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QUARTERLY REPORT 3

MICHIGAN TECHNOLOGICAL UNIVERSITY

JANUARY, 1995

Recovery of Bypassed Oil in the Dundee Formation Using Horizontal Drains

Contract Number: DE-FC22-94BC14983

University: Michigan Technological University

Budget Period: 04-28-94 to 10-27-95

Project Period: 04-28-94 to 04-27-97

Cumulative DOE Obligation: $800,000

Program Manager: James R. Wood (813) 974-9674

Principal Investigator: James R. Wood

Contracting Officer's Representative (COR): Chandra Nautiyal (918) 337-4409

Reporting Period: 1st Quarter, FY 1995

EXECUTIVE SUMMARY

Although project members are located at four sites (Tampa, FL; Houghton, MI; Kalamazoo, MI; and Los Angeles, CA) project coordination has been very successful. Allan and Nigrini make quarterly trips to Michigan Technological University (MTU) in Houghton and occasional trips to Western Michigan University (WMU) in Kalamazoo and the University of South Florida (USF) in Tampa to work on project tasks with Wood, Harrison, Pennington, Huntoon, and their students. Wood travels from USF to MTU every 6 weeks on project business. Chittick travels to WMU on a regular basis to work with the database and core repository there. Allan and Nigrini generally meet at least every other week to coordinate their work on the project. The computer network and server at MTU is a critical link in the communications network.

Well data, including drillers' logs, wireline logs, and seismic data, from the Crystal and other Dundee hydrocarbon fields in the Michigan basin have been acquired. Digitized logs of 342 wells that currently produce or have produced from the Dundee Formation in the seven-county study area have been purchased from Maness Petroleum Company. The data-gathering phase of the well log program is now complete and activity has advanced to the construction of maps and cross sections from well data.

During the last quarter, production data was added to the well-file database, and we now have the capability of mapping production as well as geology. Well location maps were constructed for all 30 fields. Contour maps were constructed for several fields on the top of the Dundee Formation, the top of the Dundee porosity zone (which is well below the top of the Dundee and varies in stratigraphic position throughout most fields), and initial production. Simple computer-generated cross sections were constructed for the same fields. Construction of contour maps and cross sections for the rest of the fields will continue during the next quarter. Now that we have production data for all of the fields in our database, cumulative production maps can be constructed. Interval isopach maps of top Dundee to top Dundee porosity zone (which will map the number of feet one must drill beneath the top of the Dundee to hit pay) will also be constructed.

A masters thesis on Winterfield Field is well underway. The purpose of the Winterfield study is to delineate possible economic zones of by-passed oil by characterizing the structural, stratigraphic, and lithological components of the Dundee utilizing well data (driller's logs and scout tickets), petrophysical log data, and production data.

SEM analyses of a few selected samples have been made at WMU and Fourier Transform Infrared (FTIR) spectroscopy analyses have begun at MTU. Techniques for performing quantitative analyses of rock samples using FTIR ar being developed as part of another masters thesis. Sample preparation, accumulation of a suite of mineral standards, and development of reliable analytical techniques are critical to this endeavor. Much of the work to date has concentrated in these areas.

Thirty Dundee fields are being studied in this project. Well data (driller's logs and scout tickets), log data, and production data sets for all 30 fields are now complete. The data are currently stored in TerraSciences' TerraStation database at WMU. Drilling of our horizontal well at Crystal Field was delayed pending completion of an environmental survey. It is expected to commence in spring, 1995. Cronus Development Corp., under contract to Terra Energy, will drill the well.

A prototype multimedia-based shell using MacroMind Director was designed and developed by one of our research staff. We intend to use this shell as a technology transfer mechanism. All data and information associated with the project will be stored on hard disk and will be accessible via the interactive multimedia shell program. At the end of the project, all data, graphics, tutorials, manuals, etc., will be stored on CD ROM for distribution to DOE and to our target audience within the petroleum industry.

We have contracted to run a booth in the Exhibits Hall at the AAPG National Meeting in Houston, March 5 to 8, 1995. The booth will include a poster display describing project goals and progress to date. This year we will run two adjacent booths, one for this project and one for our California DOE project. Our AAPG Exhibit for the California project was very successful last year and we hope to repeat that success this year.

On January 19 and 20, 1995 we held a meeting at the University of South Florida in Tampa to review both of our DOE projects. Each project member made a presentation on his or her work. The meeting afforded project members an opportunity to learn what everyone else was doing and to discuss project plans and accomplishments in an open forum. The meeting was very successful at accomplishing these goals.

SUMMARY OF TECHNICAL PROGRESS BY TASK

BUDGET PERIOD 1

TASK 1.1 PROJECT MANAGEMENT

Although project members are located at four sites (Tampa, FL; Houghton, MI; Kalamazoo, MI; and Los Angeles, CA) project coordination has been very successful. Allan and Nigrini make quarterly trips to Michigan Technological University (MTU) in Houghton and occasional trips to Western Michigan University (WMU) in Kalamazoo and the University of South Florida (USF) in Tampa to work on project tasks with Wood, Harrison, Pennington, Huntoon, and their students. Wood travels from USF to MTU every 6 weeks on project business. Chittick has travels to WMU on a regular basis to work with the database and core repository there. Allan and Nigrini generally meet at least every other week to coordinate their work on the project. The computer network and server at MTU is a critical link in the communications network.

In general, all parties seem to be satisfied with the present management structure and implementation. Contacts are frequent enough, and permit sufficient time for discussions and problem-solving, without being overly intrusive. All team members so far appear to be functioning well with this management style.

TASK 1.2 RESERVOIR CHARACTERIZATION

The goal of this task is to quantify reservoir heterogeneities and controls on producibility. Geologic, geophysical, hydrologic and engineering techniques are being used. The Crystal Field is the focus of the characterization effort, but up 30 other Dundee fields are being studied. Well and log data sets and production data sets for all 30 fields are now complete.

1.2.1 WELL LOG ACQUISITION, DIGITIZATION, ANALYSIS

Well data, including drillers' logs, wireline logs, and seismic data, from the Crystal and other Dundee hydrocarbon fields in the Michigan basin (Figure 1), have been acquired. Digitized logs of 342 wells that currently produce or have produced from the Dundee Formation in the seven-county study area have been purchased from Maness Petroleum Company. Multiple logs exist for each well, and include gamma ray, caliper, lithodensity, neutron porosity, various types of resistivity, and some sonic logs. The logs total about 3 million linear feet of digitized data. All deep wells in the area are included in the log suite. The data gathering phase of the well log program is now complete and activity has advanced to the construction of maps and cross sections from well data.

Regional Studies

During the last quarter, production data were added to the well file database, and we now have the capability of mapping production as well as geology. Well location maps were constructed for all 30 fields. Contour maps were constructed for several fields on the top of the Dundee Formation, the top of the Dundee porosity zone (which is well below the top of the Dundee and varies in stratigraphic position throughout most fields), and initial production (Figures 2, 3, and 4). Simple computer-generated cross sections were constructed for the same fields (Figure 5). Construction of contour maps and cross sections for the rest of the fields will continue during the next quarter.

Now that we have production data for all of the fields in our database, cumulative production maps can be constructed. Interval isopach maps of top Dundee to top Dundee porosity zone (which will map the number of feet one must drill beneath the top of the Dundee to hit pay) will also be constructed. Net pay isopachs will be more difficult. Most wells are drilled to the top of Dundee porosity and completed without ever crossing the oil/water contact. Therefore the positions of oil/water contacts can only be estimated from off-structure dry holes. However, it appears that we may be able to reasonably estimate the positions of oil/water contacts in about 25% of the fields, which will allow us to construct volumetric maps for those fields. All of these maps will be constructed after completion of the basic contour maps for each field.

Pressure data is also hard to come by in many of these old fields. We expect that we will be able to produce pressure decline curves for a few wells, though, and with the volumetric maps for our most tightly constrained fields, be able to estimate recovery factors and other engineering parameters in a few locations. These values can then be extrapolated to other fields with poor data.

Winterfield Field

S. Chittick is writing his M.S. thesis on Winterfield Field (Figure 6), which possesses more modern log data than most other Dundee Fields. In addition, several wells penetrate the entire Dundee porosity zone, allowing a more thorough evaluation of the reservoir than can be done elsewhere. The purpose of the Winterfield study is to delineate possible economic zones of by-passed oil in the Dundee by characterizing the structural, stratigraphic, and lithological components of the Dundee utilizing well data (driller's logs and scout tickets), petrophysical log data, and production data.

The initial well data set used to create maps and plots was obtained from Petroleum Information Corporation (PI). Contour plots and surface plots were constructed with CoPlot by CoHort Software. Geophysical logs from Winterfield field were obtained in digital form from Maness Petroleum. Production data were obtained from the Michigan Department of Natural Resources, Geological Survey Division.

Porous dolomite above the oil-water contact, capped by either the Bell Shale or tight Dundee limestone, is the producing lithology within the Dundee. The producing zones can be discriminated quite readily from a suite of geophysical logs containing GR, PEF, and LLD logs (Figure 7). These logs can be further enhanced with the addition of the CNL and density logs to determine corrected porosity values in the producing interval. Corrected porosity values were calculated for all wells with available CNL and density well log data using the KOBRA:XPLOT algorithm of TerraSciences' TerraStation software, which is based on Schlumberger cross plots. Water saturation values were calculated and averaged over the top sixty feet of the reservoir using the Terra Station software. Water saturation values were subtracted from 1 to get the oil saturation. These values were plotted as a contour map.

Although Chittick has not yet been able to accurately quantify the amount of bypassed oil in Winterfield Field, potential areas for further exploration can be delineated by looking for leases that appear to be underachievers relative to structural position, initial production tests and relative production compared to surrounding similar wells that produce from similar lithologies. Dart Oil and Gas drilled 3 wells in the mid 1980's with the the Richfield Formation as the target zone and inadvertently discovered oil in the Dundee in the western part of the field, where reservoir quality was previously thought too poor to produce. The discovery shows that pockets of ecomomically produceable oil still exist in the field.

1.2.2 CORE ACQUISITION AND ANALYSIS

Twenty to thirty cores of the Dundee Formation from throughout the state of Michigan are currently available. Cuttings samples are also available from 60 to 100 Michigan wells. Project staff will acquire and examine core and cuttings from as many of these wells as possible. Samples will be selected from cores in public repositories such as Western Michigan University Core Research Lab, University of Michigan Subsurface Lab, the Wayne State University Core Facility, and the Michigan Geological Survey core repository. Additional materials will be obtained from private sources, such as oil companies. M. Foley is using a database called COREDAT, provided to us by Maness Petroleum, to search the drillers' reports and core analysis files for cores we have missed.

There are no cores in Crystal Field, the site of the field trial in this study. The closest Dundee core is in an outpost well 8 to 10 miles away from Crystal Field. Thus, acquisition of a good vertical core through the Dundee in Crystal Field is an essential element of the reservoir characterization study. W. Harrison currently has all of the porosity, permeability, and oil saturation (p,k,s) data for all of the Dundee cores from wells in a seven-county area surrounding Crystal Field in his possession. This includes data from some cores that are no longer available. be sampled. Drill cuttings collections are housed at WMU, the University of Michigan, Central Michigan University, and the Michigan Geological Survey in Lansing.

SEM analyses of a few selected samples have been made at WMU.

1.2.3 FTIR SPECTROSCOPY

Fourier transform infrared (FTIR) spectroscopy analyses have begun. D. Popko at MTU is developing techniques for performing quantitative analyses of rock samples using FTIR as part of his masters thesis research. Sample preparation, accumulation of a suite of mineral standards, and development of reliable analytical techniques are critical to this endeavor. Much of the work to date has concentrated in these areas.

1.2.4 FLUID SAMPLES

Hydrocarbon and produced-water samples from the Crystal Field have yet to be collected and analyzed. If possible, arrangements will be made to sample fluids from other Dundee fields as well. Inorganic geochemical analyses of produced brines will be used in conjunction with isotope and fluid inclusion analyses of core and cuttings to determine the origin and history of the porosity-producing dolomitizing fluid. Since reservoir quality appears to be locally enhanced in some fields by vertical migration along fracture zones to produce porous "dolomite chimneys", understanding fluid flow is critical in finding these high production-rate areas.

TASK 1.3 DATABASE MANAGEMENT

This task includes all activities required to establish and maintain a database of all the data collected under this project. A commercially available computer database management program will be used. Currently, project personnel at WMU are using Terrasciences' TerraStation program to archive and manipulate project data. The MTU group is evaluating the use of a multi-vendor applications package to handle their database, mapping, log evaluation, 2D cross-sectioning, and 3D visualization needs for this project and another DOE project also run out of MTU. A. Nigrini is in charge of database management for both contracts and will attempt to standardize software for the two projects.

TASK 1.4 DRILLING

Drilling was delayed pending completion of an environmental survey. It is expected to commence in spring, 1995. Cronus Development Corp., under contract to Terra Energy, will drill the well. A schematic cross section showing the expected geometry of the intersection of the well bore with the top of the Dundee porosity zone is shown as Figure 8. A more detailed description of the drilling plan is included in the following paragraphs:

A vertical well at an appropriate location in the project area has been designed and permitted and will be drilled. The well will be cored through the producing interval of the Dundee Formation and the cores analyzed for porosity, permeability, and fluid saturations. A full set of well logs will be run, including gamma ray, porosity, resistivity, and geochemical logs. This data will be incorporated into the existing database for the project area and used to calibrate the MWD (Measurement While Drilling) logs which will be run during the drilling of a horizontal leg. The horizontal leg will be drilled as a sidetrack from the vertical test well. Cuttings from the horizontal leg will be collected and analyzed and input to the reservoir model. As full a suite of well logs as is permitted by the hole geometry will be run on the horizontal leg. If commercial amounts of hydrocarbon are encountered, the horizontal well will be placed on production. An evaluation will be conducted after the horizontal leg has been on production.

A 4-inch core, approximately 60 ft in length, will be cut vertically through the Dundee reservoir. The coring point will be the base of the Bell Shale. The core itself will include the reservoir interval (approximately 20 ft thick) and the overlying caprock interval, both within the Dundee Formation. A full log suite will be run on the vertical well. The well will then be plugged back to the top of the Dundee, and a horizontal well will be drilled along the top of the reservoir interval. The vertical core and log suite will be used to pick the optimum depth for the horizontal leg. The lateral leg will be 1700 ft long and will drop downsection by 10 ft over the 1700 ft lateral distance. At the very least, a Measurement While Drilling (MWD) Gamma Ray log and cuttings will be recovered from the horizontal well.

TASK 1.5 TECHNOLOGY TRANSFER

This task focuses on technology transfer of information derived in this study through academic, technical, and commercial channels. J. Allan is responsible for preparation of technical reports to DOE, for coordination of communication between project members, for coordination of technical publications and workshops, and for most other technology transfer activities.

1.5.1 MEETINGS

Semiannual meetings of the Michigan Oilfield Research Consortium (MOFRC), open to all interested parties, will be conducted by the project staff. Various aspects of the project will be discussed through poster or oral presentations. Efforts will be made to make interested parties aware of these meetings. J. Huntoon and A. Hein have put together a newsletter which will be mailed to independent oil producers and other interested parties.

1.5.2 REPORTS

Multimedia Presentations on CD-ROM

D. Schueller designed and developed a prototype multimedia-based shell using MacroMind Director. We intend to use this shell as a technology transfer mechanism. All data and information associated with the project will be stored on hard disk and will be accessible via the interactive multimedia shell program. At the end of the project, all data, graphics, tutorials, manuals, etc., will be stored on CD ROM for distribution to DOE and to our target audience within the petroleum industry.

Since DOS/Windows is the most popular platform in the petroleum industry, development of the program was switched from the Macintosh to the Windows environment. B. Watkins programmed the new multimedia shell in Visual Basic 3.0. The hardware and software necessary for writing to CD ROM is available for our use in another department at MTU and does not have to be purchased at this time.

1.5.3 PROFESSIONAL MEETINGS AND PUBLICATIONS

AAPG National Meeting

1.5.4 WORKSHOPS

Tampa Workshop/Conference

On January 19 and 20, 1995 we held a meeting at the University of South Florida in Tampa to review both of our DOE projects. This project was discussed on January 19 and our California project was discussed on January 20. Each project member made a presentation on his or her work. The meeting afforded project members an opportunity to learn what everyone else was doing and to discuss project plans and accomplishments in an open forum. The meeting was very successful at accomplishing these goals. A meeting agenda is attached (Table 1).

Annual Workshops

Annual training workshops will be held at the MTU Subsurface Studies Laboratory (SSL) to familiarize interested parties with the computational hardware and software made available by this project and to demonstrate the reservoir characterization methodologies being developed. After training, attendees may later visit MTU to use the SSL computational facilities or may access the facility over an Ethernet network.

Later in the project, short courses and workshops will be run through professional societies, most likely AAPG, since SPE has no mechanism for this type of communication. Other, less-formal workshops may be run either in conjunction with a local geological or engineering society meeting or independently. A list of "customers" will be prepared and publicity will be generated to make these customers aware of workshops that are run independently of professional organizations.

TASK 1.6 PROJECT CONTINUATION

A Project Evaluation Report describing in detail the project status will be prepared and submitted in accordance with the Reporting Requirements.