Vol 2
Issue 3
October 2003

>Our Perspective:

When my car needs an oil change....

I think for a moment I will change it myself. Then, I remember the last time I did: the effort involved, the mess, the run to a disposal center. Then I consider the reasonable price the service station charges, and I hurry to get it done there while I use my time to do something more important.

The companies that perform basic auto maintenance quickly, reliably, and reasonably priced have a great business model! They take care of routine, non-core maintenance and they do it well. It saves us time and money. They are good at what they do, because they repeat the same actions over and over for many different cars and owners.

Now take the leap to E&P. There is consensus about "core expertise"; people seem to agree about where a company should focus its employees’ efforts. What we hear from successful companies is that they concentrate their resources on exploration and field development and on the operations of their largest assets. No surprise there. They have found surprising value, though, in outsourcing segments of their work to first-class, outside asset managers, entrusting them with the management of smaller assets, usually mature or underperforming fields. Because the outside asset managers repeat this process often, and their job is specifically to manage these assets, they are often able to find value where none is expected. These lesser fields can add to the bottom line with reduced operating expenses and increases in production.

They have found surprising value, though, in outsourcing segments of their work to first-class, outside asset managers, entrusting them with the management of smaller assets, usually mature or underperforming fields. Because the outside asset managers repeat this process often, and their job is specifically to manage these assets, they are often able to find value where none is expected. These lesser fields can add to the bottom line with reduced operating expenses and increases in production.

Collarini's total asset management program was created for this market. Our recent alliance with Baker Energy lets effectively manage assets from the reservoir through the sales line. Efficient and safe operations combine with technical evaluation to provide maximum profitability. Included are reservoir study, well analysis, and equipment optimization, among other services.

Next time you notice your staff chasing nagging logistics issues or worrying about AFEs on smaller projects, remember they could be finding and developing the next great asset.

And here is a great idea: Read a book to your daughter or granddaughter the next time you are waiting for that oil to be changed!

Your friends at Collarini

Energy Careers in Crisis?
Recruiting Tomorrow's Energy Generation

Discussions lead by key leaders in the industry
On "Brain Drain", industry image and recruiting
for the future!

October 21, 2003
University of Houston Hilton
Conrad Ballroom

A Free Event Sponsored by the
Global Energy Management Institute of the
University of Houston

Information Here

Tools for Career Success in the Early 2000s
hosted by

The SOCIETY OF WOMEN ENGINEERS
HOUSTON AREA and
The SOCIETY OF PETROLEUM ENGINEERS
GULF COAST SECTION

The event will take place
from 8AM to 4PM
at (Cameron building)
4646 W. Sam Houston Pkwy N
on October 25, 2003.

Seating is limited
Go to www.swe-houston.org
for registration information.

>Upstream News:

Proved undeveloped reserves

Proved undeveloped reserves are one of the most misunderstood categories. Because they are proved, the criteria of reasonable certainty must still be met. Due to their very nature of being undeveloped, there is less information available on which to base reasonable certainty.

SEC Regulation SX, Rule 4-10, states "Reserves on undrilled acreage shall be limited to those units offsetting productive units that are reasonably certain of production when drilled.” The Society of Petroleum Engineers-World Petroleum Congresses (SPE-WPC) says that proved undeveloped locations must be direct offsets to productive wells, be within the known proved productive limits, conform to legal spacing regulations, and will be developed. SPE-WPC goes on to say that engineering and geologic data must "indicate with reasonable certainty that the objective formation is laterally continuous." The SEC engineers, in a published opinion, took a much stronger view, saying it must be "demonstrated with certainty that there is continuity of production from the existing productive formation." They emphasized that there is no qualifier for the word "certainty".

There are two significant items in the term "continuity of production"” First is the word production. Contrary to what some prospect generators claim, a show in a downdip well is not production. The requirement for commercial production is no less stringent for undeveloped reserves than it is for developed reserves. The other item is continuity. In some areas of the country, reservoir continuity is less of a concern. In many areas, however, it is extremely difficult to be certain about reservoir continuity. Faults and stratigraphic changes that have not been seen in the subsurface control and are not detectable by seismic can prevent continuity of production.Thus it can be difficult to establish certainty of continuity.

Another problem is in identification of fluid content. A saturated oil reservoir may have undeveloped attic reserves, but are these oil or gas? The definitions make no reference to fluid types or saturation pressures. The most conservative approach is to call all of the updip area gas. This is frequently used because it is difficult to be reasonably certain otherwise. With information on bubble point pressure, it may be permissible to classify updip reserves as proved oil.

It is also necessary to have a commitment to develop these reserves. The SEC takes a very dim view of undeveloped reserves that stay on the books year after year, with no effort being made to develop them. Unless there is a very compelling reason why the reserves will not be drilled sooner (such as gas cap blowdown), there should generally be a commitment to develop proved reserves within the next three years. The SEC does not consider current economics or the financial condition of the owner as a compelling reason to delay development.

Undeveloped reserves are not limited to undrilled locations. If a substantial investment is required to place the reserves on production, they should be considered undeveloped. This is the case when a well has been drilled, but not completed, or is awaiting facilities. The definitions do not state what is considered substantial. At Collarini we define substantial as one-half the cost of a new well. Thus an offshore well waiting on a $150,000 facility may be proved shut-in, while a shallow onshore well waiting on a similarly priced facility would be undeveloped.

>Our Talented Staff

Geoscience technician with twenty years of experience in various areas of geological and geophysical computer and support work. Skilled at generating synthetic seismograms, graphs and cross-sections, and loading all 2D and 3D seismic data. Proficient at creating daily backups and seismic models, and maintaining workstations, backup systems, and various printers. Experienced at transferring data between different systems and offices, and supporting geoscientists during different phases of their work.
Ask for TG560.

Petroleum engineer with five years of experience in reservoir, production, and drilling projects. Experienced in reserve estimation, field studies, sand control and management, decline curve analysis, project economics, production forecasting, field development planning, gas-lift design and operations, and production log analysis. Geographic areas worked include the Gulf of Mexico and the Niger Delta. Proficient in using PC and UNIX based petroleum engineering applications, nodal analysis tools, SAM, PROSPER, GAP, MBAL, Perform, WePS, HORVIP, PEEP, OA Tool, PA, PUMA, and EPPROMS. Ask for PR175.

Geologist with fifteen years of extensive experience in identifying and evaluating exploration plays and prospects and assessing project risks, economics, and value. Geographic experience includes the deepwater Gulf of Mexico, Nigeria, and Angola. Highly experienced at assessing reservoir quality including petrographic characterization and fluid compatibility analysis. Skilled at prospect generation, project economics, risk analysis, and well-site geology. Computer experience includes 3D seismic interpretation with Landmark SeisWorks. Ask for G1223.

Reservoir Engineer with 12 years of experience in reservoir characterization, simulation, and fluid and rock property analysis. Geographic experience includes south Texas, the Gulf of Mexico, South America, Latin America, Canada, and Mexico. Highly skilled in a wide variety of software, including simulation, geostatistics, reservoir characterization, mapping, and production analysis. Experience in reservoir simulation including the computer applications of VIP, CMG, and Eclipse.
Ask for R553.

Engineering Technician with 20 years of experience in providing technical support to both reservoir engineering and production engineering. Highly experienced in researching well files and creating well histories along with building wellbore schematics. Proficient in Dwights P2000, US PEEP, PowerPoint, and Excel. Ask for TE382.

Petroleum Engineer with 25 years of experience working for a major oil company and several independent oil companies. Highly experienced in acquisitions and divestitures, well logging, well stimulations, recompletions, and daily production operations. Geographic experience includes the mid-continent, Gulf coast, and the Rocky Mountains. Proficient in Excel, dBase, ARIES, Eclipse, and SAM. Ask for PR57.

Meet thousands of talented people in 25 upstream disciplines at:
www.collarini.com

Is the candidate and recruiter relationship doomed from the start...or can people with different
objectives really "need" each other?

Can you really call this a relationship?

• Only if it is not monogamous or exclusive.
• Only if you and the recruiter envision a long-term relationship that benefits both of your networks.
• Only if your recruiter has made constructive suggestions on managing your career, not just about getting you a job.
  

What the candidate needs to know.

• You are not the one paying the recruiter.
• You are a commodity to a recruiter, unless you become a positive part of the recruiter's long-term network.
• You are different from others. Find what that means and be able to communicate it quickly and effectively.
  

What the candidate needs to know about a recruiter!

• Ask what relationship the recruiter has with his or her clients. Ask about retained search,
  contingency search, and temporary placements. No recruiter has access to the entire market and
  it is important to understand exactly how a recruiter can help you.
• Ask how long the recruiter has been in staffing. Ask how long within your industry.
• Ask about the individual recruiter's and the recruiting company’s processes. Understand what to expect or not to expect.
  

If this is a relationship, what should the candidate do?

• Do start the relationship before you need it. Recruiters are great sources of market information, sometimes about your own company.
• Do let the recruiter know where your resume has been submitted. You might even find a recruiter
  who wants to be a willing reference.
• Do not push a recruiter to submit you for certain positions. Spend you efforts positively by communicating your strengths and by highlighting how you are different from others.
  

Everybody wins when both the recruiter and the candidate look for ways to positively contribute to
the relationship outside the position fill and job search activity. At the end of the day, building a
strong industry network is the most important thing a recruiter and candidate can do for each of
their careers.

Turns out that the needs are not so different after all…

(Disclaimer: Please note that the speaker is only claiming to have some insight into the Mars-Pluto
and Venus-Pluto relationships, some working knowledge of the Pluto-Pluto relationship, BUT IS
NOT suggesting any understanding whatsoever of the Mars-Venus relationship.)

Collarini Energy Staffing Inc. is a full-service agency specializing in the placement of exploration and production personnel including the disciplines listed below (other supporting personnel are managed upon request):

Accountants
Administrative assistants
Business analysts
Clerical personnel
Computer programmers
Database administrators
Drilling engineers
Drilling operations personnel
Electrical/Instrument Engineers
Facilities engineers
Geologists and Geophysicists
Health, safety and environmental
Landmen and supporting personnel
Management personnel
Petrophysicists
Procurement personnel
Producing operations personnel
Production engineers
Reservoir engineers
Technical writers
Technicians

Reservoir Solutions the Industry Trusts...

The Collarini Engineering petroleum engineers and geoscientists specialize in evaluating oil and gas reservoirs. Specific projects include integrated field studies, acquisition evaluations, independent reserve appraisals, and exploration and exploitation prospect generation and assessment. Our full divestment services include creation and hosting of electronic and physical data rooms in addition to the technical evaluation. Our teams in Houston and New Orleans are very experienced and stand ready to help you on projects of any size. Try us!

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>Contact Us
Visit us on the web!
www.collarini.com

2500 Tanglewilde Street, Suite 480
Houston, Texas 77063
832.251.0160 (Engineering)
832.251.0553 (Energy Staffing)

909 Poydras Street, Suite 1450
New Orleans, Louisiana 70112
504.522.9077 (Engineering)
504.592.4007 (Energy Staffing)