Abstract: A method of collecting and processing spectral data obtained from the earth's surface is employed to identify areas where hydrocarbon seepage to the surface is occurring. Intensity or brightness is detected from bands 4 and 5 of light reflected from a plurality of pixels, each pixel being a small subsection of a large sectional area of the earth's terrain. Band 4 and band 5 intensity values are accordingly obtained for each pixel. An alteration index, or H(x), value is then calculated for each pixel whereinH(x)=K[F.sub.4 (x)-F.sub.5 (x)],where K is a constant, x is a variable representing intensity, and F.sub.4 (x) and F.sub.5 (x) are functions of intensity for each respective band. Pixels can be selected for potential drilling if they have corresponding H values above a predetermined H value.