Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 201821 November 2018 Premium MMS-NR (AISI 4138M) Sucker Rods Alejandro F. Ameglio – Head Technical Services Tenaris Rods Division

Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 201821 November 2018 Contents Chemical Analysis Mechanical Properties Laboratories Tests Field experiences Conclusions Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 201821 November 2018 Chemical Analysis Element Grade UHS-NR (4330M) Grade MMS-NR (4138M) Grade Plus (1530M) C (Carbon) 0.30-0.35 0.38-0.43 0.31-0.36 Mn (Manganese) 0.70-0.95 1.10-1.40 1.4-1.6 S (Sulfur) 0.025 Mx. P (Phosphorus) Si (Silicon) 0.15-0.35 0.20-0.40 0.25-0.40 Ni (Nickel) 1.65-2.00 0.30 Mx. 0.15 Mx Cr (Cromium) 0.80-1.10 0.60-0.90 0.2 Mx Mo (Molibdenum) 0.20-0.30 0.25-0.35 0.05 Mx V (Vanadium) 0.035-0.07  0.04-0.07  0.10-0.15 Nb   0.025-0.045  Cu (Copper) 0.25 Mx. As it can be observed, main difference between Grades UHS-NR and MMS-NR is the Nickel (Ni) content. Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Mechanical Properties 21 November 201821 November 2018 Mechanical Properties Grade UHS-NR (4330M) Grade MMS-NR (4138M) Grade Plus (1530M) YTS (ksi) 115 Min. UTS (ksi) 140-160 Thermal process Normalized Partially tempered Mechanical properties are the same for all Grades Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 201821 November 2018 Lab Tests A set of lab tests were done to evaluate the performance of the different steels at corrosive environments CO2 (“sweet” corrosion) SSC (Sulfide Stress Cracking) Resistance Localized attack in H2S environments Two steels were tested: AISI 4330M and AISI 4138M Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Results of Lab tests 21 November 201821 November 2018 Lab Tests At CO2 environments both steels showed approximately the same performance. Besides that, AISI 4138M showed a lower corrosion potential compared with the AISI 4330M. Analyzing the behavior of them at H2S environments, both showed a poor performance. None of them are recommended for sour service. Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field history 21 November 201821 November 2018 Field experience A major company operates a field at Neuquen Basin (Río Negro Norte Field) Going trough a natural declination process, wells were changing the ALIFT systems from ESP to Rod Pumping. Main characteristics of the field are: Depths: 8200-9800 ft (2500-3000 m) Production rates: 300-600 bfpd (50-90 m3/d) Water cuts: 10-40% Vertical wells Load levels make Grade D rods not applicable at the first stage of field development Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field evolution 21 November 201821 November 2018 Field experience Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field evolution 21 November 201821 November 2018 Field experience Major problems were related with sucker rod failures Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field data analysis 21 November 201821 November 2018 Field experience As the failures rates were constantly increasing, it was decided to do a complete analysis of the field data A task force that included production engineers and specialized technicians studied data including: Fluid analysis Annulus gas determinations (H2S and CO2) Bacterial measurements (SRB-Sulfate Reducers Bacteria) Failure analysis (all of the rod failures were analyzed) Operating conditions (spm, loads, etc) Handling & care practices, make-up procedures, etc. Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field data analysis - Conclusions 21 November 201821 November 2018 Field experience Annulus gas determinations showed a low content of CO2 (partial pressure < 3psi). From this point of view, there is no a corrosion problem However, CO2 in fluid analysis were detected (concentrations between 40-70 mg/lt) No H2S were detected, neither SRB (Bacteria). Failure analysis indicated a corrosion-fatigue process as the responsible for the rod breaks. NACE MR0175 (carbon steels or low alloy steels should not contain more than 1% of Ni) As a final conclusion, a change in the steels of HS sucker rods were decided (from AISI 4330 to AISI 4138) Those wells whit loads level less than 130% (SF=0.8) (Grade D) will be installed with Grade D rods A task force that included production engineers and specialized technicians studied data including: Fluid analysis Annulus gas determinations (H2S and CO2) Bacterial measurements (SRB-Sulfate Reducers Bacteria) Failure analysis (all of the rod failures were analyzed) Operating conditions (spm, loads, etc) Handling & care practices, make-up procedures, etc. Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Field evolution after AISI 4138 rods 21 November 201821 November 2018 Field experience Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Tabla 2- Caracterización del agua de formación de los pozos en ensayo   Rod body failures evolution 21 November 201821 November 2018 Field Experience Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Tabla 2- Caracterización del agua de formación de los pozos en ensayo   Premium MMS-NR (AISI 4138) failures evolution 21 November 201821 November 2018 Field experience Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods Grade of sucker rods installed 21 November 201821 November 2018 Field Experience Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018

Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 201821 November 2018 Conclusions This material has shown to have a better performance at corrosive environment than the other type of high strength sucker rods previously tested. A reduction in the pulling interventions rate (increase in service life) has been observed. Even with a “sweet” corrosive environment (CO2), and because of its reduced content of Nickel (Ni), the material is less susceptible to corrosion-fatigue processes that were affecting the other type of sucker rods. Recommendations As with all of the high strength rods in a corrosive environments, an effective corrosion inhibition program must be applied. Besides that, with loads level less than 140% (SF=0.8) Grade D rods are also an alternative that should be considered Premium MMS-NR (AISI 4138M) Sucker Rods 21 November 2018