1. IAGP Neuquen 2008 Production Maintenance in Mature fields How Monitoring Impacts Production…

2. 2 - IAGP Neuquen 2008 Introduction Mature fields require an intensive monitoring in order to:  Understand the field behavior.  Characterize the reservoir  Detect opportunities to increase production and reserves  workovers, stimulations, perforations, loops, fractures, etc  Adjust dynamic models to provide accurate production forecasts and justify new projects BUT monitoring must be carefully chosen and followed from the very beginning of field life “To much info kills info”  each field requires a dedicated monitoring plan Operating costs must be kept under control as production is declining  get the right data at the right time Examples of specific monitoring actions that had impact on production and reserves  Aguada Pichana: new fracture methodology adapted to heterogeneously depleted reservoir  San Roque: well performance actions to fill a production gap

3. 3 - IAGP Neuquen 2008 Neuquen Basin – Aguada Pichana Block SCHEMATIC SECTION SCHEMATIC SECTION Neuquen Basin Sedimentary column  The Aguada Pichana field is located in the Neuquén Basin, south-western Argentina.  The field produces gas from the sandstones of the Mulichinco formation, its main reservoir.  Aguada Pichana is the second largest gas field in Argentina  It is developed in the eastern flank of the NW-SE trending positive structure called Chihuido anticline.  The Mulichinco Fm depths ranges between : 1600 / 1800 mMD

4. 4 - IAGP Neuquen 2008 Aguada Pichana Production History PROBLEMATIC Low/Med perm. / heterogeneous sands Strong natural decline Intense drilling campaign (3 to 4 wells per month) New wells towards the West (low K) Necessity of LP compression Complex coordination with multiple constraints Hydraulic fractures systematically required k=20-50mD k=5-10mD k=1-5mD K<1mD

5. 5 - IAGP Neuquen 2008 How to maintain the production plateau in AP ? Continuous monitoring actions such as: Well tests, Isochronal tests, MDT, PLT, fluid sampling, seismic surveys allowed to define: 1.Drilling Campaign extensions  thanks to adequate coring program and dedicated 3D seismic survey infill & delineation wells Step out wells 2.Production Optimizition & stimulations actions MP & LP compression  inline with expectations thanks to an adapted monitoring and a good model history match New fracture design (wells without fracture don’t produce) 3.Future development projects in AP Block being studied LLP compression Well spacing reduction Low permeability reservoirs  how to produce them economically ?

6. 6 - IAGP Neuquen 2008 AP: Fracture design optimization Continuous monitoring actions in order to identify possible “bottlenecks of potential”: 1. Increased average gas rate (~20%) 2. Accelerate reserves 3. Average skin = -5 against -3 previously Monitoring & new fracture design: Gas potential evolution: production tests Reservoir pressure evolution: statics gradients & MDT acquisition in every new well Isochronal test after frac  transmissibility / Skin / Xf Thanks to monitoring, it was possible to see that some wells didn’t show the expected fracture behavior and the corresponding productivity By Integrating the MDT data (differential depletion) + rock mechanics in our designs, it was possible to optimize the treatment with dedicated fractures to avoid convection and disconnection between frac and wellbore Old fracture design New fracture design Disconnection of frac due to convection Perf High K zone Depleted zone Lower K zone Pressurized zone Main results Typical MDT + permeability log in AP

7. 7 - IAGP Neuquen 2008 Neuquen Basin San Roque Block PROBLEMATIC Intrusive sills: volcanic sills naturally fractured Shallow sills (LLY, F3C): Rich gas and oil Deep sills (Rincon Chico) : Dry gas HP/HT Shallow Clastics (Centenario / Mulichinco) ASR Block Gas export ASR LLY RCh

8. 8 - IAGP Neuquen 2008 How to maintain the production plateau in ASR ? 1.Continuous monitoring actions: Well tests, Flow after flow tests, PLT, etc 2.Production optimization & stimulations actions Nodal Analysis: tubing resizing, loops, etch. MP & LP compression Optimizing selective completions in ASR clastics wells Acid stimulation with balls sealers: necessary in all filons target Re-perforations / re-stimulations with new acids treatments. 3.Future studies in ASR Block New technologies (batch fracs, new acids, local compression,…) Infill targets based on revised and history matched models New stimulation campaign based on recent success on filones

9. 9 - IAGP Neuquen 2008 Aguada San Roque Clastics: Production Optimisation Example Centenario C Centenario A Mulichinco Optimization: based on good initial data per layer + pressure monitoring in neighboring wells, a multi layer nodal analysis was performed  low risk of crossflow and potential production gain was identified Best configuration was found (M + Cent A + Cent C) Significant production increase was achieved Gain: + 110 Km 3 /d from M + Cent A + Cent C

10. 10 - IAGP Neuquen 2008 San Roque : another production optimisation example Incremental production : 70 KSm 3 /d Bad tests MP WO LP Tubing Change 1.Flow after flow  PI diagnosis 2.Analysis nodal  Prod performance 3.Workover (2 7/8”  4 ½”) 4.Re-perforation + acid job  to be done shortly Tubing change + acid job + ball sealers + Loop 1.Add perforations + acid job + ball sealers 2.Analysis nodal 3.Workover (2 7/8”  4 ½”) 4.New analysis nodal 5.Loop Perf + acid WO Loop MP Incremental production : 600 Km3/d Due the complexity of the ASR & LLY fields (filones), acid jobs with ball sealers are necessary in order to stimulate all the opened fractures. In the same way, reperforations jobs enhace access to new fractures. A typical workflow in ASR block is:

11. 11 - IAGP Neuquen 2008 San Roque Actions: Impact on production profile Δ ~ 1.5 MMm 3 /d

12. 12 - IAGP Neuquen 2008 Conclusions 1.  Aguada Pichana:  Extend production plateau and compensate the strong decline of the field (400 / 450 Km3/d every month)  Identify new zones of interest (conventional or not)  Debottleneck surface facilities and well architecture when required  Design a new fracture methodology to increase production and push upwards the recovery factor  Prepare the future (new drilling campaigns and/or developments, LLP, spacing reductions)  San Roque  Extend the production plateau until LP compression start up  Debottleneck surface facilities and well architecture when required  New stimulations design  potential stimulation campaign could be triggered 2. A monitoring plan is a fundamental part of a Field Development Plan. It allows to: Understand the field, anticipate actions and react in time in any situation Update our models (static and dynamic) for more robust reserves estimates Identify potential upsides and reduce risks for future projects The actions carried out as consequence of the monitoring have allowed us to:

13. 13 - IAGP Neuquen 2008 Final Word: Integration of disciplines is key Well Performance Team Well Completion Reservoir Production / Surface facilities