The Odessa American from Odessa, Texas • 47

The Odessa! American Sunday, February 22, 1981 CO -2 opens new era for oil Billions being spent on tertiary recovery by Shell Oil in Yoakum County field WELCOME TO DENVER GITY 5C N04 cirnccuc: from time to time on this project as well as other projects we are planning. We want the public to understand what we are doing and why we are doing it. "When you think about spending $2.3 billion ($3.5 billion including the cost of a pipeline and the development of "the CO-2 gas field) on a single project, it's mind-boggling, but it's true," Vernon said. "When you think about the enhanced recovery and what you are getting and will be getting, it's worthwhile." Shell's enhanced oil recovery program for its Denver Unit of the Wasson Field in Yoakum County was certified last week by the Texas Railroad Commission as a qualified tertiary oil recovery project under the federal crude oil windfall profits tax act. All that remains is a final determination by the Internal Revenue Service so Shell will receive a tax break for money spent on the project.

The purpose of the CO-2 tertiary DENVER CITY PROUD OF HERITAGE residents welcome oil industry The company has tested the rrNf.hod in every way humanly possible- Vernon said Shell engineers constructed a scale model of a test field at the company's laboratories in Houston just to test the theory. Following the lab testa, they conducted tests at an experimental field on the outskirts of Denver City. "In the experimental field we spent 3Vz years and about 9" million," he said. "What we foa out in the experimental field Is will definitely work fie! wide." A total of 11 wells were drilled the small experimental field an Vernon said the wells ve-monitored constantly from the t'n the water was first injected until time oil began flowing following injection of CO-2. "The end results of the program were great," Vernon said.

An acual launching of the Yoakum County project is scheduled for June or July. "The billions of dollars for the cost of the project does not include L. several million that it took for the environmental impact study for the pipeline," he said. The permit for the 480-mile, 30-inch pipeline from the Four Corners area of Colorado and New Mexico was only recently approved by the Bureau of Land Management. 4 One of the first phases of the project will be the development of the carbon dioxide gas field in Colorado.

Vernon said other development work would also be conducted at the same time in the Wasson Field. Shei hopes to begin laying pipeline by mid-year. Vernon said the CO-2 pipeline would also serve other companies other than Shell in West Texas. "This will be a 30-inch line and the gas will be available to other people wanting it," he said. "Shell has about 25,000 acres in the Wasson 'It could be super good or super oil recovery project in the Denver Unit of the field is to recover an additional 278 million barrels of crude oil which has been left behind after primary pumping and secondary waterflooding recovery have been completed in the field.

Vernon said the -carbon dioxide gas injected into the formation puts the oil left behind in waterflooding into a movable state so it can be pumped to the surf ace. "You can take a blob of oil out here on the ground and mix CO-2, butane, propane or something that is miscible with it and it make it live oil again," Vernon said. "That is what will be happening down there. It is still live oil but we will be putting it in a state where it be can moved it to the surface." Vernon said waterflooding leaves behind most of the heavy oil. And there are some areas of the formation which can't be reached by the water.

Plans call for the CO-2 gas, injected under pressure, to thin the heavy oil and reach into portions of the formation untouched by the water, enabling the oil to be pumped out of the formation. Vernon said one of the advantages of using the CO-2 gas, other than its safety factor, is that it will mix with oil, making it thinner. It will not, however, mix with water to any great degree. "What will be happening is that we will first pressure up the formation with water and follow it with the CO-2 injection and followed again by the water, etc," he said. "This way you get a balloon effect with the gas and oil being pushed out with a wall or bank of water." According to Vernon, one CO-2 project in West Texas did not go with the water bank method first.

In the early stages of the project the carbon dioxide gas was going right through the formation, leaving the oil behind. After spending billions just to launch the CO-2 project in the Denver Unit, how do Shell engineers know it will work and obtain the desired results? Company spokesmen say the answer is simple. 'This is like sitting on a volcano' have ever had and all factors are in our favor. "This is the big wave we've been looking for to take us into the future or gobble us up," he added. "We'll be working with new technology, new equipment, new everything.

This is the most exciting period that has ever hit the oil industry, even more exciting that it was when it started 50 and 60 years ago." Kirkland said Shell and other major oil companies operating in the Wasson Field are working with service companies to help beef up their equipment and crews. All the ty is intended to lay the groundwork for the day the CO-2 projects get off the ground. "The well service industry is really the small business segment of the oil industry," Kirkland said. "Our biggest problem right now is money, cash flow. Everyone has to be a financial expert to operate in this business because money is costing something like 21 percent." When Ricahrd Kirkland talks about money, he means big money.

"With this CO-2 project by Shell and the others to follow, our equipment investments could quadruple," Kirkland said. "I am not talking By BOB HORN State Editor DENVER CITY Carroll Vernon is a production foreman for Shell Oil Co. in Denver City. Perhaps more than anything else, he and his company dramatically represent the changing attitudes of the oil industry. Shell Oil is in the process of spending some 3.5 billion at its Denver Unit of the Wasson Field in Yoakum County and in New Mexico and Colorado on a CO-2 tertiary oil recovery project, and Vernon is more than willing to talk about it no holds barred.

Vernon is even willing to talk about some of the dangers of the massive and expensive project, such as the use of hydrogen sulfide gas, something oil companies were not willing to handle several years ago. "Shell Oil wants to inform the general public and wants them to know what's going on," Vernon said. 'You will be hearing more from us bad' about a service company adding maybe one new rig to their fleet. We will have to add three or four, and maybe even more if we are going to be ready when this thing hits." The "thing" Kirkland is talking about is roughly this: 100 new wells, 200 conversions of producing wells to injection and vice versa, 60 miles of new flowlines and gas gathering lines, 130 miles of new injection lines, major modifications and additions to all existing satellites and batteries, a completely new gas conditioning plant, and significant enlargement of gas compression capacities. That much alone will cost something like $2.3 billion.

And that isn't all the cost of the project. Additional expenses will push the price tag to about $3.5 billion. Included in that additional cost will be the development of the CO-2 gas field in the McElmo Dome area in southwestern Colorado near Cor-tez, where 24 wells have already been drilled and another 175 are planned when the field is fully developed. To move the CO-2 gas from Colorado to Denver City, Shell will lay a J. there sinking, but no large chunks of ground have given way in the past several months.

The water level in the hole has now dropped to something like 50 or 60 feet below the surface, and hopes that a "Lake Kermit" will appear are gradually fading. The probable cause of the mysterious hole is still a matter of speculation after nine months. The most popular theory is that salt beds some 1,000 feet below the surface have gradually been eroded away over the years, weakening the earth above until it finally gave way and collapsed last summer. The curious public is now kept at a safe distance from the hole by a high chainlink fence erected by Arco Oil and Gas, owners of the property. And as yet, the once-famous hole hasn't even rated an historical marker.

'4 480-mile, 30-inch line capable of handling one billion cubic feet of gas per day operating at 2,000 pounds per square inch. All of this will take people. Kirkland said he would immediately hire 10 additional workers who knew absolutely nothing about the oil service business, if they displayed potential. "We are going to need more people and a different kind of people if we are going to be ready for this project," Kirkland said. "They will have to be more professional because we just can't send anybody out with a $500,000 piece of equipment to work on a million-dollar well.

"I think we have the people here. Please see VOLCANO, Page 2D ST 4p -N. if' I war-- By BOB HORN State Editor DENVER CITY Businessman Richard Kirkland puts it this way: Watching multi-billion dollar oil recovery projects in this Yoakum County town is not unlike "sitting on a volcano that is a gold mine. It could be super good or super bad." Regardless of the outcome, momentum surrounding tertiary enhanced oil recovery projects now being planned and launched for the giant Wasson Field here and in and Gaines County is growing. And it's going to get bigger.

As president of Tong Rentals arid president of the Denver City Well Servicing Contractors Assoc tion, Kirkland is probably the most optimistic supporter of the oil in-1 dustry mushrooming around Denver City. Like many other West Texans, he sees great prospects in the future. There are, for instance, at least five undertakings that include a $2.3 billion tertiary oil recovery project now in its initial stages by Shell Oil Co. and several other firms. "We think this is the pie in the sky," Kirkland said, "but we don't really know just what it will be.

We are riding on the strongest wave we 7 By BOB HORN State Editor KERMIT It's still there and it still shows signs of nibbling away at the surrounding ground. It's known as the "Kermit Hole" or the "Wink Sink," and it will soon be nine months old. The sinkhole, which is about five miles south of Kermit arid-two miles north of Wink, came into being on June 3, 1980. By the following day it had attracted worldwide attention. The hole began as a three-foot crack in the ground and was discovered by an oil field worker.

Within 24 hours, it had grown large enough to swallow up a couple of football fields. In the weeks to come, the Kermit Hole became the most popular tourist attraction in West Texas. Local cafes enjoyed overflowing crowds and the drive- The Please see NEW, Page 2D Photos by BOB HORN -r -k 'i -v sinkhole is still Minium? ii 'i iif- i in stores did a landslide business on six-packs to go. The effects of the hole were far-reaching. Winkler County sheriff's deputies found' themselves working around the clock tying to keep the curious from getting too close to the edge and falling in.

Oil companies pressed emergency crews into the field to reroute endangered pipelines. One company even plugged a nearby well because officials feared the sinkhole might develop an appetite for oil wells. Today, the once-famous sinkhole has lost it glamour and only occasionally does an outsider pause to check on the status of the landmark. The hole's sides appear to be fresh dirt and show signs the hole is still nibbling away at the surrounding ground. The ground on the south side of the hole appears to be gradually AERIAL VIEW OF VYASSOM OIL FIELD.