Small-Scale Water Floods Using Horizontal Wells in the...

Small-Scale Water Floods Using Horizontal Wells in the Red River O O SB Zone One Operators Story

Luff Exploration Company

Horizontal waterflooding is not, strictlyHorizontalwater floodingisnot,strictlyspeaking,unconventionaloilrecovery.

However,theexperienceofonesmalloperator ma be of interestoperatormaybeofinterest.


CedarHillsField/BowmanCounty,ND

A large portion of Cedar Hills Field (just across the state line into North

/ y,

AlargeportionofCedarHillsField(justacrossthestatelineintoNorthDakota)wasdevelopedintheRedRiverBZonebyalargeindependentusingexclusivelymediumradiushorizontalwellsandwaterfloodoperations with an alternating pattern of producers and injection wellsoperationswithanalternatingpatternofproducersandinjectionwells.

Localizedgeologywasnotasignificantfactor,andseismic(andtheresulting mapping ) was typically not shotresultingmapping)wastypicallynotshot.

TheresultingCedarHillsSouthUnitwasaverylargescalewaterfloodunit

LuffExplorationCompany

Luff Exploration Company on the other hand is a small independent that

p p y

LuffExplorationCompany,ontheotherhand,isasmallindependentthathascontinuouslyoperatedonbothsidesoftheSD/NDstatelinesincethemid1970s.IntheareasdevelopedbyLuffduringthistimeperiod,localized geology matters greatly and there are numerous existing verticallocalizedgeologymattersgreatlyandtherearenumerousexistingverticalwells,manyofthemdecadesold.

Luff as a private company with a small staff has developed several smallLuff,asaprivatecompanywithasmallstaff,hasdevelopedseveralsmallscalewaterfloodsintheRedRiverBZone,andhaspioneeredtheuseofshortradiushorizontaldrillingtechnology(frombothexistingverticalwells and newlydrilled vertical wells)wellsandnewly drilledverticalwells).

AreasofConcentration WaterFloodUnits

In the creation development and management of small-scale Red River BIn the creation, development, and management of small-scale Red River B Zone horizontal water floods, Luff has concentrated its efforts in these categories:

1. Reservoir characterization, integrating traditional data and non-traditional data, and using iterative processes.

2. Using a mix of horizontal drilling methods, to account for both local geology and the existence of vertical wellbores.

3. Well surveillance and reservoir management

4. Installation of state-of-the-art surface facilities and related automation

Luff Exploration CompanyAmor North Red River Unit

Luff Exploration CompanyAmor South Red River Unit

Luff Exploration CompanyGrand River Red River B Unit

Luff Exploration CompanyState Line Red River Unit

Grand River Red River B Unit

State Line Red River Unit

Bowman CountyNorth Dakota

Luff Exploration CompanySouth Dakota - State Line Red River Unit Harding County

South DakotaSouth Dakota



Luff Exploration CompanyPetes Creek Red River Unit

Luff Exploration CompanyNorth Buffalo Red River Unit

Luff Exploration CompanyEast Harding Springs Red River Unit

East Harding Springs Red River UnitEastHardingSpringsRedRiverUnit

Thisunitwasformedin2003andexpandedin2010.ItpbordersthePetesCreekRedRiverUnitontheEastside.

ThePlanofDevelopment(POD)callsforalternatinghorizontalproductionandwaterinjectionwells.

Examplesofcomplexmappingareshown.

Twoexamplesofresponsetooffsettingwaterinjectionarealsoshown.

Sandy White P26HSandyWhiteP26H

NorthDakota

di i

PetesCreekRed River Unit

Dividingline

SouthDakota

EastHardingSpringsRedRiverUnit

RedRiverUnit

EHSRRUI32HRespondedtooffsettingwaterinjection

EHSRRUF6H

injection

Respondedtooffsettingwaterinjection

Red lines are unit bordersBlack lines show horizontal laterals for producing wellsBlue lines show horizontal laterals for water injection wellsjDashed lines show possible future horizontal wells

Augmenting2D/3DSeismicDatainM i f I iti l R i D i tiMappingforInitialReservoirDescription

Creatingsubsurfacemapsusing3Dseismicreflectiontimedataiscertainlynotnew.Creatingresidualstructuremaps(structureminustheregionaltrend)isalsonotnew,thoughnotcommonlyused.Theuseofelectriclogmeasurement(fromverticalwells)ofthickness,porosity,and

lwatersaturationisalsonotnew.

However,MarkSippel(withLuff)hasalsoincorporated: True vertical depths (TVD) of the reservoir along horizontal laterals Trueverticaldepths(TVD)ofthereservoiralonghorizontallaterals,

inadditiontoTVDatverticalwells.Thisaugmentsseismicreflectiondata,andcoverslargeareasofthereservoir.

Drillingpenetrationratealonghorizontallaterals(fastdrilling=goodk)rock).

Gasmeasurementswhiledrillinglaterals(measuredindrillingfluidanddrillingcuttings).

Human observation of hydrocarbons (oil) from drilling cuttingsHumanobservationofhydrocarbons(oil)fromdrillingcuttings.

EHSRRU Expansionlands

East Harding Springs Red River Unit (before expansion)(before expansion)

Luff Exploration CompanyEast Harding Springs Red River UnitT22-23N, R6E Harding Co, SD

Subsea Depth of Red River B Porosity

CI = 10 feetPrepared by Mark Sippel CI = 10 feetFebruary 2010

EHSRRU Expansionlandslands



Residual Map ofSubsea Depth of Red River B Porosity

P d b M k Si lCI = 10 feet

Prepared by Mark SippelFebruary 2010



Luff Exploration CompanyEast Harding Springs Red River Unitg p gT22-23N, R6E Harding Co, SD

Initial Producing Oil Cut

CI 0 1 f ti


CI = 0.1 fractiony


East Harding Springs g p gRed River Unit (before expansion)


Oil Saturation (So) MapDerived from Reservoir Simulation

CI = 0.05 fractionPrepared by Mark SippelFebruary 2010 CI 0.05 fractiony


Tr.19

East Harding Springs Red River Unit (before expansion)

Tr.20

(before expansion)

Tr.1

Luff Exploration CompanyEast Harding Springs Red River UnitT22 23N R6E Harding Co SDPrepared by Mark Sippel T22-23N, R6E Harding Co, SD

Mobile Oil Pore Volume Map(So-Sor) X Porosity X Feet


CI = 0.02 pore-feet

350

400

EHSRRU F-6HCartesian Plot - Daily Oil Production

5-Day Trailing Average Values

Y axis has a Cartesian scale Made changestopumpandpumpingmotion

200

250

300

y Pr

oduc

tion

(BB

LS/D

ay)

Well responded significantly to offsetting water injection

50

100

150

Dai

ly

RDG 10/3/2010

0

Date

Oil

RDG 10/4/2010

0

50

100

150

200

250

300

350

Dai

ly R

ates

EHSRRU I-32H - Horizontal "B" Zone3-Day Trailing Average

Oil

CartesianScale

Icestorm

Setlargepumpingunit

Well responded significantly to offsetting water injection

A large pumping unit on the EHSRRU I-32H

A cow (protected f th i t )from the moving parts)

People!

EAST HARDING SPRINGS RED RIVER UNIT - EHSRRU

100,000

EAST HARDING SPRINGS RED RIVER UNIT EHSRRU

d ande

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Green curve is monthly oil production in BBLS/month

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012100

Time

Petes Creek Red River UnitPete sCreekRedRiverUnit

Thisunitwasformedin2009.ItborderstheNorthDakotastatelineontheNorthsideandtheEastHardingSpringsRedRiverUnitontheWestside.

ThePlanofDevelopment(POD)callsforalternatinghorizontalproductionandwaterinjectionwells.p j

Examplesofopenholelogsectionsandreservoirsimulationareshown.

NorthDakota

PetesCreekRedRiverUnitDividing line

Betweenunits

SouthDakota

PCRRUN21H(currently producing)

EastHardingSpringsRedRiverUnit

(currentlyproducing)

PCRRUF9H(currentlyproducing)

Red lines are unit bordersBlack lines show horizontal laterals for producing wellsBlue lines show horizontal laterals for water injection wellsjDashed lines show possible future horizontal wells

Luff Exploration Companyp p yMiller Ranch F-4H

K.B. 2.901 ft.

SchlumbergerPlatform Express

Compensated Neutron 3 Detector Litho-Density Porosity LogThere are no economically productive zones between the top of the Gunton and the Red River B zone. This interval is

included in the unitized interval because of short-radius horizontal re-entries.

Top of Gunton MemberStony Mountain Formation8 763 ft8,763 ft.

Proposed Stratigraphic IntervalStratigraphic Interval

Proposed Petes Creek Red River Unit

Top of the Gunton member of the Stony Mountain formation down to the Red River C Zone Marker

(top of the C Zone)

Top of Red River

Red River A Zone

Red River B ZoneRed River B Zoneporosity

Red River C Marker8 987 ft

Red River C Zoneporosity

8,987 ft.

p y

Top of Top ofTopofRedRiver

TopofRedRiver

Red River BRedRiverBRedRiverB

Exhibit 5-3

EnhancingReservoirCharacterizationWithTighterI t ti f R i Si l ti d S i i M iIntegrationofReservoirSimulationandSeismicMapping

ReservoirsimulationwithaBlackOilmodelsoftwareapplicationisnotnew.Noristheuseofseismicmappingforinitialmappinginthereservoirmodel.

However,MarkSippel(withLuff)hastakenthereservoircharacterizationprocessfurther,byiniterativeprocessofreservoirmapping(description)andblackoilsimulationforhistorymatchandfuturepredictionofoil,water and gas flow rates and pressure In this iterative process thewaterandgasflowrates,andpressure.Inthisiterativeprocess,themappinggetschangedfor:

o Structure(tochangewatercut)o Permeability(tochangeflowrate)o Porosity(tochangeratedeclineorresponseandpressureinthe

reservoiraroundawell)

WhyDotheIterativeProcess?y

Matchingreservoirmappingdescriptiontoobserveddatawhiledrillingandduringproductionisusefultomakingbettereconomic decisions for development and for deriving bettereconomicdecisionsfordevelopment,andforderivingbetterequityparametersforworkinginterestownersandroyaltyownersduringthestatutoryunitizationprocess.

19 20 21

21 22 23 24

129N 101W128000

129000

130000

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25262728123000

124000

125000

126000

127000

1-21

1-28

1 21

14-19H

28293025

26

119000

120000

121000

122000

41-33H

1-34

1-35

P-26H

31 32 33

33 34 35 36

115000

116000

117000

118000

1-19

16-331-33

1 35

1-35

1-36

1-34H

I-21

24 19 20 21 22 23 24 19

111000

112000

113000

114000

1-25

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F-29H

I-21

C-28H

25

2526272829

30

3023N 6E106000

107000

108000

109000

110000

1-27

1-30

O-28H

36 31 32 33 34 35 36 31102000

103000

104000

105000

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1-32P

1-32

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M-33H

I-32H

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F-4H

1-35H

12 7 8 9

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1-7C-8H C-9H

CRI 1-3H

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24 19 20 21 22 23 24 19

22N 6E

81000

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Green lines show horizontal laterals for producing wells in modelBlue lines show horizontal laterals for water injection wells in modelDotted lines show actual lateral trajectories

800001248000 1250000 1252000 1254000 1256000 1258000 1260000 1262000 1264000 1266000 1268000 1270000 1272000 1274000 1276000 1278000 1280000 1282000 1284000 1286000 1288000

Luff Exploration CompanyJune 2009

Prepared by Mark Sippel

0 2000 4000 6000 8000

Pete's Creek Red River Unit Model MapGrid Cells 100 x 100 x 2

Grid Cell Size 406 ft x 515 ft x 2 ft0 2000 4000 6000 8000 Grid Cell Size 406 ft x 515 ft x 2 ft

Oil rate with time from reservoir simulations for Petes Creek Unit.

PETES CREEK RED RIVER UNIT - PETES CREEK

100,000

PETES CREEK RED RIVER UNIT PETES CREEK

med

Uni

t for

m

10,000

onth

ly)

1 000

Rat

e (m

o

1,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012100


2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Time

SouthDakota StateLineRedRiverUnit

Thisunitwasformedin2008.ItborderstheNorthDakotastatelineontheNorthside.

ThePlanofDevelopment(POD)callsforalternatinghorizontalproductionandwaterinjectionwells.

Examplesofwellsurveillanceareshown.

Anexampleofresponsetooffsettingwaterinjectionisalsoshown.

SD-SLRRU F-20H(WIW) Ferkingstad 33 20

Njos 1-19 (P&A)

(WIW) Ferkingstad 33-20 North Dakota

South Dakota

Njos J-19HJanvrin A-29H (WIW)

Janvrin L-28H

S th D k t St t Li R d Ri U itSouth Dakota State Line Red River UnitState Line Field

Harding County, South DakotaBlack lines show horizontal laterals for producing wellsBlue lines show horizontal laterals for water injection wells

350

Ferkingstad 33-20 (SD-SLRRU)Cartesian Plot - Daily Production

3-Day Trailing Average Values

Injection started at Janvrin A-29H

InjectionreducedatJanvrinA29H

LargerplungerrunIcestorm

200

250

300

ily P

rodu

ctio

n

WellRespondedsignificantlytooffsettingwaterinjection

50

100

150 Dai

AdjustSAMPOC

RDG 10/5/2010

0

Date

Oil

DifferentHorizontalDrillingMethodsg

Luffhasemployedseveralmethodsfordrillinghorizontalwells:

o Newmediumradiuswellso Newverticalwells,followedbyshortradiushorizontalre

t ith diff t ientrywithadifferentrigo Shortradiushorizontaldrillingfromexistingverticalwells

Thisapproachreflects:o Localizedgeologyo Existence of numerous vertical wellso Existenceofnumerousverticalwells

Janvrin L-28HNW SW, Sec. 28, T23N, R5E Well spudded in 5/22/07SD-SLRRU Diagram Not To ScaleHarding County, SD

KB @ 3,047 ft.Gr @ 3,032 ft.

8-5/8" casing set at 2,020 ft.(KB) cemented w/ 500 sx Lite cmt. &tailed w/200 sx Class "G" cmt.

TOC 2nd stage - 3,360 ft.from CBL

2nd stage - cement pumped through DV:o 170 sx Class "G" cmt (tail)o 140 sx PLC Lite cmt (lead)

D.V. collar @ 6,816 ft. (CBL)(Casing detail has DV @ 6,849 ft.)

Tubing detail July 17, 2009: TOC for 1st stage - approx. 6,824 ft.KB 15 15 from CBL280 jts 2-7/8" 8,799 8,814AC 3 8,817 1st stage - cement:3 jts 2-7/8" tbg 94 8,911 o 300 sx Class "G" cmt SN w/DT 1 8,9122-7/8" Perf sub 4 8,9161 jt w/BP 31 8,947

Landed @ 8,947 ft.

Upper Casing window - 8,936 - 8,942 ft. Lower Casing window - 8,924 - 8,930 ft.West Lateral TD @ 10,940 ft. MD North Lateral TD @ 8,976 ft. MDSidetrack West Lateral @ 9,690 ft. MD Sidetrack North Lateral @ 8,950 ft. MDWest Lateral Sidetrack TD @ 10,785 ft. MD North Lateral Sidetrack TD @ 11,279 ft. MD

CIBP @ 9,010 ft.

Red River "B" Zone

5-1/2" casing set at 9,150 ft. (KB)TD 9,150 ft. (driller) (KB)TD 9,159 ft. (logger) (KB) PBTD - 9,091 ft. (drilled out)Updated 12/15/09 KDReviewed by GM

ProducingAutomationandWellSurveillanceg

Theuseofpumpoffcontrollersforwellswithbeampumpingunitsisnotnew.NoristheuseofSCADAtoprovidesummaryinformation at a field officeinformationatafieldoffice.

However,Luffs engineersinDenverhavetakentheprocessfurther,bydirectlypullingdatafromthepumpoffcontrollers,andconvertingthedatatopumpintakepressurevalues(aproxyforproducingbottomholepressure),whichismonitoredandusedininjection/withdrawaldecisionsandwellperformanceassessments.PumpingunitloadingandsuckerrodloadingisalsoassessedfromthedatapulledfromDenver.

Pump Off Controller

Load cell at bridle of pumping unit

Controller and antenna for telemetry

Surface dynamometer card

Calculated down-holedynamometer cardy

SD-SLRRU Ferkingstad 33-20

Pump intake pressure Currentp pbefore response Pump intake pressure

Significant gas interference (and loss of stroke) before No gas interference currently( )response to water injection

SOUTH DAKOTA-STATE LINE RED RIVER UNIT - STATE LINE

100,000

Uni

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onth

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1 000

Rat

e (m

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1,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012100


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Time

StateoftheArt Facilities and AutomationState of the ArtFacilitiesandAutomation

Extensive automation Careful water filtration

Variable Speed Drive Injection Automated oil sales with LACT

Some Lessons LearnedSomeLessonsLearned

Placinghorizontalwaterinjectionwellsinteriortoproducersandintheoilcolumn is bestcolumnisbest.

Alternatinghorizontalproductionandwaterinjectionwellsideallyshouldbenofurtherapartthanapproximatelyonequartertoonethirdofamile.

Producingwellsdesignatedforwaterinjectionservice,foraperiodoftime,ishelpfulforseveralreasons.

Injectionwaterqualitymatters.

Automation,includinginjectionandproductionfacilities,watertransfer,productionwellpumpoffcontrolsanddynamometerdatacollection,etc.helpssignificantlyinwaterfloodperformanceoptimization.Luffsfieldemployeesplayacriticalroleinthistechnicaleffort.

Surprisesneverstop.

A Good NeighborAGoodNeighbor

Ken Luff and Luff Exploration Company have operated continuously on both sides of the SD / ND state line since thethe SD / ND state line since the early 1970s. We continue to work at being a good neighbor.

Photo: Dan Thompson

Thank you for your time! Luff Exploration Company

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