Summary
Buffalo field covers a large area on the southwestern flank of the Williston
basin, in the northwest corner of South Dakota. In 1987, 8,000 acres of the
field were divided into two units to initiate improved-oil-recovery (IOR)
operations with two different methods: air injection and waterflooding. After
collecting 19 years of production history, a technical and economic comparison
has been made between the two projects to determine the relative success of
both units.
The technical performance was evaluated in terms of incremental oil
recovery, ultimate recovery, and incremental recovery per volumes of fluid
injected. Ultimate primary recovery was estimated using conventional
decline-curve analysis on individual wells. Ultimate recovery was estimated by
extrapolation of the current performance of the units, assuming the same actual
development scheme and operating strategies.
The economic comparison was performed in terms of net present value,
incremental rate of return, and payout time. A sensitivity analysis on some of
the key drivers of the project economics--specifically, oil price, operating
cost, and capital investment--was also performed.
Throughout the years, the west Buffalo Red River unit (WBRRU) under
high-pressure air injection (HPAI) has technically outperformed its
"twin," west Buffalo "B" Red River unit (WBBRRU), which is
under waterflooding. Nevertheless, the waterflood project has shown greater
economic benefit, which results primarily from the low oil prices (less than
USD 20/bbl) experienced during most of their operating lives.
This case study shows that for an air-injection project to be successful not
only technically but also economically, a sufficiently high oil price (i.e.,
greater than USD 25/bbl) is needed, mainly because of the high operating costs
and capital investment.
Introduction
Producing from thin, low-permeability oil reservoirs can be a very
challenging issue, particularly when an efficient driving mechanism is lacking
originally. Rapid depressurization makes primary production a very inefficient
process; and low capacities limit the injectivities for potential IOR
operations. This challenge was faced by several operators in Buffalo field
since its discovery in 1954.
During the early 1960s, it was recognized from the fast reservoir depletion
that primary-recovery efficiency in the field would be very low, and
water-injectivity tests were discouraging for future waterflood operations.
During the late 1970s Koch Exploration Company (Koch) conducted an
air-injectivity test and developed a pilot under HPAI. Because the pilot
results were promising, the Buffalo Red River unit (BRRU) was formed (Fassihi
et al. 1987; Erickson et al. 1993; SDDENR 2005). On the basis of the success of
the BRRU air-injection project, another HPAI project was started in the early
1980s in the southern part of the field and was called the south Buffalo Red
River unit (SBRRU) (Erickson et al. 1993; SDDENR 2005).
Late in 1987, the western area of the field was divided into two parts to
carry out two different IOR projects: an HPAI project in the WBRRU and a
waterflood in the WBBRRU located to the west of the HPAI project in WBRRU, both
of which are the subject of this paper.
© 2008. Society of Petroleum Engineers
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History
- Original manuscript received:
28 August 2006
- Meeting paper published:
11 October 2006
- Revised manuscript received:
30 March 2008
- Manuscript approved:
11 June 2008
- Version of record:
25 October 2008
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