Post on 14-Apr-2017
Section 31-Tulare Analysis Dilan Orrino , Reservoir Engineering InternSoCal Asset Team, Bakersfield, CA
Agenda
2
Project Introduction Area of interest Outline
Initial Reservoir Analysis Stratigraphy Structure Proposal
LOE Optimization Pilot vs Future
Full Development Plan ARIES case
Future Ventures Executive Summary
Introduction
4
Area of Interest
Tulare
MonarchSublakeview
Homebase
2mi
10
20
20
20
30
30
30
40
40
40
40
50
Sec31_32i Sec31_34i
Sec31_31i
Sec31_004A
Sec31_005
Sec31_006
Lakeview_007
Sec31_012
Sec31_013
Sec31_014
Sec31_016
Sec31_017
Sec31_018
Sec31_019
Sec31_020
Sec31_021
Sec31_021RD
Sec31_100
Sec31_101
Sec31_102
Sec31_103
Sec31_104
Sec31_105
Sec31_106
Sec31_201
Sec31_217
Sec31_223
Sec31_236
Sec31_300
Sec31_301
Sec31_302
Sec31_306
Sec31_303
SEC_31D_028
SEC_31D_029
SEC_31D_034
Sec31_305
Sec31_33i
Sec31_304
Sec31_307 Sec31_308
Sec31_309
Sec31_TO2
Sec31_TO1
Sec31_401
Sec31_402Copy of Sec31_013
4.006.008.0010.0012.0014.0016.0018.0020.0022.0024.0026.0028.0030.0032.0034.0036.0038.0040.0042.0044.0046.0048.0050.0052.0054.00
HCPV oil (map) [ft]
0 200 400 600 800 1000ftUS
1. Maximize Free Cash Flow2. Minimize Base Decline3. Identify development opportunities and
quickly execute4. Replenish development opportunities
SoCal Asset Team
Initial Assessment Geology Overview
LOE Analysis of Pilot Identify current spending on
pilot Adjust spending to field
development Compare to ARIES
Reservoir Engineering on field development Type curve analysis Update ARIES with new Future
capital and LOE Build updated ARIES case
5
Project Outline
Project Features
302 303
304 305 306
307 308
309
301i
302i 304i
303i
301
233 ft.
Section 31 Pilot Homebase property
Multi-reservoir lease near Taft Target the Tulare Formation
Sandstone, Depth 1000 ft Heavy Oil (9-13 API)
30 MM bbls OOIP, 0% RTD 9 wells, 4 injectors, 2 temperature
observation wells
TO Well
Injector
Producer
Initial Reservoir Analysis
7
Stratigraphic Characteristics
Base Tulare Reservoir
San Joaquin
Miocene
Top Tulare
Top Middle Tulare
(-241.7)
(2864)
43.9
243.9
443.9
643.9
843.9
1043.9
1243.9
1443.9
1643.9
1843.9
2043.9
2243.9
2443.9
2643.9
Sec31_104 [SSTVD]
87.48 mV 88.89
SP Derived Normalized [Synthetic]
30.00 gAPI 150.00
GR
5.00 20.00inHCAL
Color fill
MD1.0000 ohm.m 100.0000
ILD [Derived] 1 0.6000 ft3/ft3 0.0000
DPHI_cln [Derived] 1
0.6000 ft3/ft3 0.0000
NPHI_cln [Derived] 1
DPHI_cln
Top Tulare
San Joaquin Formation
Miocene Unconformity
Upper Tulare
Middle Tulare
Lower Tulare
Air saturated alluvium
Deposition Upper Tulare
Alluvial deposits Air saturated
Middle Tulare Lacustrine deposits Shale and fine grain
sediment Lower Tulare
Alluvial deposits High water saturation
Lower Tulare
Middle TulareUpper Tulare
Target Interval
Depth: 940-1,160 MD Gross Pay: 140 ft Net Pay: 105 ft NTG: 79% Average porosity: 29% Average oil saturation: 41% Permeability: 4,000 mD Oil gravity: 9.4 API Viscosity at 122F: 8,200 cp
Reservoir
8
Structure Map Tulare Top
?
??
?
Tulare OutcropAir Sand
LOE Analysis
10
Current Spending
SURFACE R&M11%
Surveillance20%
ELECTRICIAN1%
PIPELINE1%
FIELD SUPPLIES
0%
SERVICE RIGS40%
PUMPER1%
STEAM RIG1%
SURFACE PUMPS
4%
LOCATION0%
PUMPING UNITS
3%
RODS/PUMPS15%
DOWNHOLE0%
WATER1% WIRELINE
2%Discussion of Fixed Costs
Cost (8 mo.) Cost/Well/Month
LOE to Date $156,264 $2,170
-Reduced Rigs ($57,140) ($794)
-Reduced Surv. ($14,184) ($197)
-Reduced Misc. ($8,136) ($113)
Reduced LOE $76,804 $1,067
ARIES $76,320 $1,060
Compared Sec31 Similar Rig Costs Service Rigs- $856
Surveillance cost reduction Pilot information utilized Surveillance- $426
Decreased pump work and rod failures
Unexpected lifting challenges
2010 2020 2030 2040 2050 2060 20700
1
2
3
4
5
Inflated Optimized
Year
Net N
on S
tm E
xp, M
M$
($36,470,000)
Bitumen Zone Rod failures
Pump work
Fluid over pump Upsizing equipment Stroke rate
11
Section 31 Challenges
LOE Drivers
Equipping Strategy
Pumping Units Longer stroke Higher spm
Pumps Larger bore
Better rod integrity More efficient well pump off
Field Development
13
ARIES Case Constrained
Steam Injection Profile Drilling
Lifting Cost Production
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
2044
2047
2050
2053
2056
2059
0
10
20
30
Net Stm Exp $MM Net Non-Stm Exp $MM Production Tax
$
2014
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
0
5
10
15
20
25
30
35
0
50
100
150
200
250
Count Cum
Wel
l Cou
nt
2014
2018
2022
2026
2030
2034
2038
2042
2046
2050
2054
2058
0
5,000
10,000
15,000
20,000
25,000
30,000
0
2
4
6
8
10
12
Stm Vol B/D Constaint UnconstrainedSOR
BBLs
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
2044
2047
2050
2053
2056
2059
00.5
1
1.52
2.53
3.54
Pilot Risked Unrisked
MB
OPD
14
ARIES Case Constrained
5 Year Cash Flow Capital
Free Cash Flow ComparisonConstrained Unconstrained
ROR 85.01% 84.61%
NAV $ 96,450,448 $109,300,384
Oil Recovery 17.9 MM 17.9 MM
Revenue $604,541,056 $604,541,120
OPEX ($234,518,048) ($234,956,720)
Capital ($69,874,000) ($81,572,000)
Free Cash Flow $300,149,008 $288,012,400
Key points
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
2044
2047
2050
2053
2056
2059
-6
-2
2
6
10
14
18
22
26
30
Unconstrained Constrained
$MM
2015 2016 2017 2018 2019 20200
5
10
15
20
25
Unrisked 65
$MM
2015 2016 2017 2018 2019 2020-2
2
6
10
14
18
22
Risked 50 Risked 65 Risked 75
$MM
New Tulare Ventures
16
Executive Summary
Oil Price $65 $50
ROR 85.01% 52.59%
NAV $ 96,450,448 $ 55,150,312
Oil Recovery 17.9 MM 17.9 MM
Revenue $604,541,056 $466,157,856
OPEX ($234,518,048) ($234,518,048)
Capital ($69,874,000) ($69,874,000)
Free Cash Flow $300,149,008 $161,765,808
Constrained Steam
Heat in pilot this summer Confirmed oil production
Utilize Steam Excess steam capacity due to field
decline
Production Parameters Pad construction and roads Pipeline Infrastructure
Engineering for steamline and installation of groupline
Steam Headers 7 producers per header
Updated equipping strategy Higher expected gross
Reservoir Engineering Recap
LOE analysis Proved up lease expenses
Type curve analysis Steam type curve for SOR
management Oil type curve based on pilot IP and
steamflood EUR Adjusted Facilities
No steam generation New drilling timeline
Thank you to LINN Energy!
Greg Wagner Ben Mendes Jeremy Vanderziel Carlos Alvarez Jennifer James Dream Weaver Sara Maloney Eric Dhanens
Special thanks to… Niles Dhanens Jacob Farewell