SIPES Houston: 2015 CES

1. SIMULATION – GIVING LIFE
TO A MARGINAL FIELD
SIPES – September 2015
contact-us@durangoresources.com
281.558.7998

2. DURANGO RESOURCES HISTORY
 1980: Founded Swanson Consulting
 Provided industry-leading reservoir description (30+ yrs)
 Geological, geophysical, and engineering models, original and remaining hydrocarbons in place maps, reserves
analysis and classification, depletion plans, economics, risk analysis, A&D due diligence
 1985: Founded Stratamodel
 Created the first commercially available 3D geocellular modeling software in the industry
 Merged with Landmark / Halliburton in 1994
 1998: Founded Durango Resources Corporation
 Increased reserves consistently through detailed geologic mapping and the use of simple simulation
technology (ReservoirGrail)
 1999: Founded GrailQuest Corporation
 Developed ReservoirGrail, the first commercially available volumetric balancing reservoir
simulation software
© Durango Resources Corp. 2015 2

3. GIVING LIFE TO A MARGINAL FIELD
Are there any left-behind
reserves?
Where are these left-behind
reserves?
What is the most economic
way to produce them?
These questions can best
be answered with
simulation
We need to discover how
the fluids have migrated in
the reservoir through time
in order to find answers to
these questions
© Durango Resources Corp. 2015 3

4. METHODOLOGY
 Build your reservoir model (for each separate reservoir zone)
 Gross reservoir thickness map
 Net reservoir thickness map
 Net pay thickness map
 Structure map
 Collect and organize your historical production data
 Allocate field / lease / tank data to individual wells
 Allocate individual well production by zone
 Check for fluid level data and reservoir pressure tests to verify your reservoir communication
assumptions
 Run a simple volumetric-based simulation
 Doing this manually is possible if the reservoir is small and simple
 For most fields, you will need to use a simple volumetric simulation program like ReservoirGrail
 Make adjustments to your reservoir model (geology) or historical production allocations based on how
well the simulation matches your production history
© Durango Resources Corp. 2015 4

5. WEST TEXAS WATERFLOOD CASE STUDY
 Located in Tom Green County near San
Angelo
 Discovered in 1979 at ~3,400ft tvd
 Acquired in early 2000’s
 7 producers
 5 injectors (3 of them were converted from
producers)
 Limey sandstone (probably a shelf-edge
sand)
 Avg pay thickness = 8ft
 Avg porosity = 18.5 pu
 Avg Initial Oil Saturation = 72%
 OOIP ~2.3MMSTB
 Current recovery ~1MMSTB (~44% of OOIP)
© Durango Resources Corp. 2015 5
Original Net Pay Map
1,000 ft

6. RESERVOIR MODEL
Net Reservoir Thickness (ft) – 5ft Contours Structure (SSTVD) – 10ft Contours
© Durango Resources Corp. 2015 6
N N

7. HISTORICAL PRODUCTION
 Sorted through well files to allocated field-
wide and tank battery production to
individual wells based on historical test
data
 Current status:
 1 producer (20bopd)
 2 injectors (injecting 2200bwpd combined)
 1% oil cut
© Durango Resources Corp. 2015 7

8. SIMULATION RESULTS Firstly, our current reserves were confirmed
© Durango Resources Corp. 2015 8
Dashed green = modeled oil
production
Solid green = forecasted reserves
Royal blue = water production
Teal = water injection
WATCH THE VIDEO ON THIS SLIDE ON YOUTUBE
https://youtu.be/7F6Wsdnrem8

9. SIMULATION RESULTS
Secondly, we identified remaining waterflood movable
oil and booked proved, undeveloped reserves
© Durango Resources Corp. 2015 9
Additional proved
undeveloped reserves
(80MSTB)
Planned injector location
WATCH THE VIDEO ON THIS SLIDE ON YOUTUBE
https://youtu.be/7F6Wsdnrem8

10. CONTACT
contact-us@durangoresources.com
281.558.7998
1147 Brittmoore Rd Ste. 1
Houston, TX 77043
10© Durango Resources Corp. 2015