For complete survey results, stop by IAGC’s booth at SEG in Houston in late October and pick up a copy. Members can request a copy by email at iagc@iagc.org.

Anecdotally, it is hard to get a sense of the current status of the exploration market. In amongst comments of gloom and doom comes news that the Society of Exploration Geophysicists has had to expand its exhibit space, not once but twice, in anticipation of its meeting in Houston at the end of October.

So E&P and the International Association of Geophysical Contractors (IAGC) undertook a survey of IAGC member companies to gain a more statistical appreciation for the current market outlook. Topics ranged from non-exclusive data to client composition and head count. Here’s a snapshot of the results.

Non-exclusive data investment

On average, respondents say that their investment in non-exclusive surveys is flat year-to-year. Data library sales are also flat for most, but more than 40% report a drop in sales, with nearly 15% reporting a drop of more than 50%. Prefunding levels are mostly flat.

When asked, “Overall, when compared to 2008, would you say the health of the non-exclusive data business is better, worse, or about the same,” 100% of the respondents answered “worse.”

Client composition
The majority of clients for data acquisition services are E&P companies, as opposed to national oil companies, and that trend is strengthening, with 11% reporting an increase in the ratio and 89% reporting no change. Among the E&P companies, the mix between majors and independents is more spread out and has not changed significantly in the past year.

Recruiting and retention

A whopping 78% of respondents reported a reduction in head count, with 14.3% reporting a drop of more than 25% and 42.3% reporting a drop of 16 to 20%.

Yet nearly half of the respondents report that they’re still actively recruiting from universities, and 77.8% state that they’re only “somewhat” concerned about their ability to staff up when the market recovers.

Additional comments

Respondents were given the opportunity to respond to a number of other questions. The first asked, “What do you see as the key enabling technologies that will help the geophysical industry minimize the negative impact of this downturn?” Multicomponent, wide-azimuth, and time-lapse seismic were all mentioned, and one respondent commented that the focus has shifted in the last year from technologies that produce higher-fidelity images to techniques that improve efficiency.

These efficiency gains were further outlined in the next questions, which asked about acquisition and processing. Marine techniques such as shooting during turns, and land methods such as simultaneous sources, larger spreads, and point receivers with digital group forming were mentioned as enabling techniques. In processing, respondents cited optimizing sequences to limit data transforms and data management as well as more effective use of onboard processing.

The biggest perceived threats to the health of the industry include overcapacity, competition that doesn’t include proper risk analysis, lack of E&P industry access to the resource base, and the need to make the industry a more attractive option for young recruits.

Finally, the respondents were asked, “Overall, how do you think the geophysical industry is faring in this downturn compared to the 1998-2004 downturn?” One respondent wrote, “It’s faring about the same. For some players, there is probably quite a bit of pain still to come. [But] the established players went into this with strong balance sheets and mature processes.

“The customer base has a far higher risk portfolio now — even deeper water, more complex reservoirs, challenges in access to acreage, and pressure to improve ultimate recoverability. This means that being conservative is potentially a very high-risk strategy, and that’s a change.”

Another was much more succinct and pessimistic: “The same mess, Part 2.”

For complete survey results, stop by IAGC’s booth at SEG in Houston in late October and pick up a copy. Members can request a copy by email at iagc@iagc.org.

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