Assessing Technical and Economic Recovery of Oil Resources

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8. The technically recoverable ROZ/TZ resource in the Permian Basin isestimated at 5 billion barrels, based on a recovery efficiency of 35%of the 15 billion barrels of ROZ/TZ oil in-place. The study establishedthat, overall, 2.5 billion barrels of oil resource could be ultimatelytechnically recovered from the five study fields using “state-of-the-art”CO 2 -EOR technology. Of this, 1.4 billion barrels is from the transition andresidual oil zone (TZ/ROZ) resource. The remaining 1.1 billion isrecoverable from the remaining oil in-place in the main pay zone (MPZ)(Table EX-1), with 0.6 billion of this already produced or proven.Table EX-1. Technically Recoverable Oil Resources from Applying CO2-EORto the MPZ and TZ/ROZField/UnitSimultaneousMPZ and TZ/ROZ CO 2 -EOR(MMbbl)MPZ OnlyCO 2 -EOR(MMbbl)AdditionalDue toTZ/ROZCO 2 -EOR(MMbbl)Seminole (San Andres Unit) 569 268 301Wasson (Denver Unit) 1,064 570 494Wasson (Bennett Ranch Unit) 179 84 95Vacuum (San Andres) 577 172 405Robertson (San Andres) 83 - 83Total 2,473 1,094* 1,379*Of the 1,094 million barrels recoverable from the MPZ, 650 million barrels has already been produced orproven from application of CO2-EOR.The 1.4 billion barrels of oil recoverable from the TZ/ROZ represents arecovery efficiency of 35% of the oil in-place in the TZ/ROZ of these fivefields. (This translates to 18% of the original oil in-place, beforehydrodynamic sweeping of the ROZ – See Appendix A.)Applying the 35% recovery factor to the previously estimated 15 billionbarrels of TZ/ROZ oil in-place estimated for the Permian Basin would add5 billion barrels of technically recoverable oil to our domestic resourceEX-5 February 2006
ase. Application of “next generation” CO 2 -EOR oil recoverytechnologies, as examined in our recently completed report, “EvaluatingThe Potential For “Game Changer” Improvements In Oil RecoveryEfficiency From CO 2 Enhanced Oil Recovery” 2 , would significantlyincrease recovery efficiency and the technically recoverable resource fromthe TZ/ROZ.9. Our detailed cost and economic studies show that the TZ/ROZ oilresource in these five Permian Basin oil reservoirs can beeconomically produced with CO 2 -EOR at oil prices of $35 per barrel.To examine the economics of producing the TZ/ROZ, AdvancedResources constructed an up-to-date economic and cash flow cost modeland applied this model to the five study fields. The model includes costsfor deepening wells and reworking them for CO 2 -EOR, drilling newinjection and production wells (as required), and operating the project.The economic model uses an oil price of $35 per barrel, a CO 2 purchasecosts (per Mcf) of 4% of the oil price and a CO 2 recycling cost (per Mcf) of1% of the oil price. A 25% (pre-tax) rate of return (ROR) economicthreshold is used to account for the higher risk nature of pursuing theTZ/ROZ resource.Detailed economic analysis of the Wasson Denver Unit San Andres oilreservoir shows that while the main pay zone CO 2 flood (conductedseparately) exceeds the ROR economic threshold, the TZ/ROZ flood(conducted separately) does not. However, when these two reservoirunits are CO 2 flooded jointly, the overall MPZ+TZ/ROZ flood has a RORthat exceeds the economic threshold. This is due to inherent inefficienciesof separately flooding the TZ/ROZ, leading to higher operating and CO 2purchase costs and lower recoverable oil.2 “Evaluating The Potential For “Game Changer” Improvements In Oil Recovery Efficiency From CO 2Enhanced Oil Recovery”, Advanced Resources International for U.S. Department of Energy (February2006).EX-6 February 2006
Page 1 and 2: ASSESSING TECHNICAL AND ECONOMICREC
Page 3: ASSESSING TECHNICAL AND ECONOMIC RE
Page 6 and 7: EXECUTIVE SUMMARYOur first study,
Page 8 and 9: have favorable TZ/ROZ characteristi
Page 12 and 13: When conducted simultaneously, each
Page 14 and 15: saturation left after waterflooding
Page 16 and 17: 4800Oil Saturation %100 04850490049
Page 18 and 19: WEOil TrapROZROZProducingOWCBase of
Page 20 and 21: WEOil TrapROZROZProducingOWCBase of
Page 22 and 23: 5,400 5,300 5,200 5,100 5,0006,000
Page 24 and 25: 6,000 5,900 5,800 5,700 5,600 5,500
Page 26 and 27: C. Evidence for ROZs in the Permian
Page 28 and 29: III. EVALUATING OIL RECOVERY FROM R
Page 30 and 31: Estimates of MPZ and ROZ oil produc
Page 32 and 33: Producing OWCAdapted from Oxy Permi
Page 34 and 35: The initial forecasts of oil respon
Page 36 and 37: B. Sample ROZ Oil Fields. Five majo
Page 38 and 39: Basin Name Permian West Texas 8A15
Page 40 and 41: Seminole San Andres Unit Production
Page 42 and 43: Basin Name Permian West Texas 8A19
Page 44 and 45: Basin Name Permian East New Mexico4
Page 46 and 47: IV. CALIBRATING THE OIL RECOVERY MO
Page 48 and 49: PROPHET input file to account for t
Page 50 and 51: 1,400Reservoir Simulation1,200Proph
Page 52 and 53: Table 3. Technical Oil Recovery Tot
Page 54 and 55: the full TZ in the TZ/ROZ CO 2 -EOR
Page 56 and 57: • Methodology. Reservoir simulati
Page 58 and 59: Development of the reservoir starte
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VI. ECONOMICALLY RECOVERABLE OILRES
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• Finally, the largest single cos
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These 1.4 billion barrels of oil re
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APPENDIX AOIL IN-PLACE FOR THE TZ A
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Table A-1. Key Inputs for Calculati
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ADJUSTING THE ROZ OIL IN-PLACE VALU
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APPENDIX CECONOMIC ANALYSES OF FIVE
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Field Cashflow Model Pattern FieldS
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Field Cashflow ModelStateFieldForma
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BasinFieldFormationTechnology CaseD
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Assessing Technical and Economic Recovery of Oil Resources

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