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Timber Creek Field: A Case Study in Successful Exploitation of a Producing Minnelusa Oil Field Brad Bauer Jacob Hartgroves, Merit Energy Company

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Timber Creek Field: A Case Study in

Successful Exploitation

of a Producing Minnelusa Oil Field

Brad Bauer Jacob Hartgroves, Merit Energy Company

A Simple Formula for Success…

"Rise early. Work late. Strike oil.“

─ J. Paul Getty

“Don’t give me your best geologist… give me your luckiest.”

─ Ace Gutowsky

“Good fields get better.”

─ Merit Energy Company

Acquire + Operate + Exploit = 24 Years of Success

Powder River Basin - Minnelusa Play

Upper Minnelusa Formation

E. Permian 280 Ma

Minnekahta-Minnelusa Isopach

• PMk-PMl ispach illustrates significant incision in the top PMl.

• Assumption:

• Top PMk was deposited ~flat.

• Opeche-aged drainage, filled with mudstone.

• Most fields found on SW side of large Opeche incisions:

• Excellent strat trap.

Pennsylvanian to Lower Permian in age.

Lateral equivalent to Tensleep, Casper, Ingleside, Weber Ssts.

Coastal dune field with inter-layered non-marine to marine lst.

Blakey; http://jan.ucc.nau.edu/~rcb7/mollglobe.html Tomasso, 2010

General Overview — Timber Creek Field (Campbell Co., WY) A_BURTBR

Timber Creek TOTAL Minnelusa ‘B’ & ‘C’ 7 Producers / 6 Injectors OOIP ≈ 55 mmbo [37% RF]

Current Rates

1,150 bopd

3,850 bwpd

3,850 bwipd

Outline of Productive

Minnelusa ‘B’

0

5

10

15

20

25

We

ll C

ou

nt

1962: Field Discovery

(LeSueur # 1 – 598 bopd + 6 bwpd)

1963: Primary Development

1966: Water re-injection / disposal initiated

(eastern flank)

1967: Western flank injection begins

1969: Southern flank injection begins

……………………………………………………….

1997: Merit acquired

1998: Field unitized

1998: Waterflood begins (Injection > Withdrawal)

2002: Toro # 3 drilled by Merit Energy

2008: Cook # 4 reactivated;

ESPs installed on Cook # 5 & Toro # 2;

Increased WINJ to ~ 2,500 bwipd

0

1

2

3

4

5

IWR

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Ba

rre

ls P

er

Da

y

Water InjectionWater ProductionOil ProductionGas Production, mcf /d

Production HistoryTimber Creek Unit

Field History

1960 1961 1962 1963 1964

1965

1970

1980

1990

2000

2010

Water Out

Water Inj

Zero

Appreciable

Water

Movement

ModelBoundary

Evolving Geologic Interpretations

1960’s

1990’s

2000’s

CURRENT

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Barr

els

Per

Day

Water Production

Water Injection

Oil ProductionRe-injection / Produce

Waterflood / Reservoir

Management

Primary (Depletion + Water Drive)

Water Out

Water Inj

Zero

Appreciable

Water

Movement

‘Primary’ Period

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

1963 End-of-Year

BHPs

2,756 psi

791 psi

576 psi

2,390 psi

1945 psi

770 psi

2,300 psi

1963 End-of-Year

BHPs

2,756 psi

791 psi

576 psi

2,390 psi

1945 psi

770 psi

2,300 psi

10

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Avera

ge M

on

thly

Rate

s

Gas - mcfpd

GINJ - mcfpd

Water - bwpd

WINJ - bwpd

Oil - bopd

Production / Injection History

Timber Creek Field - Green Pod

(All)

Equations

Black Oil Material Balance

PPS

CSCBmEExpansionWaterFormation

B

BBEExpansionGas

BRRBBEExpansionOil

BWWBRRBNFWithdrawaldUndergroun

BWEEmENFFormGeneral

iwc

fwcwoiwf

gi

goig

gssioioo

wipgspop

wewfgo

11&

1

,

,

Oil Material Balance

Equations

Black Oil Material Balance

PPS

CSCBmEExpansionWaterFormation

B

BBEExpansionGas

BRRBBEExpansionOil

BWWBRRBNFWithdrawaldUndergroun

BWEEmENFFormGeneral

iwc

fwcwoiwf

gi

goig

gssioioo

wipgspop

wewfgo

11&

1

,

,

What are the effects of water influx?

Water (Aquifer)

Influx is the Primary

Driver for Production

in the “Green” Pod

Pi = 3,655 psi N = 15,280,590 stb

P = 1,860 psi G = 993,238 mcf

W = 4,083,474 stb

Np = 1,136,736 stb Bo = 1.081 rb/stb

Gp = 73,888 mcf Boi = 1.070 rb/stb

Rp = 65 scf/stb Rs = 65 scf/stb

Wp = 116,754 stb Rsi = 65 scf/stb

Wi = 0 stb Bg = 0.00144 rb/scf

Oil Recovery = 7.4% Bgi = 0.00080 rb/scf

Gas Recovery = 7.4% Bw = 1.001 rb/stb

Swi = 20.0% Depletion Drive Index = 14%

m = 0 Gas Cap Drive Index = 0%

Cw = 0.00E+00 psi-1 Water Drive Index = 86%

Cf = 0.00E+00 psi-1 Pore Volume Index = 0%

F --- 1346177.494 Cumulatives as of Jan-64

Eo --- 0.011435567

Eg --- 0.852992423

Ef,w --- 0

We --- 1,170,265 stb

Expansion / Withdrawal / Influx Notes / Comments

Production / Injection PVT Properties

Other Expansion Terms Reservoir Indices

Pressures Volumetrics

Assume Volumetric OOIP

Pi = 3,655 psi N = 15,757,830 stb

P = 511 psi G = 1,024,259 mcf

W = 4,211,009 stb

Np = 1,147,774 stb Bo = 1.089 rb/stb

Gp = 74,605 mcf Boi = 1.070 rb/stb

Rp = 65 scf/stb Rs = 52 scf/stb

Wp = 165,965 stb Rsi = 65 scf/stb

Wi = 0 stb Bg = 0.00604 rb/scf

Oil Recovery = 7.3% Bgi = 0.00080 rb/scf

Gas Recovery = 7.3% Bw = 1.001 rb/stb

Swi = 20.0% Depletion Drive Index = 112%

m = 0 Gas Cap Drive Index = 0%

Cw = 0.00E+00 psi-1 Water Drive Index = -12%

Cf = 0.00E+00 psi-1 Pore Volume Index = 0%

F --- 1503782.121 Cumulatives as of Jan-64

Eo --- 0.095430787

Eg --- 7.01479143

Ef,w --- 0

We --- 0 stb

Pressures Volumetrics

Expansion / Withdrawal / Influx Notes / Comments

Production / Injection PVT Properties

Other Expansion Terms Reservoir Indices

But Not in the Other

Pods…

2,756 psi

791 psi

576 psi

2,390 psi

1945 psi

770 psi

2,300 psi

Water Out Water Inj

Zero

Appreciable

Water

Movement

Re-injection Period

1967 1974 1981

1985 1991 1996

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

0

100

200

300

400

500

600

700

800

900

1,000

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

bo

pd

rbp

d

Total Liquids - rbpd

Total Injection - rbpd

Oil - bopd

Injection / Withdrawal History

Timber Creek Field

(All)

Changing Fluid Rates…

What’s the next step in development?

0

100

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Wolff # 1

Toro # 2

LeSueur # 3-M

LeSueur # 2-M

LeSueur # 1-M

LeSueur # 1

Fed 311 Camp # 1

Cook # 5

Cook # 4

Cook # 3R

Cook # 2R

Cook # 1

0

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1/3

1/1

99

5

Wolff # 1

Toro # 2

LeSueur # 3-M

LeSueur # 2-M

LeSueur # 1-M

LeSueur # 1

Fed 311 Camp # 1

Cook # 5

Cook # 4

Cook # 3R

Cook # 2R

Cook # 1

Oil Rate, bpd

Total Fluid Rate, bpd

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

Waterflood Implementation

2000

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

Some Response to Injection?

19

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-20% -10% 0% 10% 20% 30% 40%

Oil

Re

cove

ry F

acto

r, %

of O

OIP

Total Oil Recovery vs. HCPV Injected

Total Oil Recovery vs. Net Displaceable Pore Volumes Injected

Dimensionless Performance Plot

Timber Creek Field

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19591960196119621963

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1967

1968196919701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992

1993199419951996199719981999 20002001

2002

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-20% -10% 0% 10% 20% 30% 40%

Oil

Re

cove

ry F

acto

r, %

of O

OIP

Total Oil Recovery vs. HCPV Injected

Total Oil Recovery vs. Net Displaceable Pore Volumes Injected

Dimensionless Performance Plot

Timber Creek Field

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1%

10%

100%

10,000 15,000 20,000 25,000

Oil

Cu

t

Cumulative Oil Production, mbo

Actuals

Oil Cut vs. Cumulative Oil Production

Timber Creek Field

Waterflood Analysis: General Observations

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1.0%

10.0%

100.0%

0 5,000 10,000 15,000 20,000 25,000

IWR

stb

/stb

Np, mbo

Water Cut

Liquid IWR

Water Cut & IWR vs. Cumulative Oil Production

```

• Possible aquifer influence

• Unaffected by initial disposal

Next Steps – Reservoir Simulation

General Information

Name: Timber Creek Simulation Project

Description: Develop a simulation model of Timber Creek field (using available data) to better understand its historic performance, aquifer behavior, & future opportunities; develop a methodology for evaluating Minnelusa fields given a limited data set & determine critical variables to help guide future data-gathering efforts

Objectives: (1) Create a reservoir simulation model of the Minnelusa ‘B’ & ‘C’ formations, at Timber Creek field

(2) Using available data, develop history match scenarios in an attempt to mimic the historic performance of the field

(3) Determine the relative likelihood of un-drained/un-exploited, moveable oil being present in the northeast quadrant of Timber Creek field

(4) Based on history match construction & associated sensitivity runs, determine which reservoir/geologic variables are most important to the development of a reservoir simulation model

Goals / Metrics: • Increased oil production rates

• Improved ultimate oil recovery

• Low production, F&D costs per incremental barrel of oil

ModelBoundary

B Sand Blue

B Sand Red

B Sand Green

B Dolomite

Upper C Sand

Middle C Sand

Lower C Sand

B Region

Upper C Region

Lower C Region

B Dolomite Region

WY EORI – 2010 Reservoir Simulation

Simulation Process • GEOL Interpretation (GRG / MEC)

• GEOL Model Construction, Initial Build (GRG / EORI)

– Problems w/ data (No gas, missing water, very few BHPs)

– Different Oils (“B” & “C”)

– Strong aquifer influx from SE edge; weak influx from NW

– Tilted OWCs (Consistent w/ aquifer direction & 3-pod configuration)

– Initially, mobile water present in “C”; but, only immobile water in “B”

– Not enough OOIP in northern tip to support production; higher uncertainty in “C” volumetrics due to insufficient layering & water production

• Model Calibration, History Matching

– Using oil rate & FBHP constraints; focused on WORs & mass balance…

– Additional tuning was necessary

• Increased PV in “B” by 10% except in North, which was raised 20%

• Increased k by 2-5 X

• Manual tuning of aquifer w/ controlled pseudo-injection

Minnelusa “B” – Upper Hi Res (Red)

Minnelusa “B” – Middle, Mid Res (Blue)

Minnelusa “B” – Lower, Low Res (Green)

Minnelusa “C” - Upper

Minnelusa “C” - Middle

Minnelusa “C” - Lower

2010 Prediction Runs…

Important Observations / Conclusions

• Simulation suggests substantial remaining reserves, even under current injection conditions… (7 mmbo)

• A new producer (NE corner) will add reserves (+ 60 – 70 mbo)

• A new injector will add even more reserves, & also accelerate recovery (+ 380 mbo overall; + 500 mbo would be recovered over the base case within the next 10 yrs)

• The highest EUR can be obtained with reactivating the Wolff # 3; conversions will accelerate recovery

• Drilling an injector & performing conversions should result in the greatest present value… (+ 730 mbo within 5 yrs… + 1.1 mmbo over next 10 yrs… dropping to an ultimate increase of + 250 mbo)

Scenario Description B + C B Only B + C B Only B + C B Only

1 Base Case, No Changes 1.52 1.32 2.81 2.38 7.07 5.34

2 Vertical PROD Well (NE) 1.57 1.38 2.88 2.45 7.13 5.40

3 Horizontal PROD Well (NE) 1.50 1.30 2.94 2.53 6.95 5.30

4 Increased INJ (hist. max) 1.75 1.47 3.15 2.56 7.39 5.27

5 Reactivate Wolff 3 1.83 1.47 3.31 2.54 7.84 5.23

6A INJ Conv (Cook 1, 4, Wolff 1) 2.30 2.08 3.62 3.15 7.14 5.37

6B INJ Conv (Cook 1, 3R, 4, Wolff 1) 2.17 1.95 3.66 3.18 7.16 5.37

7A Vertical INJ Well (NE) 1.90 1.65 3.31 2.78 7.45 5.51

7B Vertical INJ Well (NE) + 6B 2.25 2.04 3.91 3.46 7.32 5.60

Next 5 Yrs Next 10 Yrs Next 40 YrsSimulation Runs, Estimated Reserves

Exploitation Recommendations… Using the simulation as

a guide to future development… – Drill new well (NE corner) –

Gene George # 1 (WIW) – Reactivate Wolff # 3 for

waterflood support – Convert additional wells…

• Wolff # 1 • Cook # 1 • Cook # 4 (When it waters out)

– ESP / AL Changes (LeSueur # 2M or other…)

– Shut off / divert current injection (address recycling from Fed Campbell #1)

Drill New Well Gene George # 1

PMk

POp

PMl

B sst

B dol

C1 sst

C1 dol C2 sst

Oil over shaker

Gene George #1 Logs

Gene George #1 Fluid Analysis

Gene George #1 Core Analyses 20 plugs for immediate

phi/k measurement (17 horiz, 3 vert).

63 plugs for EORI research analyses (59 horiz, 4 vert).

2 plugs for electrical properties.

Kv ~ factor of 10 lower than Kh.

Samples with lower anhydrite cement have better than average reservoir properties. (Helps explain good injectivity.)

Cored New Well (Gene George # 1)

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

100

1,000

10,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

bp

d

Water Injection

Water Production

Oil Production

Production / Injection History

Timber Creek Field

(All)

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10,000 15,000 20,000 25,000 30,000 35,000

Oil

Cu

t

Cumulative Oil Production, mbo

Actuals

Culled Data Set

OUTLOOK13 - All Prvd Rsvs

Outlook13 (Exp. Match)

2010 Simulation Runs

Expon. (Culled Data Set)

Oil Cut vs. Cumulative Oil Production

Timber Creek Field

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0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0 5,000 10,000 15,000 20,000 25,000 30,000

bo

pd

Cumulative Oil Production, mbo

Actuals

Primary Forecast - Fluid Expansion Drive

Secondary Forecast - Pressure Maintenance

WF Forecast

Secondary Forecast - After '98 WF Upgrade

Outlook

2010 Simulation Runs

Oil Rate vs. Cumulative Oil Production

Timber Creek Field

Minnelusa Waterflooding Guidelines • Understand the Aquifer!

– Encroachment direction

– Compartmentalization?

– Contribution to oil recovery. Higher aquifer driven reserves => lower waterflood reserves

– Poor waterflood patterns may interfere with aquifer drive

• BHP histories are key

• Good PVT data

• Confidence in production volumes from t=0

• Material balance works if… – Confidence in Volumetric OOIP => Aquifer influx

– Or there is negligible aquifer influx => OOIP

• Must keep wells pumped off – Weekly fluid levels during waterflooding

• Frequent Well Tests

• Inject as much as practical (under formation parting pressure)

– Step rate tests

Any Questions?