2 WHO WE AREUSR DRILLING SERVICES (USRD) is the premier provider of Ultra-Short Radius and Short Radius horizontal drilling services to the oil and gas industry.USRD is the only directional drilling company who provides Ultra Short Radius drilling services worldwide.We employ highly experienced drilling personnel and offer unique problem solving well intervention technologies.Over two decades our team has introduced new technologies while maintaining our cost advantage relative to the competition.
3 WHAT WE DO 2012 Drilled 50 USR wells from 2002 To Date (Oct ’12) • Completed 8th Well in W. Africa for Perenco Gabon in OBA, Olende and Niungo Fields• Upcoming 2 more wells in Niuango; 16 more in OBA; xx more in Niungo• Drilled a World Record well with a Reach to Radius Ratio of 32:1 and Longest USR lateral length of 430 m (Gabon)• A 5 well IOR pilot project will commence in Myanmar end Q1-13• Currently developing new generation Titanium DP and Composite DP• Drilled first two wells in Indonesia for Citic Seram. Drilled 2 wells for Pertamina Java EP.• Drilled first First USR well in African Continent for Perenco Gabon.• Completed 7 well campaign for Oxy Oman, Safah field• Drilled a World Record well with a Reach to Radius Ratio of 25:1First USR well completed with articulated and rotatable sand screen “SnakeScreen™.Acquired TDP with two designs improvements based on USRD field data built in.2007Developed USR mud motors to reduce drillpipe RPM’s and to steer in thin targets. Began running a hybrid string combining S-135 and one or two joints of TDP as non-mag.2006 – 2007Drilled USR wells in Turkey and India. Replaced Composite Drill Pipe with Titanium Drill Pipe.Drilled in Rima field of PDO Oman. Built 30 ft ROC fixture to fatigue test drill pipe to be run in USR wells.2004 – 2005Drilled multi-lateral “fishbone” wells for PDO, Oman. Introduced USR to Indonesian Operators.Completed five well trial successfully for PDO, OmanDrilled 170 USR wells in various fields in the United States with a number of milestones:• First ever horizontal well drilled with air hammer• First ever well drilled with Titanium Drill Pipe• First USR well drilled Under Balanced using USRDS’s Low Cost RSS toolsDrilled more than 200 Ultra Short Radius (USR) test wells at Amoco’s Catoosa Drilling Research Center.Low cost “push-the-bit” Rotary Steerable System (RSS) developed by Amoco.
5 WHAT IS ULTRA SHORT RADIUS DRILLING DEFINITIONBUR : 100°/100 ft to 230°/100 ftROC : 25 to 57 ftOUR APPROACHSlim Hole Drilling with hole sizes and downhole tools that permitHigh BURSteeringDirectional SurveyingCompletion
7 CONVENTIONAL HORIZONTAL SIDETRACK USR SIDETRACKAccess Reserves Near Vertical WellboreHorizontal Section Begins 27-57’ From Vertical WellboreKickoff In Producing Formation Resulting in Entire Curve and LateralSection in Pay Zone.Avoid Overlying and Underlying Problematic ShalesDrill with NDDF Designed only for Reservoir Pressure which is OftenPartially DepletedAvoid Need for and Cost of Intermediate Casing / LinerAvoid Expensive Logging ToolsUse Lighter Workover Rigs and Smaller Circulating SystemsDrill Smaller Hole Sizes Utilizing Slim Hole Drilling TechnologySet Pumps in Vertical Position and Near Top of ReservoirEstimated Cost is 30-50% of Vertical Well CostA Deviated Pilot Hole can be Drilled from Existing Wellbore andLogged to Acquire Data and Determine USR Well Bore Placement. APilot Hole + USR Sidetrack is Less Expensive than ConventionalHorizontal DrillingLow Lost in Hole CostCONVENTIONAL HORIZONTAL SIDETRACKCan Not Target Near Wellbore ReservesHorizontal Section Begins over 1000’ From VerticalWellboreKickoff Points over 1000’ above PayCurve Section Does Not Intersect Pay Zone Therefore notContribute to ProductionNumerous Lithologies Including Unstable Shales areExposed in Curve Section which Increases the Risk ofDrilling ProblemsDrilling Fluids are More Complex Due to Hole Stability andLower Reservoir PressuresLWD is Required Due to Target Uncertainty away fromoriginal well boreUse Heavier Drilling Rigs and Larger Circulating SystemsLarger Hole Sizes are RequiredCemented Casing / Liners are Required Through CurveSectionSet Pumps Well Above Top of Reservoir or in Curve Sectionat High Inclination. This Could Result in NumerousProduction ProblemsEstimated Cost is % of Vertical Well CostHigh Lost in Hole CostDrill 2,000’ to Reach 90 DegreesDrill 45’ to 90’ to Reach 90 Degrees
8 Applications2. Sidetracks from Vertical Wells in Tightly Spaced Fields1. Sidetracks from Vertical Wells with Water Coning4. Sidetracks into Channel Sands with Surrounding Shale3. Exploitation of Attic Oil from a Vertical or Horizontal Wells5. Sidetracks from Vertical Wells with Near Wellbore Damage6. Alternative to Hydraulic Fracturing7. Sidetracks from Water Injectors to Increase Injection Rates and Improve Sweep Efficiency8. Sidetracks with conventional deviated well followed by USR drain hole to avoid water coning
9 USR DRILLING SERVICES CO. WLL. CASE HISTORYSOME EXAMPLES
10 Case 1 – Horizontal Drain Trial HISTORY :• Appraisal well for the field northwestern extension• 7 Workovers to test Dolomite and Sst• Converted to water injector with disappointing 50 bwipd injecting rate• Converted back to producer from Sst 3 and 4 with 130 bopd, 22% BSW• Vertical well log shows 4 m net pay, 24% poro, 60 mD perm
11 Case 1 – Horizontal Drain Trial OBJECTIVES :• To Prove production from a horizontal drain hole through Sst 3• To Monitor long term production and acquire dynamic data, expecting low / base / high case 320 / 400 / 530 bopd
12 Case 1 – Horizontal Drain Trial RESULTS :• Production increase from 130 bopd, 22% BSW to 750 bopd, nil BSW• Total 620 bopd incremental oil at “flat” decline rate• 16 more USR wells in 2013
13 Case 2 – Low Mobility Oil HISTORY : • M Sst - high perm (vug), low mobility• 18° API Oil with high viscosity 253 cP• Very low PI in vertical well, 20 m perf• Heavy oil limit production in vertical well - 40 bopd, low BSW from M Sst
14 Case 2 – Low Mobility Oil OBJECTIVES : • Increase PI by increasing connectivity• Monitor long term production and obtain dynamic data• Support further development in M reservoir• USRD trial with company owned light rig
15 Case 2 – Low Mobility Oil RESULTS : • 6 folds increase in oil production• “Open door” to 60 MMstb STOIIP
16 Case 3 - Improve Recovery HISTORY :• Field – Active aquifer drive, constantly increase in water cut• High water encroachment tendency• 23% Recovery factor suggests remaining field potential• Well – drilled as appraisal to assess field’s north extension• Low PI 0.4 stb/d/psi (3 to 10+ stb/d/psi field average)• 30 bopd the lowest producer in the field (decreased from 600 bopd initial)130 bopd30 bopdSandDepositsESP failure
17 Case 3 – Improve Recovery OBJECTIVE :• To improve recovery with a horizontal drain hole• To delay water piercing• To monitor long term production
18 Case 3 – Improve Recovery RESULTS :• 600 bopd pre-initial rate(still at sub-optimum flow condition)
19 Case 4 – Water Coning HISTORY : • Water coning due to bottom water drive. Well is 100% water out.• Bypass oil in unswept area 15 m from reservoir top. Last interpretations est MMstb STOIIP recoverable• Not recoverable with conventional radius horizontal profile. Need 11 m TVD build section.• Densely faulted, structural compartments and faulted blocks requiring high degree of trajectory control. Need max 200 m lateral section – ideal application for USRD.• Ideal application for USR horizontal drilling
20 Case 4 – Water Coning OBJECTIVE : • Access bypass oil from closed in or high BS&W wells using USR horizontal drilling technique• Step away from coning radius (80 m)• Replace existing infill wells with USR horizontal drain hole where ever possible• Maximize oil delivery by reactivating closed in wells
21 Case 4 – Water Coning RESULTS : • 310 bopd • Low BS&W • Flat decline rate
22 Case 5 – Heavy Oil, High BS&W, Tight HISTORY :• High perm (10 D) with highly fracture in dome, low perm and low fracture density in flank areas• Extremely high oil viscosity 1,300 cP• Strong edge aquifer• High CO2 content (highly corrosive when mixed with water)• Low productivity of vertical well on the flank• Challenge to increase or maintain current production plateau. USRD is seen fit to develop both dome and flank areas.
23 Case 5 – Heavy Oil, High BS&W, Tight OBJECTIVE :• To increase net reservoir length in the flank area with less number of wells• To reduce water coning and/or fingering effect with reduced drawdown in a horizontal drain as compared to vertical well• To increase connectivity between the new horizontal wellbore to undrained fracture networks• To give access to sweet spots few meters from the vertical wellbore by combining USRD technology with the nature of the reservoir• To support USRD technology to re-enter very high water cut wells in the field (15+ well candidates)
24 Case 5 – Heavy Oil, High BS&W, Tight RESULTS :• 185 bopd, low BS&W from 35 bopd, 35 bwpd• USRD trial wells increased from 2 to 5 wells• World record Reach-to-Radius Ratio• Longest USR lateral length 1,411 feet
30 TRAJECTORY PROPOSAL & PROGRAM Survey Type :PROPOSALVertical Section Origin :N m., E m.Vertical Section Azimuth :0°Reference Datum TVD :RKB Original Drill Floor ElevationTie-in :SurfaceSurveys :Definitive Survey not availableTop Milango :834 m MD ORT9-5/8” Casing Shoe :894 m MD ORTTop 7” 29# Casing Section Window :934 m MD ORTKOP – Start 4-1/2” Curve :935 m MD ORTTop Milango Sandstone :943 m MD ORT, 942 m TVD ORT, 934 m TVD SSRadius of Curvature (DLS) :15.05 m (114° / 30m)Landing - End of 4-1/2” Curve :957 m MD ORT, 950 m TVD ORT, 942 m TVD SSWell TD :1157 m MD ODE, 950m TVD ORT, 942 m TVD SS:Revision Date :5-May-11Report Date :50° AzimuthMilangoMilango SandstoneAssumes no formation dip
31 LIGHT DUTY RIG Schramm 94 klbs (750 HP Chain Drive) Single Schramm with sub-structure (tiled, USRD from slant well)ZJ20 350klbs 600 HP DoubleIdeco H40 Rambler – 400 HP DoubleRig H40 with USRD WorkshopHRI 80T 350 HP Single