Release Date: May 22, 2003

TULSA, OK - The U.S. Department of Energy has added six new projects to its "Technology Development with Independents" program. The program is intended to assist small independent oil producers in testing higher-risk technologies that could keep oil flowing from thousands of U.S. fields.

Independent oil and gas producers operate the majority of wells in the United States. More than ever this segment of the oil and gas industry plays a major role in the recovery of our Nation's domestic oil and gas resources.

Since the program began in 1995, over 57 projects have been initiated by small independent operators in 19 different states. Independent operators have contributed more than 70% of the investment needed for these projects. Sharing the risks and expenses has resulted in innovative methods and technologies which have boosted oil production and prevented the premature shut down of some of the nation's most endangered oil fields.

The Energy Department's funding will provide up to half of the costs of the projects. In some cases, the companies are offering to more than match the federal dollars. In total, private sector cost-sharing for this current round of projects amounts to more than $700,000. These projects include:

• Arnell Oil Company, Littleton, Colorado, will demonstrate alkaline-surfactant-polymer (ASP) chemical flooding designed to produce economical, incremental oil reserves in the Poison Spider field in Natrona County, Wyoming. This technology demonstration will expand chemical flooding applicability to higher viscosity reservoirs. Total project value: $200,000; DOE share: $100,000

• Bass Enterprises Production Company, Fort Worth, Texas, in coordination with the Bureau of Economic Geology at The University of Texas at Austin and Trend Technology, Midland, Texas will demonstrate how independent oil producers can acquire and analyze advanced imaging data from small seismic test patches embedded in large-scale seismic surveys. This will provide a low-risk, low-cost option for independents to acquire specific seismic data. Total project cost: $310,000; DOE share: $90,000

• Grand Mesa Operating Company, Wichita, Kansas, in collaboration with TIORCO, Inc., Englewood, Colorado and the University of Kansas, Lawrence, Kansas, will demonstrate the feasibility of polymer gel technology to increase the recoverable reserves from Mississippian reservoirs in Kansas. Mississippian reservoirs account for 14 million barrels of oil annually in Kansas. However, inadequate reservoir characterizations, drilling and completion design problems, and extremely high water cuts and low recovery factors are limiting the economic viability of this vast resource. If successful, the use of polymer gels will reduce water production, reduce well operating costs, and increase oil production throughout the region. Total project cost: $206,319; DOE share: $100,000

• Peden Energy, Fort Worth, Texas, will demonstrate that micro-turbines are more efficient and less costly to operate than traditional internal combustion engines/generators. Micro-turbines can reduce the need for electric grid power at well sites, significantly reducing operating costs for producers. Additionally, Peden Energy will install variable frequency drives (VFD), with computerized pump off controllers, on two pump jacks. The VFD responds to the down hole torque demand, adjusting and varying the pumping speed of the well. The greater the torque, the faster the pumping. Conversely, as torque demand decreases, the pump speed is decreased. This pump control ability has several benefits, including increasing oil production by ten percent and reducing capital expenses. Total project cost: $200,000; DOE share: $100,000

• TENECO Energy LLC., Wheatridge, Colorado, will use regenerating bio-chemicals (eg., microbes and organic surfactants) to reverse formation damage, restore permeability and improve production in the East Texas Field. This field has produced over 5 billion barrels of oil since the late 1930s. Abnormal deposits of paraffins and asphaltenes, resulting from early exploration and production practices, have severely reduced the productive life of this field. Successful application of bio-chemicals should remove well bore deposits and improve production. Partners in this project include MICRO-TES Incorporated, San Antonio, Texas and Oil Patch Pipe and Supply, Kilgore, Texas. Total project cost: $191,565; DOE share: 89,862

• Terra Oil Exploration and Production Company, Signal Hill, California, will run newly-developed cased hole well logs in a selected deep well in the Santa Fe Springs oil field in Los Angeles, California to identify bypassed oil. Many productive zones of the field have been waterflooded to reach oil in more permeable sand layers. It is suspected that flooding of the preferable sands in this area have bypassed lower permeable, yet oil-saturated sand intervals. Potentially productive zones will be identified, and nearby wells will be re-completed to increase recovery and add bypassed oil to improve production. Total project cost: $200,000; DOE share: $100,000