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Permian Basin Overview July 25, 2006. McElmo Dome Unit Doe Canyon Unit Cortez PL Sheep Mountain Unit Bravo Dome Unit Bravo PL Sheep Moutain PL Denver.

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Presentation on theme: "Permian Basin Overview July 25, 2006. McElmo Dome Unit Doe Canyon Unit Cortez PL Sheep Mountain Unit Bravo Dome Unit Bravo PL Sheep Moutain PL Denver."— Presentation transcript:

1 Permian Basin Overview July 25, 2006

2 McElmo Dome Unit Doe Canyon Unit Cortez PL Sheep Mountain Unit Bravo Dome Unit Bravo PL Sheep Moutain PL Denver City CRC PL Central Basin PL W Bravo Dome Val Verde Plants

3 How did it Happen?

4 Wasson Texas New Mexico Welch Slaughter SACROC Salt Creek Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant Yates Permian Basin Circa 1970 Geraldine Ford Elmar N. Dollarhide S Cross S. Cowdan Means Unit Cogdell Mabee SeminoleNorth Hobbs Adair

5 Southern CRC CRC Pipeline McCamey New Mexico Welch Slaughter SACROC Salt Creek Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant CRC Pipeline Yates Permian Basin 1972 S Cross Geraldine Ford Elmar N. Dollarhide Wasson Texas Means Unit Mabee S. Cowdan Cogdell Seminole Adair North Hobbs

6 Windfall Profits Tax adopted in 1980 Windfall Profits Tax adopted in 1980 Waterfloods unitized in the 60s and 70s had started to decline Waterfloods unitized in the 60s and 70s had started to decline Owners of Potential EOR Projects aligned with CO 2 Source Fields Owners of Potential EOR Projects aligned with CO 2 Source Fields Major Oil Companies operating in Permian Major Oil Companies operating in Permian Shell, Mobil, ARCO, Exxon, Amoco Shell, Mobil, ARCO, Exxon, Amoco Source Field Unitizations Source Field Unitizations Shell, Mobil, et al – McElmo Dome Shell, Mobil, et al – McElmo Dome ARCO/Exxon – Sheep Mountain Unit ARCO/Exxon – Sheep Mountain Unit Amoco, Hess, et al - Bravo Dome Unit Amoco, Hess, et al - Bravo Dome Unit Majors commenced planning and development for their EOR projects Majors commenced planning and development for their EOR projects

7 Southern CRC CRC Pipeline McCamey Denver City New Mexico S. Cowdan Slaughter Salt Creek Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant CRC Pipeline Elmar Yates Permian Basin Sheep Mountain Bravo Dome McElmo Dome Welch Central Basin N. Dollarhide Geraldine Ford Mabee Means Unit Denver Unit Wasson S Cross SACROC Texas Cordona Lake Cogdell Cortez Pipeline SMPL Bravo P/L Seminole

8 Val Verde CRC Pipeline McCamey Denver City New Mexico S. Cowdan Slaughter Salt Creek McElmo Dome Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant CRC Pipeline Yates Sheep Mountain Bravo Dome Permian Basin Welch Este Geraldine Ford Elmar N. Dollarhide S Cross SACROC Cordona Lake Reinecke Sharon Ridge Cogdell Mabee Cortez Pipeline SMPL Bravo P/L Central Basin Means Unit Adair Seminole

9 Val Verde CRC Pipeline McCamey Denver City New Mexico S. Cowdan Slaughter Salt Creek McElmo Dome Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant CRC Pipeline Yates Sheep Mountain Bravo Dome Permian Basin Welch Este Geraldine Ford Elmar N. Dollarhide S Cross SACROC Cordona Lake Reinecke Sharon Ridge Cogdell Mabee Cortez Pipeline SMPL Bravo P/L Central Basin Means Unit Adair Seminole Centerline PL North Hobbs

10 EOR Projects started in 1983 are still purchasing CO2. EOR Projects started in 1983 are still purchasing CO2. Original projections indicated these projects would be on total recycle but HCPV Slugs have steadily increased. Original projections indicated these projects would be on total recycle but HCPV Slugs have steadily increased. Projects such as Denver Unit and Seminole San Andres Unit have been expanded into the Transition Zone and Residual Oil Zone respectively Projects such as Denver Unit and Seminole San Andres Unit have been expanded into the Transition Zone and Residual Oil Zone respectively Higher oil prices have justified startup of smaller and/or previously marginal projects Higher oil prices have justified startup of smaller and/or previously marginal projects

11 Current Denver City CO2 supply from all sources 1,420 MMCFD Current Denver City CO2 supply from all sources 1,420 MMCFD With oil price increasing, project expansions as well as new projects are justifying expansion of CO2 source fields With oil price increasing, project expansions as well as new projects are justifying expansion of CO2 source fields Kinder Morgan and partners are expanding McElmo Dome Unit by 200 MMCFD and initiating development of Doe Canyon Unit to 100 MMCFD. Kinder Morgan and partners are expanding McElmo Dome Unit by 200 MMCFD and initiating development of Doe Canyon Unit to 100 MMCFD. Kinder Morgan and co-owners are planning expansion of Cortez Pipeline to accommodate SW Colorado source field expansions Kinder Morgan and co-owners are planning expansion of Cortez Pipeline to accommodate SW Colorado source field expansions Expansion and development opportunities also exist in NE New Mexico at Bravo Dome Unit operated by Oxy and West Bravo Dome Unit operated by Hess Expansion and development opportunities also exist in NE New Mexico at Bravo Dome Unit operated by Oxy and West Bravo Dome Unit operated by Hess 2005 was record year, supplies pro-rated on occasion

12 How does the Permian Basin success story translate to Wyoming? How does the Permian Basin success story translate to Wyoming? Supply, Transportation and Demand have to be aligned. The 80s had the Supply and Demand fields mostly owned by the same companies. It is different today. Supply, Transportation and Demand have to be aligned. The 80s had the Supply and Demand fields mostly owned by the same companies. It is different today. Must be a win-win proposition for all Must be a win-win proposition for all What is the catalyst for EOR expansion in Wyoming - oil price, emissions regulation, other? What is the catalyst for EOR expansion in Wyoming - oil price, emissions regulation, other?

13 CO2-A (emissions) is more expensive to capture and compress than CO2-N is to develop and produce CO2-A (emissions) is more expensive to capture and compress than CO2-N is to develop and produce CO2-A is likely to cost $ $2.50/MCF Delivered CO2-A is likely to cost $ $2.50/MCF Delivered 6-10 MCF/BBL has been a rule of thumb utilization rate for new projects in the Permian Basin 6-10 MCF/BBL has been a rule of thumb utilization rate for new projects in the Permian Basin

14 End

15 Val Verde CRC Pipeline McCamey Denver City New Mexico S. Cowdan Slaughter Salt Creek McElmo Dome Terrell Plant Grey Ranch Plant Mitchell Plant Puckett Plant CRC Pipeline Yates Sheep Mountain Bravo Dome Permian Basin Welch Este Geraldine Ford Elmar N. Dollarhide S Cross SACROC Cordona Lake Reinecke Sharon Ridge Cogdell Mabee Center Line Cortez Pipeline S. Mouontain Bravo P/L Central Basin Means Unit


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