Significant San Andres Play Emerging Amid ROZ Fairways

Research May Rewrite the Science Behind ‘Dewatering’

Article Originally Appeared in the Midland Reporter Telegram on Sunday, June 21, 2015 12:15 am

Steve Melzer and Mella McEwen, Midland Reporter Telegram

Research in the massive living laboratory that is the Permian Basin has unlocked unexpected sources of crude oil and natural gas for decades.

Most recently, through development of new horizontal drilling and hydraulic fracturing technologies, Permian Basin producers have begun producing from the Wolfcamp and Lower Spraberry shales. As a result, Permian Basin has more than doubled, and U.S. production has reversed a four-decade decline, making the nation the world’s leading crude and natural gas producer.

Now the Permian Basin is reinventing itself again, said Steve Melzer, a Midland consultant.

“I think this will be long term; it has some staying power,” he said.

The new play

Some operators are working on projects to “dewater” the San Andres dolomites, primarily in Andrews and Yoakum counties.

Operators have been interested in what are known as residual oil zones since Hess and Shell did some work in ROZs in the 1980s. Residual oil zones contain remnants of oil that were not swept away by a natural waterflood of a huge paleo trap of oil present in the San Andres formation at the close of the Mesozoic and at the time of the Chicxulub meteor impact in Mexico’s Yucatan Peninsula, Melzer said.

A later, Tertiary Age uplift in what is now central New Mexico exposed the San Andres formation west of Artesia and Roswell, allowing water to infiltrate the subsurface and the oil entrapments of the San Andres. That water moved on through the Permian Basin into the eastern flank, sweeping oil along with it but leaving a portion behind as residual oil, he said.

Recent research by Melzer, the University of Texas of the Permian Basin and Arcadis has mapped the swept areas. Melzer said that research shows the sweep was not just limited to below San Andres oil fields but into regions between fields, known as ROZ “fairways.”

“If our maps are accurate, the oil will be there, so the risk of finding the residual oil is really small,” Melzer said.

While the San Andres has the largest region and thickness of the residual oil, other zones can have residual oil as well, he said.

Melzer said it is similar to dewatering plays in Oklahoma.

“That is pertinent to this, as well, but this is a hybrid of dewatering and depressuring,” he said.

The water must be produced to lower the reservoir pressure, making some of the oil mobile, Melzer said. The produced water can be disposed or processed into drilling or hydraulic fracturing fluids.

Some are calling this new play DUROZ for depressuring the upper ROZ. The man-made secondary recovery waterflood and tertiary recovery carbon dioxide flood projects in the main pay zones above the ROZs have similar properties to the natural waterflood. There are currently 15 different projects flooding the ROZs, producing an estimated 12,000 barrels of oil per day in the Permian Basin.

Melzer said two projects — the Tall Cotton by Kinder Morgan and the George Allen by Trinity CO2— are testing the next wave of CO2 enhanced-recovery projects. These two, both in Gaines County, are flooding areas without an overlying main pay zone in what is being called greenfield areas because they don’t have existing well infrastructure.

Operators are also using the technologies perfected in unconventional shale drilling to exploit these greenfields: They’re drilling horizontally into the ROZs, hydraulically fracturing the interval and producing the fluids with submersible pumps.

That primary recovery is a prelude to coming in with tertiary recovery methods, Melzer said.

The skepticism

As a result, the science in this new play refutes the conventional “dewatering” model, he said.

“There’s a lot of skepticism about where the oil is coming from. We’re not taught that way, but (the production) speaks for itself,” Melzer said.

He explained that conventional wisdom dictated the ROZs were limited to intervals below oil fields.

“I think we, as an industry, have been doing this for a very long time, but we haven’t been able to observe this process at work. What the greenfield ROZs allow us to do is isolate that the process is working and, even more exciting, that it is working economically even at these prices, when the conditions are right. So, in essence, it is confirmation of and a new explanation for a process we haven’t studied in the past,” Melzer said.

He said it is an unconventional play like the shales, but in this case is a carbonate formation with more classic reservoir properties. “It just doesn’t have the mobile oil component we’ve exploited for 100 years.”

The industry has to “flip out of that mode of conventional thinking into this new mode of thinking. It’s really a stretch to use traditional explanations” of fracturing operations connecting mobile oil compartments or the relative permeability explanation” he said.

It’s an exciting prospect that opens significant new sources of crude from the Permian Basin, Melzer said.

“Another aspect of this that is really exciting is that we now know how large the ROZ resources are. Not all of them will be productive at $50 a barrel, but a lot will. Some will do better at $70 or $80 a barrel. But this is a huge resource for the Permian Basin’s future,” he said.

A four-day short course on residual oil zones and CO2 EOR is planned for Aug. 23-26, 2016 at Midland College’s Petroleum Professional Development Center, 105 W. Illinois, downtown Midland

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