Technology For Enhancing Marginal Well Profitability

Transcription

1 Technology For Enhancing Marginal Well Profitability Glenn R. McColpin, CEO Cell: wells.com Wells.com

2 SURGITECH Created in 2015 to develop or acquire innovative technologies with the capacity to dramatically impact marginal well economics In parallel we acquired Pennsylvania operator with 350 wells across 3 counties to use as science sandbox to evaluate and refine new technologies and delivery processes Focused on low cost technologies for severely depleted, low energy reservoirs. Specifically targeting: Paraffin issues Asphaltene deposits Loss of connectivity with fracs or significant skin damage Extending well drainage without conventional drilling Addressing water disposal costs

3 Operator Reactions To The Oil Bust Cut Reduce CAPEX budgets Reduce OPEX Layoff non essential staff, reduce hours, Defer maintenance or workover programs Optimize Re quote everything from oil filters to insurance Take a fresh look at compressor settings and pumping schedules (parameters change over time) Identify problem wells and shut them in In source services

4 Then What? Do you hunker down and wait? Do you sell out? Do you merge to gain economies of scale? Do you invest and figure out how to take advantage of the next upswing?

5 What Technologies Can We Apply To Change The Game? Solvent/Surfactant Circulations: Instead of expending the time and energy required to hot oil or mechanically remove wellbore paraffin, we use a solvent based technique to harvest the paraffin and increase production Nitro Dyne, Mobile Huff & Puff: Allows for rapid and low cost well cleanouts, production stimulation and paraffin/asphaltene inhibition Micro Bore Jet Drilling (MBJD): Inexpensively extend drainage radius of vertical wells without a drilling rig or frac ing

6 Paraffin Challenges Tubing & Rods Formation Frac Flowlines

7 Solvent/Surfactant Circulations Why? Rapidly remove years of paraffin deposits from tubing & rods We aren t just removing the paraffin but harvesting it and selling it with the oil Single pumper can treat 30+ wells per day Clean tubing should result in lower power usage and wear on equipment Inexpensively remove paraffin from large open hole intervals Solvent raindrops fall at 20mph inside the annulus. Constant solvent impingement gradually breaks down paraffin. System parts cost just $28.80 per well. Clean and prepare wells for subsequent NitroDyne treatment program NitroDyne process will liquefy paraffin in fracs, increase reservoir energy and inhibit future paraffin deposition

8 Solvent/Surfactant Circulations Results Started with individual wells across multiple fields. Forest: 2 wells which made.25bbls/week produced bbls over the following 5 day period Venango: 1 well which made.26bbls/day pre treatment, produced.54bbls/day over the next 3 weeks Venango: 1 well which made.195bbls/day pre treatment, has had production climbed to 1.43 bbls/day over 9 day period Expanded program to battery level treatments in all 3 fields Forrest: 16 well battery had pre treatment production of 4.5bbls/week. Post treatment, battery is averaging 11.40bbls/day Warren: 12 well battery had a pre treatment production of 4bbls/week. Post treatment, battery produced 6.8bbls/day first 2 days and 5.77bbls on 3 rd day Warren: 8 well battery had pre treatment production of 2.28bbls/week. Post treatment, rate didn t change. Believed that thief zone is close to pump. Started pumping daily and rate appears to be.75bbls/day. Venango: Treated 12 well battery with pre treatment rate of 4bbls/week. First day made 2.61bbls. Second day made 5.22bbls.

9 Challenges Getting pumpers to understand that the schedules that they ve used for the last 5 years need to be changed We learned multiple ways how to make a super stable, paraffin/water/oil/solvent emulsion prior to finding the correct solvent/surfactant combination.

10 Solvent/Surfactant Circulations: Next Steps Currently manufacturing circulation assemblies for 100 wells in Venango county which can be rolled out over 5 day period next week. Evaluate solvent volume requirements, initial treatment cycles and then maintenance treatment frequency. Roll program out across all 350 wells.

11 Nitro Dyne Process Inexpensively test a formation s response to a variety of EOR processes. Mobile steam/gas generator eliminates need for expensive plants, pipelines and infrastructure Superior well cleanout process. Higher heat, solvent vapor, gas lift paraffin & debris, impacts asphaltene as well as paraffin deposits Innovative solvent delivery process Extremely low operating cost

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13 Nitro-Dyne Super Heated Pressure Treatment

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15 Field Setup For Well Cleanout and Injection Tubing Valve FlowMor Injector Annular Valve Chiksan Line to Nitro Dyne Unit

16 Field Setup For Annular Injection Only FlowMor Injector Annular Valve Chiksan Line to Nitro Dyne Unit

17 Nitro Dyne Gas Attributes Flue Gas: Nitrogen/CO2 Composition Temperature can be varied from 200F to over 1200F Flowrates controllable between 100cfm and 750cfm Pressure from atmospheric to 500psi. (1100, 3500 and 5000psi pressures available with multi stage boosters) Steam can be generated simultaneously with the CO2/N2 gas Plant based solvent (FlowMor) is vapor phased by the hot Nitro Dyne exhaust Researchers at Louisiana State University, compared flue gas to pure CO2, N2 and Methane and found that a flue gas mixture has twice the sweep performance of pure gases. SPE 36687

18 FlowMor Attributes All Natural, citrus based (terpene) product Proprietary, non ionic surfactant Fully biodegradable Pour point/cloud point modifier Invisible at the refinery

19 Process Uses Hot oiling without the oil: Heat & plant based solvent dissolves asphaltene deposits in addition to paraffin. Hot oil only addresses the paraffin. Gas Lift: High velocity gas circulation is able to lift debris and liquefied paraffin from the wellbore Steam Clean Pore Space: Plant based, bio solvent/surfactant vapor strips oil from pore space and leaves the rock water wet, mobilizing residual oil Re Establish Frac Conductivity: Paraffin filled fracs can be remediated with the hot gas injection Reduce Oil Viscosity: At pressure and temperature, the CO2 component in the Nitro Dyne gas should be soluble in oil. The bio solvent vapor will also serve to reduce the oil viscosity and modify its cloud point so that paraffin formation is inhibited Re Energize Pore Pressure: The nitrogen component in the Nitro Dyne gas will be non miscible when cool. The nitrogen provides the drive needed to move the thinned oil towards the wellbore

20 Why Vapor Phase Treatment Chemicals? A vapor contacts the entire wellbore uniformly while a liquid drops to the bottom of the well Vapor treatments will contact significantly more pore space than a liquid squeeze while using significantly less volume. A gas or vapor has significantly lower viscosity than traditional treatment liquids like toluene, xylene or mineral spirits. Nitrogen viscosity at 350F =.025cp Toulene viscosity at 80F =.550cp Kerosene viscosity at 80F = 1.66cp

21 Nitro Dyne in Action

22 Enhancement Results (Kentucky)

23 1.60 Pennsylvania Enhancement Results Venango 1804% increase in 1 st month 600%+ increase in 4 th month 300+% increase in 7 th month bpd / well Pre Treat Day 1 15 Day Day Day Day Day Day Day Axis Title Warren Forrest Venango

24 What Happened in Warren and Forest? Warren: Attempted NitroDyne process on 3 wells and could not circulate gas down tubing or annulus. Subsequently pulled 2 wells to use high pressure water blasting process to remove wellbore paraffin which was thought to be impeding circulations. First well pulled wet with 600lbs of sand inside tubing. Second well had tubing completely sanded in. Forest: Only treated a single well without performing a cleanout. Wasn t able to get much gas volume into the well. Many wells in the field appear to have decent oil volumes and pressure but are impeded by severe paraffin accumulations requiring a full a NitroDyne or solvent cleanout to remove skin damage.

25 Next Steps Evaluate short & long term production responses to a variety of treatment variables Treatment volume Treatment frequency Solvent volume/concentration Huff & puff vs 5 spot Steam vs dry gas Testing wells in a large number of basins over the next 12 months in order to identify where the process yields the best ROI

26 Micro Bore Jet Drilling

27 Technology Landscape Uses high pressure water to erode rock and create hole Currently at least 8 different companies providing the service globally Deployment methods vary from micro coiled tubing to various types of high pressure hoses & jointed pipe Attributes: Able to turn from vertical to horizontal in 1.5ft Lateral lengths up to 300ft Can be accomplished with small pulling unit Small quantities of brine used as drilling fluid Drill string is not rotated

28 Applications Transform vertical wells into TAML Level 1 multi lateral enabling: Higher production indices Drainage of relatively thin formations Decreased water and gas coning Increased exposure to natural fracture systems Better sweep efficiencies Overall higher production rates (treated old wells yielding between 200% and 1600% increase in long term production) Pretreatment for optimizing stimulation techniques Acidizing Fracturing Chemical treatments Water or CO2 Floods Huff and Puff Stimulations MULTI DEPTH LATERALS

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30 1 Hole Casing Cutting

31 Jet Drilling Process Mill or cut casing exit Trip in diverter sub Trip in jetting assembly Jet lateral then rotate pipe for new lateral direction or add tubing joints to change lateral kickoff depth

32 High Pressure Pipe Allows use of workover rigs in shallow wells <5000ft, CT in deeper wells >5000ft Better hydraulics than micro coil Lower cost in shallow wells. 1/3rd the cost of coil deployed solutions. CT rig better in deeper wells due to longer trip times 1 or 1 ¼ Macaroni Tubing

33 Modified Radial Flow Equation Example for Enhancing a Well by Jet Drilling FlowRate BOPD 2k h ( pe pw ) re "µ " ln rw k = rock permeability h = formation thickness pe = fluid pressure at outer boundary pw = fluid pressure in wellbore μ = fluid viscosity re = effective drainage radius rw = wellbore radius BOPD = barrels of oil per day Production (BOPD) Lateral Lengths (Feet) Original Production without laterals is 10 BOPD.

34 Hurdles Consistency Distance Where did the lateral go?

35 Other Highly Useful Technologies Downhole Video Camera: Able to see whether fracs are in the right locations Identify oil seeps to target location of jetted laterals or future fracs Verify effectiveness of solvent or NitroDyne treatments as well as high pressure water blasting Poor Man s Field Automation Inexpensive fluid level monitors and data logging system can be setup to monitor tank volumes, optimize pump schedules and warn of system leaks or theft. Old Fashion Hydrometer Monitor oil gravity during heavy solvent applications to ensure that loads fall into Tier 1 pricing.

36 Conclusions We know that these technologies and specialized processes can economically increase production volumes We also feel that we can significantly increase recovery factors by Introducing a solvent/surfactant into the pore space Resetting the reservoir pressure Reducing oil viscosity Cleaning up existing fracs to re establish conductivity Extending reservoir drainage with MBJD We hope to be back in 2017 with an update to illustrate the economics of the larger scale implementation of these technologies

37 Questions? Glenn R. McColpin, CEO Cell: wells.com Wells.com