In the rolling hills of northeastern Oklahoma, a group of Oklahoma City oilmen is hoping to follow in the footsteps of the country's oil leaders, reawakening one of the state's oldest oil fields.
If all goes as planned, Oklahoma City-based Chaparral Energy's effort to redevelop the North Burbank field could create up to $11 billion in economic activity in Osage County over the next 30 years and employ 110 people in the area.
“To think that Chaparral could be involved in a program of this size in such a historic field is almost beyond words,” Chaparral CEO Mark Fischer said. “It's something that is really tremendous and something I was glad we could see through fruition and get up and running.”
While the field is good news for Chaparral, it also stands to benefit Osage County and the Osage Nation, which owns mineral rights throughout the area.
The Osage Nation could receive as much as $1.2 billion in royalty payments over the next three decades, according to Chaparral projections.
“We're very excited about this project,” said Andrew Yates, chairman of the Osage Minerals Council. “As royalty owners, anything that's good for the oil company is great for us. We're extremely happy and hope for the best. This is a win-win deal for us. It's our oil, and they're producing it. The more they produce, the better for us.”
The North Burbank field is one of the oldest and richest oil fields in Oklahoma.
First drilled in 1920, the field is where Frank Phillips and his Phillips Petroleum Corp. made their fortune. The field also was home to the predecessors of Conoco, Texaco, Gulf Oil and many others.
At its peak in the mid-1920s, the area produced more than 70,000 barrels per day from more than 1,800 wells.
Production slipped to about 4,000 barrels per day in the late 1950s before Phillips launched an aggressive waterflooding project that boosted production back to about 20,000 barrels per day.
Also known as secondary development, waterflooding involves pumping large amounts of water into one portion of an oil field and pumping the water and oil out of another portion of the oil field. In most cases, the produced water is then reinjected to continue the process.
Today, the field produces about 1,500 barrels per day, but Chaparral expects its enhanced oil recovery project to boost production back to more than 12,000 barrels per day.
“This field is what made Frank Phillips and the Osage people who they are,” Yates said. “It made Phillips one of the biggest oil companies in the world and the Osages one of the richest people in the world at one time. Starting over with a new project like this, I'm just looking to the future and hoping for the best.”
How it works
Primary conventional oil production involves drilling into a layer of relatively soft rock that absorbs oil like a sponge. The process generally recovers about 15 percent of the oil contained in the reservoir.
Secondary processes such as waterflooding typically recover an additional 15 percent. After most oil field operations are completed, about 70 percent of the original oil is still trapped in the ground.
Chaparral is using an enhanced oil recovery process known as carbon dioxide flooding to recover up to an additional 77 million barrels of oil, which would be worth more than $7 billion at today's prices.
To reach that production level, Chaparral expects to spend about $1.6 billion in the next three decades.
Chaparral is pumping pressurized carbon dioxide into the reservoir, essentially carbonating the oil attached to rock layers underground. The carbon dioxide is absorbed by the oil, releasing it from the rock and making it lighter and more able to move toward the wellhead and to the surface without the need for the pump jacks that have dotted Osage County for decades.
When the oil is produced, the water and carbon dioxide are separated out and reinjected, continuing the cycle. The more carbon dioxide Chaparral uses, the faster production will increase.
The company earlier this month began receiving 25 million cubic feet per day of carbon dioxide from a fertilizer plant in Coffeyville, Kan. The project is expected to capture about 290 billion cubic feet of carbon dioxide that the fertilizer plant otherwise would have released into the atmosphere.
At current rates, it will take about seven years for the field to reach full production. At that point, production should level off for at least two decades.
Chaparral begin injecting carbon dioxide into the ground June 2. It took about two years to get to that point. During that time, the company has drilled new wells and repaired old ones.
Chaparral also has pumped water into the rock, increasing pressure to where the oil can more easily absorb the carbon dioxide.
“This field is 93 years old. Some of these are the original wells. They were still out there, but they were not very usable,” said Larry Brinlee, Chaparral's vice president of operations for the North Burbank unit. “Over the past few years, we've had to rework hundreds of wells by installing new casings and basically redoing everything short of drilling new wells. We spent a lot of time and money making those old wells suitable for this project.”
Besides repairing old wells, Chaparral also has drilled more than 40 new wells to replace old wells that had long been plugged and abandoned.
The company has begun operations in the first of about 17 planned phases.
“As we go forward, we will potentially drill another 300 wells,” Brinlee said.
A long future
Chaparral Reservoir Engineer DeLon Flinchum is a third-generation oilman who has spent his entire life in Oklahoma oil fields, including the past four decades in the North Burbank. He began in the area in 1971 with Texaco and joined Chaparral as it was beginning its work in the North Burbank field.
“This is my swan song. I could ride off into the sunset now,” Flinchum said. “It's neat to know we're working in a field that has been active for 93 years. Hopefully it will be here for another 93.”
“When Phillips built the waterflood in the '50s, they had no concern we'd be here 63 years later still waterflooding. ... We will just keep getting the oil out of the ground as long as it keeps producing.”