MPD Moving to a “Must Have” Creates a Long -Term Cli lick to edit Master tit itle style le Optimization in Western Canada 8 March 2019
Where is “there”? MPD Technology Adoption Moore's technology adoption life cycle curve Innovators Early Adopters Companies that pursue new Companies that pursue new technologies aggressively to approaches aggressively to gain early advantage gain a significant competitive advantage Early Majority Late Majority “Transition” Companies that wait for a Companies that wait until from UBD to new approach to prove itself the new approach is well and then move quickly established and there is lots MPD Cli lick to edit Master tit itle style le of support ▪ Technology is a main driver in our ▪ Company X is doing it, does it ▪ It works but it’d be too expensive ▪ “Well established and lots of support”: organization work for us? There are several providers to choose ▪ “There are risks associated with it” from ▪ We can afford new technologies ▪ Will it allow us to go places we haven’t gone before? ▪ Commodity? ▪ If we don’t do it this way, it can’t be done ▪ Mainstream 8 March 2019 2
Where is “there”? Adoption varies by Market Maturity How can we do it? Operators look for ▪ alternatives to dril drill well ells th that at are chal challengin ing g from the pressure management perspective It works! Successful implementation of the ▪ technology leads to its adoptio ion n at the field level Knowledge is key: With adoption, field ▪ development teams not only become familiar with the technology but also learn when en not not to to us use e th the e tech technology (misuse of the technology is Cli lick to edit Master tit itle style le one of the main causes of technology rejection) The more the merrier: Once it is adopted, the ▪ market is established and more ore alt ltern rnativ ives lead to a widespread use that makes it easier to evaluate the use of MPD in more fields and plays in the region 8 March 2019 3
Adoption Challenges and Old Paradigms MPD is an additional cost MPD D Serv Services Cost of problems associated with pressure MPD D Serv Services Cost of problems not associated with pressure Cost reduction associated with MPD efficiencies (e.g. ROP increase) Drill Dri lling ng cost st Dri Drill lling ng cost st Dri Drill lling ng cost st and and Productive e and Productive and e and Productive and e Cli lick to edit Master tit itle style le Time Time Time Time Time Time St Statu tus s Quo uo Old Old Par Paradigm New Par New Paradig igm (pre-MPD adoption) (MPD is just an additional cost) (MPD mitigates problems and makes drilling more efficient) 8 March 2019 4
Adoption Challenges and Old Paradigms “If necessary” Costs increase substantially if MPD is necessary and only called after problems arise MPD MPD MPD PD-ena nable bled operat operatio ion Services Serv Call out out servic ervice ▪ MPD enabled rigs (we will use only if we ▪ RCD housing rental run into problems) Cost of problems MPD D Serv Services MPD D Serv Services associated with pressure Cost of problems not Cost reduction associated with MPD associated with pressure efficiencies (e.g. ROP increase) e and Productive and Productive e st st ng cost ng cost e and Productive and Productive e st st Time Time ng cost Time Time ng cost lling lling Cli lick to edit Master tit itle style le Time Time Time Drill Drill lling lling Tim Dri Dri and and Drill Drill Dri Dri and and No MPD Planned MPD Planned No MPD Planned MPD Planned Plann nning ng Exe Execu cution 8 March 2019 5
Adoption Challenges and Old Paradigms Paving the way for a wider adoption of the technology A condition for market maturity and for a technology to be well established is to have “lots of support” . For support to exist, there are certain conditions to meet: ▪ Use Users rs nee need d to to be be tr trai ained to to und understand d the the ad adva vantages and and sho shortcomings of of the the tech technology: As MPD becomes more popular in several regions of the world, both operators and service companies participate in exercises to spread the knowledge and communicate experiences on the use of the technique, that have helped field development teams to be more efficient in well construction projects. Cli lick to edit Master tit itle style le ▪ An An incr increased supp supplie lier ba base se: As more providers offer the service, competition keeps service companies striving for a more cost-efficient solution to provide to their customers and more equipment is available to fulfill the demand for services. 8 March 2019 6
Adoption Challenges and Old Paradigms Paving the way for a wider adoption of the technology (cont.) ▪ Plu lug and and play play and and Int ntegra rated so solu lutions: During the initial days of MPD, packages were UBD-modified kits that were used for MPD, this resulted in the need for a large footprint to provide the service. New modular and integrated packages, as well as MPD-enabled rigs will help MPD become more accessible to customers. ▪ Tec Technic ical Sup Support: The expertise on a particular technology usually resides on the supplier side in its earlier days. At the present, several majors and medium-size operators can afford to have in-house experts. This is not an option for expansion in new areas and it is certainly something small operators will Cli lick to edit Master tit itle style le struggle with. It is important that service providers are able to provide the necessary support to not only help planning, but executing a successful drilling operation. 8 March 2019 7
New Reality: Cheaper, Longer and Faster New problems call for better solutions ▪ More challenging market conditions are forcing operators to drain reservoirs in a more efficient way, using a reduced amount of surface resources. This has led to the development of more complex reservoir production techniques, such as multi pad wells with several horizontal wells being drilled, trying to reach as much of the reservoir as possible. ▪ In making reservoir drainage more efficient, new problems arise Cli lick to edit Master tit itle style le for the drilling team. Having to drill long lateral sections in narrow Source: Drilling Contractor Magazine drilling windows created by stimulating certain sections of the reservoir, producing others to depletion while some keep virgin pressures becomes problematic. 8 March 2019 8
New Reality: Cheaper, Longer and Faster But faster? ▪ These events will cause several areas of the reservoir that need to be crossed with the same hole to exhibit different pressure regimes that are difficult to manage with conventional techniques. ▪ Operators who try to maximize returns on investment now see MPD as an enabling tool to create long longer dra rain inage con conducts ts in the reservoir, making drilling not only possible in some instances, but a more ore econ economic ical l opt optio ion when challenged with pressure related problems such as influxes and losses. ▪ The on-bottom ROP improvement that is usually associated with lower ECDs is seen in MPD operations, it is difficult to predict and can only be assessed once MPD has been tried and drilling performance compared with wells drilled conventionally. Cli lick to edit Master tit itle style le ▪ The following slides illustrate a case history of the implementation of two techniques that are known to increase ROP: Low Lower mud ud den ensit ity and Low Low-so solid ids s con conte tent t dri rill lling g flu fluid ids. 8 March 2019 9
New Reality: Cheaper, Longer and Faster Faster: Utilizing MPD and Brine in HPHT Formations ▪ Specific Deep Basin formation groups in Western Canada have been drilled successfully utilizing strategies that incorporated Invert as a drilling fluid in HPHT wells with a TD between 16,400’ and 19,680’. ▪ MPD has been employed in these wells, which often have very narrow drilling windows, to great success but economics became a driving force to utilize brine as a drilling fluid. Cli lick to edit Master tit itle style le ▪ Brine presents its own set of challenges. With Pore Pressures in the range of 13.0 – 13.5ppg EMW, special brines would be required but they would be corrosive and expensive. 8 March 2019 10
New Reality: Cheaper, Longer and Faster Faster: Utilizing MPD and Brine in HPHT Formations ▪ Incorporating MPD into Brine drilling allowed the operator to dynamically modify the density of the drilling fluid by applying Surface Back Pressure with a MPD system. Lower brine densities were then required and this allowed the use of chlorine-based AVERAGE brines (11.6 ppg) AVERAGE ▪ Premature trips, to replace downhole tools, were often necessary. The use of a low solids content fluid like brine reduced the Cli lick to edit Master tit itle style le number of trips necessary and this resulted in a higher overall ROP in similar wells (av (aver erage improve vement t ~ ~ 30 30%). The economic impact of the new strategy resulted in cos cost t sa savings vings of of 16% 16% pe per r well ell compared to wells drilled with invert oil. 8 March 2019 11
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