The Odessa American from Odessa, Texas • 31

Section PetroFact U.S. natural gas liquids production, in January 1 995 was 1 .73 million barrels compared to 5.62 million barrels in January 1994. Review Rig counts 2 Stocks 3 Classified 7-14 1U ODESSA AMERICAN Sunday. April 16. 1995 INDUSTRY DIGEST Lower prices cause fewer petroleum jobs PmHa Ail 1 ton -i -1 no chitfigej Future 18' $17 T'ojted people were employed in upstream and refining.

This compares to the combined maximum of 920,300 employees, in upstream and refining for February 1982, Taylor said. Lower oil prices, higher costs from added environmental regulations, higher taxes and lack of access to government-owned lands are among the reasons for the decline, said Michael Canes, vice president for policy analy- By George Van Dam Odessa American Employment in petroleum exploration and production was at its lowest monthly level in two decades in January, according to figures released by the American Petroleum Institute. API used information compiled by the U.S. Bureau of Labor Statistics on the upstream (exploration and production) and refining sectors of the petro leum industry, said Susan L. Hanh, media relations representative for API.

Hanh said 331,000 people were employed in exploration and production in January. The previous low was May of 1975, when 325,000 people were employed. Hanh said about 423,500 U.S. exploration and production jobs have been lost since February 1982, when monthly upstream production was at its pfeak of people. K.

"In the past five years, 64)600 peo ple have lost their jobs in the exploration and producnorrsector," Hanh said. API also compiled information on the oil and gas industry's refining operations that showed 109,200 employees as of January 1995. This compares to a peak of 172,800 employees in refining in (981 with the lowest level of 108,300 empjoyees in March 1994, said Bill Taylor, media relations representative for API. As of January, a total of 440,200 $16 Monday Tuesday Wednesday Thursday Friday Natural gas $2.00. See JOBS on Page 2E $1.75 $1.50 $1.25 $1.00 Monday Tuesday Wednesday Thursday Friday Source: Permian Corp, ARBON DIOXIDE Ector County ranks fourth for January By George Van Dam Odessa American .1: JfalWi ffnmmm Crude oil futures ranged from $19.59 per barrel to $19.15 on the New York Mercantile Exchange last week.

The posted price began the week at $18 per barrel and ended at $17.50. Natural gas futures ranged from $1,623 per 5 million btu to $1,597 on the NYMEX. Cash prices at Henry Hub in Louisiana began the week at $1.55 and ended at $1.61. Ref-Chem awarded construction contract Ref-Chem Corp. of Odessa has been awarded the Phase II construction contract for modernization of GPM Goldsmith Plant, said B.L.

Crenshaw, executive vice president and chief operating officer of Ref-Chem. The project includes installation of two gas turbines that will drive four stages of centrifugal compression with associated auxiliary equipment at the Goldsmith plant. Completion of the project is scheduled for fall 1995. Two groups to hold joint luncheon meeting The Environmental Study Group of the Society of Petroleum Engineers will hold a luncheon meeting from 11:30 a.m. to I p.m.

Thursday at the Midland Center. John Haagansen, regional manager of the San An-gelo office of the Texas Natural Resource Conservation Commission (TNRCC), will speak on "TNRCC Standard Exemption Notification System and Enforcement." Cost for the luncheon is SI 0. For reservations, call the SPE at 686-7329 by noon Wednesday. Independent Professional Earth Scientists The Society of Independent Professional Earth Scientists will have a luncheon meeting at 11:30 a.m Wednesday at the Midland Country Club. Admission is free for members and $12 for guests'.

For more information call Steve Robichaud at (915) 683-0739. West Texas Geological Society The West Texas Geological Society will hold its' luncheon meeting at a.m. April 25 at the Midland Center. Mark Sonnenfield "from the Colorado School of Mines will speak on "Anatomy oF Offlap: Sequence Stratigraphy and Seismic Modeling of the Upper San Andres, Last Chance Canyon, Guadalupe Mountains, N.M." Cost for the luncheon is $7. ARCO Permian Building Purchase ARCO Permian, a unit of Atlantic Richfield announced recently the final purchase of its headquarters building in Midland.

The building, located at 600 N. Marienfeld, was originally known as the Paragon Building when it was built in the early 1980s. ARCO Permian and its predecessors have been the anchor tenant since 1988. Since 1994,. the building has been known as the ARCO Permian Building ARCO appoints asset manager ARCO Permian, a unit of Atlantic Richfield recently announced the appointment of Robert May as Block 3 1 asset manager.

May was the operations supervisor at Block 31 for the past four years. Phillips board approves rate increase Phillips Petroleum Co. board of directors recently approved a 9 percent increase in the dividend rate for the company's common stock. The second quarter dividend will be S.305 per share, or $1.22 annually. This quarterly dividend, payable on June 1995, to stockholders of record at the close of business May 5,, 1995, represents an increase from $.28 per share or" $1.12 annually.

From staff reports The Odessa American: Larry becner Gary Paulette, a staff mechanical engineer with Amoco Production inspects a North Cowden C02 injection unit. The C02 is injected into the ground, allowing oil companies to recover.more oil. C02 recovery method floods Basin with future opportunities Ector County ranked fourth in Texas for crude oil production fbY January 1995, according to a report by the Texas Railroad Commission. Ector County produced about 2.4 million barrels of crude oil in January, the report said. The other counties rounding out the top 10 in oil production, for January were: Gainesi 3.21 barrels; Andrews, 2.7 million" Yoakum, 2.6 million barrels; Hockley, miMion barrels, Pecos, 1.9 million barrels, Gregg, 1.9 million barrels; Crane, 1.3 million barrels; Midland, 1.0 million barrels and Upton, 984,1 67'barrels.

Preliminary, figures released by the commission show crude oil production for January averaged 1.4 million barrels dailywhich is down from about 1.5 million barrels daily for January 1994. -Total oil production for January 1995 was 44.1 million barrels, down from the 46.1 million barrels reported in January 1994. Webb County was the top natural gas producer for January 1995 with 29.0 billion cubic feet(bcf). The other counties in the top 10 in January were: Pecos, 25.4 bef; Zapata, 23.3 bef; Panola 20.5 bef; Hidalgo, 17.5 bef; Starr, 12.3 bef; Crockett, 10.9 bef; Crane, 10.9 bef, Harris, 8.8 bef; and Yoakum, 8.6 bef. Total oil and gas wells produced about 469.3 bef of gas in prelimir nary production for January 1995, up 1.8 percent from the January 1994 production of 460.8 bef.

Texas natural gas production in January 1995 came from 168,977 oil and 48,176 gas wells. Although drilling permits for March 1995 were down from the same time last year, drilling permits issued for 1995 year-to-date are ahead of last year. The commission issued 986 original drilling permits in March 1995 compared to 1,125 issued in March 1994. The March 1995 total included 686 permits to drill new oil and gas tests, 43 to re-enter existing well bores and 257 re-completions. Total drilling permits issued in 1995 year-to-date is up six percent from 2,588 issued for the same period in 1994.

Permits issued in March 1995 included 396 oil, 243 gas, 313 oil and gas, 26 injection and eight miscellaneous permits. Operators reported 432 gas, 360 oil and 28 injection and service completions for March 1995, compared to 280 gas, 362 oil and 39 injection and service completions for March 1994. Operators reported 1,051 holes plugged and 156 dry holes for" March 1995. compared to 1,059 holes plugged and 223 dry holes reported for March 1994. floods in the Permian Basin was realized, pipelines were built to carry the C02 into the Permian Basin, Melzer said.

"When people realized there. was a market for the C02 here, the whole world changed," Melzer said. Because of this pipeline infrastructure, Melzer said, C02 flooding is cheaper and' more accessible in the Permian Basin than anywhere in the world. About 1.2 billion cubic feet of C02 is transported daily frorh New Mexico and Colorado into the Permian Basin for C02 floods, Bradley said. Another reason C02 floods will become increasingly important in the Permian Basm is that through years of trial and error, C02 floods are becoming more economical and successful, Bradley said.

"Other basins don'f have that luxu-. ry (of experience) and came in later in the game," Bradley said. Bradley said C02 floods were first developed in the Permian Basin because its reservoirs have a higher residual oil saturation from water-flooding than other basins in the United Srates. "Although waterfloods were fairly successful in the Permian Basin, there were still huge amounts of oil in By George Van Dam Odessa American The. Permiam Basin recovers significantly more oil through carbon dioxide flooding a method of enhanced oil recovery than anywhere else in the world.

And local industry officials think the method will be even more important here in the future. C02 floods, as they are called, are' expected to increase in the Permian Basin because of pipeline infrastructure already set up here, said Tim Bradley, manager of C02 marketing for Shell Western Exploration and Production Inc. "You can get C02 to other basins in the U.S., but other basins don't have (he C02 supply infrastructure that's in place here," Bradley said. Bradley also said the C02 pipelines feeding the Permian Basin have sufficient capacity to supply the basin withCOl Steve Melzer, director of the Petroleum Industry Alliance, said before C02 floods became a major enhanced recovery operation in the Permian Basin, carbon dioxide reservoirs in New Mexico and Colorado were considered of no commercial value. But once the potential for C02 reservoirs like the'San Andres and the Clearfork," Bradley said.

Meltzer said only about 15 percent of oil is recovered by primary methods, while another 15 percent is recovered by Melzer said C02 floods can recover another I0 to 15 percent. C02 works on oil in a way anala-gous to tar on a driveway where solvent is used to remove it, Melzer said. "The C02 becomes miscible with the oil and changes the character of the oil, which makes it flow easier." The first C02 floods in the Permian Basin were the North Cross Unit operated by SWEP1 near McCamey and the Sacroc Unit operated originally by Chevron in Scurry County in the early 1970s, Bradley'said. "On a worldwide perspective, C02 flooding is now the most common tertiary flooding method for light oil Melzer said. C02 flooding in the Permian Basin accounts for nearly 50 percent of the world's C02 floods, with more than 70 percent of total world oil production from C02 floods coming from, the Permian Basin, Melzer said.

Melzer also said C02 floods ac- See C02 on Page 2E Stable wells, ample resources provide reasons for optimism Oil oil Gil Rather than the shallow formations like the San Andres and Greyburg reservoirs for oil, the potential for natural gas lies in tfie deep Silurian, Devonian and Ordovician carbonate ramp deposits. These reservoirs, we believe, hold as much as 15 trillion cubic feet of natural gas. The Permian Basin clearly has enormous resources and potential for extended development. The Permian Basin is rapidly becoming a prime target for a new breed of independents, those that are technically aggressive, together with the major oil companies in the Pcmiian Basin. Recent developmental history in the Permian Basin has- demonstrated its resiliency and amendabilitv to with Noel Tyler Noel Tyler is director of (lie Bureau of Economic Geology and Stale Geologist for Texas.

Tyler talked to (he Odessa American recently about the abundant resources in the Permian Basin. The Permian Basin is as important to the domestic )il supply as the Middle East. The Permian Basin is clearly one of the family jewels of the U.S. domestic resource base with more, than 100 billion barrels of oil in place. Production to date is a little more than 25 billion barrels, and with technology in place and recovery Strategies deployed, we expect to recover about 30 percent of the oil in place.

This means an enormous resource is awaiting extended development in the Permian Basin reservoirs. For the past 15 years, the Bureau of Economic Geology has undertaken a major research and development initiative to document the locations and quantities of this remaining oil. Of the more than 70 billion barrels remaining in the Permian Basin, almost 30 billion barrels are conventionally recoverable, but the oil- is prevented from migrating to the borehole because of "reservoir complexities. Our efforts in the Permian Basin have identified that he major source of this unrecovercd oil is in one major Another important component of the remaining oil resources are the submarine fan reservoirs of the Midland and Delaware Basins. These two systems were recently targeted by the Department of Energy for its pdvanced recovery development program.

The. San Andres, Grayburg and Clearfork were grouped in the DOE's Class II program, while submarine fans were grouped in the DOE's Class HI program. The bureau and Conoco were-successful in obtaining funding for what we believe is a major resource the Delaware Sands. The key issue in the Permian Basin is 88 percent of the remaining resources in the Basin are at a depth less than 8,000 feet. Resources in the Basin are critical not only to the OdessaMidland area for sustained development, but alsO are of national importance, with oil imports surpassing the 50 percent mark.

These resource jewels must be more effectively developed. The bureau also sees similar upside potential for natural gas. Our estimates indicate that some of the same types, of geological heterogeneity may Vcrcatc similar opportunities for extended recovery of natural gas. The targets, however, have changed for natural gas. advance recovery strategies.

of reservoir shallow platform carbonates. Shallow platform carbonates include the San Greyburg and Clearfork formations. With this understanding, we have been characterizing these reservoirs so we can identify, on a well-by-well basis, exactly where (his resource resides in the reservoir and then developing advanced strategics to recover a substantial portion of the oil. Strategies we believe will be effective are' water-floods, optimization and geologically targeted infill, drilling. For the last five years, even rnsucTof relatively low oil prices, production levels in the Permian Basin have remained relatively stable on the Eastern Shelf, (he Midland basin and the Central Basin Platform.

Not only have reserves remained stable, but they saw an increase from 1986 to 1990, although we've seen a slight drop over the past several years. These reserve additions, even during periods of low price, show that the remaining resource, be it mobile oil or residual oil, is recoverable if aggressively pursued..