Presented by:

Enhanced Oil Recovery with CO2

Presentation to the Wyoming Pipeline AuthorityJuly 25, 2006

Enhanced Oil Recovery with CO2

Presentation to the Wyoming Pipeline AuthorityJuly 25, 2006

Presented by:

Craig WaltersArea Manager

2

AgendaAgenda

Overview of CO2 Enhanced Oil Recovery (EOR)

Wyoming CO2-EOR Assets

Anadarko Projects– Salt Creek, WY– Monell, WY– Linch, WY

Overview of CO2 Enhanced Oil Recovery (EOR)

Wyoming CO2-EOR Assets

Anadarko Projects– Salt Creek, WY– Monell, WY– Linch, WY

3

COCO22 EOR – A Mature Technology EOR – A Mature Technology

Industry has over 30 years experience– Anadarko has been involved for 10 years, 3 in Wyoming

– Operated in multiple basins

Over 80 projects in existence

Over 230,000 BBL/D due to CO2 injection

Industry has over 30 years experience– Anadarko has been involved for 10 years, 3 in Wyoming

– Operated in multiple basins

Over 80 projects in existence

Over 230,000 BBL/D due to CO2 injection

# Projects

0

50,000

100,000

150,000

200,000

250,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Ba

rre

ls O

il p

er

Da

y

0

10

20

30

40

50

60

70

80

90

# o

f P

roje

cts

Rate # Projects

4

How Miscible COHow Miscible CO22 Flooding Works Flooding Works

Production PhaseProduction Phase Recovery (% OOIP)Recovery (% OOIP)Primary Production 6 – 15 %Waterflood 6 – 20 %Miscible CO2 Flood 8 – 20 %

20 – 65 %

Inject CO2Inject CO2Produce Oil,Water & CO2

Produce Oil,Water & CO2

At certain temperatures and pressures, CO2 and oil will mix completely – termed miscible.

Miscible fluids tend to prefer the same flow paths, resulting in more oil being swept to the producer.

5

COCO22 EOR – Attributes EOR – Attributes

Benefits– Extends life of mature fields – increased production, long-life reserves

– Low chance of complete technical failure

– Environmentally friendly – sequestration of greenhouse gas

Challenges– Requires the “right” reservoir – rock, fluids, depth, size / OOIP

– CO2 availability, cost and distance to pipeline

– Significant, up-front capital investments with long payouts

– Higher operating expenses – CO2 recycle

– Access to resources – expertise, software, technology, goods / services

– Future oil prices – Does anyone have a crystal ball?

Benefits– Extends life of mature fields – increased production, long-life reserves

– Low chance of complete technical failure

– Environmentally friendly – sequestration of greenhouse gas

Challenges– Requires the “right” reservoir – rock, fluids, depth, size / OOIP

– CO2 availability, cost and distance to pipeline

– Significant, up-front capital investments with long payouts

– Higher operating expenses – CO2 recycle

– Access to resources – expertise, software, technology, goods / services

– Future oil prices – Does anyone have a crystal ball?

6

Wyoming’s COWyoming’s CO22 Source, Pipelines and Source, Pipelines and ProjectsProjects

Current CO2 Source

– By-product of natural gas production @ La Barge (ExxonMobil)

– Significant CO2 reserves (>100 TCF)

CO2 Infrastructure

– ExxonMobil

– ChevronTexaco

– Anadarko

Current CO2 Source

– By-product of natural gas production @ La Barge (ExxonMobil)

– Significant CO2 reserves (>100 TCF)

CO2 Infrastructure

– ExxonMobil

– ChevronTexaco

– Anadarko

Gas FieldsOil Fields3rd Party CO2 Pipelines

Anadarko CO2 Pipelines

3rd Party CO2-EOR Project

Anadarko CO2-EOR Project

SALT CREEKSALT CREEK

LINCH - FutureLINCH - Future

MONELLMONELL

BAIROILBAIROIL

24”

20”

16”

16”

Anadarko’s Pipeline into Powder River Basin

– 125 miles, 16 inch, 290 MMCFD max capacity

– 2006 average volume: 50 MMCFD (Peak @ 130)

– $45MM when constructed in 2003; $125MM today

Anadarko’s Pipeline into Powder River Basin

– 125 miles, 16 inch, 290 MMCFD max capacity

– 2006 average volume: 50 MMCFD (Peak @ 130)

– $45MM when constructed in 2003; $125MM today

7

Discovered late 1800’s

OOIP 1,680 MMBO

Cumulative production 655 MMBO

APC acquired 2002: 99% WI

First CO2 injection Jan 2004

Developed 15% of proved reserves

Expect to recover 10-15% OOIP

Sequester 490 BCF CO2

Discovered late 1800’s

OOIP 1,680 MMBO

Cumulative production 655 MMBO

APC acquired 2002: 99% WI

First CO2 injection Jan 2004

Developed 15% of proved reserves

Expect to recover 10-15% OOIP

Sequester 490 BCF CO2

Salt Creek Field – HistorySalt Creek Field – History

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pipeline

2012 2013

Pilot WC2

Phases 3 & 4 Phase 5

Pipeline

Pilot WC2

Phases 3 & 4 Phase 5

Pipeline

Pilot WC2

Phases 1 & 2 Phases 3 & 4 Future Phases

Development Timeline

Completed

InProgress

FutureDevelopment

8

Salt Creek Field – PerformanceSalt Creek Field – Performance

21,000 BOPD

Current Rates7,500 BOPD (Total)4,300 BOPD (CO2 Flood)140 MMCFD CO2 Injection

9

31 -1031 -10

PHASE 2 PHASE 3

Future InjectorFuture ProducerInjectorProducer

PHASE 1

Monell Unit – HistoryMonell Unit – History

Discovered 1959Discovered 1959

OOIP 112 MMBOOOIP 112 MMBO

Cumulative production 40 MMBOCumulative production 40 MMBO

100% working interest100% working interest

First COFirst CO22 injection Sept 2003 injection Sept 2003

Completed 1 of 3 phasesCompleted 1 of 3 phases

Expect to recover 20-25% OOIPExpect to recover 20-25% OOIP

Sequester 150 BCF COSequester 150 BCF CO22

Discovered 1959Discovered 1959

OOIP 112 MMBOOOIP 112 MMBO

Cumulative production 40 MMBOCumulative production 40 MMBO

100% working interest100% working interest

First COFirst CO22 injection Sept 2003 injection Sept 2003

Completed 1 of 3 phasesCompleted 1 of 3 phases

Expect to recover 20-25% OOIPExpect to recover 20-25% OOIP

Sequester 150 BCF COSequester 150 BCF CO22

2000 2002 2004 20062006

Phase 2

2008

Pipeline

Phase 1 Phase 3CO2 Pilot, Reservoir Analysis, Simulation, Design

Development Timeline

10

Monell Unit – PerformanceMonell Unit – Performance

15,000 BOPDCurrent Rates3,000 BOPD33 MMCFD CO2 Injection

11

COCO22 Purchases Purchases

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20

40

60

80

100

120

140

160

180

200

2004 2005 2006 2007 2008 2009 2010 2011 2012

CO

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urc

has

es,

MM

CF

D

Linch

Monell

Salt Creek0

20

40

60

80

100

120

140

160

180

200

2004 2005 2006 2007 2008 2009 2010 2011 2012

CO

2 P

urc

has

es,

MM

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D

Linch

Monell

Salt Creek

12

SummarySummary

CO2-EOR is a mature technology

Wyoming has 3 key ingredients for future growth– Amenable field characteristics

– Significant CO2 reserves at La Barge – can be utilized for EOR

– Good start to pipeline infrastructure

Be prepared / Proceed with caution– Significant up-front capital investments – long term projects

– Do your homework

– Anadarko’s Wyoming projects have been successful

Questions??

CO2-EOR is a mature technology

Wyoming has 3 key ingredients for future growth– Amenable field characteristics

– Significant CO2 reserves at La Barge – can be utilized for EOR

– Good start to pipeline infrastructure

Be prepared / Proceed with caution– Significant up-front capital investments – long term projects

– Do your homework

– Anadarko’s Wyoming projects have been successful

Questions??