Zodiac praises Kreyenhagen formation characteristics

Zodiac Exploration Inc., Calgary, has completed a 10-stage stimulation in the Upper Kreyenhagen formation in its 1-10 horizontal well in Kings County, Calif., followed by a flowback period.

Zodiac Exploration Inc., Calgary, has completed a 10-stage stimulation in the Upper Kreyenhagen formation in its 1-10 horizontal well in Kings County, Calif., followed by a flowback period.

It stimulated the well using a water-based gelled fluid with a ball drop completion system. It is continuing to flow test the 1-10 well and will shortly follow up with a buildup phase.

Despite surface and downhole equipment limitations during the stimulation and testing phases, the well flowed at a total fluid rate of 1780 b/d to 260 b/d from Jan. 7 to Jan. 24, 2012. These rates included 126 b/d to 60 b/d of 29° gravity oil, respectively.

Preliminary analysis of the flowing pressures and data from a brief shut-in period indicated possible damage to the hydraulic fractures and reservoir. The damage could have resulted from the completion fluid (gel filter cake) or downhole obstruction generated by the inability to restrict the flow rate during the initial cleanup phase. The company and its partners elected to clean up the well with a foamed acid treatment.

The well was later opened to flow with oil production averaging 50 b/d of oil over the first 72 hr at 1,150 psi wellhead flowing pressure on a 20/64-in. choke. The company is encouraged by the higher wellhead pressures and will release stabilized flow rates once the testing operation is concluded.

Murray Rodgers, Zodiac president and chief executive officer, said, “This type of deep high pressure and high temperature operation is new to California. Limitations of the surface and downhole equipment available to us, and the downtime caused by failure of key pumping units during the critical phase of the operation, has, in our view, limited our ability to achieve optimal flow rates.

“Nevertheless, we are very encouraged by this result in light of the fact that new, high resolution geological analysis provides further confirmation that this siltstone zone has excellent reservoir characteristics that include very high quartz content, low clay content, high brittleness, and pervasive oil charged natural fractures. These data support our view that several similar zones in the Kreyenhagen formation are highly prospective.

“It is significant that the 1-10 well produced flowing oil from this zone where it is not located on a defined geological structure, and as a result, we have clearly demonstrated that the Upper Kreyenhagen is a major regional resource play in this part of the San Joaquin basin. Our geological mapping indicates we have only tested the updip edge of the play, which has increased thickness, thermal maturity, and pressures to the south on our lands,” Rodgers said.

“While demonstrating that a horizontal well can be successfully drilled and completed at depths below 14,000 ft in the San Joaquin basin, we have tested a zone where we recorded high initial wellhead and

reservoir pressures, high fluid recoveries, and flowing oil rates. We have now gained important insights into future wellbore and completion designs which we expect will translate directly to improved cost and well performance as the project evolves.”

Rodgers continued, “Of further importance, our ongoing geological and geochemical analysis has confirmed the presence of five separate oil source/reservoir intervals on our acreage, including the Upper Kreyenhagen formation. Each of these intervals represents a major resource play.

“The ‘science’ phase of our program has clearly demonstrated the presence of significant producible light oil resources on our acreage. We have an enviable acreage position which is unique in California, with approximately 90,000 net acres including large, contiguous lease blocks. This allows us the flexibility to attract the right partner or partners to help prove up the acreage in a manner that is most

accretive to our shareholders.”

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