A Houston independent has decided to commence its own Permian basin carbon dioxide pilot floods hoping to jump-start demand for CO2 from a world-class helium and CO2 resource in New Mexico and Arizona.
A reoriented Ridgeway Petroleum Corp. has the task of delineating the nearly 400-sq-mile St. John CO2 field that the ex-Calgary company’s founder discovered in 1994. A scant 26 wells have been drilled in that accumulation, the extent of which is defined only by geologic work.
Ridgeway’s founder, Walter Ruck, who passed away in 2005, thought the best market for the St. John CO2 was for enhanced oil recovery in light oil fields of California’s Los Angeles and Ventura basins.
Ruck’s successor, Barry Lasker, has redirected marketing efforts toward the Permian basin, already supplied by three large CO2 pipeline systems. Lasker, president and chief executive officer, also plans to truck CO2 to Ridgeway’s own oil production pilot projects until industry support materializes for construction of a pipeline.
Permian EOR
The reserves that supply two of the three large pipelines that ship CO2 to the Permian basin from Colorado and northeastern New Mexico are declining, Lasker noted.
Those pipelines were built in the 1980s from Sheep Mountain field west of Trinidad, Colo., and Bravo Dome field near Bueyeros, NM.
The third system originates at McElmo Dome field southwest of Cortez, Colo. Its operator, Kinder Morgan, is considering an expansion, but producers have already spoken for all of the additional supply.
With oil prices near record highs, demand for CO2 for EOR in the Permian basin is at an all-time high. Lasker expects to conduct an open season later in 2007 to gauge oil producers’ needs for CO2 from St. John field. He estimates permitting and construction of a 250-500 MMcfd, 300-mile pipeline would take 2 years.
Meanwhile, Ridgeway in February 2007 completed the purchase of 15,000 acres in a 19,000-acre mature Permian basin oil field. It cited an independent estimate that the field, which has produced 14% of the original 180 million bbl of oil in place, could recover a further 34 million bbl with state-of-the-art CO2 injection.
Lasker said Ridgeway hopes to begin trucking and injection CO2 later this year and continue for at least several months. Last month Ridgeway signed a binding agreement to purchase another oil field adjacent to its first acquisition.
Ridgeway did not identify the properties because it is pursuing other acquisitions in the area but said they produce oil from a formation that has responded well to CO2 injection elsewhere in the Permian basin.
Field and pipeline
The main line to the Permian basin would be expandable to 500 MMcfd.
An extensive gathering system would be required, and bottomhole pressures of 400-500 psi would entail compressors hooked up to a power grid link in eastern Arizona.
Wells would require fiberglass and stainless steel tubulars and nickel-coated packers.
St. John field, 40% in Catron County, NM, and 60% in Apache County, Ariz., is at 7,000 ft above sea level. Ridgeway controls 200,000 acres in the area.
Consulting engineers estimate the St. John resource at 15 tcf in place, of which 5 tcf may be recoverable. The gas also contains 30 bcf of recoverable helium.
Power plants in the Permian basin produce large volumes of CO2, but Lasker said the pipeline will be competitive with them at $1.50-1.80/Mcf for CO2 because such plants require installation of processing equipment at $30/ton to separate CO2 from the raw stack gas.
Drilling program
Ridgeway had three rigs running in late April on a 12-well program in New Mexico designed to hold expiring leases, evaluate air drilling and various completion methods, test zones individually, and learn well deliverabilities and decline rates.
One of the wells found CO2 and helium for the first time in fractured Precambrian basement at TD 2,666 ft, adding to that previously encountered in the Permian Granite Wash, Amos Wash, and Fort Apache formations at 1,800-3,000 ft.
The same well was drilled through the Granite Wash to total depth without encountering any water returns and appears to have extended the lowest known gas by 55 ft to 4,250 ft above sea level.
Another air-drilled well stabilized at 2.5 MMcfd, the field’s highest natural flow rate, from Amos Wash open hole at 1,740-1,907 ft.
None of the 26 wells has encountered oil or natural gas.
Ridgeway hopes to drill another 10 wells later in the year, 1 or 2 of which could be horizontal.
Over the next 2 years, the company expects to drill up to 200 wells at St. Johns with initial production of 250 MMcfd to commence late in 2009.
