Sample Heavy Oil Sample Heavy Oil Screening StudyScreening Study

Prepared For Epsilon Energy LTD.Prepared For Epsilon Energy LTD.3-31-20093-31-2009

Gemini Solutions Inc.Gemini Solutions Inc.

James L Buchwalter, P.E./PhD.James L Buchwalter, P.E./PhD.

Goal Of Sample Heavy Oil Goal Of Sample Heavy Oil Screening StudyScreening Study

Build model with crude properties similar Build model with crude properties similar to those found in the heavy Syrian Crudeto those found in the heavy Syrian Crude– Guess properties to allow vertical well rates of Guess properties to allow vertical well rates of

20 BOPD with 11 API crude20 BOPD with 11 API crude Run sensitivities to reservoir temperature Run sensitivities to reservoir temperature

increase from steam flood , horizontal increase from steam flood , horizontal versus vertical wells, and pattern aspect versus vertical wells, and pattern aspect ratio and development sizeratio and development size– These sensitivities can be used to understand These sensitivities can be used to understand

probable flow streams, economics, and rank probable flow streams, economics, and rank multiple prospects in a consistent fashionmultiple prospects in a consistent fashion

Basic Model AssumptionsBasic Model Assumptions

Rock propertiesRock properties

Basic Model AssumptionsBasic Model Assumptions

pvt propertiespvt properties

Basic Model AssumptionsBasic Model Assumptions

Kr propertiesKr properties 20% water 20% water

saturationsaturation

Basic Model AssumptionsBasic Model Assumptions

Pattern Model Pattern Model SetupSetup

Well Production Profile, 20 yearsWell Production Profile, 20 years160 acres, no steam, vertical well160 acres, no steam, vertical well

Well Production Profile, 20 yearsWell Production Profile, 20 years160 acres, no steam, vertical well160 acres, no steam, vertical well

Sensitivity – Horizontal WellSensitivity – Horizontal Well160 acres, 3/1 aspect ratio, 3000 feet long160 acres, 3/1 aspect ratio, 3000 feet long

blue [=] horizontal well, green [=] vertical wellblue [=] horizontal well, green [=] vertical wellRecovery increase 4 fold !!Recovery increase 4 fold !!

Sensitivity – Horizontal WellSensitivity – Horizontal Well160 acres, 3/1 aspect ratio, 3000 feet long160 acres, 3/1 aspect ratio, 3000 feet long

Recovery increase 4 fold, 5% recovery factor !!Recovery increase 4 fold, 5% recovery factor !!

Horizontal WellHorizontal WellPressures after 20 yearsPressures after 20 years

160 acres, 3/1 aspect ratio, 3000 feet long 160 acres, 3/1 aspect ratio, 3000 feet long

Heat Oil With SteamHeat Oil With Steam

Original PVT and Original PVT and revised PVT on revised PVT on rightright– Oil viscosity drops Oil viscosity drops

from 71 cp to 13 cp from 71 cp to 13 cp at the bubble pointat the bubble point

6 fold increase in 6 fold increase in rate through rate through viscosity reductionviscosity reduction

Temperature Sensitivity – 160 acresTemperature Sensitivity – 160 acresVertical well [=] blue, vertical well + 180F, greenVertical well [=] blue, vertical well + 180F, green

4 fold increase in recovery!4 fold increase in recovery!

Temperature Sensitivity – 160 acresTemperature Sensitivity – 160 acresHorizontal well [=] blue, horizontal well + 180F, greenHorizontal well [=] blue, horizontal well + 180F, green

10 fold increase in recovery!10 fold increase in recovery!

Horizontal Well Versus Vertical Well Horizontal Well Versus Vertical Well +Steam+Steam

Both scenarios have similar profilesBoth scenarios have similar profilesPerhaps as alternative to steam horizontal well technology Perhaps as alternative to steam horizontal well technology

may be feasible (if vertical permeability sufficient)may be feasible (if vertical permeability sufficient)

Closing CommentsClosing Comments A base model can be built and history matchedA base model can be built and history matched A series of sensitivity models can be created to A series of sensitivity models can be created to

understand the best drilling and completion understand the best drilling and completion strategy for a fieldstrategy for a field

Screening models are adequate for ranking Screening models are adequate for ranking prospects and determining potential recovery prospects and determining potential recovery factors and well drilling/completion strategiesfactors and well drilling/completion strategies

More precise thermal project design requires a More precise thermal project design requires a true thermal simulator and this is recommended true thermal simulator and this is recommended for the final field designfor the final field design– Suggest CMG Stars simulatorSuggest CMG Stars simulator– This work will be an order of magnitude more expensive This work will be an order of magnitude more expensive

than the screening studies and take far longer than the screening studies and take far longer