1. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 1 Cuando un simple modelo estocástico conviene más que un simulador numérico. Cuando un simple modelo estocástico conviene más que un simulador numérico. Victor Sancho Vincente Berrios Oman Oquendo Victor Sancho Vincente Berrios Oman OquendoSTOIIPSCGIIP(MSm3)(MSm3) Mean Reward 3,7775,46 Standard Deviation 1,8737,31 90 Percent Probability 1,5029,90 50 Percent Probability 3,6272,39 10 Percent Probability 6,22124,30 Victor Sancho Vicente Berrios Oman Oquendo Victor Sancho Vicente Berrios Oman Oquendo Desarrollo Estratégico de un Campo :

2. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 2 CONTENT:CONTENT: Field Description Field Description Generalities Generalities Geology Geology Production History Production History Numerical Simulation Numerical Simulation Reservoir Development Strategy Reservoir Development Strategy Stochastic Model Stochastic Model Reserves Estimations Reserves Estimations Water Management Water Management Infill Drilling Infill Drilling Conclusions Conclusions Field Description Field Description Generalities Generalities Geology Geology Production History Production History Numerical Simulation Numerical Simulation Reservoir Development Strategy Reservoir Development Strategy Stochastic Model Stochastic Model Reserves Estimations Reserves Estimations Water Management Water Management Infill Drilling Infill Drilling Conclusions Conclusions

3. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 3 Where it is… Señal Picad a

4. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 4 Basic Information… Discovered in 1963 Discovered in 1963 Area: 15.000 acres (62 Km 2 ) Area: 15.000 acres (62 Km 2 ) Lease Ending: Nov. 2017 Lease Ending: Nov. 2017 Reservoir Depth: 2750’ (850 mts) Reservoir Depth: 2750’ (850 mts) Reservoir Temperature: 110º F (43.3ºC) Reservoir Temperature: 110º F (43.3ºC) API: 25 API: 25 GOR: 120 ft 3 /Bl (22 m3/m3) GOR: 120 ft 3 /Bl (22 m3/m3) Drilled Wells: 306 Drilled Wells: 306 Active Wells: 174 Active Wells: 174 Injector Wells: 71 Injector Wells: 71 Well Spacing: 500 mts Well Spacing: 500 mts Actual Gross Production: 105.546 BOPD, (16.781 m3/d) Actual Gross Production: 105.546 BOPD, (16.781 m3/d) Actual Oil production Rate: 5.604 BOPD, (900 m3/d) Actual Oil production Rate: 5.604 BOPD, (900 m3/d) Actual Water Injection Rate: 107.622 bbl/d (17.101 m3/d) Actual Water Injection Rate: 107.622 bbl/d (17.101 m3/d) Water Cut: 94 % Water Cut: 94 % Cummulative Oil Production: 122.0 MMBls (19.4 MMm 3 ) Cummulative Oil Production: 122.0 MMBls (19.4 MMm 3 ) Discovered in 1963 Discovered in 1963 Area: 15.000 acres (62 Km 2 ) Area: 15.000 acres (62 Km 2 ) Lease Ending: Nov. 2017 Lease Ending: Nov. 2017 Reservoir Depth: 2750’ (850 mts) Reservoir Depth: 2750’ (850 mts) Reservoir Temperature: 110º F (43.3ºC) Reservoir Temperature: 110º F (43.3ºC) API: 25 API: 25 GOR: 120 ft 3 /Bl (22 m3/m3) GOR: 120 ft 3 /Bl (22 m3/m3) Drilled Wells: 306 Drilled Wells: 306 Active Wells: 174 Active Wells: 174 Injector Wells: 71 Injector Wells: 71 Well Spacing: 500 mts Well Spacing: 500 mts Actual Gross Production: 105.546 BOPD, (16.781 m3/d) Actual Gross Production: 105.546 BOPD, (16.781 m3/d) Actual Oil production Rate: 5.604 BOPD, (900 m3/d) Actual Oil production Rate: 5.604 BOPD, (900 m3/d) Actual Water Injection Rate: 107.622 bbl/d (17.101 m3/d) Actual Water Injection Rate: 107.622 bbl/d (17.101 m3/d) Water Cut: 94 % Water Cut: 94 % Cummulative Oil Production: 122.0 MMBls (19.4 MMm 3 ) Cummulative Oil Production: 122.0 MMBls (19.4 MMm 3 )

5. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 5 Geology…Geology…

6. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 6 How it was… …Discovered in 1963 …Primary Drainage 1963 – 1976: 130 wells drilled, 8500 B/D (1350 m3/d) 25 % water cut, 2% annual decline rate, 25 % water cut, 2% annual decline rate, Np: 26.4 MMBls (4.2 MMm3), RF: 7% Np: 26.4 MMBls (4.2 MMm3), RF: 7% …1976 Water Flooding Started: Pilot Project 6300 BWPD, 6 inyectors. …1978 – 1979 Pattern Expansion: 61 new wells drilled, reached max. Oil rate 15.400 BOPD (2450 m3/d). 15.400 BOPD (2450 m3/d). …80’s – 90’s Full scaled project: 71 injector wells, 10.000 BWPD, 11.600 BOPD (1850 m3/d), 4% decline rate. (1850 m3/d), 4% decline rate. …2000 – today Project Maturity: 20.000+ BWPD, 5600 BOPD (900 m3/d), 95% water cut, Np: 120.75 MMBls (19.2 MMm3), RF:32% water cut, Np: 120.75 MMBls (19.2 MMm3), RF:32% 180 active wells, 72 injectors 180 active wells, 72 injectors …Discovered in 1963 …Primary Drainage 1963 – 1976: 130 wells drilled, 8500 B/D (1350 m3/d) 25 % water cut, 2% annual decline rate, 25 % water cut, 2% annual decline rate, Np: 26.4 MMBls (4.2 MMm3), RF: 7% Np: 26.4 MMBls (4.2 MMm3), RF: 7% …1976 Water Flooding Started: Pilot Project 6300 BWPD, 6 inyectors. …1978 – 1979 Pattern Expansion: 61 new wells drilled, reached max. Oil rate 15.400 BOPD (2450 m3/d). 15.400 BOPD (2450 m3/d). …80’s – 90’s Full scaled project: 71 injector wells, 10.000 BWPD, 11.600 BOPD (1850 m3/d), 4% decline rate. (1850 m3/d), 4% decline rate. …2000 – today Project Maturity: 20.000+ BWPD, 5600 BOPD (900 m3/d), 95% water cut, Np: 120.75 MMBls (19.2 MMm3), RF:32% water cut, Np: 120.75 MMBls (19.2 MMm3), RF:32% 180 active wells, 72 injectors 180 active wells, 72 injectors

7. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 7 Production History…Primary Apr 68: 8500 B/D, 1% WOR Apr 76: 2% Decline rate, 25% WOR. A waterflooding Pilot Project was initiated Apr 76: 2% Decline rate, 25% WOR. A waterflooding Pilot Project was initiated Production rate proportional to Active wells. Decline rates almost constant Production rate proportional to Active wells. Decline rates almost constant

8. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 8 Production History…Primary Apr 68: 8500 B/D, 1% WOR Apr 76: 2% Decline rate, 25% WOR. A waterflooding Pilot Project was initiated Apr 76: 2% Decline rate, 25% WOR. A waterflooding Pilot Project was initiated Production rate proportional to Active wells. Decline rates almost constant Production rate proportional to Active wells. Decline rates almost constant Production History…Secondary Pilot Project, 6300 BWPD, 6 Injectors Production increased proportionally to new wells entry Production decreased proportionally to inactive wells. WOR increased rapidly to 90% Decline rate constant in 4% annually. Inyection rate 63.000 BWPD

9. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 9 Production History…Secondary Pilot Project, 6300 BWPD, 6 Injectors Production increased proportionally to new wells entry Production decreased proportionally to inactive wells. WOR increased rapidly to 90% Decline rate constant in 4% annually. Inyection rate 63.000 BWPD Production History…Maturity Injection rates reached 126 MBWPD, increasing as water production increases. WOR 95% Oil Production stabilized in 5400 B/D.

10. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 10 Reservoir Numerical Simulation

11. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 11 Date: 2003 Reservoir Pressure = 54 Kg/cm²- 768psi Reservoir Bubble Point: 72 Kg/cm² - 1024 psi Cells: 96 x 85 x 16 = 130.560 65.490 active cells. 65.490 active cells. Swi: 32% from cores Date: 2003 Reservoir Pressure = 54 Kg/cm²- 768psi Reservoir Bubble Point: 72 Kg/cm² - 1024 psi Cells: 96 x 85 x 16 = 130.560 65.490 active cells. 65.490 active cells. Swi: 32% from cores Reservoir Simulation

12. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 12 History Matching and Prediction

13. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 13 As seen so far, this field presents recovery optimization challenges: The strategy contemplates: Recalculate OOIP using an Stochastic Model. Recalculate OOIP using an Stochastic Model. Determining fluids distribution under current producing and injecting Determining fluids distribution under current producing and injecting conditions. Infill drilling Program conditions. Infill drilling Program Implementing a Water Conformance Approach. Implementing a Water Conformance Approach. Construction of an expanded numerical simulator will be considered further. As seen so far, this field presents recovery optimization challenges: The strategy contemplates: Recalculate OOIP using an Stochastic Model. Recalculate OOIP using an Stochastic Model. Determining fluids distribution under current producing and injecting Determining fluids distribution under current producing and injecting conditions. Infill drilling Program conditions. Infill drilling Program Implementing a Water Conformance Approach. Implementing a Water Conformance Approach. Construction of an expanded numerical simulator will be considered further. Reservoir Development Strategy

14. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 14 18 23 27 31 36 POROSITY Hu FVF AREA

15. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 15

16. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 16 MODELO ESTRATIGRAFICO Informacion SP Informacion Porosidad Información Litológica

17. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 17 Determining fluids distribution under current producing and injecting conditions Analysis through segregated flux model software. Analitic Simulation Constant inyection of 150 m³/d. Analysis through segregated flux model software. Analitic Simulation Constant inyection of 150 m³/d.

18. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION VALUE GENERATION CURVE $/d $ IMPLEMENT A WATER CONFORMANCE APPROACH.

19. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 19 Results…Results…

20. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 20 Señal Picada. Localización Infill Señal Picada. Localización Infill SP-001 OBJETIVO OBJETIVO : Adicionar un punto de drenaje inter-espaciado en el Reservorio Loma Montosa a fin de recuperar 20 mil m 3 de petróleo. DATOS BASICOS: Coordenadas: X: 5.830.216,00 Y: 2.573.875,00 Profundidad Total: 1000 mbnm Distancia entre pozos: SP-009 a 441 mts SP-042 a 377 mts SP-243 a 334 mts SP-291 a 472 mts SP-136 a 278 mts Tasa Inicial Esperada: 10 m 3 /dia Reservas Asignadas: 20.000 m 3 de petróleo Costo de Perforación: 800.000 US$ POZOS VECINOS: Winy Acum Winy Acum Winy m3/d Winy m3/d W. Acum W. Acum W m3/d W m3/d Oil Acum. Oil Acum. Oil. m3/D Oil. m3/D TIPO TIPO

21. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 21 Señal Picada. Localización Infill Señal Picada. Localización Infill SP-002 OBJETIVO OBJETIVO : Adicionar un punto de drenaje inter-espaciado en el Reservorio Loma Montosa a fin de recuperar 20 mil m 3 de petróleo. DATOS BASICOS: Coordenadas: X: 5.830.216,00 Y: 2.574.535,00 Profundidad Total: 1000 mbnm Distancia entre pozos: SP-009 a 325 mts SP-028 a 390 mts SP-029 a 298 mts SP-291 a 367 mts Tasa Inicial Esperada: 10 m 3 /dia Reservas Asignadas: 20.000 m 3 de petróleo Costo de Perforación: 800.000 US$ POZOS VECINOS: TIPO Oil. m3/D Oil Acum. W m3/d W. Acum Winy m3/d Winy Acum

22. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 22 Señal Picada. Localización Infill Señal Picada. Localización Infill SP-003 OBJETIVO OBJETIVO : Adicionar un punto de drenaje inter-espaciado en el Reservorio Loma Montosa a fin de recuperar 20 mil m 3 de petróleo. DATOS BASICOS: Coordenadas: X: 5.829.435,00 Y: 2.574.550,00 Profundidad Total: 1000 mbnm Distancia entre pozos: SP-030 a 295 mts SP-033 a 196 mts SP-278 a 374 mts SP-032 a 221 mts SP-030I a 297 mts Tasa Inicial Esperada: 10 m 3 /dia Reservas Asignadas: 20.000 m 3 de petróleo Costo de Perforación: 800.000 US$ POZOS VECINOS: TIPO Oil. m3/D Oil Acum. W m3/d W. Acum Winy m3/d Winy Acum

23. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 23 Señal Picada. Localización Infill Señal Picada. Localización Infill SP-004 OBJETIVO OBJETIVO : Adicionar un punto de drenaje inter-espaciado en el Reservorio Loma Montosa a fin de recuperar 18 mil m 3 de petróleo. DATOS BASICOS: Coordenadas: X: 5.830.315,00 Y: 2.574.985,00 Profundidad Total: 950 mbnm Distancia entre pozos: SP-028 a 310 mts SP-251 a 338 mts SP-006 a 423 mts SP-137 a 306 mts Tasa Inicial Esperada: 8 m 3 /dia Reservas Asignadas: 18.000 m 3 de petróleo Costo de Perforación: 800.000 US$ POZOS VECINOS: TIPO Oil. m3/D Oil Acum. W m3/d W. Acum Winy m3/d Winy Acum

24. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 24 CONCLUSIONSCONCLUSIONS Although Señal Picada has a numerical simulator in a single block which matches with production history and has been used to forecast future development, the geological complexity and critical data availability suggested the use of a stochastically model to accelerate field oil production. Using a probabilistic model oil reserves were re-estimated in 472.5 MMBls (75.1 MMm3) which represents 12 % higher than initially calculated. A development plan of 24 new wells was considered for the next two years. Considering oil prices, lease time and reservoir characteristics, the selection of a stochastically model can surpass the use of a numerical model in order to optimize a mature field profitability. Although Señal Picada has a numerical simulator in a single block which matches with production history and has been used to forecast future development, the geological complexity and critical data availability suggested the use of a stochastically model to accelerate field oil production. Using a probabilistic model oil reserves were re-estimated in 472.5 MMBls (75.1 MMm3) which represents 12 % higher than initially calculated. A development plan of 24 new wells was considered for the next two years. Considering oil prices, lease time and reservoir characteristics, the selection of a stochastically model can surpass the use of a numerical model in order to optimize a mature field profitability.

25. A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION A FIELD DEVELOPMENT STRATEGY: WHEN A SIMPLE STOCHASTIC MODEL SURPASSES NUMERICAL SIMULATION 25 Thanks…Thanks… Muchas Gracias…