Submit seismic for downspacing?

When do you need to submit seismic interpretation to get a spacing application approved?

One operator submitted his seismic time structure map of a Livingstone pool in Southern Alberta. He was trying to downspace to two gas wells per quarter section. Submitting seismic was a bit over-kill.

But, because he submitted it, you can get his 3-D seismic interpretation on one of the hottest plays in the last couple of years. You can get the map and all his other application documents delivered to you within moments from our self-serve portal.

Submitting seismic interpretations is rarely a good idea

If you just follow the guides you might think seismic is required. But anything you submit in an application comes into the public domain the minute you submit it.

The service that submitted this application should have known better than to let this interpretation from his client into the public domain. But, because he submitted it, you can see his seismic time-structure interpretation in a hot exploration area.

Unfortunately, to save cost, operators often hire an inexpensive service to submit their applications. They believe that such a service will do a better job of getting their application approved. To further save cost, the operator offers to complete all the mapping.

Good, Fast and Cheap -- Don't believe you'll get all three

"Good, fast and cheap: Pick any two," says the old adage, "but you can't have all three". Good and cheap won't be fast. Fast & good won't be cheap. Cheap and fast won't be good.

So it is with applications.

Do you hire a service because you don't want to spend money? Or do you hire them because you want to invest in wells or infrastructure?

Is it really worthwhile to save a few dollars on the application and end up waiting for approval because your cheap service made an error?

Wish: I want a cheap service.

If you want a cheap applications service, don't bother checking their success ratio. Success Ratio is the number of applications actually approved compared to those refused by the regulator.

Because it's hard to make a profit on applications, cheap shops concentrate on quantity, not quality. They need to spend as little time on your application as possible so they can break even.

Better idea: Hire a service with a great success ratio.

Don't cut corners

Cheap application services must cut corners -- they must or they die. They don't think, "Will this piece of information from the client help or hurt them?" They don't have time for that. They just submit everything you give them. If you don't believe that, just look at the featured application this week. What wise service would let his client submit a seismic time structure on a hot play?

The most popular cheap services also have the worst success ratio. It comes from cutting corners. And how fast are they? Will they guarantee a submission date?

Better idea: Hire a service with an approval guarantee.

I want a service with experience so they can give me good advice.

If you commission an application service for it's name only, don't bother checking their success ratio.

Cheap services don't give good advice, they just get applications submitted. If you doubt that, just watch them bail as soon as the regulator has an objection to your application. The cheap service will want you to answer all the regulator's questions. Do they really have any useless experience if they don't see applications through to the end?

Better idea: Hire a service that guarantees approval. They really know what they're doing.

I want a cheap application from my service. I'll make the maps myself. They can just submit the application.

The featured application this week was submitted by a popular cheap service. They didn't think to tell the client not to submit their seismic time structure map.

If you make the maps, your service will just submit them without review. That is all you are paying them for.

If you're going to do this, why have a service at all? Your tech can submit the application for free.

Better idea: Use a service that knows how to keep your confidential mapping - er - confidential.

I want my application approved. I'll give them everything.

We call this the enthusiastic application -- where you throw everything you've got into it.

Better idea: Use a service that knows the minimum you need to submit to get an approval -- and guarantees the approval.

Over a thousand applications

This operator should have used Proven We have submitted over a thousand application.

We handle all the negotiations with the AER staff.

We can guaranty your application won't be denied.

We read between the lines of the regulations and the guides. We know exactly what is needed for approval.

Submitting too much data can be worse

Submitting too little information can set your application up for failure.

You need to submit the right amount of data -- not too little and not too much. Too much data submitted can get you in more trouble than submitting too little. Like the featured example application above.

What is the value of an application?

The average application is the key to unlocking a $500 thousand in oil and gas reserve value. This is from a study conducted by Proven Reserves.

If your applications are so valuable, why not trust an application service that guarantees approval?

Tags: AER application, Seismic, Tight, Exploration

Granger Low   7 Jul 2023

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