Risk in Well Plugging & Abandonment by Twachtman Snyder & Byrd, Inc Risk in Well Plugging & Abandonment by Twachtman Snyder & Byrd, Inc. September 2006

Twachtman Snyder & Byrd, Inc. Houston, Texas, based company founded in 1987. Provides project management, well P&A and contracting services to the oil and gas industry. Specialized in decommissioning of offshore facilities. Consulting services for decommissioning planning and liability assessment.

Robert C. Byrd Over 30 Years in the Offshore Industry Joined TSB in 1993 Responsible for Risk and Liability Consulting Services Educational Background: B.Sc. Marine Engineering, US Coast Guard Academy M.Sc. Ocean Engineering, Unv. of Alaska, Fairbanks M.Sc. Structural Engineering, Unv. of California, Berkeley Ph.D. Engineering, Unv. of California, Berkeley

Well Plugging & Abandonment Summary

WELL PLUGGING & ABANDONMENT Rigless Method used predominantly in Gulf of Mexico & North Sea Rig-based method used primarily on subsea wells 6 7 6

Well P&A Objectives Assure isolation of hydrocarbon zones Protection of fresh water aquifers Prevention of migration of fluids & gases

General Well P&A Procedure Cement plug is placed below and across the lowest production zone, tagged and tested. Cement plugs across all production zones All open annuli are plugged. Tubing cut approximately -100 m below the mud line (BML) and the tree is removed. Production casing removed to -100 m BML. Surface cement plug is pumped into the casing with top at -32 m BML.

Well P&A - Rig vs. Rigless Step 1 Typical Wellbore Schematic

Well P&A - Rig vs. Rigless Step 2 Bottom Plugs Set With Tubing Pulled Out of Hole

Well P&A - Rig vs. Rigless Step 3 Balanced Plug on Rigless and Stopped Plug With the Rig

Well P&A - Rig vs. Rigless Step 4 Rigless with Cut Casing and CIBP; Rig with Same but with a little more Casing Out of the Hole

Performance Risk Issues in Well P&A Time lapse between well completion and P&A Deterioration of hardware Loss of, incomplete or inaccurate records Often performed long after platforms shut-in P&A personnel often know little about the wells Cost pressure: Not income generating

Risk Mitigation Factors in Well P&A Formations generally produced out, therefore pressures not high. Systems and tools are available to deal with any eventuality.

Well P&A Cost Risk Example

Offshore Platform Components Production Equipment Deck Drilling Rig Quarters Power Generation Pipeline Conductors/Wells Jacket Piles Offshore Platform Components

Other Risk Issues in Well P&A

Risk in Well P&A Conclusions The performance risk in well P&A is primarily economic: It is very difficult to estimate the cost accurately for a single well. We can estimate the cost of multiple wells probabilistically. These Risks Pale in comparison with the uncertainty following a Catastrophic Event (Hurricane).