APPENDIX 16

PROJECT RULISON FEASIBILITY STUDY-SUMMARY

INTRODUCTION

A feasibility study by Austral Oil Company Incorporated and CER Geonuclear Corporation has shown the tremendous potential value of nuclear stimulation of the Mesaverde formation in the Rulison Field.

This study, Project "Rulison", follows a letter of intent to the AEC by Austral/CER, in which a nuclear experiment was proposed in Garfield County, Colorado. The report concludes that the nuclear test could be conducted safely and should lead to commercial development of the gas resources of that area. As tentively planned, the experiment will involve the simultaneous firing of two 50 kiloton nuclear explosives placed about 1,000 feet apart in the same wellbore in the Mesaverde formation of the Rulison Field. The shot could be fired shortly after Projects "Gasbuggy" and "Dragon Trail".

Why use nuclear explosives? Because here is a tremendous energy source in a small package. The explosive breaks up a huge rock pile underground that becomes the new wellbore. Gas will flow at a much faster rate into this broken up rock pile and can then be produced economically.

Rewards could be high in the "Rulison" experiment. Tightly locked in the Mesaverde formation are approximately 100 billion cubic feet of gas per section. This gas cannot be produced profitably by current methods. The permeability of the reservoir is so low that production rates do not justify development with available fracturing techniques. Should the nuclear stimulation technique prove

successful, this tremendous volume of tightly bound gas could be pro

duced economically.

The U. S. Government has a large vested interest in this project since it owns most of the area, and would gain substantial royalties from its production. Thus, the government will be interested not only in the development of the nuclear stimulation technique, but in the income to be derived from the gas production. Predicted royalties to the Federal Government from the Rulison Field alone would more than repay all of the money spent on the Plowshare Program since its inception.

NUCLEAR EXPLOSIVE EFFECTS

Two 50 Kiloton devices in the same wellbore are suggested for the "Rulison" experiment. The purpose of the two devices is to break a larger chimney zone so that more of the sand lenses would be in contact with the wellbore. Predicted shot effects are given in Table I

(Table VII Rulison Report). This table shows that even two 50 Kiloton devices would not form a chimney that extends completely across the Mesaverde formation; however, it will put the wellbore in contact with the major portion of the sand lenses. The overall chimney height should be approximately 1,600 to 1,700 feet, and the diameter of the fractured area should be 600 to 800 feet. This chimney and broken up or fractured rock zone will be re-entered by the new wellbore and will allow production rates that are commercially attractive. A drawing of

the expected configuration is given as Figure 1 (Figure 15 Ruli

son Report).

A seismic study will be made to determine the magnitude of the shots that can be used in this area and will be combined with

the experimental program to determine the effect of the nuclear explosive on productivity. It is readily apparent that two larger de

vices would do a much better job of tying in the entire Mesaverde formation than will the two 50 Kiloton devices. Data from this shot should give information on the seismic interactions from the two shots. Because of the remoteness of the area, it may be possible to develop the field with higher energy levels than those proposed for this experiment.

SITE LOCATION

The site of the proposed "Rulison" nuclear test is in Section 36, Township 7 South, Range 95 West, Garfield County, Colorado. This section proposed for the nuclear test is located by a red arrow on Figure 2 (Figure 1 Rulison Report). The location is in the Battlement Creek Valley at an elevation of approximately 8,600 feet. It lies about 45 miles northeast of Grand Junction and 7 miles southeast of Grand Valley, the nearest town.

RESERVOIR CHARACTERISTICS

The nuclear explosives will be fired deep within the Mesaverde

formation. At this proposed location, the Mesaverde formation extends throughout the interval between the depths of 6,500' and 9,000 feet below the surface. Figure 3 (Figure 7 Rulison Report) presents the log cross-section through the area. The logs show that the Mesaverde is made up of intermittent sand and shale lenses. Analysis of the logs shows that the 2,500 feet of Mesaverde formation contains approximately 500 feet of gas bearing sands.

Figure 4 (Figure B-8 Rulison Report) is a photograph of the Mesaverde outcrop. It was taken in the DeBeque Canyon area, only a few miles from the shot point. The outcropping shows clearly the interbedded shale and sand lenses. These sand lenses have discontinuities which restrict the flow of gas into the wellbore. It is these restrictions to flow, coupled with the very low permeability of the lenses, which makes the reservoir uneconomical using normal production techniques. The purpose of the nuclear explosive will be to create a vertical chimney and a radially extending fractured area far enough out into the reservoir so that a sufficient number of the sand lenses are connected to the nuclear "wellbore" and thus give up their gas at an economic rate.

Core analyses from Austral's new wells show the average permeability to be about 0.5 millidarcies, the porosity 9.7 percent, and the water saturation 45 percent. The bottom hole pressure is normal hydrostatic gradient or approximately 2,600 psi. These values combined with the pay thicknesses of over 500 feet (from the logs) verify the previous estimates of gas in place ranging from 96 bil

lion to 125 billion cubic feet per section.

Attempts at production by conventional means have been un

successful. Elaborate fracture treatments have been designed in an attempt to tie more of the sand lenses to the wellbore. Such treatments originally result in wells which produce close to a million cubic feet per day; however, they drop off fairly rapidly and produce at something between 100,000 to 150,000 cubic feet per day. ion at these rates is uneconomical in 7,500 to 9,000 foot wells.

Product

EFFECT OF NUCLEAR EXPLOSIVE ON RESERVOIR PERFORMANCE

Studies made of the cores, logs, and Mesaverde outcrop show this to be a complicated reservoir. The sand lenses are interbedded with some shale breaks extending over large areas. This means the individual lenses must be tied into the nuclear chimney or fractured area to be able to deliver its gas into the wellbore.

Since the sand

lenses are intermittent, the reservoir cannot be mathematically simulated by a simple radial system. A three-dimensional, isothermal mathematical analysis (flow model or code) was designed to represent the productive history of the reservoir. With this more complicated model, it has been possible to duplicate the observed results on all the existing wells. By using the model and the 7094 computer the production history of the well following nuclear stimulation was calculated.

Figure 5 (Figure B-18 Rulison Report) shows projected cumulative production from a non-stimulated and a nuclear-stimulated well.