1. Enhanced Oil Recovery Institute Department of Geology and Geophysics University of Wyoming Preliminary CO 2 Demand Analysis for the Powder River Basin Presentation to Wyoming Pipeline Authority Jan. 24, 2006 by J. Michael Boyles Klaas van ’t Veld

2. EORI’s Goals Assist operators to help improve oil production in Wyoming fields through research, technology transfer and project assistance –Improve existing production practices Increase efficiency of water floodsIncrease efficiency of water floods Identify bypassed payIdentify bypassed pay –Assist with evaluation of potential EOR projects for Wyoming fields

3. Goal – More CO 2 EOR in Wyoming Convert more of Wyoming’s CO 2 from a waste gas to a resource Convert more of Wyoming’s CO 2 from a waste gas to a resource Help Wyoming operators with CO 2 field evaluations Help Wyoming operators with CO 2 field evaluations –Very effective EOR technique Recovers additional 8% to > 15% of OOIPRecovers additional 8% to > 15% of OOIP Swells oilSwells oil Lowers viscosityLowers viscosity –Capital intensive –Higher operating costs

4. What is EORI Doing about CO 2 Characterizing Wyoming oil fields Characterizing Wyoming oil fields –Building integrated database for fields and reservoirs (WGA, O&G, SPE, DOE ….) –Analyzing reservoir performance (RMS-AAPG talk) Building reservoir models Building reservoir models –Analyzing reservoirs currently being flooded –Will predict CO 2 -EOR response for reservoirs not currently being flooded with CO 2 Developing scoping tools Developing scoping tools –Simple tools to evaluate “what if” scenarios –Based upon Wyoming reservoir characteristics

5. Current CO 2 Situation in Wyoming CO 2 Sources CO 2 Sources –La Barge Sales250 MMSCFD at high pressureSales250 MMSCFD at high pressure Venting210 MMSCFD at low pressureVenting210 MMSCFD at low pressure –Madden Venting55 MMSCFD at low pressureVenting55 MMSCFD at low pressure Existing pipeline* Existing pipeline* –Current distribution Salt Creek105 MMSCFDSalt Creek105 MMSCFD Baroil40 MMSCFDBaroil40 MMSCFD Rangely80 MMSCFDRangely80 MMSCFD Monell30 MMSCFDMonell30 MMSCFD –Potential additional distribution to PRB Easy+75 MMSCFDEasy+75 MMSCFD Possible+350 MMSCFDPossible+350 MMSCFD * Towler, in press

6. Current CO 2 Pipeline 20 in 16 in 24 in La Barge Madden Powder River Basin Monell Bairoil Salt Creek Rangely

7. Enhanced Oil Recovery Institute Department of Geology and Geophysics University of Wyoming Preliminary CO 2 Demand Analysis for the Powder River Basin

8. Study Area Powder River Basin

9. 50 miles

10. Initial Scope Reservoirs Cum production Reservoirs Cum production Minnelusa600 MMBO* Sussex / Shannon365 MMBO* Muddy266 MMBO* * IHS Production Database

11. Rationale –Near the end of CO 2 trunk line Extra capacityExtra capacity –Several big fields in basin that would support development of needed infrastructure Hartzog Draw, Hilight, Raven Creek, House Creek, Big MuddyHartzog Draw, Hilight, Raven Creek, House Creek, Big Muddy –Younger fields that have complete production data –Structurally simple traps –Stratigraphic heterogeneities are understandable

12. Work Plan 1. Identify “promising” fields 2. Screen for miscibility 3. Estimate CO 2 -EOR response 4. Screen for profitability

13. 1. Identify “Promising” Fields 99 Fields (120 field-reservoir combinations) 99 Fields (120 field-reservoir combinations) –Each has cum oil > 4 MMBO –Combined cum oil 1,300MMBO –Combined OOIP 3,200 MMBO Potential size of prize, assuming Potential size of prize, assuming –all pass miscibility screen –all yield extra 10% of OOIP CO 2 -EOR response –all pass profitability screen 320 MMBO 320 MMBO

14. 2. Screen for Miscibility Rule-of-thumb approach Rule-of-thumb approach –API cutoff –Depth cutoff –Too simple for accurate forecasts EORI approach EORI approach –Measured MMP –Estimate based on oil composition and temperature –Estimate based on API and temperature

15. 3. Estimate CO 2 -EOR Response Rule-of-thumb approach Rule-of-thumb approach –8 to 15 % of OOIP Other industry-standard approaches Other industry-standard approaches –Scaled response (Kinder Morgan tool) Based on field analogs (San Andres and Morrow)Based on field analogs (San Andres and Morrow) –CO 2 Prophet (DOE) Based on simulation of Louisiana fluvial-deltaic reservoirBased on simulation of Louisiana fluvial-deltaic reservoir EORI approach EORI approach –Scaled response (“EORI Tool”) Based on simulation of Wyoming reservoirsBased on simulation of Wyoming reservoirs

16. 4. Screen for Profitability Industry-standard approaches Industry-standard approaches –Use KM tool with built-in price, cost assumptions –Use CO 2 Prophet adding price, cost assumptions EORI approach EORI approach –Use “EORI tool” with flexible price, cost assumptions

17. Why an EORI Tool? Major Economic Screening Factors Major Economic Screening Factors –Cost of pipeline Distance to trunk lineDistance to trunk line –Cost of gas plant Capital costCapital cost Operating costsOperating costs Quantity recycled over timeQuantity recycled over time –Cost of CO 2 PricePrice Quantity purchased over timeQuantity purchased over time –Oil revenues PricePrice Quantity produced over timeQuantity produced over time

18. KM Prediction: Lost Soldier-Tensleep Predicted Actual

19. KM Prediction: Lost Soldier-Tensleep Predicted Actual

20. KM Prediction: Lost Soldier-Tensleep Predicted Actual Based on 1995 KM cost data

21. KM Prediction: Lost Soldier-Tensleep Predicted Actual Based on 1995 KM cost data

22. KM Prediction: Lost Soldier-Darwin Madison Predicted Actual

23. KM Prediction: Lost Soldier-Darwin Madison Predicted Actual

24. KM Prediction: Lost Soldier-Darwin Madison Predicted Actual Based on 1995 KM cost data

25. KM Prediction: Lost Soldier-Darwin Madison Predicted Actual Based on 1995 KM cost data

26. KM Prediction: Wertz-Tensleep Predicted Actual

27. KM Prediction: Wertz-Tensleep Predicted Actual

28. KM Prediction: Wertz-Tensleep Predicted Actual Based on 1995 KM cost data

29. KM Prediction: Wertz-Tensleep Predicted Actual Based on 1995 KM cost data

30. What about Economies of Scale? Major Economic Screening Factors Major Economic Screening Factors –Cost of pipeline Distance to trunk lineDistance to trunk line –Cost of CO 2 gas plant Capital costCapital cost Operating costsOperating costs Quantity recycled over timeQuantity recycled over time –Cost of CO 2 PricePrice Quantity purchased over timeQuantity purchased over time –Oil revenues PricePrice Quantity produced over timeQuantity produced over time

31. Two Phases Initial estimate of CO 2 -EOR response to define CO 2 trunk pipeline route Initial estimate of CO 2 -EOR response to define CO 2 trunk pipeline route –Individual field model –Central gas recycling plant model Detailed analysis of CO 2 -EOR response and economics given CO 2 trunk pipeline route Detailed analysis of CO 2 -EOR response and economics given CO 2 trunk pipeline route –Individual field model –Central gas recycling plant model

32. CO 2 -EOR Potential Recovery 3 Mile radius

33. CO 2 -EOR Potential Recovery 6 Mile radius

34. CO 2 -EOR Potential Recovery 9 Mile radius

35. Bottom Line Wyoming is blessed with cheap CO 2 Wyoming is blessed with cheap CO 2 The distribution system is not at capacity The distribution system is not at capacity CO 2 -EOR could substantially increase production in the PRB CO 2 -EOR could substantially increase production in the PRB So where do we go from here?

36. Current and Future Work Wyoming reservoirs are unique Wyoming reservoirs are unique Need accurate, WY-specific forecasting models Need accurate, WY-specific forecasting models –Statistical analysis of past production –Research into CO 2 -EOR response –Research into CO 2 -EOR economics (including potential sequestration credits) Working with Pipeline Authority Working with Pipeline Authority Building database and knowledge repository on Wyoming oil fields Building database and knowledge repository on Wyoming oil fields

37. We Need Your Help Contact us with suggestions / recommendations Contact us with suggestions / recommendations Please let us know if you have data that might help Please let us know if you have data that might help –Oil/gas analyses –Oil samples –Special core analyses –Detailed production data (including pressure) –Detailed cost data

38. Acknowledgments Wyoming Oil and Gas Commission Wyoming Oil and Gas Commission –Production data, field files, technical support IHS IHS –Production data and well information Merit Merit –Data on Bairoil CO 2 floods