1. VAGABOND VENTURE OIL COMPANY SEARCHES FOR FOSSIL FUELS
Winter Term 2012
Session 1
What are we after,
how do we find them,
and how do we make a profit?
The course outline
But first, Geology in the News

2. The course outline Geology in the News
Chesapeake Energy Corp., one of the oil and gas producers most responsible for the current glut of natural gas supply, said it will reduce drilling activity this year as natural gas prices have reached a 10-year low. Cutting 46 drilling rigs to 23.
The current glut of natural gas partly stems from the U.S. energy industry's success with new exploration techniques, notably hydraulic fracturing of shale formations, or fracking. The boom in new production, plus lackluster demand amid a mild winter, helped drive natural gas prices Friday to $2.343 a million British thermal unit, down 26% month over month and down from nearly $14 in July 2008 as supply has far outstripped demand
The course outline

3. Geology in the News

4. Geology in the News

5. The Course Outline Vagabond Venture Oil Company offers
Week 1: Geology of Coal, Oil and Gas (Don)
Week 2: History and processes of exploration (Sandi)
Week 3: Engineering of exploration/production (Rocky)
Week 4: ‘Vagabond Venture Oil Company’ finds
4 prospects (together)
Week 5: ‘Vagabond Venture Oil Company’ drills 2 (together)
Week 6: ‘Vagabond Venture Oil Company’ finds &
produces two fields: one oil & one gas (together)
Vagabond Venture Oil Company offers
you a virtual investment opportunity

6. What Vagabonds Oil Company will be offering you
Several Ways of Investing in Oil & Gas Projects
1. Invest $’s in the Stock of a Major Oil Company
10 year return on investment = $3-5%
What Vagabonds Oil Company will
be offering you
2. Invest $’s in the stock of a Small Oil Company
10 year return on investment - $0 to 500%+
3. Invest $’s in the drilling of a single well:
10 year return on investment - $0 to 100%X+
4. Invest $’s in the drilling of two or more wells:
10 year return on investment - $0 to 1,000%X+

7. Investing $’s as a Partner* in Vagabonds Oil & Gas
1. Invest a $ amount in an E & P project for a small % of profits or
2. Pay a % of the cost of an E & P project for a larger % of profits
Invest in:
1. drilling a single well,
dry $ or completed $$ or
2. Two of more wells depending on
the results of initial drilling
Your investment return =
your % of actual project cost
applied to profits
What you can study in order to make
your investment decision
Partner*: you participate in decisions on major deviations from approved $ expenditures

8. What Natural Resources Burn?
What you can study in order to make
your investment decision
Proposed Location
Geological report and map
Geophysical report and
cross sections
Drilling recommendations &
detailed cost flow chart
Land-lease report and map
Introduction:
What Natural Resources Burn?

11. What are Natural Resources that Burn?
Vegetation: Grass, twigs, wood chunks
Compressed Vegetation: Peat, lignite, coal
Compressed animal remains: Oil and gas
How are these resources related?
Humans have sought for and fought
over these resources from the
beginning of historic time

12. Natural Resources that Burn
How are these resources related?
They all have an organic origin:
either from plants
or from “animals”
Peat briefly
For example: plants
Today‘s burnable Vegetation: grass, twigs, wood chunks
Yesterday’s Vegetation: peat in inland glacial bogs
Long Ago’s Vegetation: lignite in tropical coastal swamps
Very Long Ago’s Vegetation: coal from buried lignite

13. Peat hand dug from a glacial
bog in Scotland

14. Commercial peat operation, Ireland

15. Peat fired electrical generation, Finland
Peat bogs are found today scattered where
the recent continental glacier covered
much of the Northern Hemisphere

16. Most Recent Continental Glaciation
Last continental glacier:
North America: areas of peat bogs
Leaving peat; next lignite (low grade coal)
First, let’s look at lignite in Texas
Human land
path
Last continental glacier:
Eurasia: area of peat bogs

17. Lignite at or near the surface in Texas
Texas lignite: ancient, Gulf of Mexico coastal swamps
Lignite mining in Texas

18. Open Pit Lignite Mining, Texas
Huge drag-line crane removing rock covering the lignite layer
Dump trucks move lignite to nearby
furnaces to be burned to make electricity
How do we get layers of lignite in layers of
sandstone, shale, and limestones?
Continuous belt conveyer digs up
lignite layer and loads lignite into
huge dump trucks

19. Cross Section Cartoon of Occurrence of two layers of Lignite
Land surface
Shale layer
Sandstone layer
Limestone layer
Shale layer
Lignite layer
How did all this happen?
Lignite layer
Let’s look at the present-day Texas coast
as a possible modern model

20. Accumulation of sediments in the Gulf of Mexico
Bays, swamps, & marshes (organic rich mud) = future lignite
Sand = future sandstone
Accumulation of sediments in the Gulf of Mexico
An area world famous for Oil and Gas Fields
Mud (clay) = future shale
How do we get several layers of lignite of different ages

21. But before considering oil and gas, let’s look briefly at COAL
Today’s Bays, swamps, & marshes = future lignite
Long time ago location of bay muds & offshore sands & clays
Younger location of bay muds & offshore sands & clays
Today’s location of bay muds & offshore sands & clays
But before considering oil and gas,
let’s look briefly at COAL

22. Natural Resources that Burn
How are these resources related?
They all have an organic origin:
either from plants
or from “animals”
Coal briefly
For example: plants
Today‘s burnable Vegetation: grass, twigs, wood
Yesterday’s Vegetation: peat in inland glacial bogs
Long Ago’s Vegetation: lignite in tropical coastal swamps
Very Long Ago’s Vegetation: coal from buried lignite

23. Coal Resources: USA Why so much soft coal in the central USA? Lignite
Hard Coal
Why so much soft coal in the central USA?

24. Coal Resources: Central & Eastern USA
Let’s look at the geology of North America
at the time when soft coal was being formed

25. A quick look at geologic time
Land: ancient North America
290 million years ago
Vast area of tropical swamps & marshes
Today’s soft coal areas
A quick look at geologic time
Ancient Appalachian Mountains

26. Where does oil & gas fit with these
Geologic Time: Last 570 Million Years
Time of lignite formation in Texas
570,000,000 years
Time of coal formation &
building of the
Appalachians Mountains
Where does oil & gas fit with these
natural resources derived from plants?

27. Natural Resources that Burn
How are these resources related?
Where might large volumes of plant
and animal remains be buried quickly?
Generally speaking;
Oil & gas are made from minute, marine
animal remains:
Coal is made from tropical swamp plant remains.
Let’s look again at the paleo-geologic map
of North America 290 million years ago
How are coals related to oil & gas?
In both coal and oil & gas: remains
must be prevented from decaying:
usually by PROMPT BURIAL by younger
sediments!!

28. Does this paleo-geologic map account
Land: ancient North America
290 million years ago
Area of thick sediment accumulation
along rising mountains
Appalachian Trough
In the Appalachian Trough both
plant and marine animals were
quickly buried giving rise to the
coal, oil, and gas fields of PA & WV
Does this paleo-geologic map account
for the oil and gas fields of eastern USA?
Ancient Appalachian Mountains

29. Focus on eastern USA
Central
Texas
Gray=dry holes!

30. Focusing now on a recent geological model for oil & gas:
The Gulf of Mexico geosyncline
Focusing now on a recent
geological model for oil & gas:
1. generation
2. migration and
3. entrapment

31. Geology and Oil & Gas Fields: GOM
Gulf of Mexico geosyncline
Focus on this area

32. What is a Geosyncline?
Answer: A thick (1000’s of feet)
accumulation of rock debris in the
ocean at the continental margin
Debris brought to the ocean by rivers
and spread along the coast by
ocean currents

33. A modern example of a geosyncline: The Gulf of Mexico
Geosyncline Example:
land
River debris
Ocean
Rocks of the Iberian continental crust
river debris
geosyncline
A modern example of a geosyncline:
The Gulf of Mexico

34. Example of a Geosyncline: Gulf of Mexico
1. Integration of the debris of several rivers
Swamp Muds
Shallow water Sands
Modern Sediment
Accumulations
Affect on the North American Continent by
the creation of the GOM geosyncline
Deep water Muds

35. Example of a Geosyncline: Gulf of Mexico
Affect on the North American Continent by
the creation of the GOM geosyncline
Oldest part of geosyncline rising
as erosion moves debris into Gulf
rising
Hinge Line
Sinking
Gulf of Mexico Geosyncline
Youngest part of geosyncline sinking as
erosional debris is deposited in the Gulf
2. Accumulation of thick layers of debris

36. 2. Accumulation of thick layers of debris
Subsurface Cross Sections
Gulf of Mexico Geosyncline
Hinge Line
Austin
Sun City
New Orleans
Gulf of
Mexico
rising
Shale: potential
oil & gas source
Rocks
SandstoneReservoir
Rocks
Sinking
65,000 feet thick
Gulf of Mexico
Geosyncline
Mature
Source
Rocks
What is a source rock?
2. Accumulation of thick layers of debris
What are source & reservoir rocks?

37. What is an oil & gas source rock?
Any rock, usually a shale, that yields
oil & gas naturally when squeezed
and heated (buried) .
Let’s look for source & reservoir rocks in
a typical well in the Gulf of Mexico
What is a reservoir rock?
Any rock, usually a sandstone or limestone,
that will yield oil & gas (or water) when
penetrated by drilling

38. Geology and Oil & Gas Fields: GOM
Gulf of Mexico geosyncline

39. Geology and Oil & Gas Fields: GOM
Gulf of Mexico geosyncline
Let’s look for source and reservoir rocks in a typical
well drilled in the Gulf of Mexico geosyncline

40. Typical layers of shale (gray) & sandstone (yellow)
in a geosyncline: e.g. Gulf of Mexico
Well drill hole
Let’s look at this
portion of the well log

41. Can you read this electrical log?
Reading a Wire Line Electrical Log
Depth track: depth below
derrick floor
Sandstone
(reservoir)
Shale
non-reservoir
Water
Oil &/or Gas
Reservoir Rocks
Potential Source Rocks
Can you read this electrical log?

42. How does oil & gas get from the source rock into the reservoir rock?
Reading the electric log of the well
How does oil & gas get from
the source rock into the reservoir rock?

43. Typical oil and gas traps A simple fault trap
Oil & Gas escapes
at the surface
Unless there is a trap (fence)
in the reservoir rock layer
Reservoir rock
Source rock
Source rock
Top of mature (generating) source rock
Typical oil and gas traps
A simple fault trap

44. Where’s the Oil trapped?
Rock Layers can be Broken (faulted)
Fault
Where’s the Oil trapped?

45. NEXT WEEK! The Course Outline
Week 1: Geology of Coal, Oil and Gas (Don)
Week 2: History and processes of exploration (Sandi)
Week 3: Engineering of exploration/production (Rocky)
Week 4: ‘Vagabond Venture Oil Company’ finds
4 prospects (together)
Week 5: ‘Vagabond Venture Oil Company’ drills 2 (together)
Week 6: ‘Vagabond Venture Oil Company’ finds &
produces two fields: one oil & one gas (together)
NEXT WEEK!