisal well:65 to 250 MBOE (after drilling)101 to 152 MBOE (after testing)Only proven MBOE counts

88. Increasing proven volumesAppraisal wells - proven reserves increaseRange between proven and possible is decreased