Issued on: December 23, 1999
DOE Selects 3rd Group of Small Oil Producers for Technical Assistance
Projects Reflect DOE's Initiatives to Keep Domestic Oil Fields in Production; Government Still Seeks Additional Proposals from Oil Producers by February
In the third round of its program to provide technical assistance to the Nation's smaller oil producers, the U.S. Department of Energy's National Petroleum Technology Office will provide grants totaling $365,000 to five more companies that have proposed innovative approaches for keeping their fields producing.
Independent oil companies with fewer than 50 employees remain the target of this technical assistance effort. Many of these family-owned firms operate on an economic tightrope and conduct little, if any, research on their own.
As in the first two rounds announced this past June and August, the Energy Department will provide grants of up to $75,000 to each independent company. These dollars support unique ideas for lowering operating costs and maximizing production in marginal fields.
Energy Secretary Bill Richardson announced the program this past February as one of several initiatives to help preserve the nation's oil production capacity. Today's selections bring the total number of technical assistance grants to small oil producers this year to 17 and the total Energy Department funding to $1,139,500.
The new round of selected projects, chosen from 19 proposals, are:
For more information on each project, click on project name
Visos Energy Company, Austin, TX, will evaluate the comparative abilities of two seismic surveying techniques to identify potentially productive oil zones in the Morrow Sandstone reservoirs in areas of Colorado, Kansas and Texas.
Strand Energy Company, Houston, TX, will investigate enhanced oil recovery processes in a mature Arkansas oil field to select the process that will provide the most efficient, least costly operation under the field conditions.
Coral Production Company, Denver, CO, will use computational techniques to evaluate publicly available information in assessing the risk of initiating a waterflood in the Denver-Julesberg Basin, Nebraska.
Read & Stevens, Roswell, NM, will identify reservoir rock characteristics in a New Mexico well from preserved core samples and special suites of well logs to evaluate how well a waterflood will operate in the reservoir, and will estimate potential secondary recovery.
Makoil, Inc., Las Vegas, NV, will use modern, more affordable 3-D seismic data processing techniques that yield improved imaging of geologic structure at depth to provide accurate guidance for drilling development wells in a complex eastern Nevada field.
The Energy Department is encouraging other small companies to apply for these technical assistance grants. Producers have until February 7, 2000, to submit applications for the final round of the current program. The Energy Department's National Petroleum Technology Office in Tulsa, OK, (918-699-2017 or 2076) evaluates the applications.
Details on the Technology Assistance to Independents Program can be found at http://www.npto.doe.gov/indep/.
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For more information, contact:
Herb Tiedemann, DOE National Petroleum Technology Office, (918) 699-2017, e-mail: email@example.com
Technical information contact:
Jim Barnes, DOE National Petroleum Technology Office, (918) 699-2076, e-mail: firstname.lastname@example.org
Technology Development with Independents
1999 Program - 3rd Round
Visos Energy Company, Austin, TX
Project: An investigation to document reservoirs that can be better detected with seismic S waves than with seismic P waves - Oil production from the Morrow Trend of Colorado, Kansas and Texas is from reservoirs positioned in stream channels. Optimum drilling sites in the Morrow sands cannot be determined from conventional 3-D seismic surveying, which operates with compressional (P) waves (waves traveling in the direction of the original seismic signal), because the Morrow reservoirs generate weak, or no, reflected energy. This situation exists over much of the three-state area, a large region affecting several hundred independent operators. However, Morrow reservoir targets reflect energy from shear (S) waves and are important in identifying the location and pattern of reservoir pores and for indicating changes in pore fluids across reservoir targets.
Visos Energy will record data from a system known as 9-component Vertical Seismic Profiling, which generates both compressional and shear waves, in three test wells in the three states. Visos will then create and compare images with subsurface control to determine if shear waves produce better images than compressional waves in the Morrow reservoir. If successful, the findings can influence exploration and production drilling by Morrow producers, and can also translate to other areas and basins where compressional-wave seismic data do not always image targeted reservoir units.
Visos Energy will provide $90,000 in cost sharing for the 12-month project, with DOE contributing $66,000. The project contact is Thomas Coffman, 512-476-6452.
Strand Energy Company, Houston, TX
Project: Economic optimization through selective review and implementation of a secondary oil recovery process for the St. Mary West Cotton Valley Unit, Lafayette County, Arkansas - In pursuing candidate waterflood fields, Strand Energy often finds that the time lost between installing the injection system and recouping the investment following the waterflood, coupled with operational costs during the fill-up process, results in significant financial loss.
Strand will evaluate the economics and operation of possible ventures stressing three issues: reducing injection system installation costs; reducing operating expenses during the fill-up period; and reducing the response time to increased production rates.
Strand Energy Company and Platt, Sparks & Associates Consulting Petroleum Engineers, will use advanced reservoir characterization and reservoir simulation to perform a comparative efficiency study of the physical recovery, capital requirements and operating expenses of the various enhanced oil recovery processes available to the St. Mary West field, which is mature in respect to its primary recovery reserve life. The field has high-quality, high-volume equipment already in place, allowing concentration on the costs of the secondary recovery system. Water sources are available, and natural gas is available for the compressor and the pumping unit.
Strand designed and scheduled a waterflood injection unit for the field for late 1999. In this project, Strand will consider air injection as a possible alternative because it could produce a quicker response than injection of a noncompressible fluid in the pressure-depleted reservoir, reducing fill-up time or time to first response. This consideration will require estimates of oil reserves for air injection and comparison to the volumes quantified for a waterflood.
Strand will disseminate the results of its secondary recovery optimization study and the results of the process selected in cooperation with the Petroleum Technology Transfer Council's newsletters, through the Society of Petroleum Engineers publications, and in presentations at regional chapters of SPE and other industry and professional associations.
Strand Energy will contribute $312,000 in cost sharing to the 24-month project, and DOE will provide federal funding of $75,000. The project contact is Cary D. Brock, 713-658-8096.
Coral Production Corporation, Denver, CO
Project: A quick method to evaluate waterflood success - Coral Production plans to install a waterflood in the Herboldsheimer field, in the western Nebraska section of the Denver-Julesberg Basin. The success rate of waterfloods in the area is mixed, with Basin operators typically failing. Various causes for the failures include the presence of depositional channels and high free-gas saturation at the end of primary production, preventing formation of an oil bank; wettability problems -- the tendency of a fluid to adhere to the pore walls of reservoir rock; and fractures adversely affecting the flow of oil.
Because the D-J Basin comprises mostly small independent operators who lack in-house laboratory facilities and access to special core and fluid analyses, Coral Production will use the new computational intelligence technology to model field information available in the public domain (Nebraska Oil and Gas Conservation Commission). The calibrated simulation model can then be used to predict future performance with a high degree of confidence. A significant use would be calculating the ratio of secondary production to primary production (S/P). An S/P ratio of less than 0.5 is considered an economic failure, so a means of rapidly and inexpensively estimating secondary recovery reserves as a function of primary recovery would provide a gauge of potential success for a waterflood.
Coral Production will use this technology to evaluate the probability of a successful waterflood at the Herboldsheimer field. Operational and oil data from 164 D-J Basin sand units will be analyzed using "fuzzy logic" and neural network techniques to develop correlations of secondary production to primary production performance ratios and the field and oil information. A ranking technique will rate individual parameters such as field location, producing horizon, production and other field and reservoir characteristics. The high-ranking parameters will then be correlated with the secondary production to primary production (S/P) of a portion of the waterfloods in the database. S/P predictions will be made for the remaining waterfloods, and neural network correlations based on the entire data set used to predict the secondary reserves from waterflooding the Herboldsheimer field.
The prediction of the S/P ratio will provide a quick means of evaluating the probable success of waterflooding not only in the Herboldsheimer field but, if successful, can be used to evaluate the many D-J Basin wells that are depleted and temporarily abandoned. Computational intelligence screening of technical merits and estimating secondary reserves would prevent the premature plugging of these potentially valuable assets.
Coral Production's cost share for the 24-month project will be $125,000, and DOE will provide federal funding of $75,000. The project contact is James R. Weber, 303-623-3573.
Read & Stevens, Roswell, NM
Project: Petrophysical investigation of the secondary recovery potential in the Cherry Canyon Formation, Northeast Lea Field, Lea County, New Mexico - Read & Stevens is interested in waterflooding potential for secondary recovery from the Cherry Canyon horizon in Lea County, New Mexico. Much of the development in this area is approaching primary recovery depletion.
The reservoir is composed of fine-grained sandstone and siltstone containing clay material which results in high water saturation, and also swells and reduces reservoir permeability -- the ability of water and oil to flow through the rock pores and fractures. There are also abundant organic materials that interfere with obtaining well logs. These complications have limited oil volume calculations and identifications of all net pay zones, and present a challenge to Read & Stevens' planned waterflooding.
Faced with the scarcity of truly representative core to provide accurate analyses, Read & Stevens will drill fresh core and preserve it. The consulting firm of T. Scott Hickman and Associates will collaborate on special core analyses, and will obtain additional well logs for a more detailed analysis of reservoir properties. The log interpretation will be calibrated to the core analysis results, and the entire collected data set used to assess the potential for a successful waterflooding in each rock type identified.
Successful results from the project will improve accuracy of log interpretation and establish methodology for evaluating secondary recovery by water injection using wireline logs, possibly supplemented by sidewall cores.
Read & Stevens will provide $86,000 in cost sharing for the 6-month project, and DOE will provide $75,000 in federal funding. The project contact is T. Scott Hickman, 915-683-4391.
Makoil, Inc., Las Vegas, NV
Project: Increasing oil recovery through advanced reprocessing of 3-D seismic, Grant Canyon and Bacon Flat Fields, Nye County, Nevada - Oil production in the Grant Canyon and Bacon Flat Fields in eastern Nevada is from two separate small but complex fault blocks, typical deformational products of Basin and Range geologic history. Producing zones in the wells of both fields have a large vertical extent, but their limited lateral extent has resulted in an excessive number of dry development wells that have been drilled using a 160-acre spacing pattern.
To date, 3-D seismic data processing has not provided depth-structure maps that fully image complex features such as compartmentalization of the reservoir rock, critical to accurate drilling in this type of reservoir. Without details of the reservoir's structure to guide drilling, fields like this will be abandoned with a large volume of oil unproduced.
In this project, Makoil will use modern, cost-effective advances in seismic data processing to obtain significantly improved imaging to accurately represent the geologic structure. Working with seismic consultants, Custom Geophysical Services will use special processing software to resolve signal phase differences resulting from the use of two different signal energy sources (dynamite and Vibroseis), and to resolve problems in signal velocities due to weathered rock zones. Special computational processing of signal velocities will enhance overall quality and detail of the structural imaging.
Improved imaging of at-depth structure in the two fields will significantly enhance Makoil's ability to understand the reservoir, to more accurately guide development drilling, and to combine the enhanced structural resolution with reservoir engineering data to identify undrained volumes of oil. The technology would be applicable not only to the Basin and Range region, but to some extent wherever structural traps are located.
Makoil will provide cost sharing of $74,000 for the 12-month project, and DOE will provide matching federal funds. The project contact is Gregg S. Kozlowski, 702-221-1931.
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