Economics of constructing deep HPHT gas wells with formate brines

1. SPE 130376 A Review of the Impact of the Use of Formate Brines on the Economics of Deep Gas Field Development Projects John Downs Cabot Specialty Fluids 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

2. Deep gas wells are expensive ..... 12 times more expensive than conventional gas wells * Last 10% of deep gas well accounts for 50% of total well cost * 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Gas well cost versus depth** * US Department of Energy website - Onshore gas well costs in USA ** Snead (2005) - The Economics of Deep Drilling in Oklahoma

3. Some basic principles for improving the economics of deep gas field developments ? Working at depth is expensive, so.. : Use technologies that will accelerate deep well construction * Get it right first time – avoid costly interventions Know what is down there - ensure accurate reservoir evaluation Focus on recovering your substantial investment - extract recoverable reserves as fast as the reservoir (engineers) will allow * US DOE ”Deep Trek” R&D programme aimed at identifying some of these technologies 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

5. Well design and placement

6. Well control and safety

7. Well integrity, lifetime and maintenance

8. Logging capability and interpretation

9. Waste management and liabilities

10. Rate of recovery of reserves 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

12. Need gels, causing high swab, surge and start-up pressures

13. Corrosive gas influx into halide brines will destroy ”corrosion resistant alloys” 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Super 13Cr, 1 month 22Cr, 2 months 25Cr, 2 months

14. Extreme conditions in deep wells expose the performance deficiencies of conventional WCF High pressures and hard rocks High solids loading have negative effects on ECD, ROP, bit life, swab and surge, differential sticking, hole cleaning, tools, screens, seals, formation, etc ......! 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Best fluid for high ROP and long bit-life is solids-free water … From :SPE 112731 “Optimisation of Deep Drilling Performance with Improvements in Drill Bit and Drilling Fluid Design”

16. Solids-weighted muds may not be able to stay within ECD limits

17. Well control problems if fracture pressure gradient exceeded

18. Increasingly the domain of MPD and ”designer fluids” providing Fracture Gradient Enhancement (FGE) or Stress Caging effects 2010 SPE Deep Gas Conference, Bahrain, 24-26 January FGE -Increasing hoop stresses around the well bore by creating short stabilised fractures

19. Conventional high-density completion fluids used in deep gas wells have a high cost of ownership 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

20. Software tool now available that calculates the full cost of owning and using high-density completion fluids 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Prices the full operational costs, waste costs and the cost of “incidents”

22. Transport onshore /offshore

23. Sub-optimal rig time

24. Well clean up time

25. Waste treatment and disposal

26. Stand-by time

28. Production handover delays

29. Liabilities and legal fees arising from splashes, spills, releases Factors in damage caused to company reputation by incidents

31. Creating well control and safety risks

32. Degrading well integrity/durability

33. Raising waste management costs and liabilities – i.e. high cost of ownership ...And if they are damaging to the formation they may reduce the rate of revenue generation 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

35. Remove any halide salts (chlorides and bromides)

36. Preferably remove any hydrocarbons too (well control risk and logging issues) Formate brines developed by Shell Research, 1985-95 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Density to SG 2.3 /19.2 ppg/143 pcf No solids No halides No hydrocarbons Anti-oxidant Drilling, completion, workover and suspension fluids for deep gas wells

37. 2010 SPE Deep Gas Conference, Bahrain, 24-26 January 1995 – Formate brines used for first time by Mobil to drill and work over deep gas wells, onshore, northern Germany Walsrode field – onshore, high-angle slim hole wells Z1, Z5, Z6 and Z7 TVD : 4,450-5,547 metres Reservoir: Sandstone 0.1-125 mD BHST : 315oF (157o C) Section length: 345-650 metres

38. Outcome of Mobil’s first drilling trials with formate brines in onshore deep gas wells - 1995/96 Absence of weighting solids has a clear impact on efficiency and economics 1,2 “Use of formate drilling fluid ….eliminated most of the previous hole problems ...resulted in a dramatic increase in drilling performance and hydraulics… and significantly reduced well costs” Low-solids drilling fluid concept appears to be validated 1)Sundermann, R. and Bungert, D.: “Potassium-Formate-Based Fluid Solves High Temperature Drill-In Problem,” Journal of Petroleum Technology (November 1996) 1042 2) Bungert, D., Maikranz, S., Sundermann, R., Downs, J., Benton, W. and Dick, M.A.: “The Evolution and Application of Formate Brines in High-Temperature/High-Pressure Operations”, IADC/SPE 59191, IADC/SPE Drilling Conference, New Orleans, 23-25 February 2000. 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

39. Formate brines used by Mobil in 15 deep gas well constructions in northern Germany 1995-1999 (SPE 59191) 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

43. Fast casing running speeds

44. Less mud conditioning and wiper trips than with conventional drilling fluids” Low-solids fluid enables faster well constructions at depth 1) Saasen, A., Jordal, O.H., Burkhead, D., Berg, P.C., Løklingholm, G., Pedersen, E.S., Turner, J. and Harris, M.J.: “Drilling HT/HP Wells Using a Cesium Formate Based Drilling Fluid,” IADC/SPE 74541, IADC/SPE Drilling Conference, Dallas, 26-28 February 2002. 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

45. Deep and/or HPHT gas fields developed using formate brines as WCF 1995-2009 Author has good information on 35 fields 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

46. Formate brine used in > 140* deep and/or HPHT gas wells , 1995- present Drilling, completion, workover, suspension and packer fluids At densities up to SG 2.25 (18.7 ppg or 140.2 pcf) At BHST up to 235oC (450oF) For periods of > 10 years dowhole (packer fluid applications) In sandstone and carbonate reservoirs, 0.01 mD up to 4 Darcy Wide variety of completions – barefoot open hole, cased and perforated, with sand screens and gravel packs * Actual field/well numbers will be greater – but some are not documented 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

47. Deep gas fields where formate brines have been used as WCF – segmented by operator 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

48. Formate brines used in the world’s largest HPHT gas field development – Elgin/Franklin 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Also the deepest HPHT gas field in North Sea Cesium formate brine used by TOTAL in 34 well construction operations in 8 deep gas fields in period 1999-2009 B

49. Gaining an economic perspective – Scope of review Collect and analyse user observations on operational well construction efficiencies 2) Look for examples of long-term production rates, for evidence of production efficiencies Only examined Cs formate brine applications (more extreme conditions) 128 user observations extracted from 5 published field case histories 8-year production figures found for two HPHT gas fields drilled and completed entirely with potassium/cesium formate brines Observations on well construction efficiencies tend to be qualitative rather than quantitative 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

50. Economic benefits from use of formate brines in deep gas field developments – Results of review Operational efficiencies provide well construction cost reductions Better drilling environment gives rig-time savings - Stable hole: see LWD vs. WL calipers in shale - Elimination of well control and stuck pipe incidents - Good hydraulics, low ECD - Good ROP in hard abrasive rocks “ a remarkable record of zero well control incidents in all 15 HPHT drilling operations and 20 HPHT completion operations” 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

51. Economic benefits from use of formate brines in deep gas field developments – Results of review Operational efficiencies provide well construction cost reductions 2. Allowing faster and easier movements of tubulars and fluids - Pipe and casing running speeds are faster - Mud conditioning and flow-check times shorter - Displacements simplified, and sometimes eliminated (i.e. formate drilling fluid = formate completion fluid) Quote by operator : “ Improved well economics by increasing trip speed” 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

53. Efficient delivery of gas reserves (revenues) Tune and Huldra fields – drilled and completed with formate brines 90% recovery of reserves (16-18 billion m3) produced in 7 to 8 years 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Source : Norwegian Petroleum Directorate- Fact Pages - November 2009

54. Efficient delivery of condensate reserves (revenues) Tune and Huldra fields – drilled and completed with formate brines 90% recovery of reserves (3-5 million m3) produced in 4 to 6 years 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Source : Norwegian Petroleum Directorate- Fact Pages - November 2009

56. Allowing faster/easier movements of WCFand hardware

57. Allowing faster completions The non-damaging nature of formate brines may have contributed to the efficient production of recoverable hydrocarbon reserves from two HPHT gas/condensate fields examined in this study. 2010 SPE Deep Gas Conference, Bahrain, 24-26 January

58. Footnote 1 Results of independent Eco-efficiency study by BASF show that cesium formate brine is the most sustainable high-density completion fluid 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Leasing of cesium formate brine encourages a sustainable approach

59. Footnote 2 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Good reservoir definition in cesium formate brine “Using photoelectric factor and bulk density data, combined with resistivity measurements from both the LWD drill pass and the ream pass, produces a very reliable and consistent net reservoir definition.”

60. Footnote 3 2010 SPE Deep Gas Conference, Bahrain, 24-26 January Good reservoir definition in cesium formate brine “Applying a conductive drilling fluid in all production wells drilled in a field also provides the possibility of running high quality resistivity image logs (FMI). Extensive use of such logs provides the geo-modelers with detailed information regarding structural dip, depositional environment, sedimentary features, facies, and geological correlations.”