Optimizing coiled tubing composite plug milling in new wells with high differential pressures between zones

ACIPET Optimizing coiled tubing composite plug milling in new wells with high differential pressures between zones Autor(es): Nicolás Cubitto, Diego Marozzini, Ariel Lueje. Baker Hughes Argentina SRL. Categoría: Marque con una X Artículo Técnico x Tesis Pregrado Tesis Posgrado Derechos de Autor 2017, ACIPET Este artículo técnico fue preparado para presentación en el Congreso Colombiano del Petróleo organizado por ACIPET en Bogotá D.C. Este artículo fue seleccionado para presentación por el comité técnico de ACIPET, basado en información contenida en un resumen enviado por el autor(es). Abstract The continual economic development of the Neuquén Basin, one of the most exciting unconventional plays outside North America, is contingent largely upon the well completion costs. While operators are working on improved techniques and technologies to minimize these costs, Plug & Perf continues to be the preferred completion philosophy. New completions can involve stimulating both conventional and unconventional reservoirs within the same wellbore and high differential pressures between zones (~2800 psi) have made composite frac plugs (CFP) milling design with coiled tubing (CT) more challenging. Lost circulation due to under-pressurized zones can lead to reservoir damage or stuck CT, while in over-pressurized zones, significant forces can be generated resulting in increased risk of failure of the bottom-hole assembly (BHA) or the CT string. Additionally, milling in low pressure intervals may require large volumes of Nitrogen to aid with well cleaning and maintaining hydrostatic columns of fluid. Historically these associated incremental costs result in higher than planned completion costs, while the operational challenges have resulted in premature failures of the downhole tools and CT strings. This paper aims to review how incorporating an Intelligent Coiled Tubing System can enhance CT Interventions in the Neuquén basin by real-time monitoring and intervention relative to actual downhole parameters. The benefits of this technology are illustrated by analyzing the case history of milling CFP in a scenario with significant differential pressures between stimulated zones. Introduction One of the most potentially high-quality shale gas and oil resources sedimentary basin in Argentina is the Neuquén Basin which is the main focus of shale exploration in the country. It indicates good production potential in the deposited Los Molles and specially Vaca Muerta shales. These two thick deepwater marine sequences sourced most of the oil and gas fields in the basin and are considered the primary targets for shale gas development in the country. [6] Geological studies position Argentina reservoirs, primarily the Neuquén basin, as the 4 th shale oil reserve and the 2 nd shale gas reserve in the world. Current Coiled tubing operations A significant number of conventional Coiled Tubing interventions are dependent on the position of the tools in the wellbore relative to other completion components or formations depth containing hydrocarbons. CT equipment bears on mechanical counters for BHA depth correlation and for years the industry has accepted significant errors mostly related to friction wheels slipping, string helical buckling and/or thermal linear and radial expansion in response to high temperature gradients in the wellbore. These errors have increased uncertainties and even limited certain applications, such as tubing conveyed perforating (TCP) in narrow productive zones

2 NICOLÁS CUBITTO, DIEGO MAROZZINI, ARIEL LUEJE or accurate plug or packer setting. Generally, prior to execute any precise task, it is necessary to depth reference by tagging an additional completion component previously set with Wireline (WL) (i.e.: plug, packer) to minimize the error by reducing the distance between the working and known depths. In addition, for evaluating downhole performance, CT operations depends on indirect measurement on surface (i.e.: differential pump pressure during CFP mill out). However, working in under-pressurized zones with high volumes of nitrogen may generate a delayed response between downhole pressure variations and differential pressure readings on surface. Since mid-1980 s, service companies have been working on technologies that allow real time measurements of downhole parameters in order to accurately read the depth and get instant variations of downhole pressures to finally transmit them to the surface. Different CT real-time communication systems exist today. Data can be transmitted to surface by: 1- Wireline conductor (stiffwireline, e-line CT, monoconductor or heptacable); 2- Using pressure pulses in the fluid system [2] or 3- By data transfer technology offered by the fiber optic. 1. The CT e-line system, which employees a braided cable installed in the CT string, can efficiently communicate downhole WL tools with surface data acquisition equipment. However, the cable inside the CT restricts fluid rate and prohibits pumping acid, abrasive slurries and even balls to activate bottomhole tools functionalities. When an acid/cementing treatment has to be done, it is necessary to send two CT reels what is neither practical nor economical. 2. Pressure pulses systems do not require the use of conductor inside the CT but the fluid media must be compressible to allow the transmission of the pulses, reason why it is not suitable to be applied in low pressure reservoirs where significant volumes of nitrogen are required. 3. With the objective of reducing the conductor diameter and enhance communication, fiber optics data transmission was introduced in the market. This technology requires the use of large capacity batteries within the BHA as the fiber optic is not capable of powering the tools. Long interventions may need to retrieve BHA to surface and change batteries, making this technology less robust than the wireline conductor. In this paper a review of a proprietary reduced diameter wire data transmission system and its first application in the Neuquén Basin are reported Intelligent Coiled Tubing System introduction This technology is more robust and reliable than systems using fiber optic technology, and provides higher data resolution, at greater speed, than mud pulse telemetry. Additionally, the system can transmit power while receiving real-time data without the need for downhole batteries. It also allows virtually unrestricted flow rates, no limitations in fluid types and ability to pump activation balls. The system configuration components is described in more detail below (See Fig. 1), and the main components are the downhole tools, armored wire for data transmission and surface equipment for data interpretation and analysis. Figure 1. System Components Asociación Colombiana de Ingenieros de Petróleos ACIPET Carrera 14 No. 97-63, Piso 5 PBX: 6411944 - www.acipet.com

OPTIMIZING COILED TUBING COMPOSITE PLUG MILLING IN NEW WELLS WITH HIGH DIFFERENTIAL PRESSURES BETWEEN ZONES 3 Downhole tools [2], [3]: Integrated sensor BHA. The integrated sensor BHA is a combination of proprietary Motorhead and a Pressure-Temperature/Tension- Compression-Torque (TCT)/Casing Collar Locator sensor assembly. The Motorhead assembly combines the dual-flapper check valve, the ball activated hydraulic disconnect and the dual-circulating sub, which has an emergency rupture disc in case the tool nozzle is obstructed. When downhole data is not required, a protection adapter secures and seals the end of the conductor. Figure 2. Integrated Sensor BHA Logging Adapter. The Logging Adapter provides a connection between the wire and a logging tools. In addition it contains the motorhead functionalities like check valves, a release sub and flow ports. The Logging Adapter is interchangeable with the Integrated Sensor Assembly, and connects to the same coiled tubing connector for a quick switch of system assemblies. CT can now be integrated with third-party wireline operations, making this versatility extremely beneficial in horizontal wells where WL needs to be pumped down or tractor conveyed to desired depths. [5]: Fig. 1- Adapter Logging Camera Adapter. The Camera Adapter is a variation on the logging adapter that allows the use of a third party downhole camera to obtain real-time snapshots or video of the wellbore and any obstructions or fish present. (Fig. 4, 5). The camera can transmit data about well deviation, tool topside and internal temperature. Note in figure 4 that cameras have front flushing ports to allow washing camera lens for better downhole imaging. Fig. 2- Camera adapter/ third party camera

4 NICOLÁS CUBITTO, DIEGO MAROZZINI, ARIEL LUEJE Fig. 3- Wellbore obstructions snapshots with camera adapter and third party camera Wire: The wire is the key element in the system that enables communication and control between surface and downhole. It is similar to wireline in some respects, but its small size and different construction deliver significant benefits such as less impact to conventional coiled tubing operations [1]. Major advantages of the wire include its small size, light weight, corrosion resistance, and compatibility with oilfield chemicals. (Fig. 6). Lifetime is expected to exceed the fatigue life of the CT string in which is installed, meaning that it can be retrieved and reinstalled in a new string. [2] Fig. 4- Preinstalled wire in CT string The wire is installed by pushing it through the injection system and inside the pumping fluid in the coiled tubing. Once the wire enters the coil, it is carried along the coiled tubing string by the frictional forces between the fluid and the wire itself. Fig. 5- Wire stripping/ Injection system Asociación Colombiana de Ingenieros de Petróleos ACIPET Carrera 14 No. 97-63, Piso 5 PBX: 6411944 - www.acipet.com

OPTIMIZING COILED TUBING COMPOSITE PLUG MILLING IN NEW WELLS WITH HIGH DIFFERENTIAL PRESSURES BETWEEN ZONES 5 Surface Hardware: Bulkhead and Slip Ring. The surface bulkhead provides hydraulic seal around the wire. The slipring is a simple device to provide electrical connection between rotating reel and data acquisition system on surface. (Fig. 8, 9) Fig. 6- Bulkhead Fig. 7- Slipring Data Acquisition System. The surface hardware powers the tools and interprets the data from the Integrated Sensor BHA enabling real-time visualization and analysis of the actual downhole parameters. (Fig. 10) Fig. 8- Proprietary Data Acquisition System Case History A major operator in the Neuquén basin wanted to use coiled tubing (CT) to mill composite frac plugs set during a six-stage Plug & Perf fracturing operation in a new gas well. This particular well was planned to target a conventional reservoir (Quintuco) and a tight gas reservoir (Los Molles) within the same wellbore. The differences in estimated pore pressures for each stimulated zone forced to design the intervention using large volumes of nitrogen to aid with the well cleaning and to be capable of sustaining the hydrostatic column of fluid above the BHA. The operator needed a cost effective solution in order to optimize the milling process with high nitrogen rates, what historically had led to change up to three downhole motors per job in similar wells. The most common operational flaw in previous interventions

6 NICOLÁS CUBITTO, DIEGO MAROZZINI, ARIEL LUEJE was the downhole motor premature failure produced by multiple stalls, worsen by the delayed differential pressure variation observed in surface. When penetration could not be achieved, CT was retrieved to the surface for checking and changing the motor, generating additional runs, nonproductive time and more than planned costs. The architecture of the well is shown in the next pictures. STAGE 6 PLUG 5 STAGE 5 PLUG 4 2705/2707 mts 247 kg/cm2 2798/2802 mts 150 kg/cm2 STAGE 4 PLUG 3 STAGE 3 2885/2876 mts 250 kg/cm2 2950/2914 mts 300 kg/cm2 PLUG 2 STAGE 2 3079/3081 mts 128 kg/cm2 PLUG 1 STAGE 1 3118/3120 mts 330 kg/cm2 Fig. 11- Well Survey Bottom: 3212 mts Fig. 12- Well Diagram The well was slightly deviated and completed with 5.5 in P-110 17 lb/ft. Casing. Engineering Challenges. The engineering evaluation aimed to optimize the entire milling/cleaning process by reducing the downhole motor stall time, as well as the risk of getting stuck due to loss of circulation or differential pressures. Differential pressures could also exert significant forces resulting in increased risk of failure of the bottom-hole assembly (BHA) or the CT string. The next formula will illustrate the force generated by upward differential pressure while milling plug 1: (1). F= (Ps 2-Ps 1)*A ct Where: Ps 2: Pressure Stage 2=330 kg/cm2= 4694 psi Ps 1: Pressure Stage 1=128 kg/cm2= 1820 psi A ct: CT Cross Sectional Area= 2.41 in 2 Then: Asociación Colombiana de Ingenieros de Petróleos ACIPET Carrera 14 No. 97-63, Piso 5 PBX: 6411944 - www.acipet.com

OPTIMIZING COILED TUBING COMPOSITE PLUG MILLING IN NEW WELLS WITH HIGH DIFFERENTIAL PRESSURES BETWEEN ZONES 7 F= (4694 psi -1820 psi) *2.4 in 2 F=6926 lb This upward force, generated by the differential pressure between stage 1 and stage 2, if special attention is not taken and it is applied instantly (kick off), could generate damage to the CT string or BHA. When milling plug 2, for example, downward differential pressure can lead to loss of circulation or stuck CT. Job planning. To overcome the challenges, a detailed programme with the use of the Integrated Sensor BHA was designed. Monitoring downhole pressures and temperature data on real time would help to optimize downhole motor performance, as well as know the actual complex bottomhole parameters and enhance cleaning/milling operation. It would provide also valuable post-frac pressure data for each stimulated interval. The planned objectives for this operation were: 1. Run in Hole (RIH) CT cleaning frac sand until tagging plug 5. Circulate and full cleanout wellbore before milling plug 5. 2. Modify pumping rates in order to equalize the bottomhole pressure (annulus real time sensor) with the stage 5 estimated pressure. Start milling applying 750 lb- 1500 lb Weight on Bit (WOB). 3. RIH and mill plugs 4 and 3. 4. RIH CT cleaning frac sand out until tagging plug 2. Circulate and full cleanout wellbore before milling plug 2. 5. Modify pumping rates in order to equalize the bottomhole pressure (annulus real time sensor) with the stage 2 estimated pressure. Start milling applying 750 lb- 1500 lb WOB 6. RIH and mill plug 1. 7. RIH to bottom depth and wiper trip to surface. Special attention should be taken when milling each plug: 1. Clean out all the debris above each plug before milling. If fail to achieve this, circulation loss could incur in stuck CT. 2. Closely monitor surface and downhole parameters. Differential pressure across the motor read instantly, thus avoiding long motor stalls. 3. Equalize bottomhole pressure (annulus sensor) with the estimated pressure for the next stimulated interval before start milling. Following the designed sequence, CT failures or formation damage would be avoided. Equipment and BHA selection. A 5304 m, 1.75 in outside diametre (OD) CT string 90000 psi yield strength with preinstalled 1/8 in OD conductor was selected for this job. The BHA was composed by an Integrated Sensor made up of double flapper check valves (DFCV), hydraulic disconnect, and circulation sub with a rupture disc. Sensors were deployed to read temperature and pressure inside and outside the BHA. The casing collar locator (CCL), located below the integrated sensor, helped to correlate BHA depth. TCT sub was not deployed. Third party BHA tools, such as dual phase separator, motor and mill (98 % Drift) were attached to the Integrated Sensor. Engineering Design and Simulations. Three critical steps were simulated. 1. Flow and Hole Cleaning Analysis before Milling Plug 5 2. Flow and Hole Cleaning Analysis before Milling Plug 1 3. Hole Cleaning Analysis during final wiper trip Tubing Force Analysis was also simulated in order to know the expected weight gauges and limits for both RIH and POOH runs. Job Execution and conclusions. The job was successful in achieving the objectives set out in the scope of work. 5 Composite Frac Plugs were milled and subsequent caliper runs confirmed the well was cleaned out up to 3212 m. The performance of the Intelligent Coiled Tubing System exceed customer expectations. Downhole Pressures and Temperatures data were acquired during the operation and the CCL was used for depth reference.

8 NICOLÁS CUBITTO, DIEGO MAROZZINI, ARIEL LUEJE 8200.0 8203.5 8207.1 8210.7 8214.4 8218.1 8221.8 8225.4 8229.0 8232.8 8236.6 8240.4 8244.3 8248.2 8252.0 8255.9 8259.6 8263.4 8267.2 8271.4 8275.7 8280.0 8284.2 8288.4 8292.5 8296.8 8301.1 8305.5 8309.8 8314.0 8318.2 8322.3 8326.7 8331.0 8335.4 8339.7 8343.8 8348.0 8352.2 8356.6 8360.9 8365.3 8369.6 8373.8 8378.0 8382.4 8386.8 8391.3 8395.6 Fig. 13- Visualization of Temperature, Pressure and CCL Data The operator was very enthusiastic about the capabilities of the system, and indicated that the technology would be taken into account for near future projects. To exemplify the operational benefits of the technology, reading the below job chart can be observed that downhole differential readings were noticed about 1 minute before pump pressure changed on surface, resulting in shorter motor stall and minimizing string fatigue cycling. In addition, 15 min average time per plug was achieved, 32% faster than previous operations. Fig. 14- Visualization of Temperature, Pressure and CCL Data Asociación Colombiana de Ingenieros de Petróleos ACIPET Carrera 14 No. 97-63, Piso 5 PBX: 6411944 - www.acipet.com

OPTIMIZING COILED TUBING COMPOSITE PLUG MILLING IN NEW WELLS WITH HIGH DIFFERENTIAL PRESSURES BETWEEN ZONES 9 The possibility to read downhole parameters real time significantly improved job quality, and it allowed to make better informed decisions that benefited the safety of the personnel involved and the care of the environment. Operating parameters were adjust helped by in situ technical support in order to reduce the risk of getting differentially stuck when passing to a new interval. The operator asked for a detailed table with estimated and real pressures read on the annulus sensor. This analysis would help on future milling operations for similar wells. Frac Stage Estimated Zone Pressure [kg/cm 2 ] Real Annulus Pressure [kg/cm 2 ] Simulated WHP [kg/cm 2 ] Real WHP [kg/cm 2 ] N 2 Rate [scf/min] Fluid Rate [bbl/min] 6 247 260 41.92 38.6 300 1.9 5 150 173 5 5.6 800 2 4 250 152 15 16.3 1200 1.8 3 300 172 22 23.4 1200 1.8 2 128 124 28 28 1500 1.8 1 330 132 38 42.1 1500 1.8 Note that the estimated pressures for zones 4, 3 and 1 were significantly lower than the estimated pressures for that interval. Additional precautions were taken in location optimize the operation. Conclusion. Downhole parameters real-time reading improved the efficiency of the motor, avoided stalls and reduced possible premature failure. As previously expressed and observed in this report, this system allowed a safer operation and eliminate nonproductive times relative to downhole parameters misinterpretation. Avoiding premature failures of the downhole motor, it was possible to estimate the inherent costs of performing additional runs which would have taken about 1 day operation. The estimated savings for the client were approximately $ 75500, based on the following table: Item Description Days Cost USD Coiled Tubing Operation 1 25000 Nitrogen 1 14300 Downhole Tools 1 13700 Rig / Flow back Equipment / Personnel 1 8000 Motor Repair / Maintenance 1 7000 Trailers and Services on Location 1 5000 Crane 1 2500 The future projects in the Neuquén basin tend to converge into horizontal and deeper wells, more plugs to be milled out per well and longer operations of motors in more severe environments. This conditions will generate larger probabilities of frequent failures of the bottomhole motors. The costs saved can be extrapolated in significantly larger amounts for each future operation, supporting the conclusion that the technology analyzed offers technical and economical to provide sustainability for the new projects to materialize in the area.

10 NICOLÁS CUBITTO, DIEGO MAROZZINI, ARIEL LUEJE Applications 1. Perforating, stimulation, and gas lifting 2. Milling and cleanout operations 3. Logging operations 4. Actuation of sleeves 5. Setting packers and casing patches 6. Fishing Features and Benefits 1. Integrated CT and Wireline logging operations: o Increases efficiency, minimizes equipment and reduces risk. 2. Accurate depth correlation: o Improves operational accuracy during plug setting, perforating and fluid placement. 3. Real-time, high-resolution, pressure and temperature data: o Reduces uncertainty when operating in unknown downhole conditions, confirms BHA operations, and tracks formation breakdown and injectivity during stimulation 4. Motor differential pressure readings: o Improves motor efficiency and avoids stalls and premature motor failure 5. Preinstalled conductor: o Speeds rig-up by eliminating onsite conductor installation and maintenance tasks 6. Enables the use of ball-activated tools: o Provides flexibility and ensures the most effective tool is used 7. Small-diameter (1/8-in.), armored, corrosion-resistant conductor: o Transmits reliable, real-time data without materially affecting flow rates or increasing reel weight o Survives virtually all common oilfield fluids and slurries 8. Real-Time Tension-Compression-Torque readings: o Aid in determining and maintaining WOB o Track Motor Performance o Extend Motor Life o Help diagnose and differentiate between friction lockup and wellbore obstruction o Enable control of WOB to accurately set inflatable packers and casing patches o Confirm jarring activation and effective fish capture. Asociación Colombiana de Ingenieros de Petróleos ACIPET Carrera 14 No. 97-63, Piso 5 PBX: 6411944 - www.acipet.com

OPTIMIZING COILED TUBING COMPOSITE PLUG MILLING IN NEW WELLS WITH HIGH DIFFERENTIAL PRESSURES BETWEEN ZONES 11 References [1]. Taggart, M., Murray, N., Sturgeon, T.: Operational Benefits of Coiled Tubing Enabled New Real-Time Data Communication System, SPE 142714, SPE/ICoTA, 5-6 April 2011, Texas [2]. Oberascher, R., Briemer, G., de Jonge, R.M.: Case Study: Successful Application of Coiled Tubing With Real-Time Data Communication System for Selective Reservoir Treatments Using Straddle Packer Assemblies, SPE 153939, SPE/ICoTA, 27.28 March 2012,Texas [3]. Acorda E., Deenadayalan, S., Stanley, F., Terry, A., Dean, G.: Coiled Tubing Downhole Communication System Helps Solve Complex Intervention Challenges, OTC 25059-MS, OTC, 25-28 March 2014, Malaysia. [4]. Yang Li, Adrián Terry, Christopher Parr, Rick Stanley, Braden Dunsmore: Using Coiled Tubing to Safely and Efficiently Mill Out Composite Bridge Plugs Set Across Zones with significant Differential Pressures, SPE 173671- MS, 24, 25 March 2015,Texas [5]. Blanco D., Rahimov K., Livescu S., Garner L., Vacik L.: Coiled Tubing Telemetry System Improvements with Real-Time Tension, Compression, and Torque Data Monitoring, SPE 183026- MS, 7-10 November 2017,Abu Dhabi, UAE [6]. Technically Recoverable Shale Oil and Shale Gas Resources: Argentina. 2013. Report. https://www.eia.gov/analysis/studies/worldshalegas/pdf/argentina_2013.pdf Nomenclature CCL= Casing Collar Locator P&P= Plug and Perf OD= Outside Diameter (inches) TVD= True Vertical Depth (m) ID= Inside Diameter (inches) Psi= Pressure (pounds per square inch) BHA= Bottom Hole Assembly MHA= Motor Head Assembly TCP= Tubing Conveyed Perforating RIH= Run in Hole POOH= Pull Out of Hole WOB= Weight on Bit L