Wyoming CO 2 Status and Developments. Glen Murrell

Transcription

1 Wyoming CO 2 Status and Developments Glen Murrell P R E S E N T A T I O N T O T H E 7 T H A N N U A L W Y O M I N G C O 2 C O N F E R E N C E, J U L Y 1 1 T H,

2 Agenda Industry Stakeholders Status Supply Projects Developments Supply Projects ROZ

3 Market Participants Producers: Carbon Energy - Supplier, UCG operation in Green River Basin. Supply volume unknown. Contracted supplier to Anadarko Petroleum. ConocoPhillips - Supplier, owner of Lost Cabin Gas Plant. Contracted to supply ~ 50 MMcf/d to Denbury. ExxonMobil - Supplier, owner and operator of Shute Creek facility, with capacity of ~ 340 MMcf/d CO 2, supplying various clients. Pipeline operator. Medicine Bow Fuel & Power (DKRW-AF) - Potential supplier, Coal to Liquids plant in Hanna Basin. Potential for supply of ~ 200 MMcf/d. Contracted supplier to Denbury Resources.

4 Market Participants Consumers: Anadarko Petroleum Corporation - Operator of Salt Creek and Monell projects, taking ~ 125 MMcf/d from ExxonMobil. Distribution pipeline operator. Chevron - Consumer, operator of Rangely field, taking ~ 35 MMcf/d from ExxonMobil. Distribution pipeline operator. Devon Energy - Consumer, operator of Beaver Creek field, taking ~ 25 MMcf/d from ExxonMobil. Distribution pipeline operator. Elk Petroleum - Consumer, JV partner in Grieve Field with Denbury Resources. Merit Energy - Consumer, operator of Lost Soldier/Wertz fields, taking ~ 30 MMcf/d from ExxonMobil. Distribution pipeline operator.

5 Market Participants Integrated Business Models: Linc Energy - UCG operation in Powder River Basin. Supply volume unknown. Future CO 2 EOR operator of three fields near Casper. Denbury Resources - Operator of Grieve, Hartzog Draw, Bell Creek and Cedar Creek Anticline. Owner of Riley Ridge (130 MMcf/d initially in 2017). One third interest owner in LaBarge Field. Contracted for 115 MMcf/d from Shute Creek (ExxonMobil). Contracted for ~ 50 MMcf/d from Lost Cabin (ConocoPhillips). Contracted for ~ 100 MMcf/d from Medicine Bow Fuel & Power (DKRW Advanced Fuels). Owner of Greencore pipeline.

6 2013 6

7 2012

8 Conversion Natural Gas Processing Natural Resources MMcfpd ~50 MMcfpd Process Project Name Operator Location McElmo Dome Kinder Morgan, ExxonMobil Supply Capacity (MMcfpd) CO 1,150 Jackson Dome Denbury MS 930 Bravo Dome KM, Occidental, Amerada NM 290 Sheep Mountain Occidental CO 50 Doe Canyon Deep Kinder Morgan CO 110 LaBarge Exxon Mobil WY 340 Terrell, Grey Ranch, Mitchell, and Puckett Sandridge Energy Inc. Terrell and Pecos Counties, TX Turtle Lake DTE Energy Ostego, MI 11 Agrium, Inc. Borger, TX 26 Koch Nitrogen Enid, Oklahoma Conestoga Liberal, KS MMcfpd 1000 MMcfpd

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11 ~1000 MMcfpd ~100 MMcfpd ~2900 MMcfpd ~2500 MMcfpd 11

12 Supply Developments Rockies: CO 2 Supply in the Rockies will increase by almost 0.7 Bcfpd over next 5-10 years. Mostly by development of Riley Ridge but also through several conversion projects. Supply, and CO 2 EOR industry, could quadruple in 5-10 years. Implications for oil industry in the region in general and consequent state economics. Permian Basin: Natural source supply will be lifted incrementally, but significant volume of additional supply will come from NG processing plants and conversion technologies. Midwest/Mississippi/ Gulf Coast: Natural source supply will be lifted incrementally, but supply will be supplemented massively by conversion project supply going forward. Ultimately, as Jackson Dome enters decline, majority of supply will be from anthropogenic sources. Mid-continent: Possible tie-in to Permian Basin system. Additional supply provided by conversion projects. Canada: Initiation of CO 2 Transport and Utilization system. CO 2 supply from upgrading processes. 12

13 Oil production (Million barrels per year) CO2 EOR Production Midal Weyburn Mid Continent MS/Gulf Coast Rocky Mountains Permian basin Nth American CO2 EOR Production Year 13

14 CO2 Sales (MMcfpd) Doll et al., rd Wyoming Annual CO2 Conf.; Murrell, th Wyoming Annual Co2 Conf.; Denbury Resources 2011 Annual Report; Melzer th Wyoming Annual CO2 Conf.; DiPietro et al., ,000 CO2 Sales Average Daily CO2 Sales - Nth America 3,500 3,000 Other Dakota Gasification MS/Gulf Coast Rockies Permian Basin 2,500 2,000 1,500 1, Year 14

15 Supply Shute Creek* Processes NG from LaBarge Field First production (CH4, He, CO 2 ): September1986 Supply capacity of ~340 MMcfpd. Currently supplying about 210 MMcfpd to Rangely, Monell, Beaver Creek, Bairoil Complex and Salt Creek. Excess capacity will be mostly subscribed to Grieve, Bell Creek, Hartzog Draw via Greencore Pipeline System (Denbury). Will require interconnect with Anadarko line somewhere near Hells Half Acre in Natrona County. Lost Cabin Processes NG from Madden Field. First production (CH4): April 1995 Supplies ~50 MMcfpd to Greencore Pipeline. No reported sales of CO * From Condon and Parker, 2011: Shute Creek Treating Facility Project Updates. 5 th Annual Wyoming CO 2 Conference, July 13, 2011

16 MMcf/d Price per Barrel (2012%) 400 Shute Creek CO2 Supply Capacity vs. Average Daily Sales Shute Creek CO2 Sales (Average MMcfd) Shute Creek CO2 Supply Capacity (MMcfd) Wyoming Crude Oil First Purchase Price (Dollars per Barrel) $ Year

17 CO 2 Purchase rates (MMcf/d) 250 CO 2 Purchase rate by year 200 Beaver Creek Monell Salt Creek Bairoil 50 0 Rangely Year

18 2012 Shute Creek CO 2 Sales (MMcf/d) by EOR Project Bairoil 30 MMcf/d Beaver Creek 25 MMcf/d Salt Creek 95 MMcf/d Rangely 35 MMcf/d Data from WOGCC website Monell 30 MMcf/d

19 MMcf/d 160 CO 2 Purchases over time from Shute Creek Data from WOGCC website SALT CREEK RANGELY MONELL BEAVER CREEK BAIROIL 20 0 Date

20 Jan-81 Jan-82 Jan-83 Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Monthly Production (BOPM) Rockies CO 2 EOR Incremental Production Oil by Field 700,000 RANGELY 600, , , ,000 BAIROIL 200, ,000 0 SALT CREEK MONELL BEAVER CREEK Date

21 Annual Production (BOPY) 7.15 MMBO MMBO 14,000,000 CO 2 EOR Incremental Production by Field in the Rockies 12,000,000 10,000,000 8,000,000 6,000,000 Bairoil; 67.5 MMBO Monell; 9.53 MMBO Beaver Creek; 3.93 MMBO Salt Creek: 14.9 MMBO 4,000,000 Rangely; 112 MMBO 2,000,000 0 Since 1986 CO 2 EOR has produced an incremental 95.8 million barrels of oil in Wyoming; 208 million barrels in the Rockies system. Year

22 Project Field Reservoir Injection Start Total CO 2 Purchased (Bscf) Cum. Incr. Oil* (MMbbls) RF* (% OOIP) UR NET * (Mscf/bbl) Bairoil Lost Soldier/ Wertz Tensleep, Darwin/ Madison, Flathead /2011) /2011) ~10% 12/2011) ~5 12/2011) Rangely Weber Sand Unit Rangely Weber Sst ~6.0% ~5 Monell Patrick Draw (Monell Unit) Mesaverde Almond /2011) /2011) ~8.3% 12/2011) ~8 12/2011) Salt Creek Salt Creek WC 1& /2011) /2011) ~1.3% 12/2011) ~20 12/2011) Beaver Creek Beaver Creek Madison /2011) 3.93 ~3.6% ~12 12/2011) 12/2011) 12/2011) * Incremental recovery, utilization ratio and recovery factors are highly sensitive to analytical assumptions. We have been as conservative as possible and our assumptions may not match those used internally by operators.

23 Jan-1981 Jan-1982 Jan-1983 Jan-1984 Jan-1985 Jan-1986 Jan-1987 Jan-1988 Jan-1989 Jan-1990 Jan-1991 Jan-1992 Jan-1993 Jan-1994 Jan-1995 Jan-1996 Jan-1997 Jan-1998 Jan-1999 Jan-2000 Jan-2001 Jan-2002 Jan-2003 Jan-2004 Jan-2005 Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 CO 2 EOR Incremental Oil as % of Total WY production Monthly CO 2 EOR Incremental Production (BOPM) CO 2 EOR Incremental Production and % of Total WY Production 24% 800,000 22% 20% 18% Wyoming CO 2 EOR Incremental Production 700, ,000 16% 14% 500,000 12% 400,000 10% 8% 300,000 6% 200,000 4% 2% as % of Total Wyoming Production 100,000 0% - Date

24 Annual Production (BOPY) 140,000,000 Wyoming Oil Production by Type 120,000, ,000,000 80,000,000 60,000,000 Incremental CO 2 Oil Pindeale/Jonah Condensate 40,000,000 20,000,000 "Conventional" Oil 0 Year

25 Annual Production (BOPY) 70,000,000 Wyoming Oil Production by Type 60,000,000 50,000,000 Incremental CO 2 Oil 40,000,000 Pindeale/Jonah Condensate 30,000,000 Stimulated Horizontal Plays 20,000,000 Conventional Oil 10,000, Year

26 Oil Production (BOPY) 10,000,000 Stimulated Horizontal Play Production 9,000,000 TOTAL 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 FRONTIER SUSSEX 1,000,000 0 NIOBRARA TURNER PARKMAN MOWRY Year

27 Future Supply Riley Ridge Unit Will produce from LaBarge Field. Gas Plant currently under-construction does not include CO2 capture. CO2 capture facility currently being designed will initially supply ~130 MMcf/d and is planned to double over the next decade. Initial supply expected ~2017. DKRW Medicine Bow F&P Phase I CO2 supply ~100 MMcf/d, Phase II, if implemented, would double this amount. Contracted to 3/2013 still seeking final financing 6/20/2013 permit re-submitted, construction scheduled to start 7/2014, in operation mid UCG Linc Energy Powder River Basin based. Will provide CO2 to Linc projects Carbon Energy Green River Basin. Lease agreement with Anadarko includes CO2 off-take clause. At least 4 other entities considering some form of Hydrocarbon Conversion with CO 2 supply for EOR built in.

28 MMcfd 1200 Rockies CO 2 Supply Capacity DKRW (Phase II) DKRW (Phase I) 1000 Carbon Energy Linc Energy Riley Ridge 800 Lost Cabin Shute Creek Sales ???? Year

29 Forecasting CO2 EOR Incremental production Collaboration with Phil DiPietro from NETL Normally need a dimensionless curve Can be difficult, and at least very time consuming, to compile data. On a system and sub-system basis, we can use UR Net Use sensitivity analysis on historic data to determine best model (nominal, cumulative, average, SLM) and forecast system of UR Net in each system (e.g. Rockies, Permian, GC/MS) Assume perfect knowledge of supply capacity past and future. Use probabilistic methods to forecast actual sales. Use UR Net to calculate production from forecast sales. Not perfect but much better than resource based models currently used. 29

30 CO2 Sales (MMcf/d) Oil Production (MMBOY); URNet (Mcf/bbl) Rockies CO2 EOR: CO2 sales, Crude oil Production, and CO2 net utilization CO2 use, MMcfd Crude oil production, MM bbls/yr CO2 Net Utilization, Mscf/bbl

31 Future Projects Denbury/Elk - Grieve First injection reported March First incremental production expected late-2014 or early Denbury - Hartzog Draw Under development. First injection and first incremental production expected in Denbury - Bell Creek (MT) Injection has commenced. First incremental production expected 2 nd half of Linc Energy Glenrock area fields Under development Denbury - Cedar Creek Anticline (MT, ND, SD) Under development. Extension of Greencore expected. First injection and first incremental production expected in Magellen Petroleum - Poplar Dome (MT) Under development. Pilot project planned. Confidential Two other projects being investigated in Wyoming

32 CO2 Supply Great target, no supply. No supply does not mean no CO2. There are vast volumes of CO2 in Wyoming, but there is limited deliverability. LaBarge and Lost Cabin sources are fully utilized (or will be soon). Denbury had plans to get in to the BHB, but, after divesting BHB assets, have stepped back to focus on CCA. Will they be back? Several hydrocarbon conversion prospects floating around. Some of which consider current source/transport system as competitive threat. Consequently they are looking at regions isolated from the system (BHB and WRB). Problems associated with cost and policy. 32

33 Conclusions Development of CO 2 EOR projects in Wyoming continues. Supply capacity, CO2 sales and incremental production are forecast to increase over next 5 years. In 2012, CO 2 EOR produced 7.15 million barrels of oil (12.4% of total oil production) in Wyoming, million barrels in the Rockies system. CO 2 EOR has produced 95.8 million barrels of oil from Wyoming reservoirs, and 208 million barrels in the Rockies system. CO 2 EOR, Condensate production (and the increasing influence of stimulated horizontal drilling) has reversed the decline of oil production in Wyoming.

34 Questions? Glen Murrell

35 Tax Revenue ($) Oil Production (BOPY) Wyoming CO 2 EOR (@ Dec, 2011) Wyoming CO2 Oil and State Tax Revenue per year $80,000,000 7,000,000 $70,000,000 Tax Revenue CO2 Oil 6,000,000 $60,000,000 5,000,000 $50,000,000 4,000,000 $40,000,000 3,000,000 $30,000,000 $20,000,000 2,000,000 $10,000,000 1,000,000 $0 0 Year

36 Utilization Ratio* UR net = CO 2 purchased Incremental oil UR gross = CO 2 purchased + CO 2 recycled Incremental oil A measure of economic efficiency. Dependent on flood design and maturity. WAG vs GS, number of HCPVs injected Compare Salt Creek with Beaver Creek SC: phased, WAG, pattern flood, 1099 MMBO OOIP. BC: WAG-GS hybrid, Single development phase, 109 MMBO OOIP A measure of technical efficiency. Dependent on flood design and sweep efficiency. * Incremental recovery, utilization ratio and recovery factors are highly sensitive to analytical assumptions. We have been as conservative as possible and our assumptions may not match those used internally by operators.

37 Elevation (ft) Elevation (ft) ROZ S (%) o Porosity