Oil and Gas Fields of South Louisiana, 2010 186

LAKE WASHINGTON FIELD

Plaquemines Parish, Louisiana

R. Kirk ClemSwift Energy Operating, L.L.C.

Houston, Texas

* Originally drilled as Richardson & Bass, Louisiana Land & Exploration et al. #1, in 1955. At that time it was the deepest well in the world.

Location:T19S-R27&28E, T20S-R26&27E and T21S-R26&27E in the Grande Ecaille- Lake Washington bay and marsh areas, approximately 60 miles south of New Orleans, Louisiana

Discovery Well: Humble, Cockrell-Moran #4, TD 1,158’ (Drilled & Completed in 1931)

Completion: Caprock @ 1,140’

Deepest Well*: Hilcorp Oil and Gas, Louisiana Land & Exploration et al. #1, Sec. 35, T19S-R27E, TD 22,570’

Deepest StratigraphicInterval:

Cib. op. (Middle Miocene)

Productive Interval: Approximately 1,200 feet to 21,400 feet

Productive Wells: 720

Principal Operators: Swift Energy Operating, LLC; Hilcorp Oil and Gas

SONRIS Field ID: 5759

LAKE WASHINGTON FIELD 187

History

Introduction

Detailed subsurface mapping techniques have been the historical tools used to discover,develop, and document much of the world’s petroleum production. Current 2-D/3-D seismictechnology has been indispensible in the continuing success and huge growth of the oil indus-try in virtually all world petroleum basins. Due to the obvious improvements gained throughseismic interpretation, the petroleum industry has gradually seen a shift away from the older,slower, less glamorous and more tedious methods of the past. The modernization of theseolder techniques to enhance time efficiencies in assimilating large volumes of data, in combi-nation with improved drilling and completion techniques, have been critical success factors inthe rejuvenation of Lake Washington Field. Thus far, these efforts have resulted in the creationof over 2 billion dollars of revenue value.

Background

Lake Washington Field is a shallow-expression, cap rock salt dome discovered in 1931.The field is in the Grande Ecaille-Lake Washington bay and marsh area about 60 miles southof New Orleans in Plaquemines Parish, Louisiana. It has produced over 1 TCFG and 300MMBO. The field has roughly 90 pay sands, with the best production predominantly locatedon the north flank. The cap rock, Upper, and Middle Miocene oil and gas reservoirs range indepth from 1,200 feet to greater than 21,000 feet subsea.

In 2001 Swift Energy Company (Swift) bought a majority interest in approximately25,000 acres, covering most of the field except for the deeper north flank area. At the time, theSwift portion of the field was only capable of producing about 700 BOPD. Almost no seismicdata had ever been acquired in the purchase area. After 3 years of subsurface map-based drill-ing that resulted in an overall success rate of 75%, Swift acquired a proprietary 3-D seismicsurvey in 2004. Through an aggressive 348 wellbore (including sidetracks) drilling programemploying as many as 7 drilling and 4 completion barge rigs simultaneously, Swift’s dailyfield oil production reached levels of up to 22,000 barrels. Swift has produced nearly 47 mil-lion BOE since the purchase of the field.

Keys to Success

Many factors have contributed to the ongoing story of success for Swift at Lake Wash-ington Field. The constructive effects of true entrepreneurial spirit, together with appropriatefield management and multidisciplinary teamwork utilizing “in-parallel” business practices,continue to play major roles, but are outside the scope of this discussion. Instead, the key tech-nical geosciences and engineering aspects will be the focus of this study.

The following list provides insight into the major technical applications and techniquesemployed by Swift in Lake Washington:

Improved “geo-steered” directional well paths and drilling efficiency for multiple tar-gets, coupled with real-time sidetrack decisions,

LAKE WASHINGTON FIELD 188

Meticulous interpretation at numerous reservoir levels making use of older, tried andtrue principles of subsurface mapping, in unison with newer work station applications to moreeffectively and continuously (real-time) interpret, integrate, and organize large volumes ofwell data,

Installing screens on all well completions for sand control,

Later acquisition of 3-D seismic coverage for enhancement of original subsurface inter-pretation, resulting in expected improved drilling success and “geo-steering” outcomes,

Highly detailed mapping of the salt surface that represents the major trap for most of thereservoirs.

Geology

Very little recent mapping had been done in Swift’s buy-area, and no in-house digitaldata was available at the time of acquisition. The database was a scattered, semi-organizedgroup of paper logs, maps, files, etc. typically seen in old producing fields. Early drilling suc-cess of some of the identified PUDs, which were used to purchase the acreage, sparked Swift’sinterest in the rapid re-development of the field. By digitally organizing the data into an inte-grated database while simultaneously mapping with geological and geophysical workstationapplications, Swift has been able to increase reserves significantly above the originally pro-jected numbers.

The primary trapping mechanism for Lake Washington Field is salt, with numerousregional and radial faults that complicate reservoir geometries and water levels. By mappingthe salt surface in detail, many prospects were generated. No detailed salt map using allsources of information had been previously prepared. Subsequent acquisition of 3-D seismicdata, tied to all existing well control, provided improved drilling results with fewer sidetracksbecause of prematurely encountering salt. Most Swift wells are drilled to salt in order to accu-rately map this important, highly variable surface.

Comprehensive reservoir mapping and drilling activity revealed that basically the saltfunctions as a truncation surface (similar to a fault). As a result, there are relatively few updipcomplete sand pinch-outs (shale-outs) seen in the shallow Upper and Middle Miocene massivesand section reservoirs between 1,200 feet to approximately 7,500 feet. Therefore, hundredsof small, fault-bounded reservoirs (2 to 10 acres), trapped against salt, are present on all flanksof the dome. Many of the reservoirs are below seismic resolution.

Swift has established dozens of correlation horizons utilizing hundreds of stratigraphiccross sections and arbitrary seismic lines. Vertically reconciled maps were prepared from thisnetwork through computer applications and internal process work flows. Data points fromcontact information (i.e., oil /gas/ water contacts, lowest/ highest known contacts), includingnon-penetration data (i.e., not deep enough, faulted-out, etc.) has been incorporated for allwells. In addition, real-time drilling information and engineering data (i.e., production vol-umes, pressures, and interpreted reservoir drive mechanisms) have been incorporated into theanalysis. Consequently, risk of failure due to improper interpretation has been significantlyreduced, which has been reflected by improved drilling and completion results.

LAKE WASHINGTON FIELD 189

Most sands penetrated in good structural position are potential reservoirs in the field.Swift has thrived by directionally drilling scores of small target sand reservoirs, while follow-ing the salt truncation surface with depth. These targeted, “follow-the-trap”, directional wellsserve to mitigate and manage risk by providing multiple prospect opportunities, while effi-ciently testing and producing all possible reservoirs with fewer wells. This process hasresulted in the discovery of numerous new field sand pays and the optimization of develop-ment drilling for attic wells, PUDs, etc.

Previous operators had mostly given up on the shallow portion of the field because therelatively small reservoirs tended to quickly sand up during production, especially during highrate production. The addition of sand control screens and sliding production sleeves to pro-duce the many various pays encountered by directional drilling has been a boon for Swift.Well production rates of up to 3,000 BOPD have been achieved, and several of the wells haveproduced between 1 and 2 MMBOE to date in these nearly unconsolidated, thick sand reser-voirs.

Conclusions

Fully utilizing, reconciling, and integrating voluminous subsurface and production datafrom well control with 3-D seismic data is a daunting task that most modern geoscientistsavoid in established, high-density drilling areas because of time constraints versus perceivedvalue added.

The accomplishments in Lake Washington Field demonstrate that improved results canbe realized through the efficient use of thoroughly integrated subsurface mapping of all avail-able well data. This is not only possible, but critical, in areas that have seen significant pastdrilling activity. It can be achieved by imaginative revamping of older, tried and true work pro-cess flows with modern technology. Huge payoffs through this type of value creation inmature areas are still possible.

Acknowledgements: Thanks are extended to Swift’s Kim Todd, Brian Burke, and Elisa-beta Enache-Pommer for their help in organizing and providing the well productioninformation used to create certain exhibits in this study.

LAKE WASHINGTON FIELD 190

LAKE WASHINGTON FIELDSONRIS Field ID 5759

Year Oil Total Gas Total1977 4,946,658 25,159,1651978 4,138,570 21,987,8441979 3,754,623 22,878,4361980 3,655,968 27,242,8351981 3,268,227 24,802,2871982 2,972,600 14,613,1031983 2,963,263 12,642,4611984 2,794,665 15,627,9891985 2,438,233 8,895,3621986 2,830,578 6,943,4911987 3,044,745 6,039,9691988 2,828,647 7,191,2631989 2,643,211 6,123,3691990 2,354,395 4,801,8241991 1,996,019 4,182,7331992 2,161,041 4,778,5211993 2,006,369 5,188,6851994 2,074,621 5,182,2511995 2,014,357 4,566,0811996 2,016,834 6,405,1081997 1,971,201 5,643,8621998 1,578,076 5,424,6741999 1,611,356 4,389,3612000 1,582,860 3,237,4742001 1,506,317 4,039,9422002 1,892,872 4,030,0392003 3,243,530 3,897,6962004 5,474,076 4,940,1662005 6,193,278 6,239,6542006 8,371,144 10,063,9532007 8,338,277 9,254,1142008 6,048,759 7,377,7582009 4,725,726 4,771,258

Lake Washington Field Annual Gas Production

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Gas

, MC

F

Lake Washington Field Annual Oil Production

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Oil,

Bbl

s

Total reported oil 1977 - 2009109,441,096 Bbls

Total reported gas 1977 - 2009308.6 BCF

LAKE WASHINGTON FIELD 191

LAKE WASHINGTON FIELD 192

LAKE WASHINGTON FIELD 193

LAKE WASHINGTON FIELD 194

LAKE WASHINGTON FIELD 195

LAKE WASHINGTON FIELD 196

LAKE WASHINGTON FIELD 197

SL�17990�No.�22�ST2�Seismic�Dip�LineSL 17990 #22 ST2 Directional Well

Pay SandsPay�Sands

SL�17990�No.�22�ST2�Directional�Well

Top Salt