Saturday, May 18, 2013

Day 4: A Final Push of Analysis and Reflection

       With the seminar complete, all of my resources today were devoted to the project that Mr. Tucker tasked me at the beginning of the week.  I continued my mobility analysis by running statistics on certain intervals from each well/reservoir (still distinguishing between MDT and TTK data).  For the rest of the day, I finished my analysis by creating multitudes of cumulative frequency plots for the mobility.  I have to say that the analysis today started to test my excel skills, and I started to see my statistics lessons coming through in my work.  I began by creating a plot for all wells and distinguished two more data sets by tester (MDT or TTK).  I then created new cumulative frequency plots of mobility, distinguishing data sets on a reservoir-by-reservoir basis; this allowed me to identify those reservoirs that have a higher than average mobility and those that have a lower than average mobility.  Lastly, I created the same plots, but splitting up data sets by well and creating individual plots for each reservoir.  Hopefully, all of my analysis will be able to help Mr. Tucker in his work on this project during the ensuing weeks.
      As I wrap up my senior project and reflect upon my experience this week, one conversation sticks out at me.  I was talking to a world-class petrophysicist and a close coworker of Mr. Tucker earlier in the week when I realized that everything that this well-experienced man was speaking of was the very reason why I like science and want to be involved in this industry.  We were discussing logs when the importance of our understanding of chemistry and physics on the atomic scale sparked him into a discussion on the structural integrity of reservoirs when exposed to foreign liquids such as salt water.  His paraphrased discourse is as follows:  “As is known, crystalline substances contain atoms, ions, or other molecules arranged in very specific repeating patterns.  Shale-type rocks when forming deep in the earth contain many substances created in a similar manner.  Let’s say that one day, numerous atoms are lining up in a nice pattern when all of a sudden a ferric cation ion becomes stuck where a magnesium cation should be located.  Now, that locale has one less electron than it should and the region has a slight positive charge.  Now while this sort of “accident” may not occur a lot from an atomic perspective, it occurs enough on a macroscopic scale to make a huge difference.  Imagine that two of these positively charged regions are stacked close to one another, enough so that there is repulsion between the two regions.  When viewed on a macroscopic scale, this local electromagnetic interactions account for a significant portion of the structural integrity of a reservoir.  Now imagine that during the drilling/completion/recovery process, the reservoir is exposed to an influx of salt water.  All of a sudden, excess electrons can complete these crystalline structures, the positive regions and their repulsions disappear, and the reservoir collapses.”  Our understanding of a very macroscopic event such as a reservoir collapse can all come down to our understanding of the world on an atomic level.  It all relates to the four fundamental forces: strong, weak, electromagnetism, and gravity.
      This is what a love about science; it is the convergence of the micro and the macro.  It fascinates me to no end that chemistry, physics, and biology can ascribe almost everything we experience in day-to-day life to atomic and molecular phenomenon, and it is for this very reason that I can see myself in this industry.  As this petrophysicist said, in no other field has he found so many different fields of science merging together for some ultimate goal; in no other industry would he have been able to play with such very large things and very small things on a daily basis and get paid to do it.
      Ultimately, I think I see now the motive behind Parish’s senior projects.  The goal of any educational institution should not just be information oriented, but skill oriented.  My high school experience would not be complete without being given the opportunity to take all of the skills learned over the years and to apply them in a productive manner.  Learning how to utilize skills outside of the classroom environment should be part of the high school education as well.  On top of it all, the one thing that sticks out to me as being the most important part of any internship is simply the exposure.  Having been fortunate enough to have these experiences at Five States and NSAI, I can say that I completely expect that this exposure and basic understanding of industry dynamics will be an invaluable benefit throughout college.  With a basic knowledge of the industry, I hope that I will better be able to connect the dots between seemingly disjoint classes and place them a greater context of their applicability in the workplace.

      I would like to thank everyone at NSAI for their warm welcome during my stay, Chris Tucker for everything that he taught me and trusted me to analyze, and Dolores Gende, my faculty advisor, for her continuous support throughout this project and all of high school.

Thursday, May 16, 2013

Day 3: Getting the Hang of Things

      Today ran its course in a very similar manner as yesterday with my arrival at 7:30.  I decided not to attend the morning sessions (mostly financial sessions) so that I could work on my project.  As Mr. Tucker is currently out of town, I know that getting as much completed as possible will aid him in his analysis and help with the quick turnaround that the client demands.  I finished up creating depth-pressure plots for each reservoir and began analyzing mobility data.  As mentioned before, two different companies performed this formation pressure analysis; TesTrak log is taken while drilling while MDT is a separate wireline log.  Due to this difference, in the pressure and mobility analysis I am performing, it is important to distinguish between the two data sets so that any major discrepancies that could indicate unreliable data can be noted.
      At 10:00, I went back up to the seminar to attend sessions on unconventional gas and enhanced oil recover technology.  After lunch, I attended the last few sessions of the seminar: unconventional oil, interpreting news releases, and worldwide energy supply.  As the seminar closed around 4:00, I gave my farewells to the few acquaintances I had made during the seminar (after obtaining business cards, of course) and returned to my office to work for a few more hours.

Wednesday, May 15, 2013

Day 2: My First Day at Seminar

      As it turns out, this week NSAI is hosting their annual Oil and Gas Property Evaluation Seminar.  Targeted toward the banking industry, the seminar essentially serves as a two-day introduction to the oil and gas industry so that bankers can better understand the mechanics behind the industry so they will be better equipped to read and interpret reserve reports.  The seminar is advantageous to both NSAI and the bankers in attendance as it introduces the bankers to NSAI while supplying them with enough background so that they know the right questions to ask when presented with proposals.  In addition to my project, I will be attending the seminar today and tomorrow to get a better taste of certain facets of the industry with which I am not yet acquainted.
      After arriving to the Tower Club around 8:00 and having some coffee and light discussion with the bankers sitting around me, the seminar began with introductions from Scott Rees and Joe Spellman, the CEO and Senior Vice President of NSAI respectively.  The morning session began with talks about reserves report reliability, reserves and resources definitions and risk, reserves determination methods, and petrophysics.  Lunch soon followed and I found myself at a table of bankers from JP Morgan.  Listening to their conversations, it was obvious that they were gaining a lot from the seminar and really absorbing all of the information that the various engineers from NSAI were presenting in their sessions.  The sessions after lunch included petroleum geology, seismic basics, isopach mapping, hydrocarbons-in-place, and recovery factors and rates.  While most of the topics mentioned I had heard—if only in passing—at least once before, it was very beneficial to see them all placed within a much larger context and to have their explanations flushed out fully.  At 5:00, the seminar closed for the day and I headed back down to the office to work on my project, creating more graphs of depth versus temperature on a reservoir-by-reservoir basis until 6:30.
      On whole, the most significant experience that stands out from today is the extent to which all of the employees of NSAI and those attending the seminar were interested in my presence.  Throughout the day as I introduced myself and explained my attendance at the seminar and my internship at NSAI, their reactions were rather uniform: they all were impressed that I was taking an interest in the industry at such a relatively young age and without fail, mentioned that they wish they had this opportunity when they were still in high school.  While many asked numerous questions about what I plan to do in college in the future and what I was gaining from the seminar thus far, the overreaching trend was what a wonderful opportunity it was to be able to get a head start and gain some key insights into the industry even before college.

Tuesday, May 14, 2013

Day 1: Beginning my Analysis

      Today started off bright and early with my arrival at Chris Tucker’s—my mentor’s—household at 7:15 AM.  While it was not necessary to be at work until 8:00, we had many motives for an early start.  NSAI’s Dallas offices are located on the 45th floor of Thanksgiving Tower in downtown, so we both thought it would be a good idea to make sure that I was familiar with the parking setup and had all of the proper introductions to the building.  In addition, as Mr. Tucker was departing Dallas for a trip to Peru to work with the charity KIDS AIDE early afternoon the following day, he thought it would be a good idea to get as much time in together today so that I would be set for the rest of the week.
      After arriving at the office, getting a tour of the workplace and all its amenities, and being introduced to numerous coworkers, Chris allowed me to get settled in my office and set me up with a computer.  This was actually happening. I had my own office on the 45th floor of a skyscraper in downtown.  What a strange feeling.
      On the car ride downtown, Chris briefed me on the background of NSAI and specifically what I would be doing.  As luck would have it, data for a new and exciting project had just arrived, and I was going to be the first to begin analysis of formation pressure and mobility data.  From my time at Five States, I was already well acquainted with the general feel of reviewing a prospect such as this, so without much delay we began to talk through the introductory report including geographic (isopach maps), seismic, well log (neutron logs, gamma ray logs, resistivity logs, etc.), and some volumetric data.  We discussed the types of hydrocarbons expected in the reservoir as well as the importance of PVT (pressure versus temperature) analysis in determining the types of hydrocarbons-in-place.  As is described in basic chemistry courses, every substance (or mix of substances) will have its own individual phase diagram that depicts the characteristics of the substance with respect to pressure and temperature.  By performing PVT analysis to obtain information regarding reservoir fluid properties (i.e. bubble points, dew points, gas oil ratios, formation volume factors, fluid compositions, etc.), the types of hydrocarbons-in-place (black oil, volatile oil, dry gas, wet gas, or retrograde gas condensate) along with various impurities (CO2, H2S, and N2) can be determined.  This information along with in-place hydrocarbon volumes determined through volumetric or material balance methods to determine OOIP or OGIP, which combined with recovery factors, can be used to calculate EURs (estimated ultimate recoveries).  All of this information is crucial in creating accurate reserves reports that are utilized in almost every facet of the industry, from capital investment, acquisitions and liquidations of properties, as well as in government reporting.
      Following this discussion, I began the analysis that I will be performing throughout the week.  I will be working with formation pressure measurements from numerous wells to determine GWC (gas water contact) depths within the reservoirs.  Utilizing pressure tests performed by either Schlumberger (MDT Modular Formation Dynamics Tester – a wireline formation tester for pressure, permeability, and fluid samples) or Baker Hughes (TesTrak logging while drilling formation-pressure and mobility testing) and supplied to us by the client, I began compiling data from multiple runs into a master list for use throughout the process.
      Soon enough, lunch came around and Chris and I headed out to an Italian place across the street. A fellow engineer at NSAI came along and we had quite the enjoyable meal.  The main reason that I mention this is to include that I was quite surprised to find out that Kathy worked at the building in which Parish is now located when it was still owned by Mobil.  It was very interesting to discuss the building as it now is and compare it with how she remembered it when it was an oil company.  The rest of the afternoon followed in a similar fashion as I continued to compile pressure, depth, and mobility data into a master list and began to create various graphs until our departure around 6:00 PM.
      Despite my nerves and anticipation last night, I think that today turned out quite well.  Chris and I had a great time discussing numerous facets of the oil industry and spent the car ride home telling humorous stories about quirky industry mishaps and the business world in general.  

Monday, May 13, 2013

Exaustion and Excitement: Preparing for Day 1

      When I say that I cannot believe that senior projects are already upon us, my first thoughts turn not to the week ahead, but to a memory. I think back, a year ago today, when the Class of 2012 had just ventured out for the first day of their projects while our Class of 2013 thought upon this event with great anticipation. I remember how different Parish seemed without their presence, how the entire dynamic of the high school was altered as each grade tentatively slid into its new role while still having to sprint through the finish of the year at hand. Startled by this sudden change in status quo, I distinctly recall musing about the intentions behind Parish’s senior projects: why would the administration effectively release seniors from school two weeks before graduation?
      Skipping back to today, while I now understand seniors’ perspectives on the early dismissal, admin’s motive is still a bit unclear. Having just completed my last two AP tests—AP Biology and AP Physics—I am utterly mentally drained yet I know that a big week is ahead. For the following four days, I will be interning at Netherland, Sewell & Associates, Inc. (NSAI), an international petroleum consulting firm that provides a wide range of geological, geophysical, petrophysical, engineering, and economical services to the petroleum industry on whole. As the #1 choice for SEC reserves reporting along with many other accolades, NSAI has quite the reputation for its reliability and integrity. I am sure that this is going to be a very informative experience.
      While I am somewhat nervous about being inserted into a new work environment, I am not going in cold. This past summer, I had the opportunity to intern as an engineering assistant at Five States Energy Capital LLC, a capital company working primarily with mezzanine financing and acquisitions in the Permian Basin, New Mexico, Mid-Continent, and Rocky Mountain areas. During my summer there, I worked primarily with decline curve analysis of PDP (Proved-Developed-Producing), PUD (Proved-Undeveloped), and PDNP (Proved-Developed-Nonproducing) properties and analogs to prospective properties to help determine EURs (Estimated Ultimate Recoveries) for various reservoirs/leases. While I know somewhat about the industry because of Five States, I am thoroughly excited to hopefully be able to perform numerous forms of high-level analysis during my upcoming week at NSAI.
      Just as a quick note, due to the confidential nature of work at NSAI, my descriptions of some of my projects may seem terse and generalized; I will be able to talk about the type of work I am doing, but nothing that relates to specific companies or prospects.