1. Field Demonstration of CO 2 Miscible Flooding in the Lansing-Kansas City Formation, Central Kansas Alan P. Byrnes Kansas Geological Survey Alan P. Byrnes Kansas Geological Survey Class II Revisited DE-AC26-00BC15124 MV Energy LLC

2. CO 2 Pilot Project Team Kansas Geological Survey –Alan P. Byrnes –Marty Dubois –Dr. W. Lynn Watney –Dr. Timothy R. Carr –Willard J. Guy –Dana Adkins-Heljeson –Kenneth Stalder Kinder-Morgan CO 2 Co. LP –Dr. Lanny Schoeling –Paul Nunley U.S. Department of Energy –Edith C. Allison (Prgrm Mngr) –Daniel Ferguson (Project Mngr) Kansas Geological Survey –Alan P. Byrnes –Marty Dubois –Dr. W. Lynn Watney –Dr. Timothy R. Carr –Willard J. Guy –Dana Adkins-Heljeson –Kenneth Stalder Kinder-Morgan CO 2 Co. LP –Dr. Lanny Schoeling –Paul Nunley U.S. Department of Energy –Edith C. Allison (Prgrm Mngr) –Daniel Ferguson (Project Mngr) Tertiary Oil Recovery Project –Dr. G. Paul Willhite –Dr. Don W. Green –Dr. Shapour Vossoughi –Richard Pancake –Rajesh Kunjithaya –Rodney Reynolds MV Energy LLC –Dave Murfin –Jim Daniels –Larry Jack State of Kansas (Dept. of Commerce) Tertiary Oil Recovery Project –Dr. G. Paul Willhite –Dr. Don W. Green –Dr. Shapour Vossoughi –Richard Pancake –Rajesh Kunjithaya –Rodney Reynolds MV Energy LLC –Dave Murfin –Jim Daniels –Larry Jack State of Kansas (Dept. of Commerce)

3. Central Kansas CO 2 Flooding Project Overview Producibility Problem Central Kansas Resource Target Pilot Site Project Overview Demonstration Site Characteristics Flood Implementation Producibility Problem Central Kansas Resource Target Pilot Site Project Overview Demonstration Site Characteristics Flood Implementation

4. Kansas Oil Production History CO 2 ? 6.6 Billion Barrels to Date

5. Producibility Problems Primary producibility problem is that the reservoirs have been depleted by effective waterflood Require technology that can mobilize residual oil Uncertainty in effectiveness of CO 2 flooding process for central Kansas reservoir conditions No present economic supply of CO 2 to Central Kansas Primary producibility problem is that the reservoirs have been depleted by effective waterflood Require technology that can mobilize residual oil Uncertainty in effectiveness of CO 2 flooding process for central Kansas reservoir conditions No present economic supply of CO 2 to Central Kansas

6. Total Cumulative and CO 2 Potential Oil Production by Interval

7. Central Kansas Oil Production Kansas Total 6.6 Billion Central Kansas Uplift Total 2.4 Billion Kansas Total 6.6 Billion Central Kansas Uplift Total 2.4 Billion LKC Pilot

8. CO 2 EOR Significance to Kansas 100’s of millions of barrels of additional reserves Double current daily oil production $2.5 Billion additional revenue for every 100 MMBO Thousands of additional jobs 100’s of millions of barrels of additional reserves Double current daily oil production $2.5 Billion additional revenue for every 100 MMBO Thousands of additional jobs

9. Purpose of Demonstration Determine the technical and economic feasibility of using CO 2 miscible flooding to recover residual and bypassed oil in LKC shallow shelf carbonates. Develop reservoir data for the LKC and Hall-Gurney for other floods Develop an understanding of operating costs and operating experience for CO 2 miscible flooding in Lansing-Kansas City reservoirs

10. General Demonstration Tasks Characterize the reservoir Model the flood using reservoir simulation Design and construct facilities and remediate existing wells Implement the planned flood Monitor the flood process

11. Pilot Site Located in Largest LKC Field: Hall-Gurney 55 MMBO 19 MMBO

12. Demonstration Design Summary 40 acre, seven-spot 2 CO 2 injectors 5 Producers 5 Containment Water Injectors 0.843 BCF CO 2 injected-WAG 4.6 year operating life 75,300 BO estimated recovery 18,300 BO in 3 years after DOE Project 40 acre, seven-spot 2 CO 2 injectors 5 Producers 5 Containment Water Injectors 0.843 BCF CO 2 injected-WAG 4.6 year operating life 75,300 BO estimated recovery 18,300 BO in 3 years after DOE Project

13. Project Economics Total Project – $5.4 million –$2.0M – CO 2 Purchase, transport, recycling –$1.5M – Research, Technology Transfer –$1.1M – Capital Costs (wells, etc.) –$0.8M – Operations (6 years) Funding –$2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company –$1.9M U.S. Department of Energy –$1.0M KGS and TORP –$0.1M Kansas Department of Commerce Total Project – $5.4 million –$2.0M – CO 2 Purchase, transport, recycling –$1.5M – Research, Technology Transfer –$1.1M – Capital Costs (wells, etc.) –$0.8M – Operations (6 years) Funding –$2.4M Kinder-Morgan CO 2 Co. LP and Murfin Drilling Company –$1.9M U.S. Department of Energy –$1.0M KGS and TORP –$0.1M Kansas Department of Commerce

14. Milestone Schedule

15. Phase I Tasks Acquisition of data into a web-based accessible database Geologic, petrophysical, and engineering reservoir characterization of site Numerical flow simulation of oil recovery and prediction of the optimum location for a new injector well Drilling, sponge coring, logging and testing a new CO 2 injection well to obtain better reservoir data Measurement of remaining oil saturation and advanced rock properties for improved reservoir characterization Assessment of the condition of existing wellbores Evaluation of the economics of carbon dioxide flood Acquisition of data into a web-based accessible database Geologic, petrophysical, and engineering reservoir characterization of site Numerical flow simulation of oil recovery and prediction of the optimum location for a new injector well Drilling, sponge coring, logging and testing a new CO 2 injection well to obtain better reservoir data Measurement of remaining oil saturation and advanced rock properties for improved reservoir characterization Assessment of the condition of existing wellbores Evaluation of the economics of carbon dioxide flood

16. Demonstration Site Description Lansing-Kansas City “C” zone Oomoldic Limestone Depth – 2,900 feet Net thickness - 15 feet Average porosity - 24% Average Permeability - 50 md Estimated residual oil saturation after waterflooding - >30% Initial Pressure - ~1250 psig Primary Drive - Solution Gas Lansing-Kansas City “C” zone Oomoldic Limestone Depth – 2,900 feet Net thickness - 15 feet Average porosity - 24% Average Permeability - 50 md Estimated residual oil saturation after waterflooding - >30% Initial Pressure - ~1250 psig Primary Drive - Solution Gas Lease location- –Colliver: E/2SW/4&SE/4 Sec 28-14S-13W –Carter: NE/4 Sec 33-14S- 13W 40 acre, seven-spot 2-injectors, 5-producers, 5- containment injectors Estimated Primary Recovery – 23% OOIP Estimated Secondary Recovery – 27% OOIP Cumulative lease production (400acres) – 2,293,200 bbls Lease location- –Colliver: E/2SW/4&SE/4 Sec 28-14S-13W –Carter: NE/4 Sec 33-14S- 13W 40 acre, seven-spot 2-injectors, 5-producers, 5- containment injectors Estimated Primary Recovery – 23% OOIP Estimated Secondary Recovery – 27% OOIP Cumulative lease production (400acres) – 2,293,200 bbls

17. Minimum Miscibility Pressure in Hall-Gurney LKC API = 37.5 o -38.4 o

18. Colliver No.18 CO 2 Injector L-KC “C” divided into 6 Layers-three flooding cycles General Properties* –C1: 8 md, 18.8% –C2: 150 md, 25.8% –C3: 40 md, 22.0% –C4: 6 md, 19.4% –C5: 2 md, 14.7% –C6: 0.3 md, 12.0% *- Colliver No. 18 injector exhibits better properties than average for site Colliver No.18 CO 2 Injector L-KC “C” divided into 6 Layers-three flooding cycles General Properties* –C1: 8 md, 18.8% –C2: 150 md, 25.8% –C3: 40 md, 22.0% –C4: 6 md, 19.4% –C5: 2 md, 14.7% –C6: 0.3 md, 12.0% *- Colliver No. 18 injector exhibits better properties than average for site

19. Oomoldic Porosity in Lansing-Kansas City ‘C’ Zone Thin section with blue epoxy-filled pores

20. L-KC Permeability vs Porosity Colliver-Carter

21. Water Saturation vs Oil Column Height

22. Relative Permeability

23. Lansing-Kansas City Residual Oil after Waterflood

24. Reservoir Structure and C2 Porosity

25. Preliminary streamtube modeling of two injector sweep efficiency

26. Highlights of Flood Implementation A new injection well will be drilled, cored, logged, and tested to obtain important data Surrounding wells will be recompleted in the “C” zone Five water injection wells will be recompleted to confine the flood CO 2 injection will begin in the second year of the project and alternate slugs of CO 2 and water will be injected for a period of 3.6 years It is planned to inject 0.843 billion cubic feet of CO 2 at injection pressures of a minimum of 1300 pounds per square inch (psi) Produced CO 2 will be recycled Full time water injection will begin in the sixth year of the project Preliminary estimated oil recovery is 75,300 STB (stock tank barrels) at the end of the project (year six) Additional 18,300 STB produced in years 6-9 after project A new injection well will be drilled, cored, logged, and tested to obtain important data Surrounding wells will be recompleted in the “C” zone Five water injection wells will be recompleted to confine the flood CO 2 injection will begin in the second year of the project and alternate slugs of CO 2 and water will be injected for a period of 3.6 years It is planned to inject 0.843 billion cubic feet of CO 2 at injection pressures of a minimum of 1300 pounds per square inch (psi) Produced CO 2 will be recycled Full time water injection will begin in the sixth year of the project Preliminary estimated oil recovery is 75,300 STB (stock tank barrels) at the end of the project (year six) Additional 18,300 STB produced in years 6-9 after project

27. Sensitivity to Oil Price Base Case: $20/bbl Oil $1.00/mcf CO 2 12% OOIP Base Case: $20/bbl Oil $1.00/mcf CO 2 12% OOIP

28. Conclusions Potential recoverable Arbuckle and L-KC oil reserves using CO 2 flooding may exceed 250 MMBO to 1 BBO Partners in Lansing-Kansas City Demonstration Flood $2.4M Kinder-Morgan CO 2 Co. LP and MV Energy LLC $1.9M U.S. Department of Energy $1.0M KGS and TORP, University of Kansas $0.1M Kansas Department of Commerce Reservoir Characterization and Simulation On-going New Injector to be Drilled July-August, 2000 CO 2 flooding begins mid-2001 Potential recoverable Arbuckle and L-KC oil reserves using CO 2 flooding may exceed 250 MMBO to 1 BBO Partners in Lansing-Kansas City Demonstration Flood $2.4M Kinder-Morgan CO 2 Co. LP and MV Energy LLC $1.9M U.S. Department of Energy $1.0M KGS and TORP, University of Kansas $0.1M Kansas Department of Commerce Reservoir Characterization and Simulation On-going New Injector to be Drilled July-August, 2000 CO 2 flooding begins mid-2001