NONTRIBUTARY GROUNDWATER ASSESSMENT: MESAVERDE GROUP AND WASATCH FORMATION - PICEANCE BASIN, COLORADO Submitted to: OXY USA INC. AND OXY USA WTP LP Date: November 4, 2009 Norwest Corporation 950 South Cherry Street, Suite 800 Denver, CO 80246 Tel: (303) 782-0164 Fax: (303) 782-2560 Email [email protected] www.norwestcorp.com 004280 TABLE OF CONTENTS EXECUTIVE SUMMARY ..............................................................................................................1 1 INTRODUCTION.................................................................................................................1-1 2 CONCEPTUAL MODEL .....................................................................................................2-1 2.1 GEOLOGIC SETTING ....................................................................................................2-1 2.1.1 Mancos Shale ..............................................................................................2-1 2.1.2 Iles Formation ..............................................................................................2-2 2.1.3 Williams Fork Formation ..............................................................................2-2 2.1.4 Wasatch Formation......................................................................................2-3 2.2 HYDROLOGIC DATA .....................................................................................................2-3 3 HYDROLOGEOLOGIC PARAMETERS.............................................................................3-1 3.1 PERMEABILITY.............................................................................................................3-1 3.1.1 Oxy Reported Permeability – Mesaverde ....................................................3-2 3.1.2 Permeability information – Wasatch ............................................................3-2 3.2 SPECIFIC STORAGE .....................................................................................................3-2 4 NONTRIBUTARY GROUNDWATER EVALUATION.........................................................4-1 5 SUMMARY..........................................................................................................................5-1 6 REFERENCES....................................................................................................................6-1 LIST OF TABLES Table 3-1. Literature Values for Mesaverde Group and Wasatch Formation Producing Units .3-3 Table 3-2. Summary of Mesaverde Group Permeability Data Provided by Oxy .......................3-5 Table 4-1. Parameters Used in Nontributary Analysis ..............................................................4-3 LIST OF FIGURES Figure 1-1. Site Location ...........................................................................................................1-2 Figure 2-1. Surficial Geologic Map............................................................................................2-4 Figure 2-2. General Stratigraphic Column near Grand Junction (from Cole and Cumella, 2003) ...................................................................................................................................................2-5 Figure 2-3. Generalized West to East Cross Section of the Mesaverde and Mancos (from Johnson and Roberts, 2003)......................................................................................................2-6 Figure 2-4. Depositional and Stratigraphic Framework of the Piceance Basin .........................2-7 (from Yurewicz, 2005)................................................................................................................2-7 Figure 2-5. Geologic Map of Project Area with Perennial Streams...........................................2-8 Figure 4-1. Mesaverde Group Nontributary Groundwater Zone ...............................................4-4 Figure 4-2. Wasatch Formation Nontributary Groundwater Zone .............................................4-5 OXY USA 4010-000023 PB NONTRIBUTARY GROUNDWATER ASSESSMENT TOC - 1 004281 LIST OF APPENDICES Appendix A Mesaverde Group Permeability Data Provided by Oxy Appendix B Wasatch Formation Permeability Data Appendix C Nontributary Distance Calculations OXY USA 4010-000023 PB NONTRIBUTARY GROUNDWATER ASSESSMENT TOC - 2 004282 EXECUTIVE SUMMARY OXY USA Inc. and Oxy USA WTP LP (Oxy) engaged Norwest Corporation (Norwest) to evaluate the nontributary status of groundwater associated with formations Oxy is producing natural gas from in the Piceance Basin in Garfield and Mesa Counties Colorado. Oxy is producing unconventional (tight) gas from the Wasatch Formation (Wasatch) and Mesaverde Group (Mesaverde) in the southern Piceance Basin. The Norwest evaluation of nontributary status of groundwater from the producing formations utilized the Glover-Balmer equation. This equation is a commonly used method for evaluating the timing and magnitude of depletions to surface water from pumping tributary groundwater. The Glover-Balmer equation requires simplification of the groundwater system, and assumes it is a semi-infinite, homogeneous, confined aquifer in perfect connection to a fully penetrating stream. For this analysis, the formation parameters based on the assumption that the gas producing formations were a confined groundwater-saturated aquifer in perfect connection with the stream were input into the Glover-Balmer equation. The oversimplification required by the Glover-Balmer equation results in an extremely conservative evaluation of the potential depletions that producing groundwater during natural gas production from the Mesaverde and Wasatch may have on surface streams. Permeability data that is site- specific to Oxy’s operations were used for the Mesaverde analysis and data from surrounding operators were used for the Wasatch analysis. For the purposes of this assessment the potential points of depletion were considered to be the location where the Mesaverde or Wasatch lie directly beneath a mapped perennial stream or the alluvium of a mapped perennial stream. The calculated distances from points of depletion where the groundwater was nontributary were 6,160 ft (1.17 miles) and 6,450 ft (1.22 miles) for the Mesaverde and Wasatch respectively. Areas where groundwater was within these distances from perennial streams in or crossing the Mesaverde or Wasatch outcrops were excluded from the nontributary groundwater zones. OXY USA 4010-000023 PB NONTRIBUTARY GROUNDWATER ASSESSMENT ES-1 004283 1 INTRODUCTION Oxy engaged Norwest to evaluate the nontributary status of groundwater associated with formations Oxy is producing natural gas from in the Piceance Basin in Colorado. Groundwater in Colorado is presumed by law to be tributary water, the pumping of which may have injurious impacts on vested tributary water rights in over-appropriated stream systems in Colorado. Oxy is producing unconventional (tight) gas from the Wasatch Formation (Wasatch) and Mesaverde Group (Mesaverde) in the southern Piceance Basin. Oxy’s primary holdings are in the Cascade Creek Field located north, north-east of DeBeque, CO and the Collbran Field located near Collbran, CO. The major surface water drainage through the area is the Colorado River with tributaries joining the river from both the south and north. The lease locations, topographic relief, and perennial streams are shown on Figure 1-1. The study area that Norwest evaluated is physically bounded by the outcrops of the Wasatch and Mesaverde and is limited to Garfield, Mesa, and Pitkin Counties. The watershed of the North Fork of the Gunnison River was used as a southern boundary for the study area since Oxy does not have operations in this watershed. The study area is shown on Figure 1-1. Oxy is producing natural gas from sandstones in the targeted formations. Natural gas is a hydrocarbon that has lower viscosity and is much less dense than water or brine. The lower viscosity of natural gas and significant buoyancy forces compared to water would drive the natural gas to discharge from the formations if this was physically possible. Natural gas remaining trapped in these formations over geologic time indicates the natural gas is isolated by extremely low permeability rock from the surface. Water in these zones is not in the active groundwater cycle (i.e. recharge to a formation outcrop, movement of groundwater through an aquifer, and discharge to a surface stream). The Norwest evaluation of nontributary status of groundwater in Garfield, Mesa, and Pitkin Counties of the Piceance Basin from the producing formations utilized the Glover-Balmer equation. The Glover-Balmer equation is a commonly used analytical method for evaluating the timing and magnitude of depletions to surface water from pumping tributary groundwater. The conceptual model used in the Glover-Balmer equation is a semi-infinite, homogeneous, confined aquifer in perfect connection to a fully penetrating stream. The Glover-Balmer equation was used with formation parameters based on the assumption that the producing zones were a confined groundwater-saturated aquifer in perfect connection with a surface stream. This conceptual model gives an extremely conservative evaluation of the potential impacts that producing groundwater during natural gas production from the Mesaverde and Wasatch may have on surface streams. OXY USA 4010-000023 PB NONTRIBUTARY GROUNDWATER ASSESSMENT 1-1 004284 r e v i R n e e r G Yam Moffat pa Riv e r Routt Rio Blanco White River Garfield Eagle Rifle Roaring Fork River Cascade