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KAPPA Consortium on Unconventional Resources – Draft – 7
th
Feb 2011
p6/10
E – Why a consortium?
In the last 20 years KAPPA has developed software using its own resources and funding. We
consider that developing new features is our problem and should be self-financed. We just sell
you the resulting products. Sometimes, our clients request developments that they fully or
partially finance in exchange for limited time exclusivity. To date we have never taken the
initiative for such projects.
In the past we have possessed all the expertise and had sufficient access to real data to
initiate and bring our own developments to market. But this is different. Unconventional gas is
new territory. The work we have done so far has been based on reviewing the literature,
theoretical assessments, a bit of common sense and a lot of hard work. We had access to just
enough data to validate our models. We could continue in this vein, keep on reading the
literature, implement what our users ask for and deliver products. However we believe this is
no longer sufficient:
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The stakes are too high and the technical cycles are too long. The industry is investing
billions, booking reserves and pinning their future on this now. A 5-year lag between a
relevant idea and its viable commercial availability in a PTA / PA / History Matching
software tool is too long when the correct analysis and subsequent forecast and reserve
booking could have such a massive impact on the cashflow and balance sheet.
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KAPPA cannot do this alone. Decisions to develop, or not, a model or process needs to
come from a collective of talented engineers exposed to real-world problems and not just
sieved from the literature by a software vendor.
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We need access to much more data to validate the different concepts and our
implementations.
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To put it mildly, we are not convinced by some of the things the industry is doing and
publishing. What we seek is the technical truth. To do this we need input from the
engineers who have been involved in this for years. We need to use external resources to
complement our know-how.
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If we collate all this, the work involved in the gathering of information, technical dissection
and implementation in the software is beyond our usual self-financing model. We then have
the choice of partnering or seeking outside finance. Both of these options are undesirable
as they conflict with our independent desire to provide solutions to our clients as a whole
and introduce a profit motive to the project that could override our overall objectives; the
technical truth and improving our software.
To summarize; we need more funds, more resources, more interaction with end users and
much more data. A consortium seems to be the right answer for such a combination of needs
for KAPPA and our clients.