“Your value is in the technical skills you possess…”

Dave let’s begin by asking you to give us your educational background and professional experience.

I started out in pure mathematics at the University of Alberta. After completing that I did some graduate work in statistics and probability, and then got a chance to come and work with Amoco in 1980, so I left my degree half finished and came to work at Amoco. I put in a year at Amoco and decided I should finish the degree, so I went back to school for one more year and finished off my masters in statistics and probability. At that point, in 1982, I went back to work for Amoco and stayed there until 1985 when I moved to BP Canada. I left BP Canada in 1991 at the time it became Talisman and did some consulting work, including teaching some math at SAIT. I started doing some consulting work at Amoco again and was offered a full time position in 1997. Then we were bought by BP in 1998 and I’ve been here ever since.

That’s an interesting educational background.

My undergraduate degree was pure mathematics, an awful lot of theoretical mathematics.

So basically you’re a mathematician.

That’s right. I’m a mathematician, not a geophysicist. (Laughter)

Why did you leave Amoco in 1985?

Amoco was actually in a bit of a slow period, in response to the national energy program primarily. They weren’t being very active. BP was making a big push to find new oil reserves within Canada, so they were recruiting quite a few people and I got caught up in that recruitment. It was an opportunity where with only about four years of experience I could start drilling a lot of wells and get involved in a lot of activity that wasn’t happening at Amoco at the time.

Did you like your stint as a teacher at SAIT?

I enjoy teaching. It’s something I do part time. I actually teach sailing courses right now as an outside interest. I enjoy taking part in educating people.

Have you ever considered teaching courses within the industry?

I’ve never really gotten involved in teaching professional courses. I’m not sure I’ve ever had anything I’ve felt was at a level which was valid and worth contributing at the professional level. I have done some informal training internally of the younger geophysicists, more along the lines of mentoring.

What sort of differences did you see in the work culture going from Amoco to BP and back again?

That’s a good question. I’m not sure I can give you a good answer. I can certainly say there are differences back here at BP now, having come from Amoco again for the second time. There are differences in how the company operates. BP gives you a lot of room to try and define yourself, and what you think is important, and to stand out in the crowd as someone who is doing something of value within the organization. Amoco was probably a little bit less encouraging of that kind of behavior. It depended a great deal on which group you were with as well. At Amoco there was more small group culture than corporate culture.

What particular accomplishments are you most proud of?

I was involved with some of the foothills development, the Sukunka area, back with BP in the late 80’s. That was an opportunity; I really enjoyed. I found it was very challenging geophysically, working with some poor data attempting to interpret some very complex structures. Lately I’ve been involved in using inversion technology for exploration, and actually getting involved with the AVO aspects of inversion. How we can use that to start defining things like lithology and fluid content. I’m beginning to become a very firm believer that this is viable technology.

How prevalent is it within BP? Is there widespread use of AVO in the company?

There is widespread use. AVO based inversion is becoming more and more common practice. Certainly not everywhere, obviously there are places with extremely complex geology where the data quality is too poor to use, but places where we think it can add value it is becoming a common practice.

What sort of technically demanding prospects is BP Canada currently pursuing?

At the moment we are focusing on tight gas plays in NEBC. We are using a lot of physical modeling, and attributes, I find my statistical training turning out to be quite useful here. As well we have looked at coal bed methane, but decided not to pursue it at this time. In the Mackenzie delta we are quite active, acquiring new data. And we are looking into opportunities on the east coast.

How many employees are there now at BP Canada?

I’m going to have to be careful about that. I think the actual in office staff is around a couple hundred. We’ve actually become quite small. Geophysically we’re down to about 13 or 14 geophysicists.

Do you see BP taking the view that Western Canada isn’t a growth area, and they don’t see it as being a beneficial asset to have in the future?

There are two parts to that. One is that we are regarded as a harvest organization, which means we are looking to continue the production we have, using technology where appropriate to expand production. But western Canada isn’t viewed as a place with world scale exploration opportunities. Having said that, they see huge value in Western Canada. We make a good profit here and they find it a very valuable piece of their business. We are trying to extract maximum value from the resource, but using technology to do things more efficiently.

So would BP see Canada as a more technically demanding area, the benefits of technology are a little more important here than elsewhere in the world?

Different technology I think. Here we have the luxury of a huge number of well ties for example, what’s become more important is integrating the information we have, both geologically and geophysically and probably the engineering information as well. The only way you’re going to be able to understand how to add maximum value is to see the big picture. Then actually use the geophysics to help extract reservoir information and look for the remaining relatively small opportunities. You have to be able to do this very effectively and with a high probability of success, otherwise we won’t be making enough money.

How active are you in the foothills?

The foothills program right now is relatively quiet. We have just acquired one 3D, and we’re looking at that. We’re also doing some work up in northeast BC.

What other areas is BP active in within Canada?

Deep Basin gas, we still have some interest in shallow gas in NE Alberta. Still some interest in the Alberta foothills and we see a lot of opportunity in northeast BC. As well, there is still limited activity around the old Kaybob and Windfall type pools.

How about the East Coast?

That’s a good point. When I said we are a harvest organization, that is with regards to western Canada. BP sees opportunity in both the Mackenzie Delta and offshore east coast, for some world scale type exploration opportunities, and we’re pursuing those at this time.

As you pointed out, exploration in the foothills is really challenging. How do you gear up, in terms of new technologies, or say processing, to overcome these challenges?

I think you need two things. The most success I’ve had when working on foothills data is when you work closely with the processor. You have to know, or have some idea of what you think the answer is going to be, and you can develop that over time as you get to understand your data. Then you have to go back to your processor and go over it one more time just to try to make it that little bit better, knowing what you know now. Certainly the best success is working with individual processors at whichever institution you care to be processing at, but work with that individual to develop a good rapport so that they understand the data, they know what you are looking for, and they can actually help you get the answer you need. It’s a very integrated piece of work between the interpreter and the processor. You also need to involve the geologist, because they see different things than we do and can integrate their knowledge as well. Every little bit you can get helps to achieve a better picture.

How much does a specialized type of processing come in?

There are various techniques, the AVO inversion-type methods I’ve worked with to date have not proven to be all that useful because of the quality of the data itself. Things like depth migration can add real value, but it’s a lot of work. You have to have the correct general ideas to start with, keeping it simple enough so your depth migration starts out from a good point, then improve the picture as you go along. Our experience has been that depth migration involves an incredible amount of work and expertise to do it properly, as well as a considerable amount of time to learn how. People have to learn that it’s not as simple as just sitting down and doing it, or just sending it off to a processing shop. It does take time.

It does require a good velocity model as well, you need accurate velocity information for the area.

Right. That’s part of the reason for saying you have to work to get the answer. You have to work to refine the velocity model. It’s come a long way, there are much better processes now for updating velocity models than there used to be. As well people are learning to use the data better to give them better information about how to update their velocities. All of this is a big improvement over when I first started looking at depth migration about 15 years ago, it was a very cumbersome process. It was very painful going through several iterations. Now the processes are better, the algorithms are better and the increase in quality is huge.

Back around 1997, 1998 Amoco was quite highly regarded with respect to their depth imaging capabilities. I believe at the time locally, depth migration was a fairly common in-house process. Since the merger, and the displacement of the research centre, here as well, what has become of this?

We still have an imaging group in Houston, still doing state of the art algorithm development. I’m not personally aware that we are using that group locally, but I know we still have access to people who are doing current development. We have also taken advantage of the relationships we have with former employees at the companies where they are now working, and using their technology when appropriate. I think what’s important is maintaining the relationships with the individuals; and whether or not they work within or outside your company you can develop a mutually beneficial working relationship. It’s in our best interests as companies to establish those relationships.

There are those in BP who think some technology should be developed within the contractors. You can spread the cost of development over a number of companies that need to use it, and let them all put something into the development of new technologies. The contractors are the ones who see the most examples of the use of the new technologies and get the benefit of all the extra work using that technology. Having said that, companies such as BP have to be willing to pay a price that is sufficient to enable these companies to afford to do this development. If they squeeze the contractors too hard then there is no money left to do that work, and we will eventually suffer because it won’t be done there, it won’t be done here, and pretty soon it won’t be done at all.

Unfortunately one of the problems with technology is everyone wants to see the payout but the payout is over years if not decades. We have to keep supporting it in order for us to keep moving forward as an industry. For instance this inversion work I’m doing, the beginnings of inversion were out when I was in university in 1980, and it was probably the end of the 80s when you started to see commercially viable inversion products. Now, 10 or 15 years later we’re starting to get some really good results out of inversion where we are actually modeling things like rock properties properly. So this is 25 years in the making. Looking back over 25 years the difference is phenomenal, but if you look at any one of those years you would think not much has happened from the previous year.

Do you think part of the pace of development is related to the fact a lot of it is done by the contractors, who have to finance it through regular revenues?

I think the industry has to strike a balance. It has to realize that the work has some value and that the money has to come from somewhere, whether you do it individually or collectively. Back in the 1970s all of the major companies had large research centres, and over time the burden has been moved onto the contractors, not only geophysical, but on the engineering side as well. Then there has been a move to squeeze for profit, and at some point something has to give. Unfortunately it will not become apparent that there has been a problem, because year over year it will be difficult to see. It’s just that two decades from now we will not be as far ahead as we would have been, had we put the effort and the money into it.

Do you see the larger companies recognizing the need for technology to stay competitive?

That’s right, but there’s also the problem that you have the really large producers who have the budgets and can afford to pay for it. They are now in competition, certainly in western Canada, with a lot of very small companies who are simply trying to exploit what they can, and don’t have the budgets to fund research. Not so much that they don’t see the benefits of it, but they are more concerned with surviving day to day, and keeping the company going.

Historically, by doing research, companies felt that they had an advantage over the competition in some particular area. By funding research by contractors, or in academia, or via some sort of consortium that advantage is lost. Do you feel there is some sort of trade-off involved?

There is a trade-off. I think since there is no visible immediate payoff they have a hard time justifying the expenditures for the effort, the money they have been putting in. That’s a decision that’s been made over many years, from not seeing enough benefit, when they actually have to measure benefit. I must say that here at BP we see it as important to have people who know how to use the technology and not so much develop it. The real advantage is in being able to take this and use it effectively; I think this is where they see the big value to themselves, and why we’re kind of done with research now.

Over the last few years it seems some companies have moved towards taking advantage of the knowledge contractors have in that the contractor has had the opportunity to be exposed to work from many different companies. There is an implicit knowledge gain in having been exposed to a wide variety of different problems.

That’s a valid point, I actually believe in that. There is value in going to contractors, they don’t give away corporate secrets, but they do have ingrained in the way they do things the benefit of having done the work. They know the things that work and the things that don’t work to produce the product. So you get a better product in the long run by having worked with these people, because they do have that advantage which you don’t. There’s an advantage to developing your own stuff, but there’s a potential disadvantage that you can become very insular, and you can go down a path that can become very narrow, and you don’t get the benefit of a broader scope. I think there’s a bit of give and take on both sides.

At the same time, I don’t know if it’s really advantageous for industry to follow this path. For example, Amoco had an excellent research facility with a large annual budget, which came out with a lot of new ideas and new technology every year. That has virtually stopped. We now have new technology coming from contractors, universities and oil companies who have a small R&D department. For the industry I don’t think this is a very good trend.

I think we are currently seeing what I hope will be a low spot in the amount of technology being developed. Relying on universities for research, the potential downside is they don’t always have the practical knowledge of what results are really important and how we are going to use the technology for day to day exploration. They do extremely good work, but sometimes it can be directed the wrong way. You have to work with them to guide them to where the applications are, but they are not always solely interested in the practical implementations. And I’m not sure it’s fair to expect them to do that type of work. The universities should be developing the ideas that 20 years from now will be very valuable, but presently need the appropriate theoretical frameworks.

The next level is to take those ideas and develop them into practical methods. I think there are some gaps there. That becomes the real point of discussion, who is responsible for doing that, how do we get that accomplished? The producers are the ones who have the deeper pockets and ultimately are paying the bills, whether they want to admit it or not. They are the ones who have to have enough of a budget to actually pay for this.

There needs to be a mechanism to have the money flow through to those who are actually doing the development. It’s up to the developers to go through the ideas that are coming out of the universities or wherever, and filter out the ones which are going to have practical benefit, and make them work. In addition to money, the producers can offer advice about what are the important problems, and contribute their expertise as well. There has to be this back and forth dialog, and we need to work together in order for it to be effective and efficient.

It’s difficult for the producers who are ultimately responsible to their shareholders to justify expenditures with a long-term payoff in a climate where results are expected quarter to quarter. You need to have faith that over the years what you are developing will add value to the bottom line. I think over the last few years we have taking advantage of intellectual capital, squeezing the value out of what has been done research-wise in the past. If we want to move ahead we have to be willing to ante up a little more.

What are your impressions of the geophysical community here in Calgary, as compared to Houston for example?

My time in Houston was relatively short, just about a year. What I did find was a big difference in culture. In Houston I was working for BP, which means you are out in a complex on the west side of town which is miles from anyone, including your partners and competitors, so you have very little interaction on a daily basis with either of them. To go and visit your processor is a half hour or hour drive sometimes. Here I can walk across the street to any one of a dozen processors, or walk across the street to have lunch with the people I’m either in partnership with or in competition with. I think we have far more interaction within the geophysical community as a whole here in Calgary. Even going to a Geophysical Society of Houston meeting was a major undertaking, an hour’s drive. I can walk across the street here and go to a luncheon. You’re far more inclined to take part in the opportunities when you have a greater network of people. I think we have a really unique place here in Calgary. It’s a much more closely knit community, the people all know each other, and it’s a very good working environment.

People tend to look south of the border in terms of employment due to the opportunities and potential for monetary gain. Did you ever consider this?

I went to Houston; it was a great opportunity. I learned a great deal, and got to work with people within BP who taught me a lot, and I felt I was able to give back with some of the things that I knew. Financially I would probably be better off living in Houston, and I have nothing against Houston, having lived there a year. However, I also like the life I have here in Calgary, I’ve spent the last 24 years living in Calgary, I grew up in Alberta, and to me this is home. I would have to start over again in Houston, and the opportunities I have here are more than sufficient to make me happy. I enjoy the opportunities and the people I work with.

What are your other interests apart from work?

I like to curl; I’ve been doing that for 35 years, so I take part in the DoodleSpiel. I’m a really bad golfer, but I’m trying to get better, I actually improved my game in Houston, (one of the plusses of living in Houston you get to play golf all year round)). I also sail; I have a boat on the west coast. I’m also an instructor for the Canadian Yachting Association. Currently I’m teaching a celestial navigation course.

Based on your experience, what advice would you give to young people in our industry?

I think people have to persevere, it’s becoming a very tough industry in some ways, and it’s not as easy as when I first entered it. Back then there was all sorts of energy and enthusiasm, but in the last decade it’s been very tough. At the same time it’s a very rewarding and challenging career. Find the things you think are important, don’t worry about the financial side early in your career but focus on the technical side. Where you add value is in being able to do the things others can’t. Whether you pursue processing, interpretation or acquisition, gather all the technical knowledge that you can. Work to understand the technology. Your value is in the technical skills you possess, and someone will be willing to pay you for them. There is no fear in being unemployed, if you know enough, the industry is large enough that someone will be interested in what you know. You have to get to a technical level where people see the value. You have to find your own way, do what you feel is right in you’re career and you’ll be happy.

Do you feel it’s necessary for someone starting out in geophysics to go through the three phases, starting in acquisition, going through processing, and into interpretation?

I think that while you can always specialize in one aspect, the danger is you don’t have the perspective on how it all fits together. I have benefited a great deal from having had at least some limited time in the field. If you’ve never been out planting geophones, you don’t necessarily appreciate the real world problems that can be encountered in the field.

I was also fortunate to have been able to process at Amoco when we had internal processing. You learn to get a feel for what you can do with your data, how hard you can push things. As well, you learn to recognize problems, you can see when things haven’t turned out as you would have expected. By doing it you gain perspective, you develop a basis for how much you can trust your data. Every geophysicist can benefit by seeing the other side of the business in some fashion.

It is a fun industry, I’ve always enjoyed it.

What are your plans for the future?

I’d like to keep working. Maybe in ten years I’d like to be sailing around somewhere, but for right now just keep working. I think I’m making a worthwhile contribution, for the first time in my career I think I’m adding a lot of value back. I think I know enough now to be maybe dangerous. There are some things I think need to be done and I am going to try and push them in that direction.

Thank you very much for giving us your time Dave. It has been a pleasure talking to you.