May 2000 Supplement  Case Study

Alternative artificial lift system improves well profitability

Brian Fox, Renco Energy, Inc., Tulsa, Okla.; and Gerold Allen*, Toups Technology Licensing, Inc., Claremore, Okla.
*allengda@aol.com

Bottom line. A balanced, oil recovery, artificial lift system improved well profitability by lowering operating costs and increasing oil production in problem wells in northeastern Oklahoma. Water production with its associated costs and, in some instances, well servicing costs were lowered, as were electrical power costs. Five uneconomical wells were converted into profitable producers.

Problem wells in northeastern Oklahoma. Renco Energy, Inc., a small independent in Tulsa, Okla., operates several stripper well leases throughout northeastern Oklahoma. As is typical with stripper well leases, profit margins are thin and often nonexistent if leases contain problem wells. In many cases, high costs can be attributed to high water production with its associated operating costs. In managing its leases, Renco identified five problem wells that needed something different done to restore or improve profitability.

Help from balanced oil recovery system. While looking for solutions, Renco began exploring whether the balanced oil recovery system BORS Lift, manufactured by Toups Technology Licensing, would be helpful. Equipment is quite different from a conventional rod-pumping unit. From a mechanical standpoint, oil is lifted to the surface in a flexible tube (having appropriate valves and bottom weight) with a nylon strap (Fig. 1). Current depth is limited to 2,500 ft, although units with capacity to 5,000 ft are under development.

Fig. 1. A balanced, oil recovery pumping unit is shown on location at the Ogelsby 1 well in Washington County, Okla.

At the surface, the strap is wound / unwound on a reel. As the full tube arrives at the surface, a sensor tells the tube valve to open, dumping the fluids into a small holding tank. The current design does not capture casinghead gas, although a system to do so is under development. A small transfer pump with a level controller periodically transfers fluids from the holding tank into the well flowline.

A wellsite computer controls both the depth from which fluid is lifted and the number of cycles per hour. These parameters, determined in the pre-installation analysis, can (and often need to) be adjusted at the wellhead – a simple matter. By achieving a balance, the system removes oil at a rate that corresponds to the natural migration of oil through the formation.

Not all wells are amenable to this system. To determine if a well is a candidate, Toups requires information about porosity, water saturation and permeability, in addition to standard well data (depth, perforations, oil / water / gas production, drive mechanism, oil and water gravities). Typically, well logs are analyzed and permeability estimated from the nearest available core or regional experience. As a final screening test, Toups logs the wellbore (preferably after a 3-day shut-in period) to determine fluid level and oil-water contact within the wellbore. If adequate oil entry is not occurring, wells are not good candidates.

Problem wells. In 1998, Renco drilled and completed the Keefer 8 in the Bartlesville sand at about 1,400 ft and Peru sand at about 950 ft. There had been an old waterflood, but not in the area where Keefer 8 was drilled. For more than a year (except for a few instances after well work when it would produce 9 bopd for several days), the well produced essentially all water – at around 80 bwpd, if one chose to pump that much.

The Ogelsby 1 is on a single-well lease and produces from the Peru sand at about 950 ft. The well could produce at 80%, or higher, water cut. But since the lease does not have a saltwater disposal well, water must be hauled at a cost of $600 per 80-bbl tank of oil sold ($7.50 per bbl oil sold). Operations were uneconomic, but to hold the lease, the well was operated on a time clock, producing for two, 15-min periods a day. Production averaged about 0.5 bopd.

Renco operates four wells on the Comstock lease. The Comstock 1 produces from the Wayside sand at about 500 ft. Sand production, with its associated mechanical and well service needs, was a real problem in the Comstock 1. Pulling frequency was excessive, often being only days (or weeks apart). Well servicing costs were excessive – averaging over $1,000 per month. With production of only 3.5 bopd, the lease was unprofitable if the problems associated with sand production could not be solved. In fact, the well had been inactive for a couple of months when the BORS system was installed.

The operator installed BORS units on two Bartlesville completions on the Commonwealth lease. Prior to installation, one of the wells would produce about 3 bopd plus 70 bwpd, which is marginally economic. The second well produced a trace of oil plus 70 bwpd, but one could not "keep ahead" of the water production. Like the Keefer 8, the problem for the second well was obvious – try something or plug the well.

Composite results. Table 1 summarizes experiences with the BORS installations described above. For the five wells combined, production has increased about 16 bopd, while water production, with its associated costs, has been virtually eliminated. Combined electrical power costs have been lowered about $265 per month and operating costs have been lowered about $2,700 per month.

Purchase costs of the BORS units are $19,500 each. However, Renco is leasing the five units with combined lease payments of $2,080 per month. At the end of the lease term (36 months for 3 units, 48 months for two units), there is a nominal buyout to purchase the units. Overall, these five units have been highly profitable.

Based on its overall positive experience, the operator has expanded the program and now has 10 units working company-wide. Of these, nine are considered profitable. The single unprofitable application is in a well that pre-installation testing indicated would be a marginal candidate.

When making installation decisions, Renco relies on balance calculations and logging results. Rather than shutting in and pulling wells specifically to determine if they are candidates, the operator has found it most practical to wait for wells to go down for other reasons, then log and evaluate them.

Minimal problems were experienced in installation, which requires about a half day and little equipment. Pumpers required some initial training. Maintenance has been relatively easy compared to conventional rod-pumped units, which are sometimes restricted by weather and surface conditions. The units have operated through a couple of severe Oklahoma thunderstorms without electrical component problems (including the computer).

The BORS system is a relatively new concept, with field units having been available only since January 1999. As might be expected, some design problems were encountered, but have been solved:

• Strap length (standard 2,500 ft on initial units) should be tailored to anticipated depth to prevent problems with proper winding on the reel.
• In some instances, problems have been experienced with the hose staying attached to the strap. Better stitching, or actually tieing the strap to the hose, solved this problem.
• The hose bends over rollers at the wellhead with each lifting cycle, and the steel-braided hose used initially broke down prematurely from induced fatigue. A rubber hose, without steel braids, solved this problem.
• Mechanical sensors that tell the valve to open and dump oil in the holding tank were found to be unreliable. A magnetic / electrical sensor has proven reliable.
• Occasionally, a wellhead computer will encounter problems and need replacement.

Disclosure. Since submitting this case study for publication, Renco Energy, Inc., has chosen to become a distributor of the BORS Lift technology.

The authors

Brian Fox is president of Renco Energy, Inc. As such, he is heavily involved in production and operations, retaining geological and engineering consultants when needed. He alternates time between Oklahoma and Canada, doing business in Canada as Renco Resources, Inc.

Gerold Allen is chief engineer with Toups Technology Licensing, Inc. He originally conceived the technology behind the BORS system while teaching at Rogers State College in Claremore, Okla. Mr. Allen is responsible for evaluating each prospect to determine if it is a candidate for using the technology and for performing final calculations to set the computer for depth and migration.