A Case History from Kansas Application of Horizontal Wells in Mature Basins: A Case History from Kansas Tulsa Geological Society September 5, 2000.

Application of Horizontal Wells in Mature Basins:

A Case History from KansasA Case History from Kansas

Tulsa Geological Society September 5, 2000

Acknowledgements

US Department of Energy Mull Drilling Company Inc. Ritchie Exploration Inc. Sperry-Sun Drilling CMG (Computer Modeling Group) Security DBS Baroid Norseman Art Merrick Consulting Scientific Drilling Weatherford

University of Kansas

Saibal Bhattacharya Tim Carr John Doveton Paul Gerlach Bill Guy Richard Pancake

Presentation Outline

Introduction, Overview, ResultsWhy Identify Horizontal Candidates in

Mature Basins ?Remaining Oil and Gas ReservesEconomic Impact

Tools for Identifying Candidate Reservoirs, Leases and Locations

Large and Numerous Targets

One Kansas Target: MississippianReservoir Heterogeneity (Vertical &

Horizontal)

Presentation Outline

Reservoir Characterization & Simulation

Work with Sparse and Old Data

PC-Based Case Study of Horizontal Well

Operational Success

Economic Success ?$?$?$?$? The Learning Curve

http://www.kgs.ukans.edu/PTTC

Potential Targets

Numerous Targets State Level

Numerous Targets State Level

Compartmentalized ReservoirsMississippian “Meramecian”

Thin BedsLansing - Kansas CityShoaling Carbonates

Attic OilSub UnconformityOrdovician and Mississippian

SAGDCherokee Sandstones in Eastern Kansas

EOR InjectorsMultiple Reservoirs

Fractured ReservoirsArbuckle, Chat

Low Permeability Gas ReservoirsMississippian “Cowley Facies”

Gas / Water ConingCentral Kansas Reservoirs

Modified from Paul Gerlach

Why Identify Horizontal Candidates in Mature Basins ?Exploit Remaining Oil and Gas Reserves

Remaining Mobile Oil in Place/Quarter Section

Welch-Bornholdt-Wherry FieldsRice County, KansasDiscovered: 1924Producing Formation: MississippianTrap Type: StratigraphicCumulative Oil Production: 60 MMBO

CI: 500 MBOColor GridRed = 7 MMBOBlue = 2.5 MMBO

Modified from Paul Gerlach

ST

B/m

nth

ST

B/m

nth

Oppy South FieldHodgeman County, KansasDiscovered: 1962

Impact of Horizontal Well

Producing Formation: MississippianCum. Oil Prod.: 800 MBO

Why Identify Horizontal Candidates in Mature Basins ?Economic Impact

10001000

Modified from Paul Gerlach

Large Potential Target

Ness County

Schaben

Total Production 5+ Billion Barrels

Regan & Granite2 %

ARBUCKLE32 %

Upper & MiddleOrdovician

8 %Hunton

1 %

Pennsylvanian(Virgilian)

3 %

Pennsylvanian(Missourian)

23 %

Pennsylvanian(Desmoisian)

8 %

Pennsylvanian(Morrow)

3 %

Pennsylvanian(Other)

1 %

Mississippian19 %

Cumulative Production 6.6+ Billion BarrelsCumulative Production 6.6+ Billion Barrels Numerous Targets Mississippian

Numerous Targets Mississippian

Kansas Regional Cross-Section

Southwest Northeast1 2 3 4 5 6 7 8 9 10 11 12

1

23 4 5

6

78

9

10 11

12

Rush

Ness

Ellis

Lane

FinneyKearny

0 10 20 30 40

miles

Lansing - Kansas City

Pleasanton

Marmaton

Arbuckle

Viola Simpson

Reagan

Datum top Heebner

SchabenField

Cherokee

Mississippian

Kinderhook

Precambrian

Morrow

Cost Effective High Technology for the Independent Producer

In the Past....» Performed on Core Assets of Large Companies» Required Expensive Hardware and Software

At the Present....» Advances in PC-Based Hardware Software and Databases» Within Reach of Independent Producer

Mapping Field Level VolumetricsRemaining Mobile Oil in Place / Quarter Section

Welch-Bornholdt-Wherry FieldsRice County, KansasDiscovered: 1924Producing Formation: MississippianTrap Type: StratigraphicCumulative Oil Production: 60 MMBO

CI: 500 MBOColor GridRed = 7 MMBOBlue = 2.5 MMBO

Modified from Paul Gerlach

000

20S/7W

123456

7 8 9 10 11 1 2

1 3141 5161718

19 20 21 2 2 23 2 4

2 5262 7282 930

31 32 33 3 4 35 3 6

20S/6W

123456

7 8 9 10 11 12

131 415161718

19 20 21 22 2 3 24

252627282930

31 32 33 34 3 5 36

20S/5W

456

7 8 9

161718

19 20 21

2930

31 32

1

12

1 3

21S/7W

123456

7 8 9 10 11 12

1314151 61718

21S/6W

123456

7 8 9 1 0 11 1 2

1 3141 5161718

56

7 8

1718

Welch-Bornholdt-Wherry Fields

Cumulative Production per Quarter Section

CI: 100 mbo / quarter section

= 1.5 mmbo = 0.4 mmbo

Mapping Field Level VolumetricsCumulative Production / Quarter Section

Modified from Paul Gerlach

Welch-Bornholdt-Wherry Fields

Recovery Efficiency per Quarter SectionCI: 2%

0

60

0

20

20S/7W

123456

7 8 9 10 11 1 2

1 3141 5161718

19 20 21 2 2 23 2 4

2 5262 7282 930

31 32 33 3 4 35 3 6

20S/6W

123456

7 8 9 10 11 12

131 415161718

19 20 21 22 2 3 24

252627282930

31 32 33 34 3 5 36

20S/5W

456

7 8 9

161718

19 20 21

2930

31 32

1

12

1 3

21S/7W

123456

7 8 9 10 11 12

1314151 61718

21S/6W

123456

7 8 9 1 0 11 1 2

1 3141 5161718

56

7 8

1718

0

60

0

20

= 18% = 2%

Mapping Field Level VolumetricsRecovery Efficiency / Quarter Section

Modified from Paul Gerlach

Lease Level AnalysisVolumetric Recovery Efficiency

Horizontal Well Applicationin a Lease with Low Recovery Efficiency

Lease Level AnalysisVolumetric Recovery Efficiency

Large Potential TargetNess County

Ness CountyNess County

Schaben Field

Schaben Field

Numerous Targets Regional Level

Numerous Targets Regional Level

Production Data AnalysisSchaben Field

High Vertical High Vertical PermeabilityPermeability

Result Poor Result Poor Horizontal Horizontal SweepSweep

Reservoir Heterogeneity

Strong Vertical Heterogeneity 3” Interval Facies Controlled

Result Poor Lateral Drainage

Strong Vertical Heterogeneity 3” Interval Facies Controlled

Result Poor Lateral Drainage

0.00 100.00 200.00 300.00 400.00

Minipermeability (md)

4395.0

4400.0

4410.0

4420.0

4430.0

4405.0

4415.0

4425.0

4435.0

Ritchie Exploration1 Foos "A-P" TwinNE SW SW Sec. 31-T19S-R21W

Ness County, Kansas

Dolo Wacke-Packstone

Grainstone

Lime or DoloMudstone - Wackestone

Silt-Shale Fill

Late Stage BrecciationOriginal Facies Indeterminate

Chert

OilStain

Brecciation

Depositional Model

Shelf

Skeletal Bank

Shoal Island

Lagoon

SkeletalBank

RestrictedShelf

Silty Mudstoneand Wackestone

Mudstone andWackestone

Packstone andGrainstone

Wackestone andPackstone

Mudstone andEvaporites

Schaben Field

Geologic Reservoir Description

0.00 100.00 200.00 300.00 400.00

Minipermeability (md)Oil

Stain

Dolo Wacke-Packstone

Grainstone

Lime or DoloMudstone - Wackestone

Silt-Shale Fill

Late Stage BrecciationOriginal Facies Indeterminate

Chert

Brecciation

4430.0

4435.0

Ritchie Exploration#1 Foos "A-P" TwinNE SW SW Sec. 31-T19S-R21WNess County, Kansas

Reservoir FaciesSkeletal Wackestone - Packstone

Ritchie 2 Schaben PRitchie 2 Schaben P

Spicule-Rich Mudstone -Wackestone Facies

Ritchie 1 Moore BRitchie 1 Moore B

Perforation: 4400-4404. Produced 85 bopd & 132 bwpdPerforation: 4400-4404. Produced 85 bopd & 132 bwpd

Super Pickett Plot

Reservoir PorositySaturationPay HeightBVW

Super Pickett Plot

Reservoir PorositySaturationPay HeightBVW

Petrophysical Analysis

NMR AnalysisNMR AnalysisCore PlugsCore Plugs

Sample S23POROSITY vs T2

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1.00 10.00 100.00 1000.00 10000.00

T2 Relaxation Time, ms

Incr

em

enta

l P

oro

sity

, %

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Incr

em

enta

l P

oro

sity

, %

Saturated Incremental

Saturated Cumulative

Desaturated Incremental

Desaturated Cumulative

Sample S23POROSITY vs T2

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1.00 10.00 100.00 1000.00 10000.00

T2 Relaxation Time, ms

Incr

em

enta

l P

oro

sity

, %

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Incr

em

enta

l P

oro

sity

, %

Saturated Incremental

Saturated Cumulative

Desaturated Incremental

Desaturated Cumulative

NMR Derived Effective Porosity vs. Core Pororsity

0

5

10

15

20

25

0 5 10 15 20 25

Core Porosity

Eff

ecti

ve P

oro

sity

2nd OrderFitData Points

Eff. Por. =( Core Por.)^2*.03295 - (Core Por.)*0.00956

NMR Derived Effective Porosity vs. Core Pororsity

0

5

10

15

20

25

0 5 10 15 20 25

Core Porosity

Eff

ecti

ve P

oro

sity

2nd OrderFitData Points

Eff. Por. =( Core Por.)^2*.03295 - (Core Por.)*0.00956

Schaben Field Effective Porosity

NM

R E

ffec

tive

Por

osit

y

Core Porosity

Average Reservoir Pressure

Reservoir SimulationReservoir Heterogeneity

Poor Lateral Drainage Poor Lateral Drainage

Reservoir SimulationPerformance Prediction

24

25

19

30

W ITTM A N

2

W ITTM A N

1

G N EIC H

1

G N EIS C H

1

G N EIC H

2

W ILH E LM C

1

R EIN A

5

FR AN K E R E IN

1-A

R E IN O W W O

1R EIN 'A '

2

R EIN A O W W O

1

FR AN K R E IN

1

R E IN A

6

R E IN A

4

M O O R E C

2

M O O R E D

1

M O O R E D

4

M O O R E D

3

M O O R E D

2

M O O R E B

5

M O O R E C

3M O O R E B

2

M O O R E B

1

M O O R E B

3

M O O R E C

1

M O O R E B7

M O O R E B

6M O O R E B

4

SC H A BE N

1

SC H A BE N A

1

SC H A BE N A

1

LY LE S C H AB EN

1

SC H A BE N A

2

BATT C

1

B ATT A

1

G ILLIG

1

G ILLIG A

2

G ILLIG

1

G ILLIG

1-24

G ILLIG B

2

G ILLIG B

1

S C H AB EN

1O U T O N BA IL

1

BO R G ER

1

H U M B U R G1-X

BO R G ER

2

D O R A W AG N E R

3

W A G N E R2

D O R A W AG N ER

1

BO R G ER

2

BO R G ER

1

BO R G ER

2

H U M BU R G

2

H U M BU R G

1

H U M BU R G 1

H U M BU R G 'A '

2

H U M B U R G 'A '1

BO R G ER 'A '

1

BO R G ER

4

B O R G E R

13

B O R G E R 'A '

2

G ILLIG

1

R O BE RT B LE N T

2

R O B ERT B LEN T

1

G ILLIG

1

FIC KE N

1

F IC KE N

1A N N A W ILLIA M S

1

A N N A W ILLIA M S2

3

AN N A M W ILLIA M S

5

W ILLIA M S ES T

2H L W ILLIA M S ES T

1

H U M BU R G 3

W A G N E R

4

W AG N E R

5

B O R G E R3

W ITTM A N 3

M O O R E D P 6 M O O R E B-P TW IN 4M O O R E D P 5

Sim ulated Horizontal Well #1

2 4 2 0 1 6 1 2 48 0 S o - F t

V e r t i c a l I n f i l l v s . H o r i z o n t a l I n f i l lC o m p a r i s o n A r e a

Best Areas for Infill Drilling

So > 40% & Payheight > 20 ft.

Schaben Field

2 4 2 0 1 6 1 2 48 0 S o - F t

W ITTM AN

2

W ITTM AN

1

G N EIC H

1

1

M O O R E D M O O R E D

M O O R E D 3

M O O R E D 2

M O O R E B

6M O O R E B

4

W ITTM AN 3

MOORE DP 6 MOORE B-P TW IN 4MOORE DP 5

Simulated Horizontal Well #1

Vertical Infill vs. Horizontal Infill Schaben Field

Reservoir SimulationPerformance Prediction

10,000

1,000

100

10

1365 730 1095 1460 1825 2190

Cu

mu

lati

ve M

ST

B

Tim e (days from 1/1/1997)

1st Year Oil Production 5 Yr. Oil Production

1st Year Water Production 5 Yr. Water Production

184.0 mstb - 1 Horizontal Infill 337.2 mstb - 1 Horizontal Infill

820.9 5,486.1

99.4 mstb - 3 Vertical Infill 233.4 mstb - 3 Vertical Infill

425.3 2,725.5

46.2 mstb - No Infill

262.1 1,593.5

3 Vertical Infills vs. 1 Horizontal Infill

Boast VHS Performance Prediction

Reservoir SimulationPerformance Prediction

Numerous Targets Regional Level

Numerous Targets Regional Level

Ness City North Field

Numerous Targets Local Level

Numerous Targets Local Level

Reservoir Heterogeneity

Strong Horizontal Heterogeneity 10’ - 100’ Interval Karst Controlled

Result Poor Lateral Drainage

Strong Horizontal Heterogeneity 10’ - 100’ Interval Karst Controlled

Result Poor Lateral Drainage

Economic Success $?$?$?

IP: 85 BOPD & 54 BWPD

Daily Prod:

55 BO& 50 BW

1000’ of fluid over pump

Current Daily Prod:

18 BO & 32 BW

Pumped off

Cum Prod: 3,417 BO (7/31/00)

Plan to work over in September

Lessons Learned forHorizontal Well Operational Flexibility (Maintain Your Options)

New Well vs. Reentry Hole Size Drilling Fluids Case off the Curve Well Operations

Good Planning Communication “The Lateral is a Piece of Cake” Reservoir Heterogeneity

Reservoir CharacterizationGeologic Model

Geologic model: log (GR, Res), core, production, DST data

Maps & cross-sections of Mississippian sub-units: 5 layered reservoir model

Reservoir CharacterizationPetrophysical Model

Log K (eff. Klink) vs. Phi y = 0.1361x - 1.7989

R2 = 0.43

y = 0.1251x - 1.2269

R2 = 0.5407

y = 0.1401x - 2.3942

R2 = 0.6537y = 0.0815x - 2.5567

R2 = 0.209

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

0 5 10 15 20 25 30

Phi (%)

Lo

g K

(m

d)

Moldic Pckst Moldic Pck-WckstMudstone WckstoneLinear (Moldic Pck-Wckst) Linear (Moldic Pckst)Linear (Wckstone) Linear (Mudstone)

41 core plugs from wells in study area

Reservoir CharacterizationInitial Reservoir Model

Sparse porosity logs

DST and IP average K

HP1>HP2>LP2

>LP1& LP3

Assumptionuniform K for

each layer

Frequency histogram of core permeability

0

5

10

15

20

25

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

Insitu Klinkenberg horizontal K, md

Fre

qu

ency

Class 1: LP1 & LP3, 8 md

Class 2: LP2, 25 md

Class 3: HP2,40 md

Class 4: HP1,60 md

Reservoir CharacterizationInitial Reservoir Model

Identification of dominant lithofacies - core studies

LP1, LP2, LP3 –

Moldic Wackestone

HP1 & HP2 –

Moldic Packstone

Layer porosity –

from phi-K correlation, and

dominant lithofacies

Sub Phi, % K, mdunit

LP1 15 8LP2 21.5 25LP3 15 8HP1 23.6 60HP2 22.2 40

Reservoir CharacterizationSwi - Core Plugs

Swi @ 150

ft above OWC

Variation of Swi with porosity y = -2.0764x + 55.709

R2 = 0.4884

0102030405060708090

100

0 5 10 15 20 25 30

Phi, %

Sw

i, %

Swi - Pck Swi - PckWck Swi-Wck

Swi-Mudst Linear (Swi - Pck)

Reservoir CharacterizationSorw - Core Plugs

Variation of Sorw with porosity

0

5

10

15

20

25

30

35

40

0 5 10 15 20 25 30

Phi

So

rw

Sorw-Pck Sorw-PckWck Sorw-Wck

Sorw averaged in each cluster

Reservoir CharacterizationRelative Permeability

Honarpour’s correlation - intermediately wet carbonates

Relative permeability profiles

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Sw (fraction)

Re

lati

ve

K (

fra

cti

on

)

Krw - HP1 Krow - HP1 Krw - HP2 Krow - HP2

Krw - LP2 Krow(f) - LP2 Krw - LP1&3 Krow(f) - LP1&3

Reservoir CharacterizationCapillary Pressure

Cap Pr - Ness City

0

2

4

6

8

10

0 10 20 30 40 50 60 70 80 90 100

Sw

Br-

HC

, p

si

HP1,Pck 55md,24% HP2,Pck,33md,22%

LP2,PckWck,24md,19% LP1&3,Pck,8md,17%

Engineering AnalysisDST Interpretation

Pressure declined by 450 psi over a period of 17 years

Ness City North Fieldy = -0.0587x + 2953.3

R2 = 0.9316

0

200

400

600

800

1000

1200

1400

1600

Dec-75

No

v-79

No

v-83

No

v-87

No

v-91

No

v-95

No

v-99

Pi,

psi

Engineering AnalysisProduction History Reconstruction

WOR vs. cumulative production y = 0.0001x

R2 = 0.6933

y = 0.0008x

R2 = 0.684

y = 0.0068x

R2 = 0.6882

0

20

40

60

80

100

120

140

0 50000 100000 150000 200000

Cum Oil prod. STB

WO

R

Ummel#1 Ummel#2 Ummel#3 Linear (Ummel#1)Linear (Ummel#2 ) Linear (Ummel#3)

Limited water production data available

Engineering AnalysisProduction History Reconstruction

Lease production - allocated to wells

Water production approximated when data unavailable -Ummel #2

Cumulative comparison - well production

100

1000

10000

100000

1000000

0 2000 4000 6000 8000 10000

Days produced

Cu

mu

lati

ve

pro

du

cti

on

(S

TB

)

Ummel #1 Ummel #2Ummel #3 Pfannenstiel #2Pfannenstiel #1 Pfannenstiel #1-24Pember A5

Engineering AnalysisReservoir Simulation - History Match

Reservoir SimulationResidual Potential - So-ft, 2000

Performance PredictionPerformance Prediction - Infill

Rate performance & best case - Ummel #4 Hskin = 4.5, Pwf = 675 psi, effective producing

length = 400 ft

76

2829.946.6 37.5 32.8

22.72425.9

143

3728.5

214211198 206

186

153

60.7

163160134

148.7 155.5

5551

0

50

100

150

200

250

300

Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05

Av

era

ge

qu

art

erl

y b

bl/d

Qo Qo - bestQw Qw - bestQo - avg 2 mnths Qw - avg 2 mnths

Oil Oil (b) Wtr Wtr (b)1st yr 18803 23526 59208 372322nd yr 32128 33560 126069 86816

Original Plugged Well

Drill Out Cement & Set CIBP

Set Whipstock - Mill Casing

Drill Build Section

Drill Lateral Section

Set Liner

Final Completion

Rig Time & Job Costs

Work Performed

Approximate Rig Hours

% of Total

Approximate Workover Costs

% of Total

Drilling out cmt & setting CIBP 82.0 23.5 $26.4 M 10.6 Setting whipstock & milling casing 84.5 24.2 $24.2 M 9.8

Drilling build section (actual drilling time)

120.0 (27.8)

34.4 (8.0)

$135.1 M

54.4

Drilling lateral section (actual drilling time)

52.0 (32.8)

14.9 (9.4)

$44.3 M 17.8

Setting liner through the curve 10.0 2.9 $18.2 M 7.3

Totals 348.5 100 $ 248.2 M 100

Lessons Learned forHorizontal Well Operational Flexibility (Maintain Your Options)

New Well vs. Reentry Hole Size Drilling Fluids Case off the Curve Well Operations

Good Planning Communication “The Lateral is a Piece of Cake” Horizontal Heterogeneity

The Learning Curve

3042

1100

27128

0

500

1000

1500

2000

2500

3000

3500

Saskatchewan North Dakota Montana Kansas

To

tal

Ho

rizo

nta

l W

ells

, Ja

n-1

998

Where We Are in Kansas