Environmental BioTechnologies, Inc.

Estimating the Probability of Drilling Success Based on Microbial Surface Surveys

Introduction

EBT has surveyed over 4,000 square miles of land during the past several years using its proprietary method of microbial surface exploration survey technology, referred to as MET surveys. As exploratory drilling occurs in this surveyed area (Alberta, Saskatchewan, North Dakota primarily, and from some surveys in Ecuador and Argentina), we determine how our MET surveys correlate with actual drilling results obtained by industry. To date, there have been 83 exploratory wells drilled in our survey area after EBT's MET surveys were completed. From this database of drilling results, we have developed a method to use MET survey data and evaluate the potential drilling success for a given proposed drill site. This is a two step process. The first step (Correlation of Survey Data and Drilling Results) is to record how the surveys correlate with drilling results. The second step (Estimating Probability of Drilling Success) involves using this correlation to develop a method to support site selection and to estimate the probability of success for a proposed drill site.

Correlation of MET Survey Data and Drilling Results

EBT uses three parameters to determine how the MET survey value for a drill site correlates with drilling results. The first parameter is the average MET value for the nearest four sampled points surrounding the drill site. This is the basic value we obtain in the laboratory for the collected soils. These sample points are generally in a 1/4 by 1/4 mile grid pattern and thus are relatively close to the proposed drill site. Graph 1 indicates how this data correlates with exploratory drilling results. For instance, sites with a MET value average less than 10 were successful only 11% of the time, while sites with a MET value above 22 were completed 69% of the time. Using this basic average MET value for a drill site, we can calculate the percentile rank of that site in comparison to other soil samples taken to complete the survey. This correlation with exploratory drilling results is plotted in Graph 2. The third value EBT uses in its correlation is the relative average value of the drill site, again in comparison to the survey average. These results are reported in Graph 3.

Estimating Probability of Drilling Success

As can be seen after reviewing Graphs 1-3, there is not yet a smooth straight line fitting the field drilling results. We expect that as more drill sites are added to these two data bases, that the data will smooth out and a good best fit line will be achieved. In the meantime, we are using what we believe to be a reasonable approximation of how the data will eventually graph out (heavy solid line). In 1997, we used these lines for our calculations of Probability of Success (PS) for a given site and periodically adjust this line to reflect the results of additional drill sites added to our database and how well our predictions correlate with new drilling results. For a potential drill site, we determine the PS based on three parameters, and then average these numbers to end up with an overall PS% value.

This approach to establishing a Probability of Success was established in April 1997 and has been used to rank potential drill sites for 1997 drilling activities as well as to retroactively rank several sites previously drilled by our clients. A total of 10 wells have been drilled by EBT's oil company clients since December 1995. Two of these were drilled after this method of site selection and well ranking was developed for testing. The two sites drilled in 1997 had a 55% and 84% Probability of Success (PS) rating and both were completed as oil wells. Two wells drilled in 1995-1996 with a 75% PS rating and a 56% PS rating were also successfully completed. Four exploratory wells that were drilled in 1996 which had PS ratings of 26%, 30%, 40% and 53% resulted in dry wells. In addition, two exploratory wells drilled in 1996 with 69% and 74% PS ratings were dry wells.

Discussion

As mentioned in the introductory section, EBT is in the process of developing methodology based on its microbial surface survey technology to derive an estimate of drilling success for a selected drill site. We have made certain data assumptions which we are currently testing via drilling results. Based on the correlation of 140 development and exploratory drilling results to our MET surveys, it appears that drill sites should have a PS rating greater than 55% unless there is other supporting information that can overcome the relatively low PS rating. If we had used that criteria for the ten well drilling programs described above, six wells would have been drilled and four would have been completed for a 66% success rate. The average PS % for this group of six wells is 68%, a good correlation with actual results.

For the 10 drill sites, EBT's PS ratings averaged 55.2%, indicating that 5 to 6 wells should be successfully completed. Four sites were actually completed. We will continue to monitor our predictions and drilling results to determine how to bring estimated PS ratings in line with actual drilling results.

For now, it would appear that sites with over a 55% PS rating should be considered since sites having a PS rating below this level have all been dry wells.

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Environmental BioTechnologies, Inc.
255C S. Guild Ave.
Lodi, CA 95240
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