1. Supercement for Annular Seal and Long-term Integrity in Deep, Hot Wells DE-FC26-02NT41836

2. Problem:Long Term Zone Isolation in HTHP Wells High Temperature and Pressure Deviation angles - Placement is difficult High Density systems – 17 to 20 ppg well fluids High Pressure Gas – Gas migration Narrow Annuli – High Friction Liners versus longstrings Tie Backs and Expandable Liners CO2 and H2S common

3. Problem: Well Intervention is Big Cost Survey – 15% of all primary jobs require remedial cementing Estimate of 35% of HTHP primary jobs require remedial cementing Cost estimate: – On shore - $100k per squeeze (average 2 per) – Off shore - $500k per squeeze (average 2 per) Bigger cost for Operators – Long Term loss of production – Interzonal flow – Water influx

4. Project Objectives Develop database of jobs for evaluation Determine the cement system properties that affects the ability of cementing materials to provide long term zone isolation under deep hot conditions Use recently developed laboratory methods to determine key properties Evaluate various materials to generate the key properties Develop Supercement systems!!!! Application for all wells including “deep hot”

5. Project Work Team CSI Technologies LLC Material Manufacturers Steering Committee Operators

6. HTHP Well Database Develop database for HTHP Cementing – Determine critical well info and parameters – Successful cementing/completion – Unsuccessful cementing/completion – Confidentially is important (all contributing members have access) – Track industry practices and results – Status – rollout week of 10-31-05 Update with outside data if possible

7. Deep Trek Technical Interest Web-Site CSI/DOE develop web-site – Clearing house for discussion, questions, concerning Deep Trek wells – Focus mainly US but can include others – Look for trends, new information, repeating issues, new technologies used etc.

8. Mechanical Integrity Issues Flow of Fluids – Around the Cement Bonding, Microannulus, Deformation – Through the matrix of the Cement Cracking, Permeability changes – Stress Pressure, Temperature Stress Cycling Conditions Mechanical shock

9. Mechanical Integrity Issues - Solutions Improve material properties relative to Portland Cements: – Higher Tensile Strength – Higher Ductility* – Lower Anelastic Strain – Higher Young’s Modulus Correlate material properties with performance

10. Anelastic Strain Definition: Permanent Deformation resulting from Low-Intensity Stress Cycling – Measured at 25% and 50% ultimate strength – Tensile and Compressive may be very different – All Portland cements exhibit behavior – Measured by comparing “ideal” (completely elastic) behavior with actual – Low-level stress can modify ultimate strength

11. Potential HTHP Solutions Potential HTHP Solutions Multi-material solutions – Optimized sealing – Optimized strength Placement methods Enhanced Portland performance Non-Portland materials Hybrid Portland materials

12. Phase I Tasks Phase I Tasks Literature Search on Portland and Non- Portland Binders Evaluate materials at low temperatures Evaluate materials at high temperatures Evaluate materials with non-traditional testing

13. Literature Search Strategy Literature Search Strategy Emphasis on non-Portland binder research Emphasis on ceramic acid-base reactions Effects of unconventional additives on Portland cement properties Refractory cements Emphasis on non-oilfield binder applications

14. Literature Search Results Literature Search Results Chemically-reactive fibers – Ceramic – Kevlar Inorganic expansive additives – Molybdenum – High concentrations of MgO Ceramicrete (ANL) Calcium Aluminum Silicate High-temperature resins

15. Material Evaluation Strategy Material Evaluation Strategy Conduct screening laboratory tests to determine material properties Advanced material property and performance testing on best materials from screening tests Evaluate materials at low and high temps Correlate material properties and performance

16. Material Evaluation Strategy Material Evaluation Strategy Conventional testing – Compressive Strength – Tensile Strength Kinetics and Placement – Thickening time – Consistency

17. Material Evaluation Strategy Material Evaluation Strategy Non-traditional testing – Young’s Modulus – Anelastic Strain / Fatigue – Annular Seal performance under cyclic loading – Expansion – Shearbond

18. Material Evaluation Results Material Evaluation Results Candidate Phase II Materials – 9 formulations in 3 product categories: Non-Portland –High-temperature resin –Calcium Aluminum Silicate Portland with Unconventional Additives –MgO –Molybdenum Reactive Fibers –Modifier for other slurry systems

19. Material Evaluation Results Material Evaluation Results “Best” properties do not always mean best performance No single property is a reliable predictor of performance Performance based on Annular Seal model Preliminary numerical model relates energy application and resistance prior to loss of seal to cement properties When available, evaluate Single-Wall Carbon Nanotubes as performance-enhancing additive

20. Material Evaluation Results Material Evaluation ResultsSystemFormulaRecipeWaterDensityBaseline99 H + 35% Silica Flour 5.1616.6 Mod Baseline 77 H+25% SBMC+15% MFA+2% Daxad 9 2.5019.7 MgO128 Baseline 77 + 20% MgO H 3.6019.0 Moly132 Baseline 99 + 0.5% Moly 5.1916.6 Moly133 Baseline 77 + 0.5% Moly 2.5019.7 Resin188 Resin + Hardener + Reactive Diluent N/A9.0 Silicate180 NaSiO 3 + CaOH + AlOOH 24% Fiber130 Baseline 99 + 1.0% Ceramic Fibers 5.2116.6 Fiber131 Baseline 99 + 1.4% Ceramic Fibers 5.2416.6 Fiber136 Baseline 77 + 0.5% Ceramic Fibers 2.5019.6

21. Material Evaluation Results Material Evaluation ResultsSystemFormulaCompTensile AS * 10 -6 SB Ann Seal Baseline994,7907055.87260 44,850 Mod Baseline 775,6507253.49470 29.900 MgO1283,190281* *1850+ Pend HT Moly1324,2801,0831.55308 1,325,360 Moly1336,6801,3660.85570 349,900 Resin1885,5503,69018.23*1850+ In Proc Silicate1801,2409706.41 Fiber1303,7101,0164.04300 0 Fiber1313,0201,1493.10190 8,250 Fiber1364,5101,3121.591,020 1,749,500

22. High-Temperature Epoxy Resin High-Temperature Epoxy Resin Solves problems with Furan Resins – Shrinkage – Water intolerance – Weighting / Lightening destroys properties – Difficult to control kinetics High-Temperature Epoxy Resins – Discovered as part of a different project – Traditional usage – HT winding insulation for electric motors – Evaluation revealed controllable kinetics at high temps – Material subjected to DeepTrek testing

23. High-Temperature Epoxy Resin High-Temperature Epoxy Resin Properties – Very high tensile and compressive strength – High shearbond – Rubber-like Absorbs large amount of energy without failure Difficult to test using conventional cement test protocols High anelastic strain over short time / Low anelastic strain over long time (deforms, then rebounds)

24. High-Temperature Epoxy Resin High-Temperature Epoxy Resin Issues – Liquid / liquid system – Health issues with handling – Highly exothermic – must cure under pressure – Can use conventional batch mixers – Dedicated automatic-controlled continuous mixer feasible – Requires different test protocols and equipment to adequately quantify properties and performance

25. Modifications to Resin Combine with Cement – Solids help with fluid loss – Penetration of big voids with cement – Filtrate of the fluid sets and consolidates formations – Sealing and zone isloation not only in wellbore but in the formation itself

26. Phase II Tasks Phase II Tasks Manufacture Supercement to specification Batch testing to confirm performance on large scale Large-scale mixing, shearing, and drillout, testing Field test, research test well

27. Phase II Result to Date Phase II Result to Date Phase II Tasks nearly complete for Epoxy Resin – Field-scale mixing, shear, and drillout testing – Large-scale manufacturing – Field tests in low temperature (200 deg F) well Phase II Remaining Work – Deep, Hot test well application – Test well applications of other candidate systems

28. Phase II Results to Date Phase II Results to Date Continuing materials property and performance testing to refine formulations – Epoxy Resin – Calcium Aluminum Silicate – MgO and Moly (performance) – Hybrid Epoxy Resin / Portland Cement Interesting properties Fills matrix voids with strength and ductility-contributing material

29. Testing Issues Testing Issues Cannot measure tensile strength via Splitting Method for highly expansive cements Cannot measure tensile Young’s Modulus with indirect Splitting method “Ultimate” Annular Seal test must be conducted at elevated temperatures Expansion of highly-expansive cements cannot be measured with current tests

30. Testing Issues - Solution Testing Issues - Solution Design new test equipment, develop testing protocols, and perform validation tests – “Direct” tensile strength test – Expansion under elevated temperature and pressure conditions – High temperature Annular Seal Phase II Extension Proposal to Develop apparatus, protocols, and validation

31. Direct Tensile Strength Method No industry- authorized method Different methods give different results Proposed method yields tensile YM

32. High Temperature Expansion Utilize split sleeve Expansion imposes forces on transducers Continuous measurement of expansive forces

33. High Temperature Annular Seal Test resistance for gas flow continuously at temperature and pressure Different methods give different results Proposed method yields tensile YM

34. Phase III – 2007-2008 Phase III – 2007-2008 Evaluate Supercement in Field Applications Cost / benefit analysis Commericalization / Technology Transfer

35. Deep Star Project Determine current technology and gaps in cementing and zone isolation at HTHP wells primarily in deep water Considering leveraging Deep Trek for addressing key gap in cementing CO2 and H2S resistance at elevated T and P Estimated funding at $1million (non DOE funds)

36. Summary Summary Successful Phase I – multiple candidate systems of interest Successful Phase II to date with Epoxy Resin Additional test apparatus and protocols required to evaluate candidate systems under HTHP conditions