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Home My WebLink About2008 Prudhoe Oil and Put River Oil PoolsKE BP Exploration (Alaska) Inc. 900 East Benson Boulevard P.O. Box 196612 Anchorage, Alaska 99519-6612 (907) 561-5111 March 16, 2009 John Norman, Chairman Alaska Oil & Gas Conservation Commission 333 West 70'Avenue, Suite 100 Anchorage, AK 99501 Re: ANNUAL RESERVOIR SURVEILLANCE REPORT WATER AND MISCIBLE GAS FLOODS PRUDHOE OIL POOL and PUT RIVER OIL POOL - 2008 Dear Chairman Norman, BP Exploration (Alaska) Inc., as the Operator of the Prudhoe Bay Unit, submits herewith a consolidated Surveillance Report for the Prudhoe Bay Waterflood Project, Miscible Gas Project, Gas Cap Water Injection Project, Field Gravity Drainage Area and Put River Oil Pool in accordance with the requirements of Conservation Orders 341C (originally CO 279), 341D and 559. This report covers the time period of January 1 through December 31, 2008. The Operators of the Prudhoe Bay Field reserve the right to alter the content of the analyses contained in this report at any time based upon the most recent surveillance information obtained. Any questions can be directed to the undersigned or to David Lenig at 564-5301, david.lenig@bp.com. Sincerely, ott Di eri g Waterflood Resource Manager Greater Prudhoe Bay 564-4480 Attachments: Exhibits 1 through 12 Cc: A. Mitchell, BPXA G. Peters, ExxonMobil D. Kruse, CPAI G. Fredrick, Chevron USA J. Williamson, AOGCC C. Taylor, DNR T. Verseput, BPXA F. Paskvan, BPXA G. Pospisil, BPXA J. Buono, BPXA M. Banks, BPXA D. Lenig, BPXA T. Cahalane, BPXA ANNUAL RESERVOIR SURVEILLANCE REPORT WATER AND MISCIBLE GAS FLOODS PRUDHOE OIL POOL JANUARY THROUGH DECEMBER 2008 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT CONTENTS SECTION PAGE 1.0 INTRODUCTION 4 2.0 OVERVIEW 5 3.0 PRESSURE UPDATE 6 3.1 Pressure Monitoring 6 3.2 Pressure Plan 6 4.0 PROJECT SUMMARIES 7 4.1 Flow Station Two Water / MI Flood Project 7 4.2 Eastern Peripheral Wedge Zone Water / MI Project 8 4.3 Western Peripheral Wedge Zone Water / MI Project 9 4.4 Northwest Fault Block Water / MI Project 10 4.5 Eileen West End Waterflood Project 11 4.6 Gas Cap Water Injection Project 12 4.6.1 Reservoir Pressure 4.6.2 Injector Status 4.6.3 Observation Well RST Surveys and Zonal Conformance 4.6.4 Reservoir Evaluation 4.6.5 2009 Surveillance Plans 4.6.6 Plans for Change in Project Operation 4.7 Put River Pool 15 5.0 GAS MOVEMENT SURVEILLANCE 16 5.1 Gas Movement Summary 16 Page 2 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT LIST OF EXHIBITS 1-A Prudhoe Bay Unit Field Schematic 1-B PBU Well Statistics 1-C PBU Production / Injection Statistics 1-D PBU Pressure Map 1-E Areally Weighted Average Pressure Plot 1-F Areally Weighted Pressure Data 1-G Average Monthly CGF MI Rates and Compositions 2 Fieldwide Reservoir Balance 3-A FS-2 Base Flood Map 3-B FS-2 Reservoir Balance 3-C FS-2 Areal Average Reservoir Pressure 3-D FS-2 Daily Average RMI 4-A EPWZ Base Flood Map 4-B EPWZ Reservoir Balance 4-C EPWZ Areal Average Reservoir Pressure 4-D EPWZ Daily Average RMI 5-A WPWZ Water/MI Flood Base Map 5-B WPWZ Reservoir Balance 5-C WPWZ Areal Average Reservoir Pressure 5-D WPWZ Daily Average RMI 6-A NWFB Base Flood Map 6-B NWFB Reservoir Balance 6-C NWFB Areal Average Reservoir Pressure 6-D NWFB Daily Average RMI 7-A EWE Base Flood Map 7-B EWE Reservoir Balance 7-C EWE Daily Average RMI 8 Wells Surveyed for Gas Movement 9 Pressure Surveys 10 SI Well List 11-1 Prudhoe Bay Pressure History-GD 11-2 Flood Front and Well Locator Map 11-3 Water Bank Cross-section Interpretation - 2008 11-4 Inversion Mass Model— 2008 Gravity Survey 12 Put River Lobe Map Page 3 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 1.0 INTRODUCTION As required by Conservation Orders 341C (Approved June 12th, 1997), 341D (Approved November 301h, 2001) and 559 (Approved November 22, 2005) this report provides a consolidated waterflood and gas oil contact report summary of the surveillance activities for the Waterflood Project, Miscible Gas and Gas Cap injection projects, and the Gravity Drainage Area within the Prudhoe Oil Pool plus a section for the Put River Pool. The time period covered is January through December of 2008. In keeping with the requirements of the Conservation Order the report format provides information for each of the five major flood projects and the gravity drainage project in the field, where applicable, as follows: • Analysis of reservoir pressure surveys and trends • Progress of the enhanced recovery projects, including the gas cap water injection project • Voidage balance by month of produced and injected fluids • Data on Minimum Miscibility Pressure (MMP) of injected miscible gas • Summary of Returned Miscible Injectant (RMI) volumes • Results of gas movement and gas -oil contact surveillance efforts. • Results of pressure monitoring efforts • Table of wells shut-in throughout the 2008 calendar year Separate sections are provided for the five major flood areas: Flow Station 2 (FS-2), Eastern Peripheral Wedge Zone (EPWZ), Western Peripheral Wedge Zone (WPWZ), North West Fault Block (NWFB), and Eileen West End (EWE) along with information on the GCWI in the Gravity Drainage region and the Put River Pool. Water and miscible gas floods are described in each section. A separate section has been provided with detailed information on gas -oil contact surveillance. As agreed in 2004 with the Commission, the discussion of Gas Production Mechanisms was not included in the report. Page 4 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 2.0 OVERVIEW Exhibit IA identifies the five flood areas and gravity drainage areas in the Prudhoe Oil Pool as follows: FS-2, EPWZ, WPWZ, NWFB, EWE, and GD. The Waterflood Project encompasses all five flood areas. The Prudhoe Bay Miscible Gas Project (PBMGP) is currently active throughout the waterflood areas. The Eileen West End waterflood pilot concluded in March 1999, after successfully establishing EWE injection potential. EWE information since waterflood startup in September 2001 is included in this report. Exhibits 1-B and 1-C provide well, production, and injection statistics for the major project areas included in this report. As in last years' report, wells do not share project boundaries, but belong to a single project area. The well counts therefore reflect the total number of wells actually contributing to production and injection. Similar to last year, only wells that actually produced or injected during the year are included. During the report period of January through December 2008, field production averaged 262.1 MBOD, 7243 MMSCFD (GOR 27,635 SCF/STB), and 959 MBWD (water -cut 78.5%). Waterflood project injection during this period averaged 936 MBWD with 146 MMSCFD of miscible gas injection. Cumulative water injection in the five major projects from waterflood startup through December 2008 was 10,478 MMSTB, while cumulative MI injection was 2,835 BCF. Cumulative production since waterflood startup was 2,732 MMSTB oil, 9,650 BCF gas, and 6,946 MMSTB water. As of December 31, 2008, cumulative production exceeded injection by 4,972 MMRB compared to 4,547 MMRB at the end of 2007. Similar to last year, production and injection values have been calculated based upon the waterflood start-up dates for the project areas rather than for each injection pattern. Exhibit 1-D provides analysis of pressure static, buildup, and falloff data that was collected from 2006 through 2008 at a datum of 8,800 ft, subsea for the Full Field Dominant Zone. This is a change from the last several Prudhoe Bay Annual Surveillance Reports in which only the most recent year's pressure statics were used. This change should improve the statistical validity of the pressure distribution since it will roughly triple the number of data point employed. The average magnitude of waterflood area pressure change is reduced by 25 psi by going to a three year rolling technique versus only using 2008 static pressures. As in the past, abnormal pressures, such as pressures taken in fault compartments and in the Sag Formation have been removed. As shown in Exhibit lE, the historic pressure decline appears to have stabilized due to gas -cap water injection with 60% of repeat 2008 pressure surveys found equal to or greater than their 2006 or 2007 pressure measurements. For 2008, average pressure in the PBMGP project areas using three years of pressure static measurements was calculated to be 3,299 psia (as opposed to 3212 psia for just 2008 pressures) by areal weighting, as compared to 3,310 in 2007 (Exhibit 1F). The GD area was virtually flat rising one psi from 3,243 psia in 2007 to 3,244 in 2008 (versus 3258 psia using just 2008 points). This subtle pressure increase is within the expected statistical variation with a different annual pressure sampling data sets. The methodology for calculation of the average pressure is explained further on page 7. Confirmed MI breakthrough has occurred in 128 wells during the reporting period. RMI production is an indicator of FOR pattern performance and the presence of RMI is determined by Page 5 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT gas sample analyses that show a separator gas composition richer in intermediate range hydrocarbon components. MI breakthrough in a well is considered to have occurred when the average RMI rate over the number of producing days in a well exceeds 200 mcf/d. The previous year showed MI breakthrough in 150 wells. The decrease in RMI can be attributed to lower MI injection in the PBMGP areas. Exhibit 1-G shows the 2008 average monthly CGF MI rates and compositions for the field. 3.0 PRESSURE UPDATE 3.1 Pressure Monitoring Exhibit 9 provides pressure, buildup, and falloff data collected in 2008 at a datum of 8,800 ft, subsea used for the Full Field Dominant Zone. For this report, as in the past, pressures taken in fault compartments, the Sag River Formation, and in Zone 1 of the G-Pad LPA (Low Pressure Area), which don't appear to be in good communication with the rest of the reservoir, have been excluded from Exhibit 1-D. Also excluded were wells shut-in less than a week that obviously had not stabilized as compared to offsetting statics. Other wells completed in Zone 1 and Zone 413, which are in poor communication with the rest of the reservoir and therefore have lower pressures, were still included in the map and calculations if their shut-in times were deemed long enough. The excluded pressure measurements are listed separately in Exhibit 9 along with the reason for exclusion. Unless otherwise noted, all pressure calculations are areally weighted, bound by the main field original 50' LOC contour, and are referenced to a pressure datum of 8,800' SS. It was agreed with the commission that the polygon pressures would be calculated differently starting with the 2005 than it had in past reports due to the advent of pressure response to gas - cap water injection. That methodology consisted of utilizing only the pressure gathered during the reporting period. Starting with the 2008 report, since the field pressure has stabilized, pressure points from a rolling three year period will be used to construct the pressure map so as to reduce the statistical variation induced by changing year-to-year well sets. Exhibit 1-D illustrates the 2008 pressure map using 2006 through 2008 data points. 3.2 Pressure Plan Per C. O. 341 C, Rule 6b, a pressure plan containing the number of proposed surveys for the next calendar year is required to be filed with this report. Prudhoe Bay reservoir depletion strategies are defined, and the goal of the pressure program is to optimize areal coverage and provide sufficient data for well safety. The proposed plan for 2009 calls for collection of 90 pressure surveys fieldwide. The number of surveys proposed is equal to last year. Per administrative approval 341C.01, dated June 22, 1999, a summary of pressure surveys run during 2008 is presented in Exhibit 9. Page 6 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.0 PROJECT SUMMARIES 4.1 Flow Station Two Water / MI Flood Project The Flow Station Two area (FS-2), which comprises the eastern third of the Eastern Operating Area, is shown in Exhibit 3-A. The locations of production and injection wells are shown with the FOR injection patterns identified. There were 109 producing wells and 61 injection wells that contributed to production/injection during 2008 within the FS-2 flood area. Production/injection data was calculated with the polygon boundaries as in last year's report. The FS-2 waterflood area oil production averaged 33 MBOD for 2008 compared to 32 MBOD in 2007. Cumulative production since waterflood start-up through the end of 2008 is 1,025 MMSTB of oil, 4,324 BCF of gas, and 3,557 MMSTB of water. Injection rates averaged 523 MBWD and 36 MMSCFD in 2008. Since 12/31/07, the waterflood imbalance has increased from a cumulative under injection of 1,618 MMRB to 1,807 MMRB under injected. During the report period, production exceeded injection by 189 MMRB. Under - injection is related to production of free gas influxing from the gravity drainage region which should not be replaced so as to maintain a steady declining gas contact. Waterflood strategy is to replace voidage on a zonal basis after accounting for the free gas influx. Cumulative water injection since waterflood start-up through the end of 2008 is 5,493 MMSTB. The flood area's GOR increased from an average of 18,355 SCF/STB in 2007 to an average of 20,218 SCF/STB in 2008. Gas influx continues along the FS-2/GD GDWFI area, and in the high permeability conglomerates in the Updip Victor area. Water -cut was flat at 93% in 2008. A breakdown of the production and injection data is provided in Exhibit 3-13 for the report period. See Exhibit I-C for a comparison of the cumulative figures with last year's AOGCC report. Exhibit 3-C presents the areal average waterflood pressure decline over time. The pressure in the FS-2 area was 3,317 psia in 2008. This is a decrease of 41 psi over the 2007 pressure. This variation in pressure was likely caused by averaging in the 2006 data points which included 04- 29AL 1 which had a relatively low bottom -hole pressure value of 3,184. Exhibit 3-D is a presentation of 2008 average returned MI (RMI) rates. Miscible gas return has been confirmed in 36 wells by gas compositional analysis (RMI>200 MSCFD). Page 7 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.2 Eastern Peripheral Wedge Zone Water / MI Flood Project The Eastern Peripheral Wedge Zone (EPWZ) water and miscible gas (MI) flood area is shown in Exhibit 4-A. In 2008, oil production averaged 20.4 MBOD with an average 87% water cut and 19,787 SCF/STB Gas Oil Ratio. Injection averaged 118 MBWD and 37 MMSCFD of miscible injectant (MI). There are a total of 68 producers and 24 injectors in the flood area that contributed to production/injection during 2008. Of the 24 injectors, 10 injected miscible gas at some point throughout the year, while the remaining wells injected water only. Production and injection values have been calculated using polygon boundaries as revised in last year's report. Two waterflood start-up dates have been used, 12/30/82 for the DS 13 flood and 8/20/84 for the down -dip sections, rather than the start-up dates of each injection pattern. A total of 601 MMSTB of oil, 2,476 BSCF of gas, and 1,359 MMSTB of water have been produced with 1,851 MMSTB of water and 635 BSCF of miscible gas injected. Exhibit 4-B shows the monthly injected and produced volumes on a reservoir barrel basis during 2008 and provides cumulative volumes since injection began. During the report period, production exceeded injection by 134 MMRB. Exhibit 4-C shows the trend of reservoir pressure decline in the EPWZ flood area with time. The area receives pressure support from pattern injection, some aquifer influx, and GCWI. Faulting and out of conformance injection can impair flood performance in some areas. Areas of low pressure are being addressed by flood management strategies designed to increase voidage replacement. The EPWZ pressure was 3,299 psia in 2008. This is a decrease of 40 psi as compared to 2007. Much of the decrease in pressure can be attributed to inclusion of the 2006 data points from which a rise of 43 psi was noted in the 2007 report. Exhibit 4-D shows the 2008 average of estimated RMI rates in producers, as calculated from well tests and from numerous produced gas sample analyses. Miscible gas returns have been confirmed in 31 wells (RMI <200 MSCFD). Page 8 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.3 Western Peripheral Wedge Zone Water / MI Flood Project Exhibit 5-A is a map of the Western Peripheral Wedge Zone (WPWZ) water and miscible gas (MI) flood areas. During the report period oil production averaged 21.1 MBOD at a gas/oil ratio of 10,083 SCF/STB and a watercut of 86%. Injection averaged 129 MBWD of water and 8 MMSCFD of miscible injectant. For the WPWZ project, 40 injectors (5 WAG injectors and 35 water injectors), and 92 producers contributed to the production and injection during 2008. The well counts reflect only the active wells for the year. The waterflood startup date for the WPWZ project area was September 1985, corresponding to the start of injection in the Main Pattern Area (MPA). The production and injection data for the project reflect this startup date. Consistent with last year, production and injection data are calculated on the single area basis. Cumulative water injection from waterflood start-up through December 2008 was 1,522 MMSTB while cumulative MI injection was 545 BSCF. Cumulative production since waterflood start-up is 484 MMSTB oil, 1,440 BSCF gas, and 1043 MMSTB water. As of December 31, 2008 cumulative production exceeded injection by 778 MMRB. Exhibit 5-B provides the monthly injection and production data from 01/08 through 12/08. During the report period, production exceeded injection by 72 MMRB. The reservoir balance in Exhibit 5-B doesn't identify support from the aquifer, thereby understating voidage replacement nor does it capture the production of gas -cap -gas which needs not be replaced. During 2006 a produced water tie - line was installed connecting two GC-1 slug catchers to GC-3 produced water tanks. This allowed up -dip Zone 4 waterflood expansion and should allow ideal voidage replacement in the eastern half of the WPWZ area. Exhibit 5-C shows that the pressure in the WPWZ was 3,298 psia in 2008. This is an increase of 22 psi over the pressure reported in 2007 and appears to be due to higher pressures along the GD boundary. Exhibit 5-D indicates wells with MI breakthrough and the 12-month averaged returned MI rates. Miscible gas breakthrough has been confirmed in 29 wells by gas compositional analysis. Page 9 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.4 Northwest Fault Block Water / MI Flood Project Exhibit 6-A is a map of the Northwest Fault Block (NWFB) water and miscible gas (MI) flood areas. During the report period, oil production averaged 11.0 MBOD at a gas/oil ratio of 7,292 SCF/STB and a watercut of 85%. Injection averaged 79.3 MBWD and 8 MMSCFD of miscible inj ectant. For the NWFB project, 27 injectors (3 WAG injectors and 24 water injectors), and 59 producers contributed to the production and injection during 2008. The well counts reflect the number of wells actually contributing to production/injection during the reporting period. Production and injection values have been calculated based upon the start-up date for the project area, 8/13/84. Consistent with last year, production and injection data are calculated on the single area basis. Cumulative water injection from waterflood start-up in August 1984 through December 2008 was 1,532 MMSTB while cumulative MI injection was 665 BCF as detailed in Exhibit 61-C. Cumulative production since waterflood start-up was 579 MMSTB oil, 1,215 BSCF gas, and 899 MMSTB water. As of December 31, 2008 cumulative production exceeded injection by 382 MMRB. Exhibit 6-13 provides the monthly injection and production data from 01/08 through 12/08. During the report period, production exceeded injection by 22 MMRB. However, this does not include support obtained from aquifer influx or gas cap expansion. The areally weighted pressure in the NWFB area was 3,269 psia in 2008. This is an increase of 21 psi over last year which likely is the influence of the higher 2006 pressure points of S-17C and S-27B along the western boundary. The historical pressure trend can be seen in exhibit 6-C. The increase in 2004 was largely due to the fact that this polygon's boundaries were expanded to the northwest with the presence of aquifer area affecting the overall pressure of the northwest fault block. Exhibit 6-D indicates wells with MI breakthrough and the 12-month average returned MI rates. Miscible gas breakthrough has been confirmed in 21 wells by gas compositional analysis. Page 10 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.5 Eileen West End Waterflood Project Exhibit 7-A is a map of the Eileen West End (EWE) waterflood area and miscible gas (MI) flood area. During the report period, oil production averaged 14.4 MBOD at a gas/oil ratio of 3,948 SCF/STB and water cut of 68%. Injection averaged 47.3 MBWD and 24.4 MMSCFD of miscible gas injectant. For the EWE project, 18 injectors (4 WAG injector, 14 water injectors), and 62 producers contributed to the production and injection during 2008. The well counts reflect only the active wells for the year. Cumulative water injection from waterflood start-up in September 2001 through December 2008 was 79 MMSTB and cumulative MI injection was 55 BCF. Cumulative production since waterflood start-up was 44 MMSTB oil, 195 BCF gas, and 89 MMSTB water. As of December 31, 2008 cumulative production exceeded injection by 162 MMRB. Exhibit 7-13 provides the monthly injection and production data from January 1, 2008 through December 31, 2008. During the report period, production exceeded injection by 8 MMRB. The EWE pressure was 3,626 psia in 2008 representing an average pressure increase of 8 psi for this area from 2007. This increase is within the statistical variation expected. Four of the six W and Z Pad wells, with pressures in both reporting periods, measured pressure increases. Exhibit 7-D indicates wells with MI breakthrough and the 12-month average returned MI rates. Miscible gas breakthrough has been confirmed in 11 wells by gas compositional analysis. Page 11 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.6 Gas Cap Water Injection Project Details of the Volume of Water Injected during 2008 are detailed below; units in thousands of barrels of seawater injected per month (MBWM): Date PSI-01 PSI-05 PSI-06 PSI-07 PSI-08 PSI-09 PSI-10 Total 1/1/2008 3,060 3,100 3,216 3,165 3,151 3,176 3,100 21,967 2/1/2008 2,974 2,900 3,027 2,988 2,965 3,011 2,900 20,766 3/1/2008 1,922 3,096 1,965 1,957 808 2,583 3,096 15,428 4/1/2008 2,263 3,000 2,358 2,464 681 2,594 3,000 16,360 5/1/2008 2,578 3,100 627 2,545 2,539 2,611 3,100 17,100 6/1/2008 2,664 2,509 0 2,710 2,547 2,807 2,679 15,915 7/1/2008 3,097 3,028 831 3,043 3,024 3,076 3,075 19,174 8/1/2008 115 123 120 123 121 123 124 850 9/1/2008 1,803 1,737 1,718 1,565 1,513 1,629 1,746 11,711 10/1/2008 610 764 623 757 2,340 753 757 6,604 11/1/2008 613 1,435 1,723 1,857 2,172 1,898 1,948 11,646 12/1/2008 3,048 2,892 2,959 2,889 2,963 3,028 2,939 20,719 Total 24,748 27,684 19,168 26,065 24,823 27,288 28,464 178,239 The 2008 volume of sea water injected was 178 million barrels. The cumulative volume injected at the end of 2008 was 1,013 million barrels of sea water. 4.6.1 Reservoir Pressure The overall goal of the GCWI project is to slow the Prudhoe field pressure decline. To see this effect, all SBHP's from the gravity drainage areas of the field were pulled and plotted as shown in Exhibit 11-1. Because local waterflood pressures are quite variable, they introduce a wide scatter in the field pressure plot making interpretation of pressure trends difficult. The waterflood SBHPS were not included for this reason. The low pressure area in G Pad was also excluded due to local geological effects. The change in slope at waterflood start up in 1984 is very pronounced, with declines of 80 to 90 psi/year pre-waterflood falling to approximately 35 psi/year after start up. The slope change is apparent only because there are long term stable trends both before and after waterflood start-up. The next obvious slope change occurs shortly after the GCWI project begins injecting in 2002. Although more data is required before reaching definitive conclusion, it appears the GCWI is achieving its goal and has stabilized field pressure decline. No new static bottom hole pressure surveys were taken in the PSI injectors in 2008. 4.6.2 Injector Status All seven of the GCWI injectors are in good mechanical condition and continue daily injection. Pressure -rate plots for each well are routinely monitored and show injectivity is quite healthy. Each of the five original wells is capable of injecting well over 100 MBWPD at injection Page 12 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT pressures between 1,400 psi and 1,800 psi. Erosional velocity limits injection to under 100 MBWPD in each well. 4.6.3 Observation Well RST Surveys and Zonal Conformance The RST surveys run in offset producers continue to be the primary method of monitoring water movement from the Gas Cap Water Injection project. These wells have been logged repeatedly since injection began at intervals of 4-6 months to monitor water movement. By comparing the RST logs with the baseline and previous logs, the presence of water can be readily observed. This procedure has provided a very clear picture of water in the Ivishak formation and allows the monitoring of vertical and lateral movement of the waterfront. Exhibit 11-2 is the locator map for the GCWI area and shows the PSI injectors along with the observation wells. This map shows the current interpretation of the shape of the waterfront in map view. The estimate of the waterfront shape for the March, 2005 and the March 2008 time periods are also shown for comparison. The information from the RST logging program was also used to develop the updated cross section (Exhibit 11-3) showing our interpretation of the surveillance data for the current time period. RST logging in 2008 has shown a continued advancement of the water front with respect to its position in 2007, primarily seen as a building of water thickness of 5-16 feet in Zone 2C in observation wells on the leading edge of front (L2-24, L2-18A, L2-16, L3-11, L2-33). As the size of the water mass becomes larger in areal extent, the rate of incremental advancement both laterally and vertically has become noticeably slower. At this point, the changes in the waterfront have followed a predictable pattern established in recent surveillance, where most incremental waterfront changes are seen in Zone 2C, with less additional water logged in lower zones. RST logs in the L2-33 well, which is just to the east of the NGI gas injectors, show that water first reached this area in the spring of 2008, when 10 feet of water was detected in Zone 2C. A December, 2008 RST showed that an additional 16 feet of water had built in Zone 2C, whereas no water breakthrough has occurred in any lower zone. Water continued to build to the south, as seen by observation wells L2-16 and L3-11, where 4 to 6 feet of water of additional water column was logged in Zone 2C. These wells also have shown no water breakthrough in any zone below Zone 2C, which may be a result of shale smear on a primary east -west trending fault that exists just to the north of these wells. To the east of the PSI injectors, a December RST in L5-15 detected the first water breakthrough in this well since monitoring began in 2003. Approximately 9 feet of water was logged in Zone 2B. Zone 2C is truncated in this well, and no water was detected in Zone 2A. In the northwesterly direction from the PSI injectors, a December, 2008 RST log showed that water continued to build in Zone 1 B and Zone 2A, whereas a previous 10 foot column of water in Zone 2C from a December 2007 RST log had actually dropped 5 feet in height. This suggests that gravity slumping plays an important role in the dynamic shaping of the water front. There have been no deviations from the past RST surveillance which has shown that water first appears on top of a major shale then builds height with time. The 24N shale, which forms the Page 13 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT base of Zone 2C, is clearly the most prominent unit controlling the lateral progression of the flood front. There continues to be no indications of water running down thief zones or high perm intervals in the middle of sand units. The flood front continues to maintain a sloped aspect indicating that gravity has a strong influence on the process. Gravity Survey The results of the 2008 gravity survey placed the water in general agreement with the RST information. Exhibit 11-4 shows the results of the gravity survey. The bulk of the gravity anomaly lies in a downdip (southwest) direction from the PSI injectors. The western boundary of the anomaly agrees with two surveillance logs, the LGI-04 and L2-28 wells, where 72 and 118 feet, respectively, of water were logged. On the southern edge of the waterfront, approximately 48 feet of water was logged in the L3-11 at the time of the 2008 gravity survey. This correlates very well to the southern leading edge of the gravity anomaly. The shape of the gravity anomaly shows a slightly oval -shaped body of water in map view with no evidence of localized fingering in a specific direction. 4.6.5 2009 Surveillance Plans GCWI Injectors Injection pressures, rates, and temperatures are recorded for each well every day. Pressure -rate plots will be routinely monitored for changes in injectivity of the well. Observation Well RST's This program will continue as it has in the past by running RST's every 6-8 months with the final timing and locations determined based on the results to date. Gravity Survey A gravity survey is not planned for 2009 due to the slowing of the flood front advance. The flood front has slowed enough to be within the uncertainty of the gravity survey. 4.6.6 Plans for Change in Project Operation No changes to the Gas Cap Water Injection plan are expected in 2009. Page 14 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 4.7 Put River Oil Pool On November 22, 2005 the AOGCC ruled in Conservation Order 559 that the Western, Central and Southern Lobes of hydrocarbon bearing Put River sands would be defined as the Put River Pool and that the Northern lobe would be included in the Prudhoe Oil Pool. Exhibit 12 displays all four lobes which are in pressure isolation from each other. Additional technical information was previously supplied with the application which led to Conservation order 559. 2008 Production Production from the Put River Oil Pool was shut-in for the majority of 2008 due to a lack of water injection support. Injection in the Southern Lobe of the Put River was restarted in 4Q 2008 when the seawater supply line was replaced. For the year 2008, all of the production and injection in the Put River Pool occurred in the Southern Lobe. One well produced from the Put River Pool, the 02-23A. The 02-23A was returned to production on November 20, 2008 after the seawater supply line was repaired. This well was on production from 7/10/2008 through 8/2/2008 and 11/30/2007 until 12/31/2008. Production from the Southern Lobe for 2008 averaged 2330 BOPD for the days the reservoir was in production.. The 2008 cumulative production for the Put River Oil Pool was 116 MBO and 14.1 MMscf gas. The full life cumulative production for the Put River Oil Pool through December 31, 2007 is 651 MBO and 924 MMscf gas. 2008 Pressures Put River Pressures taken during 2008 are listed in Exhibit 9. The Southern Lobe pressure obtained in 02-23A measured 3328 psi at 8,100' SSTVD in August 2008. 2008 Surveillance Plan Southern Lobe —Production will continue from the 02-23A at around 2000 BOPD to achieve a voidage replacement ratio of approximately 1.0. Static pressures will be taken periodically through the year to confirm volumetric calculations. Western Lobe - No 2009 production or surveillance planned. Central Lobe - No 2009 production or surveillance planned. Page 15 2008 ANNUAL RESERVOIR SURVEILLANCE REPORT PRUDHOE BAY UNIT 5.0 GAS MOVEMENT SURVEILLANCE The report on gas movement surveillance activities and interpretations provides an overall summary of gas influx movement and summarizes the 2008 gas -monitoring logging program. 5.1 Gas Movement Summary Fieldwide GOC surveillance continues with collection of open -hole and cased -hole logs and monitoring of well performance. In order to mor estimates are made across the field and are based historical well performance. The central portion o exhibits in some areas almost total influx of the essentially absent in the southern peripheral regions the waterflood areas. for gas movement in the reservoir, GOC pon the ongoing monitoring program and the field, the gravity drainage area (GD) �OC (Light Oil Column). Gas influx is as a result of water and WAG injection in It has become difficult in most parts of the field to define a single current GOC as the surface is commonly broken into a series of oil lenses and gas underruns beneath the shales. The reservoir is better characterized by a description of remaining oil targets. The targets within the GD occur within three general regions; the basal Romeo (Zones 1 & 2A) sands, the inter-underrun sands, and oil lenses within the expanded GOC. Production from the Romeo (Zones 1 & 2A) sands has historically been low compared to the more prolific upper zones. This interval has a lower net to gross, lower permeability and more limited sand connectivity than the rest of the reservoir. These factors impede gas expansion into the Romeo. Underruns beneath shales within the Romeo sands are likely to be local. The inter-underrun sands occur throughout the GD and are characterized by one or more underruns or solution gas pockets segmenting the remaining oil pad. Gas underruns are observed beneath the top of the Sadlerochit reservoir, under Zone 4 shales, and the most regional persistent underruns have developed under the mappable floodplain shales of Tango or Zone 2B. Oil within the expanded GOC occurs in lenses above regionally continuous shales. Such lenses have been identified from neutron logs. Many lenses continue to exhibit oil drainage over time, while others appear isolated. Exhibit 8 lists the open and cased -hole neutron logs, as well as RST logs, run in the Prudhoe Bay Unit during the gas -influx reporting period from January 2008 through December 2008. A total of 108 gas -monitoring logs, mostly cased -hole (89) logs were run in the PBU. Page 16 2007 AOGCC Report Producers Injectors -WAG -Water Only -Gas 2008 Producers Injectors -WAG -Water Only -Gas Production Well Status in 2008 -Newly Drilled -Sidetracked or Redrilled Gas Injection Well Status in 2008 -Newly Drilled -Sidetracked or Redrilled WAG Injection Well Status in 2008 -Newly Drilled -Sidetracked or Redrilled Water Injection Well Status in 2008 -Newly Drilled -Sidetracked or Redrilled Exhibit 1-13 PBU Well Statistics WELL COUNT BY FIELD AREA WPWZ NWFB EWE FS2 EPWZ GD 90 59 56 110 63 449 37 29 15 62 30 50 9 4 3 5 9 3 28 24 10 54 20 14 0 1 2 3 1 33 92 59 62 109 68 478 40 27 18 61 24 47 5 3 1 5 9 1 35 24 14 53 14 13 0 0 3 3 1 33 1 0 2 0 1 1 4 0 2 0 2 37 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 NOTES: (1) Well count data reflects ONLY those wells which contributed to production/injection during the respective year. (2) Project boundaries were simplified in 1998. Wells no longer share project boundaries, but belong to a single project area. (3) EOA GD and WOA GD have been combined. Exhibit 1-C 2008 PBU Production/Injection Statistics Waterflood Project Area WaterfloodTotal WPWZ NWFB FS-2 EPWZ EWE Cumulative Production from WF Start -Up through 12/31/08 Oil (MMSTB) 484 579 1025 601 44 2732 Gas (BCF) 1440 1215 4324 2476 195 9650 Water (MMSTB) 1043 899 3557 1359 89 6946 Cumulative Injection from WF Start -Up through 12/31/08 Water (MMSTB) 1522 1532 5493 1851 79 10478 MI (BCF) 545 665 934 635 55 2835 Cumulative Balance from WF Start -Up through 12/31/07 Cum Production (MMRB) 2605 2280 7656 4001 250 16793 Cum Injection (MMRB) 1899 1920 6038 2293 96 12246 Over/Under (MMRB) -706 -361 -1618 -1708 -154 -4547 Cumulative Balance from WF Start -Up through 12/31/08 Cum Production (MMRB) 2728 2334 8054 4189 283 17588 Cum Injection (MMRB) 1951 1952 6246 2347 120 12616 Over/Under (MMRB) -778 -382 -1807 -1842 -162 -4972 MI Breakthrough in Producing Wells > 200 mcfd 29 21 36 31 11 128 Production Oil (MBD) 21.1 11.0 32.6 20.4 14.4 99.5 Gas (MMSCFD) 212.7 80.3 659.5 402.8 56.9 1412.2 Water (MBD) 129.5 62.9 466.9 140.1 31.1 830.5 Injection Water (MBD) 128.9 79.3 523.0 118.0 47.3 896.6 Gas (MMSCFD) 8.2 7.9 36.1 36.6 24.4 113.2 AVERAGE RESERVOIR PRESSURE (Psial GD WPWZ NWFB FS-2 EPWZ EWE PBMGP Previous report period: 2007 3243 3275 3248 3357 3339 3618 3310 Current report period: 2008 3244 3298 3269 3317 3299 3626 3299 Estimated Annual Change (psi/yr) 0 22 21 -41 -40 8 -11 560000 590000 620000 650000 680000 710000 740000 0 0 0 0 560000 4 by Exhibit 1-D 'e"O. Greater Prudhoe Bay 2008 1 ? y soN' Reservoir Pressure Map I------------------------------------------ 1-- • S — 1 3476 9 S-440 S-38 O L-02A 30 S-33 4. 6 M-116 R-009A R OO6A O S C 3462 0 S- 3`"" M•04. L-04 347E 1 i� 26A 3•7 R-p A 4 Q L:3B 1241 aza�� M� R � A R010 F032 3718 3472l05 M 326 O V:3 3197 3mN111 -04 J 12-1 0�B S .1B NWFB �0 3O1M•3 3•U J"21 O pO0 V:2 3312 asst 321M1-23 3111 0 F-115A Z-22B EWE M-096 • N-26��gg -17 3.3 3310 3zoe M3 5 A N'0A J 223A �00 Z 98 3207 3125 J-18 p 25432 -19 192 J-14A O 3195 Z-32 L1 3765 Z-10 A VMJAAL1 31 N-112 3150 •----I Z-38 Z-1o10 Z:S1 Z-21A —7 30 1C 30 0 3Ot 390A Zia 37t9 Z04Z-14B W-23A Hp6 H3 55°�7 H-06A 3741 • 3737 • W-25 • • 3751 M 1141 O W 32 3.3 31a1 Z•0 73617 WH_13WfA 0 W'07� 0_3 + 4 6 WO65554 3 .112diU13575 09 21 Z-ZW-002A A 3311623 5A H-22A H-2-10 Z-33A010 0 W.0 WPWZ 3332072 36 Q 33707 3626 3573 • 3335 3156 72 W-r• 42 3460 W 08 Y-33 322 Z-1A asO Y-23B 0 10 Y-02W-06AW-05A P-04' O 349Y04 0 •QO P-O6B 386 0 OA Z17 369 • 18 3502 33. 330] P-26 Y3t+87 7�•4 -16 34003 P•�,,�3 YJj}433 ' W-1 A 3261 33'2�18.5 Y-30L7 3305 3244 i3553 P-07A P-17 az56 CY-34A W-A S 3802dp6B P 19 Y-14B 32 _--.--_i 3483445 • Y0 a- -----i z Y- 3466 Y-•11C 0 Q 3r.% Y-'4�09A 3 �z27 �1, 32 33 11 2008 Reservior Pressure at 8800' SS Datum 7 3,050 - 3,150 psi 3,150 - 3,225 psi 3,225 - 3,300 psi 3,300 - 3,420 psi 3,420 - 3,550 psi 3,550 - 3,680 psi 3,680 - 3,790 psi 3,790 - 3,890 psi 3,890 - 4,000 psi 0 5,500 11,000 22,000 • 2006 SBHP Well Test • 2007 SBHP Well Test 0 2008 SBHP Well Test ---I Prudhoe Bay L..—; Unit Boundary = Depletion Polygons NOTE: Engineered control points have been added to the field permiter to provide a more accurate contouring. 33,000 44,000 Feet 590000 b0 C K-0o3B 0 A9 E-03P, G 0 A 312E_2EP248 3276 3•3 K q% -� C I L- — —---—--— --— --— -- — --I AGI-10 WAGI-07 . 3444 Gas Cap NGI-07j13 PS• P�SS1.10 • 3524 P 87 3455 34 ft:09 I 330(k:4 3 :i�i] ,�II,,99A G00J"� Q`f 3309 15-028A 15-007m 3456 3050 3 3368 C O68 1806A 18A GO A 15�34Y45A D 0 B1s2 15-34A 18-016B 1S704N3•0 3186 1Y001B L 327 0 21- 23A p 3•4 3269 1 3+ 3316 1103 0 33 ] 3278 D"2 05 D-. PO.O B 1 OBB 1 -42A 18-04B 18-24AL2 11_" 11.32 04-35 318] 3237 G D 3zao 3z45 3•7 3•4 18-2 311-33 •1 94 3z0i91-0 3•75.4 15.13A 02.39L1 0 04:9A 07--3 A 3•7 A. A-048-17 BOO B•4 3z72 0 - 6 3448 11DPN 32 02-28A 3•4 O 02-33A 3350 0 A 3413 04-29AL1 ' • s 3z06 3234 1209 3 �e.s B• B•16 02-15A 2z3 3•1 OS♦1C • 13 11?38A 04-42 0414 3O4 3231 • O 3281 • • • ' 56 A 23 3241 07-26 B-29A 07-18 • B-22A B 9 07-01A 0 3zsz A'"Q A' 12A• • 3243 02-25 0 05.256 • 4 3414 3362 11-02 C C 30 3252 324Q-26�249 3261 02-06� 33s •' 02.12A • 3z06 • 09.�q 09.44 r J • A-32A 0 A 3•z27 3O0 302 06-03Aazaa -22A0 04.45 •.209-31C Q a3ge • 09.36C 3288 • 3z]7.a 32A 34 1403A 3258 • 0p p�,p� A • 1 au5e 01-20:9A 01-21 1433p 01 0 3 1 3366 3322 33LB-O6 09.17 ' 0 1 X s0.7a 3 3 14041 3• A-17A 64280 X-32 3274 1 06-15 3269 • 0. 06-20 %01 �2 -17B0 O 0 O 9 3235 �"� 3188 3326 03-27 01.29 • • • 3244 3329 3306 — - - • 3254 d2A3354 xi� •s 3284 w _—__—_•-- v--—--—-- — -- —- i 32 146b 312 329114--222A X33 I - ----—--—--— -- — --0 , 4-44A 3324 • 32 i i + 620000 + 650000 + 680000 2 8 32479 '1m 3258 p 3z1a.e V1-31 0 03"0'h303 09.46 0 13A 31�i1-0201-15JY • 0&�QQggp O 0 71.11-24A 3204.3 3 26/a3 2 • 03"� 3za7 03-32A 09-51 O 3159 08.3j + IB 324913 Q252 5 O 3259 3273 O 3293 • 3217 3322 ' 328 3-2 3• I24A 3zao : 120 39 1 16.13 03 1 - 33332 3262 Q 07A 3•8 3296 12-26 0 16-22 328 32637-0713 6 1 - 2 ' 12-04A 012-23 13-30A 3290 3u0 3221 az 17-21 3 13 16-57• 322s 16 11 3•3 013-13A13-10 3182 17-19A 3622 0335$2i154 3268 307 33012 30, 16.29A 16�6.1J'A 3361 •25 12-08C • • 3178 ' Q 17.03A 1 -01A0 3306 16-26A • E P W 3357 374 1- 2 3228 3378 i + i 710000 740000 0 0 0 0 3900 3800 3700 3600 P 3500 S I A 3400 3300 3200 3100 3000 Exhibit 1-E Areal Average Pressure f PBMGP areal avg P f Gravity Drainage OP 0 O� O� 0 �d Oo OP �d �d OP vd vd �d �d �d vd �d vd vd vd vd �d �d vd �d �d vd c& e& e& 0& c, b� c,& e� d9 49 09 79 79 h9 h9 79 79 h0 �O h0 �O �O h0 �O �O h0 u' A S 6 6 c? 9 7 2 F S 6 8 9 O 7 2 ? F S 6 6 9 O