In 1987, 8,000 acres of the Buffalo field were divided into two units to initiate improved oil recovery operations with two different methods: high-pressure air injection (HPAI) and waterflooding. After collecting 19 years of production history, a technical and economic comparison has been made between the two projects.
The technical performance was evaluated in terms of incremental oil recovery, ultimate recovery and incremental recovery per volumes of fluid injected. The economic comparison was performed in terms of net present value, incremental rate of return and payout time. A sensitivity analysis on some of the key drivers of the project economics was also performed.
Throughout the years, the West Buffalo Red River Unit(WBRRU) under HPAI has technically outperformed its "twin" West Buffalo "B" Red River Unit (WBBRRU) under waterflooding. Nevertheless, the waterflood project has shown greater economic benefit, which results primarily from the low oil prices (less than $20/bbl) experienced during most of their operating lives.
This case study shows that for a HPAI project to be successful not only technically but also economically, a sufficiently high oil price (greater than $25/bbl) is needed due mainly to the high operating costs and capital investment.
The Buffalo Field is located in the northwest corner of the state of South Dakota (USA), on the southwestern flank of the Williston Basin. It was discovered in 1954 and produces from the Red River reservoirs.
During the early 1960's it was recognized from the fast reservoir depletion that primary recovery efficiency in the field would be very low and that water injectivity tests were discouraging for future waterflood operations. During the late 1970's Koch Exploration Company (Koch) conducted an air injectivity test and developed a pilot under air injection. Because the pilot results were promising, the Buffalo Red River Unit (BRRU) was formed.
Based upon the success of the BRRU High-Pressure Air Injection (HPAI) project, another HPAI project was started in early 1980's in the southern part of the field and called the South Buffalo Red River Unit (SBRRU). The Buffalo Field is located in Harding County in the northwest corner of the state of South Dakota (USA), on the southwestern flank of the Williston Basin. It produces from the Ordovician Red River reservoirs.
As of December 31, 2006 the Buffalo Field is composed by six units (plus a non-unitized area) after the creation of the North and Central Red River Units (NBRRU and CBRRU) in 2003 and 2004 respectively. The West Buffalo area (WBRRU and WBBRRU) is located to the west of the existing Buffalo and South Buffalo Red River Units.
The primary producing horizon in these two units is the Red River "B" zone found at an average depth of 8,400 ft. The trapping mechanism appears to be predominantly stratigraphic with porous dolomite encased in limestone and anhydrite.Structural relief of the porous zones has served to enhance production.
The two West Buffalo Red River Unit areas were discovered at different times, the area of the West Buffalo "B" Red River Unit is much younger than its "twin" West Buffalo Red River Unit.
