Basins

When one looks for oil one first looks for a basin, for oil and gas are found principally where in ancient times there existed a marine environment in proximity to land.

One of the best students of basins has been Meyerhoff who has studied and listed the significant basins of the world. In addition to those parts of the ocean near land one would seek out the ancient lakes and rivers, particularly those near the sea, although these reservoirs would necessarily be less extensive than those found in the ocean itself.

Deltas

Deltas are the prize, because they are located where an important river flows into the ocean. The combination of the nutrients from the land and the aquatic life of the river creates at the point where it flows into the ocean a habitat for the feeding and breeding of vast quantities of marine life. Although the link connecting the presence of aquatic life in the past with the petroleum in the present, has never been made, and how could it be, occurring so long before our present day, but observations, common sense and experience have correlated them.

Therefore, the search is for oil and gas, the searcher seeks those types of ambiences, not in the present day, but in the distant past. It so happens, however, that sometimes present deltas and shorelines exist near where they did in prehistoric times. One such example is the Niger delta. Another prime example is the delta of the Mississippi River.

Ancient Shorelines

In the Cretaceous era, when dinosaurs roamed the earth, the shoreline of what is presently the Gulf of Mexico, paralleled the present shoreline just north of the present day city of Baton Rouge. In each time period following the Cretaceous the shoreline, always paralleling that of the shoreline existing today, was located somewhat southward of how it had existed in the prior era. So that, if today one looks for oil in the Miocene period, a more recent era, the search is zeroed in on a shoreline not too far north of the present one. The shoreline of the Oligocene, the next important period, is found slightly to the north of that of the Miocene.

The era in which the Wilcox sands were laid down, had its shoreline somewhat north of that of that of the Oligocene.

Cretaceous - Dinosaur Period

The deepest the drill bit has drilled in Louisiana, although some perfectionist might cite a couple of wells that are questionable, is into the Cretaceous. This is where the sands the Austin Chalk and Tuscaloosa, two horizons that are now receiving a tremendous play in Louisiana are found.

The Austin Chalk having been laid down more recently than the Tuscaloosa will, as logic would dictate, be found overlapping but extending somewhat farther north and less farther south than the Tuscaloosa. Since the shoreline of the Gulf of Mexico has migrated southward in a parallel manner over eons of time, this results in South Louisiana containing substantial oil and gas reservoirs from all of those time periods.

Traps

After finding an old marine basin, the oil explorationists then look for traps. These are basically of two types, structural or stratigraphic. An oil or gas field is simply an underground compartment containing oil or gas usually found in an old marine ambience. It is, of course, also necessary that the escape into the atmosphere of the oil and gas has been prevented by some type of seal.

When sedimentary beds have been pushed up from below, in Louisiana often by the underlying salt, and become more elevated than the surrounding beds, then the oil and gas intermingled with the water in which it was formed rises above it and separates from the relatively heavy water. The other factor, the lid that seals the top of the storage tank, is usually a bed of shale or other layer of much more dense constituents than the sands in which the oil or gas is found. Another type of oil storage compartment, or field, is called statigraphic. If the sedimentary beds are inclined at an angle, and if they change from their sedimentary or sand character to denser and impermeable rock forming a seal beyond which the oil or gas cannot penetrate, then the oil and gas may have escaped from the water below into that horizon and risen to the upper portion of the stratum to create an oil or gas field.

This latter type appears to have less significance in Louisiana where most oil and gas fields seem to be structural.

Salt Domes and Faults

In South Louisiana the two principal types of structures are those created by salt domes and those which lie along faults. Nearly all salt domes in South Louisiana are productive. There the rising salt has pushed up the sands above and alongside it to high points relative to the surrounding sands forming perfect oil and gas traps. The other interesting mechanism for the creation of traps are related to large faults where what were formerly parallel beds of sand or shale has been split by a fissure which divides the area into fault blocks, one where the sands have risen, the "upthrown block" and one where the sands have declined, the "downthrown block". Due to subsequent declivity in the beds the oil and gas rise to the more elevated areas of the sands in which they are located, forming a productive reservoir. So that one often finds the fields lying along the fault as one distinguished geologist and friend, Grover Murray, called "link sausages".

The links, where the sand is thin, do not produce, but when one gets to the sausage that is a different story. One with enough experience in studying the geology of an area can almost predict where a field should be found. From that it is a relatively easy step into determining whether the area has structure, from the electrical logs of wells, if there has been drilling in the area, or from seismic data if the area has been "shot".

Of the continental United States, South Louisiana has best ambience for the discovery of oil and gas fields as has, in fact, been proven. There are many more to be discovered there.

Pattern Recognition: Promise of the Future

Of all the modus operandi of the human brain one of the most prevalent and effective is pattern recognition. For that matter this even applies to the brains of animals. If the master of a dog reaches for his hat the dog gets excited. The dog thinks he may be going for a walk. He associates that adventure with his master's movement.

To allude to the higher level of human output, the patterns of which Beethoven is cognizant permit him to produce compositions that relate to those patterns, while still diversifying from them.

From its inception the oil business has been replete with examples of pattern recognition that were later rewarded. The story of the Oklahoman noticing his train being slowed across terrain that was imperceptible to the eye as an incline, and later discovering oil there, whether true or not, is illustrative.

Colonel Lucas, was a German whose career had been spent looking for salt. When so engaged, he noted the affinity between salt domes and oil and gas reservoirs. When told there was a salt dome at Spindletop he drilled for oil there and discovered a giant field. When told that another such a salt dome existed at Jennings, he drilled there and discovered another lush reservoir.

Many examples could be furnished highlighting the importance of pattern recognition in the discovery of oil and gas reservoirs. Pattern recognition is susceptible to mathematical analysis. Though some of the oil pioneers were experts at eye-balling, that gift seems to have disappeared. This is where the computer comes in. It is particularly adaptable to pattern recognition. This is one of the most exciting domains that the computer leads us into.

OilGasTech hopes to take full advantage of this innate capability and is working with gurus abreast in the field.

Some Exploration Examples

The Focused Approach

The focused approach entails the long time study of an area and careful selection of targets. A company which rushes in is likely to use geologists that have not worked an area to select its drilling spots. This greatly decreases the chance of success. The optimum path is one that lies between the scattershot approach of the sudden invasion without sufficient planning and the methodical snail’s pace approach of most major companies.

Discovery by Independents

It is generally conceded that the bulk of the oil and gas discovered in this country has been found by independent companies, often small staffed with individuals who have participated in drilling wells in the particular area and who customarily may have studied thousands of electrical logs from wells drilled in the region. Thus, the independent with sufficient experience and knowledge of a region may move precisely and expeditiously, but unhampered by the excess baggage of a major oil company, with its huge administrative costs and committee system of decision making.

Individuals

Colonel Lucas

The oil discoverer is much like the consummate artist who combines expertise, which imposes the necessary restraint, with a certain abandon that achieves the creative result. Significant oil discoveries and advances in the techniques of finding them have been made by individuals who were not in a specific scholastic niche but who combined wide experience and novel approaches in their search. The first advocate of the anticlinal theory, the now accepted explanation of how oil and gas occur in "underground hills", was a medical doctor in Pennsylvania. Colonel Lucas, the discoverer of Spindletop, came into the oil business serendipitously. He was an expert in locating salt for its value alone. From his work in looking for salt he was struck with the insight that there was an affinity between the presence of salt and the occurrence of oil.

Why not the Seven Sisters?

Although a Company such as OilGasTech can hit upon worthwhile purchases of oil production, including oil royalty interests, the salient effort it will make is in finding the new field, the real bonanza in the oil business. One wonders, as it is grasped that the energy business and its oil and gas components are here to stay, why it is not recommended that one purchase stock in one of the Seven Sisters. The answer is that purchasing stock in one of the major oil companies is not dissimilar to putting money in the bank and drawing interest on it. There is not much risk of loss. On the other hand, if a company has millions of shares out, even the discovery of a Spindletop will have relatively little impact on the share value. Investment in a major oil company is really an investment in the general economy more than an active investment in the oil and gas sector.

With respect to investment in a company like Chesapeake, the answer there is that the stock price has declined as often as it has advanced, and though well financed, the company seems to have relied more upon stock market reaction than in finding the molten gold. The success reapers in the oil business have been those who have invested with a small group that found an oil field. The record is replete.

"Doc" Pennington

We could cite many such individuals, all of whom we have personally known. One is C.B. "Doc" Pennington. He was an optometrist by training who became interested in the oil business, and shut down his optometrist office and embarked upon the oil business. He learned geology in a practical manner, consulting with many geologists, raising money from friends and acquaintances to drill wells on prospects that he had leased. He had found some oil in the Darrow and Lobdell Fields in Louisiana. He became interested in the Port Hudson structure right north of Baton Rouge. He went to see Edward Eagle Brown, the Chairman of the First National Bank of Chicago who owned a thousand acre plantation there. He wanted to obtain an oil and gas lease. But Brown, who was then in his nineties, said he would prefer to sell him the property.

When Pennington demurred saying he could not afford it, Brown replied, "I will lend you the money", and the sale was passed. Pennington induced Amoco to drill a Tuscaloosa test there. The result was that Pennington became one of the wealthiest men in the country, donating some one hundred and twenty-five million dollars for the funding of the Pennington Biomedical Center.

Others

One of the landowners at Port Hudson, Talmadge Bickham, who obtained a twenty per cent royalty on his lease had one good well on his property. With its proceeds he bought a Hilton Hotel, office buildings in New Orleans, various other properties, and still lived in high style. The well after eighteen years on stream is as productive as ever. It is in the Tuscaloosa formation. There are many other examples, such as Hugh Hawthorne of Lafayette, Louisiana. He adopted ten Irish children, after which they would not let him adopt any more.

He purchased property from the Burton Lumber Company for fifty dollars per acre, sold the timber for that price and then discovered the LaPice oil field on it. Needless to say after his concentrated efforts in drilling wells in South Louisiana he left a very substantial estate. Many other examples could be provided, and although, the "rags to riches" cliche’ has been overworked, South Louisiana has certainly provided the scenery for it to be played out.

Networking

An area in which new companies entering into the South Louisiana environment in search of oil or gas are deficient relates to networking.

The smaller companies which have long operated in the area, and their principals, usually personally know a number of the landowners, including those who have extensive holdings, and they know many of the oil operators and geologists who have spent time and effort in the area. There is a constant interchange of information. This enables a company to acquire attractive leases easier, and, even more importantly, to put together the myriad geological facts and data which lead to the skylighting flame that flashes across the pit of a well being brought in. Embassy has recently taken on board as a consultant, one geologist who was the prime mover in discovering six oil and gas fields, and clearly meets its tests.

Embassy is negotiating with a company that has a significant repository accumulated over the years of seismic readings and other data. If agreement can be reached, the combination of this data with Embassy’s own lists of potential reservoirs, gleaned from the work product of a group of enlightened geologists and oil finders, should have beneficent results.

Nimbleness

In some businesses, such as retail sales, a large company has inherent advantages. One business, in which there are some decided advantages in a smaller size is the oil business.

The oil pioneers were men who knew all the facets of the oil business. They knew something about geology, drilling, land ownership and other details of the business having been involved in each aspect. They could also move quickly.

A large percentage of the oil discovered in the United States was discovered by independents. The modern big integrated oil company is extremely compartmentalized. The process of finding oil is broken down into landmen, geologists, petroleum engineers who are divided into reservoir specialists and exploration specialists and further divided into geographical areas. Decision making is by committee. Compared to a smaller independent the process moves at snails pace.

Embassy can move overnight and take advantage of any sudden opportunity, which as all experienced oil men [generic sense] know, occurs not infrequently. Timing, though important in all business, is critical in the oil business.