Gary Swindell has more than 30 years of experience in reservoir engineering and petroleum property appraisal. Swindell earned a bachelor’s degree in geological engineering from the University of Oklahoma in 1974. Since 1980, he has been working as a petroleum engineering consultant, specializing in petroleum property evaluation and reservoir engineering. He is a registered professional engineer in the states of Texas, Oklahoma and Pennsylvania, and he’s a member of the Society of Petroleum Engineers. Swindell is currently pursuing a master’s degree in petroleum engineering through Heriot-Watt University in Edinburgh, Scotland. Here, he answers some questions about his career:
Q: What geological features are considered optimal in terms of indicating the presence of oil?
A: You must have three things – porous rock, a trap that keeps the oil or gas from migrating elsewhere and the presence of oil or gas, generated from organic deposits of some kind. Miss any of those three, and there is no reservoir.
Q: Is reservoir engineering as much an art as it is a science?
A: Much of my work is oil reserve evaluations – how much is in the ground and how much is it worth. Almost always there is erroneous data mixed in with the truth. Almost never is the data complete enough. As a result, much of reservoir engineering is dependent upon judgment – especially what data points to ignore. I’m often wrong about reserves in a single well. But if I evaluate 1,000 oil wells, I hope to be within plus or minus 10 percent of the true reserves.
Q: Do you have to determine how difficult it will be to drill through certain geological features and down to a reservoir?
A: Drilling difficulty might change the costs, but it is never an issue if a reservoir is present. Oil drilling is a mature technology.
Q: What has changed most about being a reservoir engineer in the past few years?
A: Computer programs enable much faster analysis of the reservoirs. Data availability is much improved from commercial sources, especially in the United States.
Q: Are there different strategies that your recommend for recovering oil or gas, depending on your evaluations of what lies underground?
A: Larger oil accumulations often are injected with water or other fluids to support reservoir energy – this is almost never the gas with gas. The highest gas recovery comes from the lowest abandonment pressure. Oil and gas wells deplete over time. Most gas reservoirs behave like volumetric tanks of pressurized gas and the pressure goes down over time until it becomes uneconomic to produce them further. Some reservoirs are water drive – water invades the reservoir as oil is withdrawn. This is a good situation for oil but a poor one for gas. If the reservoir is large enough, it might be amenable to the injection of water to enable additional recovery.
Q: What are those small drilling rigs you see everywhere when driving across Kansas, Oklahoma or Texas?
A: Those are pumping units that are lifting fluids to the surface. The mineral owner, which may or may not be the surface owner, leases the oil rights to an oil company, which drills the wells and pays the owner 12-20 percent of the proceeds. Even the small pumping units are too costly, complex and risky for individuals without technical expertise to manage.
Q: With respect to your evaluations and recommendations, how much money are you typically dealing with? What is the range?
A: Evaluation work is all over the map, just as real estate evaluations would be. I just did an evaluation of a royalty interest in a lease in south Texas that valued at $35,000. I often do acquisition work that values in the $10 million range – perhaps hundreds of wells. I’ve participated with other engineers in big company evaluations in the $5 billion range. I’ve done recent estate evaluations in the $500,000 neighborhood and drilling projects in the $2 million range. We’re working on a potential drilling project in western Oklahoma that would be worth many billions – if it proves to be productive. We’ve acquired 5,000 acres of oil and gas leases in western Arkansas that cost $1 million, and that’s before drilling costs.