1. Carbon Dioxide Flooding in Kansas Reservoirs G. Paul Willhite Tertiary Oil Recovery Project 14 th Oil Recovery Conference, March 14-15,2001

3. Minimum Miscibility Pressure

4. Requirements for Carbon Dioxide Miscible Flooding Minimum miscibility pressure must be determined for Kansas crude oils Minimum miscibility pressure must be determined for Kansas crude oils Must be possible to re-pressure reservoir to reach MMP during the displacement process Must be possible to re-pressure reservoir to reach MMP during the displacement process Carbon dioxide must be available at a price that will make the process economic Carbon dioxide must be available at a price that will make the process economic Tertiary Oil Recovery Project

5. Minimum Miscibility Pressure in Hall-Gurney LKC Tertiary Oil Recovery Project

6. Outline of Presentation Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply Tertiary Oil Recovery Project

7. Research on Carbon Dioxide Miscible Flooding Technology Potential Application of CO2 Process in Kansas(1979-1981) Potential Application of CO2 Process in Kansas(1979-1981) Evaluation of LKC CO2 Potential(1986- 1989) Evaluation of LKC CO2 Potential(1986- 1989) The Southwest Kansas CO2 Initiative (1997-1998) The Southwest Kansas CO2 Initiative (1997-1998) The Central Kansas Initiative(1998- ) The Central Kansas Initiative(1998- ) Tertiary Oil Recovery Project

8. Outline of Presentation Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply Tertiary Oil Recovery Project

9. Carbon Dioxide Flooding in Central Kansas Reservoirs Central Kansas Initiative (1998- KTEC (1999-2000) KTEC (1999-2000) DOE Class Revisited Project (2000-2005) DOE Class Revisited Project (2000-2005) Tertiary Oil Recovery Project

10. Carbon Dioxide Flooding in Central Kansas Reservoirs A Cooperative Program Involving Shell CO 2 Ltd(Kinder Morgan), Energy Research Center at University of Kansas( TORP, KGS)

11. Overall Objective Verify technical and economic viability of the application of CO2 miscible flooding to Central Kansas oil fields Verify technical and economic viability of the application of CO2 miscible flooding to Central Kansas oil fields Critical element: Demonstrate sufficient field performance(oil in the tank) to justify the development of a carbon dioxide pipeline into Central Kansas Tertiary Oil Recovery Project

12. Components of Carbon Dioxide Program Phase I:Conduct a feasibility study on Arbuckle and Lansing Kansas City Reservoirs(KTEC Contract) Phase I:Conduct a feasibility study on Arbuckle and Lansing Kansas City Reservoirs(KTEC Contract) Phase II: Select a site and design one or more field pilot CO 2 miscible floods(DOE Class Program Revisited) Phase II: Select a site and design one or more field pilot CO 2 miscible floods(DOE Class Program Revisited) Tertiary Oil Recovery Project

13. Components of Carbon Dioxide Program(Continued) Phase III: Construct and operate the CO 2 pilot(DOE Class Program Revisited) Phase III: Construct and operate the CO 2 pilot(DOE Class Program Revisited) Phase IV: Evaluate technical and economic performance of pilot(DOE Class Program Revisited) Phase IV: Evaluate technical and economic performance of pilot(DOE Class Program Revisited) Phase V: Build a CO 2 pipeline into Central Kansas(Shell CO 2, Ltd/Kinder Morgan) Phase V: Build a CO 2 pipeline into Central Kansas(Shell CO 2, Ltd/Kinder Morgan) Tertiary Oil Recovery Project

14. KTEC Contract Results Collected representative Arbuckle oil samples and determined the MMP and basic properties of these oils Collected representative Arbuckle oil samples and determined the MMP and basic properties of these oils Compiled a data base of LKC reservoirs and identified potential sites where pilot-scale demonstrations would be effective Compiled a data base of LKC reservoirs and identified potential sites where pilot-scale demonstrations would be effective Tertiary Oil Recovery Project

15. KTEC Contract- Results(Continued) Measured rock properties to provide input to reservoir characterization and simulation Measured rock properties to provide input to reservoir characterization and simulation Performed reservoir characterization of potential LKC sites within Hall Gurney and to identify optimal sites for CO2 screening simulations Performed reservoir characterization of potential LKC sites within Hall Gurney and to identify optimal sites for CO2 screening simulations Tertiary Oil Recovery Project

16. KTEC Contract- Results(Continued) Simulated CO2 miscible flood response at selected sites with screening models Simulated CO2 miscible flood response at selected sites with screening models Developed an economic model of the demonstration sites and the regional resource Developed an economic model of the demonstration sites and the regional resource Prepared a proposal for the DOE Class Revisited Program to support a field demonstration program in the Hall-Gurney Field(May 1999) Prepared a proposal for the DOE Class Revisited Program to support a field demonstration program in the Hall-Gurney Field(May 1999) Project Completion Report(September 2000) Project Completion Report(September 2000) Tertiary Oil Recovery Project

17. Hall-Gurney LKC Oil Resource- 10 County Area

18. Lease Scale Economic Variables-CO2 Flooding CO2 cost $1/mcf Oil price $20/bbl Capital cost $4,000,000/sec CO2 utilization 5/10 mcf/bbl (net/gross) Recovery 30% Primary + Secondary Operations $400-600M/yr/sec NRI 84% Residual Oil Volume???? CO2 cost $1/mcf Oil price $20/bbl Capital cost $4,000,000/sec CO2 utilization 5/10 mcf/bbl (net/gross) Recovery 30% Primary + Secondary Operations $400-600M/yr/sec NRI 84% Residual Oil Volume???? Kansas Geological Survey

19. CO 2 Costs vs. Oil Price for 20 % IRR Base Case: $20/bbl Oil $1.00/mcf CO 2 12% OOIP Kansas Geological Survey

20. Sensitivity to Oil Price Base Case: $20/bbl Oil $1.00/mcf CO 2 12% OOIP Kansas Geological Survey

21. Required Recovery for 20% IRR $20 Oil Recovery Required: 2,500 gross BO/acre Recovery FactorResource Threshold 30% P+S8,500 BO/acre 25% P+S10,200 BO/acre $25 Oil Recovery Required: 1,650 gross BO/acre Recovery FactorResource Threshold 30% P+S5,500 BO/acre 25% P+S6,600 BO/acre $20 Oil Recovery Required: 2,500 gross BO/acre Recovery FactorResource Threshold 30% P+S8,500 BO/acre 25% P+S10,200 BO/acre $25 Oil Recovery Required: 1,650 gross BO/acre Recovery FactorResource Threshold 30% P+S5,500 BO/acre 25% P+S6,600 BO/acre Kansas Geological Survey

22. Outline of Presentation Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Field Demonstration Project Hall- Gurney Field Field Demonstration Project Hall- Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply Tertiary Oil Recovery Project

23. Field Demonstration of CO 2 Miscible Flooding in the L-KC, Central Kansas Class II Revisited DE-AC26-00BC15124 MV Energy LLC March 7,2000

24. L-KC Recoveries in Hall-Gurney and Trapp > 8 MBO/acre 6-8 MBO/acre 4-6 MBO/acre 2-4 MBO/acre Cumulative Production Primary + Secondary Lansing-Kansas City (Per Section Basis) Cumulative Production Primary + Secondary Lansing-Kansas City (Per Section Basis) Kansas Geological Survey

25. Project Economics Total Project – $5.4 million Total Project – $5.4 million $2.0M – CO 2 Purchase, transport, recycling $2.0M – CO 2 Purchase, transport, recycling $1.5M – Research, Technology Transfer $1.5M – Research, Technology Transfer $1.1M – Capital Costs (wells, etc.) $1.1M – Capital Costs (wells, etc.) $0.8M – Operations (6 years) $0.8M – Operations (6 years) Funding Funding $2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company $2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company $1.9M U.S. Department of Energy $1.9M U.S. Department of Energy $1.0M KGS and TORP $1.0M KGS and TORP $0.1M Kansas Department of Commerce $0.1M Kansas Department of Commerce Total Project – $5.4 million Total Project – $5.4 million $2.0M – CO 2 Purchase, transport, recycling $2.0M – CO 2 Purchase, transport, recycling $1.5M – Research, Technology Transfer $1.5M – Research, Technology Transfer $1.1M – Capital Costs (wells, etc.) $1.1M – Capital Costs (wells, etc.) $0.8M – Operations (6 years) $0.8M – Operations (6 years) Funding Funding $2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company $2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company $1.9M U.S. Department of Energy $1.9M U.S. Department of Energy $1.0M KGS and TORP $1.0M KGS and TORP $0.1M Kansas Department of Commerce $0.1M Kansas Department of Commerce

26. DOE Class Program Revisited Central Kansas CO 2 Demonstration Project Phase 1-Reservoir Characterization( 1 Year) Phase 1-Reservoir Characterization( 1 Year) Phase 2-Field Demonstration(4 years) Phase 2-Field Demonstration(4 years) Phase 3-Monitoring(1 year) Phase 3-Monitoring(1 year)

27. Demonstration Design Summary 55 acre, nine-spot 55 acre, nine-spot 2 CO 2 injectors 2 CO 2 injectors 7 Producers 7 Producers 5 Containment Water Injectors 5 Containment Water Injectors 0.843 BCF CO 2 injected- WAG 0.843 BCF CO 2 injected- WAG 4.6 year operating life 4.6 year operating life >80,000 BO estimated recovery during DOE >80,000 BO estimated recovery during DOE >20,000 BO in 3 years after DOE Project >20,000 BO in 3 years after DOE Project 55 acre, nine-spot 55 acre, nine-spot 2 CO 2 injectors 2 CO 2 injectors 7 Producers 7 Producers 5 Containment Water Injectors 5 Containment Water Injectors 0.843 BCF CO 2 injected- WAG 0.843 BCF CO 2 injected- WAG 4.6 year operating life 4.6 year operating life >80,000 BO estimated recovery during DOE >80,000 BO estimated recovery during DOE >20,000 BO in 3 years after DOE Project >20,000 BO in 3 years after DOE Project

28. Outline of Presentation Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Research on Carbon Dioxide Miscible Flooding Technology Applied to Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Carbon Dioxide Flooding in Central Kansas Reservoirs Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply Tertiary Oil Recovery Project

29. Carbon Dioxide Supply Is the resource base in LKC reservoirs large enough to support a pipeline that could deliver CO2 at $1.00/mcf? Is the resource base in LKC reservoirs large enough to support a pipeline that could deliver CO2 at $1.00/mcf? Can the “Golden Trend” in the Hall- Gurney Field anchor a pipeline? Can the “Golden Trend” in the Hall- Gurney Field anchor a pipeline? Tertiary Oil Recovery Project

31. Pipeline Cost Estimates* Distance is 220 miles to Hall-Gurney Distance is 220 miles to Hall-Gurney Other LKC areas would require 110 miles of lateral lines Other LKC areas would require 110 miles of lateral lines Pipeline cost is $22,000/inch-mile Pipeline cost is $22,000/inch-mile Ten year amortization of capital cost at 10% based on 80% of line capacity Ten year amortization of capital cost at 10% based on 80% of line capacity CO2 is available at Postle Field at pipeline pressure CO2 is available at Postle Field at pipeline pressure *William Flanders, Transpetco Engineering

32. Pipeline Considerations CO2 oil recovered is 25% of Primary and Secondary CO2 oil recovered is 25% of Primary and Secondary Net CO2 required is ~4 mcf/BO Net CO2 required is ~4 mcf/BO Risk assessment=fraction of operators who would install floods Risk assessment=fraction of operators who would install floods Hall Gurney “Golden Trend”  70% Hall Gurney “Golden Trend”  70% Nearby LKC areas(Lateral)  50% Nearby LKC areas(Lateral)  50%

33. William Flanders

34. LKC Pipeline Results Risk weighted CO2 for LKC is ~60-65 BCF +-10% Risk weighted CO2 for LKC is ~60-65 BCF +-10% CO2 oil potential from LKC ~15-16MMBO CO2 oil potential from LKC ~15-16MMBO Not enough LKC resource base to anchor pipeline Not enough LKC resource base to anchor pipeline Need ~184 BCF risk weighted CO2 to deliver at $1.00/mcf at 10% IRR/10 year amortization Need ~184 BCF risk weighted CO2 to deliver at $1.00/mcf at 10% IRR/10 year amortization

35. Carbon Dioxide Pipeline Need an additional 120 BCF risk weighted CO2 potential to build 8” pipeline to Central Kansas Need an additional 120 BCF risk weighted CO2 potential to build 8” pipeline to Central Kansas Are Arbuckle reservoirs potential carbon dioxide miscible flood candidates? Are Arbuckle reservoirs potential carbon dioxide miscible flood candidates? Minimum miscibility pressure ~1600 psi Minimum miscibility pressure ~1600 psi Initial reservoir pressure~1050-1150 psi Initial reservoir pressure~1050-1150 psi Well connected to an aquifer Well connected to an aquifer

36. Determining Distribution of “Low” Pressure Arbuckle Concept: Low SIP on DST’s in mature production indicates less effective water drive than in areas with higher SIP Methodology: Map SIP for infill and replacement wells in mature Arbuckle fields. DST’s in top 30 feet and > 80 feet of fluid recovery. Preliminary results: Significant contiguous areas have lower pressures than would be anticipated for strong water drives. Original BHP 1150# “Normal” pressured areas 1050# Moderate pressured areas 550-750# “Low” pressured areas 300-550# Concept: Low SIP on DST’s in mature production indicates less effective water drive than in areas with higher SIP Methodology: Map SIP for infill and replacement wells in mature Arbuckle fields. DST’s in top 30 feet and > 80 feet of fluid recovery. Preliminary results: Significant contiguous areas have lower pressures than would be anticipated for strong water drives. Original BHP 1150# “Normal” pressured areas 1050# Moderate pressured areas 550-750# “Low” pressured areas 300-550# Kansas Geological Survey

37. “Low” Pressure Arbuckle, Bemis Field, Ellis Co. Kansas DST SIP overlain by Arbuckle Structure Arbuckle Production Total Cum.: 221 MMBO More than 8 MBO/acre All 200 MMBO 550-750 psi* 70 MMBO <550 psi* 20 MMBO *recent DST’s in top of Arbuckle Note: Data is very preliminary Arbuckle Production Total Cum.: 221 MMBO More than 8 MBO/acre All 200 MMBO 550-750 psi* 70 MMBO <550 psi* 20 MMBO *recent DST’s in top of Arbuckle Note: Data is very preliminary Low Moderate “High” Kansas Geological Survey

38. Carbon Dioxide Supply ICM(U.S. Energy Partners, LLC) announces ethanol plant to be constructed in Russell(February 5,2001) ICM(U.S. Energy Partners, LLC) announces ethanol plant to be constructed in Russell(February 5,2001) On stream ~November 1,2001 On stream ~November 1,2001 CO2 production 3.4 MMCFD(wet at atmospheric pressure) CO2 production 3.4 MMCFD(wet at atmospheric pressure) 8.5 miles from CO2 demonstration project 8.5 miles from CO2 demonstration project Tertiary Oil Recovery Project

39. Location of Ethanol Plant & CO2 EOR Site Kansas Geological Survey

40. Carbon Dioxide Supply-ICM Plant CO2 supply capable of supporting small scale commercial operation in the Hall Gurney Field(~1 BCF/year) CO2 supply capable of supporting small scale commercial operation in the Hall Gurney Field(~1 BCF/year) Cost to deliver CO2 at 1500 psi at the field is on the order of $1.00/mcf for commercial scale operation Cost to deliver CO2 at 1500 psi at the field is on the order of $1.00/mcf for commercial scale operation Working with ICM to secure CO2 supply for LKC CO2 demonstration project Working with ICM to secure CO2 supply for LKC CO2 demonstration project Tertiary Oil Recovery Project

41. UPDATE: Field Demonstration of CO 2 Miscible Flooding in the L-KC, Central Kansas Martin K. Dubois Kansas Geological Survey Martin K. Dubois Kansas Geological Survey Class II Revisited DE-AC26-00BC15124 MV Energy LLC KGSociety Tech Meeting, March 1, 2001 http://www.kgs.ukans.edu/CO2/reports.html

42. CO 2 Pilot Project Team Kansas Geological Survey Kansas Geological Survey Alan P. Byrnes Alan P. Byrnes Marty Dubois Marty Dubois W. Lynn Watney W. Lynn Watney Timothy R. Carr Timothy R. Carr Willard J. Guy Willard J. Guy John Doveton John Doveton Dana Adkins-Heljeson Dana Adkins-Heljeson Kenneth Stalder Kenneth Stalder Kinder-Morgan CO 2 Co. LP Kinder-Morgan CO 2 Co. LP Russell Martin Russell Martin Paul Nunley Paul Nunley William Flanders(consultant) William Flanders(consultant) U.S. Department of Energy U.S. Department of Energy Edith C. Allison (Prgrm Mngr) Edith C. Allison (Prgrm Mngr) Daniel Ferguson (Project Mngr) Daniel Ferguson (Project Mngr) Kansas Geological Survey Kansas Geological Survey Alan P. Byrnes Alan P. Byrnes Marty Dubois Marty Dubois W. Lynn Watney W. Lynn Watney Timothy R. Carr Timothy R. Carr Willard J. Guy Willard J. Guy John Doveton John Doveton Dana Adkins-Heljeson Dana Adkins-Heljeson Kenneth Stalder Kenneth Stalder Kinder-Morgan CO 2 Co. LP Kinder-Morgan CO 2 Co. LP Russell Martin Russell Martin Paul Nunley Paul Nunley William Flanders(consultant) William Flanders(consultant) U.S. Department of Energy U.S. Department of Energy Edith C. Allison (Prgrm Mngr) Edith C. Allison (Prgrm Mngr) Daniel Ferguson (Project Mngr) Daniel Ferguson (Project Mngr) Tertiary Oil Recovery Project G. Paul Willhite Don W. Green Shapour Vossoughi Jyun-Syung Tsau Richard Pancake Rodney Reynolds Rajesh Kunjithaya Ed Clark MV Energy LLC Dave Murfin Jim Daniels Larry Jack Niall Avison State of Kansas (Dept. of Commerce) ICM, Inc. Dave Vander Griend Tertiary Oil Recovery Project G. Paul Willhite Don W. Green Shapour Vossoughi Jyun-Syung Tsau Richard Pancake Rodney Reynolds Rajesh Kunjithaya Ed Clark MV Energy LLC Dave Murfin Jim Daniels Larry Jack Niall Avison State of Kansas (Dept. of Commerce) ICM, Inc. Dave Vander Griend Kansas Geological Survey Tertiary Oil Recovery Project

43. The Potential for Carbon Dioxide Flooding in Kansas Kansas oil production 96,000 B/D Kansas oil production 96,000 B/D Oil production from CO2* 12,500 B/D Oil production from CO2* 12,500 B/D *CO2 Pipeline @ 50 MMCFD CO2 oil production at 4 MCF/BO CO2 oil production at 4 MCF/BO Tertiary Oil Recovery Project