Luff Exploration Company Mark Sippel, Consulting Engineer

1. Intelligent Computing Systemfor Reservoir Analysisand Risk Assessmentof Red River FormationAmor Field, Bowman County, NDDE-FC22-00BC15123 Luff Exploration Company Mark Sippel, Consulting Engineer

2. Statement of Problems • Integrating Seismic, Geologic and Engineering Data • Transforming Seismic Attributes to Reservoir Attributes in Seismic Thin Beds • Predicting Reservoir Limits on Small Structural Features with Limited Well Control • Identifying Tilted Oil-Water Contacts

3. Location of Amor Field Demonstration Site

4. Intelligent Computing SystemTool Kit • ICS is a Collection of Software Tools and Utilities • Designed for Primary Use with 3D Seismic But Can Be Used in Areas of High-Density 2D Seismic Grids (1/2 mile spacing) • It May Be Used without Seismic in Fields with Large Number of Wells (>30) for Reservoir Characterization • Luff is Using the ICS Tool Kit for Predicting Reservoir Limits and Reservoir Attributes in 6-ft Dolomite Beds in the Red River Fm. • Transformed Seismic-Reservoir Attributes are Used in Simulation Studies and Parameters for Waterflood Unitization

5. Intelligent Computing System Menu

6. ICS Strategy for Reservoir Characterization Level 1 Level 2 Level 3 Level 4 Transformed Seismic-Production Attributes Forward Seismic Modeling Transformed Seismic-Reservoir Attributes Seismic Data Regional Depositional Setting Well Geologic-Reservoir Data Well Production Data Regional Structural Setting Geological Data Engineering Data

7. ICS Transformationto Production Attributes Transformed Seismic Attributes Structural Attributes Depositional Attributes Transformed Production Attributes Rock-Quality Attributes Well Production Training Entrapment Attributes Growth-Thinning Attributes

8. Type Log forRed River Formation The Upper Red River Consists of Four Episodes in Shallow Shelf Carbonate Setting Main Reservoirs are: Red River B Zone Red River D Zone Amor Field mostly B Zone 6 - 8 ft Thick

9. Red River B Zone Type Log Top Red River B Zone 0 100 30% 0% Gamma Ray Neutron-Density Porosity

10. Time Seconds Normal Polarity Reverse 0.7 0.8 Mission Canyon 0.9 Duperow Interlake 1.0 Red River P1 T1 Base D zone P2 T2 Winnipeg 1.1 ForwardSeismic Modeling Upper Red River Reservoirs Are “Seismic Thin Beds” Reservoir Information Contained in Two Peak-Trough Pairs Each Event Consistently Labeled in Every Seismic Survey

11. Low Porosity High Porosity 0.0 Interlake Time - Seconds Red River 1.0 P1 T1 P2 T2 Winnipeg Understanding Seismic Attributesfrom Synthetic Seismograms Weak Amplitude Response Strong Amplitude Reponse

12. Training for Seismic Transforms Comes fromMultiple 3D Seismic Surveys Amor Field

13. Amor Field, Red River Depth Map Seismic Data Transformed to Depth Structure Does Not Adquately Define Reservoir Limits Feet Average TVD is 9300 feet

14. Seismic AttributesTransformedto Oil Cut Average Oil Cut First 24 Months The Oil-Cut Map is Tilted with Respect to Present-Day Structure

15. 100 bopd 50 bopd 20 bopd 10 bopd Seismic AttributesTransformed toOil Rate Average Oil Rate First 24 Months

16. Predicted D Zone kh/uB (md-ft/cp) Seismic Attribute Transform kh/uB Useful for Reservoir Simulation Log of kh/uB Drill-Stem Tests

17. Predicted D Zone Porosity-Feet (phi-h) Seismic Attribute Transform phi-h Useful for Reservoir Simulation Porosity- feet

18. B Zone Reservoir Attributes fromDepositional Setting (280 Wells)

19. Predicting B Zone Deposition Setting

20. Seismic Transform toB Zone Depositional Setting Thickness Predicted A + B Cycle Thickness (feet)

21. Entrapment PressureAmor Field, Red River B Zone Pressure (psi)

22. Amor Field, Red River B Zone Oil Cut Production Laterals Predicted Oil Cut at Initial Conditions Planned Injection Well A

23. Initial Production fromHorizontal Demonstation Well A

24. Composite Production from3 Horizontal Completions

25. Composite Production with ProjectionsAmor South Red River Unit Oil Rate Barrels per Month

26. ICS Example with 2D Seismic Average Oil Cut First 24 Months

27. Conclusions • Intelligent Computing System Successfully Used to Characterize Seismic Thin Beds in Red River Fm. • Training from Normalized Seismic Data at Multiple 3D Surveys Increases Control Population • Seismic and Regional Well Data Analyzed with ICS • Reservoir and Productive Limits Predicted with ICS • Horizontal Completions Targeted from ICS Interpretations • Incremental Primary plus Secondary for Amor Field is Projected at 1,100,000 bbl • Five Similar Projects Are Planned for 2003 and 2004

28. Conclusions cont. • Keys to Successful Re-development • 3D Seismic • Reservoir Characterization Based on ICS • Understanding Depositional Setting and Relationship with Reservoir Development • Better Computer Simulation Models from Seismic-Resevoir Attribute Transformations • Targeted Horizontal Drilling • Luff is Re-Developing All Operated Fields that Were Discovered in the 1970’s and 1980’s • Many Plugged or Uneconmic Producers Re-entered and Drilled Horizontally, Resulting in 200-250 bopd

29. Horizontal Re-Entry Example 1

30. Horizontal Re-Entry Example 2

31. Horizontal Re-Entry Example 3

32. Horizontal Re-Entry Example 4

33. Horizontal Re-Entry Example 5

34. Software Availability • Visit the Project Website at http://www.luffdoeproject.com • Download ICS Files and Project Reports • Alternatively, Request a CD-ROM by Mail