Wolverine Gas and Oil’s Covenant Discoveryby Mike Seal, PTTC Rocky Mountain Region

Environmental Corner . . . . . . . . . . . . .3Tech Transfer Track . . . . . . . . . .4–6Oilfield Training . . . . . . . . . . . . . . .8

Gulf Coast Carbon Center . . . . . . .9

DOE Digest . . . . . . . . . . . . . .10–11Industry View . . . . . . . . . . . . . . . .12PTTC Tech Info . . . . . . . . . . . . . .13Upcoming PTTC Events . . . . . . . . .15PTTC is a national not-for-profit informa-tion network formed in 1994 by oil andnatural gas producers. Programs are fund-ed by matching funds from the USDepartment of Energy (DOE) with fundsfrom State Governments, Universities,State Geological Surveys and Industry.This program would not be possible with-out contributions from the DOE Office ofFossil Energy through the National EnergyTechnology Laboratory (NETL).

In This Issue

P e t r o l e u m T e c h n o l o g y T r a n s f e r C o u n c i l W W W . P T T C . O R G

Vol. 11, No. 2 2nd Quarter 2005

Productivity in theDomestic E&P Arena

Equipment, steel and drilling rigscarcities aside, operators must get themost from their human resources toseize the domestic E&P challenges infront of them today. Factors that con-tribute to high productivity includeknowledgeable, insightful workersusing efficient tools to solve technicalproblems and realize opportunities thatcontinually present themselves. Thereis little time or money to relearn pastlessons gained from either within thecompany or from the E&P industry atlarge. This requires both individualand company commitments to staycurrent and work smart.

PTTC's activities can be a major con-tributor to productivity. Bottom-lineoriented workshops deliver regionally-

Utah currently ranks as number15 in the oil producing states, butif there are a few more discover-ies like the Wolverine Gas andOil Covenant Field in Utah, itcould be moving up in the ratings.As reported in the April edition ofthe AAPG Explorer, the CovenantField discovery in Central Utahopens up one of the most promis-ing onshore plays in the UnitedStates in recent memory. It alsohighlights the importance of theindependents to the U.S. Oil andGas Industry - Wolverine pur-chased its acreage from Chevronin 1999 when the majors werepulling out of the Rockies.

Doug Strickland, explorationmanager for Wolverine, is quotedas saying "I honestly expect thisto be a billion-barrel province. Iexpect we'll find another 10 fieldsout there." Wolverine's discoverywell, the 17-1 Kings MeadowRanch, hit nearly 500 feet ofNavajo Sandstone pay in Utah'sSevier County in late 2003.Thiswell was completed and beganproducing in May 2004. A secondwell was completed in September2004. It was announced at an SPEworkshop in Salt Lake City onMay 20th, that these two wellsare currently producing 1,600BOPD and 160 BWPD and todate, they have produced over376,665 barrels of good quality,40 degree gravity crude. The dis-covery well has produced 273,666barrels.

Tom Chidsey, petroleum sectionchief with the Utah GeologicalSurvey, has provided some background to this discovery. The last major new oil find in Utahwas the 1975 discovery of the Pineview Field in the northern part of the state. Pineview hasproduced over 31 million barrels of oil and is still pumping nearly 15,000 barrels per month.Oil companies have been exploring central Utah for over 50 years with no success (58 dry

Cont. on page 2

Cont. on page 7

Central Utah thrust belt with colored band (crosshatch)showing greatest oil potential. Covenant oilfield, SevierCounty, Utah.

PTTC 2nd Quarter 20052

News In General

Meeting AlertsLIOGA Gulf Coast Prospect Expo

July 26-27, 2005Lafayette, LA

www.lioga.com

Network News

Summer NAPE

Aug. 24-25, 2005Houston, TX

www.napeonline.com/SNAPE/index.html

Colorado Oil & Gas AssociationRocky Mountain Natural Gas Strategy

Conference & Investment Forum

Aug. 1-3, 2005Denver, CO

www.coga.org/pageinpage/conference.cfm

Hart Energy Conferences

Risk Management and Hedging forEnergy Professionals

Aug. 24-25, Denver, CO

Executive Forum: A&D Strategies & Opportunities

Sep. 1, Dallas, TX

www.hartenergyconference.com/upstream-index.html

DOE/PTTCMicrohole Technologies

Integration Meeting

Aug. 17, 2005Houston, TX

watch: www.pttc.org

AAPG Regional Meetings

MidcontinentSep. 10-13,

Oklahoma City, OK

Rocky MountainSep. 24-26,

Jackson Hole, WY

EasternSep. 18-20,

Morgantown, WV

GCAGSSep. 25-27,

New Orleans, LA

www.aapg.org/meetingsIOGCC Annual Meeting

Sep. 18-20, 2005Jackson Hole, WY

www.iogcc.state.ok.us/EVENTS.HTM

focused technology insights in a very time andcost effective manner. There are generally sev-eral presentations on key technical aspects ofa technology, followed by (wherever possible)field case studies illustrating key points. Bothproducers and the technology provider com-munity participate. For those unable to attend,key information from workshops is presentedonline.

On a national level PTTC develops monthly"Tech Connections" columns for the AmericanOil and Gas Reporter. These columns featurekey insights from recent regional activities.PTTC also works with producers and technol-ogy providers to develop monthly case studiesin the "Petroleum Technology Digest" pub-lished in World Oil. PTTC also develops thisnewsletter, a 16-page quarterly effort thatcrisply captures technology insights in boththe government and industry world.

There is a conscious effort to capture the fruitof all these efforts by making informationavailable online at www.pttc.org. Accessingonline information is one approach all in theindustry should employ. However, PTTC rec-ognizes there is no substitute for face-to-facemeetings in the contact sport of technologytransfer.

For those who utilize low cost computingpower, PTTC conducts software trainingcourses for popular packages by leveragingdonations by software developers. Bettertrained users make these tools fly even fasterand the answers are generally better too. Thetrend is clearly enabling all sizes of companiesto participate in utilizing cutting edge tech-nologies at affordable prices. All this adds upto increased reserves and production opportu-nities.

As an organization, PTTC is a network ofpeople across the country. Localized ProducerAdvisory Groups provide industry guidance toregional resource centers at Universitiesand/or Geological Surveys who in turn per-form the work of technology transfer. Thisnetwork of people can be of value to thosewith a technology-related question. The peo-ple working within PTTC don't presume toknow everything, but we have developed quitea network of "connections" that usually enableus to link inquirers with companies or individ-uals that can provide informed responses. Letus help you reduce the time required to findthe information/data required to makeinformed technology decisions. And if youhave an idea or topic of interest that couldbenefit a given challenge within the energyindustry, feel free to contact us to discuss.

Cont. from page 1, ...

Environmental Corner

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6,000th Site Cleaned Up By OERB

Started in 1993, part of the Oklahoma EnergyResources Board's (OERB) mission is tocleanup abandoned oilfield sites. Mike Terry,executive director, recently reported thatOERB has completed cleaning it's 6,000thsite—a site in Oklahoma City that involvedremoval of concrete remnants of the oldOklahoma City Oil Field. In 2005 aloneOERB plans to cleanup 1,200 sites which areselected by the Oklahoma CorporationCommission. OERB's cleanup costs areextremely low, averaging just $4,000 per site.This is a testament to OERB's efficiency andcost control efforts.

Excerpted from Tulsa World, June 3, 2005.

10 Steps to Explosives Safety in The Oilpatch

Field activity is up and experience level isdown - a combination that can be dangerous.Whether its old hat or new to you, reviewingexplosives safety doesn't take long and itmakes sense. The 10 points highlighted inthis article are:1. Have a tailgate safety meeting2. Check for stray voltage3. Ground everything4. Check firing circuit5. "Safe" and secure the firing circuit/area6. Arming safety7. Power-up below 200 ft minimum8. Secure power at 200 ft minimum9. Assume a misfire10. Clean up and inventory

Excerpted from "Ten Steps to Explosive Safetyin the Oil Patch," Well Servicing,March/April 2005, pp. 53-54.

Vapor Recovery, CapturingHigh Value Gas

Gas escaping from storage tanks is highvalue, usually averaging 2,500 BTU content.The volume of escaping gas depends on theoil volume cycling through the tanks, crudeoil composition, separator operating pressuredumping to the tank, the tank configurationand seasonal daily temperatures. Sustainedhigher natural gas prices (with a 2.5 BTUmultiplier) and technological advancementsin vapor recovery units (VRUs) justify a pro-ducer taking a relook at VRUs. Two fieldexamples described in the article confirm theeconomic potential of doing so.

· New Mexico: Two VRUs installed ontwo stock tank batteries, each emitting90 Mcfd of 2,500 BTU gas into 45-psisales line. Capital cost (excludes instal-lation and operating costs) was recov-ered in 21 days (@ $5/million BTU for2,500 BTU gas).

· North Texas: One VRU installed onstock tank battery emitting 190 Mcfd of2,400 BTU gas into 50-psi sales line.Capital cost was recovered in 14 days.

A calculator/economics tool on EPA's NaturalGas STAR program’s website (www.ergweb.com/gasstar/analytical_tool/vaporrecov-ery.asp) can be an effective screening tool.For attractive opportunities, further interac-tion with VRU vendors is recommended.

VRUs are not a commodity item. Whilestraightforward in concept, vapor recovery ischallenging—pressures are minute and one iscompressing a very wet gas stream.Compressor selection is critical. With wetgas, either rotary screw or rotary vane com-pressors are appropriate—reciprocating com-pressors do not do well. Unit packaging/inte-grated design helps avoid common installa-tion errors.

With vapor recovery one or more tanks aremanifolded to a common suction line andpiped to the suction scrubber. An "indepen-

dent" sensing line should be run from themost active or farthest tank to the sensingunit on the VRU. VRUs are configured tostop and start automatically, depending ontank pressure. Proper design includes abypass system that will automatically divertdischarge volume back to the suction scrub-ber.

Properly designed units shut down before anyvacuum (pulls air/oxygen in, can implodetanks) is reached. If oxygen is entering thesystem, it is typically caused by an improper-ly designed package (no bypass system orimproper pressure settings), improperlysealed tank hatches or leaking relief valves.Gas blanketing systems help alleviate otherissues related to oxygen ingress. In the past,pilot valves were used as pressure sensors butthey had operational problems. Newer elec-tronic transmitters operate much more reli-ably at extremely low pressures.

Other technological advances contributing toimproved reliability include variable speeddrives on electric-driven compressors, moresophisticated control systems, enhanced lubri-cation systems, and remote monitoring.

Excerpted from "Producers Tap VaporRecovery For High-Btu Gas, AdditionalRevenue Streams," American Oil and GasReporter, March 2005, pp. 81-87. Note: AJune workshop in Texas by PTTC, EPA STAR,Hy-Bon Engineering and TCEQ had a vaporrecovery focus. Contact Sigrid Clift with thePTTC Texas Region about getting a copy ofthe workshop notebook at a nominal cost(sigrid.clift@beg.utexas.edu).

International PetroleumEnvironmental Conference

November 8-11, 2005 Houston, TX

http://ipec.utulsa.edu/conferences.htm

From Well Servicing, March/April 2005, reprinted with permissionWork Experience on Rig When Injured Job Position Experience When Injured

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PTTC 2nd Quarter 2005

2004 F&D Costs Show Marked Increase

A recent Banc of America Securities studyrevealed that finding and development (F&D)costs for both majors and U.S. independentsincreased markedly. For the majors 2004fully loaded F&D costs were $9.55/boe, up36% from 2003. Equivalent F&D costs forindependents, which were nearly the same asmajors at $9.65/boe, rose 21%. Factorsresponsible for these increases include asharp escalation in acquisition and servicecosts, coupled with fewer added reserves andnet negative reserve revisions.

For the first time ever, the major's reservesadded per well in the U.S. was less than theindependents. The integrated majors replacedonly 89% of production from all sources,including 81% via the drill bit. The indepen-dents replaced 218% from all sources, includ-ing 145% with the drill bit. Costs for provedproperty acquisitions, although increasing28% from 2003 to $8.25/boe in 2004, stillremained lower than for finding reserves withthe drill bit.

Excerpted from "BAS: Industry's 2004Finding, Development Costs Soar," Oil andGas Journal, May 16, 2005, p. 31-32.

Avoiding Reserve Writedowns—CDs Available

With the support of several sponsors and par-ticipation of recognized industry experts, theHouston Geological Society sponsored fourone-day short courses on different aspects of"avoiding reserves write-downs" and is nowmaking those courses available on CD. Thefour aspects covered are:

· Part I: Reserve Definitions andReporting Requirements, including cov-erage of issues the SEC routinely ques-tions, SEC "Red Flags"

· Part II: Recommended GeologicalPractices, including coverage of com-mon errors and recommended geologicmethods and techniques

· Part III: Recommended EngineeringPractices, including coverage of reser-voir evaluation techniques, commonerrors and recommended practices

· Part IV: Recommended PetrophysicalMethods, including coverage of wirelineinterpretation and use of core data, 10causes/sources of Low Resistivity/LowContrast response and how to adjustpetrophysical evaluation to compensate,real world examples

Sold only as a four-CD set ($120 - Part IVCD not available until after course presenta-tion on Sep. 21). For more information visitHouston Geological Society's websitewww.hgs.org/en/art/?458.

Hart’s 2005 MeritoriousEngineering Awards

In March Hart's announced the 2005Meritorious Awards for EngineeringInnovation. The awards recognize new prod-ucts and technologies that offer innovation inconcept, design and application. 2005 awardwinners, selected by an industry panel ofjudges, are:

· Exploration: Halliburton's Well SeismicFusion (individual) and Schlumberger'sStethoScope (systems)

· Subsurface Characterization:Schlumberger's PeriScope 15 (individ-ual) and Halliburton's FasTest (systems)

· Wellbore Construction: SuperiorManufacturing & Hydraulics andGlobal/Santa Fe Corp.'s UIBOP ValveQuick Change System (individual) andHalliburton's BOREMAX Drilling Fluid(system)

· Completions: Schlumberger's One-TripNatural Gas Lift Solution (individual)and Baker Oil Tools Mono-TripCementhru Completion (systems)

· Production: Star Oil Tools' ModularWellhead Gas Compressor (individual)and Weatherford's Red-Eye WatercutMeter (system)

· Remediation: Western Well Tools'Intervention Tractor (individual), BakerOil Tools' FASTFrac Packer and BridgePlug (individual), and Halliburton'sDeepReach Coiled Tubing Service (sys-tems)

· Facilities: Tronic's Wet Mate (individual)

Excerpted from "2005 Meritorious Awards forEngineering Innovation," Harts E&P, Mar2005 viewable online at www.eandpnet.com/pdf/MEAAwards2005.pdf.

2005 Directory of StateRegulatory Agencies

Time is money and quickly finding the rightplace/person in state regulatory agencies isimportant for busy independents. TheAmerican Oil and Gas Reporter's 22nd edi-tion of "The American Directory of StateRegulatory Agencies" strives to provide pro-ducers with the names and phone numbers ofofficials in major producing states who canprovide answers and direct operators to theknowledge they seek in basic regulatory cate-gories.

If you haven't kept the March issue, or don'tget the magazine, contact them at 316-788-5796. Excerpted from "The AmericanDirectory of State Regulatory Agencies,"American Oil and Gas Reporter, March 2005,pp. 143-153.

SPE/IADC Panel on MatureWell Technologies

In a February drilling conference sponsoredby SPE and the International Association ofDrilling Contractors, one plenary sessionaddressed "Mature Well Technologies." Onepanelist noted that "brownfields remain ourgreatest potential source of hydrocarbons."Responses to selected questions gatheredfrom the audience of about 500 people usingwireless voting pads are revealing.

What is the most pressing issue for futuredevelopment of mature fields?

Technology 44%Economics 33%Trained personnel 22%

PTTC recognizes that products and services featured in “Tech Transfer Track” may not be unique and welcomes information about other upstreamtechnologies. PTTC does not endorse or recommend any of the products or services mentioned in this publication, even though reasonable steps aretaken to ensure the reliability of information sources. Input can be directed to HQ@pttc.org.

Finding & Development Cost$/boe ($/boe excl. reserve revisions)

Year 12 Fully 60 U.S.Integrated Majors Independents

2004 9.55 (9.85) 9.65 (9.70)

2003 7.00 7.95

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Tech Transfer Track

Can advanced technology be dumbed down?77% said "Yes"

What type of company is best equipped toprovide solutions for mature fields?

Integrated service companies 47%Independent operators 19%Niche technical solutions 11%Major integrated oil companies 9%

Survey responses reveal consensus that ser-vice companies already have many of thetools, and that they can be adapted for maturefields. More standardization and increasedregulatory streamlining will help decreasecosts. Taking a total life cycle approach(looking ahead to the abandonment stage)when doing additional development inbrownfields will also reap benefits.

Excerpted from "Mature Well TechnologiesMust Become Cost-Effective, Standardized,"Oil and Gas Journal, Apr. 11, 2005, p. 39-42.

Accelerating TechnologyDevelopment & Deployment

A panel at the Offshore TechnologyConference in early May noted how industrymust find a way to compress technologydevelopment time from first-generation inno-vation to product commercialization to fulldeployment. In the past, this could take 15 to30 years. Some thoughts expressed by pan-elists worthy of mulling over include:

· Vendors disproportionately shoulder costwhile receiving inadequate share of themargin.

· Disruptive technologies require chang-ing behaviors.

· Risk aversion is the largest obstacle toimplementation.

· What we tend to call R&D is really"engineering." One really needs to dis-tinguish between the two.

· Desperation (examining a problemunder pressure) is the mother of inven-tion.

· Applications-based technology (fieldexperience) really makes a difference.

· Technology transfer is a contact sport(PTTC can attest to that).

Venture capital funding in the energy busi-ness is low, at least partly because of the longproduct lead times. Venture capital providerswant developers to have customers first, yetwithout capital, developers find it difficult to

attract customers. Which comes first, thechicken or the egg?

Excerpted from "OTC: Technologies RequireNew Business Models," Oil and Gas Journal,May 16, 2005, p. 26-28.

PTAC Online R&D Projects Database

The Petroleum Technology Alliance Canada(PTAC) has developed and now placed onlinean Oil & Gas R&D Projects Database, acces-sible at www.ptac.org/rdd/search.php. Thedatabase now contains over 150 new technol-ogy projects of interest to the industry andremains available to accept new submissions.This will allow industry to stay abreast ofcurrent developments and locate research pro-jects aligned with their needs.

The database can be searched by industrysector (8 categories), technical area (17 cate-gories), keyword, company/organization andresearcher last name. Researchers may identi-fy partners for complementary technologiesand for applications development.Researchers who submit project informationwill have increased exposure to industry andgovernment stakeholders.

To include an R&D project in the database,please submit an online, brief public domainsummary of your R&D oil- and gas-relatedproject. Background information, input guid-ance and the input form are available at:www.ptac.org/rdd1.html.

Venture Capital in the Energy Industry

The 5th Edition of Research ReportsInternational's "Venture Capital in the EnergyIndustry" report is a 190-page sourcebook thatoffers a detailed look at venture capital fund-ing of emerging energy technologies. It strivesto provide value for those looking for venturecapital funding, those considering investing inventure capital funds, and to venture capitaliststhemselves. Among other things, the report:

· Identifies trends driving energy industryinvestments

· Details the key sectors receiving invest-ment

· Reveals candidate funding criteria andvaluation methodologies

· Discusses advantages and disadvantagesof VC funding

· Profiles participants in energy venturecapital

The report contains company profiles on 50key venture capital firms and 41 portfolio com-panies. More information about the report isavailable online at www.researchandmar-kets.com/reportinfo.asp?report_id=228247.

Gas Well Dewatering withConcentric Coiled Tubing

and A Jet PumpA recent artificial lift advancement employsconcentric coiled tubing and jet pump tech-nology for gas well dewatering. With BJServices' AquaLiftTM Gas Well DewateringSystem, the inner coiled tubing string is usedto power a downhole jet pump, returning pro-duced wellbore fluids and power fluid up theconcentric coiled tubing annulus. Based on aventuri effect, system fluid pressure is con-verted into a high-energy jet stream, creatinglow pressure at the pump intake. The trick isto miniaturize the jet pump. A typical systemconsists of one-inch coiled tubing pre-setinside a string of 1.75 inch tubing, where thepump is attached to the bottom of the pre-assembled string.

AquaLift's best fit is in aging gas wells ofshallow- to medium-depth. The main benefitof the system is it's ability to draw reservoirpressure down to a lower level, which posi-tively affects recoverable reserves. Typicallythe pump is set below casing perforations andimmersed in produced water. Some reservoirpressure must remain, for instance a medium-depth well of 5,000 ft should not be muchbelow 100 psi. At 10,000 ft, the pressure limitmight be 250 psi.

Excerpts from "Priming the Pump," NewTechnology Magazine, March 2005 (seewww.ntm.nickles.com). Further informationon BJ Services' Aqualift system viewableonline at www.bjservices.com/website/ps.nsf/0/3BDA3895D04825F286256F43006BFAA7/$file/AquaLift+System.pdf.

GeoScience World, A NewInformation Portal

GeoScienceWorld (GSW), a new informationportal containing GeoRef plus 30 leadingjournals from the world's foremost geo-science organizations, was launched (www.geoscienceworld.org) in late February. Theinitial GSW collection incorporates the com-plete text of 30 journals from 22 societies andinstitutes from six countries. Founding orga-nizations include: American Association ofPetroleum Geologists, American GeologicalInstitute, Geological Society of London,Mineralogical Society of America, SEPM-

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Society for Sedimentary Geology and theSociety of Exploration Geophysicists.

GSW provides access to scientifically peer-reviewed full-text articles from high impactgeoscience publications with linking betweencited references and articles within the GSWdatabase and outside of GSW throughCrossRef. The ability to search the databaseand review abstracts of GSW articles is anopen access activity.

Although the core value of GSW is the col-lection of articles and data set linkage, GSWalso is integrated with GeoRef, the biblio-graphic search database published by AGIthat includes information on over 3500 publi-cations. Direct linkage exists from a GeoRefsearch to all articles within GSW and crosslinking to references outside of GSW isaccomplished with CrossRef. GeoRef integra-tion results in a search of geoscience andallied publications that is as complete as pos-sible. Literally no stone is left unturned.GeoRef also provides linkage to other openaccess digital files, such as USGS, StateSurveys, etc.

For more information, please contact GSW'sExecutive Director Don Hemenway (hemen-way@geoscienceworld.org).

Planning EOR Projects, Apply Lessons Learned

Crude oil prices are strong and consensus isthat they will remain so. In this environmentmany operators are taking a relook at theirmature oil reservoirs for enhanced oil recov-ery (EOR) potential. There is wisdom inapplying general lessons learned from pastEOR projects. These lessons learned include:

· The Planning Process. Economic studies,reservoir characterization and engineer-ing design, and reservoir performancemodeling should proceed in parallel.

· Reservoir Performance Modeling. EORmodeling requires more data and moretime than primary- or secondary-processes, but it's worth it since thepenalties for being wrong are muchhigher.

· Economic Studies. Start with simplescreening models to aid in process selec-tion and add sophistication as the projectdevelops.

· Process Selection. Realize that EORprocesses do one of two things—improve sweep efficiency or improvedisplacement efficiency (or both). Knowwhat will be at work in your reservoir.

· Reservoir Characterization. Build ageological and petrophysical descriptionof the reservoir and know the impact onEOR processes. Not understanding thereservoir adequately is probably themost common cause of failure in pastEOR projects.

· Engineering Design. Know which para-meters will influence economic successthe most, then focus effort there.

· Pilots, Field Tests. These are neededwhen there are important parameters andvariables where more needs to beknown. Pilot design should target gettingthose answers. Good pilots use observa-tion or monitor wells. Targeted pilots canget answers in months, not years.

· Project Implementation. Ongoing activesurveillance is a partnership betweenoperations and engineering. Anticipatethat adjustments will be needed andmake them.

Excerpted from "Planning Successful EORProjects," Journal of Petroleum Technology,March 2005, p. 28-29. Article accessibleonline at www.spe.org/spe/jpt/jsp/jptmonthly-section/0,2440,1104_11038_3623293_3-630284,00.html.

S3GPS, A Unique GPS ServiceMost in industry are convinced of the valueof knowing where there assets are. The chal-lenge for busy operators is sorting throughmore than 250 vendors to find the rightmatch. That is where S3GPS, which wasformed in 2003, enters the picture. Much likea general contractor, S3GPS lets a customerexplain what it wants, then they go to workinterviewing the "right" vendors for the job.To the customer, S3GPS's services are probono—they are compensated by the vendorsfor their matching. This service helps time-stressed small- to mid-size companies with-out IT staff make informed decisions and getsthem aligned with appropriate vendors.Operators should note that, due to declassifi-cation of military technology, GPS costs havedecreased significantly in recent years.

Excerpted from "New Service Providers EnterOil Field," American Oil and Gas Reporter,March 2005, pp. 67-ff. Visit www.s3gps.comfor more information.

SPE Begins eMentoring ProgramThe Society of Petroleum Engineers (SPE)recently launched an eMentoring program, aprogram designed to be a convenient andeffective way to connect young professionals(fewer than five years in the industry) and

students with more experienced members. Inaddition to being mentored, young profes-sionals have a unique opportunity to serve asmentors to students as well. eMentoring pro-vides the advantage of transcending geo-graphic boundaries and time constraintsthrough online communication. Mentors areencouraged to communicate with mentees ona regular basis and initiate discussions offer-ing guidance and advice. Through frequentcommunication, mentors will foster trust bymaking mentee's feel their questions and con-cerns are carefully considered.

Interested SPE members must register asmentors; mentee registration will soon follow.Mentors and mentees will then be matchedand the mentoring process begun. This repre-sents an opportunity for both new and sea-soned professionals to contribute to their pro-fession, plus there is the potential for buildinglifelong relationships.

For more information visit www.spe.org/spe/jsp/basic/0,,1104_3983211,00.html.

What’s New In Artificial LiftEach year World Oil features a series byJames Lea and Herald Winkler of Texas TechUniversity about new developments in artifi-cial lift. This year Bob Snyder co-authoredthe two-part series that appeared in the Apriland May issues of World Oil. Consideringthat artificial lift is essential for the vastmajority of U.S. wells, operators are encour-aged to review the highlighted developments.

A partial listing of developments (with issueindicated) includes:

· Sidestream Flush Restrictor forImproved Chemical Injection, OmegaTechnologies, Inc. (April, p. 60)

· Low Horsepower Drivehead for PCP pumps,Baker Hughes Centrilift (April, p. 64)

· Insertable High-Volume PCP pump,Arrowhead (April, p. 64)

· PAL Improved Casing Plunger, P.A.A.L.LLC (April, p. 71)

· High-Volume ESP Gas Separator, BakerHughes Centrilift (May, p. 63)

· Insertable Diaphragm Pump, SmithLift(May, p. 67)

· Data Recording with FieldDIRECTServices (expanded to AL data, chemicalusage, etc.), IHS Energy (May, p. 69)

View articles online at www.worldoil.com/Magazine/Magazine_Contents.asp.

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PTTC 2nd Quarter 2005

holes) until now. The major reason for this is the extremely complexgeology of the central Utah thrust belt, also referred to as the"Hingeline."

Throughout this area's geologic history, the Hingeline has marked a pro-nounced boundary between two different terrains. During LateProterozoic to Devonian time, it marked the boundary between a verythick layer of sediments deposited in western Utah and a thin sequencein eastern Utah. Later, the Hingeline coincided with the eastern edge ofa mountain belt that formed during the Sevier Orogeny, a mountain-building period that took place during Cretaceous to Tertiary time.Today it marks the general boundary between the Basin and Range andthe Colorado Plateau physiographic provinces. Thrust faults and largeanticlines that formed during the Sevier Orogeny provide the trappingmechanism for the Pineview oilfields.

Daniel Schelling, structural geologist and David Wavrek ofInternational Petroleum Systems gave specifics at the SPE meeting. Theseal is the middle Jurassic Arapian, a 5,500-ft mudstone with halite,gypsum and anhydrite layers. These layers are good reflectors, makingseismic interpretation more difficult. The reservoir is the lower JurassicNavaho, a 1,200-ft aeolian sandstone. They consider the source rock tobe of Mississippian age whereas the previous paradigm was that it wasthe Permian Phosphoria. The trap is described as large scale fault bendfold.

The actual discovery was an early Christmas gift. On December 22,2003 the operators hit the Navaho Sandstone at 5,800 ft instead of theanticipated 7,200 ft. By December 24 they had 500 ft of oil shows andhad established the NAV1 reservoir with flow and correlation to theRangely Weber Oil. The petrophysics of the discovery well are gross

pay 487 ft, net pay 424 ft, average porosity 12 percent and water satura-tion 38 percent. The permeability was reported as 100 mD, but theywere unable to comment on how much natural fractures contribute tothis permeability. Potential reserves are estimated at 75-200 million bar-rels for this 1,600 acre field, and they are hoping for 50 percent oilrecovery. The finding costs were $5.5 million split among 10 partners.Estimated development costs for the field are $56 million.

Doug Strickland gave further information at an RMAG luncheon meet-ing in Denver on June 3. Doug described how Wolverine used the gooddipmeter data from a Chevron well drilled to 17,000 ft in 1981, andconventional seismic, to determine that they could drill 1,500 ft higheron structure. Drilling motors and modern mud systems kept the well ontarget through the highly deformed and salt-rich Arapian shale. TheNavaho sandstone did not show up on seismic, so they had to rely onthe deepest salt layer in the Arapian as a marker. Formation water isfresh with an Rw of 0.4-0.6. The reservoir has a water drive and theyexpect to have a total of 12-15 wells on 160-acre spacing. Production isprojected to reach 5,000 BOPD by August of 2005.

Wolverine has 500,000 acres under lease in central Utah and has identi-fied 25 drillable structures.

To summarize, a story of how patience and perseverance can pay - inthis case, 500 ft of pay.

Cont. from page 1, Wolverine Gas...

Note: With increased activity in Utah, both industry and governmentagencies are finding the website (http://geology.utah.gov/emp/pump) developed by the Utah Geological Survey in a DOE-supportedPUMP II project quite helpful.

Schematic east-west structural cross section through Sevier Valley (line of section shown on map) just north of the 2004discovery of the Covenant oil field showing potential exploratory drilling targets in anticlines between thrust faults.Modified from Villien and Kligfield, AAPG Memoir 41, 1986.

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PTTC 2nd Quarter 2005

Midland College Program Following receipt of its DOL grant, Midland College began offeringoilfield training focused on the service industry in August 2003. Thissector was particularly targeted because as a whole it has had the con-tinuing problem of inadequate levels of skilled workers due to histori-cally volatile market conditions. Midland College targets the expectedareas in Texas, but it is notable that individuals from New Mexico,Oklahoma, Florida, California, Colorado and Illinois have participated.

Training combines classroom and hands-on equipment training directedtoward entry-level workers. Combined with safety topics, this projectoffers actual hands-on training on a well servicing unit. Currently thereare four, 40-hour courses held weekly. These classes include aUniversal Oilfield Safety Class, Well Servicing Class, Well ServicingApplications Class, and Drilling.

· Universal Oilfield Safety Class covers a wide range of safety top-ics that are oilfield relevant such as H2S, CPR and firstaid, to Slips, Trips and Falls.

· The Well Servicing Class and the Drillingclasses cover topics that prepare studentsfor entry level oilfield positions such asa lead tong man or roughneck.

· The Well Servicing ApplicationsClass is a hands-on training classthat is held the second week ofevery month at Key Energyfacilities. Students receive atno cost to the student, steel-toed boots, coveralls, hardhats and safety goggles.

Project staff network withemployers to assist students inobtaining employment at thecompletion of the classes. Somecompanies refer prospective stu-dents to the project with thepromise that if they successfullycomplete the project they will thenhire the students.

Further information is provided onMidland College’s website www.midland.edu/~pbeep.

San Juan College ProgramLeveraging a DOL grant received in 2003, San JuanCollege's Regional Energy Training Center provides a vari-ety of oilfield training programs. Beyond the expected rig/service crewtraining, there are specific lease operator and gas compression techni-cian programs in place.

· Rig Operations Training. Includes safety and hands-on rig experi-ence training for new employees/rig workers. They also providedevelopmental training programs for current derrick men and rigoperators.

· Petroleum Technology Training Programs. Oil and gas field per-sonnel are trained in the classroom and hands-on in all aspects ofproduction operations. Included are the Lease Operator TrainingProgram (5-1/2 month), artificial lift training and gas measure-ment.

· IADC WellCAP Certified Well Control Training (BOP). Trainingin drilling, workover/completion, underbalanced, coiled tubing,snubbing and wireline well control operations. Individual andcombined classes are available.

· Natural Gas Compression Program. Covers the mechanical andtechnical aspects of compression technology specifically related tothe natural gas industry. Students train in a classroom/shop setting,and work with a sponsoring company in the field.

Further information is provided on the Training Center's websitewww.sjc-retc.com.

The Emerging Kansas ProgramRecently the Kansas Independent Oil & Gas Association (KIOGA), incooperation with the Kansas Department of Commerce and severalcommunity colleges across Kansas, teamed up to develop basic, entry-level training for the drilling and well servicing sectors. Participating

community colleges (and the person to contact for informationand registration) are:

· Pratt Community College, Pratt (JerryBurkhart: ph 620-450-2715, e-mail

jerryb@prattcc.edu)· Seward County Community

College, Liberal (Dale Reed: ph 620-626-3137, e-mail dreed@sccc.edu)

· Ft. Scott Community College,Fort Scott (Paul Osborn: ph 913-294-4178 ext 205 e-mailPaulo@fortscott.edu)

High Plains Technology Centerin Woodward will be involved inpresenting a component of thetraining. Further information isprovided on KIOGA's websitewww.kioga.org.

High Plains Technology Center Since receiving its DOL grant in

2003, High Plains has served as DOL'sofficial Midcontinent site for oil and gas

training with a training area includingOklahoma, Kansas and the Texas Panhandle.

High Plains works with IADC, AESC, theEnergy Training Council, and others in developing

programs.

· Floorhand Training for Well Servicing· Floorhand Training for Oil and Gas Drilling with IADC Rig Pass

certification· Oil and Gas Production Training - this includes specific programs

for Roustabouts, Pumpers and Technical Interns

An extended article on the High Plains program was published in theDec 2004 issue of Oklahoma's Marginal Well Commission availableonline at www.marginalwells.com/MWC/MWC/December_2004_Color.pdf.

Further information is provided on High Plains’ website www.hptc.net/ogtc.asp.

Some Oilfield Training Program OptionsShortages of field workers are one of several factors limiting the activity level that operators can maintain.Through some Department of Labor(DOL) grants a couple years ago, there have been training programs at work meeting those needs—at Midland College in West Texas, at San JuanCollege in Farmington, NM, and at the High Plains Technology Center in Woodward, OK. This article strives to inform operators about those pro-grams, plus alert them to a new effort emerging in Kansas. Note that each program has a special flavor/approach. One can match the approach fit-ting your situation. PTTC is well aware that other field training programs of some nature exist. We invite other providers to submit information toPTTC (Lance Cole, e-mail lcole@pttc.org) and we'll provide more information in future issues.

Courtesy of Midland College

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PTTC 2nd Quarter 2005

Four-”E” Bridge to the Carbon-Free Energy Future

The Gulf Coast Carbon Center (GCCC)merges expertise in four key areas—Energy,Environment, Economics, and Education—tofind optimal ways to provide sustainableenergy in the future. The GCCC is an indus-trial-academic consortium led by the Bureauof Economic Geology at The University ofTexas at Austin and partly funded by theJackson School of Geosciences, electricpower producers Entergy and NRG, gas han-dler Praxair, CO2 pipeline and EOR special-ist Kinder Morgan, and international energycompanies BP and Chevron.

In the near term we need the process of car-bon capture and storage (CCS) to reach theenvironmental goal of reducing risks result-ing from buildup of CO2 in the atmosphere.Fossil fuel usage is increasing, and the great-est opportunity for quickly reducing theimpact of this increase is to capture CO2 atlarge point sources such as electricity gener-ators and industrial sites and inject it into thesubsurface underlying many of these facili-ties.

Strong collaboration with energy businessesis key to successful implementation.Beneficial use of captured CO2 to enhanceoil production, coalbed methane generation,and possibly gas production will speedimplementation. Expertise in reservoir char-acterization and multiphase flow modelingavailable in the hydrocarbon productionindustry is needed to identify geologic stor-age sites where CO2 will be retained in thereservoir for long enough periods to influ-ence atmospheric concentrations.

An economic plan for CCS is critical forrapid and widespread implementation. Credittrading, penalties, or incentives are needed tomotivate a market. The new Center forEnergy Economics, a group led by MichelleMichot Foss who recently joined the Bureauof Economic Geology, will assess commer-cialization issues.

Education supported by research is a criticalrole of the GCCC. Exchange of informationwithin a diverse group of industries, theresearch community, other stakeholders, andthe public is required to build this industry.For example, oil producers need to knowwhere and when CO2 capture will becomefeasible to plan for CO2 floods, and captureexperts need insight into the economics ofusing reservoirs in decline. Policy makersneed to consider how commercializationcould benefit or harm private- and public-sector employment and tax bases. Regulators

need to explore the synergy between wastedisposal and commercial use of the CO2 inthe subsurface and the ways existing regula-tion can be used to support the process on anunprecedented scale.

The initial U.S. experiment in geologic stor-age, the Frio Pilot test, merges expertise inenergy, environment, economics, and educa-tion. The Bureau of Economic Geology drewon experience provided by 16 research andservice organizations, including 4 nationallabs (LBNL, ORNL, NETL, and LLNL), theU.S. Geological Survey, Schlumberger,Praxair, Paulsson Geophysics, SandiaTechnologies, the Alberta Research Council,and the Australian CO2 CRC. The Frio Pilottested the efficiency of the subsurface instoring CO2 in nonproductive sandstones toassure that the process would reach environ-mental goals. The project was leveraged bydata and infrastructure from five decades ofhydrocarbon production in the host site atSouth Liberty field, including donation of 3-D seismic, historical well logs, and wellaccess by Texas American Resources.

The figure shows the favorable relationshipbetween point sources of CO2, shown as barsabove the land surface, and the thickness ofthe sedimentary wedge in North America.

Content provided by Sue Hovorka (Susan.Hovorka@beg.utexas.edu), Bureau of Economic Geology,The University of Texas at Austin. Website:www.gulfcoastcarbon.org.

In last issues State-of-the-Art article, PTTCfocused on DOE’s carbon sequestration partner-ships. This resulted in inadequate coverage ofthe Gulf Coast Carbon Center, an industrial-academic consortium in Texas.

State-of-the-Art Summary

PTTC 2nd Quarter 200510Network News

DOE Digest

Recovery Method for AlaskanNorth Slope Heavy Crude

Alaska's North Slope boasts a massive heavyoil resource, as much as 36 billion barrels ofOOIP within the Ugnu, West Sak, andSchrader Bluff formations. These reservoirslie tantalizingly in reach of existing infra-structure, but recovering them has provendaunting. At a depth of 3,000-3,500 feet,these formations' proximity to the subsurfacepermafrost renders the already low-gravitycrudes extremely viscous. Low formationstrength presents an additional hurdle to highrecovery and productivity rates. North Slopeoperators thus far have focused on the less-viscous crudes in the West Sak and SchraderBluff heavy-oil formations, where viscositiesrange from ~30 centipoise to ~3,000 cen-tipoise. Combined original-oil-in-place vol-umes for these two formations total about 10-20 billion barrels.

There has been some success producing theless-viscous crudes in the West Sak andSchrader Bluff formations by injecting slugsof water alternating with gas (WAG). Thereare several gas streams available on the NorthSlope that contain natural gas liquids and car-bon dioxide. Natural gas liquids have beenused for years as part of a miscible gas EOReffort at Prudhoe Bay. DOE-funded a three-year research project at the University ofHouston to develop tools (compositionalmodel, new relative permeability model,reservoir simulator, etc.) for modeling theoptimum WAG flood design for these shal-low-sand viscous oil reservoirs. In their finalproject report, researchers also noted that hor-izontal wells offered great potential forincreasing productivity. Potential forincreased productivity with electromagneticheating was also noted.

For more information see DOE's Tech Linewww.fe.doe.gov/news/techlines/2005/tl_alaska_oil.html.

Intelliserv’s High Speed DrillString Telemetry NetworkCompletes 5th Test Well

Working for BP America Inc. (BP), anIntelliServ network consisting of five-inchtelemetry drill pipe (IntelliPipe) and associat-ed telemetry drill string components, includ-ing heavyweight drill pipe, drill collars,roller-reamers and drilling jars, was used todrill from surface to a total depth of more

than 13,000 feet. The network successfullyprovided high-speed, real-time telemetry ser-vices throughout the drilling program, withlive data sent via satellite to engineers inProvo and Houston.

"The IntelliServ network performed extreme-ly well during the latest field trial, providinga customer data rate of 66,000 bits per sec-ond. It also demonstrated reliability compara-ble to mud pulse telemetry, with a mean-timebetween failure of over 800 hours," statedMichael Reeves, IntelliServ. Reeves went onto indicate that the same telemetry tubularshad been used to drill four previous test wellsand the IntelliServ network has now accumu-lated over 3,000 operating hours in extremelyharsh conditions, including very high-shockair drilling.

To date, IntelliServ tubulars have been usedto drill more than 50,000 feet of hole for BP,demonstrating handling characteristics andmechanical reliability equal to Grant Pridecopremium drilling tubulars. An upgradeenabling customer data rates of one millionbits per second has been pilot tested and willbe implemented later this year.

Excerpted from email alert by New Technologymagazine (www.ntm.nickles.com/).

Newfield Increases Monument Butte Oil Production

Newfield Exploration Co. estimates morethan 1 billion bbl of oil is in place in Utah'sMonument Butte oil and gas field in thenorthern Uinta basin. Newfield purchasedtheir Monument Butte interests in Aug 2004from Inland Resources. Since then, Newfieldestimates reserves are up 16% and productionaverages 1,200 bopd, up 12%. Projectionswith an active drilling program (175 wells in2005) are for production to increase to 10,500bopd by yearend. That is a far step up from300 bopd when Lomax Petroleum's DOEClass 1 waterflood demonstration project inthe Monument Butte Unit started in 1992.Work in the DOE project identified severaltechnological keys to successful waterflood-ing of this low permeability, high heterogene-ity reservoir containing high paraffin oil.

Excerpted from "Newfield Lifts UtahMonument Butte Oil Flow, "Oil and GasJournal, Apr. 4, 2005, p. 44. See also (1)Slide 7, Newfield presentation at IPAAConference in April 2005 (www.newfld.com/pdf/IPAAConfApril2005.pdf) and (2) DOE'sfact sheet on early work as Class I

Demonstration Project (www.netl.doe.gov/scngo/Petroleum/publications/projfactsheets/E&P/Inland04.pdf).

Varied Technologies Reported in Latest GasTIPS Issue

· Enhancing Microbial Gas fromUnconventional Reservoirs

· High Temperature Electronics, One Keyto Deep Gas Resources

· Enhanced Wellbore Stabilization andReservoir Productivity with AphronDrilling

· Fluid Technology· Fiber Laser Offers Fast Track to Clean

Perforations· Safety Net Royalty Relief Analysis of

Natural Gas and Oil Production andRevenues

· Regulatory Considerations in theManagement of Produced Water, A U.S.Perspective

· Volume-Optimized Compressed NaturalGas

Articles in Vol. 11, No. 2 accessible online atwww.netl.doe.gov/scngo/Reference%20Shelf/GasTIPS/GasTIPS.html. GasTIPS is a publi-cation of Gas Technology Institute, U.S. DOEand Hart Energy Publishing, LP.

Fuzzy Exploration ToolAdvances Further

In a DOE-supported project the ReservoirEvaluation and Advanced ComputationalTechniques (REACT) group at New MexicoTech's Petroleum Recovery Research Centerdeveloped a Fuzzy Exploration Expert (FEE)tool, relying on computer databases informa-tion and digital maps developed by neuralnetworks to mine and use a wide variety ofinformation and "fuzzy logic" to provide real-istic estimates of risk of drilling andworkover opportunities. The first systemdeveloped for the Brushy Canyon in theDelaware Basin proved reliable and a secondsystem was developed for Siluro DevonianCarbonates in the Permian Basin. It tooproved successful. These two systems weredeveloped using knowledge gained frominterviewing experts with experience in theseplays.

REACT is now working to build similar sys-tems for more plays in the Permian Basin.Input from experienced explorationists aboutexploration techniques in different PermianBasin plays is being sought. When appropri-ately honed through sequential questionnaire

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PTTC 2nd Quarter 2005

DOE Digest

techniques (Delphi method), this feedbackwill form the knowledge foundation for FEEapplication in these additional plays. The cus-tomizable system will also allow users to fur-ther customize it by modifying, adding orremoving rules quickly and easily.

Information on the FEE tool concept is avail-able online at http://baervan.nmt.edu/research_groups/REACT/expert/expert-main.html. Companies wanting early accessto project software and results are encour-aged to contact REACT's Robert Balch (ph505-835-5305, balch@prrc.nmt.edu) aboutjoining the Consortium.

Pre-Commercial Testing of Ultrasonic Well Stimulation Device

In the past R&D scientists working on ultra-sound technology have been unable to makethe transition from the laboratory to a func-tioning commercial oilfield application. AKlamath Falls group has broken through thisbarrier in testing at RMOTC. Two differentunits, a 42-mm diameter tool designed to passthrough production tubing and a 100-mmdiameter tool for casing, were tested. Thetechnical characteristics of both units wereconfirmed in relation to their capacity to gen-erate and transmit stable signals for one totwo hours, the time period representing thetime expected to treat a damaged well. Thesystem proved to be robust, showing no sig-nal instability, attenuation, heat buildup, orother problems. Positive results in this testingare being used to design further testing.

Excerpted from RMOTC's 2005 SpringNewsletter (www.rmotc.com/Today/Newsletter.html). For more information contactRMOTC's Bryant Mook at Bryant.Mook@rmotc.doe.gov.

Digital Bibliography ofUnconventional Gas Research Reports

DOE's National Energy TechnologyLaboratory (NETL) has identified and cata-logued all the historical unconventional gasproject reports produced over the last thirtyyears. Over two hundred boxes of archivedreports on Devonian Shale, Tight Gas Sand,Deep Source Gas, Coal Mine Methane andNatural Gas Hydrates have been sorted andthe references documented in a digital bibli-ography. This reference material is extremely

useful to producers interested in developingsimilar resources today.

For further information contact DOE's TomMroz (phone 304-285-4071, email tmroz@netl.doe.gov).

Microhole Technologies Moving Forward

Companies receiving awards in DOE'sMicrohole Technology development programare moving forward in multiple fronts todevelop and test rigs and many system com-ponents. This should ultimately make micro-hole (very small diameter) wellbores a reality.The economic driving force for lower costdrilling with minimal footprint that wouldenable drilling wells for lower reserve vol-umes is powerful, so industry is also movingforward in many arenas on its own.

With simultaneous action by multiple playerson many different fronts, there is the risk thatcomponents will not "fit" together. With thatrisk in mind, PTTC will be working along-side DOE in the coming year to enhancecommunication and interaction among thosecompanies/individuals developing technolo-gies. With improved communication andawareness, the chances for all the compo-nents being simultaneously developed to be"compatible when integrated" improves great-ly.

Key elements of this Integration Initiativewill be (1) integration meetings involving theplayers, (2) developing a state-of-the industryprofile of microhole technology, and (3)developing and maintaining a web informa-tion/communication system. To accomplishthe above, PTTC will work hard to identify,expand and connect those involved in tech-nology development. Get people to talking ina timely fashion and many $ of rework can beavoided. An initial Technology Integrationmeeting is scheduled on Wednesday August17th in Houston. Producers are encouraged to“stay in the loop” by attending this and sub-sequent meetings. Watch PTTC’s website forfurther information.

DOE's Phase I Microhole Awards (mid2004)

The first set of projects focuses on fielddemonstrations and development of technolo-gy that uses coiled-tubing drilling:

· Demonstrations of existing 43/4-in.commercial microhole technology.

· Built for-purpose microhole coiled-tub-ing rig (Schlumberger IPC, Sugar Land,Tex.).

· Self-contained zero discharge drilling-mud system (Bandera Petroleum Inc.,Tulsa).

· Microhole coiled-tubing bottomholeassemblies (three projects: smart steer-ing and LWD system developed byBaker Hughes Inteq, Houston; radarnavigation and radio data transmissionsystems developed by Stolar ResearchCorp., Raton, N.M.; and a downholedrilling tractor developed by WesternWell Tool Inc., Anaheim, Calif.).

· Microhole completion and productionequipment (through-tubing artificial

For more information see DOE Tech Linewww.fossil.energy.gov/news/techlines/2004/tl_microhole_tech_selections.html.

DOE's Phase II Microhole Awards (Jan2005)

The 10 projects receiving awards in early2005 test coiled tubing rigs and continuedevelopment of various technologies neededin various parts of the system:

· Drilling 3 wells with composite coiledtubing drilling system (GeoproberDrilling Inc.)

· Field test a next-generation microholecoiled tubing rig (Gas TechnologyInstitute)

· Develop elastic-phase, self-expandingtubular technology (Confluent FiltrationSystems LLC)

· Develop mechanically-assisted, high-pressure waterjet drilling tool (TempressTechnologies)

· Increase reliability of bottomhole assem-blies (CTES LP)

· Develop high-power turbodrill(Technology International Inc.)

· Combine existing MWD/LWD into inte-grated, inexpensive measurement system(Ultima Labs Inc.)

· Develop wireless system for steering(Baker Hughes Oilfield Operations Inc.)

· Develop counter-rotating motor drillingsystem to improve penetration rates by25-60 percent (Gas TechnologyInstitute)

· Develop self-expanding, high-flow sandscreen (Confluent Filtration SystemsLLC)

For more information see DOE Tech Linewww.netl.doe.gov/publications/press/2005/tl_microhole_selections.html.

PTTC 2nd Quarter 200512Network News

Industry View

Recent interviews have focused on technolo-gy and deployment in the U.S. Recognizingthe relevance of the moving technology win-dow in Canada, PTTC invited Denis Gaudetwith PTAC to share what's happening there.

Headquartered in Calgary, PTAC is a not-for-profit association created in 1996 to facilitateinnovation, technology transfer and collabo-rative research and technology development,demonstration and deployment for a responsi-ble Western Canadian upstream hydrocarbonenergy industry (www.ptac.org). PTAC'sobjective is to leverage intellectual and finan-cial resources, applying them to solve indus-try problems, capture opportunities, andimprove industry performance. A collabora-tive structure brings PTAC stakeholderstogether to identify industry problems andopportunities and define research projects todeal with them. PTAC's mandate includesinnovation and technology transfer and aimsto increase the adoption of eco-efficient andgreenhouse gas-reducing technologies.

PTAC launched the Spudding Innovation:Accelerating Technology Deployment inNatural Gas and Conventional Oil(www.ptac.org/techinnp.html) project toassist in defining technology needs and therelated government framework and researchcontributions necessary to further the devel-opment of conventional O&G reserves andunconventional gas reserves in Alberta. Keyrecommendations include:

· Develop a strategy with compellingbusiness case

· Build a technology roadmap

· Change the way research, developmentand deployment (RD&D) is done byintegrating and focusing research efforts.In addition, industry stakeholders shoulddevelop a one-channel funding mecha-nism to save time, focus resources andensure accountability

· Improve market incentives to includeearnable, awardable royalty credits andrevamp the current system of income taxcredits.

The Alberta Department of Energy (ADoE)has subsequently developed and launched the

Innovative Energy Technologies Program(IETP) in 2004. Citing the SpuddingInnovation assertions, the ADoE says thatAlberta's recoverable reserves of convention-al oil could be increased as much as 14% ofOOIP or some 8.7 billion barrels.

IETP offers royalty adjustments of up to $200million over five years to specific pilot anddemonstration projects that use new or innov-ative technologies to increase environmental-ly sound recoveries for existing reserves andencourage responsible development of newoil, natural gas and in situ bitumen reserves.The program is also designed to assist indus-try to find commercial technical solutions tothe gas over bitumen issue that will allowefficient and orderly production of bothresources. By sharing the financial risks,IETP will encourage innovation and quickercommercialization of new technologies.

Producers and service providers can bothapply for funding. Evaluation criteria arebased on a demonstration of compliance withAlberta Energy's objectives of developinginnovation, encouraging dissemination oftechnology and providing positive economicbenefits to the people of Alberta withoutcausing harm to the environment. The firstround of funding was allocated in spring2004, and applications will be accepted forthe second round of funding until October 31,2005.

A second study released in March 2005 byPTAC through its Technology for EmissionReduction and Eco-Efficiency (TEREE)steering committee examined social, regulato-ry and other non-technical barriers to thedeployment of emissions reduction and relat-ed technologies in natural gas and conven-tional oil with a primary focus on the WesternCanada Sedimentary Basin. PTAC's Barriersto Deployment of EnvironmentalTechnologies report (www.ptac.org/eet/dl/eetreport0401.pdf) proposes ways andmeans to overcome barriers preventingupstream O&G companies from investing inemission-reducing and other environmentaltechnologies. PTAC President Eric Lloydencourages industry to begin viewing envi-

ronmental technologies not as a cost, but asan economic opportunity.

The Barriers report suggests greater govern-ment tax incentives are needed to promoteenvironmental innovation and direct fundingsupport, particularly during the demonstrationphase of technology commercialization, tomove innovative technologies toward deploy-ment. Furthermore, the report recommendsthe formation of a one-window approach toaccess funding, and the creation of a databasefor best practice environmental technology.Producers have expressed the need to betterdiscern the best practice technologies from allof the environmental technologies marketedto them. Finally, the report recommends regu-latory alignment with deployment of bestpractice technologies and improved commu-nication of progress being made.

Currently, PTAC is working on another rec-ommendation from the Spudding Innovationreport, an Unconventional Gas TechnologyRoadmap for industry, government and otherstakeholders in the Western CanadianSedimentary Basin. This project's goal is tohelp focus attention on the long term poten-tial for unconventional gas reserves, and togalvanize a coordinated and cooperativeapproach to technology development bybuilding a technology roadmap. The roadmapwill outline the business and societal chal-lenges to development, the state of the cur-rent recovery technology, and the bestavenues for improved or new technology. Thetarget completion date is March 2006.

Interview with Denis Gaudet, Director of Technology Transfer, PTAC Petroleum Technology Alliance Canada

Denis Gaudet graduated from the University of Alberta with a Mechanical Engineering Degree in 1973. Denis's oil and gas industry career began in FortSt. John, B.C. and continued in northern Alberta, B.C., The Netherlands, Scotland, Norway and England. While at Nowsco Well Service's head office inEngland, Denis worked throughout Europe and North Africa in sales, marketing and operations.

Denis returned to Calgary with Nowsco in 1986 to work in sales, operations, and international marketing, then moved to Canadian Fracmaster as VicePresident of Technical Services.

Denis joined PTAC as a Board Member and represented oil and gas industry service sector companies for seven years. In his current position as Director,Technology Transfer, Denis is responsible for the Technology for Emission Reduction and Eco-Efficiency project and several technical areas within PTAC.

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PTTC 2nd Quarter 2005

CONTACT THE PTTC REGIONALRESOURCE CENTER IN YOUR AREA:

Appalachian RegionDirector: Doug PatchenWest Virginia University304-293-2867, ext. 5443Coordinator: Mark Hoffman, 304-293-2867 Ext. 5446www.karl.nrcce.wvu.edu

Central Gulf RegionDirector: Bob Baumann,Louisiana State University225-578-4400Coordinator: Don Goddard, 225-578-4538www.cgrpttc.lsu.edu

Eastern Gulf RegionDirector: Ernest ManciniUniversity of Alabama205-348-4319Coordinator: Bennett Bearden, 205-348-1880http://egrpttc.geo.ua.edu

Midwest RegionDirector: David MorseIllinois State Geological Survey217-244-5527Coordinator: Steve Gustison, 217-244-9337www.isgs.uiuc.edu/pttc

North Midcontinent RegionDirector: Rodney ReynoldsKansas UniversityEnergy Research Center785-864-7398Coordinator: Dwayne McCune, 785-864-7398www.nmcpttc.org

Rocky Mountain RegionDirector: Sandra MarkColorado School of Mines303-273-3107www.pttcrockies.org

South Midcontinent RegionDirector: Charles MankinOklahoma Geological Survey405-325-3031Coordinator: Michelle Summers, 405-325-3031www.ogs.ou.edu/PTTC/

Southwest RegionDirector: Robert Lee,Petroleum Recovery ResearchCenter, 505-835-5408Coordinator: Martha Cather, 505-835-5685http://octane.nmt.edu/sw-pttc

Texas RegionDirector: Scott Tinker,Bureau of Economic GeologyUniversity of Texas at Austin512-471-0209Coordinator: Sigrid Clift, 512-471-0320www.energyconnect.com/pttc

West Coast RegionDirector: Iraj ErshaghiUniversity of Southern California213-740-0321Coordinator: Idania Takimoto, 213-740-8076www.westcoastpttc.org

Michigan SatelliteWilliam Harrison III, W. Mich. Univ.269-387-8633http://wst023.west.wmich.edu/pttc.htm

Permian BasinBob Kiker, UTPB CEED432-552-3432www.energyconnect.com/pttc/pb/

Regional Roundup

2nd Quarter 2005 Case StudiesPetroleum Technology Digest

Solid expandable casing liner salvagesinland water completion (June)

MPD well taps light oil in deepMonterey Shale (May)

Permian basin operators refine horizon-tal drilling techniques (April)

Petroleum Technology Digest is a joint project of GulfPublishing (World Oil) and PTTC. See case studiesonline at www.pttc.org/case_studies/case_studies.htm.Contact lcole@pttc.org.

Alerts Via E-Mail: Another PTTC Service

June 17

May 26

May 5

Apr. 15

PTTC HighlightCalifornia RebateProgram to ReduceWasteful EnergyConsumption...

Highlights from RecentRegional Newsletters

Key Sources ofAlaskan Oil and GasData

Nurturing Tomorrow'sProfessions—StudentTraining/Internships

Industry HighlightPetroCube Well LoadModule Speeds AverageReserve Calculation

Swellable Packer, ACompletion Alternative

Hart's E&P Announces2005 MeritoriousEngineering InnovationAwards

ExcapeTM ExternalPerforating Process

DOE HighlightVaried TechnologiesReported in LatestGasTIPS

Heavy Oil Potential inAlaska

6 Basin-Oriented CO2EOR Assessments by ARI

2005 Stripper WellConsortium Projects

Solutions from the Field: Online Technologies to Solve Problems

Faced by Independent Producers

PTTC Tech Info

American Oil and Gas ReporterTech Connection Column

JuneTORP Conference Features Ideas At

Work In Kansas Fields

MayOpportunity Exists in Michigan's

Mature Antrim Black Shale

AprilOperators Share Their Secrets To

Keeping Wells Unloaded

Summaries of PTTC region- sponsoredworkshops. For summaries of more than 100workshops (of more than 1,000 conducted)and for a listing of the workshops held, logonto: www.pttc.org or for more details, contact1-888-THE-PTTC, e-mail: hq@pttc.org. Forsome of the workshops the regions haveposted speaker presentations online.

Unconventional Gas Resources inKansas — Based on a workshop sponsoredby PTTC's North Midcontinent Region,January 19, 2005, Wichita, KS.

Basic Carbonate Geology: One Day ShortCourse for Geologists and Engineers —Based on a workshop sponsored by PTTC'sAppalachian Region and the PittsburghAssociation of Petroleum Geologists, March8, 2005, Washington, PA.

Cost Effective Horizontal Well Technology— Based on a workshop sponsored byPTTC's Central Gulf Region , May 12, 2005,Lafayette, LA.

Texas's Scott Tinker

Serving as AAPG's Distinguished Ethics Lecturer

www.aapg.org/explorer/2005/05may/tinker.cfm

PTTC Participants Receive AAPG Awards

Honorary Membership: Eddie David,David Petroleum Corp., AAPGRepresentative on PTTC National Board

Distinguished Service Award: ScottTinker, Bureau of Economic Geology, UTAustin; PTTC Texas Regional Director

House of Delegates Long ServiceAward: William Harrison III, WesternMichigan University, PTTC MichiganSatellite

http://www.spe.org/atce/2005

15Network News

PTTC 2nd Quarter 2005

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YUpcoming Events

PTTC’s low-cost regional workshops connect independent oil and gas producers with information about various upstream solutions. For informationon the following events, that are sponsored or co-sponsored by PTTC, call the direct contact listed below or 1-888-THE-PTTC. Information also isavailable at www.pttc.org/events.htm. Please note that some topics, dates, and locations listed are subject to change.

July 20057/27 South Midcontinent: Horizontal Drilling with Case Studies in Osage County - Norman, OK. Contact: 405-325-3031 7/28 West Coast: Computer-Aided Geological and Petroleum Engineering Studies - Valencia, CA. Contact: 213-740-7982

August 20058/16 Appalachian: Well Testing, Theory and Practice - Morgantown, WV. Contact: 304-293-2867 ext. 54468/17-18 West Coast workshop and field trip: Petroleum Potential of Deep Horizons in California - Valencia, CA. Contact: 213-740-80768/29 Rocky Mountain: Gas in Low Permeability Reservoirs (RMAG) - Denver, CO. Contact: 303-273-31078/TBD South Midcontinent: SPCC Regulations, New Downhole Pumping Technologies - Smackover, AR. Contact: 405-325-3031

September 20059/7 Eastern Gulf: An Integrated Coalbed Methane Exploration Model: Defining Coalbed Methane Exploration Sweetspots (AAPG DPA, MS

Board of Registered Professional Geologists) - Jackson, MS. Contact: 205-348-18809/17-18 Appalachian: Well Log Analysis (AAPG Eastern Section) - Morgantown, WV. Contact: 304-293-2867 ext 54469/21 Appalachian: From Rocks to Models, 3D Reservoir Characterization & Modeling - Morgantown, WV. Contact: 304-293-2867 ext 54469/22 Texas/Central Gulf: Improving Directional Drilling Performance (Slider LLC) - Houston, TX. Contact: 512-471-03209/24 Rocky Mountain: (1) Mining the Internet—Free GIS Data & Low Cost Software, (2) Bakken Play Essentials (AAPG RMS Short Courses) -

Jackson Hole, WY. Contact: 303-273-31079/TBD Midwest: Pumpers Workshop (Illinois O&G Assn.) - Salem, IL. Contact: 217-244-93379/TBD West Coast: Troubleshooter Forum - Los Angeles, CA. Contact: 213-740-8076

October 200510/20 Midwest: U.S. Geological Survey Basin Assessment of Remaining O&G Reserves in the Michigan Basin (Michigan O&G Association, U.S.

Geological Survey) - Mt. Pleasant, MI. Contact: 269-387-8633

Rod Hayes, instructor at the Futures in Energy class at theColorado School of Mines, pointing out features in sandstonesin the Red Rocks area, west of Denver

Laura Wray, petroleum geologist, discussing the oil-stainedDakota sandstone at the Turkey Creek water gap in a road-cutwest of Denver.

Futures in Energy is an oil and gas industry out-reach program organized by PTTC's RockyMountain Region. It provides talented high schooljuniors and seniors, and motivated high schoolteachers with scholarships to an oil and gas technol-ogy training program. The five-day interactive train-ing program focuses on E&P technology andincludes field trips. Subsequent student internshipsin industry provide students a real feel for the petro-leum industry.

Position Name Affiliation City/StateChairman Brian Sims Independent Madison, MSVice Chairman Gene Ames III The Nordan Trust San Antonio, TXImmed. Past Chairman Brook Phifer NiCo Resources, LLC Littleton, CO

Appalachian Rick Goings Dominion E&P, Inc. Jane Lew, WVCentral Gulf Joe Jacobs Gas Masters of America, Inc. Monroe, LAEastern Gulf Karl Kaufmann Valioso Petroleum Company Flowood, MSMidwest Richard Straeter Continental Resources of IL Mount Vernon, ILNorth Midcontinent Mark Shreve Mull Drilling Co., Inc. Wichita, KSRocky Mountain Robert McDougall Westland Energy Inc. Cody, WYSouth Midcontinent Fletcher Lewis Fletcher Lewis Engineering Oklahoma City, OKSouthwest David Boneau Yates Petroleum Corp. Artesia, NMTexas Allen Gilmer Vecta Exploration, Ltd. Austin, TXWest Coast Chris Hall Drilling & Production Co. Torrance, CAAAPG Eddie David David Petroleum Corp. Roswell, NMIOGCC John King Michigan Public Service Comm. Lansing, MIIPAA Allan Frizzell Enrich Oil Corporation Abilene, TXSEG Hugh Rowlett ConocoPhillips Houston, TXSPE Ken Oglesby Oak Resources Inc. Tulsa, OKLarge E&P Companies Robert Lestz ChevronTexaco Houston, TXService Companies Mo Cordes Schlumberger Oilfield Services Houston, TXRegional Lead Orgs. Doug Patchen NRCCE - West Virginia University Morgantown, WVExecutive Director Don Duttlinger PTTC Houston, TX

PTTC’s National Board of DirectorsGuided by Independents for Independents

Interested in participating at the regional level? Call 1-888-THE PTTC

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