## Examining The Successful Implementation Of An Innovative Partnership With A Producer And County 

## Government To Deliver Treated Residential Water For Re

Use In Steam Generation

Bob Poole, Public & Government Affairs Manager

Infocast Water Management For Shale Plays West 2014 

## May 28

- 30, Denver Colorado2 Santa Maria Energy Oil Drilling & Production Plan (Diatomite formation ):
Development of 136 production oil wells (26 existing pilot project wells and 110 new wells)
Two steam generators, connecting pipelines, oil processing facilities and related ancillary equipment 32 acre site in an existing State Designated Orcutt Oil Field (Santa Barbara County ) Utilizing the enhanced oil recovery (EOR) technique known as cyclic steaming

Laguna County Sanitation District Recycled Water Pipeline : Construction/Installation of an 8

- mile 16” buried PVC pipeline and two pump stations

peak flow rate of 2,000 gpm. Jack and Bore/Open Trench and Cover installation


###  Construction/Installation of an 8

- mile 16” buried PVC pipeline and two pump stations

peak flow rate of 2,000 gpm. Jack and Bore/Open Trench and Cover installation


###  Deliver tertiary treated recycled water from the LCSD wastewater reclamation plant in Santa Maria to Santa Maria Energy’s Orcutt Oil Field 

###  Treated water used to generate steam for the EOR cyclic steaming technique to produce oil from the Diatomite formation 

###  Project includes opportunities for additional connections to the pipeline for other potential future uses (Airport Business Park/County Park/Golf Course/Agricultural and other landscape irrigation) 

## A Tale of Two Projects . . .3 

## Santa Barbara County’s In

- Place Infrastructure4 

## Project Pipeline Infrastructure5 

## Laguna County Sanitation District Facility6 

##  LCSD produces “disinfected tertiary recycled water.”



##  Water suitable for: irrigation, industrial processes, toilets, snowmaking, commercial car washes, fountains, commercial laundries, etc.



##  The District currently treats approx. 2,000,000 gallons/day and disposes of 2,000,000 gallons/day. The water is being used by local farmers and SME.



##  The current facility has capacity for 3.7 million gallons but is limited by disposal options to 2,000,000 gallons.



##  There are two one million gallon storage tanks on the property, plus 300 million storage reservoir. During winter when there is less demand, the storage reservoir builds up capacity, which is then drained over the summer.



##  A moratorium could result if there is not enough demand for the water. 

## LCSD Facility7 

## Laguna County Sanitation District Pipeline Route8 

## Waterline Project Field Terminus9 

## Santa Maria Energy Facilities10 

##  Currently, feed water is trucked to site and stored in three 21,000

- gallon baker

type tanks near the existing 26.5 MMBtu/hr boiler.



##  With construction of the new facilities, the three Baker

- type tanks will be replaced with a 42,000

- gallon recycled water tank.



##  For longer term water storage, a 1,000,000

- gallon water storage tank, packaged treatment plant and pump station will be constructed on

- site. 

## Feed Water11 

## Cyclic Steam Process12 

## Creating the Steam13 

## Injecting the Steam & Extracting the Oil14 

##  Steam to Oil Ratio : Pilot Project (19 wells): 6 barrels/1 barrels


### Current Avg. Daily Oil Production: 200

- 250 Barrels
Current Avg. Daily Steam Injection: 1200

- 1500 Barrels 

##  Steam to Oil Ratio : Proposed Project (136 wells): 3 Barrels/1 Barrel
Projected Avg. Daily Oil Production: 3000

- 3300 Barrels
Projected Avg. Daily Steam Injection: 9000

- 9900 Barrels 

##  Injection Pressure : 1100 PSI 

##  Injection Temperature : 550 Degrees 

##  Water Use Per Day : 340,000 Gallons/8100 B arrels (approx.) 

##  Steam Injection Average Duration : 4 Days 

##  Soak Average Duration : 12/24 Hours 

##  Production Average Duration : About 2 Weeks 

##  Total Average Steam/Soak/Produce Cycle : About 3 Weeks 

## Quick Cyclic Steam Project Factoids . . .15 

## Cyclic Steam Injection Tailored To Orcutt Diatomite Formation

 Santa Maria Energy limits rate, pressure and steam injection volume to maintain matrix flow within this shallow, low permeability reservoir


##  Santa Maria Energy uses continuous real time monitoring of key steam injection parameters to monitor progress


##  Santa Maria Energy performs real time analysis of key parameters to guide operations in managing steam injection 

###  Analysis uses proven methods first described in the1960’s and 1970’s 

###  Steam is treated as a real gas e.g. pseudo pressure techniques are used 

###  Injection and falloff behavior is analyzed


##  No surface expressions or losses of steam outside the zone of interest have occurred within SME’s operation

See SPE Paper 165321

- MS “Orcutt Oil Field Thermal Case Study: Cyclic Steam Injection in the Careaga Lease, Santa Barbara County, California” Elias and Medizade 201316 

## Real T ime S team Injection Analyses: Hall Plot Schematics

Cumulative Injected Steam (BCWE) Cumulative Pressure (psi - day )

A

Cumulative Injected Steam (BCWE) Cumulative Pressure (psi - day)

C Cumulative Injected Steam (BCWE) Cumulative Pressure (psi - day)

B

Cumulative Injected Steam (BCWE) Cumulative Pressure (psi - day)

D Normal Normal

Normal Abnormal17 

## Our Experience Allows Us To Conclude

 Cycle

- by

- cycle analyses of steam injection and soak periods for all Santa Maria Energy wells show a) no indication of fractures being induced, and b) that large skin effects are present during steam injection


##  The latter calls into question use of the tubing wellhead pressure as an indicator of the reservoir pressure while injecting steam


##  Comprehensive surveillance and steam injection management protocols are in place for maintaining a safe and reliable operation18 

# California Environmental Quality Act (CEQA)

 Discretionary Compliance Process



###  Identify/Avoid/Mitigate the significant environmental impacts of a proposed project where feasible



###  Extensive environmental review in 17 categories



###  Elected/appointed decision maker certification19 Federal:

United States Army Corps Of Engineers Pre

- construction Notification

US Fish and Wildlife (FWS) Permits for Biological Impacts (ESA)

State:

Regional Water Quality Control District 401 Water Quality Certification & Construction Storm water Permit

California Department of Transportation Pipeline installation encroachment permit

California Department of Fish & Wildlife Streambed Alteration Agreement & Endangered Species Act Consultation (potential impacts to California t iger s alamander)

Local:

City of Santa Maria Road encroachment permit

County of Santa Barbara Road encroachment permit / SME LUDP approval for pipeline construction

County of Santa Barbara (LCSD Board of Directors) Government Code C onsistency Determination

Easements / Fee Acquisition (installation/operation of pipeline) :

Santa M aria Public Airport District Easement City of Santa Maria

Family Trust “A” Easement for temporary access during construction

Family Trust “B” Fee Acquisition for installation and operation of pump station. 

## Permits/Project Approvals/Permission for Recycled Waterline:20 

###  Increases County’s wastewater disposal capacity


##  Reduces demand for groundwater


##  Beneficial reuse of resources (reclaimed water and produced gas)


##  Creates additional infrastructure for delivery of reclaimed water to other end

users 

##  Pipeline constructed at SME cost and then dedicated to the County to own and operate


##  SME will also pay County for water delivered via pipeline


##  Domestic oil produced under stringent environmental regulations

Reduces LCSD operating costs borne by local taxpayers by providing both a solution to the county’s wastewater problems and additional revenues through Santa Maria Energy’s ongoing purchase of the reclaimed wastewater. 

## Combined Project Benefits21 

## Thank You . . . Questions?