During his 34-year career in the oil and gas industry, Mike Bahorich acquired nine patents, became president of the Society of Exploration Geophysics and generally solidified his status as an outstanding geophysicist. Now retired (but still almost working full-time) and a recent addition to the board of directors at Sigma3, he sat down with E&P to discuss the state of the industry, new technological advances and how things are changing.

E&P: Why did you choose to join the board of Sigma3?

Bahorich: They understand something that is important, which is that the best answer generally doesn’t come from a single discipline but from a team that provides a broader perspective. I’ve been on a number of academic boards, and some of the more successful universities will bring together people from different disciplines to solve problems. They know that they’ll get a better product that way. No single person tends to have all the answers, so we often benefit from an interdisciplinary team.

E&P: Tell us about your early days at Amoco.

Bahorich: The company drilled a dry hole in the Beaufort Sea that cost about $160 million in 2016 dollars. They asked me to take a look. So I looked at the data and wanted to map the patterns I saw in the seismic, but when I went to the workstation, there was no way to do that. So that was my first patent, which was interval seismic attribute mapping.

At that point they said, ‘Bahorich, you’re kind of a geeky guy, so we’ll send you to the lab.’ So I went to the lab for a few years. And I absolutely loved doing that. But I wanted to get back into exploration. So I became an exploration manager for Amoco.

E&P: How did you end up at Apache?

Bahorich: They called me in 1996, and I asked Steve Farris what the corporate technical infrastructure of the company looked like. He said, ‘We don’t really have one. We’re a relatively small independent.’ The next 10 years or so was incredibly fun because I was fortunate to be on the management team, and company earnings grew 28 times under the leadership of Ray Plank and Steve Farris.

But there comes a time when the younger generation needs to take over, which is what happened at Apache, and I think honestly it’s the right thing; it needs to happen. To me it was a very natural thing to leave. The young leadership needs to build their own team and do it their own way.

E&P: How is retirement so far?

Bahorich: In all honesty I’ve been a terrible retiree. My initial plan was to not work very much and spend some time on a couple of boards, and I’ve ended up consulting almost full time. Part of the reason that I don’t want to step out of the industry entirely is because I have enjoyed it, and although I’m very happy to have a new chapter, I’m not ready for the rocking chair.

E&P: Are you concerned about the dip in exploration spending because of the commodity price plunge?

Bahorich: Right now the most important thing is for companies to survive. In some cases that might be trimming back exploration a bit, but for E&Ps most of the money is related to capital, and that makes it a little easier to survive by cutting capital and hanging on.

We all know that this low oil price is not sustainable. So I’m certain it will come back, and that’s why it’s so important to focus on survival right now. If you play your cards well in a downturn, you can make a lot of money when things turn around.

E&P: What role is technology playing, and what role will it play going forward?

Bahorich: Technology has made a fundamental change in the way that we produce oil and gas. Let’s take natural gas for a starter. Natural gas will never have sustained high prices in my lifetime again. The simple reason for that is that the U.S. now has a 200-year supply of natural gas, and we have drilled enough holes to know where many of the sweet spots are. So we can now focus on quality acreage—the top one-half of 1%.

Secondly, every single year technology gets better. And there are several things that are being tested now that could end up making a big difference. One of the things I’m interested in is polymer-coated proppant. Some of the initial tests are starting to look reasonably good. The polymer lowers the specific gravity and settling velocity of the proppant. In addition, it puts a jacket around the grain, which helps prop it up.

Dissolvable plugs are interesting because they can eliminate the drillout. It will be interesting to see where cemented sliding sleeves go. It’s currently a niche application, but if you can put a sliding sleeve every 60 ft [18 m], you can have fewer frack hits because you can control the half-length of your fracture better than you can with 10 clusters, one of which might take all of the fluid.

I think oil is a different scenario because it’s a diverse global market. Unconventional technology will not keep oil prices at this low level. However, you can bring on unconventional oil pretty quickly in a high-price environment, and this will put a governor on the high end of the oil price.

E&P: How do you feel about the U.S. crude oil export ban being lifted?

Bahorich: I think crude exports are a very good idea. Export bans were put in place at a time when the political and oil supply situation was very different than it is today. So it’s good that people are able to change and do the right thing.

E&P: Are you concerned about the “great crew change” and the potential brain drain that results when people like you leave the industry?

Bahorich: One of the things I did to provide a bit of help was to develop a Wikipedia for the oil and gas industry. The idea was to take the three professional societies in engineering (petrowiki.org), geology (wiki.aapg.org) and geophysics (wiki.seg.org) and have them build wikis to provide knowledge from those that are leaving the industry. Young people get information today through Google. If you do a Google search on ‘waterflooding’ you will hit petrowiki.org, and that wiki now gets 300% of the hits
of spe.org.

All three of my sons are petroleum engineers, and the most satisfying moment was when one of them called me and said, ‘Dad, I’m using your wiki thing to solve a problem. I found it through a Google search.’ That’s the way young people do it.

What’s really happening here is that the oil price is dropping, a lot of us are gone, and when the price comes back up, it will be a different industry. I think it’ll be more computer-savvy with more young people in control.

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