The field, discovered in 1936, has been drilled extensively with vertical wells chasing four producing horizons-Tar, Ranger, Upper Terminal and Ford. Since 1971, Upper Terminal has been under waterflood. It was this project that piqued New York-based Warren's interest in the late 1990s.
Warren bought 50% of the field in 1999 from a small operator. "Oil prices went up almost immediately after we signed the deal," says Ken Gobble, Warren senior vice president. "The seller did everything it could to unwind the deal."
In February 2005, Warren purchased the other 50% of the field, and work began on a sub-zone redevelopment. While drilling new vertical wells to Upper Terminal, Warren engineers noticed the shallower Tar formation still showed good oil saturation, albeit heavy oil. It also has a partial water drive, unlike the other zones.
"With that heavy oil and partial water drive, the vertical wells that were originally drilled in the field tend to cone out quickly," Gobble says. Other than a handful of wells drilled in areas with outstanding sands, the economics of developing Tar with vertical wells were questionable.
New field geologic data provided Warren with a leg up over the previous owners, and Gobble's team began examining the potential for horizontal development. Despite advances in horizontal drilling, this would be no walk in the park. The zone of interest contains a 30- to 50-foot column of oil on top of water.
"We thought that if we could drill these wells and keep them as close to the top of the sand and as far away from the oil-water contact as possible, we could reduce the chance that they would cone." The team also faced the formidable challenge of snaking the laterals past countless vertical wellbores.
The first horizontal was drilled in August 2006 with standard logging-while-drilling (LWD) equipment. It was relatively successful, improving production significantly over the previous vertical wells. However, it immediately had problems with water cut.
What was needed was an LWD tool that could report its position not only in respect to other zones but within the zone of interest as well. PeriScope provided Warren with both deep-reading and azimuthal (directional) resistivity measurements, making it a good choice for the situation, "although not an obvious choice economically for what we were doing and what we thought the wells would do," Gobble says.
Warren set up a performance-based contract to use PeriScope on two wells. Schlumberger modeled a well for Warren that indicated the length of the lateral had a direct correlation to total production. Obviously a tool that could keep them in the upper part of the zone for a longer stretch would offer superior production results.
The goal was to drill a 1,000- to 2,000-foot lateral at a cost of more than $1 million per well. There was little room for error. The results of the first two wells were "phenomenal," Gobble says, producing some 200 barrels of oil per day with a 10% water cut. Warren has gone on to drill seven additional PeriScope wells.
Total field production prior to the horizontal program was less than 1,200 barrels per day; the horizontal wells, while representing a fraction of the total number of wellbores in the field, now account for 38% of the production.
Warren can also book more reserves from the unit due to the significant increase in its success ratio. "If we were to continue to drill without this type of technology, we would have to risk our reserves at 50%," Gobble says. "And we wouldn't really know why one well was successful and others weren't. Now our success rate is almost 100%. It's really taken the ordinary mechanical risk completely out of the picture."
It's changed the way Warren personnel view other potential opportunities, causing them to consider analogs that might otherwise have been of little interest. And most importantly, it's given the Wilmington Townlot Unit an extended life.
"It's possible that PeriScope has made such a dramatic difference that it saved a project that potentially could have failed," Gobble says. "To be honest, I was one of the skeptical ones. Any new technology is a tough sell for a small company."
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