Carbon dioxide pact signed for New Mexico EOR project

By OGJ editors
HOUSTON, Apr. 20
-- A Houston operator plans to buy a 5-year supply of carbon dioxide for an enhanced oil recovery project in Milnesand San Andres field, Roosevelt County, NM.

First CO2 would be delivered to the field by August 2012 through a 25-mile pipeline that the operator, Enhanced Oil Resources Inc., would build from the existing Cortez pipeline that transports CO2 from Colorado to the Permian basin.

EOR Inc. is under contract to buy 27.4 bcf of CO2 from Kinder Morgan CO2 Co. LP at market price. Projected oil recovery from CO2 injection on 3,000 acres, based on a completed 12-month pilot project, is 5.31 million bbl of proved and probable reserves and 8 million bbl if possible reserves were recovered.

EOR Inc. controls 5,600 acres in the 6,000-acre field. The 3,000-acre Phase 1 project is modeled to include as many as 89 producing wells and 64 injectors. Phase 1 peak oil production at the 2P level is expected to reach 2,200 b/d of oil within 3 years of the start of injection.

Before injecting CO2, EOR Inc. will conduct a drilling program to reduce the current 40-acre well spacing to 20 acres and possibly to 10 acres later. This infill drilling is expected to raise primary recovery, increase daily production, and provide a better conduit between producers and injectors.

Full development of the 5,600 acres could require as many as 140 producers to recover up to 14 million bbl of proved, probable, and possible reserves. The company hopes to double Milnesand oil production to 1,000 b/d by yearend.

EOR Inc. said, “Our CO2 pilot result has confirmed our expectations that considerable value can be generated at Milnesand and by analogy, at our adjacent 18,000-acre Chaveroo field by the use of CO2 flooding.”

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