1. Technology Development with Independents National Energy Technology Laboratory Office of Fossil Energy

2. Descriptor - include initials, /org#/date Independents 5-Phase Program  Provide technical assistance to small independent operators to help find solutions for local production problems  Cost-sharing assistance aimed at encouraging producers to apply unfamiliar technologies or novel, unproven approaches to solve operational problems through R&D field demonstration projects  Five solicitations resulted in five phases of research between 1995 and 2003

3. Descriptor - include initials, /org#/date Goals  Extend the economic production of domestic fields by slowing the rate of well abandonments and preserve infrastructure (including facilities, wells, data and expertise)  Increase ultimate recovery in known fields using advanced technologies for formation evaluation, improved oil recovery and production practices  Use field demonstrations to broaden information exchange and technology application among stakeholders by expanding participation in DOE projects

4. Descriptor - include initials, /org#/date Technology Development with Independents ‘High-Level Review’ Solicitations: Phase 1: #94PC91008 M&O with BDM-OK subcontracts under Research Opportunity Announcement # OKL-5027-01 – 1995-1998  DOE investment $1M (29%) & Independents investment $2.5M (71%)  22 projects awarded Phase 2: #01NT15146.000 – 1999-2002  DOE investment $1.4M (29%) and $3.5M (71%)  Round 1 – 7 projects awarded  Round 2 – 5 projects awarded  Round 3 – 5 projects awarded  Round 4 – 5 projects awarded  Total of 22 projects awarded Phase 3: #01BC15263.000 – 2001-2003  DOE Investment $.8M (36%) and Independents $1.3M (64%)  Round 1 – 3 projects awarded  Round 2 – 2 projects awarded  Round 3 – 5 projects awarded  Total of 10 projects awarded

5. Descriptor - include initials, /org#/date Technology Development with Independents ‘High-Level Review’ cont. Phase 4: #02NT15377.00 – 2002-2005  DOE Investment $.9M (42%) and Independents $1.3M (58%)  Round 1 – No projects awarded  Round 2 – 4 projects awarded  Round 3 – 6 projects awarded  Total of 10 projects awarded Phase 5a: #02NT15376.000 – 2003 - 2008  DOE Investment $1.8M (49%) and Independents $2.5M (51%)  Area 1 – 1 project awarded  Area 2 – 1 project awarded Phase 5b: #03NT15391.000 – 2003 - 2008  DOE Investment $3.7M (21%) and Independents $14.3M (79%)  3 projects awarded GRAND TOTAL OF 69 PROJECTS with total DOE investments of $9.6M (27%) and Independents $25.4M (73%); total combined $35M investment

6. Descriptor - include initials, /org#/date Phase 1 Support to Independents Program: Petroleum Technology Advances through Applied Research by Independent Oil Producers  Performance Period - 1995 to 1998  22 projects awarded in 13 states  Maximum award: $50,000  9 technology areas  Results  7 projects ready for technology transfer to other operators  12 were promising and justified additional monitoring or testing  3 had little or limited potential  5 of the 22 projects yielded almost twice the federal funding of the entire program

7. Descriptor - include initials, /org#/date Technology Development with Independents Initial 22 Projects Awarded – Phase 1 00-10.4.1.1

8. Descriptor - include initials, /org#/date Phase 1 Highlights Performer: Cobra Oil & Gas, University of Alabama and Schlumberger Formation Micro-Imaging (FMI) Used to log core and determine facies Confirmed that FMI logs are valid as alternation to whole core analysis Benefits Cost savings estimated at $10,000 to $25,000 per well Performer: Tenison Oil Company Wellbore problems with pump sticking, rods parting and wear due to calcium carbonate scale deposition. Redesigned rod pumps and used tubing anchors Reduced heat created by friction to reduce calcium carbonate precipitation Benefits Workover and operating costs reduced from $10,000 per month to $1,200 per month for demonstration well

9. Descriptor - include initials, /org#/date Phase 2 Support to Independents Program Technology Development with Independents  Period of Performance -1999 to 2002  21 projects awarded in 10 states  Maximum award: $75,000  16 projects less than 1 year in duration  Cost share by Industry is 71%  6 projects rated Highly successful  All projects participated in “Lessons Learned” workshop

10. Descriptor - include initials, /org#/date Technology Development with Independents Contract and Field Sites – Phase 2 00-10.4.2

11. Descriptor - include initials, /org#/date Phase 2 Highlights Performer: MNA Revitalized a 14 well waterflood in New Mexico Reservoir characterization using DOE’s BOAST III reservoir simulation software Benefits: Positive production response, which allowed sale of the property to Vintage Drilling Company in November 2001 Performer: Strand Energy Co. Evaluated secondary recovery in Arkansas oil field  Benefits: Reservoir and well- bore injection performance data obtained during the pilot project will provide important data for secondary recovery optimization. Strand Energy

12. Descriptor - include initials, /org#/date Phase 2 Highlights cont. Performer: Visos/ Vecta Energy; Partner University of Texas at Austin  9-component Vertical Seismic Profile (3 vectors and sources)  vertical vibrator  incline horizontal vibrator  crossline horizontal vibrator  Improved seismic reflection interpretation  Conventional 3-D seismic uses only compressional P waves, Analysis of S wave phenomenon  Each mode creates a different victor displacement in Morrow sandstone  Discovered that S waves were more robust the P-waves  S wave provided spatial resolution Benefits: Technology allows operators to image compartmentalized areas of reservoirs for bypassed oil.  Improved interpretation of Morrow sandstone in Co, KS, OK and TX 9 C VSP Directional movement of wave modes

13. Descriptor - include initials, /org#/date Phase 3 Technology Development with Independents  Period of Performance – 2001 to 2003  10 projects awarded in 6 states  Maximum award $75,000  Cost-share by industry 64%  8 projects judges successful Marks, Assoc. Biostratigraphy Evidence for oil exploration

14. Descriptor - include initials, /org#/date Phase 3 Highlights Performer: DAKFAM, Inc. Used GasGun to generate shockwaves and high pressure to create fissure out fro drill hole which served to connect fractures. Benefits: Returned three idle wells to production Performer: Hunter Living Trust (Vaquero Energy) Designed well surveillance system to monitor marginal oil wells. Benefits: Implemented Marginal Expense Oil Well Wireless Surveillance (MEOWWS) system. Demonstrated feasibility of wireless surveillance devices and remote sensor technology. MEOWWS Base Station Antenna and Radio Modem

15. Descriptor - include initials, /org#/date Phase 4 Research with Independents  Period of Performance – 2003 to 2005  10 projects awarded in 5 states  Maximum award $100,000  58% industry cost share  Projects with St. James and Vecta were funded as follow-ups to previous awards from Phase 2  All projects were technical successes Arnell Oil Co. Littleton, CO

16. Descriptor - include initials, /org#/date Phase 4 Highlights Performer: St. James  Designed new hydrochloric- phosphonic acid treatment to dissolve severe calcium carbonate scale buildup.  Inhibits the formation of calcium carbonate scale. Benefits: Returned 4 shut-in wells to production double the prior to shut- in Los Angeles, CA Performer: Grand Mesa Operating Co. Demonstrated feasibility of polymer gel technology to increase recovery in Kansas. Benefits: Polymer gels reduce water production, reduce well and operating costs. Grand Mesa St. James

17. Descriptor - include initials, /org#/date Phase 5 Advanced Technologies for Independents  Performance Period – 2002 to 2005  5 projects awarded in 5 states  Maximum award $100,000  Industry cost share 51-79%  Projects focused on:  Drilling and completion  Reservoir characterization  Seismic technology  All projects were successful Schlumberger time-lapse seismic, Michigan Vecta seismic Exploration in Williston Basin

18. Descriptor - include initials, /org#/date Phase 5 Highlights Performer: Enerdyne, LLC Developed submersible pump suspended on stainless steel wireline cable demonstrated in San Juan Basin, NM Benefits: Suspending the pump on wireline permits rapid deployment and retrieval New pump can cut capital costs and reduce operating costs significantly Performer: Utah Geological Survey Reservoir characterization of Leadville Lm, UT Benefits: Reduce exploration costs and drilling risk in environmentally sensitive areas Add new oil discoveries and reserves Enerdyne wireline cable UGS Leadville Limestone

19. Descriptor - include initials, /org#/date Independent Program Benefits Maintain current domestic production levels Curtail premature loss of domestic production due to fluctuating economic conditions Increase ultimate recovery in known fields using advanced technologies Program reached small independent operators who had not previous received direct benefit from DOE research or funding Shared technologies through DOE and PTTC workshop reached a wide range of independents Tremblor Petroleum Co., CA