USR DRILLING SERVICES CO. WLL.

Tatweer
INTRODUCTION TO
ULTRA SHORT RADIUS DRILLING

21st October, 2012

 WHO WE ARE

USR DRILLING SERVICES (USRD) is the premier

provider of Ultra-Short Radius and Short Radius
horizontal drilling services to the oil and gas
industry.

USRD is the only directional drilling company who

provides Ultra Short Radius drilling services worldwide.

We employ highly experienced drilling personnel

and offer unique problem solving well intervention
technologies.

Over two decades our team has introduced new

technologies while maintaining our cost advantage
relative to the competition.
 WHAT WE DO
2012 •Drilled 50 USR wells from 2002 To Date (Oct ’12)
•• Completed 8th Well in W. Africa for Perenco Gabon in OBA, Olende and Niungo Fields
•• Upcoming 2 more wells in Niuango; 16 more in OBA; xx more in Niungo
•• Drilled a World Record well with a Reach to Radius Ratio of 32:1 and Longest USR lateral length of 430 m (Gabon)
•• A 5 well IOR pilot project will commence in Myanmar end Q1-13
•• Currently developing new generation Titanium DP and Composite DP
2010-2011 • Drilled first two wells in Indonesia for Citic Seram. Drilled 2 wells for Pertamina Java EP.
• Drilled first First USR well in African Continent for Perenco Gabon.
2009-2010 • Completed 7 well campaign for Oxy Oman, Safah field
• Drilled a World Record well with a Reach to Radius Ratio of 25:1
2007 - 2008 First USR well completed with articulated and rotatable sand screen “SnakeScreen™.
Acquired TDP with two designs improvements based on USRD field data built in.
2007 Developed USR mud motors to reduce drillpipe RPM’s and to steer in thin targets. Began running a hybrid string
combining S-135 and one or two joints of TDP as non-mag.
2006 – 2007 Drilled USR wells in Turkey and India. Replaced Composite Drill Pipe with Titanium Drill Pipe.

2005 - 2006 Drilled in Rima field of PDO Oman. Built 30 ft ROC fixture to fatigue test drill pipe to be run in USR wells.

 2004 – 2005 Drilled multi-lateral “fishbone” wells for PDO, Oman. Introduced USR to Indonesian Operators.

 2001 - 2003 Completed five well trial successfully for PDO, Oman

 1994 - 2001 Drilled 170 USR wells in various fields in the United States with a number of milestones:
• 2000 - First ever horizontal well drilled with air hammer
•• 1999 - First ever well drilled with Titanium Drill Pipe
•• 1995 - First USR well drilled Under Balanced using USRDS’s Low Cost RSS tools

 1990 - 1994 Drilled more than 200 Ultra Short Radius (USR) test wells at Amoco’s Catoosa Drilling Research Center.
Low cost “push-the-bit” Rotary Steerable System (RSS) developed by Amoco.
USR Milestones
 WHAT IS ULTRA SHORT RADIUS DRILLING

DEFINITION
BUR : 100°/100 ft to 230°/100 ft
ROC : 25 to 57 ft

OUR APPROACH
Slim Hole Drilling with hole sizes and down
hole tools that permit
• High BUR
• Steering
• Directional Surveying
• Completion
 DEFINITION
0
Curve Section Max BUR Max ROC Typical Lateral
Definition (º/100 ft) (ft) Length (ft)
Long Radius 4 1,400 15,000
200
Medium Radius 8 700 7,000
Intermediate Radius 20 300 3,000
Short Radius 60 100 1,500
400 Ultra Short Radius 230 25 600
True Vertical Depth (ft)

600

800

1000

1200

1400

-100 100 300 500 700 900 1100 1300 1500

Vertical Section (ft)

 USR SIDETRACK CONVENTIONAL HORIZONTAL
• Access Reserves Near Vertical Wellbore
• Horizontal Section Begins 27-57’ From Vertical Wellbore
SIDETRACK
• Can Not Target Near Wellbore Reserves
• Kickoff In Producing Formation Resulting in Entire Curve and
Lateral • Horizontal Section Begins over 1000’ From Vertical
Section in Pay Zone. Wellbore
• Avoid Overlying and Underlying Problematic Shales • Kickoff Points over 1000’ above Pay
• Drill with NDDF Designed only for Reservoir Pressure which is • Curve Section Does Not Intersect Pay Zone Therefore
Often not
Partially Depleted Contribute to Production
• Avoid Need for and Cost of Intermediate Casing / Liner • Numerous Lithologies Including Unstable Shales are
Exposed in Curve Section which Increases the Risk of
• Avoid Expensive Logging Tools
Drilling Problems
• Use Lighter Workover Rigs and Smaller Circulating Systems
• Drilling Fluids are More Complex Due to Hole Stability
• Drill Smaller Hole Sizes Utilizing Slim Hole Drilling Technology and
• Set Pumps in Vertical Position and Near Top of Reservoir Lower Reservoir Pressures
• Estimated Cost is 30-50% of Vertical Well Cost • LWD is Required Due to Target Uncertainty away from
• A Deviated Pilot Hole can be Drilled from Existing Wellbore and original well bore
Logged to Acquire Data and Determine USR Well Bore Placement. A • Use Heavier Drilling Rigs and Larger Circulating Systems
Pilot Hole + USR Sidetrack is Less Expensive than Conventional • Larger Hole Sizes are Required
Horizontal Drilling
• Cemented Casing / Liners are Required Through Curve
• Low Lost in Hole Cost Section
• Set Pumps Well Above Top of Reservoir or in Curve
Section
at High Inclination. This Could Result in Numerous
Production Problems
• Estimated Cost is 80-100% of Vertical Well Cost
• High Lost in Hole Cost

Drill 2,000’ to Reach 90 Degrees

Drill 45’ to 90’ to Reach 90 Degrees
 Applications

2. Sidetracks from Vertical Wells

in Tightly Spaced Fields
1. Sidetracks from Vertical Wells
with Water Coning

4. Sidetracks into Channel

3. Exploitation of Attic Oil from a Sands with Surrounding Shale
Vertical or Horizontal Wells
5. Sidetracks from Vertical Wells with Near Wellbore Damage
6. Alternative to Hydraulic Fracturing
7. Sidetracks from Water Injectors to Increase Injection Rates and Improve Sweep Efficiency
8. Sidetracks with conventional deviated well followed by USR drain hole to avoid water coning 8
USR DRILLING SERVICES CO. WLL.

CASE HISTORY
SOME EXAMPLES
 Case 1 – Horizontal Drain Trial
HISTORY :
• Appraisal well for the field northwestern
extension
• 7 Workovers to test Dolomite and Sst
• Converted to water injector with
disappointing 50 bwipd injecting rate
• Converted back to producer from Sst 3
and 4 with 130 bopd, 22% BSW
• Vertical well log shows 4 m net pay, 24%
poro, 60 mD perm

10
 Case 1 – Horizontal Drain Trial
OBJECTIVES :
• To Prove production from a
horizontal drain hole through Sst 3
• To Monitor long term production and
acquire dynamic data, expecting low /
base / high case 320 / 400 / 530 bopd

11
 Case 1 – Horizontal Drain Trial
RESULTS :
• Production increase from 130 bopd,
22% BSW to 750 bopd, nil BSW
• Total 620 bopd incremental oil at “flat”
decline rate
• 16 more USR wells in 2013

12
 Case 2 – Low Mobility Oil
HISTORY :
• M Sst - high perm (vug), low mobility
• 18° API Oil with high viscosity 253 cP
• Very low PI in vertical well, 20 m perf
• Heavy oil limit production in vertical
well - 40 bopd, low BSW from M Sst

13
 Case 2 – Low Mobility Oil
OBJECTIVES :
• Increase PI by increasing connectivity
• Monitor long term production and obtain
dynamic data
• Support further development in M reservoir
• USRD trial with company owned light rig

14
 Case 2 – Low Mobility Oil
RESULTS :
• 6 folds increase in oil production
• “Open door” to 60 MMstb STOIIP

15
 Case 3 - Improve Recovery
HISTORY :
• Field – Active aquifer drive, constantly increase in water cut
• High water encroachment tendency
• 23% Recovery factor suggests remaining field potential
• Well – drilled as appraisal to assess field’s north extension
• Low PI 0.4 stb/d/psi (3 to 10+ stb/d/psi field average)
• 30 bopd the lowest producer in the field (decreased from 600
bopd initial)

Last tested Oil Rate (bopd): 29.000 Cumulative Oil (MMstb): 0.192
Cumulative Water (MMstb): 0.016
Last tested WC (%): 14.706
Cumulative Gas (MMscf): 49.877
1000 200 0.20

130 bopd ESP failure

ESP failure
Downhole pressure (psi)

800 160 0.16

Cumulative Oil (MMstb)

Sand
Liquid Rate (stb/d)

Deposits 30 bopd
600 120 0.12

400 80 0.08

200 40 0.04

0 0 2006 07 08 09 10 11 0.00

Cumulative Oil (MMstb) Oil (stb/d)

Date
Oil rate (stb/d) from test
16
Water (stb/d)
PIP (psi)
 Case 3 – Improve Recovery
OBJECTIVE :
• To improve recovery with a horizontal drain hole
• To delay water piercing
• To monitor long term production

17
 Case 3 – Improve Recovery
RESULTS :
• 600 bopd pre-initial rate
(still at sub-optimum flow condition)

18
 Case 4 – Water Coning
HISTORY :
• Water coning due to bottom water drive. Well is
100% water out.
• Bypass oil in unswept area 15 m from reservoir
top. Last interpretations est. 1.04 MMstb
STOIIP recoverable
• Not recoverable with conventional radius
horizontal profile. Need 11 m TVD build
section.
• Densely faulted, structural compartments and
faulted blocks requiring high degree of
trajectory control. Need max 200 m lateral
section – ideal application for USRD.
• Ideal application for USR horizontal drilling

19
 Case 4 – Water Coning
OBJECTIVE :
• Access bypass oil from closed in or high BS&W
wells using USR horizontal drilling technique
• Step away from coning radius (80 m)
• Replace existing infill wells with USR
horizontal drain hole where ever possible
• Maximize oil delivery by reactivating closed in
wells

20
 Case 4 – Water Coning
RESULTS :
• 310 bopd
• Low BS&W
• Flat decline rate

800
810
820
830
840
850
860
870
880 7” liner set at 952 mahtbf
890
900
True Vertical Depth

910 USR KOP at 953.5 mahtbf USR Target Depth 944-946 mtvdtbf
920 (940.93 mtvdtbf)
930
940
950
960 North, m
970 200
980
990
15 0
1000
1010
1020 10 0

1030
1040 50

1050
East, m
West, m

1060 - - - -
0
0 5 1 1 2
1070 2 1 1 5 0 0 5 0
0 5 0 0 0 0 0
1080 0 0 0
-50

1090
1100 - 10 0

1110
1120 - 15 0

1130
1140 -200

1150 South, m

-50 0 50 100 150 200 250 300 350 400 450 500 550 600

Total Departure 21
 Case 5 – Heavy Oil, High BS&W, Tight
HISTORY :
• High perm (10 D) with highly fracture in dome,
low perm and low fracture density in flank areas
• Extremely high oil viscosity 1,300 cP
• Strong edge aquifer
• High CO2 content (highly corrosive when mixed
with water)
• Low productivity of vertical well on the flank
• Challenge to increase or maintain current
production plateau. USRD is seen fit to develop
both dome and flank areas.

22
 Case 5 – Heavy Oil, High BS&W, Tight
OBJECTIVE :
• To increase net reservoir length in the flank area
with less number of wells
• To reduce water coning and/or fingering effect
with reduced drawdown in a horizontal drain as
compared to vertical well
• To increase connectivity between the new
horizontal wellbore to undrained fracture networks
• To give access to sweet spots few meters from the
vertical wellbore by combining USRD technology
with the nature of the reservoir
• To support USRD technology to re-enter very high
water cut wells in the field (15+ well candidates)

23
 Case 5 – Heavy Oil, High BS&W, Tight
RESULTS :
• 185 bopd, low BS&W from 35 bopd, 35 bwpd
• USRD trial wells increased from 2 to 5 wells
• World record Reach-to-Radius Ratio
• Longest USR lateral length 1,411 feet

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USR DRILLING SERVICES CO. WLL.

CANDIDATE SELECTIONS
 SUB-SURFACE EVALUATION
STRATEGIES :
• Production History
• Structure & Reservoir Model
• Well Objective & Target Definitions
• Candidate Ranking

NW SW
Phi
Sw

Top Formation 1

Perforations
200 m
Top Formation 2
 MECHANICAL ASSESSMENT
• 7” 29# Production Casing
• 3-1/2” PCP Completion
• Completed zones:
Milango Formation
Perforated 939 – 941.5 m
Abandoned 941.5 – 946.5 m 9-5/8” 47#
L80 BTC Shoe
Peforated 941.5 – 961 m @ 896 m

• Abandoned zones: Milango 939 – 961 Perf

Azile Dolomite 1010 - 7” BP
Azile Dolomite
Azile Sandstone (abandoned)
Cap Lopez Azile Sandstone
(abandoned)
Cap Lopez
(abandoned)
7” 29# L80 BTC Shoe @ 1770 m
 CASING EXIT

TOW 934 m
KOP 935 mMD, 926.8 mSSTVD

BOW 944 m
Landing Point 942 mSSTVD
 DRILLING HAZARD ASSESSMENT

Target @ 942 mss

TRAJECTORY PROPOSAL & PROGRAM
200

Survey Type : PROPOSAL 175

Vertical Section Origin : N 00.000 m., E 00.000 m.
Vertical Section Azimuth : 0°
uth
150
zi m
Reference Datum TVD : RKB Original Drill Floor Elevation
Tie-in : Surface 125 °A
Surveys : Definitive Survey not available 50
Top Milango : 834 m MD ORT 100
9-5/8” Casing Shoe : 894 m MD ORT
Top 7” 29# Casing Section Window : 934 m MD ORT 75
KOP – Start 4-1/2” Curve : 935 m MD ORT
50
Top Milango Sandstone : 943 m MD ORT, 942 m TVD ORT, 934 m TVD SS
Radius of Curvature (DLS) : 15.05 m (114° / 30m)
25
Landing - End of 4-1/2” Curve : 957 m MD ORT, 950 m TVD ORT, 942 m TVD SS
Well TD : 1157 m MD ODE, 950m TVD ORT, 942 m TVD SS 0
:Revision Date : 5-May-11
Report Date : 5-May-11 0 25 50 75 100 125 150 175 200

850
Milango

875
mTVD

900

925

Milango Sandstone
950

975
0 25 50 75 100 125 150 175 200 225
Assumes no formation dip
Vertical Section (m)
 LIGHT DUTY RIG

Schramm 94 klbs (750 HP Chain Drive) Single Schramm with sub-structure (tiled, USRD from slant well)
ZJ20 350klbs 600 HP Double

Ideco H40 Rambler – 400 HP Double Rig H40 with USRD Workshop HRI 80T 350 HP Single
 DRILL STRING DRIVE
POWER SWIVEL
• Bowen 2.5C
- Static Load Rating 170,000 lbs
- 100 RPM Rating 90,000 lbs
- Max Torque 3,975 ft-lbs
- Max Circ Press 5,000 psi
• Bowen S-3.5
- Static Load Rating 240,000 lbs
- 100 RPM Rating 130,000 lbs
- Max Torque 8,000 ft-lbs
- Max Circ Press 5,000 psi