Question-and-Answer Session
Operator
(Operator Instructions) Our first question today comes from Tom Gardner with Simmons & Co.
Tom Gardner – Simmons & Co.
Morning, guys.
Jonny Brumley
Hi, Tom.
Tom Gardner – Simmons & Co.
Hey, Jonny, I wanted to ask you at the Cedar Creek Anticline what Encore may have learned through high-pressure air injection. Why the underperformance, I guess, versus your expectations? What is it about the reservoir that may have driven that?
Ben Nivens
Hi, Tom, this is Ben Nivens. I think we had trouble with injectability of air in some areas. We also had more trouble though with premature breakthrough in certain areas. And I think also in panel, the water flood was a very deficient water flood and we just didn’t see the big uplift over air that we thought we would see. I think we learned that the water in certain areas the CCA did a very good job.
Tom Gardner – Simmons & Co.
Your release indicated that you think the costs for CO2 might be more favorable than high-pressure air injection. Just what are your thoughts here? What were you paying for air versus a likely market for CO2 in the area?
Ben Nivens
I think it really goes to the fact that we think CO2 is going to be much more efficient than air and that your uplift is going to be more significant; and therefore, your incremental costs per barrel are going to be cheaper.
Tom Gardner – Simmons & Co.
I got you. You indicated that the reserves will come back on the books when you have a CO2 contract and a successful production response. Is that in the area or in the field proper that you need that successful pilot?
Ben Nivens
That’s going to be both the area and the field. In the area alone we think we have 60 million barrels of potential CO2 reserves that are associated with those air projects. About 20 million are probable and about 40 million are possible. Across the entire Cedar Creek Anticline, there’s 70 million probably and about 200 million of total potential reserves.
Tom Gardner – Simmons & Co.
Can you kind of walk us through the timing? You mentioned that you had a success at South Pine in the way of a CO2 pilot. Can that be used to add back these reserves as proved at some point?
Ben Nivens
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