Improved Recovery Demonstration for Williston Basin Carbonates DE-FC22-93BC14984

1. Improved Recovery Demonstration for Williston Basin CarbonatesDE-FC22-93BC14984 Luff Exploration Company Mark Sippel, Consulting Engineer

2. Location of Project Demonstration Sitesin the Williston Basin

3. Project Objectives • Better Reservoir Characterization • Regional Studies • 3D Seismic • Better Completion Efficiency • Jetting Lance Perforating • Amoco Sidewinder Short Radius Drilling • Horizontal Mudmotor Drilling

4. Statement of ProblemsReservoir Characterization • High Drilling Cost • 2D Seismic Used for Structure Delineation • Small Structures, Less Than 1 sq. mile • Optimal Reservoir Quality Frequently not Found at Crestal Position • Reservoir Characterization from Seismic Attributes in Infancy • 3D Seismic Had not Been Used Locally

5. Statement of ProblemsCompletion Efficiency • Perforation and Acid - Standard Completion • Hydraulic Fracturing Communicates with Water Zones • Low Primary Recovery • Low Water Injectivity for Waterflooding

6. Type Log forRed River Formation The Upper Red River Consists of Four Episodes in Shallow Shelf Carbonate Setting Main Reservoirs are: Red River B Zone Red River D Zone

7. Seismic Time Seconds 0.5 mile 0.8 km Original Drilling Strategy (1970’s)One Well for Each Small-Structure Feature

8. Time Seconds Normal Polarity Reverse 0.7 0.8 Mission Canyon 0.9 Duperow Interlake 1.0 Red River P1 T1 Base D zone P2 T2 Winnipeg 1.1 ForwardSeismic Modeling Upper Red River Reservoirs Are “Seismic Thin Beds” Reservoir Information Contained in Two Peak-Trough Pairs Each Event Consistently Labeled in Every Seismic Survey

9. Low Porosity High Porosity 0.0 Interlake Time - Seconds Red River 1.0 P1 T1 P2 T2 Winnipeg Synthetic Seismogram Weak Amplitude Response Strong Amplitude Reponse

10. Reservoir Variationin Red River D Zone C Anhydrite Red River D Zone Weak Amplitude Response Low Porosity Strong Amplitude Reponse High Porosity

11. Example of Red RiverSmall-Structure Feature Amplitude Response High Porosity Red River Time Structure 1 msec = 5 ft Low Porosity

12. Demonstration Site 1Small-Structure Red River Feature Amplitude Response High Porosity Red River Time Structure 1 msec = 5 ft Original Well Low Porosity

13. Production Rate - Time GraphDemonstration Site 1 Depletion of Crestal Well New Drilling

14. Cumulative Production - Time GraphDemonstration Site 1

15. Demonstration Site 2Small-Structure Red River Feature Amplitude Response High Porosity Original Well Low Porosity

16. Production Rate - Time GraphDemonstration Site 2 Depletion of Crestal Well New Drilling

17. Cumulative Production - Time GraphDemonstration Site 2

18. Completion EfficiencyHorizontal Wells for Waterflooding • Low Water Injectivity in Vertical Completions at 100 - 150 bwpd • Local Industry Prejudice of Early Water Breakthrough • Successful Waterflooding Would Require Downspacing to 80 acre/well • Vertical Well Project - Not Economical

19. Red River B Zone Type Log Top Red River B Zone 0 100 30% 0% Gamma Ray Neutron-Density Porosity

20. Jetting Lance Completion TechnologyUnsuccessful

21. Amoco Sidewinder Completion TechnologyUnsuccessful

22. North BuffaloRed River UnitDemonstration Site 3 Pilot Horizontal Water Injection Well Pilot Horizontal Water Injection Well Depth Feet

23. Production Rate - Time GraphDemonstration Site 3

24. Cumulative Production - Time GraphDemonstration Site 3

25. Horizontal Wells for Waterflooding • High Water Injectivity at 500 - 1000 bwpd • Early Water Breakthrough Has Not Occurred • Re-entry Laterals Were Drilled from Vertical Wells • Waterflood Reserves Will Equal or Exceed Primary Recovery

26. Production from Three Demonstration Sites Project Conclusion Current Trend Prior Trend Project Start

27. Conclusions - Reservoir Characterization • Reservoir Characterization from 3D Seismic is Very Rewarding • Forward Seismic Modeling is a Must • Amplitude Attributes Were Identified for Prediction of Porosity Development in Red River D Zone • Development of Depositional Models • Understanding Importance of Depositional Setting and Relation to Reservoir Quality (porosity and permeability)

28. Conclusions - Horizontal Completions • Horizontal Completions Yield High Water Injection Rate and Efficient Waterflood Sweep • Horizontal Injection Rate Five Times that of Vertical Completion (750 vs 150 bwpd at maximum pressure)

29. Post-Project ContuationReservoir Characterization • Additional Forward Seismic Modeling and Seismic Attribute Study • Better Prediction of Depositional Setting for Each of Upper Red River Zones • Further Integration of Geologic and Production Attributes with Seismic Attributes

30. Post-Project ContinuationWaterflooding the Red River Fm. • Project Demonstration Waterflood Site was Unitized • Re-entry Laterals Drilled from Four Wells • Peak Waterflood Rate and Reserves Equal to Primary • Two Additional Red River Waterflood Units Formed Since Project Conclusion • Plan Five Additional Units in 2003 and 2004

31. Post-Project ContinuationCompletion Efficiency • Typical Horizontal Re-entry Completion Yields Three-Fold Increase in Productivity • Horizontal Drilling from Plugged and Uneconomic Vertical Wells Yielded Rates Over 150 bopd • Operator is Agressively Re-Developing Fields That Were Initially Developed in the 1970’s