Use of Cutting-Edge Horizontal and Underbalanced Drilling Technologies and Subsurface Seismic Techniques to Explore, Drill, and Produce Reservoired Oil and Gas from the Fractured Monterey Below 10,000 Feet in the Santa Maria Basin of California

DE-FC26-03NT15426

Project Goal
The project goal was to demonstrate the feasibility of horizontal and underbalanced drilling to penetrate and produce the deep fractured Monterey formation that historically has been so productive of oil and gas in the shallower old oilfields of the Santa Maria Basin of California.

Performer
Temblor Petroleum Company LLC
Bakersfield, CA

Project Results
The project demonstrated the feasibility of horizontal drilling in the deep Monterey and the use of underbalanced drilling for greater penetration rates and immediate evaluation of the reservoir being penetrated.

Benefits
This project demonstrates that horizontal and underbalanced drilling techniques can be used in the Monterey reservoir. It already has spurred other operators to undertake similar attempts in other wells in the area. Benefits to the state and general public in terms of increased oil production have not yet been realized but are expected to prove forthcoming as further work is done.

Background
The potential productive area is defined by seismic data that show a structural closure covering some 1,600 acres in the deep Monterey formation. Two previous wells on the structure, one drilled by Occidental Petroleum Corp. in 1985, and a second drilled by Temblor Petroleum in 1999, encountered 32 gravity oil and natural gas in the fractured Monterey reservoir with no evidence of water. A 700-foot thick oil column was indicated with a potential reserve of 30-50 million barrels. The wells were drilled vertically with heavy mud, and casing was run and cemented. Attempts to acidize the wells were unsuccessful due to a very tight reservoir formation, although fracturing was indicated.

Based on outcrop observation supported by some core data, it could be demonstrated that almost all the fracturing in the Monterey is vertical and is believed to lie in a northeast-southwest direction. It was thought that a horizontal well drilled in a northwesterly direction would best be able to encounter this vertical fracturing. It was also believed that underbalanced drilling would prevent the plugging of fractures by heavy mud and cement by allowing the oil and gas to flow freely to the surface.

Project Summary
The well was drilled through the thick Sisquoc formation to 10,216 feet, where 7-inch casing was set in what was thought to be the top of the highly resistive portion of the Monterey formation. This view was based on seismic data and opinions of the mud loggers and supported by the occurrence of a large show of oil and gas from a fracture at 10,236 feet. The casing was set at 60 degrees in the horizontal curve. After setting casing, a 6 1/8-inch hole was drilled rapidly at first, then with decreasing rate of penetration until a total measured depth of 12,789 feet was reached. At this point the well had a true vertical depth of 10,510 feet, a deviation of 88.82 degrees, and a horizontal displacement of 2,959 feet.

The well was drilled underbalanced by employing water as a drilling fluid with air injected at 3000 feet to ensure an underbalance of 300-400 psi while drilling. Shows of oil and gas were strong at first, with gas up to 1,500 units with C1 to C5 oil vapors and live oil in the mud. Intensity of the shows varied with the surging of the air injected. Very definite fracturing, with attendant strong gas increases and as much as 20% oil in the drilling fluid, was encountered in the last 1,000 feet of hole. However, the oil and gas entry was never strong enough to produce oil and gas separately from the fluid separation system. No evidence of formation water was encountered.

The project was successful in showing the ability to drill horizontally and underbalanced in the Monterey formation with attendant increase in penetration rates. However, in retrospect, because of the high drilling speeds in the first part of the horizontal hole, it is very doubtful that the high-resistivity Monterey was penetrated until after 11,200 feet measured depth. Above that point, it is believed that the well was drilling in the softer Upper Monterey and not in the high-resistivity Monterey. In the last part of the hole, when the high-resistivity Monterey was definitely penetrated, drilling speeds were greatly reduced, bit wear was severe, and insert bits rather than PDC bits had to be used. For this reason, it is difficult to evaluate the efficacy of the drilling methods, had the high-resistivity Monterey been encountered all the way in the horizontal hole.

Current Status (June 2006)
The well was drilled in late 2004, and an open hole completion was attempted. The project performer plans to clean out and run a Schlumberger FMI Log and induction array log on tubing in the horizontal part of the well. Also, a surfactant will be induced in the most promising fractures of the horizontal section to remove any emulsion that may have formed. Further, acid will be applied to a fracture that had a strong oil and gas show while drilling with near 12 lb mud immediately below the shoe of the 7” casing to remove mud and cement that may be blocking the fracture. This work will be done later this month.

Project Start: September 30, 2003
Project End: June 30, 2006

Anticipated DOE Contribution: $1,527,388
Performer Contribution: $2,588,963 (63% of total)

Contact Information
NETL - Virginia Weyland (virginia.weyland@netl.doe.gov or 918-699-2041)
Temblor - George Witter (temblorllc@cs.com or 661-395-5730)

Publications
A Technical Progress Report was filed with the Department of Energy in February 2005. An article emphasizing the drilling techniques and innovations applied on the well was published in the May, 2005 edition of World Oil under the heading MPD well taps light oil in deep Monterey Shale, by Bob Knoll, Maurer Technology, Inc.

New interpretation.

Old interpretation.