ViaLogy is using its seismic technology to help an unnamed global oil major locate shale oil deposits.
The technology minnow, with a market cap of barely £18m, will use its patented QuantumRD processing technology to analyse 3-D seismic data and locate unconventional oil deposits in "tight" shale formations where porosity is very low. It will then map optimal horizontal drilling well trajectories through the sufficiently porous shale it has located, specifically through zones that are amenable to fracking.
This marks its first move into analysing 3D seismic data for shale exploration, which is among the fastest growing areas within oil exploration and production. The intention is that it will use existing data to find shale deposits and avoid costly exploratory drilling.
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There was no detail on the fee for the service, however in April the company changed its business model to charge on the basis of each square kilometre analysed.
Brendan Desouza, Analyst at house broker Seymour Pierce has a price target of 5.5p on the stock. He estimates that it won't be charging less than US$1,000 per square kilometre for such a service.
Its technology, developed by a former Nasa scientist, has only this year begun to make traction in the oil and gas exploration industry. So far Chevron, India's Oil and Natural Gas Corporation (ONGC) and another, unnamed, global oil and gas major have signed contracts with Vialogy to deploy the technology.
CM
