Luncheon – July 17, 2009

Title: Discovery and Horizontal Development of Savageton Field, Powder River Basin, Wyoming: Geosteering in Thin Parkman Sandstone to Minimize Water Production and Enhance Ultimate Recovery

Speaker: David M. Wheeler, Rockies Business Area Manager, El Paso E&P Company, L.P.

Date: July 17, 2009

Publication: The Outcrop, July 2009, p. 20-21

Savageton Field (Campbell County, Wyoming) was rediscovered in 2002 by Ensign Oil and Gas through subsurface mapping of a discrete zone in the Upper Cretaceous (Campanian) Parkman Sandstone. Numerous shows, including minor production from a completion in 1976 by Davis Oil, named as the Warden Field discovery well, highlighted the potential for an accumulation. Medicine Bow Energy drilled the first few horizontal wells in 2004. El Paso E & P Company acquired the field in 2005 and continued development through 2007. Savageton is now the largest oil field in Wyoming producing from horizontal wells. Fifty one horizontal and four vertical wells currently comprise the field, recently unitized for secondary recovery; Savageton will be the first horizontal waterflood in Wyoming. The primary EUR is 7.5 MMBO with an additional 5.5 MMBO anticipated through secondary recovery.

Savageton field lies on the gentle, southwest dipping, east flank of the Powder River Basin. The Parkman Sandstone is composed of multiple parasequences arranged in a west to east, progradational stacking pattern. Within the field area the Parkman is informally divided into lower and upper lithological units. The pay zone is the distal portion of a single parasequence at the base of the lower Parkman, several miles seaward of contemporaneous shoreface deposits. The average reservoir thickness is 10 feet with average porosity and permeability of 13% and 5.8 millidarcies. Regional mapping revealed a classic stratigraphic trap; a convex, up-dip bulge of the lower Parkman parasequence at the transition from shallow marine sandstone to shelf mudstone, several miles seaward of contemporaneous shoreface deposits. This complex of offshore bars is overlain by about 45 feet of mudstone providing a top seal and distinct break from the overlying upper Parkman.

Shoreface deposits of three parasequences comprise the upper Parkman, resulting in a massive amalgamation of non-productive (wet) sandstone over 100 feet in thickness. In the field area the top of the Parkman is marked by a transgressive surface of erosion, overlain by a tongue of the Pierre Shale.

Hydraulic stimulation of the lower Parkman pay zone in the discovery well and subsequent vertical well offsets resulted in communication with the water-bearing sandstone of the upper Parkman and water/oil ratios of four to one. Geosteering of horizontal wells maximized wellbore contact in the thin lower Parkman pay zone, eliminated the need for stimulation and prevented communication with the upper Parkman water zones. The successful use of horizontal drilling to both avoid water production and improve economics in tight reservoirs has potential application in other fields and should enhance waterflood sweep efficiency.