Carbon Dioxide Flooding in Central Kansas Reservoirs G

Carbon Dioxide Flooding in Central Kansas Reservoirs G. Paul Willhite Tertiary Oil Recovery Project Tertiary Oil Recovery Advisory Board October 19 -20, 2001

Minimum Miscibility Pressure

Requirements for Carbon Dioxide Miscible Flooding n Minimum miscibility pressure must be determined for Kansas crude oils n Must be possible to re-pressure reservoir to reach MMP during the displacement process n Carbon dioxide must be available at a price that will make the process economic Tertiary Oil Recovery Project

Minimum Miscibility Pressure in Hall-Gurney LKC Tertiary Oil Recovery Project

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded DOE Project Tertiary Oil Recovery Project

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded DOE Project Tertiary Oil Recovery Project

Central Kansas Initiative Overall Objective n Verify technical and economic viability of the application of CO 2 miscible flooding to Central Kansas oil fields Critical element: Demonstrate sufficient field performance(oil in the tank) to justify the development of a carbon dioxide pipeline into Central Kansas Tertiary Oil Recovery Project

Components of Carbon Dioxide Program n Phase I: Conduct a feasibility study on Arbuckle and Lansing Kansas City Reservoirs(KTEC Contract) n Phase II: Select a site and design one or more field pilot CO 2 miscible floods(DOE Class Program Revisited) Tertiary Oil Recovery Project

Components of Carbon Dioxide Program(Continued) n Phase III: Construct and operate the CO 2 pilot(DOE Class Program Revisited) n Phase IV: Evaluate technical and economic performance of pilot(DOE Class Program Revisited) n Phase V: Build a CO 2 pipeline into Central Kansas(Kinder Morgan) Tertiary Oil Recovery Project

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded DOE Project Tertiary Oil Recovery Project

Field Demonstration of CO 2 Miscible Flooding in the L-KC, Central Kansas March 7, 2000 Class II Revisited DE-AC 2600 BC 15124 MV Energy LLC

L-KC Recoveries in Hall-Gurney and Trapp Cumulative Production Primary + Secondary Lansing-Kansas City (Per Section Basis) > 8 MBO/acre 6 -8 MBO/acre 4 -6 MBO/acre 2 -4 MBO/acre Kansas Geological Survey

Project Economics n Total Project – $5. 4 million n n $2. 0 M – CO 2 Purchase, transport, recycling $1. 5 M – Research, Technology Transfer $1. 1 M – Capital Costs (wells, etc. ) $0. 8 M – Operations (6 years) Funding n n $2. 4 M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company $1. 9 M U. S. Department of Energy $1. 0 M KGS and TORP $0. 1 M Kansas Department of Commerce

DOE Class Program Revisited Central Kansas CO 2 Demonstration Project n Phase 1 -Reservoir Characterization( 1 Year) n Phase 2 -Field Demonstration(4 years) n Phase 3 -Monitoring(1 year)

Demonstration Design Summary n n n n 55 acre, nine-spot 2 CO 2 injectors 7 Producers 5 Containment Water Injectors 0. 843 BCF CO 2 injected. WAG 4. 6 year operating life >80, 000 BO estimated recovery during DOE >20, 000 BO in 3 years after DOE Project

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded DOE Project Tertiary Oil Recovery Project

Carbon Dioxide Supply n Is the resource base in LKC reservoirs large enough to support a pipeline that could deliver CO 2 at $1. 00/mcf? n Can the “Golden Trend” in the Hall. Gurney Field anchor a pipeline? Tertiary Oil Recovery Project

William Flanders

LKC Pipeline Results n Risk weighted CO 2 for LKC is ~60 -65 BCF +-10% n CO 2 oil potential from LKC ~15 -16 MMBO n Not enough LKC resource base to anchor pipeline n Need ~184 BCF risk weighted CO 2 to deliver at $1. 00/mcf at 10% IRR/10 year amortization

Carbon Dioxide Pipeline n Need an additional 120 BCF risk weighted CO 2 potential to build 8” pipeline to Central Kansas n Are Arbuckle reservoirs potential carbon dioxide miscible flood candidates? Minimum miscibility pressure ~1600 psi n Initial reservoir pressure~1050 -1150 psi n Well connected to an aquifer n

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded Pilot/DOE Project Tertiary Oil Recovery Project

Carbon Dioxide Supply n ICM(U. S. Energy Partners, LLC) announces ethanol plant to be constructed in Russell(February 5, 2001) n On stream ~November 1, 2001 n CO 2 production 3. 4 MMCFD(wet at atmospheric pressure) n 8. 5 miles from CO 2 demonstration project Tertiary Oil Recovery Project

Location of Ethanol Plant & CO 2 EOR Site Kansas Geological Survey

http: //www. kgs. ukans. edu/CO 2/reports. html Field Demonstration of CO 2 Miscible Flooding in the L-KC, Central Kansas Project Extension October 1, 2001 Class II Revisited DE-AC 2600 BC 15124 MV Energy LLC

Outline of Presentation n The Central Kansas Initiative n Field Demonstration Project Hall-Gurney Field n The Carbon Dioxide Supply n New Partner n Expanded Pilot/DOE Project Tertiary Oil Recovery Project

Expanded Pilot Project n n n n Kinder Morgan reduced financial support CO 2 available from ICM plant in Russell Pilot size increased to provide acceptable economic and technical risk to MV Energy, ICM and Kinder Morgan Budget Period 1 extended to March 2002 Additional funding obtained from DOE effective October 1, 2001 Project extended to 2008 ICM/Kinder Morgan to provide CO 2

Expanded Project Economics n Total Project – $7. 56 million n n $2. 34 M – CO 2 Purchase, transport, recycling $2. 21 M – Research, Technology Transfer $1. 33 M – Capital Costs (wells, etc. ) $1. 68 M – Operations (8 years) Funding n n n $2. 03 M MV Energy $0. 52 M Kinder-Morgan CO 2 Co. LP $0. 97 M ICM $2. 77 M U. S. Department of Energy $1. 17 M KGS and TORP $0. 10 M Kansas Department of Commerce

Expanded Demonstration. Project n n n n 60 acre 2 CO 2 injectors 6 Producers 6 Containment Water Injectors 0. 85 BCF CO 2 injected-WAG 8 year operating life >96, 000 BO estimated recovery Final pattern is still evolving

CO 2 Pilot Project Team n Kansas Geological Survey n n n n n Kinder-Morgan CO 2 Co. LP n n Alan P. Byrnes Marty Dubois W. Lynn Watney Timothy R. Carr Willard J. Guy John Doveton Dana Adkins-Heljeson Kenneth Stalder Tertiary Oil Recovery Project n n n G. Paul Willhite Don W. Green Jyun-Syung Tsau Richard Pancake Rodney Reynolds Rajesh Kunjithaya Ed Clark MV Energy LLC n Russell Martin Paul Nunley William Flanders(consultant) U. S. Department of Energy n n n Dave Murfin Jim Daniels Larry Jack Niall Avison State of Kansas (Dept. of Commerce) Edith C. Allison (Prgrm Mngr) n ICM, Inc. Dave Vander Griend Daniel Ferguson (Project Mngr) Kansas Geological Survey Tertiary Oil Recovery Project

Critical Issues Remaining n Pattern Selection n Recompletion of old wells n Arbuckle reevaluation Arbuckle potential n Properties of oil n n MMP-nitrogen content