Midland Basin -

Central Division Hundreds of low producing tank batteries in the Permian Basin

Much of operating equipment is passed its designed life

$500,000 spent on vessel replacements since 2014

What options are available when the separator fails to reduce

maintenance capital cost and/or increase production?

Compare options technically, economically, and environmentally

Design universal tool to determine when each option should be used

Cummins M Tank Battery Equipment on Site

1 vertical separator

1 vertical heater treater

(Not in service)

2-500 bbl steel oil tanks

(1955)

1-300 bbl fiberglass water tank

(1993)

Production Data

4 BOPD

52 Mcf/D Gas

10 BWPD

2 wells producing to tank

battery

Criteria For Deciding Options Economic

Initial Capital

Payback Period

Return on Investment

Net Present Value (NPV15)

Environmental

Get old sites under current environmental regulations

EPA (QuadO) 6 tons/year VOC’s per tank

TCEQ 25 tons/year VOC’s per facility

Technical

Option feasibility

Mitigate Risks

Reducing Backpressure

Electricity

Potential Production Increase Reduction of wellhead surface pressure (casing pressure)

Using differential pressures, can estimate % increase

Theoretical site

15 BOPD, 30 Mcf/D Gas

Casing Pressure of 50 lbs

Pump intake pressure of 500 lbs

Can drop casing pressure from 50 lbs to 20 lbs

Potential increase of 7% ~ $20,00 more per year at site

Acknowledgements

Mentor: Colyn Jurek

Manager: Del Oliver

Stephanie Arriola

Brandon Merrill

Walter Fults

Fabio Lujan

Kyle Richter

Jennifer James

Brent Corwin

Eric Wooten

Joshua West

Corey Payne

Larry Sammons

University Relations

Occidental Petroleum

Economic Analysis of Options For Cummins M

Cummins M Conclusions

Gas is equivalent to 42% of total sales

Need to keep gas sales

Minimal production increase at this site

Very low surface pressure to begin with

High PIP for these wells

Initial capital

If electricity is on pad, initial capital is

drastically reduced

Tank replacements drove up VRU costs

VRU not economical if under QuadO

Other options need VCU

Universal Applications

Economic Factors

Gas oil ratio

Production Rates

Electrical Costs

Environmental Regulations

TCEQ

EPA (QuadO)

H2S Control

Technical Issues

Tank Conditions

Production Increase

Pressures on site

Automated Procedure Templates Process Flowchart Facility Field Inputs Automated Outputs

Summary Found options to deal with marginal facilities

Developed criteria to compare options Economic, Environmental, and Technical

Created templates to analyze specific sites

Automated flowchart with easy field inputs

Gives best options to look at for each site

Future Applications Apply this study to the hundreds of low producing tank batteries

in the Permian Basin

Lead to major initial cost savings

Increases in production

Bring old sites under current environmental regulations

Extend the economic feasibility of sites

INNOVATIVE SOLUTIONS FOR MARGINAL FACILITIES

Project Scope

Brady Parmenter

University of Tulsa – Mechanical Engineering

Facilities Engineering Intern

Permian Resources Midland Options Bypassing

Separators Pro’s Con’s

1. Produce to tanks +

vent

Inexpensive to keep battery producing

Easy to pipe up

Zero added maintenance

Potential production Increase

Lose gas sales

Environmental concerns Consult environmental

H2S content

2. Produce to tanks +

VRU

Maintain gas sales

Production Increase

Under current EPA (QuadO) requirements

High initial capital

More OPEX

Many need to run electrical lines

Need good tanks on site Tank replacements drive up costs

3. Produce directly to

compressor unit

Good for handling low fluid flow rates

Very easy to pipe in

Possible production Increase

Equipped with all valves needed

Rental or high initial capital

Only handle 30 BFD

If unit goes down, wells shut in

Can’t handle much H2S

Options Using

Separators

4. Replace separator Keep gas sales

Small separators are inexpensive Only need about 24” x 10’ (or smaller)

No gain

Holding backpressure on wells

Valve maintenance

5. Replace separator +

compressor unit

Potential production increase

More protection from down time

Can handle much greater than 30 BFD

Universal application to wide range of sites

Can’t handle much H2S

May need to run electrical line

Gas option available but more cost Can handle even less H2S

What Do We Do When The Separator Fails?

Trial Site

Develop computer code to step through procedure based on these criteria

Flowchart gives visual step through of procedure

Validates computer program

Allows double check of all options