Introductory talk to frame event & present results of an industry survey forming basis of a “conversation” between both sides of the geomechanics business: The specialist experts in the consultancies and those subsurface staff working within E&P companies.... on where they think the discipline is and where it is going.

1. Survey of Industry Opinion
Results of series of Q&A interviews during 2014/5
GLEN BURRIDGE
glen@glenburridge.com
GEOMECHANICS: Quo Vadis....?

2. GEOMECHANICS: Quo Vadis....?
Basis to Survey:
• Confidential & anonymised
• Mix of structured interviews & questionnaires
• Started with leading geomechanics consultancies
• Subsequent focus on practitioners & customers
of geomechanics within E&P companies
• Aims as “springboard” for further efforts

3. GEOMECHANICS: Quo Vadis....?
28 contributors
Interviews Questionnaire Both
Drilling Reservoir
Geophysics
Geology
Petrophysics
Res Eng
Prod Eng
R&D
IT
Finance
D&C
Geomechanics

4. GEOMECHANICS: Quo Vadis....?
28 contributors
Consultant Consultant - Sales
Operator Manager Operator Lead
Operator Staff
Assurance D&P
E&P Exploration

5. GEOMECHANICS: Quo Vadis....?
Nature of Survey:
 Range from technical specialists to managers
 Cross-section of established disciplines
 Includes several corporate geomechanics leads
 Mix of geomechanicists & “normal” people!
o This is the anecdotal story, not the official
o Select sample: 28 respondees
o Centred on mid-sized operators & one major
× Deficit of pure Explorationists
× No NOC’s
× Bias towards engineers & geomechanicists
× Centred on Europe

6. GEOMECHANICS: Quo Vadis....?
Feedback themed around:
OBJECTIVES1.
FACTORS FOR SUCCESS2.
WHAT NEXT?3.

7. “Hydrocarbons are sitting in the ground. You can't reach them without involving
geomechanics, consciously or unconsciously. You'd better do it consciously”
Image courtesy of Schlumberger
Implications for
differing scenarios?
Near-surface
issues?
Effective Field
Development
Deliverability!
Drillability!
“Opportunity to predict drilling & reservoir issues with intelligent foresight”“Learning to deal with stress improves your reservoir, as it does for life in general!”
OBJECTIVES
Areas of Application
Geomechanics: Quo Vadis....?
Section 1

8. Operators
• Make integral to field dev work
• Build into long-term planning & value
models via RM/OE, plus safety KPI’s
• Show value from own data, case studies,
analogue fields, post event reviews
• Not easy for exploration risk or reservoir
modelling, but should be trying!
• Importance for WBS, completions &
sand prod, but active learning?
• We must lead assurance since we see
the bigger picture
OBJECTIVES
Assurance
Consultants
o Trend towards inclusion in planning, but
only specific assets & locations
o Different frames of references in
Operators creates hazard
o Lack of champions -> lack of focus ->
opportunities lost
o Patchy or no assurance frameworks =>
event-driven reactivity & knowledge loss
o Lack of in-house competencies ->
difficulty of technically sound interaction
o Little benchmarking to discern magnitude
of problems: How bad is situation?
“If it’s a response to a problem then it’s too late.
We should be screening effectively.”
Geomechanics: Quo Vadis....?
Section 1

9. o Punctual intervention in drilling a weakness for Geomechanics (cf. predictive
use in sand stability & hydraulic fracturing)
o Short-term, task-focused, budgets of D&C don’t usually integrate with longer-
term implications for production
o However, question of value in D&C: Greater attention to remediation of
issues than prevention?
Geomechanics: Quo Vadis....?
Section 1
OBJECTIVES
Drilling
o Use for WBS & completion
design now widespread
o Fuller contribution to planning
& prediction stages of drilling?
o Can RTD open new avenues
for active learning?

10. o Greatest contribution likely to:
1. Drillability & Deliverability: Value of projects hangs upon them
2. Forward modelling for depletion (based on seismic attributes)
o Misconception that for conv’l resv’rs, sole Exploration application is WBS?
o Despite high exploration risk from seal failure, for conventional exploration
topic often neglected due to oversight / ignorance / focus
o Powerful impact for tight/unconventional reservoirs, where reserves only
incrementally increase based on drilling?
o Inclusion in assurance standards & information gathering should begin in E&A
Geomechanics: Quo Vadis....?
Section 1
OBJECTIVES
Exploration

11. o Uphill battle to gain buy-in to concept of geomechanical influence from RE’s
(info overload? technique too uncertain? reputation fear?)
o Importance of tying results to tangible ∆reserves or their uncertainty: What
happens if shows a reserves decrease? Still want to use?!?
o Association with dramatic asset hazards e.g. subsidence, well integrity Vs range
of production benefits e.g. IOR, lower well count, later water-cut
o Complication of stress criticality for reservoir => Greater uncertainty. Welcome?
o 4D seismic for geomechanical effects within reservoir: If it’s good enough for
Statoil, why not other majors?
o Need to interface with numerous technical disciplines causes inertia, especially
where no focal point to provide ‘activation energy’
Geomechanics: Quo Vadis....?
Section 1
OBJECTIVES
Reserves Mgmt
“Ideal case of full-field 4D seismic geomechanics acting as your
‘reservoir doctor’”

12. Organisation
• Subsurface vs drilling – cultural & physical divisions (budgets, frames of reference)
• Many interfaces, each with databases / models / software: Who owns the story?
• Inefficient communication: Agreement best approach coupling of specialist teams/focal
point & widespread awareness
• Lack of centres of influence in Operators: Politics, titles, activation points?
Room for Improvement
• Workflows in industry embryonic at best, often non-existent
• Procedures to identify modelling options & influence decisions in time
• Are we bringing in contextual information from basin-scale modelling & overburden?
• Get information flowing across numerous disciplines early on in project’s life!
• Attitude: To role in own work, to results, to uncertainty.
“No-one is thinking about what’s going on above the reservoir, yet this is where much of the
drilling cost is accrued: Geomech has a potentially major role to play in cost control”
FACTORS
Practice
Geomechanics: Quo Vadis....?
Section 2

13. General Subsurface Teams
• Need min. level to know where significant & when expert help required
• Should be seen as core competency. Sporadic activity should not be excuse to lose lessons
• Lots of claim of expertise in industry: More honesty & sharing needed from practitioners
Specialists
• Demanding sweep of skills required: Have to lean toward geoscience or engineering poles
• Tough apprenticeship: PhD, then still need exposure to range of real-life examples!
• May require a less specialised collaborator to translate results for wider audience
• Discipline Leads often end up working projects rather than spearheading
Management
• Unless have a specialist team on tap, organisations run severe risk of doing wrong thing
• Geomech should be “part of furniture” => awareness for managers => basis for use
• Often involvement with topic will be when called in as “emergency service”
“Geomechanicists must blend great detail with the bigger picture, plus deal with tons
of uncertainty – a rare talent!
FACTORS
Competencies
“Lack of integration means geomech’s benefits of coherent vision often lost”
Geomechanics: Quo Vadis....?
Section 2

14. Current Issues
# Lack of universal standards for data storage / transfer & integrated software environments
# Need integrated software tools to conduct geomechanics with multi-disciplinary teams
# Without internal expertise, ability for clients to know what they’re buying
# Rigorous audit of models stymied by lack of corporate workflows & best practice
# Unfamiliarity with use of the latest 3D tools: Use of “Quick-Look” stress models?
# Reluctance of Operators to be “first movers” on technology: More JIP’s? Collaboration?
Future breakthroughs?
? Seamlessly integrated 3D-4D is inevitable, but on what timescale?
? Data organisation shouldn’t be an excuse. Slick run-times for fully coupled 4D will come
? Linkages to seismic & structural geology exciting. Powerful SEM’s built as standard
? Individual technologies will depend on relevance to assets, so uneven uptake
? RTD to match WBS models with reality -> influence on safety, cost & drillability of a well?
? Discrete particle simulations & improved frac / completion design software
FACTORS
Technology
Geomechanics: Quo Vadis....?
Section 2

15. FACTORS
Modelling
Geomechanics: Quo Vadis....?
Section 2
• Select appropriate projects for pilot/QL studies to market value of techniques
• How to best judge efforts vs S/M/L-term value for any modelling planned
• Scoping extent of “unknown” risk environment presented by geomechanics
• Ensuring the full suite of data is retrieved from disparate disciplines
• Lack of understanding from technical staff about which data is relevant, e.g.: -
- Importance of offset wells will be related to structural regime
- HPHT self-frac prediction thwarted by poor seismic resolution at depth?
- Issue of sparse 3D sampling of inputs for higher-order models
• Models may only be updated when have a failure

16. FACTORS
Perceptions
“Lack of discipline definition & promotion => Lack of mission => Difficult to
integrate into the greater goals of E&P activity”
• 1-2D use well established. Move to 3D reservoir applications, but skills rare
• Interest variable across regions & companies, since different challenges
• Viewed as specialist subject of variable importance -> no strategies in E&P cos.
• Trades on fear (loss aversion): Greater association with bad, punctual events
than long-term asset stewardship. Need to prove it works in 3D sense
• Use in “book-ends” of well delivery activities: Early planning & post completion
• Operators not sharing enough case studies due to sensitivity of outcomes:
Association with induced seismicity & negative PR
“Historic perception of reactive rather than proactive tool, hence lack of
motivation for pilot studies & tests”
Geomechanics: Quo Vadis....?
Section 2

17. FACTORS
Relationships
Consultants:
• Not seen as a core business activity, so often not even on radar in many E&P cos.
• Untoward events will continue to occur, risks be taken, value untapped & uncertainties
carried until Geomechanics becomes incorporated properly in planning & assurance
• Breadth of subject matter & impacts makes target audience fragmented: Who should
we speak to? Lack of any corporate mindshare stymies interaction
• Engagements as an “emergency service” under crisis make life uncomfortable & benefits
frustratingly under-realised for all
• Potential “glitter effect” of new technology can distort relationship
Operators:
• Subject needs be driven internally by our own objectives & expertise
• Developing mistrust between operators & service companies in recent years
• Used to be the “domain of everyone”, but now split
• Information deficit among many companies => in poor position to shop for services
• Service companies not always sensitive to exterior role in decision-making process
• Restricted scope of work often means consultants don’t see the whole picture
Geomechanics: Quo Vadis....?
Section 2

18. • Instil as standard subsurface activity, from academia to planning & assurance
• Better off/on-boarding in companies for the few people with the experience?
• Technical “presence” of the specialist: Ability to communicate! Role of “nodes”?
• Encapsulating good practice within process, e.g. checklists, standards & guidelines
• More general articles rather than just specialist?
• Extent of subject => natural split between G&G and Engineering sides? Impact?
• Does embedding techniques in widespread software increase chance of uptake?
WHAT NEXT?
Sharing Knowledge
“Distill to simple message - A Green Cross Code of Geomechanics:
This is advisable, this is not, this is when you bring someone in.....”
Geomechanics: Quo Vadis....?
Section 3
Image courtesy of Baker Hughes

19. How do we get Operators to publish more examples of high-impact case studies?
• Collaboration between operators on common themes of critical interest?
• Focused events, led by Operators – motivation to honestly share experience & questions.
• For maximum relevance, organise within regional context & themes.
• Find a way to address sensitivities regarding confidentiality & fracking
WHAT NEXT?
Engagement
Geomechanics: Quo Vadis....?
Section 3
Who could provide a representation within the industry?
• Operator-to-operator collaboration via honest broker who can find out who is doing what
• For UK, could new Oil & Gas Authority fulfil this role?
• SPE (engineers) & EAGE (geoscientists) could have significant role to play in coordinating
efforts to encourage explicit involvement from Operators – this may change the dynamic.
What about other stakeholders?
• Outward-facing events for service companies & Exploration companies to seek funding &
raise awareness of topics among investors?
• Academia’s primary role to set stage for role of geomechanics in the industry.

20. “We need to demonstrate impact on cost savings, risk reduction & value uplift”
WHAT NEXT?
Realising Potential
“For serious E&P, should be fundamental to development of field & drilling wells!”
Geomechanics: Quo Vadis....?
Section 3
“Appoint ‘champions’ that ask ‘has anyone thought about this?’ ‘Have we spoken to the
drillers?’ ‘Are there uncertainties we ought to understand better?”
• Will have greatest impact on decisions when can be seen as agent of change:
o Demonstrate subsurface risk can be lowered
o Diagnosis of factors in long-term behaviour & effectiveness of assets
o Modelling fluid response to ∆stress fields (challenge constant K?)
o Greater understanding of ultimate recoverability
“Recruit people at senior level who Get It, see the full asset picture & put theory into practice”
“Deploy those with experience of geomech to actively share knowledge & marketing
the ‘toolbox’ to those who matter”

21. Where will geomechanics be in Upstream Oil & Gas in 5-10 years?
 Crucial subsurface effectiveness tool OR Can’t justify itself & side-lined?
 Small but important part of reservoir modelling workflows, especially in
complex geology. Degree of externalisation vs internal skills?
 Convert concepts into recognised applications?
WHAT NEXT?
The Future: 5-10 Years
Where should it be….in 5-10 years?
 Significant for production enhancement, superseding “Reservoir Mgmt”
 Firmly embedded as a routine workflow. A normal part of business.
 Senior Management & Assurance teams fully aware of potential impact
 Movement to 3D & reservoir effects with links to seismic & struc geology
 There will be a turning point in widespread adoption, but when....?!?
Geomechanics: Quo Vadis....?
Section 3
Image courtesy of Schlumberger

22. The one Question no-one could/would answer:
.....which led to a question back:
GEOMECHANICS: Quo Vadis....?

23. Outstanding Questions
?What’s its true potential in terms of % of subsurface projects?
?What does it take to become integrated into standard assurance?
?How to raise baseline knowledge within companies?
?Who/How best to sell value of discipline upwards & outwards?
?Are there enough geomechanicists to address topic?
?Is weight towards production stage reflective of potential?
?How can Operators & external consultants work best together?
GEOMECHANICS: Quo Vadis....?

24. Conclusions
 Geomechanics needs to market itself better across life cycle
 Stymied by lack of strategy/visibility & knowledge sharing
 Include in E&P planning & assurance: It will pay rewards
 Barrier of current poor integration is surmountable
 Disquiet between operators & service companies on roles
 Need for clarity on demand & scope of discipline
 Drillability & Reservoir Performance greatest under-realised
benefits
GEOMECHANICS: Quo Vadis....?

25. GEOMECHANICS: Quo Vadis....?
Way Forward?
1. Cross-industry working group to develop a Geomechanics Strategy
2. Geomechanics needs to find a “home” with a motivated custodian(s), e.g.
SPE, OGA
3. E&P Companies should be encouraged to review capabilities & develop
strategies
4. National bodies, e.g. OGA, to take on role of collating case studies, steer
knowledge sharing & evaluate impact on existing assets
5. Establishment of independent “watering holes” where free, honest,
valuable exchange can occur: Focused workshops, confidential reporting
6. More JIP (Joint Industry Projects) to promote deployment, transition to
3D/4D benefits & encourage rapport between industry actors?