ROZs in the Permian Basin: Exploi6ng via Horizontals and EOR

L.StephenMelzerMelzerConsul2ng

PresentedattheFt.WorthConferenceCenter

April4,2017

Overwhelmed by the Shales…

There is a Second Horizontal Revolu6on in the PB

ROZs in the Permian Basin: Exploiting via Horizontals and EOR

Outline of Talk

•  WhatisaResidualOilZone(ROZ)?And,WhyalltheFuss?•  TheScience

§ Origins•  TheUnderpinningNo2onsandtheStudies•  TheThreeTypesofROZs

§ OilCharacterandOilSatura2onTargets•  TheEngineering

§ MobilizingMechanics–CaseHistories•  DepressuringViaHorizontalWells(akaDewatering)•  EnhancedOilRecovery

•  Summary

What is a Residual Oil Zone? •  AROZisaNaturallyWaterFloodedPaleoOilZone

•  ROZsExistBecauseaStage(s)ofTectonicsOccurredAYerOriginalOilEntrapmentwhereWaterhasMovedinandReplacedtheMobileOil

•  Historically,TheyHaveBeenMistakenlyCalledTransi2onZones(Brownfields,i.e.,belowMainPayzones)buttheyalsoExistwithoutOverlyingMainPayzones(“Greenfields”)

•  TheGroundbreakingWorkWasDonethisCenturyinthePBwhereCO2EORwasExtendedintotheROZbeneathExis2ngFields(Wasson,Seminole,etc)

•  TheOil&RockPropertyDataAcquiredBelowtheOil/WaterContactswasFundamentaltotheEvolvingUnderstanding.ThePropertyDataintheBrownfieldshasnowbeenAppliedtotheGreenfieldswithEqualSuccess

The Science Behind ROZs FundamentalPremise:MotherNatureCanMoveOiland

WaterAroundAYerOriginalOilEntrapment

• DoesSheDoitinaFashiontoPreserveSomeResidualOilSatura2on(Sorw)?

• DoesSheDoWhilePreservingOilProper2esandGasinSolu2on?

• WhyarethereAmpleSorwValuesintheseLongLivedNaturalWaterFloods?

Key Refs: 1. Melzer, L.S., “Stranded Oil in the Residual Zone,” US Department of Energy report, February 2006. 2. Trentham, R.C., Melzer, L.S., and Vance, D., “Commercial Exploitation and the Origin of Residual Oil Zones: Developing a Case History in the Permian Basin of New Mexico and West Texas,” Research Partnership to Secure Energy for America report, June 2012. 3. Trentham, R.C., Melzer, L.S., Vance, D., Kuuskraa, V.A., and Petrusak, R., “Identifying and Developing Technology for Enabling Small Producers to Pursue the Residual Oil Zone (ROZ) Fairways in the Permian Basin San Andres Formation,” RPSEA Final Report, Dec. 21, 2015.

Website Source for Documents: www.ResidualOIlZones.com

Three Types of ROZs

1.  PostEntrapmentBasinTilt

2.  BreachedorLeakySeals

3.  AsymmetricBasinUpliYandLateralSweep

Mapping the San Andres ROZs*

* Latest Mapping Ref: Trentham, R.C., Melzer, L.S., Vance, D., Kuuskraa, V.A., and Petrusak, R., “Identifying and Developing Technology for Enabling Small Producers to Pursue the Residual Oil Zones (ROZ) Fairways in the Permian Basin San Andres Formation,” RPSEA Final Report, Dec. 21, 2015.

Website Source for Documents: www.ResidualOIlZones.com

San Andres

Outcrop Region

Exploitation of ROZs Via Horizontals and CO2 EOR

MostoftheROZUnderstandingsComefromtheEORStudies

San Andres ROZ Oil Saturation and Oil Property Targets - Examples

ROZ Brownfield Example

300’

Seminole Field

MPZ

ROZ Greenfield Example Near Tall Cotton Project

300’

ROZ Oil Properties Seminole Field

1st Engineering: Exploitation Via Horizontal Well Depressuring and CO2 EOR

Western Yoakum County Horizontal Well Activity (as of Early 2016)

Estimated Ultimate Recoverable Oil*

37,980

63,345

105,651

P2

P5

P10

P20

P30

P40

P50

P60

P70

P80

P90

P95

P98

P42.468,427

Swanson's Mean

-2

1,000 10,000 100,000 1,000,000

OIL EUR per 1,000 ft (barrels)

Lognormal regression

Input data samples

P10 / P90 SLOPE = 2.78

* Russell K. Hall & Associates, Apr ‘16

5000’ Lateral = 340,000 bbls

Seminole Field (Hess,

Operator)

7 Miles

2nd Engineering: Exploitation Via Horizontal Well Depressuring and CO2 EOR

Western Gaines County – KM’s Tall Cotton Project – Phase I Production Curve

West Seminole Field (Oxy,

Operator)

KM's Tall Cotton Pure Greenfield ROZ Project Production History

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep

-15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep

-16

Nov

-16

Mo-Yr

Oil

Prod

uctio

n in

bop

d

0

2

4

6

8

10

12

14

16

18

Prod

ucin

g W

ell C

ount

Oil Production in Bbls/Day

Producing Well Count (Rt Scale)

CO2 Injection Begins (11/14)

Phase 1: 9 CO2 Injectors, 16 Producers

Summary

• OilBasinsareDynamicPlaces,OilandWatercanMoveAroundAYerOriginalOilEmplacement–thisResultsinNaturalWaterFloods

• ContrarytoCommonBelief,theOilintheNaturallyWaterFloodedZonesCanbe‘Fresh’

•  IftheOilhasSufficientSolu2onGas,itcanBeExploitedbyHorizontalWells(Depressuring,akaDewatering)

•  IftheOilisnotBadlyDegraded,itCanbeExploitedbyEnhancedOilRecoveryTechniques

The Permian Basin is Actively

Exploiting by Both

Techniques

Thank you

Time for Ques6ons?

Backup Slides

P2

P5

P10

P20

P30

P40

P50

P60

P70

P80

P90

P95

P98

-2

0 10 20 30 40

OIL CUT (PERCENT)

Input data samples

LMS FIT (Normal Distribution)

P90 – 9.5%

P10 – 27%

P50 – 18.3%

HZ San Andres Performance

Typical 1-Mile Lateral Hor Well Performance