All hydrocarbons (including crude oil and natural gas) are created through the process of decay of microscopic plants and organisms that lived in the oceans millions of years ago.
When these plants and organisms died, they sank to the ocean floor and become covered by layer after layer of sediment over millions of years. The heat and pressure within these layers began to rise over time as the layers became more deeply buried and compacted. Over a long period of time, the combination of heat and pressure ultimately transformed the decaying matter into the hydrocarbons we know today.
The organic-rich layers of rock in which the hydrocarbons are formed are called source rocks. Once the hydrocarbons are formed, the surrounding pressure generally forces the hydrocarbons to migrate upward from the compact (tight) source rock into more porous and permeable layers of rock, known as reservoir rock. Generally, conventional reservoir rocks are rocks, such as sandstones, siltstones and carbonates, that have sufficient porosity (a measure of the pore space or vacant space within the rock) and permeability (a measure of the level of communication or connectivity between pore spaces) to enable the movement of fluids such as crude oil, natural gas and water within and through the rock. Left unimpeded, the hydrocarbons will often continue their migration upwards towards the surface and escape. However, as is more often the case, this upward migration is often blocked by a layer of impermeable rock or some other geologic formation and the hydrocarbon becomes trapped and accumulates to form a hydrocarbon deposit. Hydrocarbon deposits stored in rock that has sufficient permeability to allow the hydrocarbon to naturally migrate within and through the rock are often referred to as “conventional” pools or deposits. The group of activities, including drilling and completion activities, associated with their recovery are generally referred to by industry as “traditional” or “conventional” oil and natural gas exploration and development.
Decades of oil and gas production around the world have resulted in a decline of conventional resources with the majority of the oil and natural gas resources that can be produced using traditional methods already subject to development. With the introduction of advanced technologies, more specifically drilling and completions technologies such as horizontal drilling and multi-stage hydraulic fracturing, as well as 3D and micro-seismic technologies, the industry now has the capability to extract resource from previously inaccessible hydrocarbon pools such as tight gas pools that have low permeability and were previously undevelopable with more traditional technologies. Tight gas hydrocarbon deposits generally have low permeability, which prevents the hydrocarbon from flowing naturally through the rock and requires advanced techniques such as hydraulic fracturing to be produced. Tight gas is distinct from unconventional gas which generally refers to resource such as shale gas which has not migrated and is produced directly from the organic-rich source rock in which it was formed.
Vermilion’s existing oil and natural gas exploration and development rights in Germany allow for conventional exploration and development activities focused on the exploration, development and extraction of hydrocarbon resources from conventional deposits, most of which generally occur at depths of more than 3,000 metres below the surface.
Vermilion has no plans to explore or produce unconventional shale gas reservoirs in Germany.