| 1. |
Minimizing the Number of Wells.
UNIGAS will use existing wellbores in the field that can be economically reworked and that have been tested for mechanical integrity. In addition production will be from a small number of specially designed horizontal wells which are strategically placed in the field. Operating expenses and maintenance costs are thus minimized because of the small number of wells.
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| 2. |
Maximizing Storage Working Gas Volumes
UNIGAS has attempted to maximize the working gas volume which directly maximizes revenue. Cash flow is directly related to working gas volume and the project is designed to minimize pad gas by using high deliverability horizontal wells which can meet contract gas deliverability requirements at pressure which are lower than normal field reservoir pressures for a similar vertical well. Lower operating pressures translate to lower pad gas requirements.
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| 3. |
Optimizing Production Profile. (Maximum early production with short production life.)
High deliverability Horizontal wells allow for maximal gas withdrawal in the early phase of the storage system producing life. Higher withdrawal rates mean quicker cash flow for the owner/operator.
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| 4. |
UNIGAS has attempted to minimize capital expenses by a series of engineering, geological and project innovations
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| 4.1 |
Horizontal wellbores though more costly than vertical wellbores produce many multiples of the rates produced by vertical wells. Thus though a horizontal well may cost up to 200% more than a vertical well it delivers as much as 700% of the gas rate under the same conditions existing in the UNIGAS gas storage system. |
| 4.2 |
Pipeline construction. By optimally selecting the access pipelines UNIGAS has been able to minimize the total length and size of lines to be laid. |
| 4.3 |
Operating Costs: UNIGAS is negotiating an operating agreement whereby an existing utility will operate the facility under contract. This is a significant economic saving. |
| 4.4 |
Leasing of Pad Gas: Leasing of the pad gas has been examined and it seems to be economically feasible and would allow a more optimal use of capital and lower taxes on the project.
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| 5. |
Implementing a short construction schedule
UNIGAS has developed a parallel approach to field and project development. By their very nature many gas storage development activities lend themselves to a parallel operations. Well work—overs, drilling and gathering system construction can occur simultaneously. UNIGAS has utilized computer analysis to maximize parallelism and minimize construction time without any increase in costs or decrease in safety and reliability.
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| 6. |
Safety and the environment
All requisite safety issues have been addressed. Pipeline construction, drilling operations and land remediation have been analyzed to minimize present and future costs or liabilities
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| 7. |
Minimizing time between injection and withdrawal
UNIGAS has developed a pricing mechanism and a withdrawal profile for clients that would allow maximum reservoir response without unduly affecting the customer’s ability to receive stored gas on schedule.
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| 8. |
Minimizing Risk. Risk has been minimized by selecting engineering and geological working parameters that will minimize risk. In addition certain strategic decisions on contracting and operations have been made in an effort to lower risk.
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| 8.1 |
Maximum storage pressure is 1250 psi, which is below the original discovery pressure of the field. The possibility of leakage through the overburden or under burden is thereby minimized |
| 8.2 |
Several Horizontal wells are being drilled to deliver produced gas. Any two of these wells can deliver more than 80% of the gas needed for contract. The remaining production can be easily achieved by the vertical wells present in the field, several of which shall be re-entered using lateral drilling techniques to provide several additional horizontal wellbores, though smaller than the main producers. |
| 8.3 |
Reservoir Quality: The CROMWELL reservoir is selected by UNIGAS as the repository for the storage gas is a demonstrated structural and stratigraphic trap. In addition the CROMWELL sand is possibly among the most widely drilled formation in the state of OKLAHOMA and its geology and properties are well known. Finally, drilling and completing a “Cromwell Well” in Oklahoma is a simple and straightforward endeavor. It is straightforward and uncomplicated. |
| 8.4 |
Quality of Client: UNIGAS has selectively contracted and is continuing to contract with companies of robust financial stature and demonstrated commitment to the gas industry. These companies will be dependable paying customers and shall be around for the long term. |
| 8.5 |
Operations: UNIGAS is contracting with an operating company, part of a multi-billion corporation, which has operated gas storage systems for many years in Oklahoma. This operator is a large pipeline company of sufficient experience, size and resources to actively manage the operation. |
| 8.6 |
Access pipeline redundancy by UNIGAS allows the system to deliver gas at all times to major interstate systems in the event of a disruption by one or more lines. Major North—South and East—West access will continue at all times during any outages because the sizes of lines leaving the storage area are large enough to accommodate any expected gas volume changes. |
| 8.7 |
Design, Development, Procurement and Construction shall be contracted to a group of world class companies who have demonstrated their proficiency in the areas of drilling, construction, processing pipeline and engineering. This reduces completion risk and guarantees a workable system with minimum problems. UNIGAS is working closely with these groups to monitor costs and to maintain price perspective relative to costs in Eastern Oklahoma. Some of these companies have the tendency to charge at rates commensurate with foreign operations.
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| 9. |
Incorporating flexibility, simplicity and contingency
UNIGAS has maintained flexibility in deliverability operations by using multiple wellbores. Simplicity is built into gas treatment facilities on the surface because the stored gas has very little water since the original reservoir is not considered a water drive and very little condensate is expected from the dry gas.
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| 10. |
Building on previous experience of others in this area of engineering has been paramount to UNIGAS. We have analyzed all the past and current technology used in gas storage operations to give us a competitive advantage.
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| 11. |
Understanding the value of information has been a basic prerequisite in our design and operation. All data on every well and all pipeline parameters are on an interactive database which is a design and operational tool for the project.
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| 12. |
UNIGAS has worked intensively at the “people level” to meet with and educate the primary landowners in the area. UNIGAS has tried to develop an ongoing working relationship whereby this particular group has a clear understanding of what we intend to do and to minimize any problems that may develop from this direction.
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