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Cole Creek Oilfield Project

NITEC LLC Reservoir Evaluation (Executive Summary), Second Frontier, Dakota, and Lakota Formations - June 2008

NITEC LLC Reservoir Evaluation (Executive Summary), Shannon Formation - July 2008

RESERVOIR EVALUATION
Shannon Formation

Database

Geology

Dynamic Data Analysis

Original Oil In Place

Recovery Potentials

Formation Maps

Nomenclature




NITEC LLC Reservoir Evaluation (Executive Summary), Shannon Formation - July 2008

The Cole Creek Field is located in the southwestern margin of Powder River Basin, Natrona and Converse Counties, Wyoming. The objectives of this study were:

  • To review existing geologic and engineering studies on the Shannon Formation in the
    Cole Creek Field;

  • To provide an assessment of the Original Oil in Place (OOIP) and remaining oil in
    place for the formation; and

  • To estimate the recovery potential of the Shannon Formation under water flood and
    CO2 injection processes.

This study is a continuation of and a complement to the Second Frontier, Dakota, and Lakota reservoir evaluations in the Cole Creek Field published by NITEC LLC in June 2008. The study included completion of the database for the Cole Creek Field, the review of the field geology, the analysis of the production and pressure data, the estimation of OOIP for the Shannon Formation by means of volumetric and material balance calculations, and the estimation of water flood and CO2 injection recovery potentials using historical data, analog fields, NITEC’s knowledge of the area, and the results from nearby studies.

Database

The database created for the June 2008 Cole Creek study (NITEC LLC, June 2008) was completed and corrected when needed. The basic well data was gathered from the Wyoming Oil and Gas Conservation Commission (WOGCC) database. The production and injection data was obtained from paper records and digitized. The well files were carefully reviewed to collect available pressure data, which was quality controlled and corrected to datum level within the reservoir.

Geology

The evaluation of the Shannon Formation was carried out as part of the more general geologic review that comprised multiple formations of the Cole Creek. Available data included several geologic reports, structure and sand maps, core analyses, etc. particularly concerning the Shannon, Second Frontier, Dakota, and Lakota Formations, the main producing horizons in the field (Clark & George, 1987; Gene R. George, April 1989; Borah- Borah, August 2000; McCutcheon, March 2000, August 2000, January 2001). The quality of the available Shannon net pay and structure maps was considered adequate to serve as a basis for the volumetric calculations.

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Dynamic Data Analysis

The production, injection and pressure data in the Shannon Formation was analyzed. The imbalance between production and injection volumes seems to indicate that some of the reported injection was not effectively injected into the Shannon Formation. After correction to a common datum of 1075 fasl, the pressure data shows a spatial variation within the reservoir with consistently higher pressures towards the flanks of the reservoir. These pressure differentials indicate restricted to poor communication within the reservoir and they suggest that the reservoir does not perform like a tank.

Original Oil In Place

Two methodologies were used to estimate the OOIP: volumetrics and material balance. The final estimates of the most likely OOIP and the probable range of the OOIP were based not only on the volumetric and material balance calculations, but also on engineering and geologic judgment.

Volumetrics and Material Balance

The maps reviewed during the geology evaluation were used in the volumetric calculation of OOIP of the Shannon Formation. The Shannon volumetric and material balance calculations yielded an estimated range for the OOIP of 34,261,700 and 30,000,000 STB, respectively. The material balance model indicates aquifer support is present and that approximately 35% NITEC LLC Page 3 Ameriwest Energy Corp. of the reported water injection was not effectively injected into the Shannon Formation after 1968.

Original Oil in Place Final Estimates

The final estimation of the most likely OOIP and the probable range was based on the volumetric calculations and the material balance results. Also, geologic and engineering judgment was used to weigh the conclusions from production analysis, the uncertainty of the material balance/volumetric estimations, the quality of the data, and limitations associated with data availability. The final most likely OOIP was estimated to be 30,000,000 STB. Due to the nature of the reservoir and the spatial variations in the observed pressures, it is recommended that the estimate be validated with a numerical simulation model where the pressure data is locally matched at each well’s location.

Recovery Potentials

The potential oil recovery from water flooding and CO2 injection in the Shannon Formation was estimated using the analysis of historical production data, NITEC’s knowledge of primary and water flood recoveries from fields in the region, relevant data collected from publicly available sources, and reports provided by the client. A summary of the estimated primary, secondary, and CO2 recoveries is presented in Table I-1.

Table I-1: Summary of Primary, Secondary and CO2 Injection Recovery Potentials.

Summary of Primary, Secondary and CO2 Injection Recovery Potentials

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Formation Maps

Shannon formation

Shannon Structure Map
Shannon Structure Map
Shannon Net Pay Map
Shannon Net Pay Map

Nomenclature

ø: porosity (fraction)
a: formation factor constant (Archie)
Bo: formation volume factor (RB/STB)
fasl: feet above sea level
fbsl: feet below sea level
GOR: gas/oil ratio (SCF/STB)
K: Permeability (md)
m: cementation factor
N: original oil in place (STB)
Np: cumulative oil production (STB)
NTG: net-to-gross ratio (fraction)
OOIP: Original Oil in Place (STB)
P: pressure (psig, psia)
PHI: porosity (fraction)
qo: oil rate (STB/D)
Rs: dissolved gas/oil ratio (SCF/STB)
Rw: formation water resistivity (ohm-m)
Sw: water saturation (fraction)
WGA: Wyoming Geological Association
WPA: Wyoming Pipeline Authority
WOC: Water-Oil Contact
WOR: water/Oil ratio (fraction)
WOGCC: Wyoming Oil and Gas Conservation Commission

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