There’s been a move away from “measurement while drilling” sampling methods back to traditional coring in recent times due to greater accuracy. Coring and core analysis are essential to the exploration, development and production phases of the oil and gas industry, which spends in excess of $A650 million obtaining these cores annually.
But what continues to make traditional coring technology a perennial “black art” is an operator’s inability to tell whether the core sample is jamming, resulting in the costly exercise of ‘pulling, checking, refitting and the running back’ operation of the coring equipment.
To the uninitiated, jamming occurs when the column of formation inside the inner barrel loses its stability by swelling or fracturing, causing so much friction on the walls of the inner tube that the column will no longer slide within. While this may only take 10-12 hours to fix, it equates to tens, if not hundreds of thousands of dollars of drill-rig time in the offshore environment.
Oil companies use core samples - sections of rock cut out from a geological formation - to measure the properties of reservoir rocks. And it’s this enhanced understanding of a reservoir that helps predict its performance, and the all-important reserves estimate.
If only the global oil and gas industry could eliminate both the guesswork identifying whether or not a core sample is being acquired - and reduce drill rig time by avoiding jam issues - it would reduce its costs significantly.
Enter leading-edge (recently patented) technology Coretrack, with what it expects will be the ultimate solution. Brought to the market as the core product offering of Coretrack Ltd, which will soon on the Australian Stock Exchange, this technology aims to provide significant cost savings to explorers carrying out reserves and production estimates.
Maiden Capital director Trevor Beazley is manager to the Coretrack float, having assisted the corporate advisor to the listings of Dyesol and Neptune Marine Services.
Much of the $A2.2 million in working capital Coretrack plans to raise through listing will be divided between domestic and international marketing, continuing process development, worldwide IP protection, and capital equipment.
Included among Coretrack’s impressive board line-up are the company’s CEO and veteran geologist David Orth, long-standing CPA Robert Collins (chairman), former vice president with Schlumberger and Neptune’s current managing director Christian Lange, and Cathryn Curtin - a non-executive director of Neptune, and a former director of Dyesol.
According to Beazley, the key to Coretrack’s technology is the level of accuracy that’s provided through definitive, real-time information concerning the rate of core sample acquisition (rather than implying or inferring its status, which is currently the case).
He describes Coretrack’s primary goal as introducing a new technology into the coring services business, known as the ‘Core Barrel Capacity Gauge’. It’s understood that this technology will enable the positive and explicit indication and measurement of the acquisition of a core sample during a coring operation.
“Reducing drilling delays caused by jamming issues - that occurs in excess of 60% of instances during the core process - will increase the certainty while coring, the time to acquire a core and consequently deliver a corresponding reduction in costs,” advised Beazley. “This in turn should enable better and timelier decisions to be made relating to the assessment and development of hydrocarbon reserves.”
The founder of the Down hole Tractor System, William Connell, is a technical consultant to the team developing the Core Barrel Capacity Gauge. Connell has identified that improvements could be made to conventional oil and gas coring processes if real time data was available to ascertain if a core sample was jamming or milling within the inner core barrel.
A primary user of conventional oil and gas coring processes, the worldwide oil and gas exploration sector is a multi-billion dollar industry and one of the world’s strongest growing market sectors in the exploration space. In excess of $A922 million was spent within Australia alone in 2004 on oil and gas exploration with around two thirds of it spent on off-shore ventures.
As a result of the continued rise in crude oil prices, Beazley expects the current exploration flurry within the oil and gas industry globally to remain high. And based on the strength of those cost reductions, time savings, and improved efficiency in core retrieval he’s confident Australia’s major coring companies will want to closely align themselves (either via licensing arrangements or possible equity stakes) with Coretrack once it’s listed.
By significantly increasing the efficiency of acquiring core samples, Coretrack expects to be recognised as the leading initiator and supplier of innovative coring technology and services within the oil & gas exploration industry.
Coretrack is currently carrying out full scale testing of two of the main components of the Core Barrel Capacity Gauge. Once trials are complete and the technology proven, bidding for work will commence. What’s expected to fast track the commercialisation of Coretrack’s technology is the initial development of a coring services business targeted primarily at the Australian market.
In addition to showcasing Coretrack’s coring industry knowledge and capability, Beazley expects Coretrack’s Australian coring business to provide the necessary cash flow to support ongoing R&D. It will also allow for field trials of the technology, while providing access to a client base for the commercialisation of any new technologies.
“There is currently little major strategic differentiation between the various coring contractors operating in the market place,” said Beazley.
“As a result, we expect Coretrack to be a significant strategic differentiator, enabling it to capture market share in the coring services sector of the oil and gas industry.”
Having already been identified, a team of experienced core operators and is now ready to start work as soon as equipment and contracts are secured. Inititial contracts are expected to be based on onshore projects until levels of confidence are developed in the new business and the technology has been proven as commercially viable.
