New Application of Proven Completion Technique

Rejuvenation of Mature Fields

from

By-passed Oil Reserves

Anderson Sand Oil Unit Flora Field

Madison County, MS

Rejuvenation-Development ProjectNew Application of Old Completion Techniques

AbstractFlora OIl Unit is the rejuvenation of a temporarily abandoned oil unit based on supportiveevidence in a 62 page engineering-geological study of significant remaining recoverable oilreserves. Given the volume of recoverable oil NOT produced for all the reasons cited in thisreport, the application of under-reaming may hold the key to successful completions. Thistechnique has been successfully employed in several south Texas oil fields possessing similarreservoir characteristics as Flora. The process removes pore throat debris andprecipitates from decades of production while significantly increasing the kh of the producinginterval in as much a similar affect does a horizontal lateral, but at a fraction of the cost. At4,500-Ft deep, this 40-acre spaced oil reservoir having a strong water drive with highpermeability-porosity and 26-gravity oil can be re-developed using abandoned cased wellboresand 5-spot new drilling locations. A stratigraphic column of a transitional oil saturated sectionwill also be added to the completed interval.

LocationThe Flora Field is located approximately 20 miles north of Jackson, MS. It was discovered in1943 by Union Petroleum Company and had only eight (8) wells producing until the mid 1960's.Additional drilling indicated a larger structure and since that time 67 total wells had been drilledto delineate the field limits. A total of approximately 75 wells have been drilled within the field.The field was unitized containing 1,560 acres on July 1, 1987. Since unitization, produced waterhas been injected back into the Anderson Sand without any production response and has sincebeen temporarily abandoned.

Anderson Sand CharacteristicsThe producing Anderson Sand is at a depth of 4,450 feet. It consists of a calcareous sand andclean quartz sand lenses with a thickness of 30 feet, porosity of 26%, permeability ranging from500-3000 millidarcys and a connate water saturation of 40%. Net oil pay averages 15 plus feetwith an original oil (26-28 degree gravity) in place calculation of 42,000,000 BO. The sand iscontinuous throughout the field and associated with a strong bottom water drive. It isdeveloped immediately below and in transition to several thin limestones of the Selma GasRock. A very thin three foot shale separates the two lithologies with porous sandy limescontinuing up in stratigraphic section grading into a tighter limestone. The transitional sectionof the Selma has been cored with good oil saturation.

Flora Field StudyAn extensive 62-page Engineering and Geological Report conducted by William G. Bowen andJames Stripling is available indicating a significant volume of recoverable oil remaining due to

several factors consisting of, but not limited to competitive production practices from acrosslease lines, spacing development on 40 acres and water coning affects on the reservoir arecited.

Their extensive work including the study of reservoir sand characteristics with lease and fieldproduction histories indicate that there was 16,400,000 barrels of primary recoverable oil. TheField-Unit has produced 7,400,000 through the end of 1995 with not much more appreciableproduced oil since. Based on this, there is an additional 9,400,000 barrels of recoverable oilremaining. Significantly, due to poor maintenance and neglect of downhole equipment at thetime, only 358,000 barrels has been produced since unitization with the number of producingwells dropping from 27 to 3 in January 1995. The evolution of the field has never since beenfully developed or exploited due to various owners lacking sufficient capital and technologicalexperience coupled with the decrease in price of oil.

The Field is mapped as a gentle north dipping anticlinal nose located on the north flank of theJackson dome. The field is a structural-stratigraphic trap with North, East and West separateclosures separated by lows with a lack of sand permeability on its southwest and south flanks.Numerous maps constructed during their study suggest several areas for additional locationsbased on structure and permeability distribution. A more recent map constructed illustrates apotential theoretical "attic" oil reservoir which in and by itself reflects a recovery of 2,000,000barrels of oil based on Rxo/Rt and RWA e-log signatures coupled with structural positioning.Certain data from the reservoir study maps have been super imposed on the "attic" structuremap to convey where remaining location exists thru-out the field. Note that a best match fromdifferent scaled illustrations were used in making this illustration. It should also be noted thatusing the under-reaming completion technique, once "low" permeable areas of the reservoirmay now become commercially productive.

Development PlanTaking the earlier field study maps and super imposing the 500 md contour line onto the "attic"oil structure map, definitive areas of potential locations are found. As noted in the engineeringreport, wells drilled in proximity to produced wells did encounter a higher than expectant watercontact suggesting water coning affects taking place in those wells with high fluid withdrawalrates. It is for this reason why the 40-acre spaced field wells hold excellent in-field drillingpotential especially when coupled with low gravity oil and the reservoir's high permeable sand.

Another factor to water coning in the field arises from the discontinuous nature of the sandsvertical permeability associated with its various sand lenses. This eventually gives rise to waterconing and by-passed oil from competition of lower permeable sand lenses subordinate to fluidmigration and entry from higher perm sand lenses within the perforated section. Anothercontributing factor for by-passed oil are the high withdrawal rates resulting in the movement offines, scale and other loosen sand microscopic debris totally or partially restricting the porethroats in the reservoir. This enables fluid entry preference to the less viscous formation waterversus the reservoir's heavier 26-28 degree oil gravity. Therefore, it is being proposed thatexisting cased produced and new wells drilled be under-reamed completed to an enlarged holediameter beyond that of the original drilled borehole. This will eliminate probable and

potential reservoir blockage and or damage that may have occurred while significantlyincreasing the kh of the producing face of the reservoir further diminishing the reservoir'sdrawdown pressure and assist stand-off from water coning affects with managed withdrawalrates.

Enlarging of the producing perforated interval will result in a dramatic increase in the wellbore'skh extending beyond the original borehole diameter thus eliminating any and all potential bore-face damage that may have occurred during its productive history. It essentially has the minieffect as would a horizontal lateral drilled thru this same interval. This technique is not new,but in its application.

Analogs ResultsIt has been extensively used in the south Texas "Frio" aged oil fields where the formation is ofsimilar reservoir characteristics to that of the Anderson Sand. In addition, these Frio sands hadmoving formation sands that required gravel packing and a complicated mud system to stabilizethe formation while being completed. After under reaming, most of the wells experienced afluid entry as when they had been originally completed some 40+ years earlier with nearly 3x to3+x of their pre-treated fluid rate. In another setting of the same equivalent Frio sand in theBloomington Field, an horizontal lateral of net 337 Ft tested water free oil production in an 80acre lease that had already produced 2,6000,000 BO and nearly 1 BCF gas from 10-acre spacedwells. Original oil column was approximately 35 Ft with a strong bottom water drive containing26 gravity oil. Although water eventually broke-in within a few months time, the well still has aeconomical oil percentage years later.

These examples of a proven "old" technology in new applications have rejuvenated abandonedor nearly abandoned oil fields where entrepreneurs and operators have taken the riskopportunity to test these fields knowing their historical production problems. Based onstructure, permeability distribution and well spacing there are several portions of the field thatdeserve under reaming recompletions of previously abandoned wellbores. In some areas, it isalso recommended that a new well be drilled and open holed completed with under reaming inthe top several feet of its pay section. Because of consistent core data associated with most ofthe field wells, it is highly recommended that the under ream section commence above theoriginal field pay perforations as there is recorded sandy lime stringers having good oilsaturation with productive characteristics to yield commercial fluid rates. This section consistsof the basal limestone cap facies change to the underlying Anderson Sand throughout the fieldwhich has never been tested.

Annual Flora Oil Production

Horizontal Analogs 26-28 gravity oil pay

High Porous – Permeable Sands in

Strong Water Driven Reservoirs

Bloomington Field, Texas

Clear Springs Field, MS

New Application Completion Results

• South Texas oil fields

– Frio sands

• High Porosity

• High Permeability

• 26-27 gravity oil

• Strong water drive reservoirs – Production Problems: Flowing sands require stabilization

– Gravel packed for production

» 3x original fluid rates with improved oil cuts

» Nearly 100% success with operational failure exceptions

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Original BOD

Post Completion BOPD

14 Wells: Section Milled Recompletions Blue: Original BOPD

RED: Post Section Milled Completion Results

12 Open Hole Completions Results of a 5-spot drilling pattern in a developed mature oil field yields commercial productive oil rates otherwise by-passed by previous operators using a New Application of a proven mature Completion Technique

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New Wells Drilled

Open Hole Completion; BOPD

Flora Project

• Rejuvenation of TA’d oil unit using new application of proven completion technique for by-passed oil reserves

• Analogy to Horizontal results at a fraction of the costs • Flora (Anderson Sand) Unit; 4,450-Ft

– 26-27 gravity oil – Documented by-passed oil reserves {9 million barrels} in a 62 page Engineering/Geological report

• Less than half of the recoverable calculated oil produced • Water Coning; Poor field maintenance; Competitive production, etc

– High porosity & permeable pay sand – Strong water driven reservoir – 40 acre drainage pattern vs 20 acre considering reservoir depth