American Oil and Gas Reporter - PBIOS 2016 Official Program Guide - 120

Permian Basin Reports
or other solvent injection, to elevate recovery levels from this vast oil reserve.
There is a lot of oil left at Yates Field."
Kinder Morgan continues to develop
the Katz and Goldsmith EOR projects,
productive from the Strawn Sand and
San Andres, respectively, he continues.
Oil production at Katz is approximately
4,200 bbl/d and Goldsmith is yielding
about 2,000 bbl/d.
The company's newest CO2 flood is
at Tall Cotton in Gaines County, Tx.,
west of Seminole, where the company is
targeting the San Andres, a residual oil
zone, as its initial source of production,
Ricketson points out.
"There are a handful of operators who
have tested CO2 injection in ROZ in existing oil fields, but this is the first greenfield ROZ site that has gone from no oil
production to approximately1,500 bbl/d
after starting injection. We are very pleased
with the results," he says.
To better serve its own needs as well
as other Permian operators, Kinder Morgan
is expanding its Cortez CO2 pipeline
from Southwest Colorado, a project slated
for completion by the end of the year,
according to Ricketson. The 30-inch
pipeline's capacity to the Permian will
increase by 200 million cubic feet a day
to 1.5 billion cubic feet a day on completion, he says.

San Andres Dolomite
Blanchard, Ok.-based Riley Exploration
Group has drilled 13 horizontal wells
this year developing the San Andres
Dolomite in Yoakum County, Tx., on an
asset it acquired in 2015, says Chief Operating Officer Kevin Riley.
The company started drilling in the
play in July 2015 and had 12 producing
horizontals, one drilled and uncompleted
horizontal, and three saltwater disposal
wells under its belt by September 2016,
while continuing to focus on developing
infrastructure, he says. Gross oil production
is nearing 2,000 bbl/d.
Initial production in the area began
about 50 years ago, Riley says. The company's properties are sandwiched between
the Wasson Field, which was discovered
in the 1930s and ranks as one of the
largest producing fields in the lower-48,
and the Brahaney Field, which was discovered in the 1940s. Both are now undergoing active CO2 EOR, he says.
"We have an operating interest on
about 23,000 gross acres with more than
200 identified drilling locations," Riley
details. "We just completed the 12th operated horizontal well in the play with
plans to drill 20-24 more wells in 2017."
Echoing what operators of other plays
across the basin are indicating about their

In the South Hobbs Field, Occidental Petroleum is developing the residual oil zone by
utilizing workover rigs to deepen wells into CO2-floodable sections below the oil/water
contact. Since the first phase of ROZ injection was implemented in September 2015, production at South Hobbs has nearly tripled. The second phase of the project is scheduled
to get under way in early 2017.

120 THE AMERICAN OIL & GAS REPORTER

drilling projects, Riley says the play's
economics remain favorable, even at the
oil price levels experienced over the past
two years. "We are fairly bullish on our
Yoakum County opportunity. We feel the
economics work in a lower-price environment. We are focused primarily on
primary recovery with the opportunity
for CO2 enhancement down the road,"
he comments.
The company is targeting the San Andres at a depth of 5,100 feet through laterals extending from 1.0 to 1.5 miles and
fractured with 12-16 and 18-22 stages,
respectively, Riley explains.
CO2 EOR Operations
With 40 years of Permian EOR experience and 1 million net acres, Occidental
Petroleum, the largest CO2 operator in
the basin, continues to aggressively target
1.9 billion boe of remaining reserves in
31 active floods, says Barbara Bergersen,
president and general manager of Permian
EOR.
To enhance production of 145,000
boe/d generated from 700 Bcf of CO2 injected in 2015, the focus this year has
been on shifting more capital to longercycle EOR projects to take advantage of
lower costs, she says. Occidental's total
Permian net production (EOR and unconventional) for 2015 was 255,000 boe/d.
"Our inventory includes projects that
have finding and development costs between $3 and $12 per boe," Bergersen
states. "In our experience, incremental
production will come on line in six to 18
months after the start of CO2 injection."
Occidental continues to enhance its
position through debottlenecking and
bolt-on equipment to existing infrastructure
as part of a plan to increase CO2 injection
capacity by 25 percent over the next five
years, she says.
In several Permian EOR fields, Occidental is developing both the main oil
column (MOC) and residual oil zone.
Workover rigs are used to drill the extra
depth into the CO2-floodable ROZ sections
below the oil/water contact, Bergersen
details.
"The residual oil zone underlies most
of our major EOR properties, and can
be developed at a cost between $3 and
$7 a barrel," she says, noting that Occidental's overall Permian Basin EOR portfolio can operate at cash costs as low as
$22/boe.

American Oil and Gas Reporter - PBIOS 2016 Official Program Guide

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