EOR Economic Analysis - Midwestern Governors Association

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CO2-EOR should have commercial potential in Kansas • Screening process indicates 750 million barrels or more of technical CO2- EOR potential – This may be conservative, reflecting adjustments to account for limited data – Kansas has by far largest oil resources in the MGA region – Kansas shares geological formations with Oklahoma, where commercial CO2 floods are proven and are serviced by existing and planned CO2 pipeline infrastructure – Potential net CO2 demand estimated at 240 – 370 MMT • Kansas has access to high volume of region’s ethanol-based CO2 – Although the in-state supply of low cost CO2 is moderate, neighboring Nebraska produces about 6 MMT per annum of ethanol-based CO2 – Kansas is currently exporting by pipeline CO2 from ethanol (and planned from ammonia production plants) to northern and possibly central Oklahoma for EOR • Our financial modeling suggests positive economics, but needs further analysis – The Hall Gurney field was chosen for analysis, given level of data in the public domain and previous CO2 pilot (which proved somewhat inconclusive) – Our reference case economics suggest an after-tax project IRR of 22% – However, there are many questions around assumptions which need to be tested further: These include OOIP level, estimated production given experience in similar formations and costs associated with pattern practice. Changing assumptions can lead to wide fluctuations, with economics turning marginal or negative • State economy would benefit from additional jobs – direct 2,300 – 4,600 56 CO2-EOR Potential in MGA Region – February 2012
Kansas state overview CO2 Emissions Overview Screened Sources Source Power 0 Ethanol 1.4 Ammonia Production 1.4 Hydrogen Production 0.5 Total 3.3 Kansas (MMT CO2) Oil Overview Cumulative Production: 6.2 billion bbl Potential / Ongoing Projects Coffeyville Resources Status: Chaparral to “export” to OK > 0.8 MMT CO2 for EOR in 2013 Bonanza Energy Bonanza Energy Ethanol (Garden City) Status: PetroSantander to inject 0.15 MMT of captured CO2 into nearby Stewart Field for EOR. Coffeyville Source: KGS, EPA, RFA, CCI 57 CO2-EOR Potential in MGA Region – February 2012
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CO2-EOR POTENTIAL IN THE MGA REGION
Page 3 and 4:
EXECUTIVE SUMMARY 3 CO2-EOR Potenti
Page 5 and 6: CO2-EOR could be commercially viabl
Page 7 and 8: Ohio’s large resource potential c
Page 9 and 10: APPROACH & ASSUMPTIONS 9 CO2-EOR Po
Page 11 and 12: Reference case assumes US EIA 2011
Page 13 and 14: Midwest is rich in ethanol based CO
Page 15 and 16: Initial capital costs are significa
Page 17 and 18: Pipeline costs are a small componen
Page 19 and 20: Summary • MGA region has large oi
Page 21 and 22: Thousand Barrels per Day Regional c
Page 23 and 24: …with an abundance of stationary
Page 25 and 26: Oil and gas basins were screened fo
Page 27 and 28: MICHIGAN 27 CO2-EOR Potential in MG
Page 29 and 30: Michigan state overview CO2 Emissio
Page 31 and 32: The area is attractive for CO2-EOR
Page 33 and 34: Eastern Leg: Kalkaska & Otsego Coun
Page 35 and 36: State could benefit through additio
Page 37 and 38: Next Steps • Given relatively sma
Page 39 and 40: Illinois/Indiana area is likely to
Page 41 and 42: Illinois, Indiana and Iowa have an
Page 43 and 44: Representative field economics sugg
Page 45 and 46: Smaller fields could benefit from d
Page 47 and 48: Next Steps • Utilize data from sm
Page 49 and 50: Ohio’s large resource potential c
Page 51 and 52: East Canton economics suggest great
Page 53 and 54: State economy would benefit from ad
Page 55: KANSAS 55 CO2-EOR Potential in MGA
Page 59 and 60: State has access to high volume of
Page 61 and 62: Our financial modeling suggests pos
Page 63 and 64: Next Steps • More characterizatio
Page 65 and 66: Abbreviations, acronyms and units o
Page 67 and 68: Abbreviations, acronyms and units o
Page 69: 69 CO2-EOR Potential in MGA Region
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EOR Economic Analysis - Midwestern Governors Association

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