P.O. Box 10746, Midland, Texas 79702
phone 1-432-686-0397
Oil Reservoir Exploitation Projects
PHASE ONE HORIZONTAL DRILLING
Between existing wells
PHASE TWO GAS INJECTION
For Enhanced Oil Recovery
ON GOING SEISMIC ACQUISITION
Data Extensions
(click links for detailed information on proposal to tap several million barrels of oil)
Projects Active 10/24/05
Inquire about joining LONG HORIZONTAL
Possibility to Participate with
Services
or Finance
1,200' Horizontal Drainhole
To attic oil between wells
identified by 3D seismic data
FLEXIBLE PROJECT SPUD DATE
1 - 15 Well Project
LETTER to PROSPECTIVE PARTICIPANTS
(2/05/00 perspective still applies)
Finance
Drilling directionally to reservoir targets from exisiting wellbores is one method with good economics even at ultra-low oil prices.
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Midland, TX 79702
ph: 432-686-0397
fax: 432-570-0397
email: DreherGeo@aol.com
Posted numbers are approximate
Please inquire for most current numbers.
OVERVIEW | ECONOMICS | PROSPECTUS
$241,000 for Directional or
$304,000 for Short Horizontal
OIL IN THE TANKS
But Open for Participants is
Long Horizontal Participation
min. $450,000 WELL COST (plus 10% for contingency)
50% is open for participants in Long Horizontal
1,200' HORIZONTAL WILL ALLOW 120 ACRE
PRODUCTION PRORATION UNIT
1 - 15 well locations
One scenario is we are offering $240,000 of production equipment (see inventory) as collateral for a $170,000 line of credit, to be repaid with interest plus an overriding royalty interest in one well.
Or, $480,000 of equipment and inventory to be used as collateral for a $340,000 line of credit, to be repaid with interest plus an overriding royalty interest in two wells.
Please inquire for current numbers.
for SERVICE COMPANIES:
We will tailor an arrangement for you to trade services for an interest in the production.
Please inquire.
We own the basics: rig
80 ton power swivel and mud pump w/pit
(see complete package)
and could trade on misc. services
ie. downhole motors, coiled tubing, cone bits or pdc, underbalanced mud system, whipstock and mills, etc.
or email for more info
3D IMAGING: We have acquired 20 square miles of 3-D seismic data in our area of interest allowing us to identify the subsurface topographic features with higher resolution than ever before. Using state of the art processing and inversion techniques we can also identify stratigraphic features. Subsurface mapping has suggested a dozen prospects for directional drilling from existing well bores and several prospects for new drilling.Studies have shown significant reserves remain in this proven reservoir. For more detailed information use the links below to visit our other sites.
Single Sidewall Neutron Porosity Model w/30' Oil Column Between Wells
View 3D Seismic Image of Subsurface Topography
3D Seismic Image Showing Oil Trap
View 3D Seismic Image of Ancient Reef
East Vealmoor Canyon Reef (-4,800'subsea)
View 3D Seismic Showing Porosity and Permeability
3D Seismic Inversion, Line Plot Sample
DEVELOPED PROPERTY: 22 wells, including the field discovery well, have been drilled on our prospect acreage and have already produced 10 million barrels of oil since 1950. Reservoir studies show as much as 50% of the oil still remains trapped in topographic reef mounds or stratigraphic features identified between wells by using 3D seismic and geologic data. It is feasible to recover remaining oil reserves by drilling directionally to the targets from the existing wellbores of producing oil wells. WELL PLAT
A NATURAL GAS plant was built at the field to accomodate the gas production. It is within a couple of miles of our sales point. It can trade dry gas back to us in already existing lines to operate gas engines for generators if we decide to provide our own electricity. Gas has held fairly stable pricing in recent years and should be a significant source of net income for the lease. While the possibility of encountering a free gas cap is slim, the typically large amounts of solution gas (high gas:oil ratio) suggest the wells will initially be flowing. Exisitng handling facilities on our lease have been recently reconditioned and are capable of 2000 BOPD. The first wells were drilled into only the top four feet of the pay zone and were flowing for over twenty years. By drilling directionally, we will intersect the pay zone 700' from the old well and then stay in the top four feet. TOP 4'
DRILLING DIRECTIONALLY from an existing wellbore does not require a large rotary drilling rig, but rather is done economically using a smaller workover rig utilizing downhole motors and a power swivel with small drill pipe. It would be possible to start a well and have it on production within two weeks. Mobilization and demobilization between wells is done quickly and inexpensively and a multi-well project has the benefit of those economics. We have identified a dozen wells in this field as candidates for directional drilling.Drilling directionally is accomplished by using a gyro tool for orientation and cutting a window or milling a section in the casing exposing the formation rock at the kick off point. Drilling assemblies are then oriented to drill toward the target area until it is reached, in these cases only about 700' from the existing wellbore. TARGET
STORAGE & HANDLING facilities are already in place on our leases and recently reconditioned with capacity for 2,000 barrels oil per day.COMPLETED WELLS will immediately be able to send oil to the tanks and sales line.
OIL & GAS BUYERS are readily available.
12 WELLS are are existing for horizontal drilling from the well bores. We anticipate to keep production levels at under 300 barrels oil per day per well.
NEW WELLS could be drilled on several easily accessible locations.
SINCE THE 1974 OIL EMBARGO the price of oil has fluctuated with various rumors during any given OPEC production cycle. Certain types of projects still have good economics even at 1999 oil prices. This project would make good returns even when oil is less than $10/barrel because of low finding costs. Whereas some projects are extremely reserve sensitive, this project looks good at even 60,000 barrels oil per well; but we anticipate more reserves than that, up to 600,000 barrels oil per well.The first well can be structured with a 6 month payout at $8/barrel oil and 20:1 return in the life of the well. ECONOMICS
Email Form
The Horseshoe Atoll Reef Complex in the Midland Basin is nestled between the Matador and Ozona Archs, and the Central Basin Platform.
East Vealmoor is the Southern Tip of the Atoll.
in the Horseshoe Atoll are Well Known
3D seismic data is used to define the reef contour between wells to identify the highs where oil is trapped. It can also identify tidal cuts and explain other anomalous geologic information.
GAS INJECTION
EOR has had tremendous success in the neighboring Canyon Reef fields* with old leases in the Horseshoe Atoll. 50% of the moveable (produceable) oil in place is still to be recovered, some of which will initially be achieved through primary recovery, but we propose a plan for feasible secondary and tertiary recovery that would result in maximum recovery.
East Vealmoor history: Injecting a gas is proven to work best in this Canyon Reef. In the 1970s Texaco introduced nitrogen injection the East Vealmoor Unit and saw a rapid increase in production but was soon forced to stop injection for practical reasons, they experienced early breakthrough and with the technology available then the gas plant couldn’t handle the increase in nitrogen content of the produced gas.
Water injection in the unit was also tried and has been halted because it interferes with gas production and so currently they pipeline the water for disposal several miles away.
There is a Canyon Reef Carriers (CRC) CO2 pipeline running northeasterly right past East Vealmoor on it’s way for injection in the Reinecke Field 5 miles away, 15 miles away to Sharon Ridge, 20 miles away to SACROC, and 30 miles to Cogdell Canyon Reef units. All these Canyon Reef fields have exhibited significantly increased oil production from CO2 injection.
Either CO2 or N2 injection, or produced natural gas re-injection is feasible and planned for East Vealmoor. CO2 is sold in the Permian Basin for 3%-4% of the oil price.
WAG (water alternating gas) and also simultaneous water and gas injection will be used, injecting water in the perimeter wells to keep the CO2 in the producing areas. We plan to use our wells in Section 13 to accomplish this on the north side and use Section 48 to the west. The ExxonMobil unit is to the east and south.
The battery was built in the mid 1980s by Sun Production and was designed to handle water production by utilizing a 3,000 barrel flake-line coated steel water tank, 2- 150 hp triplex pumps, a 10’ x 20’ horizontal 3 phase free water knockout, an 8’ x 10’ vertical 2 phase free gas knockout, a 6’ x 20’ 3 phase heater treater, a 30” x 10’ 2 phase gas separator, a header for fluid coming from producers to the battery and a header for water going to disposal wells. Oil storage consists of 3-500 brl tanks and there was a LACT unit. They used this to produce 10,000 barrels water per day and several hundred barrels of oil per day.
Our plan to drill horizontally in the top interval of the reef in the highs is designed to maximize oil cut and decrease water production. During it’s peak production the lease produced a couple thousand barrels of oil per day with very little water the first 20 years until the wells were deepened in the 1980s and sub pumps were utilized. We expect to soon be producing over 1,500 barrels oil per day with as little water as possible, but water production will sooner or later increase and necessitate using sub pumps again.
Historically, initial production rates have been 30-150 barrels oil per day per one foot of open pay zone in the oil column. With a 100’ lateral running through the top five feet of the pay zone 500 barrels oil per day would only be 5 barrels oil per day per foot of pay, so production rates could easily be much higher. Some laterals could be drilled 1,000’+.
It is a generally accepted rule of thumb to have a bare minimum of one day storage capacity for both oil & water production.
We will install EOR gas injection facilities at the battery. In addition to the common facility requirements (compressors and CO2 rejection units) for the CO2 injection option (Kinder Morgan’s nearby CRC pipeline), the recent advances in nitrogen technology make it’s use an attractive alternative today also.
Nitrogen effectiveness is enhanced with injection methods to reduce the chance of early breakthrough using water alternating gas (WAG) or simultaneous water and gas injection to make N2 a feasible EOR technique. Miscibility discourages early breakthrough which had caused the East Vealmoor nitrogen injection test in the 1970s to be terminated though it had impressively shown positive oil production results.
On site nitrogen generation from air using state of the art pressure swing absorption (PSA) and Membrane technology make it a source of limitless supply and even less expensive than the more corrosive CO2 (though CO2 may be slightly more effective). A nitrogen generation unit could be placed at the battery.
On site nitrogen rejection to make it economically feasible to sell produced gas even when nitrogen content is above pipeline specifications. Either producer or the purchaser, can now afford this process. A nitrogen rejection module could be placed at the battery.
In-situ gas generation is still in experimental phase.
Natural gas powered electricity generators for general lease use will be installed immediately. Larger electricity generators powered by natural gas engines will be installed at the battery when sub pumps become needed.
Some wells will be drilled directionally/horizontally as producers, and some will be drilled directionally/horizontally as injectors. Some wells will have short (100’) horizontals due to reservoir geometry, some wells will have longer (likely up to 1,200’ and maybe 2,000’) horizontals when geometry allows.
*some CO2 NEWS
pdf: 5/20/01
CO2 EOR in US, Oil & Gas Journal
http://www.kindermorgan.com/business/co2/article_052001.pdf
06/01
Reinecke, Sharon Ridge, SACROC, and Cogdell CO2
http://www.eandpnet.com/ep/previous/0601/0601optimization.htm
4/25/02
Reinecke, Sharon Ridge, SACROC, and Cogdell CO2
http://www.snyderdailynews.com/2002april25/main.htm
P.O. Box 10746
Midland, TX 79702
ph. 432-686-0397
fax: 432-570-0397
email: DreherGeo@aol.com
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