Helium survey—identification of “sweet spots” locations for exploratory, appraisal and production drilling November, 2009.

Helium survey—identification of “sweet spots” locations for exploratory, appraisal and production drilling

November, 2009

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• During exploration, appraisal and development of oil and gas fields with complex geology, such as fracturing

permeability, low continuity of thickness and porosity formations, energy companies face an ever present

problem of low drilling success.

• Traditional exploration technologies such as seismic do not always accurately predict hydrocarbons

saturation.

• In a review of more than 2600 US and international wildcat wells – all drilled after completion of geochemical

or non-seismic hydrocarbon detection surveys- more than 80% of wells drilled on prospects associated with

positive hydrocarbon anomalies resulted in commercial discoveries; and only 11% of wells drilled on

prospects not associated with such anomalies resulted in discoveries*.

• Actual Geology can identify an active petroleum system in the exploration area, generate unique non-seismic

leads for further geological and seismic evaluation and identify “sweet spots”.

• Our methods are non-invasive and have a minimal environmental impact.

Executive summary

* presentation at 2008 AAPG International Conference and Exhibition, Cape Town, South Africa, October 26-29, 2008

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Outstanding track record

• 50 completed projects covering over 30,000 sq km in the last 8 years

• Strong in-house analytical team interpreting helium survey results for clients

• Clients: Gazprom, Rosneft, Lukoil, Yukos, Norilsk Nickel and many others.

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Our services

• Actual Geology services fit well into an integrated exploration strategy by detecting occurrences of

hydrocarbons’ by-products, such as helium, which serve as indicators to the location of undiscovered oil and

gas accumulations.

• Actual Geology provides:

− Mapping of helium concentration and subsequent forecasting of reservoir properties.

− Prediction of section saturation before drilling.

− Determination of areas with improved fractured permeability in prospective reservoirs or producing

deposits.

− Prediction of reservoir distribution, delineation of oil and gas accumulations.

− Determination of residual reserves at mature fields with declining production.

− Identification of prospective drilling targets, cut off of the low prospects and high risk zones.

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Service Data acquisition method Benefits

Helium survey

Field measurements of helium concentration at 1-1.5 m below earth surface and in near-surface air.

Scale 1:50000; 1:25000; 1:10000 (100x100m up to 25X25m grid)

1. Prediction of section saturation before drilling

2. Delineation of areas with better reservoir properties

3. Prediction of fracturing in reservoirs and producing

interval

4. Identification of “sweet spots” for drilling

Helium survey at well heads of producing wells

Measurements of helium concentrations at well heads 1. Identification and delineation of active reserves

2. Forecast of reservoir performance

3. Monitoring of well performance, recommendations

for well work over

4. Determination of residual reserves at mature fields

5. Identification of prospective zones for further

completion

Helium survey

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The process

Helium survey 300x300m grid,or 100x100m grid

Data processing Preliminary data interpretation

Data interpretation

Helium survey 100x100m grid,

or 25x25m grid

Identification of helium anomalies

Data processing Final mappingof helium anomalies

Preliminary stage(field):

Stage one(field):

Stage two: (analytical)

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Timeframe

• Once equipment and the team (20 detectors and 50 field specialists) are on site an average survey duration over an area of 100 km² is 60 days including:

− Deployment and deconstruction of field camp, testing of field equipment – 5 days

− Helium measurements on 100х100 m grid – 14 days

− Preliminary field data processing and planning of detailed grid – 4 days

− Helium measurements on detailed grid (15% of total area) – 7 days

− Final data processing and interpretation of the results –25 days

− Contingency work (10%) - 5 days

• Production rate of one team – 30-40 sampling points per day

Equipment example: PHD-4 Portable Helium Detector

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Field work logistics

1. Equipment and tools:• Helium leak detectors and gas analyzers • Computers and specially designed/developed

software for operational in-field quality control and processing

• Satellite communications between detectors and server holding central database minimizes human intervention and possible errors

• GPS- enabled equipment for accurate positioning and recording

2. Locally purchased (rented) equipment:• Cross-country vehicles• Field equipment (sleepers, office, kitchen,

generator, etc.)• Water, food and fuel supply tracks

3. Personnel• Initially – qualified Actual Geology specialists• Support personnel– locally hired• Future development – recruitment and training

of local staffMobile laboratory (a) and field equipment (b) versions

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Final results: Cheriomykhovskoye oilfield

Well #(heavy, high-viscosity oil)

Helium anomalyDaily production rate

Bbl/day

161 positive 645479 positive 64824 positive 64

5528, 5481, 5473 negative 11

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Well # Helium anomalyDaily production rate

Bbl/day

2034 positive 702035 positive 235

39 positive 2622024 negative dry hole

Final results: Galianovskoye oilfield

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Final results: Aprelskoye oilfield

Well # Helium anomalyDaily production rate

Bbl/day

6 positive 1645 negative dry hole

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Final results: Sredne-Shapshinskoe oilfield

Well # Helium anomalyDaily production rate

Bbl/day

7000 positive 3007002 negative <35

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Theoretical foundations

• All petroleum basin exhibit surface or near-surface hydrocarbon gases leakage.

• Helium on Earth is mostly created by the natural radioactive decay of heavy radioactive elements (thorium and uranium).

• Helium is a noble gas, chemically inert and is nonabsorbent into surrounding rocks and doesn’t form compounds. Helium’s ability for migration is greater than of other gases, with the exception of hydrogen.

• Helium migrates along the tectonic faults and through high-fractured zone. Seals, such as clay rocks, are not an obstacle for helium migration. Increased concentrations of helium in the near surface zone are the projections of zones with higher helium gas-saturation and improved permeability of geological section.

• The average helium concentrations are: 0.65 ml/l - in bottom water of hydrocarbon accumulations; 7 ml/l - in oil pools; 100 ml/l - in gas pools (ml/l – milliliters per liter).

Helium concentration - residual oil saturation relationship Oil saturation Helium concentration

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Theoretical foundations

Different vertical sections of helium concentration in the case of presence(b) or absence(a) of hydrocarbon accumulations within sedimentary cover.As helium solubility is so much greater in hydrocarbon pools than in water, reservoir is saturated by helium and it’s concentration increases (Fig.1, b). Near-earth surface helium concentrations is greater in case of hydrocarbon pool presence in geological section (b) in comparison with case where pool is absent (a).

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Conclusions

• The results of helium surveying leads to significantly better prediction, therefore risk and cost reduction

• Helium surveying is a powerful complement to conventional exploration methods.

• Further integration with available seismic, logging and production data can help companies to identify residual reserves, enhance potential of declining production or flooded fields, better plan drilling operations (especially horizontal wells) during exploration, appraisal and development stages

• In order to assess and prove effectiveness of its methods Actual Geology can conduct a pilot survey on an already explored field where a number of wells have been drilled in order to compare helium survey results with company’s existing information

• Helium surveying is a reliable and proven (by a number of successful projects in various geological settings) technique for accurate identification of the best drilling locations. Our experienced specialists are able to work in practically any complex terrain, traditionally off-limits due to restricted accessibility

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London

Vlad Sinani

Project Manager

Suite 3, Barkat House

116-118 Finchley Road

London, England NW3 5HT

Tel. +44 (0)20 7433 2512

Fax. +44 (0)20 7692 7957

E-mail: [email protected]

Contacts

St Petersburg

Viktor Chistiakov

General Director

36 Rubinstein street, office 35,

St. Petersburg

191002 Russia

Tel. +7 (812) 347 78 19

Fax. +7(812) 571 83 98

E-mail: [email protected]