Enhanced Oil Recovery Studies in the Tirrawarra Oil

Enhanced Oil Recovery Studies in the Tirrawarra Oil Field, Cooper Basin, South Australia Ian Pedler 23 September 2009 1

Enhanced Oil Recovery Studies in the Tirrawarra Oil Field, Cooper Basin, South Australia The Tirrawarra oil field is located in north-eastern South Australia in the Cooper Basin. The field was discovered in 1970 and is the largest onshore Permian oilfield in Australia. Primary production commenced in 1983 and from 1984 to 1996 the field was subjected to a miscible flood initially using raw satellite gas and subsequently, ethane injection. With the commencement of ethane sales from the Cooper Basin the EOR scheme was shut-down and the field was has been produced on blowdown since 1996. In 2008 a study team was established to re-evaluate the field and review the potential for the re-establishment of and EOR scheme using CO 2 or another suitable fluid with particular attention to the under-developed areas of the field. The study was an integrated review of the subsurface, well construction and facilities aspects of an EOR project and included the construction of a modern static reservoir model and fully compositional dynamic simulation model. This presentation will review some of the results from the 2008 study and the implications for the implementation of a future EOR scheme in the field. 2

Cooper Basin Unit Partners 3

Contents 1. Tirrawarra Field Review - Discovery Development Recent Performance 2. 2008 EOR Studies - 4 Reservoir Modelling EOR Screening Results

1. Tirrawarra Field Review 5

Tirrawarra Location Queensland Bowen Basin Cooper Basin Brisbane Moomba 50 km South Australia Gunnedah Basin New South Wales Pt Bonython Adelaide Sydney Santos acreage Basin outline Oil pipeline Gas pipeline 6

Cooper Basin Operations Typical Gas Wellhead Moomba Plant 7 Terrain Near Moomba Tirrawarra Satellite

Tirrawarra Discovery and Appraisal § 1969 : First gas sales from Cooper Basin § 1970 : Tirrawarra-1 - Gas and oil discovery well - TD 10, 200 ft - Volatile oil in Tirrawarra formation - 592 bopd max test rate - Liquids rich gas in multiple stacked sands in overlying Patchawarra formation - 6. 9 MMscf/d max test rate § 1970 – 1972 Tirrawarra 2 -11 - Patchawarra/Tirrawarra appraisal - Toolache formation gas discovery § 1973 – 1979 - No activity, pending development of Cooper Basin Liquids Project 8

Tirrawarra Field Summary Tirrawarra Field Tirrawarra Reservoir Properties OOIP: 150 MMstb Crest : 9300 feet SS Closure : 550 feet Thickness : 100 - 180 feet Area : 12, 000 acres Porosity : 6 – 10% Permeability : 0. 05 – 1 md Fluid Properties Initial Pressure : 4260 psia Bubble Point : 3000 psia Temperature : 140 o. C Solution GOR : 2700 scf/stb FVF : 2. 7 rbbl/stb Viscosity : 0. 09 c. P 9 Component Mol % H 2 S 0. 0 CO 2 16. 66 N 2 1. 72 Methane (C 1) 31. 95 Ethane (C 2) 12. 20 Propane (C 3) 9. 47 Iso Butane (i. C 4) 1. 98 n-Butane (n. C 4) 3. 72 Iso Pentane (i. C 5) 1. 31 n-Pentane (n. C 5) 1. 77 Hexanes (C 6) 2. 47 Heptanes+ (C 7+) 16. 75 100. 00 API at 60 o. F 44. 5 Tirrawarra Oil Composition

Tirrawarra Field 10

Tirrawarra Field Development § 1981 : Commencement of Cooper Basin Liquids Project § 1983 : First oil production from Tirrawarra (depletion) § 1984 : Pilot EOR miscible flood project commenced based on raw gas injection - Total 10 Bcf inj from ’ 84 -’ 88 § 1986 : Ethane injection commenced as part of basin ethane storage commitment § 1997 : Ethane injection ceased with the commencement of ethane sales from the basin - Total 90 Bcf inj from ’ 86 -’ 97 § 2007/8 : Multiwell appraisal programme and EOR Project Team established 11

Tirrawarra Field Production 12

2. 2008 EOR Studies 13

Current Operations Tirrawarra Satellite CO 2 to Vent Tirrawarra Oil Field Gas Satellite Cooper Basin Gas Fields Ethane and Sales Gas to Sydney CO 2 Removal De. H 2 O Liquids Recovery Ethane Treatment Moomba Plant Liquids to Pt Bonython 14 Sales Gas to Adelaide

Proposed MCS 1/EOR Project New Inj & Prod Wells New Dense Phase Pipeline Tirrawarra Satellite Tirrawarra Oil Field Upgrad e New Fuel Gas Line Gas Satellite Cooper Basin Gas Fields De H 2 O Compression New CO 2 Facilities Ethane and Sales Gas to Sydney CO 2 Removal De. H 2 O Liquids Recovery Ethane Treatment Moomba Plant Upgrad e Liquids to Pt Bonython 15 Sales Gas to Adelaide

Subsurface Workflow § Static Reservoir Model - 120 m x 1 ft (6, 000 cells) § Dynamic Reservoir Model - Upscale Static Model to size suitable for dynamic numerical modelling - 50, 000 – 100, 000 active cells Fieldwide Basic Data Review Petrophysics Static Model Feedback Appraisal Results New Dep. Model T PV - Fully compositional reservoir model with 8 component PVT model 3 D Seismic Based Structural Interpretation § History Matching Process - Make ‘reasonable’ changes to a base model to approximate past performance - Matching >25 years of observed pressures, ratios - Iterative, time consuming & nonunique process § Outcome is a matched model that can be used to test various EOR and development scenarios 16 P Pr rod es u su cti re on D , at a - First use of modern 3 D reservoir modelling tool in Tirrawarra - Integrate nearly 40 years of core, log and stratigraphic data from >80 wells to create 3 D geocelluar model OOIP Sensitivities Upscale Dynam ic Model Matched Dynamic Model to Test EOR and Development Scenarios History Match Res. Eng. Studies Fracture / production / log KH / single well modelling etc

Comp. Mol % CO 2 16. 66 N 2 1. 72 C 1 31. 95 C 2 12. 20 C 3 9. 47 i. C 4 1. 98 n. C 4 3. 72 i. C 5 1. 31 n. C 5 1. 77 C 6 2. 47 C 7 -C 10 C 11 -C 16+ 17 16. 75 EOR Injectants Studied s as a G 2. G es t CO l a S Sa Pr Tirrawarra Reservoir Fluid o D duc es t tin St at re io am PV n T Co m po ne nt The Importance of Compositional Modelling Mol % Comp. CO 2 Vent 1 99. 1 28. 8 1. 8 Sales Gas 3 0. 9 50. 0 93. 9 Ethane 2 - 13. 4 3. 9 N 2 C 1 C 2 C 3 LPG 4 - 6. 8 0. 4 i. C 4 n. C 4 5 Oil 1. 0 - i. C 5 - - n. C 5 C 6 6 7 8 C 7 -C 10 C 11 -C 16+

Tirrawarra History Match - HCPV 18

Tirrawarra History Match - Pressure 19

Tirrawarra : Current Day Conditions Northern, Greenfields Area Lower on structure, Higher pressure, unswept Core, Brownfields Area High on Structure Low pressure, swept 2009 HCPV 2009 Status Core Area RF : 33% North Flank RF : 10% 20 2009 Pressure

Tirrawarra : Current Day Conditions Northern, Greenfields Area Generally lower kh and well productivity Northern, Greenfields Area Lower on structure, Higher pressure, unswept Core, Brownfields Area High on Structure Low pressure, swept Core, Brownfields Area Generally higher kh and well productivity 2009 HCPV 21 Reservoir kh

CO 2 EOR Alternatives 600 ktpa CO 2 Greenfields Area “Oil Focussed” CO 2 EOR 52 New Wells 22 • 37 new prod • 15 new injectors 600 ktpa Brownfields Area “Storage Focussed” CO 2 EOR • no new wells, recreate original injection patterns

Net S’age Brownfields Area “Storage Focussed” CO 2 EOR Total Inj. Net S’age Greenfields Area “Oil Focussed” CO 2 EOR Total Inj. Tirrawarra 600 ktpa CO 2 EOR Cases C 1 C 2 LPG Oil 23

The Fuel Gas Challenge …. . 1 Mtpa CO 2 to Vent Capture 100 ktpa CO 2 to Atmosphere Process Compression 1 Mtpa CO 2 to EOR Moomba Plant Sales Gas Turbine • To inject 1 Mtpa of CO 2 for EOR, 0. 1 Mtpa of new CO 2 emissions are generated. For EOR, CO 2 is cycled through the reservoir and plant several times and each time this happens new CO 2 emissions are generated. • For pure MCS this only happens once 24

The Fuel Gas Challenge …. . 1 Mtpa CO 2 to Vent Capture Process Compression Moomba Plant Geothermal Power Station 25 Electric Driver 1 Mtpa CO 2 to EOR

EOR Fluid Evaluation Satellite Gas Blowdown Sales Gas Blowdown Initial Depletion Phase Basis: 26 Greenfields Area Northern Injection Only 600 ktpa CO 2(e)

Conclusions § Pre FEED Studies successfully completed in early 2009 § Cooper Basin JV has chosen to place a large scale Tirrawarra CO 2 EOR project on hold pending clarity on carbon pricing and oil price recovery § New development drilling in Northern Tirrawarra is proposed for 2010 to prove reservoir performance of this area § Australia’s only EOR Project is currently underway in nearby Fly Lake field - Pilot scale project using Tirrawarra satellite gas to increase oil recovery 27

Acknowledgements § TEOR Subsurface Pre-FEED Team - David Grybowski, Bich Thuy Ngo Hoang, Adam Little, Serge Toulekima and Alan Waldron § Cooper Basin Joint Venture Partners 28