Significant New “Learnings” From An Integrated Study Of An Old Field, Foster/South Cowden Field (Grayburg & San Andres), Ector County, Texas. Robert C. Trentham, DGS Center for Energy and Economic Diversification University of Texas of the Permian Basin

Project Results 290,000 BO Incremental Production 1996 to present >650,000 BO Incremental Reserves 3 Re-entries 4 New Drills >12 Workovers Economic life of field extended from 9 to 16 years

Sec 36 Production 1977 to 1993

Bottom Line

“Learnings” Came in All Areas Reservoir Characterization Well Testing Re-completions Production

INTEGATED STUDY GEOLOGICAL MODEL 3D SEISMIC / INVERSION MODELING FLOW MODELING HISTORY MATCH SIMULATION WELL WORK, TESTING, AND MONITORING

PROCEEDURES PRODUCTION TESTING PRESSURE TRANSIENT TESTING WATER CHEMISTRY WELL WORK

Type Log Queen Upper Grayburg –Main Pay Lower Grayburg – Minor Pay San Andres – Large OOIP

FOSTER FIELD

INTEGATED STUDY Problems Solutions OLD WATERFLOOD CROSS FLOW BETWEEN ZONES NO FRACTURE STIMULATIONS BHP DISCREPANCIES LOW PERMEABILLLTY WHERE DID THE OIL COME FROM AND WHERE DID THE WATER GO? OPEN HOLES / CASED HOLES GEOLOGICAL MODEL 3D SEISMIC / INVERSION MODELING FLOW MODELING HISTORY MATCH SIMULATION TESTING, WELL WORK, MONITORING

Discovered 1939 40 Acre spacing Nitro Open Holes Waterflood 1962 20 Acres 1979 Laguna 1992 DOE 1994 Oxy 2002

Reservoir Characterization San Andres Reservoir – Over Estimates and Under Achievement Barriers to vertical flow Inversion Modeling to porosity maps Seismic Velocity related to Neutron Density Porosity

Porosity vs. Permeability

Seismic Inversion Modeling

Porosity - Inversion vs. log Seismic Inversion Well Log

Well Testing Water Chemistry Bottom Hole Pressure Test results Inefficient sweep Backup for well testing & workover results Carryover and Makeup water Bottom Hole Pressure Test results Complex layering of reservoir Cross flow Low permeability = Longer test duration Production tests 3 day minimum

HC03 S04 CL CA MG NA TDS UPPER GRAYBURG 170 2990 13500 1530 450   HC03 S04 CL CA MG NA TDS UPPER GRAYBURG 170 2990 13500 1530 450 7750 26390 LOWER GRAYBURG 386 2632 20295 1889 664 11245 37332 SAN ANDRES 980 3881 33846 2507 762 19855 61831 INJECTION WATER 793 3100 32000 2646 947 17757 57244 CANYON 329 1104 76532 5880 692 42193 126693 ELLENBURGER 439 1459 63917 3840 972 36064 106691

History Match 1939 Discovery 1961 Waterflood

1979 20 Acre Infill 1996 Simulation

BOTTOM HOLE PRESSURE TESTING AND THE IMPACT OF PERMEABILITY ON PRESSURE DISTRIBUTION

Upper Grayburg wells 1320’ apart 2124 # 544 # 1534 # 955 #

Dual Zone Test

After CIBP

Same Well After Re-frac

Recompletions/Workovers 1955 to 1982 Fracture Stimulation are closed, healed or scaled over Acid Stimulations unsuccessful in contacting reservoir Success rate can be estimated and candidates ranked by Bottom Hole Pressure, Water Chemistry and Production Tests

Brock Lease Workover Results Well Work Date $$ BOPD MCFPD BWPD BR #5 Re-Frac 8/98 58.5 6 1 Post-Frac 72 10 200 6/02 13 3 71 BR#6 68.6 9 38 220 2 62 BR#7 77.2 5 44 242 15 178

Production Outcome of fracture stimulation is proportional to bottom hole pressure and Oil/Water production rates prior to treatment Flowing water recoveries do not condemn a well. Some wells produce many times load and have to have fluid level drop below 1000’ from surface before producing OIL!

Bottom Line

$ucce$$ful Project? PRODUCTION BEFORE WELL WORK (UPPER GRAYBURG ONLY) 37 BO, 9 MCF, 181 BW INITIAL PRODUCTION AFTER WORK 467 BO, 145 MCF, 3167 BW CURRENT PRODUCTION RATE 280 BO, 65 MCF, 2323 BW

Acknowledgements Dick Weinbrandt Bill Robinson DOE Tulsa office The Staff of Laguna Petroleum Baker-Hughes (previously Scientific Software Intercorp) Paul Laverty