Each year, the U.S. Department of the Interior conducts leasing auctions for various undeveloped areas in the Gulf of Mexico. These offshore areas, known as "lease blocks," are put up for bid to encourage development by oil and gas operators and to maximize revenue for the government. In an effort to obtain the right to explore these undeveloped areas, exploration and production (E&P) companies tender lease bids in written format. At a designated time and in a public forum, the bids are opened, and the lease blocks are awarded to the highest bidders. In order to prepare for these auctions, E&P companies undergo an arduous process involving a range of personnel, from geophysicists, geologists and asset management teams to seismic interpreters, drilling and completion experts and production personnel. Preparation often requires that great quantities of seismic and other exploration data be processed, interpreted and finally evaluated for their oil or gas production potential. The potential production is then assessed for possible revenue. At the end of the process, an approximate value is determined for each lease block on which the company desires to bid. In order to maximize their chances of success, the exploration departments at upstream oil and gas companies conduct their evaluations under conditions of urgency and considerable uncertainty. The process is very labor-intensive and requires a large investment from the company in the form of personnel and cost. In preparation for bidding, almost all other activity at a company can come to a halt in order to focus on lease evaluation. After leases have been evaluated, management then has the task of identifying the leases that meet the business criteria for exploration, and the company undertakes a portfolio management exercise. To boost confidence and manage their portfolios more efficiently, a growing number of exploration managers are turning to outside consultants for sophisticated new technologies and integrated methodologies.

By turning to the expertise of outside consultants at a time when internal resources are limited, exploration decision-makers can meet even the most stringent lease sale and bid deadlines without compromising accuracy or profitability. One of the companies providing consulting services to the E&P industry is Landmark's Consulting and Services group, a part of Halliburton. Landmark provides companies wishing to participate in lease auctions with highly experienced professionals who have expertise in every facet of oil and gas exploration and production. Landmark's services include play fairway analysis, regional reconnaissance, lead development, prospect evaluation, portfolio optimization and expert technical analysis. The case for consultants
One of the reasons frequently cited by E&P companies for electing to use consulting firms for assistance with their lease sales and bids is that the companies' internal experts are busy working on other projects that they cannot afford to interrupt. In some cases, data volumes are so unwieldy that the company cannot handle them without additional computing capacity or more effective information management. In other cases, staff geoscientists and engineers may have deep regional and local knowledge but lack highly specialized domain expertise or the technological skills necessary to optimally use new E&P systems that may be critical to success. Another advantage energy companies enjoy for turning to outside consultants is that consulting firms have early access to, and in-depth knowledge of, some of the industry's most sophisticated E&P-related technologies. As a result, consultants often bring valuable knowledge to bear on a client's exploration challenges more effectively than the client's own staff.

An experienced consulting team, composed of members from multiple disciplines and empowered with the latest technology, can bring considerably greater value to the bid process than is possible with in-house personnel alone. This is particularly true when the consulting group is part of a global oilfield service company that can provide additional internal expertise, as needed, from both surface and subsurface professionals. Furthermore, international organizations bring a breadth of experience rarely matched by small, local consulting firms; these global firms generally have highly accessible service centers in the major producing regions, with their own in-depth, local expertise. If a particular specialty is lacking, a global firm can deploy specialists from other regions on relatively short notice. An innovative approach
Landmark consultants begin each project by obtaining a thorough understanding of the client's business objectives, constraints and exploration profiles. The team then constructs a framework model to help understand the leases under consideration and the potential risks involved. The risks or critical elements of a project are best understood by integrating and evaluating cross-disciplinary data, understanding both dry hole and successful well analogies, and applying geological models of an area's source, trap, seal and potential reservoir quality and size. In addition to geologic risks, drilling, completion and field development strategies are also necessary to accurately define the value of a lease. Landmark's consulting experience in full-field integrated analysis brings a methodology of decision- and scenario-planning that is in the forefront of the industry. Landmark consultants examine subsurface reservoirs, draw on expertise from the rest of Halliburton to examine and place wells creatively, and provide necessary designs for facilities to transport products to sales points. As a result, Landmark clients can evaluate leases in terms of long-term costs and business objectives. Experience has shown that operators assess proposed lease areas with more accuracy and realize greater value over the long term when, early in the process, they actively model and mitigate uncertainties.

Technologies that make a difference
Certain advanced technologies can often be the difference between meeting and missing urgent exploration deadlines. Landmark consultants have expertise in software systems and data services that help evaluate large geographic areas quickly without compromising quality. Three of these key technologies are: (1) multi-volume visualization and interpretation systems; (2) Geographic Information System (GIS) -based data aggregation and visualization software; and (3) Web-based collaboration team environments. Multi-volume visualization and interpretation systems
These systems can store hundreds of gigabytes of data. Integrated pre-stack/ Amplitude Variation with Offset (AVO) technologies and automated framework construction tools manage large volumes of data quickly and efficiently. In some areas of the Gulf of Mexico, where direct hydrocarbon indicators are not present, the ability to depth-migrate the data and interpret it using prestack data can make the difference between success and failure. GIS-based data aggregation and visualization software
GIS systems help aggregate data by location and store it in one database, which is the same database used for interpretation. For example, exploration teams can work with large amounts of well and seismic data integrated with gravity magnetic information, bathymetric maps, tables, diagrams, and images for a better understanding of the overall situation. Mapping of this information provides a strong regional framework, or play fairway analysis, that helps identify, analyze and visualize an area's potential risk.

Web-based, collaborative team environments
Landmark's Consulting and Services group uses a proprietary thin-client compute environment to enable clients, team members, partners and third-party specialists to access data in a secure environment. This environment also allows Landmark personnel to consult industry experts while working from almost anywhere in the world. As many experts leave the industry for retirement or other opportunities, Landmark is able to stay in touch with them and their expertise only further contributes to a project's likelihood of commercial success.

Best practices, proven capabilities
Every phase of the typical oil or gas field life cycle requires the integration of numerous computing, geotechnical, operational, commercial and strategic decision-making processes and best-practice methodologies. Before undertaking an exploration project with a short deadline, it is vital to clarify business objectives, determine the multidisciplinary capabilities that would be the most effective, recruit or contract with internal and/or external specialists, and outline the precise technical and business workflows to be implemented. The more comprehensive and well-documented the methodology, the more likely the team will achieve its objectives on time to meet bid rounds and other strategic deadlines.

When it comes to meeting short bid deadlines, Landmark's Consulting and Services group employs best practices in project management methodologies and application workflows, including:

• Documentation of work methods and the "decision analysis framework" necessary in a contemporary environment of increasing government regulations, where documenting and tracking both science and business decisions has become a business necessity
• Teams composed of members from multiple disciplines who can work together toward a single goal in a nonlinear fashion, as opposed to in isolation in a strictly sequential manner.
• Teams, because they have been empowered with appropriately integrated technologies, accelerating decisions through the overall decision framework
• The application of integrated, multi-domain probabilistic surface/subsurface scenario modeling prior to bidding whenever large technical and/or commercial uncertainties exist (as in most lease sales and bid rounds).

Minimizing risk, maximizing for success
To maximize the chance for success, oil and gas companies must conduct timely and reliable evaluations of regional data sets and specific prospective areas under conditions of both urgency and considerable uncertainty. At a time when internal resources are limited, E&P organizations can meet even the most stringent lease sale and bid round deadlines, without compromising accuracy or profitability, by drawing on the expertise of outside consultants, along with using advanced analysis and modeling technologies and more tightly integrated, multidiscipline work methodologies.

Recently, Landmark helped a large independent oil and gas operator interpret more than 500 Continental Shelf (OCS) blocks in less than 90 days, allowing it to bid on several prospective blocks. Landmark also helped a large U.S. company integrate data in a way that enabled the evaluation of multiple opportunities within a narrow three-month time frame, thereby reducing risk and improving Net Present Value (NPV) by millions of dollars. Landmark consultants also assisted a national oil company in identifying prospective areas with an estimated worth of tens of millions of dollars, while at the same time exposing a previously unidentified play. Today, operators call on Landmark for play reconnaissance, lead development, prospect evaluation, portfolio optimization and expert technical analysis. Landmark has one of the largest consulting groups in the upstream oil and gas industry and offers experienced consultants in all disciplines, many with expertise in advanced technologies. Landmark consultants are skilled in industry-best practices and many are able to model multiple scenarios under uncertainty using advanced visualization and data management capabilities. In addition, Landmark offers multi-disciplinary, documented workflows and a Web-based client collaboration environment. For more information about Landmark's Consulting and Services group, please contact your local sales representative from the list below.

United States – Mark Brocklehurst

Middle East – Sanjeev Varma

Latin America – John Smyth