2.  You 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.  You will start with $50 million
You can apply for more later.
 Creating Value
Profit is measured by the net
value of the oil and gas fields
discovered MINUS all costs
involved.
 Winning team has highest ROI
ROI is calculated as Value
created DIVIDED by Funds
received.

4.  You get CPs for doing well
during the simulation
Correct answers and sensible
decisions are awarded with CPs
 CPs are a measure of ability and credibility
A team’s CPs are considered when bidding
for blocks and applying for funds from the
HQ

5.  Where 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.

7.  www.oilsim.com

9. Columns e.g C1, and C54
Rowse.g.R35andR163
Block
Blocks are
divided into
smaller cells
e g. C57,R73

10.  Challenge: 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 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

14.  Gravimetric
survey:
South-east
quadrant

15.  All four quadrant
surveys in map
context.

16.  Magnetic 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 field
 Non-basins have high magnetic fields.

18.  Magnetic
survey:
North-west
quadrant

19.  All four quadrant
surveys in map
context.

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

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

23.  Example:
Top basin on both
maps
 Calculate the
midpoint
between the
gravimetric and
magnetic centres
found
 = C55 and R105
C50
R100
C60
R110

25.  3 centres – one Centre
midpoint for each basin
 Example: C55, R105
 Solve 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.

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

28.  Sedimentary 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.  Any 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 basins
 How do I find them? Interpreting 2D seismic and
Common Risk Segment maps.

30. 1. SOURCE ROCK
where organic
material is put under
sufficient pressure
2. MIGRATION ROCK
where hydrocarbons
are driven through
3. CAP ROCK
Impermeable
rock that stops
migration of
hydrocarbons 4. PROSPECT

31. (c) OLF
Anticline trap
Fault trap
Stratigraphic
trap
Salt dome trap
 Geological “pockets”, that might contain hydrocarbons.

33. Red areas
You will not be allowed
to bid, drill or operate in
any of the red areas.
Green areas
Blocks in area may be
awarded.

34.  Is 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 green
 If some negative, then orange
 If mostly negative, then red

35. Layer 3 Eocene
1500m below the surface
Layer 2 Paleocene
2500m below the surface
Layer 1 Cretaceous
3500m below the surface
CRS. Common Risk Segment
surveys tell you about the
probability of a structure in
the block/cell containing
oil or gas
Surface

36.  Traps can be found with seismic surveys
 2D 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.

39. Unprocessed Processed
Interpreted Red is top of the
sealing rock
Green is top of the
reservoir rock

41. Leakage

42. Leakage
Sealant rock

43.  Buy 2D seismic from the survey shop

44. What type of data do you want?
 Columns or Rows
 Unprocessed or processed data
 Interpreted or not
Only buy maximum
of 1 block of data
at a time to speed
up processing

45.  It takes time to process your request

46.  Red circles – navigate
through the 2D seismic

47. Column
Row
Prospect, ReservoirBasin,Source

48.  Minimum bid is $250K
 Maximum bid is $7.5M
 Enter numbers without commas (ex: 250000)
 You will bid for 3 licenses but each team will only be
awarded one license
 Highest bid wins the license
 If two teams bid the same, the team with the most
CP’s gets it
 Random license awarded if none of your bids are
high enough
Submit your bid before the deadline!

49.  Three
different
blocks
 Three bids
 Example-
Block 1123
Bid 250000

50.  Study Environmentally Sensivity Area maps
to see which blocks to avoid
 Use 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.

52.  Message sent to all
teams with the
results
 credibility Points
are given for
prosperity of the
blocks you bid for
 Every team has got
one exploration
license

53.  Company 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.

54.  Spread 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.

55.  Acquire 3D Seismic interpretations for the
block you operate, and study the results from
the licensing round-can send under “surveys”
to possible partners
 Farm-out: Get others to invest 20% or more in
your license
 Farm-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 %.

56.  Shows the subsurface structure in a cube.

57. Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene

58. Either accept the
amount or % the
license owner
requests, or amend
the amounts to your
own offer
Add a message to
the seller
Press “Send offer”
Min bid is $25000
and max is $1250000
per %

59. When 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

60.  license OWNER
decides whether to
ACCEPT or REJECT the
offer
 Partnerships
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.

61. All 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

62.  Partners pay a proportional share of all future
costs incurred by the partnership
 Partners 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.

63. Click on
drill

64.  Truck-mounted Rigs
 Light Duty Rigs
 Heavy Duty Rigs

65.  Max
drilling
depth is
important
 Rig cost =
drilling
days * day
rate

66.  Few: 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.

67.  9 Star quality:
 Good- costs more
 Bad: - cheaper, but
reliability is low
 5 types of providers-
Construction and
Maintenance ,
Logistics, Well
Services, Camp
Services and Analysis

68.  Certain problems can occur if Service
Provider Selection is poor quality
 Other penalties can occur if you drill in areas
indicated as problematic in the
Environmental Impact Assessment
 As in real life, problems can occur randomly
and these are also applied with fines levied
accordingly.
 Oil spill control – 5% of overall drilling costs

70.  EIA:
enviromental
impact
analysis shows
where not to
drill.
 Place your
mouse where
to drill

71. Layer 1 Cretaceous
Layer 2 Paleocene
Layer 3 Eocene

72.  Too deep for
the chosen
rig.

75.  Volume Range
in MBOE counts
 Test may
increase Proven
MBOE if oil or
gas found

76.  Only if you discover a field – find Oil or Gas
 You decide whether you want more
information about that field
 More 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.

77.  Volume Range
 Proven Reserves
 Calculation of
licence value
 Sales value
 Costs
 Value of Licence

78.  From Probable volume to proven reserves

79. Exploration 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

82. Challenge 3B Drilling

83.  Narrow uncertainty: Drill appraisal wells to
get proven volumes
 Drill into other prospects to find more proven
volumes.
 Farm-in and -out: Get into other good blocks.
 Two additional licensing rounds: Repeat the
processes.
 Money: Apply for more money, if you run out
of cash.

84.  Click on Apply for More Funds Tab.
 1 CP for each $100,000 applied for.
 Answer the questions: All correct gives cash
and you can keep CPs. One wrong gives cash
and you keep ½ of your CPs. Two wrong
gives ½ cash and you lose all CPs. All wrong,
you get no cash and lose all CPs.
 <10 credibility points: Apply for cash and be
fined $5million for each $20million
requested.

85. Exploration acreage:
•Resources
•Reserves
•Production