Signal Hill Company has owned and operated the Thompson Creek field since the late ’90s, slowly improving its 65-barrel-a-day production to about 500 barrels a day currently.
While Signal has plans to do additional drilling, some of its historic vertical wells are declining, yielding just about five barrels of oil a day.
Stripper wells like Signal’s are those that are past their prime. Wyoming has a lot of them and a lot of old fields.
The Salt Creek field north of Casper, for example, was first tapped over 100 years ago. It’s not that all of the oil is gone from these areas, but that the primary attempt to harness that crude has been tried.
Outside of industry, the potential of enhanced oil recovery in Wyoming — when operators use substances, often carbon dioxide, to stimulate older fields with depleted wells — has attracted some attention. Given that Wyoming coal is burned in power plants that then churn out problematic carbon dioxide emissions, researching how to capture that gas and put it to use in old oil fields is a match made in heaven for the Cowboy State.
Gov. Matt Mead made pre-permitting pipelines for carbon dioxide one of his energy priorities and the Legislature set up an institute at the University of Wyoming to advance enhanced oil recovery research and technology on behalf of the state.
The Enhanced Oil Recovery Institute announced recently that about $2.2 million of research is about to roll out in Wyoming. But it’s not just about carbon dioxide.
The money will go to Signal Hill’s work to make vertical stripper wells boost production, to XRO Energy’s quest to optimize its infrastructure — from the reservoir to the tank batteries — and to new types of equipment or injection materials that are being tried in Wyoming. In short, the Enhanced Oil Recovery Institute has been broadening its approach to include more than just carbon dioxide and oil fields.
The institute awarded funding, on a cost share basis, for seven projects in Wyoming. In return, the knowledge gleaned from Signal Hill or XRO can be shared publicly for other operators to use in their patch.
The UW institute had about $500,000 to expend and hoped to reach about $1 million in research. It ended up granting about $423,000, with industry putting in about $1.8 million.
“We are constrained on (carbon dioxide) supply. It’s all spoken for,” said Rob Hurless, deputy director of the EORI. “While there are lots of places that could use (carbon dioxide) to benefit and increase production, there is also quite a bit of potential in secondary recovery.”
There’s a rule of thumb in industry that the amount of production gleaned from primary production — drilling a well and pumping out oil — can be matched again by secondary means, like flooding the reservoir with water to increase pressure.
A field that’s produced 10 million barrels of oil could likely produce another 10 million by secondary means, he said.
“The technologies to improve those fields are well at hand and reasonably well understood. Sometimes, that tends to be overlooked,” he said. “People, as they should, they are looking at their own assets. They are not looking across the state. But when you aggregate it across the state, that target becomes fairly significant.”
Take XRO Energy, a company operating in the Green River Basin. The gas company is facing, like all other gas companies, low prices for its product. The spot price Henry Hub is averaging under $3 per mcf. Other hubs like Opal in Wyoming are even lower.
“It’s a very competitive market,” Hurless said. “These guys from XRO said if you want to hang around you better become a low-cost producer.”
So they are taking part in the cost-share project to try and optimize production, looking at all the flows in the field, the valves, the piping and coming up with modeling to make that operation more economic and more efficient.
Signal Hill, up in the Powder River Basin, is also trying to optimize production, potentially doubling those 5 barrel a day wells to 10 barrels a day.
Here’s how they plan to do it.
When a well is drilled, cased and cemented, it is perforated to allow liquid to flow in. But the process creates blockage around the well, called skin damage. In Thompson Creek, a field that’s under-pressured, that area around the well gets clogged, blocking access to the hydro carbons that the producer wants to access.
So Signal Hill is going to partner with Viper Drilling, a company that sends a bit down existing wells that can turn and drill a mini horizontal out past the skin damage, about 60 to 100 feet into the reservoir.
“This is brand new technology,” said Pat Galuska, partner in Signal Hill and the company engineer. “Originally, they used to do it using high pressure jets, but you lost control of where that hole was going. It would serpentine around. Mechanically this will drill pretty straight hole.”
Along with the Enhanced Oil Recovery Institute, Galusaka will work on a technical presentation or paper that can be used industry wide, whether in depleted wells or in tight rock to help initiate hydraulic fracturing, he said.
For the institute, these projects will add to the institutional knowledge of drilling in Wyoming, said Hurless.
“We are very excited,” he said. “Getting access to data that’s not just from some model, but from the real world and everything that’s associated with that.”