Release Date: June 8, 2005

TULSA, OK - A Department of Energy research partner who developed innovative software tools that resulted in the recovery of millions of barrels of additional oil in the Rocky Mountains has been named “Wildcatter of the Year” by the Independent Petroleum Association of Mountain States (IPAMS).

Ken Luff, owner of Luff Exploration Co., Denver, CO, received the IPAMS award at the organization’s 24th annual Wildcatter of the Year Gala in Denver on May 21. The award recognizes lifetime achievement for distinguished service to the oil and gas industry and the Rocky Mountain community. IPAMS is a regional, non-profit trade association representing more than 400 independent oil and gas producers, service and supply companies, and others in the 13 Intermountain West states. Luff Exploration is an independent oil and gas exploration firm that has operated throughout the Rocky Mountain region for 35 years, mainly in the southern and western Williston Basin.

In 2000, Luff Exploration received a cooperative grant from DOE’s National Energy Technology Laboratory (NETL) to develop a set of tools for reservoir characterization from 3-D or 2-D seismic data and conventional well information. The tools comprised the Intelligent Computing System (ICS) software suite, which uses computer clustering, artificial neural networks, and classic regression methods to combine seismic, geologic, and engineering data for predictions of reservoir potential. Until the NETL-funded software was developed, there were no software tools that combined engineering, geologic, seismic, and production data to locate the elusive remaining reservoir “sweet spots” in mature oil fields.

This set of software tools assists petroleum professionals with reservoir characterization and risk assessment. It uses geologic, oil and gas production, drilling, and seismic data to create, in effect, a suite of reservoir maps. These maps predict the production rates and remaining oil and gas in any part of the reservoir, enabling the operator to choose the best drilling locations to maximize recovery of hydrocarbons.

Under the NETL grant, Luff used the tools to analyze carbonate reservoirs in the Williston Basin Red River formation in Bowman County, ND, and to locate optimum drilling targets. The Red River is one of the most prolific sources of oil in the Williston Basin of North Dakota, South Dakota, and Montana. However, Red River drilling prospects are often difficult to identify, and the requisite extensive seismic surveys are expensive for small, independent operators. Luff’s ICS software was designed to identify and help produce reservoirs that may not be pinpointed with existing methods.

Luff validated the ICS concept by drilling or recompleting nine demonstration wells in the Williston Basin’s South Amor oil field in North Dakota with the aid of ICS-generated maps during 2002. The target zone was the Red River B, a thin dolomite reservoir with an average thickness of only 7 feet at an average depth of 9,000 feet. The thin formation is all but invisible to seismic waveform, a mapping technique employed to detect subtle changes in seismic response. Luff was able to overcome the resolution problems by using the ICS software to correlate the seismic data with well and production data. By using ICS to locate remaining bypassed pockets of oil and horizontal drilling techniques to cost-effectively recover this oil, Luff revitalized an oilfield that after 20 years was nearing the end of its life.

Using the ICS software greatly reduced the risks associated with drilling horizontal wells in the Red River formation. That paid off in terms of reduced exploitation costs, increased reserves discovered, and expanded production. ICS predictions were used to re-enter and drill horizontal lateral boreholes in 16 vertical wells. Previously, these vertical wells had been producing an average of 20 barrels per day of oil. Following completion as horizontal wells, initial production shot up to 200–300 barrels per day per well. In the 24 months that followed these completions, the 16 wells have produced an average of 43,300 barrels of oil per well. As of July 2003, with the aid of ICS maps and horizontal drilling technology, Luff’s field trials had increased its proved oil reserves by 3.25 million barrels and increased its oil production by 2,600 barrels per day. The horizontal wells were projected to produce over 1 million barrels of incremental oil by this year.

There was a further environmental benefit as well to this approach. By converting the vertical wells to horizontal wells, Luff was able to increase reserves and production without adding new wells, reducing the redevelopment project’s “footprint.”

In announcing the Wildcatter of the Year award, IPAMS noted the contribution of the DOE cost-sharing grants to Luff’s exploration and production successes in the past decade: “The combination of this new approach toward petroleum system characterization and an experienced, multidisciplinary staff played a significant role in Luff’s success in increasing oil reserves through horizontal drilling and secondary recovery techniques.”

The ICS software is not specific to any particular region or reservoir class. Using the same software in tandem with their own databases and comparable advanced drilling technologies, such results could be replicated throughout the United States. ICS software is provided free along with a user’s guide and tutorial on the NETL website.