High-Pressure Jet Kerf Drilling Shows Significant Potential To Increase ROP

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High-Pressure Jet Kerf Drilling Shows Significant Potential To Increase ROP 2005 SPE ATCE Dallas, Texas October 9-12, 2005 By John H. Cohen Maurer Technology Inc. Greg Deskins Maurer Technology Inc. Dr. John Rogers U.S. Department of Energy (Morgantown, WV) SPE 96557 1

Drilling Time Study Drilling Consumes Majority of Rig Time Increased Depth = Increased Drilling Time For all wells, drilling time 33% For wells >14,000 ft, drilling time 50% To Reduce Costs, ROP Must Increase ROP Increase Must be Significant SPE 96557 2

Drilling Time Breakdown Test & Log 7% BOP 3% Wait Time 3% Well Depths >14,000 ft Trouble 4% Running Casing 5% Drilling 49% Tripping 22% From Andersen (1990) Conditioning Mud 5% Reaming 3% SPE 96557 3

Reducing Drilling Costs Drilling is Single Largest Cost Item Increased Drilling Efficiency Best Way to Reduce Costs Rate Increases Must Be Large (2X or Greater) Jet-Assisted Drilling Meets These Criteria SPE 96557 4

Previous Jet Drilling R&D Exxon (1960s) Showed that jets alone could remove rock 15,000 psi at depths up to 12,000 ft Flow Drill (1980s) Ultra HP 30,000-40,000 psi Concentric drill pipe Shell (1970s) Gulf Erosion Jets (1970s) SPE 96557 5

Jet Kerf Drilling High-Pressure Jets Erode Grooves in Rock Mechanical Cutters Break Rock Ledges Pressures Range from 5,000 15,000 psi Can Drill Many Formation at High ROPs Increases ROP 2X to 4X Conventional Rates SPE 96557 6

Jet Kerf Drilling Bit PDC Cutters HP Jets Kerfs SPE 96557 7

Jet Drilling Rate (ft/hr) High-Pressure Jet Kerf Rates 1600 1400 1200 1000 800 600 400 Bit Weight = 2000 lb 10,000 psi 1,000 psi 200 0 Texas Cream Limestone Leander Limestone Glacier Bluff Dolomite SPE 96557 8 110 Pecos Red Sandstone

Jet Kerf Drilling Video SPE 96557 9

Original System Concept Coiled Tubing (CT) to Deploy Jet Kerfing BHA HP mud motor Kerfing bit CT Routinely Used with HP Fluids No Tool Joints (Fewer Leak Paths) Fast Trips SPE 96557 10

Jet Kerfing with CT CT Reel Injector Head HP Pump Returns HP Flow Returns High-Strength Coiled Tubing HP Motor Jet Kerfing Bit SPE 96557 11

Field Test I Catoosa CT-Deployed System Problems Making Up BHA Problems with CT Ballooning Due to HP Daily Equipment Cost High SPE 96557 12

No Derrick on CT Rig SPE 96557 13

CT Equipment On Site SPE 96557 14

High-Pressure Pumps SPE 96557 15

Catoosa Test Summary Time Lost Making Up BHA High Equipment Costs Severe CT Fatigue and Ballooning Problems Downhole Well Conditions Not Known Failed to Test Jet Kerfing Drilling Additional Field Tests Sought SPE 96557 16

Field Test II RMOTC At DOE-operated Rocky Mountain Oilfield Testing Center (Casper, Wyoming) Rotary Drilling Option for Deeper Drilling Rig Upgrades Required for HP Service Jointed Drill Pipe with Double-Shoulder Tool Joints Variety of Formations Drilled SPE 96557 17

RMOTC Rig Cooper 550 Rig Rated to 275 kip 7000 depth Pulls doubles SPE 96557 18

Cost to Upgrade Rig Upgrade for High-Pressure (HP) Service HP Kelly Hose (10,000 psi) HP 150-ton Drilling Swivel HP Swivel Joints (Chicksans) Stand Pipe Master Valve 3-1/16" (15,000 psi) Stand Pipe Fill Up Valve 2-1/16" (15,000 psi) Gooseneck, unions, hardline, tees, and misc. Welding and X-ray Labor New HP Pump TOTAL: Cost $16,200 $33,500 $10,600 $11,800 $5,300 $16,700 $1,650 $10,000 $500,000 $605,750 SPE 96557 19

Upgraded HP Swivel SPE 96557 20

High-Pressure Pump SPE 96557 21

Double-Shoulder Tool Joint SPE 96557 22

RMOTC Bit Runs Formation Jet Kerf ROP (ft/hr) Conv. Rate (ft/hr) Ratio JKD to Conv. Bit 1 Run 1 Bit 2 Run 1 Bit 2 Run 1 Bit 2 Run 1 Bit 2 Run 2 Bit 1 Run 2 Bit 3 Run 1 Bit 3 Run 2 Bit 3 Run 2 Conv. Bit (Cleaning out sand from well) Crow Mountain Sand Crow Mountain Sand / Alcova Limestone Red Peaks Shale Red Peaks Shale Red Peaks Shale Red Peaks Shale Red Peaks Shale Goose Egg Goose Egg 156 49.8 55.1 77.7 61.9 66.0 39.8 39.3 120 13.5 14.8 12.9 13.3 13.8 14.1 14.1 10.4 1.3 3.7 3.7 6.0 4.7 4.8 2.8 2.8 SPE 96557 23

Jet Kerf Drilling Rates SPE 96557 24

Increase in ROP SPE 96557 25

High-Pressure Kerf Bit (6½ ) SPE 96557 26

Rapid Erosion of Nozzles SPE 96557 27

Washout in Side of Bit 3 SPE 96557 28

Sectioned Bit Eroded Nozzle Port SPE 96557 29

Solution Extended Nozzle High-velocity fluid SPE 96557 30 US Patent No. 6,142,248

Summary of RMOTC Tests Drilled Multiple Formations at High ROP (>5X) Used Conventional Rotary Drilling No Equipment Problems Nozzle Erosion Only Major Issue SPE 96557 31

Economic Model Conditions & Assumptions Defined Base-Case Well 28 total days on site 24 drilling days Value based on rig rate of $10,000/day Hole Sizes for Kerf Drilling 6½ 1/3 of Drilling Days for Kerf Drilling SPE 96557 32

Base-Case Well Daily rig cost Total days per well Drilling days per well Small hole drilling days ( 6½ ) Cost per well Wells per year $10,000 28 24 8 $280,000 13.0 SPE 96557 33

Cost per Well ($1000) Well Cost with Jet Kerfing $245 $240 $240 Daily Rig Rate = $10,000 $235 $232 $230 $225 $220 $215 $227 $220 $210 2X ROP 2.5X ROP 3X ROP 4X ROP Drilling Rate SPE 96557 34

Cost Per Well ($1000) Well Cost including Payback $290 $280 $270 $260 $250 $282 $262 $273 $254 1 Year Payback 2 Year Payback $266 $259 $248 $240 $240 $230 $220 $210 2X ROP 2.5X ROP 3X ROP 4X ROP Drilling Rate SPE 96557 35

Days Per Well Wells Per Year Faster ROP = More Wells Per Year 30 25 28.0 13.0 15.2 24.0 15.7 16.1 16.6 23.2 22.7 22.0 18 16 14 20 15 10 5 12 10 8 6 4 2 0 Base Case 2X ROP 2.5X ROP 3X ROP 4X ROP Drilling Rate SPE 96557 36 0

Conclusions Increased ROP is Key Factor in Reducing Total Well Costs. JKD Can Significantly Increase ROP. In Field Tests, System Drilled 1.3 6X Faster than Conventional. JKD Successful in Variety of Formation Types. SPE 96557 37

Conclusions (cont d.) JKD Can Be Accomplished Using off-the- Shelf Equipment to Upgrade Rotary Rigs for HP Operation. HP Kerfing Bits will Require Anti-Erosion Nozzles to Increase Bit Life. Safety Issues for Handling HP Fluids Successfully Addressed on Field Tests. SPE 96557 38

SPE 96557 39