Exposing formation to Hydraulic Pressure- Technology Advancement for Horseshoe Canyon CBM Stimulation Original Presentation by: Francois Cantaloube – Schlumberger Mike Yu – EnCana Corporation. CSUG – Nov Francois Cantaloube– Schlumberger

Agenda  The Conventional Approach  The ThorFRAC Approach  Bottom-Hole Dynamics  Tool Capabilities  Case History and Results

The Conventional Approach  Coal Cleat Matrix ─ Natural path of least resistance  Preferential damage path  Complex stimulation requirements ─ Low Young’s modulus  Stimulation fluid ─ Low effective viscosity of N2 ─ Compressibility  Equipment limitation at surface ─ Inefficiency due to friction losses ─ Bigger footprint ─ Higher costs Operational constraints limit high pumping rates Reservoir conditions require High N2 pump rates for an optimized stimulation

Effective Pressure at the Coal Face N2 Pumping 1200 scm / min Efficiency loss in the system

Mechanisms at Coalface Pressurizing BH N2 leak-off into formation as BH is pressurized prior to break down

Mechanisms at Coalface Break down

Mechanisms at Coalface Remaining volume injection

Limitations on Current Practices  Significant fracture propagation is not likely to occur with low viscosity (N2)  Experimental approaches have shown that ultra high-rates deliver better stimulation results than high-volumes  Current “high pumping rates” are limited by friction losses  CBM economics limit major operational cost increases

9 The inefficiency of the current approach has triggered the need to optimize the process of CBM stimulation Develop a Multi-zone/high-rate system that effectively transfers energy/pressure to the formation*, optimizing the volume of N2 used. * Patented process (# ) Changing The Game

Effective pressure at the coal face N2 Pumping 1200 scm / min

Pressurizing BHA High-Energy Release at Coalface (ThorFRAC)

Pressurizing BHA No N2 leak-off into formation as BH is pressurized N2 Volume optimization High-Energy Release at Coalface (ThorFRAC)

Pressure Released at highest rate possible in a N2 CoilFRAC treatment High-Energy Release at Coalface (ThorFRAC)

Incremental surface area exposed during subsequent pumping High-Energy Release at Coalface (ThorFRAC)

Bottom-Hole Dynamics Pressure loss in the system

Bottom-hole Dynamics

Tool Capabilities  Operation: ─ Actuate as many times as required. ─ Actuate at any release pressure without POOH. ─ Follow-up pumping after pressure release. ─ 1 meter minimum interval straddle.  Real Time Depth control (CCL) and BHP & BHT enabled through fiber optics.  Fluids: ─ Nitrogen: all current cases. ─ Foam: no cases but no apparent restrictions ─ Slurry: Will need to determine the effects on tool.  Depth: ~1,000 meters range.  Casing: 114.3mm, current mm, doable.  Pressure Limitation: Tool (49,000 kPa), Cups (35,000 kPa).

Case History  Formation: Horse Shoe Canyon CBM (Belly River formation completed in some wells)  24 wells on six 4-well pads  New completions- No re-fracs  Perform 2 High Energy Release, and 2 Conventional treatments per pad

Study Area Locations

Eight-Month Cumulative Production Comparison North Areas South Areas “Wet” Section

Statistical Analysis Belly River Completed BLRV Contribution Poor gas production due to Wet Section Completion by Pad

Statistical Analysis 40% Improvement

Field Production Comparison

24 Flow contribution post Conventional N2 Fracturing

25 Flow contribution post Conventional ThorFRAC Fracturing

Conclusions  Bottom-hole assembly function as per design  Pressure response indicates more surface area was opened  No complication of surface logistics  Horseshoe Canyon CBM production improvement >40%  Spinner logs run on each wells stimulated with the 2 different methods have shown a more consistent production contribution per zone  Full potential of high-energy release system yet to be realized

27 CONTACT Reservoir Maximize Reserves Effective stimulation Increase production rates