Preliminary CO2 Demand Analysis for the Powder River Basin

1. Preliminary CO2 Demand Analysis for the Powder River Basin Presentation to Wyoming Pipeline Authority Jan. 24, 2006 by J. Michael Boyles Klaas van ’t Veld

2. EORI’s Goals Assist operators to help improve oil production in Wyoming fields through research, technology transfer and project assistance Improve existing production practices Increase efficiency of water floods Identify bypassed pay Assist with evaluation of potential EOR projects for Wyoming fields

3. Goal – More CO2 EOR in Wyoming Convert more of Wyoming’s CO2 from a waste gas to a resource Help Wyoming operators with CO2 field evaluations Very effective EOR technique Recovers additional 8% to > 15% of OOIP Swells oil Lowers viscosity Capital intensive Higher operating costs

4. What is EORI Doing about CO2 Characterizing Wyoming oil fields Building integrated database for fields and reservoirs (WGA, O&G, SPE, DOE ….) Analyzing reservoir performance (RMS-AAPG talk) Building reservoir models Analyzing reservoirs currently being flooded Will predict CO2-EOR response for reservoirs not currently being flooded with CO2 Developing scoping tools Simple tools to evaluate “what if” scenarios Based upon Wyoming reservoir characteristics

5. Current CO2 Situation in Wyoming CO2 Sources La Barge Sales 250 MMSCFD at high pressure Venting 210 MMSCFD at low pressure Madden Venting 55 MMSCFD at low pressure Existing pipeline* Current distribution Salt Creek 105 MMSCFD Baroil 40 MMSCFD Rangely 80 MMSCFD Monell 30 MMSCFD Potential additional distribution to PRB Easy +75 MMSCFD Possible +350 MMSCFD The gas input to the plant has a composition of approximately 66% CO2, 21% methane, 7.5% nitrogen, 5% hydrogen sulfide and 0.6% helium. At the moment this plant produces about 450 MMSCFD of CO2 and of this about 250 MMSCFD is compressed and sold to oil producers, with about 105 MMSCFD going to Salt Creek, 40 MMSCFD going to Baroil, 80 MMSCFD going to Rangeley, 30 MMSCFD going to the Monell unit, and almost 10 MMSCFD is sold to liquid CO2 marketers at Rock Springs (Praxair and BOC). The other 200 MMSCFD of CO2 produced at Shute Creek is vented and of that 80 MMSCFD is relatively pure and vented at 65 psig from the intermediate separator, and 120 MMSCFD is 75% CO2 and 25% N2 and vented at 12 psia from the third stage separator. The gas input to the plant has a composition of approximately 66% CO2, 21% methane, 7.5% nitrogen, 5% hydrogen sulfide and 0.6% helium. At the moment this plant produces about 450 MMSCFD of CO2 and of this about 250 MMSCFD is compressed and sold to oil producers, with about 105 MMSCFD going to Salt Creek, 40 MMSCFD going to Baroil, 80 MMSCFD going to Rangeley, 30 MMSCFD going to the Monell unit, and almost 10 MMSCFD is sold to liquid CO2 marketers at Rock Springs (Praxair and BOC). The other 200 MMSCFD of CO2 produced at Shute Creek is vented and of that 80 MMSCFD is relatively pure and vented at 65 psig from the intermediate separator, and 120 MMSCFD is 75% CO2 and 25% N2 and vented at 12 psia from the third stage separator.

6. Current CO2 Pipeline

7. Preliminary CO2 Demand Analysis for the Powder River Basin

8. Study Area

9. Powder River Basin West Texas - more small fields economic once co2 infrastructure is in placeWest Texas - more small fields economic once co2 infrastructure is in place

10. Initial Scope Reservoirs Cum production Minnelusa 600 MMBO* Sussex / Shannon 365 MMBO* Muddy 266 MMBO*

11. Rationale Near the end of CO2 trunk line Extra capacity Several big fields in basin that would support development of needed infrastructure Hartzog Draw, Hilight, Raven Creek, House Creek, Big Muddy Younger fields that have complete production data Structurally simple traps Stratigraphic heterogeneities are understandable

12. Work Plan Identify “promising” fields Screen for miscibility Estimate CO2-EOR response Screen for profitability

13. 1. Identify “Promising” Fields 99 Fields (120 field-reservoir combinations) Each has cum oil > 4 MMBO Combined cum oil 1,300 MMBO Combined OOIP 3,200 MMBO Potential size of prize, assuming all pass miscibility screen all yield extra 10% of OOIP CO2-EOR response all pass profitability screen 320 MMBO [NB: need some minimum size to have any hope of passing profitability screen] Combined cum - xxx MMBO Combined OOIP - xxx MMBO Potential size of prize, assuming - all pass miscibility screen - all yield extra 10% of OOIP CO2-EOR response - all pass profitability screen xxx MMBO[NB: need some minimum size to have any hope of passing profitability screen] Combined cum - xxx MMBO Combined OOIP - xxx MMBO Potential size of prize, assuming - all pass miscibility screen - all yield extra 10% of OOIP CO2-EOR response - all pass profitability screen xxx MMBO

14. 2. Screen for Miscibility Rule-of-thumb approach API cutoff Depth cutoff Too simple for accurate forecasts EORI approach Measured MMP Estimate based on oil composition and temperature Estimate based on API and temperature

15. 3. Estimate CO2-EOR Response Rule-of-thumb approach 8 to 15 % of OOIP Other industry-standard approaches Scaled response (Kinder Morgan tool) Based on field analogs (San Andres and Morrow) CO2 Prophet (DOE) Based on simulation of Louisiana fluvial-deltaic reservoir EORI approach Scaled response (“EORI Tool”) Based on simulation of Wyoming reservoirs

16. 4. Screen for Profitability Industry-standard approaches Use KM tool with built-in price, cost assumptions Use CO2 Prophet adding price, cost assumptions EORI approach Use “EORI tool” with flexible price, cost assumptions

17. Why an EORI Tool? Major Economic Screening Factors Cost of pipeline Distance to trunk line Cost of gas plant Capital cost Operating costs Quantity recycled over time Cost of CO2 Price Quantity purchased over time Oil revenues Price Quantity produced over time

18. KM Prediction: Lost Soldier-Tensleep

19. KM Prediction: Lost Soldier-Tensleep

20. KM Prediction: Lost Soldier-Tensleep

21. KM Prediction: Lost Soldier-Tensleep

22. KM Prediction: Lost Soldier-Darwin Madison

23. KM Prediction: Lost Soldier-Darwin Madison

24. KM Prediction: Lost Soldier-Darwin Madison

25. KM Prediction: Lost Soldier-Darwin Madison

26. KM Prediction: Wertz-Tensleep

27. KM Prediction: Wertz-Tensleep

28. KM Prediction: Wertz-Tensleep

29. KM Prediction: Wertz-Tensleep

30. What about Economies of Scale? Major Economic Screening Factors Cost of pipeline Distance to trunk line Cost of CO2 gas plant Capital cost Operating costs Quantity recycled over time Cost of CO2 Price Quantity purchased over time Oil revenues Price Quantity produced over time

31. Two Phases Initial estimate of CO2-EOR response to define CO2 trunk pipeline route Individual field model Central gas recycling plant model Detailed analysis of CO2-EOR response and economics given CO2 trunk pipeline route Individual field model Central gas recycling plant model

32. CO2-EOR Potential Recovery

33. CO2-EOR Potential Recovery

34. CO2-EOR Potential Recovery

35. Bottom Line Wyoming is blessed with cheap CO2 The distribution system is not at capacity CO2-EOR could substantially increase production in the PRB

36. Current and Future Work Wyoming reservoirs are unique Need accurate, WY-specific forecasting models Statistical analysis of past production Research into CO2-EOR response Research into CO2-EOR economics (including potential sequestration credits) Working with Pipeline Authority Building database and knowledge repository on Wyoming oil fields

37. We Need Your Help Contact us with suggestions / recommendations Please let us know if you have data that might help Oil/gas analyses Oil samples Special core analyses Detailed production data (including pressure) Detailed cost data

38. Acknowledgments Wyoming Oil and Gas Commission Production data, field files, technical support IHS Production data and well information Merit Data on Bairoil CO2 floods