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Obsidian Energy Ltd T.OBE

Alternate Symbol(s):  OBE

Obsidian Energy Ltd. is a Canada-based exploration and production company. The Company operates in one segment, to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. It has a portfolio of assets producing around 35,700 barrels of oil equivalent (boe) per day. Its operating areas include Cardium, Peace River and Viking areas of Alberta. Its Cardium asset is a fully delineated and de-risked asset. It is focused on manufacturing repeatable low-decline and high-netback light-oil wells across its Cardium land base. The Viking is a light oil, horizontal development play located in central Alberta. Its operations are focused on the Esther area. Peace River is a stable, cold-flow, base production asset. It operates on a contiguous and an acreage within the heart of the Peace River Oilsands region.


TSX:OBE - Post by User

Post by JohnJBondon Mar 26, 2023 4:12pm
469 Views
Post# 35361414

OBE 14-18-082-17 W5M water disposal well

OBE 14-18-082-17 W5M water disposal wellAs many of you may know by now, last Thursday, OBE was ordered by the Regulator to do various things to one of its water disposal wells - located at 14-18-082-17 W5M (14-18)

This water disposal well is located in the Peace River area.    It is one of many active in the area.

It has apparently been used for water disposal for 10 plus years (this well was Spud on March 12, 2012 (petroninja).    During those 10 ish years it has apparently injected about a million cubic meters (that is an average of about 1/10th of a regular (Olympic) size swimming pool each day.   ie, about 250 cubic meters per day (average).  (this data comes from the paper discussed below)

This well was drilled 1923 meters deep (petroninga)

About 10 years later (last Nov), some earthquakes occured close to this water injector.

The earthquakes apparently were located about 4 km deep.    ie about 2km deeper than the well.

The cluster of earthquakes apparently happenned after 14-18 stopped injecting water.

When they first occured they were classified by the Regulator as natural caused (ie earthquakes happen when tension builds at a fault line, when the rock on one side is moving in a different direction than the other side.   At some point the tension becomes strong enough to overcome friction, and the rocks slide against each other.   This releases the tension, and the movement causes an earthquake.    Over time the tension will return, and the process will repeat).   ie earthquakes are natural and inevitable.   Little earthquake are perferable, because they release tension, and prevent tension building to the point that causes a big earthquake.

Last Thursday a paper was publish in the journal Geophysical Research Letters.   
Funding for this work came from the Stanford Center for Induced and Triggered Seismicity.

From their web site

The Stanford Center for Induced Seismicity is an industrial affiliates program on the topic of induced and triggered earthquakes, co-directed by Professors Bill Ellsworth, Greg Beroza (Geophysics), and Associate Professor Jack Baker (Civil and Environmental Engineering).

In this context, we have established an industrial affiliates program to help companies and other stakeholders develop:
  • a better understanding of the science of induced and triggered earthquakes associated with different types of activities
     
  • a context-specific consensus risk management framework
     
  • consensus risk management tool kits
It may be useful when reading a scientific paper, to see who paid for it, and keep that in mind when reading it.

This paper suggests a strong link between OBE's above water disposal well 14-18, and the earthquakes that happenned 10 years later.

As a result, the Regulator has ordered OBE to come up with a plan to reduce the size and number of earthquakes caused by water injector well 14-18.

And

To Start collecting seismic data around the injector well.

I've attached a link to the Stanford paper so you can read it yourself.

https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2023GL102940

One of the problems I have with this paper, is its apparent misunderstanding of how OBE obtains its oil in this area.   The following quote from the paper suggests OBE is using various underground stimulation to get its oil.

"...the Peace River region is too deep (∼550–700 m) for economical excavation and instead utilizes unconventional in situ recovery techniques (Hein, 2017). Cyclic steaming stimulation (CSS), steam assisted gravity drainage (SAGD), and cold heavy oil production with sand (CHOPS) techniques are used to mobilize bitumen for extraction via well pumping (de Klerk, 2020). These unconventional recovery processes aim to decrease the viscosity of oil sands, for example, by injecting solvents or hot steam. Recovery typically produces a mixture of 25%–30% bitumen and 70%–75% water (de Klerk, 2020), which requires wastewater management via subsurface disposal."

My understanding is different.   My understanding is OBE is using unfracked multi latteral well bores to let the oil naturally flow into their wells.   ie, this is a cold flow recovery.  The whole point (attractiveness) of the Bluesky or Clearwater is they produced through one production string without having to use costly hydraulic fracturing technologies or secondary thermal technologies.    Furthermore, these wells produce a very small water fraction.

Unless I'm wrong, this is an apparent fundamental misunderstanding or misinformation in the Stanford paper.

If the paper's authors are wrong about OBE using the above "unconventional in situ recovery techniques", then one wonders what else they may be wrong about?

The second issue I have is according to the Paper's Figure 2(b), the main cluster of (almost all) earthquakes apparently happened AFTER OBE's water injector stopped injecting water!    That seems inconsistent with the paper's apparent claim that injecting water causes earthquakes.     

I also note that Baytex apparently has a water injector about 8 miles West of the OBE water injector, with a total dept of 791 meters (petroninja).    This BTE injector is the 6-14 well shown in the papers figure 3.  It is closer to the center of the earthquake cluster than OBE injector - but apparently not mentioned by the Regulator.

Lastly I have the obvious issue with earthquakes located 2km deeper than the water disposal depth, and taking 10 years to appear.   That is not to say its impossible, but I can see why the Regulator originally dismissed the connection between this disposal well and the earthquakes.

That said, given the publication of this paper, I agree that the responsible thing for the Regulator to do, was to work with OBE to start watching water injection pressure, volume and seismic data at this water disposal well in real time, to see for themselves.

To further complicate this matter, the paper acknowledges there is another cluster of earthquakes (Northern Cluster), that is not located near water injectors

If it were me, I'd probably plug the well, or alternatively make it shallower to match the BTE well, and see what happens.

If the earthquakes are not associated with this water injector, as long as the injector is in use, it may be blamed for any future earthquakes.

An examination of the production wells around OBE's 14-18 water disposal well, shows they were drilled 6 - 11 years ago.   ie, these are older wells that may not have much current cummulative production.

On the otherhand, the fault tension in this area may now have been released - so there may not be remaining tension to cause any further earthquakes (one decent earthquake will often give enough of a shake to prompt any other nearby potentials - aka aftershocks)

Lastly, if you look on petroninja, you can see there are water disposal wells all over the place up there.    Each cluster of horizontal wells seems to have one or more disposal wells.    It may be the Regulator has just identified OBE to work with on one old water injector to collect seismic data to see if there is a relationship or not.   According to the Papers Figure 2(b), it appears this injector stopped injecting water in late 2022 - so it may or may not even be in use presently.

IF there is a relationship, the apparent inference from the Stanford Paper, is to use a water disposal well for less than 10 years.     I say that half in jest.   A more obvious solution may be to inject the water at a shallower depth, at a lower rate.

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