bluuebunny/crossref_metadata_2025 huggingface dataset:
Building a Reservoir Model with Problematic Faults
Authors: Hoffman K. S. , Neave J. W. , Nilsen E. H.
Published: March 2008

Certain fault geometries can be extremely difficult or even impossible to incorporate into reservoir models due to limitations of the model-building software. Multiple Y or lambda faults are well-known problems, but even more problematic are the half-Y or half-lambda faults. In these situations, the Y or lambda fault truncates against another fault along the length of the second fault, but also extends beyond the length of that fault. Existing modeling methods cannot include such geometries in reservoir models; the modeler usually removes such faults from the model or changes the fault shape so that intersections do not occur. Both of these workarounds alter the reservoir model so that it no longer correctly portrays the actual structure.

Our methodology for fault modeling does not use pillars as the basis for the faults, and therefore does not have limitations in modeling complex fault intersections. Faults are represented as surfaces built from input data only and not artificial pillars. Fault intersections define areas or sections of faults which may be truncated or removed independently of other sections. Y and lambda faults are not considered special cases and can be easily and routinely included in the reservoir model. The ability to specify and manipulate compounds areas of fault surfaces enables the reservoir modeler to create the correct truncations of half-Y or half-lambda faults without compromising the true structure.

The inclusion of such problematic faults in the reservoir model ensures that volumes are correctly calculated within fault blocks, as the faults have not been altered. The sealing nature of these faults can also be assessed and incorporated into the reservoir model, as the faults are an integral part of the reservoir framework; transmissibilities, for example, do not have to be modified in the grid to account for faults that were left out of the original framework.

The ability to include fault geometries which were ignored in the past is a significant break-through in fault modeling technology. Asset teams can now work with a complete and accurate reservoir model and no longer need to ignore significant structural components simply because of modeling limitations.
Limits on Sweep Efficiency for Solvent Injection into Heavy Oil Reservoirs at Grain-scale
Authors: Taghizadeh O. , Sepehrnoori K. , Bryant S. L.
Published: March 2008

The movement of low viscosity fluid through a porous medium containing extremely viscous fluid is an important phenomenon in several petroleum engineering applications. These include the recovery of heavy oil by solvent injection, the preferential reduction of water flow using polymer gels, and the enhancement of acid fracturing treatments. The displacement of one fluid from a porous medium by a second immiscible fluid has been extensively studied in two cases: when capillary forces are dominant, and when viscous forces are comparable to capillary forces.

This study examines a third case: when viscous forces are dominant. The viscosity of the fluid initially present in the porous medium is several orders of magnitude greater than the viscosity of the displacing fluid. Consequently, the displacement through an individual pore will be dictated by the hydrodynamic forces required to move the high viscosity fluid. This study develops a mathematical model of the viscosity-dominated displacement in a network of conduits.

Key practical insights from the model are the nature of the displacement and effects of geometry and hydraulic conductivities on the sweep efficiency.
Sensitivity Analyses of Production and Recovery Forecasts Using Variance-Based Methods
Authors: Lawal Azeez Adeyinka , Srinivasan Sanjay , Lake Larry W.
Published: March 2008

During the exploratory stage of field development, reservoir data required for forecasting is often inadequate, and hence uncertain. An understanding of the scope and extent of uncertainty is invaluable in optimizing data gathering operations, planning of field facilities, and assessing exploration and development scenarios. Sensitivity Analysis (SA), the study of how the uncertainty in a model's outputs depends on the uncertainty in its inputs, provides such an understanding.

This work presents the SA of production and recovery histories using a new continuous time Monte Carlo (MC) multiwell tank model (UTSens). The model assumes that reservoir parameters are independent; knowledge about a parameter, does not affect knowledge about other parameters. The model also assumes that the reservoir is homogeneous and undersaturated, and that the reservoir is produced by primary depletion, specifically volumetric expansion. The MC approach is probabilistic rather than deterministic; as such it computes the mean, variance and sensitivity histories of reservoir and well production rates, recovery, and pressure. The model provides a choice between Latin Hypercube and Sobol LPT sampling. These sampling methods are more efficient than conventional MC or random sampling.

In the cases considered, the sensitivity effects of different parameters vary over the producing period. Parameters with negligible main effects nevertheless can have significant joint effects. In one of the cases considered, the main effects of oil viscosity on production rate declined over twenty years of production with a single well. Conversely, the main effect of reservoir thickness increased during the same period. Other parameters like permeability and initial reservoir pressure with no main effects showed appreciable joint effects.

In its totality, the current work is part of a paradigm shift from deterministic estimates to considerations of probabilistic analysis and uncertainty. This prescription is especially relevant during reservoir exploration and appraisal. Data analysis using the MC tank model provides metrics of uncertainty for optimized data gathering and informed decision-making.
Prediction Of Effective Porosity Over the Field Using 3D Seismic Multiattributes, Seismic Acoustic Impedance And Well-Driven Effective Porosity
Authors: Arianfar Abdonabi
Published: March 2008

The prediction of logs and reservoir properties from seismic data plays a critical role in the characterization of oil and gas reservoirs. Even though the physical relationships between seismic attributes and reservoir parameters are not always clear, statistical relationships should be preferred than deterministic approaches. This technique performs a statistical relationship between well data (porosity) and seismic data (attributes) then a calibration process and a residual correction will be calculated and finally the interpretation for the reservoir properties over the field will be carried out and the map of the log or reservoir parameter of interest will be prepared over the whole field.

Mathematically, we refer to multivariate geostatistics, which is a broad term that encompasses all methods like cokriging that utilize more than one variable to predict other variables of interest.

A volume attribute is defined as the sum of an instantaneous attribute over an interval. The interval can be specified between two zones, or as a constant window around one horizon or zone. So after extracting a volumetric attribute, each value point of the resulted map is the representative for the whole interval between the top and base of the zone under study, i.e. the resulted attribute map is the representative of the whole interval in average.

Effective porosity over producible zones of interest was predicted with the aid of multivariate geostatistics method and following data: –A 3D cube of acoustic impedance.–Quadrature trace, cosine of instantaneous phase and inverse of travel time attributes.–Calculated effective porosity for 5 wells in the field.

The objective of this study is to find a link between 3D seismic data, which covers the whole field, and effective porosity that is only determined at 5 wells.
Hybrid Drilling Rig With Rotating Coiled Tubing
Authors: Choudhary Arpit , Menezes Richard , Ogra Konark , Garg Rachit
Published: March 2008

CTU has been gaining importance in the oil industry. It is a multipurpose unit with one application being drilling. The major limitation of CTU was eliminated recently by inventing rotating coiled tubing which is yet to hit the commercial market.

In this concept a conventional derrick based rig is modified to a Hybrid Drilling Rig. A coiled tubing unit is incorporated inside derrick structure itself at a height above the derrick floor which depends on type of derrick. The coiled tubing unit added is not the conventional one instead it is a unit that actually rotates the coiled tubing. This coiled tubing will be placed horizontally above the floor. It has a support structure passing through its center which is detachable. The use of this center structure is that it has straightening injector fixed in it and it supplies the torque to the CTU. Coiled tubing from the CTU will take a helical path around the support structure, pass through the injectors and become straight.

The purpose of the paper is to discuss the advantages and limitations of this hybrid drilling rig technically and economically. Also some calculations are included which are used in the design of the rig used. This paper also outlines fatigue analysis and advantages and limitations of using rotating coiled tubing.
A Critical Review of the Status of SAGD: Where Are We and What Is Next?
Authors: Albahlani A. M. , Babadagli T.
Published: March 2008

With around 7 trillion barrels reserves and recent increase in oil demand, there is no doubt that there would be tremendous effort on the development of heavy-oil/bitumen (HO-B) reservoirs in the next decades. Yet the in-situ recovery of HO-B is still not a simple process and there are many technical challenges accompanied with it.

Two major techniques, namely thermal and miscible, have been considered in the HO-B development, along with several other auxiliary methods (chemical, gas, electromagnetic heating etc.) for different well configurations, steam assisted gravity drainage (SAGD) being the most popular among others. Miscible techniques did not yet go to a high commercial level, while thermal techniques have by far a stable foundation in the industry.

Despite remarkable amount of laboratory experiments and computational studies on the thermal techniques for HO-B, especially SAGD, there was no extensive and critical literature review of the knowledge gained over almost three decades. We believe that a critical review of the status of the SAGD process will fill the gap by shedding light on the deficiencies and limitations of the process, further development areas, and new research topics. Specific attention, in this paper, was given to (a) the effect of geological environment on the physics of the process, (b) evaluation of the laboratory scale procedure and results (reasons of residual oil saturation, is it well configuration or pore scale dynamics?) and the reasons of the inconsistency between the lab and field scale performances, (c) problems faced in numerical modelling (capturing the physics of the process, relative permeability curves, dynamics of gravity controlled counter-current flow), (d) evaluation of the pilot and commercial level field applications, and (e) operational and technical challenges.

It is believed that a good compilation of the records produced over three decades will constitute a useful reference for the industry and academic people.
A Sensitivity Analysis for Effective Parameters on Fracture Network Permeability
Authors: Jafari A. , Babadagli T.
Published: March 2008

Fracture network mapping and estimation of its permeability constitute two major steps in static model preparation of naturally fractured reservoirs. Although several different analytical methods were proposed in the past for calculating fracture network permeability (FNP), different approaches are still needed for practical use. We propose a new and practical approach to estimate FNP using statistical and fractal characteristics of fracture networks. We also provide a detailed sensitivity analysis to determine the relative importance of fracture network parameters on the FNP in comparison to single fracture conductivity using experimental design approach.

The FNP is controlled by many different fracture network parameters such as fracture length, density, orientation, aperture, and single fracture connectivity. Five different data sets were generated for random and systematic orientations. In each data set, twenty different combinations of fracture density and length for different orientations were tested. For each combination, ten different realizations were generated. The length was considered as constant and variable. This yielded a total of one thousand trials. The FNPs were computed through a commercial discrete fracture network modeling simulator for all cases. Then, we correlated different statistical and fractal characteristics of the networks to the measured FNPs using multivariable regression analysis. Twelve fractal (sandbox, box counting and scanline fractal dimensions) and statistical (average length, density, orientation and connectivity index) parameters were tested against the measured FNP for synthetically generated fracture networks for a wide range of fracture properties. All cases were above the percolation threshold to obtain a percolating network and the matrix effect was neglected.

The correlation obtained through this analysis using four data sets was tested on the fifth one with known permeability for verification. High quality match was obtained.

Finally, we adopted experimental design approach to identify the most critical parameters on the FNP for different fracture network types. The results were presented as Pareto charts. It is believed that the new methodology and results presented in this paper will be useful for practitioners in static model development of naturally fractured reservoirs and will shed light on further studies on modeling and understanding the transmissibility characteristics of fracture networks.
Evaluation of Intra-Molecular Cross-Linked Polymers
Authors: Wang W. , Lu X. G. , Xie X.
Published: March 2008

There are two types of cross-linked reactions to form polymer gels, intra-molecular cross-linked reaction that takes place within a polymer molecule, and inter-molecular cross-linked reaction that takes place among different polymer molecules. Viscosity measurements and flow performance tests can be used to differentiate between intra-molecular and inter-molecular cross-linked reactions. Viscosity increases with time if inter-molecular cross-linked reaction occurs in a polymer solution, but stays constant or slightly decreases with time if intra-molecular cross-linked reaction occurs. Flow resistance and residual flow resistance increase when intra-molecular cross-linked polymer gel is injected into the porous media. This phenomenon is not observed with polymer injection.

Cross-linked reaction in a polymer solution is affected by the concentrations of the polymer and the coagulant, electrolyte type and concentration, temperature, and pore size and structure. Laboratory results show that high electrolyte concentration and temperature (in a reasonable range) can increase the tendency for intra-molecular cross-linked reaction. The higher the concentration of electrolytes, the more the polymer molecular clews curl and contract, improving the probability for intra- molecular cross-linked reaction to occur. For the three studied electrolytes, Ca2+ is more likely to enhance the intra-molecular cross-linked reaction, Mg2+ is not as good as Ca2+ but better than Na+. Three of the possible intra-molecular cross-linked polymer gels that are verified by the viscosity tests are injected into the artificial cores for flow performance tests. The results confirmed the intra-molecular cross-linked reaction in the tested polymer gels. The mechanisms of curling and stretching of polymer molecular clews may be explained by Stern-Grahame double layer theory.
Improved Analysis of the Kinetics of Crude-Oil In-Situ Combustion
Authors: Cinar M. , Castanier L. M. , Kovscek A. R.
Published: March 2008

In-situ combustion (ISC) is an effective thermal recovery process that provides an important alternative to steam injection. ISC is the process of injecting air into a reservoir to oxidize a small portion of the hydrocarbons present to generate heat and pressure. It suffers from fewer reservoir limitations than steam injection, but is not applied widely. One factor that has limited application of ISC is lack of predictability at both the laboratory and field scale. Proper experimental kinetic analysis (using, for instance, ramped temperature oxidation) provides critical parameters, such as activation energy, for modeling efforts. Conventional methods of kinetic analysis for crude oil assume, a priori, a two-step or three-step oxidation reaction.Any in-consistency between the assumed model and the real system is reflected as error in model parameters.Iso-conversional tech-niques, as applied here, provide model-free methods for estimating activation energy and naturally deconvolve multi-step reactions. The iso-conversional approach obtains the reaction kinetics for a given rock/oil sample at identical reaction extent from multiple experiments with different heating rates.The technique has never been applied to ISC kinetics, to our knowl-edge. Our work falls into two major sections.First,the applicability of the iso-conversional method to multiple step oxidation of oil in porous media is established via synthetic examples. Second, and on the practical side,the combustion kinetics are reported for two quite different crude oil samples thereby adding to the knowledge base of crude-oil and rock-matrix charac-teristics that make for successful ISC. The iso-conversional analysis of ramped temperature oxidation data appears to provide new insight into systems where ISC is/is not successful.
Liquid Carrying Capacity of Gas in Underbalanced Drilling
Authors: Guo Boyun , Yao Yuan , Ai Chi
Published: March 2008

Air/gas drilling is a technique of Underbalanced drilling (UBD) used for increasing rate of penetration in relatively dry formations. Fluid conversion from air/gas to foam frequently causes drilling complications to drilling engineers. This is mainly due to the lack of understanding of liquid loading problem and limited knowledge of liquid-carrying capacity of gas.It is highly desirable to gain the insight of the problem and develop techniques to minimize drilling complications.

Based on Turner’s theory of liquid loading in gas production wells, we have established in this study the minimum kinetic energy criterion for flowing gas to carry liquid up the borehole in air/gas drilling. A theory for estimating the minimum required gas injection rate to remove formation liquid influx has been established. A calculation procedure has been developed for estimating the minimum required gas injection arte to remove a given rate of fluid influx from the formation. Engineering charts have been generated for predicting the liquid-carrying capacity of gas that is injected into the borehole at various rates. This paper provides drilling engineers necessary knowledge and a useful tool for minimizing complications in air/gas drilling.
Develop a New Model for Saturation Calculation in Streamline Simulation
Authors: Nourozieh H. , Kariznovi M. , Jamialahmadi M. , Shahrabadi A.
Published: March 2008

Streamline simulation becomes an accurate and fast method for reservoir simulation nowadays. This method is based on decouple the pressure equation from saturation equation and transform the 3D equation to 1D equations therefore it introduces a speed up factor in respect to conventional simulation.

Tracing streamlines in the reservoir is a main step in streamline simulation. As a streamline is traced, it passed through many grid blocks. The numerical approach to 1D saturation equation requires picking up the saturation in each grid block when a streamline traced. In this way, saturation versus time of flight information recorded for each streamline traced from injector to producer. This information is defined on an irregular time of flight space.

Past efforts to move the saturation forward was based on transforming the irregular time of flight space onto a regular space. Transforming onto a regular 1D grid results in averaging of saturations, and represents one source of numerical diffusion in the streamline method.

In this paper we present a new method to move the saturation forward based on irregular time of flight space and compared the results with the common method. The result of saturation with this method will be more accurate and averaging of saturations and numerical diffusion will be decreased.
Modeling of the Stability of Multibranch Horizontal Open Holes
Authors: Manriquez Alberto Lopez , Podio Augusto L. , Sepehrnoori Kamy
Published: March 2008

This investigation was focused on studying the complex problem of stability of multi-branch horizontal openholes in a complete three-dimensional anisotropic in-situ stress field simulating drilling, completion, and production conditions.

Previous work on this subject consisted of parametric analyses placing the junction in the overburden. Whenever reservoir management requires the construction of a specific multilateral scenario such as a multibranch horizontal inside a producing formation, a complex analysis is required. In this work, stress- displacement analysis in steady-state was coupled with transient phenomena to compute stress behaviors and changes in pore pressure due to disturbances created during simulated drilling and production conditions. This coupled analysis allowed for the inclusion of time dependent non-linear processes that influence behavior of the system compounded by rock, fluids contained in the rock, and in-situ stress field.
Applications of Ultra Low Density, Operationally Simple, Non–Foamed Cement Slurries — Case Histories
Authors: El Shaari N. , Myers Scott H. , Dajani Ragib , Doherty Dale Robert
Published: March 2008

Technical and product enhancements in well cementing have allowed the introduction of non-foamed cement systems mixed at densities as low as 7.5 ppg that attain ultimate compressive strengths as high as 1,000 psi. These non-foamed ultra low-density slurries are simplifying blending and mixing operations. In California oilfields and oilfields throughout the world, drilling wells into weak and low-pressure formations, has always been an industry challenge. Successful cement placement in these types of well environments is also a challenge. Lost circulation and partial fluid returns is major culprit to poor cement bonding in addition to higher well costs. Operators in many California fields are forced to drill wells "blind", for example, drilling without mud returns. Drilling "blind" does not preclude the challenging need to properly cement these wells to obtain zonal isolation.

The process of foaming cement systems to reduce slurry densities has been applied successfully over the years in wells throughout the world. Though foamed- cementing has been successful, the design and execution add components of operational and technical challenges. These would include accurate metering of nitrogen, uncertainty of actual cement density within the wellbore, additional equipment and personnel requirements, and special drilling rig components. The need for simplicity has allowed the introduction of non-foamed ultra low- density cement systems. In California, successful cement jobs were pumped using non-foamed systems at densities as low as 10.0 ppg. In Colorado, 8.9 ppg slurry was successfully pumped that had ultimate compressive strength of over 1,400 psi. In both cases, these systems provided simpler and an economic alternative choice. These ultra low-density slurries can be designed to meet wide range well temperatures and depth applications. The paper will discuss these systems along with field applications and case histories from California and other parts of the world.
Northern California Gas Sands — Hydraulic Fracture Stimulation Opportunities and Challenges
Authors: El Shaari N. , Minner W. A.
Published: March 2008

Hydraulic fracturing is a stimulation technique successfully applied in formations throughout the world to increase production rates and enhance hydrocarbon recovery. The process involves creating a crack by pumping fluids at pressures above formation fracturing pressures, and then filling the crack with proppant to create a high conductivity connection to a large formation area. Hydraulic fracturing stimulates production by overcoming restrictions imposed by formation permeability, drilling and completion damage, production-induced damage and, an incomplete reservoir connection across laminated intervals. The process has been applied to a large scale in many Central and Southern California fields to enable economic development and reasonable hydrocarbon recovery. Example formations include the Belridge Diatomite, Stevens Sands, Etchegoin, Antelope shale, McLure shale, McDonald shale, Point of Rocks sands, Kreyenhagen shale, Ranger sands, the UP Ford shale, and the Monterey shale. Despite the routine application of fracturing in many fields, there has been very little fracturing experience in the gas-producing formations of Northern California. Example formations such as the Martinez, Forbes, Winters, and the K-1 are generally laminated sand intervals with low to moderate permeability (less than 1 mD and up to 10 mD), that are easily damaged by completion and production operations. Despite the hydraulic fracturing potential for stimulating production rates, improving gas recovery, and increasing reserves by extending the economic development area, it has been only sparingly employed. General formation properties are reviewed – what are the implications for hydraulic fracture potential, treatment design and placement challenges? Several treatments are reviewed to provide examples of fracture treatment behavior and response. Based on the initial experience and formation properties, it is believed that hydraulic fracturing has a significant potential in many Northern California gas reservoirs.
The Effect of Drillpipe Rotation on Pressure Losses and Fluid Velocity Profile in Foam Drilling
Authors: Duan Mingqin , Miska Stefan , Yu Mengjiao , Takach Nicholas , Ahmed Ramadan , Hallman John
Published: March 2008

Foam is gaining increasing applications in both drilling and cementing. Typical applications include drilling operations in naturally fractured formations and depleted or patially depleted reservoirs. The unique pressure profile created by foam makes it an ideal drilling fluid in many areas where a narrow operating window exsits between pore pressure and fracture pressure. While rotary drilling is the most widely used drilling technique, there has been no study on foam drilling with drill pipe rotation. This study was undertaken to identify the effect of pipe rotation on pressure losses and velocity profiles of foam flow in both concentric and eccentric annuli. The effects of pressure, foam quality and pipe eccentricity were also investigated.

For the first time, pipe rotation effects on foam flow were experimentally studied on a flow loop consisting of a pipe viscometer and an annular test section. Pipe rotary speeds were varied from 0 to 400 RPM with foam qualities ranging from 60% to 90% at different flow rates. Computational Fluid Dynamics simulations were performed to compare with experimental results. A flow-through rotational viscometer was used to investigate foam rheology at higher pressures and verifiy the results of the pipe viscometer.

Results show that pipe rotation increases pressure drop by more than 30% for low quality (below 70%) foams in a concentric annulus. It has no noticeable effects on medium quality (70%-80%) foams, and slightly decreases pressure drop for high quality foams. In an eccentric annulus, pipe rotation clearly shifts the maximum axial velocity core along the pipe rotation direction. When there is a cuttings bed, however, the velocity core shifts to a direction that is opposite to the pipe rotation direction, which has a tremendous impact on hole cleaning. Unlike incompressible fluids, the absolute pressure also affects foam rheology and pressure drop for a given quality foam. The results of this study are particularly useful for drilling and cementing design calculations for underbalanced and managed pressure drilling operations.
Underbalanced Drilling: "Remedy for Formation-Damage, Lost-Circulation, and Other Related Conventional-Drilling Problems"
Authors: Rafique Maqsood Ahmad
Published: March 2008

The economics of exploration and production (E&P) continue to encourage use of new methods to reduce problems and costs. Underbalanced technology is one such method, which offers effective solution to conventional drilling problems. Underbalanced drilling or UBD is a procedure used intentionally to drill oil and gas wells where the equivalent circulating density (ECD) of the drilling fluid is less than the pore pressure in the formation being drilled. Underbalanced drilling (UBD) has been used with increasing frequency to minimize problems associated with invasive formation damage, which often greatly reduce the productivity of oil and gas reservoirs, particularly in openhole horizontal well applications. UBD, when properly designed and executed, minimizes or eliminates problems associated with the invasion of particulate matter into the formation as well as a multitude of other problems such as adverse clay reactions, phase trapping, precipitation, and emulsification, which can be caused by the invasion of incompatible mud filtrates in an overbalanced condition. In many UBD operations, additional benefits are seen because of a reduction in drilling time, greater rates of penetration, increased bit life, a rapid indication of productive reservoir zones, and the potential for dynamic flow testing while drilling.
Development and Exploration Well Permitting
Authors: Rivera P. V. , Gough G. N. , Dixon W. H. , Ashley B. J.
Published: March 2008

The protection of endangered species and sensitive habitat through the performance of biological surveys and the implementation of mitigation measures is critical when obtaining regulatory agency permit approvals for development and exploration wells within the San Joaquin Valley. Certain Federal and State listed endangered species, such as the blunt-nosed leopard lizard (BNLL), also known as Gambelia sila, are fully protected (West's Annotated California Codes, 1992). A new Best Management Practice (BMP) for protection of BNLL was developed in 2004 in a cooperative effort between Occidental of Elk Hills, Inc. (OEHI) and the U.S. Bureau of Land Management (BLM) to facilitate permitting an exploration well on a BLM mineral estate in western Kern County.

The BMP mitigation measure was developed under BLM's Programmatic Biological Opinion which provides for Federal incidental take authority pursuant to Section 7 of the Endangered Species Act. The BMP involved installing an exclusion fence around a proposed new well site. A trench approximately six inches deep was cut around the area to be enclosed using a walk behind trencher. The exclusion fence was constructed of 18-inch flashing, buried six-inches in depth and reinforced with stakes. Sections of flashing were joined by overlapping the materials and sealing them with a silicon based adhesive. A sliding gate was constructed using similar materials and a steel plate was placed across the threshold of the entrance to assist gate operations. As a contingency plan for discovery of BNLL within the excluded area, silt fencing would be used to isolate smaller areas inside the exclusion area. The plan specified that a section of the main exclusion fence would be removed, if necessary, to allow the lizard to leave. The exclusion fencing remained intact until drilling and sump closure activities were completed.

In summary, no harm came to the endangered BNLL or any other listed species during the course of this project. Since the development and successful implementation of this BMP, the Bakersfield, CA BLM Field Office and other Federal/State wildlife agencies have required other applicants to utilize this mitigation measure on federal and private lands that contain BNLL, as well as for other threatened and endangered species.
An Integrated Study of Mature Low Permeability Reservoir in Daqing Oil Field, China
Authors: Xu Yunting , Pu Hui , Shi Lianjie
Published: March 2008

Chaoyanggou oilfield is the largest low permeability oilfield of Daqing, and has been under production since 1981. Because of it’s complex geological characteristics, significant difference in physical properties of reservoir and crude oil in different blocks, the development effect is not desirable. In this paper, the reasons for the low development effect are analyzed, and the infill drilling is regarded as an effective way to improve the oil recovery and development effect. Through the study, the limit for infill drilling technology was determined, which includes such influential factors as well density, waterflood control degree, low limit of reservoir permeability, and effective displacement coefficient, etc. Also an integrated geological study has been carried out. The primary goal of the study was to develop an integrated reservoir description for targeted infill drilling and improve recovery in a low-permeability reservoir. The field application of infill drilling is very successful and the predicted ultimate oil recovery can be improved by 8.9+OOIP.

The study of this low permeability reservoir in the Daqing field is an excellent opportunity to: (1) demonstrate the economic importance of this zones, (2) guide the infill drilling program in other blocks, and (3) help the company to find additional reserves in the Songliao Basin.
A Method for Characterization of Flow Units Between Injection-Production Wells Using Performance Data
Authors: Lee Kun-Han , Ortega Antonio , Mohammad Nejad Amir , Ershaghi Iraj
Published: March 2008

This paper presents a novel data mining method to characterize the flow units between injection and production wells in a waterflood, using carefully implemented variations in injection rates. The method allows the computation of weight factors representing the influence of any of the injectors surrounding a given producer. The weight factors are used to characterize the effective contribution of injection wells to the total gross production in surrounding production wells. A wavelet approach is used to design the perturbation in the injection rates and to analyze the observed variations in the gross production rates.

Tracking the contribution of injectors to various producers can help in balancing voidage-replacement in waterflood optimization. A second application is reservoir characterization, where information provided by the proposed procedure can help in mapping high permeability flow units such as channels and fractures as well as flow barriers between wells. The method was successfully calibrated and tested for simulated line drive and five spot patterns with various assumed flow units and flow heterogeneity conditions. The paper also includes a case study for a tight formation waterflood where the weight factors are intended to delineate the pattern of natural fractures causing preferential flows.
Micromechanics of Hydrate Dissociation in Marine Sediments by Grain-Scale Simulations
Authors: Holtzman Ran , Silin Dmitriy B. , Patzek Tad W.
Published: March 2008

We seek to quantify the impact of hydrate dissociation on the strength of hydrate-bearing sediments. Dissociation of gas-hydrates in marine sediments converts the solid hydrate structure into liquid water and gas. Together with the associated pore pressure increase, this process reduces the stiffness of the sediments, which may fracture or be fluidized. If sediment failure occurs, seafloor subsidence and landslides can severely damage offshore infrastructure.

To evaluate the mechanical properties of a sediment sample, we simulate loading of a disordered pack of spherical grains by incremental displacements of its boundaries. The deformation is described as a sequence of equilibrium configurations. Each configuration is characterized by a minimum of the total potential energy. This minimum is computed using a modification of the conjugate gradient algorithm. We verify our model against published data from experiments on glass beads. Our simulations capture the nonlinear, path-dependent behavior of granular materials observed in experiments.

Hydrates are modeled as load-bearing solid particles within the pores. To simulate the consequences of dissociation, we reduce the solid fraction by shrinking the hydrate grains. The effect of the associated excess pore pressure is modeled by isotropic compression of the solid grains, and reduction in macroscopic effective stress. Weakening of the sediment is quantified as a reduction of the effective elastic moduli.
Incentives and Penalties Related to Earnings Overstatements that Violate GAAP
Authors: Beneish Messod D.
Published: March 2008

This paper investigates the incentives and the penalties related to earnings overstatements primarily in firms that are subject to accounting enforcement actions by the Securities and Exchange Commission (SEC). I find (1) that managers in treatment firms are more likely to sell their holdings and exercise stock appreciation rights in the period when earnings are overstated than are managers in control firms, and (2) that the sales occur at inflated prices. I do not find evidence that earnings overstatement in these firms is motivated by concerns about debt covenant violations or the cost of external financing. The evidence suggests that the monitoring of managers' trading behavior can be informative about the likelihood of earnings overstatement.

Many economists believe that insider trading is an efficient method of compensating managers for their efforts. These economists argue that reputation losses would preclude managers from making profitable trades before periods of poor corporate performance. Consequently, this paper also investigates the employment and monetary penalties imposed on managers after the earnings overstatement is publicly discovered. This evidence reveals that (1) managers' employment losses subsequent to discovery are similar in firms that do and do not overstate earnings and (2) that the SEC is not likely to impose trading sanctions on managers in firms with earnings overstatement unless the managers sell their own shares as part of a firm security offering. The evidence suggests that neither employment or SEC-imposed monetary losses are effective in preventing the managers in these firms with extreme earnings overstatements from selling their stake in their firms in the face of declining performance.
An Empirical Investigation of an Incentive Plan that Includes Nonfinancial Performance Measures
Authors: Banker Rajiv D. , Potter Gordon , Srinivasan Dhinu
Published: March 2008

Recent studies report an increasing use of nonfinancial measures such as product quality, customer satisfaction, and market share in performance measurement and compensation systems. A growing literature suggests that because current nonfinancial measures are better predictors of long-term financial performance than current financial measures, they help refocus managers on the long-term aspects of their actions. However, little empirical evidence is available on the relation between nonfinancial measures and financial performance, and even less is known about performance impacts of incorporating nonfinancial measures in incentive contracts. Using time-series data for 72 months from 18 hotels managed by a hospitality firm, this study provides empirical evidence on the behavior of nonfinancial measures and their impact on firm performance. The results indicate that nonfinancial measures of customer satisfaction are significantly associated with future financial performance and contain additional information not reflected in the past financial measures. Furthermore, both nonfinancial and financial performance improve following the implementation of an incentive plan that includes nonfinancial performance measures.
The Effect of Incentive Contracts on Learning and Performance
Authors: Sprinkle Geoffrey B.
Published: March 2008

This paper reports the results of an experiment that examines how incentive-based compensation contracts compare to flat-wage compensation contracts in motivating individual learning and performance. I use a multiperiod cognitive task where the accounting system generates information (feedback) that has both a contracting role and a belief-revision role. The results suggest that incentives enhance performance and the rate of improvement in performance by increasing both: (1) the amount of time participants devoted to the task, and (2) participants' analysis and use of information. Further, I find evidence that incentives improve performance only after considerable feedback and experience, which may help explain why many prior one-shot decision-making experiments show no incentive effects. Collectively, the results suggest that incentives induce individuals to work longer and smarter, thereby increasing the likelihood that they will develop and use the innovative strategies frequently required to perform well in complex judgment tasks and learning situations.
Capital Gains and Dividend Taxes in Firm Valuation: Evidence of Triple Taxation
Authors: Collins Julie H. , Kemsley Deen
Published: March 2008

Although firms account for entity-level taxes, they do not account for shareholder-level capital gains and dividend taxes. To account for these proprietary-level taxes, we add them to a residual-income equity valuation model. Empirical analysis supports the model's predictions. First, both capital gains and dividend taxes reduce investors' implicit valuation of the reinvested portion of earnings. Second, dividend taxes reduce the valuation of the portion of earnings distributed as dividends, but capital gains taxes do not. Third, dividend taxes reduce the valuation of retained earnings equity, but again, capital gains taxes do not. These findings suggest that investors implicitly extend entity-level accounting to the proprietary level when they value the firm. The findings also suggest that when fully accounting for the effects of implicit dividend taxes, reinvested earnings appear to be subject to three levels of taxation—corporate, dividend, and capital gains taxes. Paying earnings out as dividends eliminates the capital gains layer of tax and may provide a net wealth benefit for shareholders, rather than a tax penalty as commonly assumed.
An Experimental Investigation of Auditors' Liability: Implications for Social Welfare and Exploration of Deviations from Theoretical Predictions
Authors: King Ronald R. , Schwartz Rachel
Published: March 2008

This paper reports the results of an experiment designed to investigate how legal regimes affect social welfare. We investigate four legal regimes, each consisting of a liability rule (strict or negligence) and a damage measure (out-of-pocket or independent-of-investment). The results of the experiment are for the most part consistent with the qualitative predictions of Schwartz's (1997) model; however, subjects' actual choices deviate from the point predictions of the model. We explore whether these deviations arise because: (1) subjects form faulty anticipations of their counterparts' actions and/or (2) subjects do not choose the optimal responses given their anticipations. We find that subjects behave differently under the four regimes in terms of anticipation errors and departures from best responses. For example, subjects playing the role of auditors anticipate investments most accurately under the regime with strict liability combined with out-of-pocket damages, but are least likely to choose the optimal response given their anticipations. This finding implies that noneconomic factors likely play a role in determining subjects' choices.
Does the Use of Financial Derivatives Affect Earnings Management Decisions?
Authors: Barton Jan
Published: March 2008

I present evidence consistent with managers using derivatives and discretionary accruals as partial substitutes for smoothing earnings. Using 1994–1996 data for a sample of Fortune 500 firms, I estimate a set of simultaneous equations that captures managers' incentives to maintain a desired level of earnings volatility through hedging and accrual management. These incentives include increasing managerial compensation and wealth, reducing corporate income taxes and debt financing costs, avoiding underinvestment and earnings surprises, and mitigating volatility caused by low diversification. After controlling for such incentives, I find a significant negative association between derivatives' notional amounts and proxies for the magnitude of discretionary accruals.
The Influence of Potentially Fraudulent Reports on Audit Risk Assessment and Planning
Authors: Newman D. Paul , Patterson Evelyn , Smith Reed
Published: March 2008

We consider how auditors assess the risk of fraudulent financial reporting and plan their audit where a possibly fraudulent auditee anticipates the assessment and planning process. The auditor uses the auditee's (possibly fraudulent) earnings report to revise his beliefs about the likelihood of fraud when formulating an audit plan.

We find that as underlying earnings increase, a fraudulent auditee increases reported earnings. In turn, as the auditee's reported earnings increase, the auditor increases audit effort. We also find that the auditee (who knows the auditor will use the report for audit planning) selects reports that increase his own expected payoff, relative to reports he would select if the auditor did not observe the report before finalizing the audit plan. By contrast, the auditor is no better off using the auditee's report for audit planning. Inherent risk, detection risk, and overall audit risk can increase when the auditor uses the auditee's report. Thus, because of the dynamic interaction between the auditor and auditee, procedures that aid in assessing audit risk may not reduce that risk or result in more efficient audits.
In Search of Profits: Measuring Income from the Unrelated Commercial Use of a Tax-Exempt Organization's Assets
Authors: Sansing Richard C.
Published: March 2008

Profits a tax-exempt organization earns from business activities that are not related to the organization's exempt purpose are subject to the unrelated business income tax (UBIT). This paper shows that when the taxable and tax-exempt activities are substitutes, taxable income exceeds the incremental pretax financial return from the unrelated business activity because the exempt organization cannot deduct the opportunity cost of lost exempt function revenues when computing UBIT. As a result, the exempt organization may: (1) reduce or eliminate its unrelated business activity, or (2) change the way it uses its assets for unrelated business purposes by licensing the use of its assets to an unrelated taxable organization in exchange for nontaxable royalties. The model shows that although UBIT may distort the way in which an exempt organization uses its assets, this distortion can increase social welfare.