Several attempts have been made in the past to apply enhanced oil recovery ("EOR") techniques to the Newcastle Sandstone formation at LAK Ranch in Eastern Wyoming. Solvent flood, steam stimulation, and chemical flooding have all been tried without significant success. Utilizing horizontal wells and the Steam Assisted Gravity Drainage ("SAGD") process, Derek Resources was able to successfully produce in excess of 5000 barrels of oil during two short (three-month) sessions of initial pilot production testing.

The Newcastle formation is an alluvial channel with a pay thickness of 25 to 100 feet, averaging 25 to 30 feet. It differs from conventional formations in that formation beds dip at up to 20 to 25 degrees. To further complicate drilling, the reservoir forms a synclinal basin, resulting in constantly changing bedding orientation; and a series of inter-bedded shale stringers make drilling horizontally along strike a challenging process.

The initial SAGD pilot consisted of a single well pair drilled for Derek Resources by Sperry Sun Drilling Services in July of 2000.

This paper will discuss the application of the SAGD process in a non-traditional reservoir, requiring non-traditional well pair geometry. The paper will cover the background to LAK Ranch. This paper will review planning phases for the project, drilling problems encountered, drilling results, and lessons learned from the drilling operation. Startup problems, production results, lessons learned about a project of this type, and future plans for LAK Ranch will also be discussed.

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