2015 CO2 Conference Week
Wednesday, December 9, 2015
Seminar on the Origins, Processes and Exploitation of Residual Oil Zones
Midland Center
Midland, Texas
2
Table of Contents for the ROZ Seminar
1 Introduction: The Evolving Understanding of ROZs………..…Melzer
2 The Science of ROZs ………………………………...Trentham/Vance
3 ROZ Properties and Characteristics ………………………..….Melzer
Break
4 The Permian Basin ROZ Resource (San Andres
Formation) …………………………………………V Kuuskraa/ARI
5 CO2 EOR and Depressuring the Upper ROZ (DUROZ)
Case Histories …………………………………...Trentham/Melzer
6 Big Horn Basin (Wy) ROZs …………………….…..…….EORI/Melzer
7 Williston Basin (ND, SD) ROZs …………………………..…….Melzer
8 ROZ Wrap-up and Buffet Lunch ………………………………..Melzer
Optional Field Trip to Seminole San Andres Unit (Separate Ticket Required)
5:30 -7:30 pm - Reception at the Midland Center
Section
72
Section 3
ROZ Rock and Fluid Properties and Characteristics
What the Field Data Tells Us
Steve Melzer
73
ROZ Rocks/Oils/WatersOutline
• Late Stage Diagenetic Overprinting
• ROZ Oils
• ROZ Waters
73
MPZ vs. ROZ Petrophysics
Petrophysics
Core Observation
Core Analysis
Adapted from Thurman, Legado Resources, CO2 Flooding Conference, Dec 2010
74
SiO2
CaCO3
Ca Mg (CO3)2
7575
76
Porosity and PhotoElectric Cross Section Log
Northern PB San Andres Formation Example
PhotoElectric Cross Sectional Value of 3:
= Dolomite
(Anhydrite and Calcite = 5+)
76
77
CR
OSSP
LOT P
OR
OSITY &
DR
Y WEIG
HT SU
LFUR
FRO
M TH
E GA
MM
A SP
ECTR
OSC
OP
Y LOG
0
0.0
2
0.0
4
0.0
6
0.0
8
0.1
0.1
2 52
00
53
00
54
00
55
00
56
00
57
00
58
00
59
00
60
00
Dep
th in
feet
SpectroLith Dry Wt Sulfur
00.0
5
0.1
0.1
5
0.2
0.2
5
0.3
Porosity - Decimal
Dry W
eight Su
lfur (lb
/lb)
PX
ND
_HI (R
t Scale)Porosity and Sulfur
Composition (Spectroscopy) Log
NE Shelf San Andres Formation (PB) Example
Sulfur Track on SpectroLith© Computation:
Increasing Sulfur in the Inverted Transition Zone
77
78
What Do We Know About ROZ Oils?
78
79
SSAU MPZ and ROZ Oils
79
80
MPZ and ROZ Oil Comparisons
ROZ
Oils
80
81
Remember this Slide?
Let’s Think about the Consumed
Hydrocarbons
81
82
MPZ and ROZ Oil Comps
82
83
Other Permian Basin Oil Data
83
84
Hypotheses
• Microbes (Anaerobes) modify oil composition
• Microbes (Anaerobes) create H2S during the process of oil
composition modification (source the S from anhydrite)
• A variety of Sulfurous Chemicals are also a by-product of the
Anaerobic Process
So what evidence of these processes do we have?
84
85
The Anedoctal Evidence
• Sour Oil and “Sulfur Water”
• And How about oil composition
changes?
85
86
GC Analysis
MPZ Reservoir Oil From ROZ Interval
Permian Basin, San Andres Oil from Goldsmith Field
Sample UH-00037-001
c3_m
nc4
c4_2m
nc5
c4_22dm
cp
c4_23dm
c5_2m
c5_3m
nc6
c5_22dm
mcp
c5_24dm
c4_tm
bz
c5_33dm
cx
c6_2m
c5_23dm
cp_11dm
c6_3m
cp_c13dm
cp_t13dm
c5_e
cp_t12dm
nc7
mcxc12dm
cp_e
tol
nc8
ai9
ebz
mxy_pxy
oxy
nc9
ai10
nc10
ai11
nc11
nc12
ai13
ai14
nc13
ai15
nc14
ai16
nc15
nc16
ai18
nc17
pr
nc18
ph
nc19
nc20
nc21
nc22
nc23
nc24
nc25
nc26
nc27
nc28
nc29
nc30
nc31
nc32
nc33
nc34
nc35
File: 11G10014.D\FID2B.CHDate & Time: 3/17/11 4:30:06 PM
20 40 60 80 100 120 140 160
100
200
300
400
500
600
700
Sample UH-00037-002
c3_m
nc4
c4_2m
nc5
c4_22dm
cp
c4_23dm
c5_2m
c5_3m
nc6
c5_22dm
mcp
c5_24dm
c4_tm
bz
c5_33dm
cx
c6_2m
c5_23dm
cp_11dm
c6_3m
cp_c13dm
cp_t13dm
c5_ecp_t12dm
nc7mcxc12dm
cp_e
tol
nc8
ai9
ebz
mxy_pxy
oxy
nc9
ai10
nc10
ai11
nc11
nc12
ai13
ai14
nc13
ai15
nc14
ai16
nc15
nc16
ai18
nc17
pr
nc18
ph
nc19
nc20
nc21
nc22
nc23
nc24
nc25
nc26
nc27
nc28
nc29
nc30
nc31
nc32
nc33
nc34
nc35
File: 11G10015.D\FID2B.CHDate & Time: 3/17/11 7:47:44 PM
20 40 60 80 100 120 140 160
100
200
300
400
500
600
700
Sample UH-00039-001
c3_mnc4
c4_2m
nc5
c4_22dm
cp
c4_23dm
c5_2m
c5_3m
nc6
c5_22dm
mcp
c5_24dm
c4_tm
bz
c5_33dm
cx
c6_2m
c5_23dm
cp_11dm
c6_3m
cp_c13dm
cp_t13dm
c5_e
cp_t12dm
nc7
mcxc12dm
cp_e
tol
nc8
ai9
ebz
mxy_pxy
oxy
nc9
ai10
nc10
ai11
nc11
nc12
ai13
ai14
nc13
ai15
nc14
ai16
nc15
nc16
ai18
nc17
pr
nc18
ph
nc19
nc20
nc21
nc22
nc23
nc24
nc25
nc26
nc27
nc28
nc29
nc30
nc31
nc32
nc33
nc34
nc35
File: 11G10147.D\FID2B.CHDate & Time: 7/22/11 1:49:31 PM
20 40 60 80 100 120 140 160
100
200
300
400
500
600
Acquired with corporate support from
86
87
GLSAU MPZ Oil Sample #213 – GC Results(MPZ Reference)
20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0
100
200
300
400
500
600
700
800
c3_m
nc4
c4_2m nc5
c4_22dm
cp
c4_23dm
c5_2m
c5_3m
nc6
c5_22dm
mcp
c5_24dm
c4_tm
bz
c5_33dm
cx
c6_2m
c5_23dm
cp_11dm
c6_3m
cp_c13dm
cp_t13dm
c5_e
cp_t12dm
nc7
mcxc12dm
cp_e
tol
nc8
ai9
ebz
mxy_pxy
oxy
nc9
ai10
nc10
ai11
nc11
nc12
ai13
ai14
nc13
ai15
nc14
ai16
nc15
nc16
ai18
nc17
pr
nc18
ph
nc19
nc20
nc21
nc22
nc23
nc24
nc25
nc26
nc27
nc28
nc29
nc30
nc31
nc32
nc33
nc34
nc35
Retention Time (min)
Retention Time - Minutes
87
88
MPZ Oil GLSAU
nC6 nC7 nC8
nC9 nC10 nC 11
88
89
ROZ Oil GLSAU GC ResultsSample R1A
20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0
100
200
300
400
500
600
700
c3_m
nc4
c4_2m
nc5
c4_22dm
cp
c4_23dm
c5_2m
c5_3m
nc6
c5_22dm
mcp
c5_24dm
c4_tm
bz
c5_33dm
cx
c6_2m
c5_23dm
cp_11dm
c6_3m
cp_c13dm
cp_t13dm
c5_e
cp_t12dm
nc7
mcxc12dm
cp_e
tol
nc8
ai9
ebz
mxy_pxy
oxy
nc9
ai10
nc10
ai11
nc11
nc12
ai13
ai14
nc13
ai15
nc14
ai16
nc15
nc16
ai18
nc17
pr
nc18
ph
nc19
nc20
nc21
nc22
nc23
nc24
nc25
nc26
nc27
nc28
nc29
nc30
nc31
nc32
nc33
nc34
nc35
Retention Time (min)
89
90
ROZ Oil GLSAU
nC6 nC7 nC8
nC9 nC10 nC11 nC12
90
91
Another Basin,
Another (heavier) Oil
91
92
Bighorn Basin, Wy Tensleep OIlOil Properties are similar in TZ/ROZ and MPZ*
GC Analysis
MPZ Reservoir Oil From Non-productive Wells (ROZs?)
?
Baseline Profile; Meaning?
92
93
Needed Work
• Get Oil Samples from Various Vertical Positions in the Type 3
ROZs
• Get Oil Compositions Paying Close Attention to Miscible-critical
Components (C-5 to C-20)
• Get and Analyze Oils from Type 1 and 2 ROZs to Compare to MPZ
Oils
• Look at Both Microbial and Diffusivity Explanations for HC
Component Reductions
93
94
What Do We Know About Type 3 ROZ Water?
94
95
PB Field #1
95
96
PB Field #2 – Water Salinities
96
97
Big Horn and Other BasinsWater Salinities
• Water Can Actually be “Fresh”
These Type 3, Laterally Flushed, ROZs can be
thought of in a Pore Volume Flushing Context
• In our First RPSEA Report (West Side of the Central Basin Platform),
we Modeled and Calculated the San Andres Hydrodynamic Flushing
at 17-46 Total Pore Volumes (15 million years) using DST*-derived
Permeabilities
* Drillstem Test
97
98
Proximity to Source WatersFor Type 3 ROZs
• The Closer to the Source and
• The Higher the Formation Permeability
Then The Greater the Pore Volume Flushing and Fresher the Water
• Does that Affect the Residual Oil Saturation? That is, is it Like a Low Salinity Water Flood?
• Should We Expect Variable Waters Even in a Project Area (Vertically, Horizontally)?
98
99
Section 4
The Permian Basin ROZ Resource (San Andres Formation)
Our report on this is pending and under review at RPSEA and DOE)
Vello Kuuskraa
Advanced Resources
International
100
The Three Residual Oil Zone Resource Studies to Date
• 2006 - Brownfields Beneath 56 fields
(45 San Andres/Grayburg Fields)
• 2014 – Four County Greenfield ROZ
Study (All San Andres)
• 2015 – Eight County Greenfield ROZ
Study (All San Andres)
101
Summary of ROZ Brownfield Study(2006)
102
Brownfield Recoverable Resources
103
RPSEA II Study Foundation:San Andres Fairway Mapping
November 2015
104
Early San Andres Fairway Mapping
(Circa 2009)
San Andres ROZ FairwaysOriginal 4 Counties Chosen
104
105
In-Place San Andres ROZ "Fairway" Resources: Four-County Area of West Texas
County
In-Place Resources
Total Higher Lower
Quality Quality
(B Bbls) (B Bbls) (B Bbls)
Gaines 45.5 35.4 10.1
Yoakum 20.7 16.1 4.6
Terry 17.9 10.6 7.3
Dawson 27.8 14.6 13.2
Total 111.9 76.7 35.2
Source: Advanced Resources International, 2015.
106
Also Performed a Recoverable Resource Estimate and Checked Against First Draft of KM’s “Tall Cotton”
Recoverables
Exhibit 7.3.3 (EX-3) Comparison of Gaines County Volumetric San Andres ROZ "Fairway" Reservoir Properties: Tall Cotton ROZ “Fairway”, Seminole Oil Field ROZ,
and This Study’s Partition #3
Volumetric Reservoir Properties
Seminole Oil Field ROZ1, 2
“Tall Cotton” ROZ “Fairway”3
This Study Partition #3
(ROZ “1” Only) (ROZ “1” & ROZ “2”)
ROZ “1”
ROZ “2”
Total
Gross Pay (feet) 246 540 244 248 492
Net Pay (feet) 197 450 208 224 432
Porosity (%) 12.8%-15% 12% 10.2% 9.7% 10%
Oil Saturation (%) 32% 35% to 50% 36% 36% 36%
1Honarpour, M., 2010. 2Bush, J., 2001. 3 Railroad Commission of Texas, 2014.
Source: Advanced Resources International, 2015.
What portion of this in-place San Andres ROZ “fairway” oil resource can be mobilized
107
Recoverable Resources(4-County Study)
108
Expanded OIP Resource Study to 8 More Counties (2015)
109
San Andres
Greenfield
ROZ
Assessment
Study
110
12-County ROZ Study
(ARI)
2014 (4-county) and
2015 (8-county)
111
12-County Greenfield ROZ Resources
112
Section 5
ON-GOING RESIDUAL OIL ZONE DEMONSTRATION PROJECTS
ROZ Seminar
CO2 Conference
December 2015
Bob Trentham & Steve Melzer
113
Section 5a
CO2 EOR Case Histories
Bob Trentham
114
There are Two Categories of Projects Currently Exploiting the ROZ
(This Section has an Engineering Emphasis)
a. EOR Exploitation (currently limited to CO2 EOR and
the Permian Basin)
b. Depressuring the Upper ROZ (DUROZ) also
Occasionally Referred to as Depressuring EOR
115
Subsection 5a
ON-GOING CO2 EOR RESIDUAL OIL ZONE DEMONSTRATION PROJECTS
ROZ Seminar
CO2 Conference
December 2015
Bob Trentham
116
Permian Basin Stratigraphic Column, Cumulative Production to Date & Estimated OOIP
117
MIDDLE SAN ANDRES FORMATION PALEOGEOGRAPHYwith Location of Industry Documented ROZ Zones/Fields
VACUUM FIELD
Guadalupe
Mountains
Midland
BasinDelaware
Basin
Central
Basin
Platform
Shelf Margin
“reef”
Texas
New MexicoMidland
San Angelo
Restricted
Carbonate Shelf
Open
Marine
Marathon
Overthrust Belt
NORTHWEST
SHELFNORTHERN
SHELF
EASTERN
SHELF
WASSON FIELD (3)
SEMINOLE FIELD (5)
GOLDSMITH FIELDHobbs
HANFORD FIELD
MEANS FIELD
GEORGE ALLEN FIELD
E. SEMINOLE FIELD
TALL COTTON PROJECT
118
The List of On-going ROZ CO2 EOR Projects
*** BF = ‘brownfield’ (requires wells deepenings;
GF = ‘greenfield’ (requires new wells)
***
119
Horizontal
Depressuring
GEORGE ALLEN
Peripheral
Greenfield CO2 Flood
TALL COTTON
Greenfield
CO2 Flood
GOLDSMITH
Brownfield
ROZ CO2 Flood
& Gas Lift
SEMINOLE
Brownfield
ROZ CO2 Flood
119
120
SEMINOLE FIELD
THE “GOLD STANDARD” OF ROZ PROJECTS
121
Tall Cotton
A Greenfield project without an associated Main Pay.
Seminole
Field
West
Seminole
Field
122
Anschutz #1 Keating
Read & Stevens #1-427 Charlene
“Bittner Field”
2 wells, the #1 Keating and the #1-427 Charlene, provided the information necessary
to establish the presence of a significant Greenfield ROZ in the area.
Tall Cotton
123
Subsection 5b
EXPLOITING THE RESIDUAL OIL ZONE VIA DEPRESSURING
ROZ Seminar
CO2 Conference
December 2015
Steve Melzer
124
Has the Permian Basin Entered a Second and New Era of Horizontal
Well Production?
125
CONCLUSIONS
• Wolfcamp Oil has effectively caught up with San Andres Oil Production
• Wolfcamp Gas Blows away San Andres Gas (40 bcfpd to 3)
• We Would Suspect the NGL Production Story is a Very Similar One
BUT……is there more to this story?
San Andres
Carbonat
e
10 mm
10 mm
Wolfcamp
125
3 mm
9 mm
126
Other Critical Factors to Consider
• The Carbonate Formation Decline Curve has Historically been very
Gentle (4-5% per year) - as witnessed on the last slide
• The Shale Decline Curves are Very Steep Creating the Need to Keep
Drilling at a Rapid Pace
• The $100/bbl Oil Era Allowed Technology to Leap Forward; $40-50/bbl
Oil will still have Sweetspots to Exploit - especially in the PB
• Is There Anything New with the Carbonates? Could they be a Hybrid
between the Gentler Decline Curve and Big Quick Returns on
Investments that the Shales Give?
127
It is Very New but There is IndeedMore to the Story
• A New Horizontal Resource Play (Depressuring the Upper ROZ) in the San Andres has Just Entered the Picture and Shows Promise of Adding Another Dimension to the PB Production Story as Time Moves Forward
• How Big is this New Play?
• What are its Characteristics?
• Does This have Scalability to Other Part of the U.S. and World?
128
Insights on An Overlooked Production Mechanism and Demonstration Case Histories:
A New and Exciting San Andres Residual Oil Zones Oil Play - Depressuring the Upper ROZ (DUROZ)*
December 2015
* Can Also Be Refered to as Depressuring EOR (DEOR)
129
Where to Start?
Much has Been Learned About Residual Oil Zones in the Last Decade
Almost all of it from Work Here in the Permian Basin
130
Current Thinking on ROZ’s
Oil and gas industry thinking has historically believed that residual
(immobile) oil can only be recovered using enhanced recovery
techniques. The fastest growing technique uses carbon dioxide-
enhanced oil recovery (CO2 EOR) and is currently being used to
recover oil from ROZs in 15 different projects as you just saw.
And….these ROZs are Predominately Oil Wet with Large Immobile
Oil Targets
Are EOR injection projects the only way?
131
An Exciting New Strategy for ROZ’s
• Two companies, drilling and completing horizontal wells in Yoakum
County, Tx, have very recently found that they can make a ROZ
productive without using an injectant (classic EOR). We believe that
they did not originally understand exactly what was controlling the
production but, nonetheless, their results are exciting and speak for
themselves.
• As of the Present, over 30 wells have been drilled and, after roughly a
month of 100% water production, all showed climbing oil cuts and, at
the 90th day of production, between 200-300 bbls/day.
132
133
133
The Permian
Basin
We are looking at this
Area in
particular
*
* ROZ Fairway Thickness Exceeding 100’
133
134
On-going
DURO
Z Play
AreaYoakum
County, TX
134
135
Private and Confidential Material 135
Analog (Reference Case History) Well
Current DUROZ
Play AreaYoakum County, Tx
136
Manzano/Walsh Area Map 34599
A
36127
36191
31933
A’
Yoakum
Cochran
Lea
Gaines
137
Manzano-Walsh Cross Section A-A’ (N-S)
-1500 msl
-1600 msl
138
138
DUROZ*: An Evolving Strategy for Producing the ROZ
• Go to a ROZ Fairway Location, Seek and Secure a Water Disposal Option (all DUROZ ROZ wells produce water cuts in the range of 75-85%)
• Target the Good Gas/Oil Ratio ROZs
• Expose a Large Section (e.g., Long Lateral)
• Stimulate the Zone
• Pump Very Large Volumes of the Water Until Reservoir Pressures Falls Below ‘Bubble Point’
• Be Patient
• Watch Oil Cuts Rise
* Reservoir Depressuring the Upper ROZ
139
Private and Confidential Material 139
The DUROZ “Play” (as
Currently Under Development as
of Jan 2015)
139
140
Starting the Completion(First Stage Perforation)
* Hydrofracture Technologies being used include gelled fracs,
hybrid fracs and “slickwater” fracs – all successful
*
141
Completing the Perforations(and Readied for Staged Hydraulic Fracturing)
Stage 1 FracStage 2Stage 3
142
Analog Well Performance (1)(DUROZ Case Histories)
• The following data is from the older upper ROZ
wells and one in particular we call our analog
horizontal San Andres ROZ well in Yoakum
County, Texas
• Since drilling and completing the analog well in
late in 2013, 30 more DUROZ wells have been
drilled and over 25 completed and, according to
our conversations with the two companies
involved, hydrofrac optimization is improving on
the analog production case history.
• Experimentation has been occurring with 9000’
laterals and recent costs of the longer lateral wells
has come down to $2.75 million where the 4500’
lateral costs range from $1.8-2.1 million
143
Horizontal DUROZ Wells - Daily Production History
Winbert 1H
144
Horizontal DUROZ Wells – Cum Production Data
Winbert 1H
145
Reservoir Depressuring Stats
146
Analog Well Performance (2)(Analog {1-mile} DUROZ Case History)
• A Good Average Well is also the oldest of the upper ROZ wells (Winbert 1-H), we’ll call our analog horizontal San Andres ROZ well in Yoakum County, Texas
• Long Term Well Decline Analysis Complicated by the Addition of Two Wells to the Lease
147
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0
50
100
150
200
250
300
350
400
450
500
Aug-13 Nov-13 Mar-14 Jun-14 Sep-14
Cu
m O
il i
n B
bls
OIL
PR
OD
UC
TIO
N (
bo
pd
)
MONTH- YR
WINBERT HORIZONTAL LEASE PRODUCTIONYOAKUM COUNTY SAN ANDRES
OIL (BOPD)
CUM OIL (BBLS)
Winbert (Brahaney Area) DUROZ Case HistoryYoakum County, Texas
12 Months
Well Drilled
Aug 2013
148
The Produced Water Volumes are Very Large
148
149
Winbert Lease Update
WINBERT LEASE HORIZONTAL SAN ANDRES ROZ WELLS PRODUCTION
YOAKUM COUNTY, TEXAS
0
5,000
10,000
15,000
20,000
25,000
0 5 10 15 20 25 30MONTHS AFTER 1st WELL COMPLETION
OIL
PR
OD
UC
TIO
N (
bo
pm
)
0
1
2
3
4
5
We
ll C
ou
nt
WINBERT LEASE OIL (BOPM)
WCNT
150
The DUROZ Play Summary
151
DEOR/DUROZ Review {1}
• The DEOR/DUROZ Play, although very new, takes advantage
of the new understanding of the widespread ROZ Fairways,
high Sorw Values, and excellent reservoir properties of the
Permian Basin San Andres porosity intervals
• The Play also takes advantage of the technological advances
in horizontal drilling and completions
• The two technologies converge to make a very commercial
horizontal play even at $50/bbl oil pricing if water costs can be
contained
152
DEOR/DUROZ Review (Cont’d)
• The Bottom of the Prospective ROZ may not be a
lithological change bringing with it hydrofracturing
risks or it can be a wackestone (tight, shaley
dolomite) providing an excellent containment
(bottom) for the hydrofracs (~ROZ thickness of 100’)
• DUROZ Zones can be stacked
• This play will have “sweetspots” like other resource
plays but could be of enormous extent throughout the
San Andres Shelf Regions of the PB
153
DEOR/DUROZ Summary (Cont’d)
• This Area of Western Yoakum County is
Laced with Dry Holes with an Occasional
Shingle of Mobile Oil at the Top of the
ROZ – a Classic Indicator of ROZ
Greenfields
• Conventional Thought Keeps Saying that
it has to be Mobile Oil that is Being
Produced (Tight Oil)
• But with 30-40% Sorw Values in the ROZ
Greenfields, there are Plenty of Reasons
to Believe it is Residual Oil that is being
Produced (i.e., Camp #3 – see Slide #16)
154
With all of this as the Premise…
What about ROZ Scalability to Other Places?
For Both (CO2) EOR and for DEOR/DUROZ
155
Comments on Scalability to Other Areas, Other Basins in the U.S. and Abroad
• San Andres ROZ
• Other ROZs in the PB (Grayburg,
Glorieta/Yeso, Clearfork, Abo)
• Hunton Dewatering Play (OK)
• Big Horn Basin (WY)
• Powder River Basin (WY)?
• Red River ROZ Play (Williston Basin)
• Others?
156
For more information and a complete set of slides – see 2015
CO2 Conference Results on www.CO2Conference.net