41st Gas-Lift Workshop Houston, Texas, USA June 3 - 7, 2019 Single Point High Pressure Gas Lift Replaces ESP in Permian Basin Pilot Test Branden Pronk, Sr. Production Engineer, SM Energy 2019 Gas-Lift Workshop June 3 - 7, 2019

Contents Introduction The Problem with ESPs Conventional GL vs. SPHPGL Pilot Test Details ESP Performance vs. SPHPGL Conclusions 2019 Gas-Lift Workshop June 3 - 7, 2019

Introduction Background SPE 195180, Single Point High Pressure Gas Lift Replaces ESP in Permian Basin Pilot Test Adoption of new technology by the oil industry is often a challenge Single Point Gas Lift is old news offshore Injection pressure above the customary ~1,200 psi not common 2019 Gas-Lift Workshop June 3 - 7, 2019

The Problem with ESPs Unconventional Well Characteristics Sand and solids production Wellbore Deviation Increasing GOR Poor electrical infrastructure High initial production rates Steep production declines 2019 Gas-Lift Workshop June 3 - 7, 2019

The Problem with ESPs FIX THIS! 2019 Gas-Lift Workshop June 3 - 7, 2019

Conventional GL vs. SPHPGL To maximizing gas lift production: Minimizing the forces working against you Maximizing the forces working for you 2019 Gas-Lift Workshop June 3 - 7, 2019

Conventional GL vs. SPHPGL Flowline Pressure Conventional Gas Lift Low max injection pressure (~1,200 psi) Tbg friction creates Back pressure on reservoir Unloading Valve at depth For max compressor injection Pressure Hydraulic Head Pressure on Reservoir BHP higher than Max injection Pressure PIP 2019 Gas-Lift Workshop June 3 - 7, 2019

Conventional GL vs. SPHPGL High Injection Pressure (4,000 psi max) Single Point High Pressure Gas Lift (SPHPGL) Flowline Pressure Use compressor HP to overcome tbg friction Low annular friction pressure for Reservoir pressure to overcome BHP lower than Max injection Pressure Lift from bottom Day 1 PIP 2019 Gas-Lift Workshop June 3 - 7, 2019

Conventional GL vs. SPHPGL Flow Area Calculations 2.88X flow area! 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details 8 wells in the same formation on adjoining pads 7 wells on ESP 1 Well on SPHPGL Well Completion Information 5-1/2”, 20#, P-110 csg 8,150’ TVD 10,000 ft treated lateral length Wells NOT FLOWING (normally pressured ~0.433 psi/ft) 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details Downhole Wellbore Diagram With Equipment Detail 5-1/2” 20# casing 2-3/8” 4.6# L80 Tubing Perforated sub @ 65 deg incl NO PACKER 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details Wellhead Configuration Gas injection down tubing, production up casing Tubing Head upgraded to accommodate 3-1/16” casing valves from the usual 1-13/16” to increase flow area and reduce pressure loss. Flow cross with ability to easily swap between annular and tubing flow Wellhead safety valve relocated downstream of the first casing outlet valve 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details: Wellhead 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details: Wellhead Annular Flow 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details: Wellhead Tubing Flow 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details: Process Flow Diagram Facility Pad Well Pad 8 2 6 1 7 5 4 3 2019 Gas-Lift Workshop June 3 - 7, 2019

Pilot Test Details Booster Compressors 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot 2-7/8” Conventional Gas Lift 1MMSCFD Injection @ 100 psi flowline 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Pilot Pilot Test Learning FLOWLINE PRESSURE MATTERS! Improvements Modeled flowlines in PIPESIM Target 250 psi or less flowline pressure on IP Any flowlines over 1,500’ long built with twined 4” flowlines. 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Improvement 5,600 BFPD 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Improvement 6,100 BFPD 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Improvement 6,500 BFPD 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Improvement 7,200 BFPD 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL: Improvement 8,050 BFPD 2019 Gas-Lift Workshop June 3 - 7, 2019

ESP Performance vs. SPHPGL Next Steps Install 2-7/8” Annular flow from ~5,000+ BFPD down to ~1,000 BFP At ~1,000 BFPD, reverse flow to produce up tubing Below 500 BFPD, drop plunger and GAPL/PAGL GAPL/PAGL down to abandonment (below 50 BFPD) No well interventions or workovers needed 2019 Gas-Lift Workshop June 3 - 7, 2019

Conclusions Conclusions SPHPGL can match or exceed ESP production. SPHPGL performance is impacted by flowline pressure more than are ESPs. Flowline pressure needs to be minimized for maximum SPHPGL performance. SPHPGL setup can take production from 5,000+ BFP down to under 50 BFPD with no workovers. 2019 Gas-Lift Workshop June 3 - 7, 2019

Conclusions QUESTIONS? 2019 Gas-Lift Workshop June 3 - 7, 2019

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