with Kyle Gorynski, Director Reservoir Characterization and Exploration at Bonanza Creek Energy
Tell us about your background and what you do now.
I’m from Kansas and got my Bachelor’s and Master’s degrees in Geoscience at University of Kansas, then moved straight out to Denver. Spent the first seven years of my career with Ovintiv, which was previously Encana, and had various roles, starting with mainly geology functions, and eventually working as a manager. I’ve always been interested in the technical side of the industry and novel approaches to petrophysics, geomechanics, and reservoir mapping, and how new data and new analyses can drive decision-making. It’s important that our decisions are driven through science and statistics and less through drillbit and opinion alone. I joined Bonanza Creek about a year and a half ago.
I’m the Director of Reservoir Characterization and Exploration. This role has two primary functions. One is an asset development function and the other is Business Development/Exploration. Asset development is the value optimization of our asset to maximize on key economic metrics by:
- understanding the subsurface to determine baseline performance
- understanding key engineering drivers that impact performance
- applying those insights to modify things in real-time like spacing, stacking, completion design, well flowback etc.
At Bonanza Creek, one of the things our CEO Eric Greager likes to say is, “We’re unique because we have the agility of a small company, with the technical sophistication of a larger enterprise.”
This allows us to respond to things that are changing quite rapidly, from the costs of goods and services to our own evolving understanding of the reservoir. By rapidly adapting, we’re able to maximize value and economic return.
That’s the main piece. The other part of the role is the exploration and business development function. We apply the same principles I just described to other assets inside and outside our basin and work with the greater operations and finance groups to determine an asset’s current value and what its potential future value could be.
How do you incorporate technology into your approach?
Technology is applied everywhere we possibly can. We have powerful technically savvy people who can develop tools and use tools to guide all our decision making.
That’s where Petro.ai comes in. We need help building additional tools to make real-time decisions. That’s going to help us stay lean and agile but also make sure we have the right information to be making the most informed decisions. It comes down to the right data and the right people.
We need the ability to make decisions at multiple levels within an organization, so decisions can be made quickly without a top-down approach but with a high level of trust. We need to make sure the technical work is vetted and have a culture of best practices built-in for engineering and geoscience evaluation so we can have a lot of trust in our workflows. When that expertise is already built into tools—a lot of the equations, the input, the math—that helps us have trust in the inputs as well as the outputs and allows us to make those quick decisions.
How do you define real-time?
Our ultimate goal on the completions side is to be making real-time changes while we’re pumping – so minute by minute. That’s what motivated the project we have going with Petro.ai, to start turning knobs during the job, making sure the reservoir is sufficiently stimulated and not over capitalized.
Let’s say we have sixteen wells per section permitted, but all of a sudden commodity prices drop and it’s at forty bucks, so we’ll only drill eight of those wells. Once those eight wells are in the ground, you’re stuck with that decision. Then maybe commodity prices go up, and we get a good price on sand or water, then we rerun the economics and what the type curves look like. Then we’ll make a new decision, for example, on the amount of sand or water or what the size of our stages are.
We are making really quick decisions in terms of completions on a well-by-well basis. As price fluctuates and we’re teetering on the edge of break-even, we have to be real flexible in terms of trying to maximize the economics.
Our next step with Petro.ai is using our 3D seismic data, well architecture, geosteering, and drilling data to understand what kind of rock we’re actually treating to make sure we’re putting a specific design for that specific formation, and we’re also reading the rock at the same time. We’re taking that information, which is mainly pressure response during the job, and trying to learn from that live.
Why do you have a passion for change in this industry?
I’m passionate about understanding the subsurface and the whole E&P industry and our evolving understanding of unconventionals. I’ve always been passionate about the big picture, trying to zoom out and understand how everything interconnects.
Change is a reality. It’s unavoidable. The pace of change and the path you take differs between organizations. The industry as a whole has been incredibly slow to adopt change. We’re now on the verge of a large extinction event. The E&P companies that remain will be in a better position to thrive once this is all over.
Unfortunately, something even as simple as generating a return on your investments has eluded many companies. For these companies, it is often the stubborn top-down culture that has resisted change and is their greatest detriment. It’s an exciting and scary time today. However, these events allow the best to survive and force others to adapt and change – for the better.
Investments on a single well can be aprox. 6 to 10 million dollars for a 2-mile lateral in the U.S.. Investments on learning are 10s to 100s of thousands of dollars for an entire year. There’s a lot of capital destruction that could have been avoided by doing homework, collecting data, doing analysis, and connecting the dots from math to modeling to statistics all the way to a barrel of oil.
Science often ends up in a folder. It takes good leadership, management, and technical work to ensure that you’re making decisions with all your data and information. The point is to make better decisions and to make better wells.