Release Date: February 18, 2002

TULSA, OK - With America's oil production increasingly being supplied by small independent producers, the U.S. Department of Energy is continuing its efforts to help the smallest of these companies test higher-risk technologies that could keep oil flowing from thousands of U.S. fields.

As part of its Fossil Energy research program, the Department has added two new projects to its "Technology Development with Independents Program:"

• Woolsey Petroleum Corporation, Wichita, KS, to study ways to improve "hydraulic fracturing," a technique in which water is injected into an oil-bearing formation to open fractures in the underground rock and free oil that might otherwise not be produced;

• Tenneco Energy LLC, Wheat Ridge, CO, to help restore production in East Texas oil fields by using advanced computer imaging technology, new logging tools to locate promising geologic features, and high capacity pumps.

The "Technology Development with Independents Program" provides matching grants of up to $75,000 to companies willing to apply innovative approaches that can lower operating costs and extend the life of marginally producing fields.

The program reflects the growing importance of small oil producers in supplying America's demand for oil. The domestic oil industry has changed significantly over the last 15 years, with larger oil companies moving to more lucrative prospects overseas leaving behind smaller companies to continue producing aging and often declining U.S. oil fields. Independent producers now account for 40 percent of the oil produced in the United States and nearly 60 percent of the oil produced from onshore fields in the lower 48 states.

Since 1999, the "Technology Development with Independents Program" has provided small businesses in 13 states, each with less than 50 employees, the financial backing to test new techniques that might otherwise have remain untried.

The program is one of several initiatives in the Energy Department's fossil energy program that is working to slow or halt the decline in U.S. oil production. The types of technologies considered included reservoir characterization, well drilling, completion or stimulation, environmental compliance, artificial lift, well remediation, secondary or tertiary oil recovery, and production management.

Companies that achieve success in prolonging the productive life of their fields convey the techniques to other small producers facing similar difficulties.

Project Details:

Optimizing Fracture Treatment in a Mississippian "Chat" Reservoir, South-Central Kansas

Woolsey Petroleum Corporation - Wichita, KS

This 12-month project will investigate geologic and engineering factors critical for designing hydraulic fracture treatments. The target reservoirs for this project ? the Mississippian reservoirs of Kansas ? account for over 1 billion barrels of oil produced in Kansas or roughly 40% of the state's annual production.

Although geographically widespread, the oil-bearing formation varies widely in geologic features. Optimum hydraulic fracturing design is poorly defined in the formations with poor correlation of treatment size to production increase.

Woolsey Petroleum Corporation will extract sample rock cores from a well drilled between existing wells ? called an "infill" well ? and run modern wireline logs to determine the location and extent of oil remaining in the formation that remains unrecovered by prior operations. Using the data, the company will design a way to hydraulically fracture the reservoir to free the additional oil.

Partners include the Kansas Geological Survey and an independent geological consultant.

Total Project Cost:   $768,130
DOE Share:              $  75,000
Woolsey Petroleum Corp:  $693,128 (private sector cost share: 90%)
Length of Project: 12 months
Point of Contact: I. Wayne Woolsy (316) 267-4379

Using 3D Computer Modeling, Borehole Geophysics, and High capacity Pumps to Restore Production to Marginal Wells in the East Texas Field

Tenneco Energy LLC - Wheat Ridge, CO

The East Texas oilfield, in the east central part of the state, is the largest and most prolific oil reservoir in the contiguous United States. Since its discovery on October 5, 1930, some 30,340 wells have been drilled within its 140,000 acres to yield over 5.2 billion barrels of oil.

The goal of this project is to extend the life of marginal wells in the East Texas Field using advanced computer imaging technology, geophysical tools and high capacity pumps. Tenneco will collect data on key geologic features from at least four wells using modern slimhole Array Induction/Neutron Density logs. This information will then be correlated with features from old well logs to determine the sections of the formation that could still contain unproduced oil.

Three dimensional geological images will be constructed with historical data from several hundred surrounding leases. A demonstration well will be drilled to validate the results of this project.

Successful demonstration of this combined technology will assist operators in evaluating and producing petroleum resources in mature reservoirs throughout the region.

Partners include Industrial Gas Services, and Schlumberger Wireline and Testing.

Total Project Cost:   $179,732
DOE Share:              $  74,558
Tenneco Energy LLC:  $105,174 (private sector cost share: 59%)
Length of Project: 12 months
Point of Contact: R.L. Bassett (303) 423-8187