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Slim Hole Technology Roger Hough Shell Canada

This presentation will: n Give an overview of slim hole technology n Define why it is only now gathering momentum n Provide some case histories n Explore the prospects for the future

Slim Hole Technology n What is slim hole? n Types of slim hole drilling n Why slim hole? n Problems and solutions

What is Slim Hole? n SHDEC: Drilling, evaluation and completion technology which allows fully engineered 6 1/4" and smaller holes at TD. n Slimline well: Well with a cost-effective design around an optimal production conduit. n Logging: Anything smaller than 4 3/4", or minimum 2 7/8". Tool OD 2 1/4"

Types of slim hole drilling: n Shallow Rotary n Continuous coring n Downsized Conventional n Combination n Small horizontal sidetracks n Coiled tubing drilling

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Completion Technology 13 “ 3 / 8 20” 9 “ 5 / 8 10 “ 3 / 4 7 “ L 5 / 8 5 “ L 1 2 / Rotating liner hanger 3 “ tubing 1 2 / ConventionalMonobore PBR tie-back 7”

Monobore Toolkit RestrictionFull bore Jet cleaner PLT High rate jet cleaner Full-bore CT mill Under reamer TTBP Straddle packer Retrievable straddle Electro line set bridge plug Packer flow meter

Typical 3 1/2 ” monobore completion 5 1/2” 17 lb/ft production casing 3 1/2” 9.2 lb/ft production liner Standard 3 1/2” flow control equipment with seal bore ID Side pocket mandrels with 2.813” seal bore ID Liner hanger complete with tubing tieback Retrievable straddle Retrievable or permanent bridge plug

Slim hole producers n A 3 1/2” monobore can produce 4000 b/d or 50MMscf/d n Downsizing a completion from 7” to 3 1/2” can reduce well costs by 15-40%

Production Rate vs Tubing Size /2 ” 5 1/2 ”7”3 1/2 ” Gross Rate b/d Wet Gas Rate MMscf/d mm inch

Well Productivity vs Diameter Relative PI Bit Diameter (inches)

Slim hole producers n For Shell’s existing reservoirs on a worldwide basis: –40% of the oil originally in place would be produced by existing technology –20% would be bypassed –20% would be residual oil saturation n Recovery of half the remaining oil would increase recoverable reserves by 50%.

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Why Slim Hole? n Exploration in immature areas n Exploration in mature areas n Production applications n High pressure / temperature wells n Safety n Environmental n Logistics n Economics

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Slim hole fluid pressure drops 3 1/2” DP 2 7/8” DP 7” 5” 4 1/8” Bit m bar Formate mud Chalk mud

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Kick detection system P P Computer Alarm Max Min SPM BNP SPP Flow in Flow out BOP

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Standard Thruster No thruster Thruster in use Hookload Mud Motor Drillpipe Drillcollars Thruster Bit

Soft Torque Rotary Table SCR Rotary Drillpipe Drive motor

Field Validation of MKII STRS ON Time = 60s

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Problems and Solutions n ProblemSolution n CementingEnhanced liners, improved slurries n FishingFishing tools n Drillstring failuresVibration mitigation, high torque drillstring n Well controlAccurate flow in / out measurement n Limited evaluationSlim hole logging and testing tools n Small clearances,Shear thinning fluids / high ECDs, holeformates, thruster to problemsreplace DC n Bit life, poor PDC bits, anti-whirl bits, penetration rate

Integration is important  pd  pc  pt  pm  pb  pda  pca mud viscosity mud density mud temperature mwd bit TFA bit aggressiveness ecd pump strokes WOB pp dp RPM GPM torque

BP - West Africa Case Histories - Exploration

Slim Hole Well Configuration SPE/IADC in conductor 6 10 in cond / / / 6 3 / 8 3 / / 8 Reservoir 3000 m

Hole diameters reduced by 50% Mud consumption and cuttings reduced by 75% Site reduced by 75% Overall costs reduced between 40% and 50% 60 m 75 m Slimhole site Conventional site Slim Hole Wellsite Environmental Impact SPE/IADC m 150m

Guatemala Case Histories - Exploration

Positive Learnings n Lower day rate n Lower material costs n Lower location preparation costs n Lower Mob/ demob costs n Less waste disposal n Smaller crew

Negative Learnings n Poor hydraulics n High ECDs - unable to get desired mud weight n Hole erosion due to high annular velocities n Limited choice of bits n Non standard tools n 3 1/2” logging tools unsuitable for 4 1/4” hole

Madagascar Case Histories - Exploration

Madagascar Slim vs Conventional 2500m2200m8.1/2”4.1/4” 9 “ 5 / 8 7” 5” MDZ-1 MDS-1 Cost 100% 60%

Madagascar Cost Comparisons $US millions Well 1Well 2Well 3 Slim-hole well

Positive Learnings n Reduced tonnage, location, construction work and waste material n Reduced driving hazards (1/2 the trucks) n Reduced environmental impact n Kick detection - 20L detected n Antivibration technology -> gauge 4 1/4” hole n Good quality logs

Negative Learnings n Assorted rig packages n 5000 psi design psi available n Bit TFA too high - bit selection poor n Mud pump used for cementing

Case Histories - Production Germany

Field Experience Retrofit SHD 24 ” 18 ” 9 “ 7 ” L 18 “ 7 ” L 5 ” L 13 “ 7 “ L 5” L 1 2 / 3 “ L 1 2 / 3 / 8 13 ” 3 / 8 9 “ 5 / 8 5 / 8 5 / 8 Well costs Cuttings volume 100% 75% 60% 30% 8 “ OH 5 “ OH 4 “ OH 5 / / 7 / 8 1 / m 13 “ 3 / 8 5 / 8

Case Histories - Production House Mountain

Hole Geometry 565 m 2120m 25 deg/30 m 3 “ 7 / 8

Where is slim-hole going? n Slim hole technologies are proven and reliable. n The industry is beginning to embrace slim hole - first operators and service companies, now the drilling contractors. n A start can be made with retrofit systems before committing to a dedicated rig. n New applications are emerging.

New Applications n Coiled tubing drilling –Ultra Short Radius Jetting –Underbalanced drilling –Expandable Tubulars –Coiled Tubing Completions n Dedicated Slim Hole Rigs

Typical slim hole casing schemes RE-ENTRYEXPLORATION 4" - 3.1/2" 12.1/4" 4.3/4" - 4.1/8" 4.1/4" - 4.1/8" 7.5/8" - 7" 5.1/2" - 5" 6.3/4" - 5.3/4" 3.3/8" - 2.5/8" 10.3/4" or 9.5/8” 9.7/8" - 8.3/8" 7" 5" 6.1/4" - 5.7/8" 3.1/2" 2.7/8" - 2.5/8" 8.3/4" - 8.3/8" 2.7/8" - 2.5/8" 3.1/2" Tubing Monobore 5.1/2" - 5" 3.1/2" 7.5/8" - 7" DEVELOPMENT / PRODUCTION 10.3/4" or 9.5/8” BHI SH manual

Case Histories - Production Peace River

New Generation Slim Hole Rigs n Euroslim (Forasol / Elf / Total / DBS) n Simpler (Sedco-Forex) n Kenting Rig 11 n Hybrid CT units

60 m 75 m Slimhole Conventional site Slim Hole Wellsite - the shrinkage continues 120 m 150 m 32m 26m Simpler Foraslim

Multidisciplinary Crew n Rig Team8 (15) n Maintenance Team3 (5) n MWD / Logging1 (3) n Total 13 (23) n Conventional Operations (40)

Next Steps n Good planning and integration of a slim-hole campaign is needed with all parties. n Design the well from inside out. n Compromises may be needed, but the result should be better information for less cost, reduced finding / lifting costs, increased reserves, better safety and S.D. n Slim hole is coming - it’s up to oil company and contractor alike to benefit from it.