GEO enjoyed a productive three days in Rio last week at the Next Generation Oil and Gas Latin America event. Lots of influential operator representatives were present, and most were very up-beat about activity levels in the region. From Mexico to Ecuador to Argentina, we were overwhelmed by the number of opportunities and the enthusiasm for our technologies ... plenty of follow-up travel coming up! Thanks to all those executives who spent time in conversation with the GEO representatives.
Two of the most common misconceptions that we run into during our global travels are: (1) that advanced perforating technology is too expensive for all but the most prolific wells, and (2) that we expect to sweep all the current products from the market.
Part (1) is absolutely not true because a relatively modest amount of incremental production - or reduction in lifting cost - pays for a LOT of advanced perforating. Simple economic examples available on request. Nonetheless, prolific wells are great candidates for reperforation! Although most operators prefer to leave them alone for fear they won't come back online as strong as when they were shut in (largely an urban myth, in GEO's opinion), even a modest improvement in productivity will translate to many barrels or cubic feet, and a handsome return on investment.
Part (2) is a nice thought, but entirely unrealistic. Products of any nature must be applied where they make technical and economic sense. Many wells can be satisfactorily perforated with standard products and do not merit the application of more advanced systems. As Pareto would have it, 80% of the potential gains from new technology are likely to come from 20% of the potential applications. GEO expects its flagship product lines (RaZor® and CONNEX®) to displace standard offerings in those wells, and to become the go-to solution when the incremental investment is returned multi-fold in added value. GEO representatives will be happy to discuss your perforating activities and recommend when and where advanced technology might unlock significant value.
