Paper: ANETH Unit Reliability Engineering Lease Review

Three significant conditions existed in the oil industry in 2000. First we had the best oil prices we had seen in years, second we didn't know how long they were going to last and third many of the major oil companies were investing in overseas growth opportunities leaving less capital for domestic projects. Aggressive operators, with the ability to respond quickly, wanted to take advantage of the high oil prices by increasing production (make hay while the sun shines). Discerning operators wanted to hedge their spending on projects that would payout before the price fell back. Many major oil companies had to use only "expense" type funding for the short-term production enhancing projects.The Aneth Unit is a 320 well waterflood/CO2 flood in Southeastern Utah. This paper discusses how Reliability Engineering was used on the Aneth Unit to select projects that increased production, paid-out in six months, used no capital funds and required no increase in the annual expense budget. The paper is intended for field engineers, field supervisors and operations technicians. The paper will cover how we assembled a team to define a mission statement that accounted for the uncertain oil prices and the lack of a capital budget. The paper steps us through the Reliability Engineering process of brainstorming for ideas, culling and prioritizing ideas, defining and assigning action items and assessing results. The paper discusses how our prudent spending resulted in increased cash flow, increased earnings, improved return on capital employed, increased production and decreased lifting costs.