Enhanced Gravity Drainage Through Immiscible CO2 Injection in the Yates Field (Tx)

Paul Button and Chris Peterson KinderMorgan

10th ANNUAL CO2 FLOODING CONFRENCE Midland, TX December 2004
www.spe-pb.org

Yates Field Unit - Location Map

N

MIDLAND
NEW MEXICO TEXAS

BASIN
Midland

~ 90 miles South Midland/Odessa SE tip of Central Basin Platform Structural high point of the CBP

DELAWARE BASIN

26,423 Acres
SHEFFIELD CHANNEL
0 25 MILES 50

YATES FIELD HIGH POINT OF CBP

General Facts & History

Field Discovery - October 28, 1926 (Ira Yates 67th birthday)
Discovery Well:
I. G. Yates A No. 1 (Unit Well No. 4901)

Structure on Top of the San Andres Formation

Vertical Exaggeration ~ 9x.

North

Type of Reservoir
Highly Fractured Carbonate

Stratigraphy
1-D Interpretation
CGR HFS 5

Indicator Facies

50 meters

HFS 4

HFS 3

Fusulinid packstone/grainstone

HFS 2

11 km
HFS 5

Middle shelf Ramp Ramp crest

HFS 3 HFS 2 HFS 1

HFS 4

Shelf crest Inner slope

Outer ramp

East-West Permeability Slice

High Permeability Zones

3-D View of San Andres Structure with Fracture Connection Overlay

Yates Original Oil in Place (OOIP)

7Rv/Qn/Gbg SA (above +1,050) SA (+950 to +1,050)
+1,050 +950

Gross BBO . 0.5

2.8 1.4 4.2 0.3 5.0

Total (above +950) SA (below +950) TOTAL

Production History
BOPD

120,000 100,000 80,000 60,000 40,000 20,000 0 1925

Great Depression
Unitization

WWII

1945

1965

1985

2005

General Facts & History

Field Discovery - October 28, 1926 Highest Oil Rate = 205,000 BPD (Well No. 4930 in 1929) Total Wells in 1929 = 315 Total Production Capacity of Wells Exceeded 2 MMBOPD! Unitized July 1, 1976

General Facts & History

Gas Plant built in 1961 to recover natural gas liquids and prevent flaring

General Facts & History

West Side of Field
-Waterflood started in 1979
-Produced using pumping units -Polymer injection from 1983 - 1989

East Side of Field

-In-field drilling continued into the mid 80s -East side had flowing wells

A distinct east/west line of demarcation was considered to exist in the field

General Facts & History

1985-1991

CO2 injected into the gas cap on east side of the field for pressure maintenance

General Facts & History

1993 Nitrogen injection from ASU #1 (30 MMCFD) initiated for pressure maintenance 1996 ASU #2 (60 MMCFD) increased nitrogen injection.

General Facts & History

1998 - WALRUS program initiated
Acronym for Wettability Alteration of Reservoirs Using Surfactant

Surfactant was added with produced water and injected into the reservoir to enhance oil movement

WALRUS Process

General Facts & History

1998 Water Export commenced for reservoir management

General Facts & History

1999 2002 Steam injection pilot was run; post-evaluation in progress.

Historical Recovery Techniques

Primary Depletion/Natural Bottom Water Drive (NBWD) (1926 1976)

Gas Injection/Limited NBWD (1976 1985)

West Side Water Flood/Polymer Augmented WF (1981-1988) East Side CO2 Injection (1985 - 1991) Double Displacement Process (Co-Production) (1993-2000) Gravity Drainage (2000 Present)

Yates Field Reservoir

Recovery Processes
Primary Depletion Secondary Pressure Maintenance Tertiary CO2 PAW Tertiary DDP Tertiary Thermal WALRUS Gravity Drainage Process

Unit Formed

YFU Extraneous Gas Injection

Effective Free Gas Additions (MCFPD)
120000

90000

60000

30000

Flue gas

CO2

C1

N2

Solution gas

Yates Reservoir History

Discovery: 1926 Discovered in 1926 550 of Oil Column at Structure Top

1926 - 1976

Produced By Individual Operators Unitized in 1976 to Prevent Aquifer Influx

Gas Re-injected, Water Re-injected Oil Column Thinned Gas Cap Inflation Reservoir Dewatering Contact Lowering Contact Stabilization Gas Cap Injection Aquifer Maintenance By Offsite Disposal

1976 - 1992

1992 - 2000

2000 - 2005

Yates Field Unit Saturation Profile

Frac Frac GOC Frac

+ 1200

Matrix

Matrix

Matrix

Frac

GOC

WOC

WOC

+ 1050

Matrix
GOC WOC

WOC

+ 850

1926

1976

1990s

Present

Reservoir Review
So, Why Gravity Drainage?

Reservoir Recovery Process Screening

30

Displacement Processes

Formation Porosity %

Yates

Neutral Zone Depletion Processes

0 Low High

Total Formation Heterogeneity

Matrix surrounded by fluid-filled fractures

Matrix exposed to gas-filled fractures

Matrix exposed to gas-filled fractures

Matrix exposed to gas-filled fractures

Mobilization
1) Oil drains vertically through matrix until downward movement is limited by phase mobility.

GOC

WOC

Mobilization
1) Oil drains vertically through matrix until downward movement is limited by phase mobility.

GOC

WOC

2) When vertical mobility is limited, the oil migrates laterally into fractures and is Mobilized to be available for Capture.

Operations Material Balance

~109 MMCFD CO2 ~113 MMCFD Prod ~222 MMCFD

~17.6 MMCFD N2 Vent ~14.8 MMCFD Fuel ~3.3 MMCFD Gas Sales ~550 NGLPD
~151 MMCFD ~24,500 BOPD

~417,000 BWPD

+1050 Original WOC

+1015 Current WOC
Produced Gas Composition

+1040 Current GOC

~392,000 BWPD ~25,000 BWPD Export

N2 ~41%

CO2 ~30%

H2S ~3%

HC ~26%

Average Contacts Connected Wells

1120 120 1100 100

1080

80

1060

60

1040

40

1020

20

1000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

GOC

WOC

OCT

Well Count

Resaturation
1500

1) Resaturation is controlled by maintaining the position of the contacts 2) Goal - prevent downward movement of the oil column

1400

Elevation (FT SUB SEA)

1300

1200

Sw
GOC = 1045

to .11

1100

1000

WOC = 1015
900

800 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

So (Oil Saturation)
Current Oil saturation Futrure Oil saturation GOC WOC

Yates Horizontal Drilling Operations/Results

Horizontal Drain Hole Re-establish fracture connections

Production response from HDH wells

26,000

Gas
24,000 22,000

20,000

BOPD

Oil

18,000

16,000

Water

14,000

12,000

2005 (115wl) 2004 (130 wl) 2003 (75 wl) Base

2001 2002 2003 2004 2005

10,000

At a lower elevation and thinner column, the fracture connectivity within the oil column is reduced.

Why CO2 at Yates ??

After active fluid contact movement stopped need to develop method to enhance gravity drainage above Nitrogen injection

Possible EOR Processes

Thermal - Expensive and doesnt replace voidage Methane Injection Expensive for voidage replacement NGL Injection Expensive and technically challenging Immiscible CO2 Reasonable cost and positive
compositional effects

Why Immiscible CO2 Will Work at Yates

Compositional effects of Nitrogen Injection
Strips light end components Increase oil viscosity Negative impact on Kro

Compositional effects of Immiscible CO2

Decrease oil viscosity
Lab tests ~ -25 % from Non-stripped sample Lab tests ~ -50 % from N2 stripped sample Model ~ 30 % from N2 processed oil

Positive impact on Kro

Lab tests ~ 5 % from Non-stripped sample Lab tests ~ 12 % from N2 stripped sample Model ~ 7-8 % from N2 processed oil

CO2 injection results in improved oil mobility vs. Nitrogen injection

Oil Mobility = K * Kro m

Yates Compositional Model History Match

Production History Match
140,000 Model Oil Hist Oil 120,000 Model Gas Model Water Hist Water Hist Gas 200,000 100,000 250,000

80,000

60,000 100,000

40,000 50,000 20,000

J-26 J-31 J-36 J-41 J-46 J-51 J-56 J-61 J-66 J-71 J-76 J-81 J-86 J-91 J-96 J-01

Gas (MCF)

150,000

- Reasonable match on all fluids - Major oil difference due to documented leak oil - Water match on exported water
900

-Reasonable pressure match - Discrepancy due to large difference in fluid contacts across the reservoir in late 80s and 90s

Oil and Water (BPD)

800

700
Pressure ( Psi)

600

500

400

300
1/ 1/ 26 19 1/ 1/ 31 19 1/ 1/ 36 19 1/ /3 12 40 19 1/ /3 12 45 19 1/ /3 12 50 19 1/ /3 12 55 19 0/ /3 12 60 19 0/ /3 12 65 19 0/ /3 12 70 19 0/ /3 12 75 19 9/ /2 12 80 19 9/ /2 12 85 19 9/ /2 12 90 19 9/ /2 12 95 19 8/ /2 12 00 20

1052

New Pressure @ +1050

Yates Compositional Model History Match

Contacts vs time
1500 500 1450 450 1400 400 1350
Ft above Sea level

350

1300

300

1250

250

1200

200

-Reasonable fluid contact match based on available data early time -Very good fluid contact match late time

1150

150

1100

100

1050

50

1000 Jan-26 Jan-31 Jan-36 Jan-41 Jan-46 Jan-51 Jan-56 Jan-61 Jan-66 Jan-71 Jan-76 Jan-81 Jan-86 Jan-91 Jan-96 Jan-01 GOC OWC hist GOC Hist WOC Series7 OCT Hist OCT

Ft

1500

-Reasonable oil saturation match based on 1984 log saturation study -Projection of current matrix oil saturation

1400

1300

Elevation (Ft)

1200

1100

1000

900

800 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

So
12/31/1984 1984 Log Study 8/31/2002 1984 Ave (block)

Projected Oil Response from Yates Immiscible CO2 Injection Project

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2002 High Trend (BOPD) Medium Trend (BOPD) Low Trend (BOPD)

Oil Rate (BOPD)

2004

2006

2008

2010

2012

2014

2016

2018

2020

Year

Immiscible CO2 Injection Design

Vertical CO2 Placement
1500

Concentrate CO2 within 50 of current GOC

Elevation (ft above sea level)

Vertical Placement

1400

1300

1200

1100

Areal Placement
NW portion of Field (Area with high N2 content)

1000

900

800 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Matrix Oil Saturation

Current So Current GOC Top of CO2 Target Area Avg CLM Elevation

Planned CO2 Migration

Vertical
Migration Upward to GLM

CO2 Target Area

Areal
Recycle through Gas Plant and injected in SE Area

CO2 Recycle Area

Implementation of Immiscible CO2 Injection

CO2 injection started March 1st 2004 Used existing infrastructure to distribute CO2 to injection wells Converted gassed-out horizontal producers to CO2 injectors within 50 of current gas-oil contact Initiated injection at 42.5 MMCFD of CO2 N2 Rejection started March 2005 Current CO2 injection rate 109 MMCFD

Cumulative CO2 Injected Since March, 2004

Total CO2 Injected = 45.7 BCF

CO2 Inj. Well

Gas Inj. Well

CO2 Area Non-CO2 Area

CO2 Injection Assessment

Different GOR Behavior

CO2 Area Is Oilier

Different Vertical Declines Non-CO2 Area

CO2 Injection Assessment

All Wells Non-CO2 Area
12000

10000

Feb 05

More Efficient
Sep 04 8000 Feb 04

CUM OIL BOPD

6000

4000

Less Efficient
2000

0 0 10000 20000 30000 CUM GAS MCFPD 40000 50000 60000

CO2 Injection Assessment

All Wells CO2 Area
16000

14000

More Efficient
12000 Sep 04 10000

Feb 05

CUM OIL BOPD

Feb 04 8000

6000

4000

Less Efficient

2000

0 0 10000 20000 30000 40000 CUM GAS MCFPD 50000 60000 70000 80000

CO2 Injection Assessment

Vertical Wells Non-CO2 Area
7000

More Efficient
6000

Feb 04

Sep 04 5000

Feb 05

CUM OIL BOPD

4000

3000

2000

Less Efficient
1000

0 0 5000 10000 15000 CUM GAS MCFPD 20000 25000 30000

CO2 Injection Assessment

Vertical Wells CO2 Area
7000 Feb 05

More Efficient
6000 Feb 04

Sep 04

5000

CUM OIL BOPD

4000

3000

Less Efficient
2000

1000

0 0 5000 10000 15000 20000 25000 30000 35000 CUM GAS MCFPD

CO2 Injection Assessment

All Wells
30000 25000

More Efficient
Feb 05 20000 Sep 04

Aug 05

CUM OIL BOPD

15000

Feb 04

10000

Less Efficient
5000

0 0 20000 40000 60000 80000 CUM GAS MCFPD 100000 120000 140000 160000

Current Production
30,000 25,000 20,000

BOPD

15,000 10,000 5,000 0

2002 2003 Base Pre 05 HDH 2004 05 Phs 1 CO2 2005

Yates Field Response VS. Modeling Predictions

Field response much earlier than model predicted Portion of early oil production response may be response to redistribution of gas injection

Projected Oil Response from Yates Immiscible CO2 Injection Project

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2002 High Trend (BOPD) Medium Trend (BOPD) Low Trend (BOPD)

Oil Rate (BOPD)

2004

2006

2008

2010

2012

2014

2016

2018

2020

Year

8801 OBS

8816

Flush oil from thinning Imitates CO2 response

8815

Yates CO2 Expansion Options

Modify Existing Facilities
Increase N2 Rejection (to 30+ MMCFD)
CO2 Processing Pipeline Pump

Expand Delivery Capacity

Mix CO2 with Recycle Gas

New Facility Potential

New gas processing facility N2 Rejection Additional Pipeline for CO2 Delivery Simulation Driven