Although the E&P software and services business is abillion-dollar-a-year industry, more than half of the world’sgeoscientists are not using currently available computer technologyto evaluate prospects, according to Bob Stevenson, president ofE&P software provider Geographix, a Houston-based subsidiary ofLandmark Graphics.

Stevenson pointed to industry cost-cutting and the increasingcomplexity of gas and oil reservoirs as reasons for the industry toget up to speed with current technology. He cited statistics fromCambridge Energy Research Associates that say over a 15-yearperiod, information technology has driven down U.S. onshore findingand development costs by 55%. Offshore the figure is about 80%.

“The easy fruit’s been picked, and so the work that we have todo to find our best reserves is dealing with more and more complexgeologic plays. To find the oil and gas in those plays we’ve got touse more and more types of data.. Some of the data sets are gettingexceedingly large. What used to be, from a computer standpoint,megabytes has gone to gigabytes, and it’s already into theterabytes for some of the larger offshore Gulf of Mexico typeplays.”

The E&P software industry has now developed to the pointwhere it falls out into three segments, Stevenson said. Thehigh-end, which is served by Landmark, typically offersinterpretation systems running $40,000 to $100,000, depending onthe technology.

“Typical of a technology market is that after the high-end getsestablished, advances in hardware and software technology begin toopen up.” The middle tier, which is served by Geographix, offerssystems ranging in price from $5,000 to $20,000. This, Stevensonsaid, is the fastest growing segment of the E&P softwareindustry. Offerings lower on the price totem pole are out there butare typically not fully integrated systems, he said.

Stevenson spoke this week at the PLS Dealmakers Property &Prospect Exposition & Conference in Houston.

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