SPE/DOE

Society of
Petroleum Entin",.

u.s. Department
of Energy

SPE/DOE 20269
A Flue Gas Huff 'n' Puff Process for
Oil Recovery From Shallow Formations
H.R. Johnson, * L.D. Schmidt, and L.D. Thrash, consultants to ICF Resources Inc.
SPE Member

Copyright 1990, Society 01 Petroleum Engineers Inc.

This paper was prepared lor prasenlatlon at the SPE/DOE Seventh Symposium on Enhanced 011 Recovery held In Tulsa, Oklahoma, April 22-25, 1990.
this paper was selected lor presentation by an SPE Program Committee following review 01 information contained in an abstract submitted by the author(s). Contents of the paper,
as presented, have not been reviewed by the Society 01 Petroleum Engineers and are subject to correction by the author(s). The material, as presented, does not necassarlly reflect
any position of the Society 01 Petroleum Engineers, its officers, or members. Papers presented at SPE meetings are subject to publication review by Editorial Committees of the Society
of Petroleum Engineers. Permission to copy Is restricted to an abstract 01 not more than 300 words. Illustrations may not be copied. The abstrect should contain conspicuous aCknowledgment
01 where and by whom the paper is presented. Write Publications Manager, SPE, P.O. Box 833836, Richardson, TX 75083-3836. Telex, 730989 SPEDAL.

ABSTRACf

This analysis assumes that the oil producing

wells and related oil production infrastructure
are in place. The analyzed project area contained 51 wells in 225 acres. Incremental cost to
install a system in 1989 similar in scale to that
employed by Troutman Oil is estimated to be
approximately $100,000. For the Troutman Oil
scale of operations, the operating costs are estimated at $37,400 per year.

Troutman Oil Co., Inc. of LaCygne, Kansas has developed a low-cost process for recovery of oil
from shallow oil formations. The process (named
"TWINC02") relies on immiscible displacement of
oil through the injection of flue gas in a cyclic
injection program. It was first installed in the
LaCygne-Cadmus field located in Linn County,
Kansas. The project has been in continuous use
since 1979. Oil production rates have stabilized
and the project has proven to be cost-effective
given its small investment requirements and low
operating costs.

Cash flow and profitability depend on the level

of oil production, posted prices, and net revenue
interest in a lease. For example, at a posted
price of $20 per barrel and average oil production of 15 barrels per day, the annual cash flow
from the entire project is estimated at $43,000
assuming an 80 percent net revenue interest.
This level of cash flow will payback the initial
investment in 2.3 years (undiscounted) and
yields an internal rate of return of 42 percent
over a 10 year project life. Economic parameters
are presented in this report which will enable
the reader to estimate the economics associated
with applicatio.n of the process at a particular
property, including the minimum oil production
required to cover operating costs and repay the
initial capital investment.

Flue gas is generated by burning natural gas in

an internal combustion engine. The exhaust gas
is treated and is compressed to around 250 psi
for injection into the reservoir. Following injection, the same well is converted to production
and the well flows oil, water, and gas into surface separating units.
The economics associated with this oil recovery
process as reported in the paper have been
updated to reflect 1989 prices and conditions.
References and figures at end of paper.

PROJECTLOCATlON

Johnson, now at BDM International, Inc.,

McLean, VA
Schmidt, now at Argas Corp., Independence, KS
Thrash, now Independent Oil Producer,
Bartlesville, OK

The Troutman Oil Company flue gas, oil recovery

project is located about 50 miles south of Kansas
City, Kansas (see Figure 1). Fifty-one oil producing wells are included in the project on the
933

FLUE GAS PROCESS

Balcer, North Baker, and Harvey leases in the

south half of Section 5, 1'20S, R23E, Linn County,
Kansas (see Figure 2). The project covers
approximately 225 surface acres with an average spacing of 4.4 acres per well.

SPEIDOE 020269

INJECTION evq E

Flue gas is injected for a period of three weeks,

or until the well head pressure reaches 300 psi.
Following injection, each well is allowed to. "soak"
for approximately one day. The well is then
opened and the produced fluids flow to the surface and into the water/oil separators through
the same one-inch flow lines used to inject the
flue gases. About one-half of the injected gas is
produced with the oil and water during the flowback period, and this gas is vented. The remaining unrecovered gas becomes dispersed into
the formation.

RESERVOIR CHARACfERIS1lCS
The lease area lies within the LaCygne-Cadmus
oil field. The target formation is the Peru sandstone found at a depth of about 250 to 300 feet.
The sand is blanket-like in this area with a total
thickness of 15 to 30 feet, and it averages about
25 feet in the project area. Reservoir permeability is erratic and averages about 35 millidarcies on the leases used in the flue gas recovery
project. The corresponding porosity is 19 percent. Produced oil averages 29 degrees API
gravity with a viscosity of 20 to 30 centipoises.
Reservoir temperature is estimated to be about
78 degrees F. No distinct gas/oil or oil/water
contacts have been identified in this field.

A typical gas injection/oil production cycle for

48 wells requires the injection of flue gas into six
wells over a three week period and then placing
each of the six wells on flowing production for
approximately 21 weeks. As these wells are
produced, the remaining 42 wells are stimulated
in groups of six and placed on production. After
all 48 wells have been stimulated, flue gas is injected into the initial six wells and the process is
repeated. After startup, 42 wells are being produced at all times while 6 wells are being
treated.

wm.J: COMPLETION METHODS

Each well has been completed using two-inch
casing cemented to the surface. The oil productive interval was perforated and hydraulically
fractured using a conventional gelled water
fracture fluid with about 3,500 pounds of sand
proppant. The operator reports that the wells
have required no remedial work since the flue
gas injection was started over 10 years ago.

OIL PRODUCDONBESPQNSE
Initial primary oil production was established on
the Baker lease in 1964, on the Harvey lease in
1965, and on the North Baker lease in 1971.
Primary oil production peaked at about 8,000
barrels per year in 1966 then fell rapidly (see
Figure 3). By the end of 1967, both the Baker
and Harvey leases were virtually shut-in. The
leases were acquired and water injection was
started on the Baker lease in 1968. The peak
waterflood oil production rate occurred in 1968
at about 12,000 barrels per year. Water was
injected through 1978 in an effort to continue to
assist oil recovery from the area.

FLUE GAS GENERATION

The flue gas is generated by burning natural gas
(or propane) in a 4-cycle, 150 HP internal combustion engine. Exhaust gas from the engine is
circulated through a platinum catalytic treater to
remove corrosive oxygen and nitrogen oxides
from the gas. The gas is cooled from 1,100 degrees F to 135 de-grees F, cycled through a liquid/gas separator and then introduced into a
compressor where it is compressed to pressures
that range from 240 to 300 psi. Compression
heats the gas to 350 degrees F and a second
cooling system is used to cool the gas exiting the
compressor to approximately 135 degrees F.

Troutman Oil acquired the leases and installed

the flue gas generator to test the production
response. The Harvey lease was selected to test
the flue gas process. This lease averaged less
than 1 barrel of oil per week prior to the test.
However, following flue gas injection in 1979, oil
production rose sharply to 120 barrels per week
and then declined to about 40 barrels per week.
Cumulative oil production totaled nearly 600
barrels of oil over the 15-week test period.

Approximately 11 thousand cubic feet (Mcf) per

day of natural gas is required for the current operation which generates over 100 Mcf per day of
flue gas. This is a sufficient amount of flue gas
to treat 6 wells at a time at an average injection
rate of 17 Mcf per day per well. During the
period of injection (21 days) each well receives
approximately 350 Mcf of flue gas. The flue gas,
conditioned for injection, consists of approximately 87 percent nitrogen and 13 percent C02
and inerts.

After the successful test of the system on the

Harvey Lease, Troutman Oil expanded the use of
the flue gas process to ultimately incorporate 51
934

SPE/DOE 020269

H.R. Johnson, L.D. Schmidt, L.D. Thrash

wells on the Harvey, Baker, and North Baker

leases. Oil production increased and repeated
cycles of the process stabilized the oil production
rate at about 4,300 barrels per year for the ten
years from 1979 through 1988.

The distribution of annual operating costs is presented in Table 2.

Cash Flow Example
This cash flow example assumes that the oil production is 15 barrels per day (5,400 barrels/year) and that the oil can be sold for $20
per barrel. The annual revenue generated under
these conditions totals $86,400 to an 80 percent
net revenue interest in the property (see
Table 3).

Through 1978, the leases now subjected to the

flue gas huff-and-puff process yielded 57,000
barrels of oil by primary and secondary oil recovery operations. From 1979 through 1988, oil
production totaled 43,000 barrels. Forty-three
percent of the 100,000 barrels of total oil produced through 1988 (see Figure 3) is related to
the flue gas injection process. The flue gas process extended the productive life of the leases
which would most likely have been abandoned
following waterflood operations.

Operating costs and various state taxes (here estimated at 7 percent of the revenue) are subtracted from the revenue to calculate an annual
before income tax cash flow of $42,977 per year.
Cumulative cash flow combines the annual cash
flow from operations with the initial capital costs
of the system ($100,000). Payout occurs at that
point in time where the cumulative cash flow
becomes positive. In this example, payout
(undiscounted) occurs in 2.3 years. The internal
rate of return for this example is 42 percent.

PRQCRSSECQNOMICS
Capital Inyestment
This economic analysis assumes that the oil producing wells have been drilled and are capable
of production. In addition, it is assumed that the
basic oil production infrastructure is also in
place, including flow lines and tank battery.
While oil production is possible, it is assumed
that oil production has declined to the point
where the operator has decided to install and
operate the flue gas system in an effort to
attempt to increase production. Each lease will
require different capital expenditures, depending on the equipment on hand and the condition
of the lease. For this paper, the one-time capital
costs to install a system in 1989 similar in scale
to that used by Troutman Oil is estimated to total
about $100,000, with the costs distributed as
shown in Table 1.

Process Economics
Process economics were examined by expanding
the assumptions used to create the Cash Flow
Example in Table 3. The economic analysis presented in Figures 4 and 5 use three levels of
posted oil prices ($15, $20, and $25 per barrel),
three levels of oil production (10, 15, and 20
barrels per day), and three levels of net revenue
interest (72, 80, and 87.5 percent). These levels
were selected to bracket the probable economic
outcomes associated with the use of the flue gas
injection process as applied to a property similar
to that of Troutman Oil Company.

0peratin& Costs

The annual cash flow calculations are presented

in Figure 4. The middle panel in this Figure
contains a data point from the Cash Flow
Example. That is, at 15 barrels/day, $20/barrel,
and a net revenue interest of 80 percent, the
annual cash flow is about $43,000 per year.
Similar estimates can be made directly from this
figure for a wide range of economic assumptions.
Payout of the investment can also be directly
estimated from the data in this figure (for the
Cash Flow Example, $100,000 investment/
$43,000 per year cash flow = 2.3 year payout).

Annual operating costs of the flue gas system

have been estimated at $37,375 per year from
the Troutman Oil Company data. For their
system, about 11 Mcf/day of gas is required at a
cost of $1.50/Mcf (a total cost of about $6,000
per year). Only one pumper is needed to maintain the system, including monitoring and repair
of the 48 active injection and/or producing wells,
the tank battery, and the generating system.
Labor costs are estimated to be $20,160 per
year. Electricity costs are estimated at
$4,400/year and repairs at $2,000/year. General and administrative expenses are calculated
to be 15 percent of the sum of the other operating expenses.

Each set of economic conditions will result in a

cash flow and a corresponding internal rate of
return before income taxes. These internal rates
of return are displayed in Figure 5 and can be
935

FLUE GAS PROCESS

Examination of the Figure 5 results show that the

internal rate of return is zero (no profit) under
certain conditions of oil price and oil production.
While most of these lower levels generate a
positive cash flow, the cash flow is not adequate
to both repay the initial capital costs and to pay
for operations. A minimum annual revenue of
about $38,000 is required to breakeven using
this system.

The minimum oil production needed to cover the

cost of operations ranges from 5.1 to 10.4 barrels
per day (see Table 4). Each of the data entries in
Table 4 will generate a revenue of about $38,000
per year, which is adequate to pay the estimated
operating costs.
In addition to operating costs, repayment of the
initial capital costs must also be considered.
However, the rate of capital repayment can
range from months to years, depending on the
objectives of each producer.
For example, a producer may choose to repay the
$100,000 capital investment over as-year
period, or $20,000 per year (this will be greater
if loan interest is also considered). The oil production needed for capital repayment can be estimated from the Table 4 data. For a 72% net
revenue interest and $15 per barrel, 10.4 barrels
per day will generate $38,000 per year. By proportion, about 5.5 barrels of oil per day is
needed to generate the $20,000 per year capital
payment, calculated as follows:
10.4 bid

= ------------

processes and the results of field applications.

Ten flue gas projects were reviewed, all of which
were aimed at deep oil reservoirs (from a few
thousand to 12,000 feet deep) using relatively
high injection pressures (thousands of psi). Field
applications of flue gas to recover oil from shallow oil reservoirs were not available. However,
the study concluded that:
"Flue gas flooding may be a good alternative for shallow heavy oil reservoirs." (1.
pg. 112)

Breakeyen Oil Production

Oil Production

SPF.JI)OE 020269

"... the C02 component of the flue gas

dissolves in oil and reduces the oil's viscosity. Nitrogen provides the energy for
pressure build-up and "chases out" the oil.
However, flue gas flooding creates operating problems due to its corrosive nature."
(1, pg. 3)
The TWINC02 flue gas huff-and-puff system has
only been used in one shallow formation. Its
application in other areas has yet to be tested,
but shallow oil reservoirs of a similar nature
exist in numerous areas within the United States.
Based on the ten years of continuous application
documented in this study, sufficient amounts of
flue gas can be injected into shallow (+/- 300
feet deep) reservoirs to cause flowing oil production. Injection pressures can be increased as
the formation depths increase. However, wells
may need to be pumped if the process is applied
to reservoirs significantly deeper than 300 feet.
thereby increasing both capital and operating
costs.

x $20,000 = 5.5 bid

$38,000
Under these example conditions, the IDlDlmum
oil production would need to total 15.9 barrels
per day to both cover operating costs (10.4 bid)
and to repay the capital investment over a
period of five years (5.5 bid). These minimum
requirements would be greater if interest and/or
the time value of money were considered in the
calculations.
APPUCABUJTY OF TIlE FLUE GAS PROCESS TO

ODIERfORMADONS
The U.S. Department of Energy sponsored a
state-of-the-art review of nitrogen and flue gas
oil recovery methods in 1980 (Ref. 1). The review included both laboratory analyses of the

To fully utilize the capacity of the TWINC02 flue

gas system installed by Troutman Oil, about 48
wells are required. This limitation can be overcome by appropriate equipment sizing or by use
of the equipment on an intermittent, rather than
full-time basis. The number of wells required to
achieve a specified level of increased oil production will vary from lease to lease. Troutman Oil
developed its injection/production cycle through
trial and error. Other leases will most likely require a similar approach. Changes to the process
may improve the efficiency of the process in
other applications and/or formations. Changes
such as higher injection pressure and/or temperature, and greater gas volumes have not been
analyzed for this paper.

H.R. Johnson, L.D. Schmidt, L.D. Thrash

SPEIDOE 020269

CONQ.,USIONS

ACKNOWI BPGEMENTS

With over ten years of continuous operations,

the use of the flue gas huff-and-puff system on
the Troutman Oil leases has demonstrated that:

This analysis was undertaken for the U.S. Department of Energy (DOE), Bartlesville Project
Office as a part of an effort to identify enhanced
oil recovery projects that are particularly suitable for use by independent oil producers at current (1989) economic conditions. Overall project
direction for this analysis was provided by Dr.
J.P. Brashear and project management by Mr.
Alan B. Becker, both of ICF Resources, Incorporated of Fairfax, VA. The work was performed
under DOE Contract No. DE-AC22-86BCI4oo0.

1.

Injection of a sufficient amount of gas is

possible at a pressure which causes
wells to flow from a depth of about 300
feet,

2.

The process is relatively simple, low in

maintenance, and is not labor intensive,

3.

Gas conditioning and the control over

gas temperature have been effective in
reducing corrosion normally associated
with recovery processes that use carbon
dioxide,

4.

The availability of a low cost fuel supply

is important to overall project economics, and

5.

The process can be cost-effective at

moderate oil prices and relatively low
oil production rates.

The authors acknowledge, with thanks, the

assistance of Mr. Lester L. Troutman, President,
Troutman Oil Co., Inc. for providing the information needed for this analysis. As the developer
of the flue gas huff-and-puff process described
in the report, Mr. Troutman has additional technical details available concerning the process and
may be reached at R.R. 2, Box 109, LaCygne,
Kansas 66040.

REfFRENCE
(1) Harish R. Anada.

"State-of-the-Art Review
of Nitrogen and Flue Gas Flooding in Enhanced Oil Recovery." U.S. Department of
Energy, DOE/MC/08333-2, December 1980.

The flue gas huff-and-puff method can most

likely be economically applied to some shallow
reservoirs even at current (1989) posted oil
prices. However, each project will need to be
evaluated on its own merits.

TABLE 2 - ANNUAL OPERAnNG

COST ESTIMATE
1989 DOLLARS

TABLE 1 - CAPITAL COST

ESTIMATES FOR FLUE GAS SYSTEM
1989 DOLLARS
GENERATOR SYSTEM
FUEL SUPPLY
LEASE MODIFICAnoNS
MISCELLANEOUS

$ 70,000
10,000
10,000
10,000

TOTAL

$100,000

$ 20,160

LABOR
PURCHASED GAS
ELECTRIC
REPAIRS
GENERAL & ADMIN.

5,940

4,400
2,000
4,875

$ 37;375

TOTAL
TABLE 3 - CASH FLOW EXAMPLE

YEAR 0

PRODUCTION, BBLS
OIL PRICE. $/BBL
REVENUE, $ 8O%N.R.I.
INVESTMENT. $
OPERATING COSTS, $
STATE TAXES. $

YEAR I

YEAR 1

YEARtl

6400
20.00
1l6400

6400

6400

6400

6400

20.00

20.00

20.00

20.00

Il6400

Il6400

Il6400

37375
6048

37375
6048

37375
6048

42977
57023

42977
-14Q.48

42977

28931

YEAR I

YEAR"

YEAR 6
THRU
YEAR 10

Il6400

27000
20.00
432000

54000
20.00
1l64OO0

37375
6048

37375
6048

186875
30240

100000
373750
60480

42977
71908

42977
114885

214885
329770

100000

CASH FLOW.$"
-100000
CUMULATIVE CASH FLOW. $" -100000
BEFORE INCOME TAX

937

TOTAL
OR
AVERAGE

329770

SEE 20 2b 9
TABLE 4 - BREAKEVEN
OIL PRODUCTION

POSTED OIL PRICE

$15

$20

$25

NET
REVENUE
INTEREST

Dally 011 Production

Needed to Cover
Operating Costs of
About $38,OOO/Year

72.0 %

10.4

80.0

87.5

9.3
8.5

15

7.8
7.0
6.4

6.2
5.6
5.1

30

MilES

Fig. 1 - Flue Gas Recovery Project Is Located Fifty

Miles South Of Kansas City, Kansas

938

se.E 20269
R-23-E

en

C\II

II

I-

PROJECT

51 WELLS
IZSACRES

NORTH

i~

2X

12

V2

X2

R4

T4

V4

X4

R6

T6

V6

X6

T8

V8

X8

P2

R2

P4
P8

BAKa

BAKa

iF4
~

ii
ACTlVEGAS
INJEC'IlON

2N

2P

I
iF2

L4

N4

.......,.!F6

La

iF8
i"

H8

1,'''''"",''11;''11111...",,1-

ABANDONED
STREAM FLOOD

PROJECT

l'

WELLS

2tJACRES
0
I

660
I

SCALE: FEET

13

v......
V

~I

P12

R12

n2

V12

X12

.....

CUllUATTVE OL PffOOUCTION

,.,/

/"

fig. 3 - Water Injactlon HIla BHn folloWed By

o.alnJ_tlon to Incr.... 011 Raoovary on a.kar,
North a.ker, and Hervey ........ linn Co.. KS

938

X10

YE'AR

./

V10

1_ -1'rIIMIy IIIIIIII 011 preduCllon

1_ - w.tIDed IIIIIIII011 pnMIuIIIIon
11171- .... JIftICItICIIIIn fnInIllIIt",

no

AIIMJAL 011. PRODUCTION

...., \j \

R10

FIg. 2 - Active Flue Gu Project Aru

Cove,. 225 Acru, Unn County, Ken...

.1\ A\\

P10

HARdY

.w.t ;~~...

SPE
Q:

$15 Per Barrel

$15 Per Barrel

ffia.:
~

....

Net Revenue

20269

Net Revenue

ffi

Q.,

~
~

~
Q:

$20 Per Barrel

$20 Per Barrel

ffi

Revenue
Interest

Q.,

~8

(,)

ffia.:

;
~

$25 Per Barrel

ffi

Q.,

~
~

~
BARRELS PER DAY

BARRELS PER DAY

Fig. 4 - Annual Cash Flow Estimates,

Flue Gas Recovery Process

Fig. 5 -Internal Rate of Return Estimates,

Flue Gas Recovery Process

940