Freedom — And That Includes Energy Independence

July 1, 2010

With Independence Day celebrations occurring across the U.S., in cities ranging from “one stoplight” towns (or in my youth – no stoplights, one stop sign and a 2 block long main street with asphalt) to major metro areas, freedom is on our minds. Our soldiers continue bravely fighting in Iraq and Afghanistan. Equally as committed, the U.S. O&G industry continues fighting to produce the natural gas and oil needed to fuel our economy and standard of life. It’s not an easy fight, and casualties do occur – the Deepwater Horizon incident being a prime example. Despite this tragedy, deepwater/ultra deepwater reserves are sorely needed.

What are also needed are the reserves, definitely oil but also natural gas, remaining in mature properties. Exploration is not needed there – but efficiency and a relook with today’s technology as many of these reservoirs were developed decades ago. It is a fact of life that many of these properties are now operated by small independents whose technical staff is limited – very knowledgeable but spread really thin. Particularly for this niche, PTTC has been a resource they can pull from to efficiently learn what they need to know to solve problems and realize opportunities. PTTC has been delivering local affordable workshops where “those who know share what they know” since 1993. The majority of the information shared is as applicable today as it was years ago when it was shared. Working together, AAPG Datapages and PTTC are now making a significant portion of this historical workshop information available in TECHPLACE at a very nominal cost. – Just $195 per year for an individual subscription, which basically equates to the cost of attending just one of PTTC’s workshops today.

PTTC’s regional organizations regularly deliver workshops that focus on the needs of independents. In an exciting development, PTTC Headquarters is augmenting this program with several series of workshops with content appropriate for mature properties. In these series of workshops there has been a conscious effort to pull in results from DOE-supported R&D projects. This is a good thing. Whatever one may think of the federal government, DOE’s oil and gas R&D program has served a niche in stimulating technology application by smaller independents. Examine the series (below), read full descriptive information on the flyers and choose which ones would work for you.:

  • IOR Field Applications and Case Histories – content tailored by
    location, so check out a few locations to see which best fits you
    •  Lafayette, LA (Aug. 24)
    • Jackson, MS (Aug. 26)
    • Houston, TX (Sep. 2)
    • Denver, CO (Sep. 8 )
    • Bakersfield, CA (Sep. 29)
  • Technologies Targeting Mature Properties – RPSEA Small Producer,
    Stripper Well Consortium (plus, there is a special feedback session – PTTC wants insight on what you want to learn
    • Shreveport, LA (Aug. 23)
    • Tulsa, OK (Aug. 25)
    • Wichita, KS (Aug. 26)
  • Mining Online Tech Information (Getting Better Answers Faster) (plus, there is that feedback session where you get to tell PTTC what you want to
    learn about)
    • Dallas, TX (Aug. 3)
    • Oklahoma City, OK (Aug. 4)
    • Golden, CO (Aug. 13)
  • Data Management & Technology for Mature Properties
    • Dallas, TX (July 21)
    • Oklahoma City (July 22)

Closing on the freedom note, there is a new study by the National Energy Policy Institute (NEPI) about “Toward a New National Energy Policy: Assessing the Options.” For now, only the executive summary is available online. There are several features in NEPI’s approach that make the study unique, so check it out. NEPI, which is located at the University of Tulsa, is a nonpartisan independent energy research organization funded by the George Kaiser Family Foundation.

———-

Lance Cole

E. Lance Cole, PTTC Operations Manager, an Oklahoma resident since 1978 and a registered professional engineer in Oklahoma, has served PTTC since 1996, beginning as Project Manager and then as Executive Director until AAPG assumed PTTC management responsibility. As National Project Manager, he was responsible for technical oversight of PTTC’s regional lead organizations and contract reporting for the national office, and served as a technical adviser on all aspects of the program. As Executive Director, he had primary staff responsibility for the overall PTTC organization. Mr. Cole received a B.S. in chemical engineering from South Dakota School of Mines and an M.S. in management from Southern Nazarene University. His professional experience encompasses reservoir and corrosion engineering, as well as reserve estimation and appraisal. He has worked with a major oil and gas company, a large integrated independent, and in engineering-oriented consulting companies. Mr. Cole is a member of SPE, AAPG, SEG, and SIPES and, in the past, has been involved with the SPE/DOE IOR Symposium in Tulsa for several years. Email Lance Cole.

The Ever Expanding Unconventional World

June 10, 2010

Just look at an industry calendar of events and there is no doubt that “unconventional” remains the focus of the O&G industry (putting aside the ramifications of the Gulf of Mexico oil spill). There may be a little “bloom off the rose” in shale gas with a soft domestic natural gas price outlook, but activity in major shale gas plays remains strong. Industry is moving quickly to take what we’ve learned in domestic shale gas international. If international shale gas is on the horizon for you, you need to consider (if you have not already done so), the Global Shale Gas Summit 2010 coming up July 19-22 in Warsaw, Poland. This Summit provides a holistic picture of the enablers for international shale gas expansion. Delegates are coming from across the world from majors, key independents, government and regulators, geological surveys and service and technology providers. PTTC is proud to be associated with this event as a partner. American Business Conferences is offering a 15% discount to attend the Summit to PTTC’s audience. To claim this discount, please email or call 1-800-721-3915 and quote registration code “PTTC15.”

Topic for this blog is no coincidence. PTTC’s next Network News newsletter, which will be coming to you in late June/early July, focuses on “unconventionals.” Just yesterday I spent several hours reviewing content and polishing copy. It is overwhelming what continues to happen in the unconventional arena. One undeniable movement is industry taking what it has learned from shale gas into unconventional oil development – North Dakota’s Bakken being the leading example. But there are many other plays and geographic areas where unconventional oil or at least “oily” shale gas are hot, the Eagle Ford shale in South Texas being a prime example. Increased interest in California’s Monterey shale is another. Being a visionary thinker (some of my friends would debate that), my mind is already moving forward to “enhanced oil recovery” in unconventional oil reservoirs. Although there will be significant primary oil in unconventional oil reservoirs, the nature of the reservoirs themselves points toward lower recovery factors. This target would be the driving force towards EOR in unconventional oil. Great minds must think alike since the SPE IOR Symposium is considering addressing that topic during its next Symposium in spring 2012. 

By spring 2012 there would be at least partial results from projects receiving awards in DOE’s “currently open” unconventional oil solicitation. DOE is looking for proposals in two unconventional oil areas: (1) Topic Area 1 – Advanced Simulation and Visualization and (2) Topic Area 2 – Next-Generation CO2-EOR. In Topic Area 1 DOE anticipates four to eight awards in the $300,000 to $1,000,000 range (including 20% cost share). In Topic Area 2 DOE anticipates three to five awards in the $500,000 to $1,500,000 range (including 20% cost share). Proposals are due July 29. View the solicitation. Take advantage of this opportunity; submit a winning proposal!

No discussion of unconventional research would be complete without mention of recent awards made by the Research Partnership to Secure Energy for America (RPSEA) in its Unconventional Resources Program. Eleven projects were selected for negotiations leading to award. Viewing the project topics and the organizations involved in them is in itself an education in O&G-focused R&D in the U.S. The following projects in particular caught my interest. 

  • Marcellus Gas Shale Project, Project Leader: Gas Technology Institute. Additional Project Participants: The Pennsylvania State University; West Virginia University; Bureau of Economic Geology/The University of Texas at Austin; Pinnacle Technologies, Inc.; ResTech, Inc.
  • Prediction of Fault Reactivation in Hydraulic Fracturing of Horizontal Wells in Shale Gas Reservoirs, Project Leader: West Virginia University. Additional Project Participants: Range Resources Corporation; Appalachian, LLC 
  • Integrated Experimental and Modeling Approaches to Studying the Fracture-Matrix Interaction in Gas Recovery from Barnett Shale, Project Leader: The University of Texas at Arlington. Additional Project Participants: Carrizo Oil & Gas, Inc.
  • Improving Reservoir Contact for Increased Production and Recovery of Gas Shale Reservoirs (Achieving Management of Fracture Complexity), Project Leader: TerraTek, A Schlumberger Company. Additional Project Participants: New Ventures; EnCana Oil & Gas USA, Inc.; Unconventional Gas Completion Research; Shell International Exploration & Production; William Duncan; Cimarex Energy Company; Devon Energy Corporation

Managing frac flowback water is a primary issue in unconventional resource development. Technology and how it is applied is moving rapidly in that area. More research is needed, but technologies have moved into the commercial realm. One example is Superior Well Services Gamma FRac System. According to developers, nearly any water can be reused with this approach, and in some applications, the technology has eliminated disposal costs. It makes interesting reading to see how the “package” of technologies is combined in Gamma FRac.
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Lance Cole

E. Lance Cole, PTTC Operations Manager, an Oklahoma resident since 1978 and a registered professional engineer in Oklahoma, has served PTTC since 1996, beginning as Project Manager and then as Executive Director until AAPG assumed PTTC management responsibility. As National Project Manager, he was responsible for technical oversight of PTTC’s regional lead organizations and contract reporting for the national office, and served as a technical adviser on all aspects of the program. As Executive Director, he had primary staff responsibility for the overall PTTC organization. Mr. Cole received a B.S. in chemical engineering from South Dakota School of Mines and an M.S. in management from Southern Nazarene University. His professional experience encompasses reservoir and corrosion engineering, as well as reserve estimation and appraisal. He has worked with a major oil and gas company, a large integrated independent, and in engineering-oriented consulting companies. Mr. Cole is a member of SPE, AAPG, SEG, and SIPES and, in the past, has been involved with the SPE/DOE IOR Symposium in Tulsa for several years. Email Lance Cole.

Gulf tragedy: Teachable moment on offshore technology challenges

May 18, 2010

The ongoing Deepwater Horizon tragedy—and let us not forget that it is a human tragedy beyond the unfolding environmental and business impacts, in that the lives of 11 men were lost—is also an opportunity to learn and to educate.

Lance Cole

It is an opportunity for the industry to learn from any operational mistakes made that might have led to this devastating accident—and from what did work, didn’t work, and could still work among the engineered-on-the-fly, improvisational solutions.

It is also an opportunity for the industry to educate all stakeholders about the technology challenges of operating in deep and ultra-deep waters off America’s coast and, in the process, take steps to repair a newly battered image of an industry operation that is still critical to our energy future.

Sober tone at OTC

Interest in offshore technology is stronger than ever, as evidenced by the nearly 73,000 in attendance at this year’s Offshore Technology Conference in Houston.

Although the Deepwater Horizon tragedy cast a sobering tone over the massive annual conference and exhibition, it was left to Noble Energy Chairman and CEO Charles Davidson to note that industry must also celebrate its offshore successes even as it takes steps to clean up the spill, “find out what happened, and fix it so that it never happens again.”

Davidson added that industry’s “willingness to take on the impossible has led to immense change and success.” Appropriately, his keynote address was titled “Today’s reality is yesterday’s impossibility.”

It is difficult enough for us greybeards in the industry to comprehend industry’s offshore technology advances of the past 25-30 years. It was just three decades ago that production in 1,000 ft of water was the deepwater limit, and only a handful of wells had been drilled in as much as 2,000 ft of water. Today, 10,000 ft of water has been surpassed for drilling, and is almost there for production.

As planned and improvised solutions proliferate to control the wild well in the Gulf of Mexico and mitigate the environmental damage, the public is getting a rare glimpse into both the daunting operational challenges of ultra-deepwater drilling and the level of technological sophistication that’s involved.

Resources for deepwater challenges

For example, the issue of methane hydrates in deep waters whhich arose anew when hydrates clogged up the cofferdam BP had installed over the wild well must be an eye-opener for the millions of folks unfamiliar with deepwater operations.

Could the average person have any notion that this odd substance, which has long posed an operational hazard when it forms in deepwater exploration and production pipes and equipment, also represents potential energy resource when it has accumulated naturally in shallow sediments worldwide? The U.S. Department of Energy’s National Energy Technology Laboratory (NETL) is working extensively with Industry and academia to better understand naturally occurring gas hydrates and its role in the environment:  for more information please visit NETL’s gas hydrates site at www.netl.doe.gov
/technologies/oil-gas/futuresupply/methanehydrates/maincontent.htm
.

A lot of discussion has also focused on the reliability of blowout preventers (BOPs) in the wake of the Deepwater Horizon disaster. And a related hot-button topic is industry’s interface with regulatory agencies.

At PTTC’s Deepwater/Ultra-Deepwater, you’ll find information on a NETL/RPSEA (Research Partnership to Secure Energy for America) project to undertake a program to move the oil and gas industry, particularly the ultra-deepwater community, toward a more efficient and effective means of evaluating safety barriers such as valves and BOPs. Southwest Research Institute (SRI) of San Antonio, Texas, the project performer, notes that a key component is industry’s interface with regulatory bodies. SRI suggests that approaches developed during the project are likely to be on the right track toward acceptance as regulatory-approved industry practices. It’s become a bit of a political buzzword in the past year, but don’t let that deter us from making this tragedy a “teachable moment” for all concerned.

Moving to the more general realm of environmental cleanup and safety, PTTC is making a “special advertising/white paper” offer to those offering technologies, products, and services in that realm. Watch for it in our next Tech Alert (you are subscribed, correct?) If you are not, you can subscribe online. It’s just another way to keep up with things in the oil and gas technology realm.

 ———-

E. Lance Cole, PTTC Operations Manager, an Oklahoma resident since 1978 and a registered professional engineer in Oklahoma, has served PTTC since 1996, beginning as Project Manager and then as Executive Director until AAPG assumed PTTC management responsibility. As National Project Manager, he was responsible for technical oversight of PTTC’s regional lead organizations and contract reporting for the national office, and served as a technical adviser on all aspects of the program. As Executive Director, he had primary staff responsibility for the overall PTTC organization. Mr. Cole received a B.S. in chemical engineering from South Dakota School of Mines and an M.S. in management from Southern Nazarene University. His professional experience encompasses reservoir and corrosion engineering, as well as reserve estimation and appraisal. He has worked with a major oil and gas company, a large integrated independent, and in engineering-oriented consulting companies. Mr. Cole is a member of SPE, AAPG, SEG, and SIPES and, in the past, has been involved with the SPE/DOE IOR Symposium in Tulsa for several years. Email Lance Cole at lcole@pttc.org

PTTC: Sustaining support for IOR tech transfer

April 25, 2010

Lance Cole

Hundreds of the world’s leading authorities on improved oil recovery (IOR) are descending upon Tulsa, Okla., beginning this weekend to attend the 17th Improved Oil Recovery Conference. The biennial conference, which has long made Tulsa its home, is sponsored by the Mid-Continent section of the Society of Petroleum Engineers. Short courses begin this weekend, and the main program gets under way Monday, April 26. More details on IOR 2010 can be found at www.speior.org.

If you are attending the conference, be sure to drop by the Petroleum Technology Transfer Council booth, where we will be distributing literature and talking to the IOR movers and shakers about what PTTC is doing to further knowledge in this dynamic area.

There are those of us who have been around long enough to remember when it was the biennial SPE/DOE EOR conference, and the emphasis was on enhanced oil recovery—and it was considered stretching a point to include secondary recovery in a conference bearing the EOR moniker. But that’s a semantics brouhaha for another day; suffice to say that the content scope of the conference has expanded to encompass the broader umbrella term of IOR. Also expanding is the conference list of sponsors, although DOE continues to be one of the biggest sponsors through its National Energy Technology Laboratory.

PTTC-IOR: strong connection

PTTC has long enjoyed a mutually beneficial relationship with this important event. Perhaps no more so than this year is that connection stronger, thanks to the involvement of consultant Dwight Rychel in both instances. Dwight is the General Chair of IOR 2010, and he has overseen yet another strong program. In addition, he is the subject of a special Point of View interview that appears with the Oil & Gas Journal’s biennial EOR Survey & Special Report.

Dwight also coordinates content for the PTTC Tech Center on EOR. And Dwight developed the white paper on EOR featured on the PTTC EOR Tech Center. I strongly encourage anyone with information about new EOR concepts, ideas, data, project news, events, reports, articles, etc., to contact Dwight by phone at 918.492.6964.

PTTC Tech Centers

The PTTC Tech Centers provide information about oil and gas technologies in the areas of EOR, Unconventional Resources, Deepwater, Environmental/Water, Methane Hydrates, and Small Producers. Think of them as primers on their subjects that also serve as focal points for the communities of oil and gas specialists interested in sharing knowledge on these topics. Here you will find white papers; listings of upcoming workshops and webinars; information on research, references, and seminal literature; reports on field applications and case studies; and technology databases.

But I want to emphasize the “focal points for communities” description. The Tech Centers will be a living resource that will grow, Wikipedia-like, through the sharing of knowledge within the industry and thus serve as a collaborative tool for each community sharing interest in a topic.

Commercial opportunities

When it comes to talking about technology transfer, we mean business—literally.

PTTC has developed several “exposure/business development packages” (advertising and sponsorship by any other name) that we are selling. These packages range from a few hundred to $4,000 per year for ads, website and Tech Center exposure, white papers, etc.

If you want to build customer awareness of your new products or product enhancements or to expand that awareness to new areas, please contact me at 918.241.5801 or lcole@pttc.org.

I encourage those with new products (or product enhancements) who want to build customer awareness or reach new geographic areas to also contact me to explore how PTTC might help. We do have a very large audience of primarily independents, most of them decision-makers, who listen to us. A technology developer’s success means producers have more new technologies to use, and that is what PTTC is all about.

The week of IOR 2010 is good timing for America’s oil industry to consider the innovations in EOR, artificial lift, well stimulation, and the like that will be supported by an oil price hovering just north of where an official no less authoritative than the Saudi oil minister has declared it to be “perfect.”
OK, then: Make that “perfect” timing. And a perfect time to check out what PTTC has to offer in the way of technology transfer on the vital topic of IOR.

E. Lance Cole, PTTC Operations Manager, an Oklahoma resident since 1978 and a registered professional engineer in Oklahoma, has served PTTC since 1996, beginning as Project Manager and then as Executive Director until AAPG assumed PTTC management responsibility. As National Project Manager, he was responsible for technical oversight of PTTC’s regional lead organizations and contract reporting for the national office, and served as a technical adviser on all aspects of the program. As Executive Director, he had primary staff responsibility for the overall PTTC organization. Mr. Cole received a B.S. in chemical engineering from South Dakota School of Mines and an M.S. in management from Southern Nazarene University. His professional experience encompasses reservoir and corrosion engineering, as well as reserve estimation and appraisal. He has worked with a major oil and gas company, a large integrated independent, and in engineering-oriented consulting companies. Mr. Cole is a member of SPE, AAPG, SEG, and SIPES and, in the past, has been involved with the SPE/DOE IOR Symposium in Tulsa for several years. Email Lance Cole at lcole@pttc.org

E&P tech transfer: America’s secret weapon

April 9, 2010

E&P technology transfer is America’s secret weapon—its energy “magic bullet.”

Hyperbole? Maybe, but bear with me.

There is a revolution under way today in U.S. oil and gas exploration and production, and that is not hyperbole. Advances in horizontal drilling efficiencies and hydraulic fracturing methods have opened up vast new recoverable resources of unconventional gas and oil. This is proving to be a game-changer in the context of America’s energy picture. The boom in development of ultra-prolific gas shales has revolutionized the gas industry: In just a few years, the U.S. gas E&P industry has gone from drilling twice as many wells as in the past just to keep production flat to drilling half as many wells to deliver even more production—and in the process jump reserves life from a couple decades to more than a century.

A new way of thinking

More importantly, the unconventional oil and gas boom has shifted the industry’s thinking about E&P in a dramatic new way. Today we are developing hydrocarbons from source rock—pretty much unthinkable on a broad commercial scale not that long ago—and thinking of that effort not in terms of E&D success ratios and portfolio risk management but in terms of a manufacturing process with essentially zero exploratory risk. Even now, the revolution is shifting to oilier shales—the Bakken, Eagle Ford, Niobrara—and spreading to other gas shales worldwide. Some speculate that the unconventional component of gas resources outstrips the conventional component by several orders of magnitude—and that’s even before we get to methane hydrates. As a nation, we are on track for unconventional gas accounting for more than half of our gas supply within a generation.

Mitchell: Father of Shale

When shale pioneer George Mitchell “built a better mousetrap” in the Barnett Shale, did he think those efforts would lead a revolution in the nation’s gas E&P business? You’d have to ask this living legend of the industry, but rest assured the response would be blunt, honest, sprinkled with a little salty language, and delivered with a twinkle in his eye. What brought Mitchell Energy success in the Barnett Shale was dogged persistence and willingness to experiment—spending millions to try different drilling methods, new frac fluid mixtures, better redrills and recompletions, just to learn and gain enough knowledge to “crack the code” in the Barnett. This wasn’t about an individual well’s ROI or the end of the quarter’s results; it was about gaining knowledge and applying that knowledge. The result: Barnett success = a company-maker. Then when Devon Energy acquired Mitchell Energy, Devon applied its knowledge about horizontal drilling and adapted it to Mitchell’s Barnett business model—and took the venture to the next level. Mitchell spent nearly two decades trying to solve the Barnett puzzle, but that effort was not a labor of love, not just stubbornness, it was a learning process. And the knowledge gleaned from that process—the know-how, the best practices, the missteps avoided—is filtering throughout the industry.

DOE role

It’s also safe to say that U.S. unconventional gas development would not be delivering more than 40% of the country’s gas production today were it not for the pioneering research into unconventional gas by the U.S. Department of Energy from the mid-1970s to the mid-1990s. When that research started, unconventional gas accounted for only 7% of U.S. gas output. The tax credits and occasional higher gas prices also helped, but without the DOE-funded R&D, where would unconventional gas be today?

According to DOE’s National Energy Technology Laboratory (NETL), accomplishments from that effort include:

  • The first use of nitrogen foam to effectively stimulate production of gas from shale wells,
  • The discovery of how natural gas is stored in coal seams and fractured shales,
  • Recognition of the importance of interconnected natural fractures in the production of gas from such reservoirs,
  • The first use of directional drilling in shale reservoirs to improve productivity by intersecting fractures,
  • The creation of advanced tools and methods for measuring the properties of unconventional reservoir rocks, and
  • The early development of micro-seismic monitoring techniques for mapping hydraulically created fractures.

NETL contends that the payoffs from these early investments are reflected in the commercial technologies that are making the current expansion of unconventional gas production possible.

Lessons learned

Despite some of the recent concerns voiced about declining discovery volumes, in fact, the world’s reserves and production continue to be sustained through the phenomenon of reserves growth. To fall back on an old saw, oil (and gas) is where you find it. Scarcely a tenth of the world’s endowment of oil has been produced. Who knows what the upper limit  on the global cache of gas is now? In the U.S., 218 billion barrels of technically recoverable conventional oil at depths shallower than 5,000 feet remains unproduced. Why can’t the same revolution in unconventional gas occur for improved and enhanced oil recovery? Why can’t marginally economic conventional gas benefit in the same way?

The lessons to be learned from the Mitchell and DOE examples are that step-changes in oil and gas E&P results—in U.S. oil and gas reserves and production growth—are possible. But they’re possible only with a dogged willingness to experiment (even if the results don’t show up on the bottom line right away), a commitment to research for the sake of gaining knowledge about the resources at hand that are ripe for the plucking, and a means for transferring the lessons learned, the new technology, the know-how, and the best practices to all oil and gas companies.

That’s what we’re all about at the Petroleum Technology Transfer Council. This new, biweekly blog is part of a broader effort, including our retooled website, to keep the U.S. oil and gas industry abreast of that mission. And that greater awareness in turn helps us carry out that mission. Just as DOE’s unconventional gas R&D helped spawn a sea change in America’s energy outlook through technology transfer, the next E&P revolution might be just around the corner.

I welcome your comments in the Comment space below. Let’s work up some great conversations about E&P technology advances, know-how, and best practices and keep the dialogue going!

Lance Cole
PTTC Operations Manager

E. Lance Cole, PTTC Operations Manager, an Oklahoma resident since 1978 and a registered professional engineer in Oklahoma, has served PTTC since 1996, beginning as Project Manager and then as Executive Director until AAPG assumed PTTC management responsibility. As National Project Manager, he was responsible for technical oversight of PTTC’s regional lead organizations and contract reporting for the national office, and served as a technical adviser on all aspects of the program. As Executive Director, he had primary staff responsibility for the overall PTTC organization. Mr. Cole received a B.S. in chemical engineering from South Dakota School of Mines and an M.S. in management from Southern Nazarene University. His professional experience encompasses reservoir and corrosion engineering, as well as reserve estimation and appraisal. He has worked with a major oil and gas company, a large integrated independent, and in engineering-oriented consulting companies. Mr. Cole is a member of SPE, AAPG, SEG, and SIPES and, in the past, has been involved with the SPE/DOE IOR Symposium in Tulsa for several years. Email Lance Cole at lcole@pttc.org


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