Carbon Dioxide Flooding in Central Kansas Reservoirs G. Paul Willhite Tertiary Oil Recovery Project Tertiary Oil Recovery Advisory Board October 19-20,2001

Minimum Miscibility Pressure

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

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

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded DOE Project Expanded DOE Project Tertiary Oil Recovery Project

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded DOE Project Expanded DOE Project Tertiary Oil Recovery Project

Central Kansas Initiative 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

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

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(Kinder Morgan) Phase V: Build a CO 2 pipeline into Central Kansas(Kinder Morgan) Tertiary Oil Recovery Project

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded DOE Project Expanded DOE Project Tertiary Oil Recovery Project

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

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

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

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)

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 BCF CO 2 injected- WAG 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 BCF CO 2 injected- WAG 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

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded DOE Project Expanded DOE Project Tertiary Oil Recovery Project

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

William Flanders

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

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~ psi Initial reservoir pressure~ psi Well connected to an aquifer Well connected to an aquifer

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded Pilot/DOE Project Expanded Pilot/DOE Project Tertiary Oil Recovery Project

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

Location of Ethanol Plant & CO2 EOR Site Kansas Geological Survey

Field Demonstration of CO 2 Miscible Flooding in the L-KC,Central Kansas Project Extension Class II Revisited DE-AC26-00BC15124 MV Energy LLC October 1, 2001

Outline of Presentation The Central Kansas Initiative The Central Kansas Initiative Field Demonstration Project Hall-Gurney Field Field Demonstration Project Hall-Gurney Field The Carbon Dioxide Supply The Carbon Dioxide Supply New Partner New Partner Expanded Pilot/DOE Project Expanded Pilot/DOE Project Tertiary Oil Recovery Project

Expanded Pilot Project Kinder Morgan reduced financial support Kinder Morgan reduced financial support CO2 available from ICM plant in Russell CO2 available from ICM plant in Russell Pilot size increased to provide acceptable economic and technical risk to MV Energy, ICM and Kinder Morgan Pilot size increased to provide acceptable economic and technical risk to MV Energy, ICM and Kinder Morgan Budget Period 1 extended to March 2002 Budget Period 1 extended to March 2002 Additional funding obtained from DOE effective October 1,2001 Additional funding obtained from DOE effective October 1,2001 Project extended to 2008 Project extended to 2008 ICM/Kinder Morgan to provide CO2 ICM/Kinder Morgan to provide CO2

Expanded Project Economics Total Project – $7.56 million Total Project – $7.56 million $2.34 M – CO 2 Purchase, transport, recycling $2.34 M – CO 2 Purchase, transport, recycling $2.21 M – Research, Technology Transfer $2.21 M – Research, Technology Transfer $1.33 M – Capital Costs (wells, etc.) $1.33 M – Capital Costs (wells, etc.) $1.68 M – Operations (8 years) $1.68 M – Operations (8 years) Funding Funding $2.03 M MV Energy $2.03 M MV Energy $0.52 M Kinder-Morgan CO 2 Co. LP $0.52 M Kinder-Morgan CO 2 Co. LP $0.97 M ICM $0.97 M ICM $2.77 M U.S. Department of Energy $2.77 M U.S. Department of Energy $1.17 M KGS and TORP $1.17 M KGS and TORP $0.10 M Kansas Department of Commerce $0.10 M Kansas Department of Commerce Total Project – $7.56 million Total Project – $7.56 million $2.34 M – CO 2 Purchase, transport, recycling $2.34 M – CO 2 Purchase, transport, recycling $2.21 M – Research, Technology Transfer $2.21 M – Research, Technology Transfer $1.33 M – Capital Costs (wells, etc.) $1.33 M – Capital Costs (wells, etc.) $1.68 M – Operations (8 years) $1.68 M – Operations (8 years) Funding Funding $2.03 M MV Energy $2.03 M MV Energy $0.52 M Kinder-Morgan CO 2 Co. LP $0.52 M Kinder-Morgan CO 2 Co. LP $0.97 M ICM $0.97 M ICM $2.77 M U.S. Department of Energy $2.77 M U.S. Department of Energy $1.17 M KGS and TORP $1.17 M KGS and TORP $0.10 M Kansas Department of Commerce $0.10 M Kansas Department of Commerce

Expanded DemonstrationProject 60 acre 60 acre 2 CO 2 injectors 2 CO 2 injectors 6 Producers 6 Producers 6 Containment Water Injectors 6 Containment Water Injectors 0.85 BCF CO 2 injected-WAG 0.85 BCF CO 2 injected-WAG 8 year operating life 8 year operating life >96,000 BO estimated recovery >96,000 BO estimated recovery Final pattern is still evolving Final pattern is still evolving

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 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 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

Critical Issues Remaining Pattern Selection Pattern Selection Recompletion of old wells Recompletion of old wells Arbuckle reevaluation Arbuckle reevaluation Arbuckle potential Arbuckle potential Properties of oil Properties of oil MMP-nitrogen content MMP-nitrogen content