PC Based Reservoir Analysis System Allows Quick Decision on E&P Well Plans for Black Widow Prospect J.L. Buchwalter Gemini Solutions, Inc. T.M. Campbell Mariner Energy, Inc.

AKNOWLEDGEMENT PGS/Diamond Geophysical Service Corporation

OUTLINE INTRODUCTION CASE STUDY - Exploration Well Sidetrack DRILLING RESULTS PRODUCTION CONCLUSIONS

When Can Reservoir Simulation Be Applied to Maximize Value ? Prevailing Idea in Petroleum Industry Once you understand the reservoir in detail GIGO Calculate accurate reserves and production profiles Problem: Often too late to optimize drilling and development decisions The Hidden Truth Study before you understand the reservoir in detail Impact exploration drilling and development maximize the economics

Key Facts Central GOM –EW 966 –Water Depth of 1853 ft Participants –Mariner Energy 69% (Operator) –Devon Energy 31% Ultimate Reserves –11 MMBOE History –Discovered Apr 1998 –Sanctioned Jan 2000 –Production Oct 2000 –Peak Rate Oct ,000 Bpd 9 MMcfpd

FIELD SUMMARY Small oil discovery in 1998 Ewing Bank area of the OCS Central Gulf region. Located approximately 3 miles east of Morpeth. Developed via a single well subsea tie-back to the Morpeth TLP in EW 921. First oil occurred in October 2000.

LOCATION MAPS

Index Map

Field Map

OUTLINE INTRODUCTION CASE STUDY - Exploration Well Sidetrack DRILLING RESULTS PRODUCTION CONCLUSIONS

High Cost Of Simulation (in the past) Unix workstations and the Unix-based software Unix system support personnel required Need for experts in geological and flow modeling

Offshore Exploration Well Net Pay Lower Than Expected Other Uncertain Variables Sidetrack or Abandon ?

WELL DATA Well NameTDMDTVDResults EW 966 #1Apr ’9812,15012,147Marginal Oil Pay

Time Constraints Floating Rig - US $125,000 / day Time 4:00 p.m. Answer Needed by 12:00 noon the Next Day

Work Flow Received Data at 6:30 p.m. Engineer 1 - Reviewed data Engineer 2 - Built single well model - Determined sensitivity to rock and fluid properties Engineer 3 - Digitized and grided maps - Calculated volumetrics - Exported grids to simulator

RESERVOIR DESCRIPTION OF BASAL NEBRASKAN SAND Early Pleistocene age Lower Slope environment Ponded submarine fan complex sands Oil hydrocarbons Defined by direct hydrocarbon indicators (amplitude anomaly) using 1996 Diamond Geophysical 3-D seismic volume. Accumulation trapped by fault, structural closure and minor stratigraphy. Excellent porosity, perm and low clay content.

Black Widow Amplitude Map

BASAL NEBRASKAN SAND STRUCTURE

Digitized Structure Map

Gridded Top-of-Structure Map

Water Saturation Contour Map at Initial Conditions

Water Saturation Cross-section at Initial Conditions

Model Building A full-field flow model, including wells, faults and an aquifer was developed in four (4) hours.

Flow Rate and Cumulative Production

Water Saturation Contour Map After 4 Years

Water Saturation Cross-section After 4 Years

Study Results 4 case ran between 6 and 10 PM 7 additional what ifs ran next morning, varied: geology rock properties All sidetrack drilling cases were economic

OUTLINE INTRODUCTION CASE STUDY - Exploration Well Sidetrack DRILLING RESULTS PRODUCTION CONCLUSIONS

WELL DATA Well NameTDMDTVDResults EW 966 #1Apr ’9812,15012,147Marginal Oil Pay EW 966 #1 ST1May ’98 11,95011,880Oil Pay. Basal Nebraskan Sand Productive. Completed. Producing.

ORIGINAL HOLE AND SIDETRACK

EW 966 #1 ST1 Log Section Basal Nebraskan Sand Penetration

EW 966 #1 ST1 Processed Log Basal Nebraskan Sand

Black Widow N-S Seismic Line NS OH ST1

DISCOVERY WELL SUMMARY BASAL NEBRASKAN SAND MEI EW 966 #1 ST1 drilled May ‘98 –Encountered 56 NFP –32 percent porosity –13 percent water saturation –LKO - 11,495 ft TVDSS –Assumed OWC – 12,000 ft (HCI)

OUTLINE INTRODUCTION CASE STUDY - Exploration Well Sidetrack DRILLING RESULTS PRODUCTION CONCLUSIONS

PRODUCTION STATISTICS First Production Oct 28, Initial BHP 8774 psi – SITP 5591 psi Peak Rate 10,500 Bpd, 8.8 MMcfpd –Oct 27, 2001 Through Jun 16, 2002 –Producing 5440 Bopd, 4.6 MMcfpd –Cum 4398 MBo, 3.64 Bcf. –SIBHP 6420 psi - SITP 3067 psi

OUTLINE INTRODUCTION CASE STUDY - Exploration Well Sidetrack DRILLING RESULTS PRODUCTION CONCLUSIONS

A PC-based characterization and simulation system exists that allows for modeling of exploration wells while the rig is on-site.

CONCLUSIONS PC-based characterization and simulation in conjunction with the appropriate user interface allows geoscientists and engineers to model reservoirs on a routine real-time basis.

CONCLUSIONS Simulation should be an everyday tool that is used in applications as diverse as exploration well evaluations and full field studies.

CONCLUSIONS The cost of PC-based simulation is low due to the lower costs of hardware, software and support. Manpower costs are significantly lowered due to a powerful interface that reduces both the time to complete a study and the need for expensive simulation experts.