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INJECTION WELLS
In the ordinary producing operation only a portion of the oil in place is recoverable by primary production methods. Such methods include free-flowing wells and production maintained by pumps. As oil is extracted from a reservoir or sands the pressure which brings the oil to the well is reduced. Secondary recovery methods are intended to increase the recoverable percentage of the oil in place by injecting a substance such as gas or water into the producing formation. The injected substance is intended to increase the pressure on the oil in the formation and drive it toward the well-bore. A well, called an injection well or water injection well, is usually drilled in order to inject the substance. Sometimes a previously drilled, abandoned well can be reworked as an injection well. When water is used as the injectant it is often produced on the property itself. Excess water produced by operating wells may be diverted to the injection well and used as the injectant.
This method of water disposal usually alleviates the need for a separate water disposal well. If the water from the producing wells does not provide enough injectant to provide proper pressure for secondary recovery, a water supply well may be required to provide an adequate supply of water.
OIL PRODUCTION
Once an accumulation of oil has been found in a porous and permeable reservoir, a series of wells are drilled in a predetermined pattern to effectively drain this "oil pool". Wells may be drilled as close as one to each 10 aces (660 ft. between wells) or as far apart as one to each 640 acres (1 mile between wells) depending on the type of reservoir and the depth to the "pay" horizon. For economic reasons, spacing is usually determined by the distance the reservoir energy will move commercial quantities of oil to individual wells. The rate of production is highest at the start when all of the energy from the dissolved gas or water drive is still available. As this energy is used up, production rates drop until it becomes uneconomical to operate although significant amounts of oil still remain in the reservoir. Experience has shown that only about 12 to 15 percent of the oil in a reservoir can be produced by the expansion of the dissolved gas or existing water.
SECONDARY RECOVERY
Water flooding is one of the most common and efficient secondary recovery processes. Water is injected into the oil reservoir in certain wells in order to renew a part of the original reservoir energy. As this water is forced into the oil reservoir, it spreads out from the injection wells and pushes some of the remaining oil toward the producing wells. Eventually the water front will reach these producers and increasingly larger quantities of water will be produced with a corresponding decrease in the amount of oil. When it is no longer economical to produce these high water-ratio wells, the flood may be discontinued. As mentioned previously, average primary recoveries may be only 15% of the oil in the reservoir. Properly operated waterfloods should recover an additional 15% to 20% of the original oil in place. This leaves a substantial amount of oil in the reservoir, but there are no other engineering techniques in use now that can recover it economically. In most cases, oil reservoirs suitable for secondary recovery projects have been produced for several years. It takes time to inject sufficient water to fill enough of the void spaces to begin to move very much oil. It takes several months from the start of a waterflood before significant production increases take place and the flood will probably have maximum recoveries during the second, third, fourth, and fifth years after injection of water has commenced. The average flood usually lasts 6 to 10 years.
Water floods have been highly successful in the Wyoming Basin and probably account for 75% of the total production from the area. Flood recoveries will generally be an additional 80% to 100% of the primary production. There are no special problems with floods in the Wyoming Basin. Ample supplies of salt water are generally available and injection pressures are not too high - 1500 PSI or less. Corrosion is minimal and no expensive, high-pressure equipment is involved. Sufficient potential flood properties are available on reasonable terms - especially smaller areas owned by independent operators who do not have the finances to support the installation of properly engineered secondary recovery operations. Water floods in the Wyoming Basin should return 2 to 3 times their cost and are considered to be low-risk prospects.
OPERATION
When all equipment is in place, the oil may begin to flow into the holding tanks to await pick up. It can be expected that a well will not be in production for certain times due to adverse weather conditions, mechanical malfunctions and other unforeseen circumstances. After the production period commences, it is necessary to incur certain costs in order to bring the oil to the surface. These costs include normal maintenance on the pump and other equipment, replacement of any pipe or tanks as needed, compensation to the operator of the pump, and payment of any incidental damages to the owner of the surface rights of the leased property. In some cases, the oil in a pay zone will be mixed with salt water. In such cases, the oil must be separated from the salt water and the salt water disposed of in a manner which is not harmful to the environment. The water may be hauled away by tank truck but often this phenomenon requires the drilling, nearby the oil producing well, of another well into which the salt water will be pumped.
The cost of this water disposal well is normally considered to be a cost of operation. Finally, there may be additional costs incurred in opening up a new pay zone when any presently producing pay zone becomes economically unfeasible. Because opening a new pay zone involves the installation of very little, if any, new equipment, the costs involved therein usually are not very substantial.
SALE OF OIL
Once the oil is out of the ground and into the holding tanks, it must be sold. In most cases each holder of a working interest has the right to take his portion of production in kind, therefore, make his own arrangements for its sale. It is not uncommon, however, for all the holders of a working interest of a well to enter into the same arrangement with the same buyer of the oil production. These sale contracts are normally entered into for periods of not longer than a few months but in no case longer than one year.
The buyer of the oil will generally be advised by the operator of the working interest as to the identity and extent of ownership of each of the holders of the working interest, as well as the identity of the royalty holders and the amount of their interests. The information will be compiled on division orders which are the basis upon which the buyer of the oil can divide the proceeds of sale among the various holders.
The buyer of the oil will pick up the oil from the holding tanks at periodic intervals, gauge it and remit the remaining proceeds in the proper amounts to the holders of the working interest and the royalties.
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