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Fossil Oil & Gas Management, L.L.C

3D Seismic
Exploration Guide


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THE MAKING OF A WELL

The philosophy of Fossil Oil & Gas Operating, L.L.C. is that oil and gas reserves are usually discovered at places where 3D seismic exploration techniques and geologic interpretation have been applied in finding solid indications that hydrocarbons exist in the subsurface of the lease tracts to be drilled. Fossil Oil & Gas, L.L.C. has teamed with New Century Exploration, Inc. as Operator to drill only 3D seismic based prospects that reflect the strongest gas and oil seismic signatures.

As the wellbore (hole) is drilled, it is lined with steel pipe, called casing that is centered into the hole. Usually, the final string of casing is cemented in place and perforated in order to complete the well. Sometimes, different completion techniques are utilized, depending on the nature of the reservoir and other factors.

Oil can flow out of a reservoir and up the wellbore to the surface because of the difference in pressure caused by connecting the pay zone (sand), through drilling, with the surface. In water-driven wells, saltwater, trapped under the weight of the Continental Shelf, rushes to all areas of less pressure, permeating where possible and collecting the lighter weight oil and gases at the top of traps. As oil and gas are produced, water takes the provided space and eventually the reservoir can become depleted. Even with artificial lift like pump jacks, all of the oil originally in the reservoir will not be recovered. Additional recovery techniques such as water-flooding and miscible processes are able to recover more. Even present-day additional recovery techniques will not recover all of the oil that is in a reservoir (30% or more remains).

Whether the oil flows to the surface through natural energy, artificial lift, or by way of additional recovery techniques, that oil from the reservoir usually has gas, water, and sediment in it. Most of the water and sediment have to be removed before the crude can be sold to a shipper. Also, gas and oil must separate from each other.

Gas wells are connected to a complex pipeline system through a flow-meter that records gas volumes as they enter the pipeline. The meter chart is replaced and submitted for payment each month. Multiple gas wells on a given lease are inter-connected through an onsite infrastructure or "mini-pipeline". Well tests are run on wells throughout their producing lives. Their basic purpose is to assist the well owners in producing their wells efficiently. Some of the tests measure the potential of the well, others measure the bottom hole pressure and temperature, still others indicate the fluid level in a well. Regardless of the test, the ultimate goal is to recover as much oil and gas from a reservoir as possible.

Oil must be temporarily stored on a lease before it is sold to a transportation company. While it is on the lease, oil is accurately tested and gauged, or measured in order to determine its quality and quantity prior to sale.

Finally, some special problems may be encountered on the lease. Corrosion, scale, paraffin, H2S, and saltwater disposal are some problems that must be solved if successful production is to continue

Exploration

People who explore for oil and gas traps are called Exploration geologists and Geophysicists. Their main job is to find subsurface traps that could contain hydrocarbons.

Geophysicists

One of the sciences that geophysicists use in their search for traps is seismology. Seismology is the study of vibrations in the earth. The vibrations take the form of sound waves. For instance, an earthquake creates sound vibrations that can be studied by seismology. Sound vibrations can also be made and studied on the surface of the earth. Man - made sounds can help geophysicists find traps.

To understand these special sounds and how they are used to find tarps, lets look at a simple comparison. Most of us have experienced the sound of our voices coming back to us from the face of a cliff or building. The sound travels through air, bounces off the cliff or wall, and returns back to us as an echo. The use of seismology to explore for petroleum traps is based on the same principal, but it is somewhat different.

In seismic exploration, geophysicists are looking for traps buried deep beneath the surface. So, the sound has to travel not through air but through rock. Also, the sound has to have the right characteristics to go through thousands of feet of rock and back up to the surface. Further, the seismic work of a geophysicist usually covers many miles of surface area in order to increase the chances of finding a potential reservoir.

Regardless of how the sounds are made, they enter the layers of rock below the surface, and each rock layer reflects some of the sound back, just as a cliff reflects the sound of a voice back. These reflections of sound, or echoes, must be heard or detected. Several sensitive detectors called geophones in land exploration and hydrophones in offshore exploration are used to pick up the echoes. On land, the geophones are usually strung out in a line or array behind truck and are connected together with electric cable. The cable goes to recording equipment that is usually housed in a truck. Offshore, the hydrophones are trailed in a line behind a boat, and the boat carries the recording equipment.

In either case, when the reflected sound comes bouncing back from the rock layers, it reaches the geophones (or hydrophones, as the case may be) on the surface. The geophones convert the sound vibrations to electric current, which is sent along the cable to a tape recorder. The tape holds a record of the echoes. In a laboratory, the tapes are played back into computer, and record sections (also called seismic sections) are made. Expert interpretation of record sections - a sort cross section of the earth - can reveal what may be a trap for petroleum.

It is important to realize that exploration techniques only indicate where an oil and gas trap may be. In most cases, record sections do not give any direct indication of
the presence of hydrocarbons in a trap. However, a seismic phenomenon known as bright spot shoes up on a seismic section as a sound reflection that is much stronger or weaker than usual. A bright spot sometimes indicates natural gas in a trap. It is safe to say, however, that the only sure way to find out whether hydrocarbons are in a trap is to drill a hole down to it.

Geologists

Geologists use a different technique for discovering oil and gas traps. Typically, a geologist will take known points of control from well logs of existing wells. With this data, the geologist will plot the wells on a map, noting the presence, thickness, quality and subsurface depths of the various strata. Then, through a combination of experience, knowledge and (to varying degrees) instinct, the geologist extrapolates the data to form a three dimensional picture of what lies between the known control points. These days, most geologist and geophysicists overlap this process using seismic data to confirm their geologically rendered maps or vice versa.

Accumulation of Oil and Gas Reservoir Fluids

In all types of traps, oil and gas seldom fill up all the rocks in the reservoir. Most of the time, salt water occupies the remaining space. Much of the salt water lies underneath the oil and gas, but salt water usually coats the grains of the rock where the oil and gas occur as a well. This salt water is the ancient seawater that existed when the formation was originally created. When hydrocarbons move into a reservoir, they have to move or displace the salt water that is already in the rock pores, but they cannot displace all of the water. In fact, pore spaces can be anywhere from 10 to 50 percent salt water even in the midst of oil and gas.

Oil, gas and water in a reservoir generally do not occur in a haphazard manner. Instead, gas is in the highest part, oil is below the gas, and salt water is below the oil. The arrangement of gas, oil and water happens because the three fluids have different a mass (they do not weigh the same).

Reservoir Drives

After a well is drilled and completed (and if necessary, stimulated); attention turns to producing oil and gas from the reservoir. Some reservoirs contain mostly gas and others mostly oil. Let’s consider those that contain mainly oil first.

In order for oil to flow to the surface, there must be a drive force associated with it in the reservoir. Fortunately, at the time oil was forming and accumulating in the reservoirs, pressure energy in the gas and salt water associated with the oil was also being stored. This gas or water pressure (or both) is what drive oil through and from the pores of the reservoir, into a well, and to the surface.

Water Drive

Let’s visualize a porous and permeable rock layer buried deeply beneath the surface, overlain by an impermeable layer, and covering a very large area. In the highest part of the porous layer lies an oil deposit that is relatively small in size compared to the rest of the layer. Occupying the remainder of the pores of the layer, and lying in contact with the oil, resides a vast amount of salt water. This huge quantity of salt water occurs under pressure and provides a source of energy for driving oil to the surface.

Dissolved-Gas Drive

In most cases, oil in a reservoir has gas dissolved in it. This gas comes out of the oil when pressure drops as the oil is withdrawn through wells drilled into the reservoir. As the gas escapes from the oil, it expands. The expanding gas drives oil through the reservoir toward the wells and assists in lifting it to the surface. Reservoirs in which oil is lifted by dissolved gas escaping and expanding from the oil are termed dissolved-gas drive reservoirs.

Unfortunately, dissolved-gas drive is not very effective in terms of the amount of oil it allows to be recovered. Typically what happens is that oil flows to the surface only at the beginning. Rather quickly, reservoir pressure drops to a value where it can push oil only to the well and not the surface. At this time, some type of pump or other artificial method must be applied to recover more oil. However, a point will eventually be reached where no more oil can be recovered, even with artificial lift. In fact, statistics show that only 5 to 30 percent of the oil originally in place in a dissolved-gas drive reservoir can be recovered. Any portions of the remaining 70 to 95 percent can be produced only by additional recovery techniques.

Gas - Cap Drive

Some oil reservoirs have so much gas that all of it cannot be dissolved in the oil. This extra gas forms a layer, or cap, over the oil. In gas - cap reservoirs, two gas drivers are actually at work. One is the gas dissolved in the oil; the other is the gas in the cap. As oil is produced through wells drilled into the reservoir, the dissolved gas comes out of the oil, expands, and helps drive the oil to the surface. In addition, the gas cap expands to push oil to the surface.

Gas - cap drive is a more effective drive than dissolved - gas alone. A reservoir with a gas - cap may yield from 20 to 50 percent of the oil originally in it.

Combination Drive

A combination drive, a drive in which both free gas in a cap and water are available in the reservoir, is the most common type of drive. In combination drives, the gas and water expand and displace oil to the surface. In addition to the free gas in the cap, gas dissolved in the oil, which escapes and expands when wells are produced, is a factor in combination drives.

In reservoirs that contain hydrocarbons primarily in the form of free gas, the drive force can be thought of as a combination drive. Even though the hydrocarbons in the reservoir are mostly gas, frequently hydrocarbon liquids (often called gas liquids) and water are associated with them. While wells drilled into such reservoirs are termed gas wells, the expanding gas and water will also drive any liquid hydrocarbons as well. Of course in reservoirs where no massive amounts of water are associated with the gas and liquid hydrocarbons, then a gas - cap drive would be in force.

Reservoir Stimulation

Sometimes, a reservoir rock has very little permeability. A reservoir with low natural permeability can present a problem because the hydrocarbons in the reservoir, though ample, cannot be extracted at reasonable rates.

Fracturing

One way in which to simulate a reservoir is to break or fracture it. Fracturing is done after the well has been completed, that is, the well has casing, tubing, and has been perforated.

Fracturing actually splits open the rock reservoir. The technique uses several powerful pumps arranged on the surface near the well to be fractured. The pumps are connected by high - pressure lines to the well tubing. A special fluid mixture, often composed of mainly water and sand, is pumped down the tubing to the bottom of the well. Pumping continues, and pressure forces the fracturing fluid into the perforations. Soon, the pressure becomes so high it overcomes the strength of the reservoir rock and cracks it open. Pumping continues until the fracture is of the desired length. Then pumping ceases, the pressure is bled off, and the fracturing equipment is removed. The sand in the fracturing fluid holds the fracture apart so that reservoir fluids can flow into the fracture and to the well.

Fracturing a reservoir is similar to splitting a log with a hammer and a wedge. Muscle power swings the hammer to drive the wedge into the log to split it open. In a fracturing job (often shortened to frac job), powerful engines replace muscles, and high-pressure pumps take the place of the hammer. Fracturing fluid becomes the wedge and the formation behaves the same as the log - it splits open.

Now picture the split log being held open by the wedge (the log is not split in two). What happens if the wedge is taken out? The split comes back together, or heals. A fracture in the reservoir behaves in the same way. When the pumps are stopped and pressure bled off, the fracture comes back together - or will if allowed to. However, the sand in the fracturing fluid holds, or props, the fracture open, preventing it from healing. Because sand serves this function, it is often called a proppant. The propped fracture serves as a pathway for reservoir fluids to flow into the well and to the surface.

Acidizing

Certain acids, when put into contact with suitable reservoir rocks, etch or dissolve them. The fact that acid reacts with rock and forms the basis of a stimulation method known as acidizing. Two types of oil well acidizing are fracture acidizing and matrix acidizing.

Fracture acidizing involves pumping acid into the reservoir at a pressure high enough to cause it to fracture. Fracture acidizing is similar to fracturing; however, acid instead of water is used as a fracturing fluid. The acid etches the face (each side) of the fracture to create flow channels for reservoir fluids. Fracture acidizing is utilized mainly in limestone formations.

Matrix acidizing does not involve fracturing. The body of the rock in which hydrocarbons and other fluids occur is often known as the rock matrix. In this method acid is injected down the tubing and into the permeable channels of the reservoir. The injection pressure is kept low enough to prevent fracturing the formation. Certain acids can remove substances that block reservoir permeability, especially mud solids.

Many different kinds of acids are used in acidizing oil wells. One of the more common is Hydrochloric acid. Hydrochloric acid is a strong acid that works best on carbonate rocks. Carbonate rocks include limestone and dolomite. Limestone is mostly calcium carbonate, and dolomite is mostly calcium magnesium carbonate. Limestone and dolomite reservoirs are called carbonate reservoirs.

Acetic acid and formic acid are sometimes used to acidize carbonate reservoirs that have high temperatures - 250 degrees Fahrenheit or more. Another acid used is hydrofluoric, or mud, acid. Hydrofluoric acid reacts with quartz, sand, and clay. Also, various acids can be mixed in order to obtain the desired results in an acidizing job. Regardless of the acid used, the idea behind acidizing is to enable reservoir fluids to flow out of the reservoir and into the wellbore.


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