Assessing Technical and Economic Recovery of Oil Resources

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When conducted simultaneously, each of MPZ and TZ/ROZ CO 2 -EORfloods in the five study fields (Seminole (San Andres Unit), Wasson(Denver Unit and Bennett Ranch Units), Vacuum and Robertson) has aROR that exceeded the economic threshold. Of note, the Robertson SanAndres flood, essentially a TZ/ROZ flood due to its very limited main pay(2 feet), is economic while the Wasson Denver TZ/ROZ flood is not. Thissuggests that reservoirs containing minimal to no main pay zones butsignificant transitional and residual zones may be viable targets for CO 2 -EOR in the TZ/ROZ. Producing these TZ/ROZ reservoir types may notsuffer the same out of zone losses and inefficiencies as reservoirs withlarge main pay zones.10. Applying CO 2 -EOR to these five Permian Basin oil reservoirs wouldprovide 1.4 billion of economically recoverable oil from the TZ/ROZ.The economic analysis shows that 1.4 billion barrels of “stranded” oil inthe TZ/ROZ may become economically recoverable from the five PermianBasin oil reservoirs using “state-of-the-art” CO 2 -EOR technology and asimultaneous flooding scheme. An additional 1.1 billion barrels iseconomically recoverable from the MPZ, using CO 2 -EOR. Of this, 0.6billion barrels has already been produced or proven.However, if separate CO 2 flooding schemes are employed for the mainpay zone and transition/residual oil zones, the economically recoverableoil drops to 1.1 billion barrels (with 0.6 billion already produced or proven),all in the main pay zone. Under this individual zone, CO 2 -EOR floodingstrategy, the oil in the TZ/ROZ will remain uneconomic and “stranded”.EX-7 February 2006
I. INTRODUCTIONResidual oil zones (ROZ), the portions of oil reservoirs below their traditionalproducing oil-water contacts, can hold large volumes of previously undocumented andundeveloped domestic oil resources. The first comprehensive report on this topic,“Stranded Oil in the Residual Oil Zone,” examined the origin, nature and presence ofROZ resources. 3 It set forth a preliminary estimate of 15 billion barrels of ROZ resourcein-place for the Permian Basin of West Texas and East New Mexico. This secondreport, “Assessing Technical and Economic Recovery of Oil Resources in Residual OilZones,” examines how much of this resource in-place may become technically andeconomically recoverable.A. Overview of ROZ Recovery Potential. Because of their low to moderateoil saturation settings, ROZ resources are not economic when using primary orsecondary oil recovery. As such, the great majority of domestic oil wells are completedabove the residual oil zone. Outside of the knowledge base being developed by a smallgroup of forward-looking operators, little is known about the ability to successfully targetand produce the ROZ resource. However, in the current economic climate, withdepleting domestic oil reserves and operators’ desires to extend reservoir life, ROZresources offer new sources of domestic oil production. Because of this, there isgrowing interest in further understanding the recoverable oil potential in the relativelythick (100 to 300 feet) residual oil zones located beneath the traditional main pay zonesof oil reservoirs.Carbon dioxide (CO 2 ) enhanced oil recovery (EOR) has emerged as a viabletechnique for recovering residual oil left behind (“stranded”) after waterflooding, mainlyin light oil reservoirs below 3,000 feet in depth. Yet, the oil saturation in the residual oilzones (ROZ) (and transition zones (TZ)) of a reservoir is often similar to the oil3 Melzer, S., (2006) “Stranded Oil in the Residual Zone.” U.S. Department of Energy Report (underreview).1-1 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 10 and 11: 8. The technically recoverable ROZ/
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
Page 60 and 61: 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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