Epm 2013 06

EPMAG.
COM
JUNE 2013
Sand and Proppant/

Fluid Management
Topsides Solutions
Deepwater Rig
Advances
Land Seismic
Improving
Exploration
Success
REGIONAL
REPORT:
CHINA
Effective completions
extend well life
EXPLORATION & PRODUCTION

WORLDWIDE COVERAGE
JUNE 2013
VO L U M E 8 6
A H A R T E N E R GY P U B L I CAT I O N
IMPROVING EXPLORATION SUCCESS
56
60
64
ISSUE 6
w w w. E P m a g . c o m
COVER STORY: WELL COMPLETIONS
36
DAS aids in permanent field monitoring

Integration leads to optimization
The promise of full waveform inversion
LAND SEISMIC
66
Integrated high-density point-source,

point-receiver land seismic
72
Renewed challenges of 3-D seismic acquisition

programs
DEEPWATER RIG ADVANCES
76
Making deep water pay by first drilling

wells digitally
80
Deepwater advances depend on transition

to closed-loop rigs
SAND AND PROPPANT/

FLUID MANAGEMENT
84
Proppant management can improve return

on investment
86
Improving performance while reducing footprint

using NADF
90
Making the case for advanced ceramic

proppants
94
New options in scale, bacteria management
Companies focus R&D

on improving downhole
completion efficiency
Operators and producers are looking for
ways to make sure that all of the clusters
in a given well are producing in a way
that maximizes both production and
the life of the well.
IndustryPULSE:
Data abound indicating that

more CO2 in the atmosphere
might actually be a desirable
outcome.
TOPSIDES SOLUTIONS
104
Reducing risk, delivering benefits for

topsides inspection
108
Winch system lightens load on Perdido
116
Global warming:
tilting at windmills
12
WorldVIEW:
Growing to go
the distance
Seven years ago BHP Billiton
Petroleums board of directors
had an epiphany. Now their
dreams are becoming reality.
REGIONAL REPORT:
CHINA
Unconventional:
96
Resurgence in the
Permian basin
Technology opens new areas while
unlocking additional potential in
established Permian basin plays.
DEPARTMENTS AND COMMENTARY
AS I SEE IT
Hart Energy dives deep with new acquisition
MANAGEMENT REPORT
Managing oil and gas portfolios in uncertain markets
18
DIGITAL OIL FIELD

Stock optimization: An efficient service partner for industry
Technology aids buying, selling properties
22
26
EXPLORATION TECHNOLOGY
Trouble on the horizons?
29
DRILLING AND COMPLETION

Unconventional gas, FLNG highlight LNG 17
31
PRODUCTION OPTIMIZATION
Two-stepping horizontal well production
33
OFFSHORE ADVANCES
Collaboration is key to the ultra-deep
35
INDUSTRY IMPACT
Azimuthal deep resistivity sensor maps formation layers
110
TECH WATCH
Technology gap widens between high-specification,
legacy drilling rigs
TECH TRENDS
INTERNATIONAL HIGHLIGHTS
ON THE MOVE/INDEX TO ADVERTISERS
112
114
120
122-123
LAST WORD
Seismic for unconventionals
COMING NEXT MONTH
124
The July issue of E&P will look at global production, examining trends
and identifying opportunities for growth. Other features will discuss workforce management; logging and
formation evaluation; managed pressure and underbalanced drilling; production testing and logging;
and moorings, risers, and flowlines; regional reports will highlight East Africa and Canadas light, tight oil
plays. As always, while youre waiting for the next copy of E&P, remember to visit EPMag.com for news,
industry updates, and unique industry analysis.
ABOUT THE COVER
A Magnum Oil Tools International crew installs a
lubricator in a well in the Eagle Ford play in preparation for hydraulically fracturing
the zone. Left, China looks to grow its conventional production and kick-start the
exploitation of its potentially huge shale gas reserves. (Image by Mark Marquez,
courtesy of Magnum Oil Tools International; cover design by Laura J. Williams)
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
2 years (24 issues), US $279. Single copies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER:
Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
Road, Suite 1000, Houston, Texas 77057; Telephone: 713-260-6442. All subscriber inquiries should be addressed to E&P, 1616
S. Voss Road, Suite 1000, Houston, TX 77057; Telephone: 713-260-6442 Fax: 713-840-1449; custserv@hartenergy.com. Copyright
Hart Energy Publishing, LP, 2013. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission to
photocopy is granted to users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology
Index and Engineering Index Inc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to
$25,000 for violations.
Printed on
recycled paper
ONLINE CONTENT JUNE 2013
PREMIUM CONTENT
Subscribe @ EPmag.com/explorationhighlights
Shell moves forward with Stones project in deepwater GoM

Royal Dutch Shell Plc has made a final investment decision in the Stones
ultra-deepwater project, a Gulf of Mexico (GoM) oil and gas development expected to host the deepest production facility in the world, the
company said in a press release.
Apache hits hydrocarbon pay

in three Egyptian discovery wells
Apache Corp. announced in a press release drilling success with three
new discovery wells in Egypts Western Desert.
CNOOC, BG Group sign LNG Australia deal

BG Group has signed binding agreements with China National
Offshore Oil Corp. (CNOOC) for the sale of certain additional interests
in the Queensland Curtis LNG project in Australia for US $1.93 billion and
for the supply of an additional 5 million tons per annum of LNG, a news
release said.
AVAILABLE ONLY ONLINE
OTC 2013: Collaboration is

key to deepwater advances
By Mark Thomas, Senior Editor
Joint industry projects can lead to

increased technology capable of
maximizing production.
Future LNG export field takes shape

By Velda Addison, Associate Online Editor
North Americas LNG export role is predicted to grow as the US transitions from
being an importer to being an exporter
due to a shale gas surge.
Cairn India bets on

Rajasthan block
By Ravi Prasad, Special to E&P
The company has undertaken an

aggressive exploration campaign that
involves drilling more than 450 wells.
The power of information in

ensuring successful exploration
By Frisco Veenstra, Elsevier Geofacets
Geoscientists can gain confidence in

their predictions through digital access
and share the information in a way that
maximizes value.
READ
TH
LATES E
T
EPmag
.
com
INDUS
TRY
NEWS
As I
RHONDA DUEY
SEE IT
Executive Editor
1616 S. VOSS ROAD, STE 1000

HOUSTON, TEXAS 77057
P: +1 713.260.6400 F: +1 713.840.0923
www.EPmag.com
rduey@hartenergy.com
Read more commentary at

RHONDA DUEY
Executive Editor
EPmag.com
JO ANN DAVY
Group Managing Editor
SCOTT WEEDEN
Senior Editor, Drilling
MARK THOMAS
Senior Editor, Offshore

Senior Editor, Production
JENNIFER PRESLEY
Chief Technical Director,

Upstream
RICHARD MASON
MARY HOGAN
Associate Managing Editor

Associate Online Editor
VELDA ADDISON
Corporate Art Director
ALEXA SANDERS
Senior Graphic Designer
LAURA J. WILLIAMS
Production Director
JO LYNNE POOL
Reprint & PDF Sales
ERIC MCINTOSH
Director of Business Development
ERIC ROTH
RUSSELL LAAS
Group Publisher
Editorial Advisory Board

CHRIS BARTON
Sr. VP Business Development, Oil & Gas, KBR
KEVIN BRADY
President, Multi Products Company
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.

Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of
Southern California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
President,
Superior Well Services, a Nabors company
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
Editorial Director
PEGGY WILLIAMS
President & Chief Operating Officer
KEVIN F. HIGGINS
Chief Executive Officer
RICHARD A. EICHLER
Hart Energy dives deep

with new acquisition
The addition of Subsea Engineering News
broadens the companys offshore offerings.
think it is safe to say that Hart Energy has the unconventional arena pretty well
covered. We expanded our DUG franchise to seven conferences this year and
will continue to add more as new areas open up. E&P features an unconventional report every month focusing on some of the hottest new plays.
But we have not turned our backs on the offshore side of the industry, acquiring Deepwater International in 2012. Our latest acquisition is Subsea Engineering News
(SEN), a UK-based publication that focuses on the subsea market.
SEN is published by Knighton Enterprises Ltd. Knightons founder and editorial director, Steve Sasanow, has written for the newsletter since 1984 and has
owned it since 1987.
It was founded the year after Esso and Shell were working on the underwater
manifold center, Sasanow said. That was the first really big subsea development
in the North Sea.
The newsletter has thrived, he said, partly because the publisher foresaw the
potential of the subsea market and was located near the center of activity.
Sasanow realized early on that, despite the title containing the word engineering, there was more to subsea than just the technology. Its important to understand the technology but also the market, he said. This set SEN apart from the
rest of the publications.
By immersing himself in the technical aspects of subsea operations, Sasanow
has gained enough insight to spot trends and know when something is new. He
also has had great success putting on technical conferences and even serving as
an expert witness in a patent infringement lawsuit.
One of his conferences was held following the Piper Alpha disaster in 1988. One
of the key recommendations of the Cullen inquiry was to develop subsea emergency shutdown systems, Sasanow said, adding that the explosion was not what led
to the deaths of the 167 people; rather, it was a connection to a 40-km (25-mile)
pipeline that fed the fire with natural gas, essentially melting the platform.
In 1989 I organized a one-day seminar on subsea emergency shutdown systems, he said. We addressed this issue and had a packed room full of operators
and equipment manufacturers to discuss a subject that nobody had discussed in
public before.
Sasanow is thrilled about the contract with Hart Energy
and excited about the future of subsea engineering. Its a
fascinating industry, he said. Otherwise I wouldnt have
stuck around all these years.
7
www.halliburton.com/HSE
HSE
TIP No. 18
DID YOU KNOW

IF YOUR PERSONAL
PROTECTION
EQUIPMENT ISNT
EXACTLY RIGHT,
things CAN go
Seriously WRONG.
For many tasks, personal protection
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clothing or chemical suits, its not
enough to just identify the correct PPE
for the hazards at hand. Your equipment
should be a perfect fit and regularly
maintained and inspected before use.
For example, did you know that hardhats
have expiration dates? And for good
reason, plastic gets brittle with age. After
a whileor once its sustained a serious
blowa hardhat needs to be replaced.
At Halliburton, solving customer
challenges is second only to keeping
everyone safe and healthy. You can
find more safety tips at
www.halliburton.com/HSE
2013 Halliburton. All rights reserved.
industry
PULSE
Global warming: tilting at windmills

Data abound indicating that more CO2 in the atmosphere might actually be a desirable outcome.
Terry W. Donze, Contributing Author
A manmade problem?
Man had something to do with that, but not a lot. Former Kansas State geologist Dr. Lee Gerhard shows in
here have been several articles published in scientific
his book, Geologic Constraints on Climate Variability,
journals recently regarding carbon capture and
(Figure 2) just how much man is contributing to greensequestration (CCS), but is the effort worth it? Will
house gases a little more than one-quarter of 1%.
finding places to put CO2 instead of releasing it to the
That number was confirmed by Augie Auer in 2007
atmosphere be beneficial to mankind, or could it have
with this breakdown:
detrimental effects in the long run? After all, isnt CO2
Nonwater vapor greenhouse gases
necessary for plant life? Shouldnt we strive for higher,
- Total CO2 = 3.6%
rather than lower, atmospheric concentrations because
- Total methane, nitrogen dioxide (NO2),
chlorofluorocarbons (CFCs), et al = 1.4%
of that?
Due to man
CO2 does have an effect on temperatures. Yet the effect
is inversely logarithmic, as shown in Figure 1 from David
- CO2 = 3.2% manmade of 3.6% total = 0.12%
- Methane = 0.066%
Archibalds paper, Solar Cycle 24: Implications for the
- NO2 = 0.047%
United States, presented at the International Confer- CFCs et al = 0.046%
ence on Climate Change in 2008.
Total due to man = 0.279%
Because of that relationship, every additional part
If we completely eliminated all of mans contributions
per million (ppm) of CO2 added to the atmosphere has
less effect on temperature than the part preceding it.
to greenhouse gases, 99.72% of all greenhouse gases
One can see in the graph the level of atmospheric conwould still remain in the atmosphere. But doing so would
centrations before the world started industrializing
mean no more burning of fossil fuels at all, eliminating
(280 ppm) and where it climbed to a couple of years
almost 85% of our power sources at the moment, and no
ago (385 ppm).
more motorized transportation to speak of, including
ground, rail, water, and air transport.
Renewables are nowhere close to providing the energy we use every day,
and after the tsunami that destroyed
the Fukushima reactor, nuclear is
pretty much off the table for now.
Referring to Figure 1, in 20 years
atmospheric concentrations of CO2
are predicted to rise to 420 ppm,
which would reduce heat emissions
from the stratosphere to space by 0.4
watts/sq m (4.3 watts/sq ft). This
would increase temperature on earth
by 0.04C (0.07F).
If CO2 concentrations rise to 620
ppm, projected to happen in 140
years, earth temperatures would
increase 0.16C (0.3F). Even at
FIGURE 1. As more CO2 enters the atmosphere, each ppm has less of an effect on temper1,000 ppm, 2.5 times what we have
ature than the one preceding it. (Data courtesy of David Archibald; images courtesy of
now, the total temperature effect
Terry Donze)
would amount to 0.4C. All of these
June 2013 | EPmag.com
industry
PULSE
FIGURE 2. Humans add very little to the overall mix of greenhouse

gases. (Data courtesy of Lee Gerhard)
numbers are swamped by natural variability. We saw a

2C (3.6F) temperature range in the 20th century, and
coming our way is a possible 2C temperature drop predicted over the next decade due to the prolonged
sunspot minimum at the end of the last solar cycle and
forecasts from NASA that the next two solar cycle maxima will be much lower than the last one. Sunspot
counts at the moment are not even reaching their
lower predictions.
Good for plants
alarmed. Look at CO2 concentrations over geologic

time in Figure 3, also from Archibald.
Two things are readily evident concerning CO2
concentrations over time. First, for more than 500
million years of geologic time the average concentration levels were much higher than what we see
today, even with our present industrialization, and
averaged 2,500 ppm. Second, CO2 concentrations
have been decreasing over time. In the late Jurassic
and early Cretaceous 150 million years ago, giant
dinosaurs had enough to eat because concentrations
were around 2,000 ppm, fueling huge plant growth.
But if concentrations get too low, what happens?
At atmospheric CO2 levels below 200 ppm, plant
growth starts shutting down. This could have disastrous effects for areas already having a hard time
growing enough food to feed starving populations.
Another significant characteristic of atmospheric CO2
is that it is more a follower than a driver of temperature
change. CO2 rise post-dates temperature rise by anywhere from a few hundred years to a few thousand years.
Figure 4, from Khilyuk and Chilingars 2003 paper,
Global Warming: Are We Confusing Cause and Effect,
also referenced in Gerhards book, shows the lag.
Astrophysicist Willie Soon of the Harvard-Smithsonian
Center of Astrophysics said that there is a clear scientific
consensus on the lagging effect of CO2 concentrations
increasing after temperatures go up, strictly due to the
oceans heating up as the planet warms and pushing CO2
out of solution and into the atmosphere. One can witness
a similar phenomenon by opening a warm can of soda.
Yet when CO2 concentration increases, plant life loves

it! Archibald found that if CO2 concentration was
increased by 300 ppm, about 75% above what we have
today, the things we like to eat increase their
growth rates between 20% and almost 50%:
C3 cereals, 49%;
C4 cereals, 20%;
Fruits and melons, 24%;
Legumes, 44%;
Roots and tubers, 48%; and
Vegetables, 37%.
Archibald said that we would be much better
off with higher levels of atmospheric CO2
because, although it has a miniscule warming
effect, agricultural production will increase significantly. He puts a minimum level of needed
atmospheric CO2 concentration at 1,000 ppm.
That seems high by todays standards, but what
is the correct safe limit? Jim Hansen, considered the father of global warming at NASAs
Goddard Institute for Space Studies, said the
maximum safe CO2 limit is 350 ppm. That is 10% FIGURE 3. Levels of CO2 have been much higher in the past. (Data courtesy
of David Archibald)
below the level we have today, but dont be
EPmag.com | June 2013
industry
PULSE
versity of Alabama-Huntsvilles
Microwave Sounding Unit. Note that
the temperatures are colder in space,
but both readings track in the same
downward direction.
The superimposed CO2 readings from
Mauna Loa Observatory in Hawaii show a
fairly steady increase over the same time
period. There is no correlation between the
CO2 trend and the temperature trend. If
increased atmospheric CO2 concentrations
are driving temperatures up, it is not apparent from the data.
But about 400 years ago the world was in
the midst of the Little Ice Age, when the
Vikings were run out of Greenland before
they froze to death along with their animals
and the British went ice skating on the
FIGURE 4. There is a significant lag between temperature change and a rise in
Thames River in London. We have warmed
CO2 levels. (Data courtesy of Lee Gerhard)
considerably since, and so have the oceans.
The rise in atmospheric CO2 concentrations that we see today corresponds well to
the time lags we have seen throughout history of increasing atmospheric CO2 after
temperature rise.
The anthropogenic global warming
debate is not over yet, and the science is
definitely not settled. More than 32,000
American scientists, about one-third of
whom are doctors of philosophy, have
signed the petition circulated by the Oregon Institute of Science and Medicine that
states, in part, There is no convincing
scientific evidence that human release of
carbon dioxide, methane, or other greenhouse gases is causing catastrophic
heating of the Earths atmosphere.
Additionally, the petition states that
FIGURE 5. Surface and satellite temperature readings indicate a lowering in
there is substantial scientific evidence
temperature over the past few years. (Data courtesy of the Hadley Climatic
that increases in atmospheric CO2
produce many beneficial effects. The
Research Unit at East Anglia University and the University of Alabama-Huntsville
Microwave Sounding Unit)
petition can be accessed online at
oism.org/pproject.
Why worry?
So the question of sequestering CO2 in the name of
Should we be worrying about sequestering CO2 at all?
preventing catastrophic global warming becomes this:
Some say we need to do so because increasing amounts
Is it worth it, or is it just another version of Don Quixote
of atmospheric CO2 are causing the planet to warm up.
tilting at windmills, potentially causing self-injury in the
Yet over the last decade temperatures have actually
process? The data implies the latter.
fallen. Figure 5 shows surface temperature data from the
Hadley Climatic Research Unit at East Anglia University
This article is excerpted from sections of Terry Donzes new
in the UK as well as satellite temperatures from the Unibook, Climate Realism: Alarmism Exposed.
10
world
VIEW
Growing to go the distance

Seven years ago BHP Billiton Petroleums board of directors had an epiphany.
Now their dreams are becoming reality.
Rhonda Duey, Executive Editor
HP Billiton Group ranks as the ninth most profitable

company in the world, just below BP and just above
Microsoft, according to Forbes. And BHP Billiton Petroleum was responsible for 32% of those earnings in the
groups most recent earnings results.
But other than its US $20 billion of US shale acquisitions in 2011, the petroleum company has kept a relatively low profile. It quietly entered the Gulf of Mexico
(GoM) in the 1990s and now has four major deepwater
platforms there, including Shenzi and Neptune, which it
built and operates. It made its first foray into shales when
it purchased Chesapeakes Fayetteville assets early in 2011
before buying Petrohawk later that year.
Now that low profile may be a thing of the past. BHP
Billiton Petroleum is growing quickly and is not shy about
sharing its success with the world. E&P recently visited
with CEO J. Michael Yeager to find out whats fueling the
companys ramp-up.
BHP seems to be in the news quite a bit these days. What has
been the motivation behind these ambitious plans?
We have always had a fairly decent representation internationally and have had a long history in Western Australia
that dates back to the 1960s. We got involved with some
acreage in the GoM in the 1990s and ended up with some
discoveries in the early part of this decade. I joined the
company in 2006 when there were about 300 of us here
in this building, and the board of directors said, Lets see
what we can do with this BHP Billiton Petroleum thing.
We made about 300,000 b/d back then, and now we
produce about 650,000 b/d. It has been a good sevenyear run.
Our growth, primarily early on, was in the GoM and
Western Australia. We have now built two of the four
deepest platforms in the GoM, and we are probably the
third or fourth largest producer out there. We have a
dominant share in Western Australia and have continued
to drill development wells, plus we have two of the largest
FPSO vessels in Western Australia Pyrenees and Stybarrow.
We started studying shale back in 2010 because we try
to be in the plays that are big and long-lived. That led us
to analyze this opportunity. So we did that, got comfort12
J. Michael Yeager currently serves as CEO of BHP Billiton

Petroleum. (Images courtesy of BHP Billiton Petroleum)
able with it, and picked out some assets that we thought
would be desirable, and that is what led us to Petrohawk
the liquids. We are now the largest operator in the Eagle
Ford with 30-some rigs down there and have gone
from about 12,000 b/d to around 110,000, b/d, and we
can get to 300,000 b/d.
You said that the board of directors stepped in and gave you
some guidance. What was their rationale?
There were two things on their minds. Number one, we
had this petroleum company, and we either needed to
make it better or get rid of it. But the board also was
aware that we were part of a giant corporation, and the
oil and gas piece was unique in that it had no anti-trust
problems. We have such dominant shares of iron ore and
coal and copper that when we want to go out and do
things commercially, we are already kind of the ExxonMobil of those things. That gives the oil and gas piece a
little bit more uniqueness in that portfolio, and they
wanted to take advantage of that.
Regarding the Petrohawk acquisition, you could have just
acquired acreage, but you acquired a company instead. Was
that because they already had the skill set you needed?
That is a great point. Many companies join the shale plays
in a nonoperating manner; they buy a joint interest posiJune 2013 | EPmag.com
world
VIEW
tion in a passive way. Quite honestly, we did not want to

do that. We wanted to start drilling and fracing these wells
ourselves and build the organizational capacity it takes to
do that. We had already done our homework knowing
that this is going to be a 30- to 50-year commitment, so we
might as well move forward.
The Petrohawk guys have been extremely wonderful
colleagues. We now operate three times the rigs that were
operating in the Petrohawk days, so that is the kind of
capital we can bring to it.
Onshore, what has it been like for someone new to the shales?
Are you looking to further expand your acreage in these plays?
The onshore business is a real game-changer for any company that gets into it. Prior to getting involved in the shale
plays, we had about 80 drilling engineers. Now we have 560
drilling engineers and supervisors. So the onshore business
is a big change in how our organization is structured. We
have that in a separate division with different metrics, different technologies, different work processes, and different overall approaches in how things need to be done.
What about South Africa?

In South Africa we are looking at the very prolific success
that has been had in the deeper horizons, both off of South
America and off the western coast of Africa. We have had
this acreage for some time. We are just now running the
seismic and hope to finish that up in July. It is about 10,000
sq km [3,861 sq miles], so it is a very large shoot and will
cost almost $100 million before we are done. Luckily it is
in a good place where other companies are calling us and
wanting to partner with us, and that is always a good sign.
It will probably be a year or so before we drill out there.
It is a significant change because it is so manpower-intensive. Our land department was about 40 people, and now it
is 340 people. The supply organization to buy all of that
equipment is now hundreds and hundreds of employees.
You are building a new headquarters in the Galleria area

in Houston?
The building we are in is not something that we want to
scoff at. We only had 300 people here in 2006, and now
we have 1,800, so that reflects the growth that
we have been through. We have hired hundreds of new employees yearly during that
time. We secured this building and love this
part of town. We are, today, in five different
buildings, so as a result of our acquisitions and
the growth of our business internationally, we
think we will grow that up to around 3,000
employees over the next three to five years.
Being in this tower and the one next door to it
will enable much higher productivity than
being scattered around in five buildings. The
teams today require so much time together and
so much collaboration, so the new building will
leverage our ability to work and communicate
with each other on a more regular basis. And
the investment in that building is not much different than the rent we are paying in those
other four right now, so it is not a big capital
output for us. It is really just consolidating, but
we are doing it so that these two buildings will be connected. We will have a two-building campus where people
can go back and forth and work collaboratively in these
two different towers as we see fit.
Tell me about your plans for Southeast Asia.

We have acreage in Asia right now that extends along
a geologic trend from the Philippines to Malaysia to
Brunei, and we have been looking at this for about five
years. We have drilled two wells so far, one of which was
You talked about the need to hire a lot of additional personnel.

How do you plan to recruit and find these people?
That has been a full-court press for us, and it is certainly
something that is not to be understated. It is a very hot
market right now. Everybody needs these people, and we
J. Michael Yeager (left) discusses

Eagle Ford operations with Derek
Cardno, vice president of drilling
for BHP Billiton Petroleums
global operations.
14
dry and one of which found subeconomic hydrocarbons.

But we know we are in an oily part of the world, and this
position is just outboard of things that are closer to shore
that are good discoveries.
world
VIEW
are no different. We are now stretching our avenues

through our media and external affairs team in ways we
never thought possible. We are eager to get our story out
there, and we are at all the main technical events so that
people know who we are.
We have some events in certain parts of our operating
territory, the most recent one down through South Texas.
We want to be sure that we are able to speak directly to
the men and women who might be looking for a longterm career with a company that is going to try to do
some fairly decent things. And we hope that we will have
some good luck with finding people there.
When you go someplace like South Texas, are you finding
people who have the skills you actually need?
There is no doubt that the industry is stretched. And
there is no doubt that we have to be concerned about
that. But the way we have built our company is that the
type of individuals we want in our South Texas operations
are people who have backgrounds in the industry, and we
are willing to train them and teach them beyond that. So

yes, I think most of our operating teams are able to find
the talent there. But, as you can imagine, what we really
have to be concerned about is not just finding the talent
but having a long-term story that people can depend
upon. We really want to try to approach people who are
not just looking for a job but for a career. That is the kind
of company we are, and that is the kind of success we
hope we will have as we go to those people who really
want to be connected to somebody for a long time.
We are very cognizant of the fact that, particularly in the
US onshore, we derive our ability to do this by virtue of
our performance and by virtue of us being good citizens.
We have some operating principles that we have published
around how we are handling North America, and they
include things like a public commitment to be the safest
company in the industry and to handle things in an environmental way that goes beyond the law. So we do recognize that this piece is uniquely community-oriented, and
we want to be uniquely community-supportive.
17
management
REPORT
Managing oil and gas portfolios

in uncertain markets
The need to rationalize and optimize portfolios has never been greater as emerging
markets open up to foreign investment against a backdrop of uncertainty and
constrained capital markets.
Dr. Renu Gupta, SPE London,
and Majid Shafiq, FirstEnergy Capital
ortfolio management provides oil and gas companies

with a bridge between corporate strategy and operational planning. It allows companies to be more proactive
and responsive to changing market and operational realities at each stage in the asset life cycle and at every level in
the organization, from corporate planners to asset teams.
Portfolio management is particularly important when
contending with the challenges posed by operating in
emerging markets such as East and West Africa. Here
opportunities come with additional risk in the form of
political instability and a lack of transparency and infrastructure. It also is important when looking to achieve an
optimal balance across exploration, development, production, and geographic spread and in better managing
price fluctuations and risk.
Portfolio management enables oil and gas companies
to mitigate the myriad forms of uncertainty (and thus
risk) they face from gaining access to new reserves, technology development, and financing to commodity price
volatility, increased regulation, and stricter environmental
policies. All of these factors present a barrier to monetization of resources and company growth and consolidation,
making an accurate and rigorous approach to portfolio
management essential.
Financing challenges
Despite the fact that oil prices remain at record highs
and well beyond the US $100/bbl mark, the main problem for the oil and gas industry over the last 12 to 18
months has been that financial markets have been
almost closed. The equity markets proved particularly
difficult in 2012. Reserves-based lending, a commonly
used technique for financing assets that are already in
production or where production is expected to commence shortly, has been hit hard because European
banks have continued to struggle amid concerns over
the Euro and the sovereign debt crisis.
18
This has proved problematic for small-cap players

such as those listed on the London Stock Exchanges
AIM because they do not have production or cash flow.
They are therefore heavily reliant on the equity markets
and, in the current climate, have had to finance off their
own balance sheet or asset base i.e., they have either
had to sell assets, farm them down, or seek to merge
and become bigger entities to make themselves more
attractive to investors.
In addition, equity fund managers have been much
more selective because they have been suffering from
redemption calls from their investors. They have been putting their money into what they perceive as safer investments, namely the corporate bond market, which has
experienced a huge rise in activity over the last 12 months.
Nevertheless, there has been an uptick in activity in the
equity markets since the beginning of the year.
Unlike small caps, the majors and midcap companies
have remained relatively unscathed by the fallout from the
financial crisis. Typically they finance from their own balance sheets and production and have been acquiring
assets and driving a lot of the activity in the oil and gas
industry. The offshore drilling sector has remained particularly buoyant.
As a result, the service companies operating the drilling
rigs and other service equipment have yet to see any significant impact on their utilization rates. However, this
sector tends to lag behind any drop in activity overall.
One region where there
has been a
Portfolio
management
requires creativity
and sufficient
capital.
management
REPORT
discernible slowdown is North America, where low gas

prices have impacted utilization rates.
Shifting investment flows

Overall, the high price of oil has to some extent compensated for the lack of external funding available for exploration and drilling activity and ensured that investment
continues to flow within the oil and gas industry.
At the same time, upstream technologies are unlocking
light tight oil and shale gas resources in the US and
Canada and are altering the dynamics of the global
energy market. By around 2020, the US is projected to
become the largest global oil producer, accelerating the
switch in direction of international oil trade toward Asia.
It also may become an exporter of LNG if the gas surplus
from shale gas development is sustained.
This likely will drive a shift in investment from traditional regional hubs for natural gas such as Australia to
North America. The International Energy Agency (IEA)
predicts a surge in unconventional supplies, mainly from
tight gas and light tight oil in the US, oil sands in Canada,
and NGL as well as a jump in deepwater production in
Brazil. According to the IEA, almost 30% of the $15 trillion in upstream oil and gas investment that is required
over the period up to 2035 will be in North America.
From a portfolio management perspective, the rise of
unconventional plays also presents new challenges around
estimating quantities of reserves and resources. Gaining
an accurate understanding of a reservoirs reserves and
resources using subsurface characterization is a key challenge, especially with the advent of so many different types
of reservoirs that must be produced in different ways
tight gas, shale gas, tight oil, and heavy oil, both onshore
and offshore, as well as conventional resources in
extremely hostile environments.
Looking further afield

In the current market investors are now looking to tick a
lot more boxes before they make an investment decision.
They want companies that have more liquidity and that
offer the potential for a high near-term return. Oil and gas
companies therefore need to spread risk and capital across
more assets. They also should be continually looking for
ways to rationalize their portfolio, ensuring that attractive
acreage and geology are included in their asset base.
For example, tapping into North Sea opportunities is
expensive as it entails offshore and sometimes deepwater
operations. The region has seen some high-profile failures
in recent years, resulting in a pullback from North American investors. It also is extremely competitive and heavily
explored, making further discoveries of large oil and gas
20
fields less likely. Investors are therefore looking for higher

potential returns from regions like Africa and the Middle
East, where there have been some excellent exploration
successes recently.
West Africa in particular continues to attract a great
deal of exploration interest as it is seen to be relatively
underexplored compared to some of the mature basins
in the world (e.g., relative to the North Sea). Nigeria has
seen a dramatic increase in activity, especially in the Niger
Delta, where the majors have been forced to sell assets
that are now being rejuvenated by indigenous companies
and small independents. Angola also is seeing increased
activity. However, both Nigeria and Angola have regulatory challenges as well as numerous other issues that can
make doing business difficult.
In contrast, most of the basins in East Africa (comprising
Mozambique, Tanzania, Kenya, and Uganda) are seeing
the first wave of serious exploration. These were led by the
larger independents, but the size of the discoveries and the
need to monetize the gas has brought in the majors and
supermajors. Currently, the infrastructure, both legal and
physical, is still taking shape, and the main challenge will
be the first serious attempt to monetize the discovered gas.
Optimizing portfolios
As technology advances, new geographies open up, and
new data are recorded, oil and gas companies must continually be looking to rebalance their portfolios toward
the type of asset base that is attractive to investors.
Many are already doing so, with small-cap players
acquiring acreage with large-equity positions that they
can subsequently farm down to finance. Should seismic
data confirm prospectivity, this then entices midcaps and
majors to either farm in or acquire the small caps in
order to progress with development/drilling. Tight equity
markets combined with growth in the number of small
caps exploring (with Africa a particular focus) have
resulted in an increase in mergers and acquisition activity.
Regardless of region, however, oil and gas firms always
should be looking to manage their portfolio creatively to
ensure it remains attractive to potential investors. Asset
sales and farm-outs should be considered alternatives and
should offer a lower cost of financing than issuing equity.
It also is essential to have financing in place to be ready
to undertake activities that have been committed to. The
secret is to have a solution in place well in advance of an
obligation to drill.
Renu Gupta is chair of the SPE London 2013 Conference and Exhibition, held May 22 to 23. Majid Shafiq was scheduled to present
on the issue of raising capital under constraint market conditions.
digital
OIL FIELD
Stock optimization: An efficient

service partner for industry
Ensuring that warehousing acts as an effective service within a business is a key consideration
for oil and gas operators, helping secure business continuity and safe operations.
Bjrn Harzer, Absoft Ltd.
emand for stock is driven by E&P operations and

associated upgrade projects. The complexity and
scale of these projects, often in remote global locations,
places a burden on supply-chain managers to ensure
effective processes are put in place to deliver the right
goods to the right place at the right time and in the
most efficient and cost-effective manner.
Developing a program of stock optimization that can
be easily implemented and incorporated into daily operations without burdening stock controllers with cumbersome reports or calculations is key.
To reach this stage, a business must address three
main areas using data from its enterprise resource planning (ERP) or supply-chain system to validate decisionmaking in stock performance and stock segmentation,
including the stock policy and stock optimization.
light problem areas and allow the effects of improvement measures to be evaluated easily.
Stock segmentation
With warehouse performance measurements in place,

an efficient means of segmenting or classifying stock in
the warehouse needs to be defined.
The purpose of stock segmentation is to enable stock
controllers to quickly analyze any increase or decrease in
demand for equipment. This will support decisions to
invest in more kit or to sell it on to the market before
the technology is superseded.
Segmentation focuses on demand value because it
captures slow- and fast-moving items as well as low- and
high-value materials. Demand value is a good basis for
an ABC(D) classification, offering an objective method
to segment stock in the warehouse.
The ABC(D) classification simply sorts historic and
planned demand value from lowest to highest. In the
resulting list the highest ranked materials will be classed
Stock performance
as A and the lowest as C, and the materials with no or
How much stock does the business have? How quickly
negative demand are classed as D. Fast-moving and highdoes it move? How long is its operational or shelf life?
value materials (A) are the top 80% of the demand value
When was it last sent out? How much was lost?
and reflect about 5% of the materials turning over in a
Identifying how to measure the performance of the
warehouse. Slow-moving (C) or dead (D) materials are
warehouse to objectively monitor stock movement is
the bottom 5% of the demand value and reflect about
vital. Visually examining levels of current stock, usage,
80% of the materials in the warehouse.
and demand using clear graphs and timelines can highThis classic ABC(D) classification approach is integrated in SAP ERP and is well suited to consumables used in maintenance-related work; however,
it may not prove to be an accurate measure in
other situations, for example critical spares.
These do not have a regular consumption value,
meaning they could be classed as less important
although they are vital and need to remain on
the shelf.
Indeed, the mathematical basis for applying
ABC(D) classification based on the bell curve
does not apply to a lot of spares in maintenancebased industry sectors. Maintenance-oriented
Visibility, segmentation, and optimization are critical parameters for wareorganizations must include aspects on availabilhouse management. (Images courtesy of Absoft Ltd.)
ity of spares in the market and lead times, espe-
22
digital
OIL FIELD
cially for critical spares, which also need to be marked

as important.
To guarantee uninterrupted production and safe
operations, the business must identify and define
what those critical spares are. It also has to identify
lead times of materials, keep them accurate, and put
in place procedures that ensure the stock controller
prioritizes its availability. There are two key examples:
Materials that are hard to acquire or have long lead
times need to be promoted up. For instance, a C
material with a lead time greater than 12 months
should be promoted to a B; and
For equipment that is marked as safety-critical by
maintenance, spares should be promoted up as well.
Stock policy
The ABC(D) classification approach is integrated in SAP ERP but
Using the stock segmentation discussed above, an objective stock policy can be defined for stock controllers taking into account usage history, planned demand, lead
times, and spare part criticality. A crucial parameter the
service level has to be introduced. The service level
describes how often demand needs to be met with available stock that is, when stock is picked from the shelf,
the probability of not running out of stock is described.
A service level is assigned to each category. For A
materials, 99.9% is assigned, with varying degrees for B
and C materials down to D materials at 50%. The higher
the service level, the less likely the chance to run into a
stock-out situation. The statistical foundation of the 50%
rating means, in practical terms, that this material
should not be stocked.
may not be an adequate measure for critical spares.
Stock optimization
Finally, minimum and maximum stock levels can be
proposed according to consumption history and
planned demand.
It is important to understand the underlying statistical
method that governs this. Most methods for proposing
minimum/maximum stock levels in ERP packages are
based on a bell curve distribution around an average consumption, but this does not apply to a lot of spares.
Therefore, visualizing consumption patterns along the
investigated timeline of material is key before deciding
which method should be used.
Using software for these calculations saves time and mitigates human error. With reports and graphs in place stock
controllers can plot the charts, objectively review current
and proposed warehouse stock levels, and quickly take
action when a material demand increases or decreases.
In summary, stock optimization should not be treated
as a one-off activity but instead as an iterative practice.
24
Due to ever-changing technology and a constant cycle of

projects, equipment is being replaced all of the time, and
underlying spare parts and consumables have to be frequently reviewed.
The impact of stocking policies on other areas of the
business, such as maintenance and procurement, also
needs to be monitored. The goal is to cut stock levels, but
if stock levels reduce too much, this can result in a negative
effect on maintenance performance such as operational
downtime. To ensure balance, management requires a
view of key performance indicators across the business,
which can be provided by standard reporting tools.
By taking care to review the data and implement the
three areas of stock performance, segmentation, and
optimization, the warehouse will be an efficient service
partner for the rest of the business.
An enterprise dashboard helps ensure that the right equipment

is available when it is needed.
digital
OIL FIELD
Technology aids buying,

selling properties
Virtual data rooms can speed transactions while providing security and easy access.
Bret Wagner, SpudShare
hen buyers recall their past acquisitions, they might

remember how unpleasant it was the last time they
tried to acquire a property from an unprepared seller. The
sellers team might have been long on data, with all of the
production, geological, land, and well data a buyer could
want. But the deal was short on analysis, with a poorly organized data room that made buy-side due diligence difficult.
Virtual data rooms provide many advantages over their physical counterparts. (Image courtesy of SpudShare)
Making matters worse, that seller might not have kept

up with information requests. Access to those with the
answers was limited, so the potential buyer could not get
the information it needed to make an informed decision.
There are two types of buyers in this scenario. The first
is the buyer who walks away from the deal. Perhaps the
prospect did not qualify. But without the seller providing
the right information at the right time, it may be more
likely that this represented a missed opportunity. The
investment was not qualified before the buyer moved on.
The second type is a buyer willing to allow for a process
that is costly and time-consuming, expecting to use gaps in
the sellers information to gain an advantage, demand
post-closing adjustments, and ultimately acquire the property for an attractive price.
Enter the virtual data room

As a seller, it can be frustrating for a buyer to walk away
from a deal when the seller has invested considerable time
26
and effort in its sell-side due diligence. Questions arise

such as, Did the seller have the technology available to
position the sale for success? and, Is there an easier,
more efficient way to present due-diligence materials and
coordinate potential buyers?
Virtual data rooms and collaborative work spaces can
solve some of these issues. A virtual data room is a secure
website allowing buyers with appropriate security clearance
to access due-diligence materials. Virtual data rooms expedite sell-side transactions and help sellers gain control over
what information is shared and to whom. Buyers access
data quickly; sellers minimize time spent on administration.
There are significant reasons why a virtual data room is
preferable to the normal practice of assembling boxes of
documents in a conference room or simply sending documents back and forth between parties by email.
Most significant is the fact that email is not a secure way of
sending documents between parties in a transaction. Hackers are increasingly brazen in their attacks, intercepting documents in transit and allowing outsiders to view proprietary
documents. Given the sensitivity of many deals, this alone is
a critical reason to switch to using virtual data rooms.
Also significant is the issue of document drafts. When a
document is updated, it must be updated in the physical data
room or sent out to all parties through email. With a virtual
data room, the document is updated once, and all parties are
notified by email to review the updated document.
According to the Institute of Mergers, Acquisitions, and
Alliances, virtual data rooms demonstrate concrete advantages over physical data rooms for specific types of transactions, such as larger transactions, auctions with many
potential buyers, international and cross-border transactions, or transactions with limited due-diligence periods.
Virtual data rooms work best in these scenarios by allowing parallel access to the data room by multiple buyers
and reducing travel-related expenses through locationindependent access.
Virtual data room features

Not all virtual data rooms are created equal. These five
features will streamline operations:
Fast upload. Staffs spend significantly less time preparing and maintaining data. Vendors should offer simple
digital
OIL FIELD
drag-and-drop functionality for multiple files directly

into the browser window;
Uncomplicated sharing. Superior managed access is the
primary differentiator between virtual data rooms and
file-sharing tools like file transfer protocol. The service
should have a clean interface that makes it easy to see
who has access to which files and whether they can
download, print, or view files. Digital rights management allows for expiration of downloaded documents.
Once a downloaded file expires, it can no longer be
opened on the guest users computer;
Work spaces converted to virtual data rooms. Collaboration within a data room prior to securing guest user
access speeds up the process of sell-side due diligence.
Data room mode prevents guest users from seeing
each other and disables collaborative features including comments, document task lists, and notifications.
A one-click option immediately converts the work
space to a virtual data room, allowing potential buyers
to quickly begin their due diligence;
Bank-level security. Services should provide 256-bit

encryption and physical security policies. These same
procedures are employed by online banking and
other sensitive information services. Every communication should be sent over a secure, encrypted connection. Stored data should always be encrypted; and
Simple pricing plans. Charging on a per-user basis
might work fine for some applications, but for virtual
data rooms where sellers have little control over the
size of buyer due-diligence teams, it does not make
much sense. Likewise, sellers should not be charged
extra for features like watermarking, custom branding,
and electronic signing features important to both
small and large organizations. Services should not
leave out important features for lower priced plans.
Sellers should place a high degree of confidence in virtual data room security based on complex password
enforcement, encryption, individual user account tracking, and other measures that provide a hardened solution
for their data security needs.
27
exploration
TECHNOLOGY
Trouble on the horizons?

Induced seismicity is starting to get the attention of the general public.
Oil and gas companies cannot ignore the implications.
hose of us who dwell in North America are not

unused to dire warnings deriving from shale plays
and hydraulic fracturing. Entire communities are convinced that their water supplies will be polluted, and
uber-active nongovernmental organizations are fueling
that fire to advance their anti-oil agenda.
Whats an industry to do? Most companies have tried
to respond with science a fact attack, if you will. By
and large, these facts are accurate, if not as sensational
as the fears they attempt to assuage. But in certain circumstances it might be wise to heed the warnings.
Such is the case with induced seismicity. While major
earthquakes that cause devastation are almost always
caused by forces beyond human control, there are
increasing incidents where industrial operations,
whether they be fracturing, waste disposal, or damming
a river, have been known to cause seismic events that
register high enough on the Richter scale to be felt by
nearby populations.
At a recent Geophysical Society of Houston luncheon,
Julie Shemeta, owner of MEQ Geo Inc. and consulting
seismologist discussed the challenges in addressing supposed induced seismicity events.
Shemeta recently participated in a study by the
National Research Council (NRC) funded by the US
Department of Energy to study the potential for induced
seismicity in geothermal, oil and gas, and carbon capture and sequestration. Some of the concern in the
A completed wellhead assembly is shown with clamped

geophones for permanent monitoring. (Image courtesy
of Weir-Jones Engineering Group)
RHONDA DUEY
Executive Editor
rduey@hartenergy.com
EPmag.com
US is based on a report by the US Geological Survey

showing an uptick in seismic events felt in areas like the
midcontinent region that are typically tectonically quiet.
A 2011 earthquake in Prague, Okla., for example, registered a magnitude of 5.6, destroyed 14 homes, buckled a
federal highway, and left two people injured, according
to Columbia Universitys Earth Institute. These types of
seismic events have triggered considerable study and
more than a few harsh reactions from legislators and
regulators. Some have suggested that the Prague incident might be linked to oil and gas wastewater disposal
in the region.
While no events have yet led to the types of earthquakes that make global headlines, many in the industry feel that it is not too early to begin monitoring the
possibility of these events. Iain Weir-Jones, president
and founder of Weir-Jones Engineering Group, said that
a baseline survey of ambient reservoir noise is the best
way to determine the extent of seismicity induced by oil
and gas operations.
Part of the problem is the uncertainty inherent in the
subsurface. Shemeta showed examples where events
continue to happen months and even years after activity
has subsided. She also discussed a situation in a coalbed
methane operation in the Raton basin in Colorado and
New Mexico where wastewater is being disposed of at a
depth considerably shallower than the seismic events.
You cant prevent it; all you can hope to do is operate
in a way that minimizes the adverse effects on your own
operations and those of your neighbors, Weir-Jones
said. If you know whats going on, you can take the
appropriate steps to mitigate the problem.
To view the NRC study,
visit nap.edu/catalog.php?
record_id=13355.
29
drilling &
COMPLETION
Unconventional gas,
FLNG highlight LNG 17
With about 5,000 delegates, the triennial LNG conference in Houston
focused on the rapidly changing LNG business.
rom exports of liquefied unconventional gas from

the US, Canada, and Australia to floating LNG
(FLNG) plants offshore Australia, the emphasis at the
LNG 17 conference in Houston April 16 to 19 was on
how to deliver gas from anywhere in the world and
develop markets hungry for that energy source.
The triennial LNG conferences are about doing
business. And there was a lot of evidence of just how
much business was being done in the exhibition hall.
Every major oil and gas company with LNG to sell had
a booth at the conference Shell, Total, Gazprom, BG
Group, ExxonMobil, BP, Repsol, ConocoPhillips,
Chevron, and Eni.
Nine years later, Australia is getting ready to give Qatar a run

for its money as the top LNG producer in the world.
And there were just as many LNG plants seeking

customers. Some companies have been producing
LNG for years while others have yet to build plants
RasGas, Qataragas, Mozambique LNG, Angola LNG,
Cheniere Energy, Yamal LNG, Sonatrach, Woodside,
Nigeria LNG, and Yemen LNG.
I have attended two of these conferences LNG 13
in 2001 in Korea and LNG 14 in 2004 in Qatar. There
was no talk about unconventional natural gas at those
conferences. Qatar was taking over as the largest LNG
producer, and the US was expected to be a major
importer of LNG.
SCOTT WEEDEN
Senior Editor, Drilling
sweeden@hartenergy.com
EPmag.com
Nine years later, Australia is getting ready to give

Qatar a run for its money as the top LNG producer in
the world, with three LNG plants that use coalbed
methane under construction. And the US is expected
to be an exporter of LNG produced with its unconventional shale gas reserves.
The hottest new technology at the conference was
FLNG. Every major shipbuilder at the exhibition had
a design for an FLNG plant. Shells Prelude project
offshore Australia, which is currently under construction, received a lot of interest.
Even Colombia is getting into the FLNG game.
Exmar LNG Infrastructure is working with Pacific
Rubiales Energy on a floating liquefaction, regasification, and storage unit (FLRSU). The barge-mounted
FLRSU has a liquefaction capacity of 500,000 metric
tons per year. The vessel will be moored to a jetty offshore Tolu, Colombia. Gas will be supplied from the
offshore La Creciente field. If Colombia needs to
import LNG, the FLRSU can switch to regasification.
The best part of the exhibition, though, was the
American Gas Association (AGA) booth. AGA brought
in a maker of cowboy boots, buckles, and belts. Burns
Cowboy Shop is headquartered in Park City, Utah, and
has offered handcrafted boots since 1876. For international visitors it was an opportunity to acquire some real
Western wear. The boots were exotic hippo, ostrich,
caiman crocodile, and elephant with prices ranging
up to US $3,000 per pair.
Those who bought a pair of cowboy boots
will really be able to kick up their heels
when that next LNG deal is signed.
31
-all
?
l
J '
I I ?
illa
15 key comparisons between Multistage Unlimited ,

plug & perf ,and ball-sleeve/packer completions
Based on 4.5-in (1 14.3 mm) casing
Unlimited stages?
Single-trip completion?
Less than 1 hour per stage?
Precise frac locations?
Required frac flowrates?
Number of frac units required?
Circulate fluids to frac zone?
Water and chemicals conservation?
Reduce the risk of screenouts?
Reverse out sand from screenouts?
Real-time frac zone pressure reading?
Unrestricted wellbore with no drillouts?
Eliminates rig-down/rig-up between stages?
Cemented wellbore isolation?
Coiled tubing required?
Multistage
Unlimited
Plug & Perf

(five clusters/stage)
Ball-Sleeves
and Packers
Yes
Yes
Yes
No
No
No
No
85-100 bpm
Yes
Yes
No
85-100 bpm
12-14
12-14
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
25-35 bpm
3-5
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
We rest our case.
M ff
?lAgo
Leave nothing behind.
!02012, NCS
+1 281.453.2222
ncsfrac.com
info@ncsfrac .com
NCS
energy services
Energy Services, Inc. All rights reserved. Multistage Unlimited , Grip/Shift and "Leave nothing behind." are trademarks of NCS Energy Services , Inc. Patents pending.
production
OPTIMIZATION
Two-stepping horizontal
well production
A new dual gas-lift system energizes well flow vertically and laterally.
f necessity is the mother of invention, then persistence is what feeds the inventors soul. The trialand-error nature of the discovery process eventually
ends with a eureka! moment. For Bill Quinlan, a
professional engineer with Horizontal Lift Technologies, that moment came while at work in a tight formation development.
The idea for the dual gas-lift system came from a
horizontal well development that we drilled in Michigan, Quinlan said. We drilled several 4,000-ft [1,219m] laterals to open a fairly tight dolomite formation
enough to make production economically feasible.
The original development plan for the wells incorporated the use of conventional gas lift to aid with
production. Over time, however, it became apparent
that another solution was needed.
Gas lift helped
increase production
but didnt help
reduce the steep
decline rates, he
said. Within a year,
the wells needed
additional help or
the field would likely
be abandoned.
According to Quinlan, it was obvious that
lift gas needed to be
efficiently applied
within the lateral portion of the wells. The question was how.
After brainstorming different ways, I came up with
a two-step approach that uses a specifically designed
packer, he said.
The packer enables an upper lift-gas stage to unload
the well low into the curve and a second dedicated
stage that delivers lift gas to the end of the lateral. In
so doing, velocity across the entire lateral completion
length is enhanced, energizing and moving the produced fluid back to the curve so it can be efficiently
produced out, he said. In doing that, we added
about 40% to 50% additional recovery from the field.
JENNIFER PRESLEY
Senior Editor, Production
jpresley@hartenergy.com
EPmag.com
Complexities of well design and how horizontal

wells are drilled contribute to production issues,
he added.
The highs and lows where the bit has drifted up
and down during drilling create, essentially, a structure within the lateral wellbore, he said. The dual
gas-lift system enables you to overcome these wellbore
issues by adding velocity
to every foot of the wellbore such that it combats
the potential for liquid to
load within any portion of
that lateral. As a result,
every foot of the completion interval thats capable of production is
brought into production.
The beauty of gas lift is
that it is very adaptable.
The dual gas-lift system,
Quinlan said, adds another
layer of adaptability.
Gas-lift rates to the vertical and curved portion of a
well can be adjusted. With the dual gas-lift system, you
are also able to adjust dual gas-lift rates within the lateral, he said. You have two independent dedicated
fluid streams for gas lift to enable you to adjust to production changes within the well.
The system has been used throughout Michigan,
with its most recent success being in the TrentonBlack River formation.
Quinlan has found the
response in those wells
to be fantastic.
33
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Collaboration is key to the ultra-deep

Teamwork has always been the key to overcoming offshore challenges,
and the latest insight from DeepStar shows an encouraging commitment
to the cause.
n expert panel in a session dedicated to DeepStar

at OTC 2013 in Houston featured a stellar lineup.
Representatives from Chevron, BP, Petrobras, Total,
ConocoPhillips, and FMC each gave some great
insights into how DeepStar itself is progressing
and what their companies are doing to tackle the
deepwater challenge.
But what also emerged was a clear need for more
effort and investment in further collaboration and standardization if the industry is to achieve its aims of both
accessing new reserves and maximizing production
from its existing assets.
Occo Roelofsen, director of the global oil and gas
practice at McKinsey & Co., also was on the panel and
highlighted the industrys success in extending its water
depth capability on average by 100 m (328 ft) every year
for the past 10 years. We predict that over the coming
10 years the industry will also see its deepwater liquids
production grow by 7%, he said.
The benefits of collaboration, he felt, were clear. If
the Gulf of Mexico was operated by just one company
as a single asset it would dramatically speed up the
process of bringing fields onstream, developing standardized technical solutions, and maximizing the
value of its assets. This theoretical operator would
have around US $50 billion of projects in action today,
but it would have the potential to upgrade those into
assets with a net present value of up to $110 billion
simply through better optimization.
It is a theoretical example, but Roelofsens point
was that further industry collaboration
could go a long way toward achieving
some of those potential gains.
Steve Thurston, Chevrons vice
president of deepwater exploration
and projects, highlighted his companys work in dual-gradient drilling
technology as a clear example of
how DeepStars technical work can
pay off. The technology essentially
eliminates water depth constraints
MARK THOMAS
Senior Editor, Offshore
mthomas@hartenergy.com
EPmag.com
for deepwater wells by replacing the mud in the riser

with seawater-density fluids. It went from an initial
research project in 1996 to full deployment by 2013
marking a remarkably rapid rise from idea to implementation in a highly conservative industry.
Work like this is what DeepStar is all about. Having
existed for more than 20 years, it has successfully identified and executed hundreds of such projects, invested
more than $100 million in them, and produced 325
technical reports so far.
The latest phase (XI) of its program is on deepwater
developments in water depths of up to 3,048 m (10,000
ft). It was good to hear Greg Kusinski, Chevrons DeepStar director, outline goals aimed at developing
enabling technologies for economic production in
depths of up to 3,658 m (12,000 ft).
DeepStar is a needs-driven organization, already
discussing what to tackle in Phase XII before getting
down to work by January 2014. Kusinski said in
particular that DeepStar would be encouraging
bigger impact projects conducted in a more
collaborative manner, particularly
with larger contributors.
Increased collaboration on projects
that can have even greater impact will
be vital as the oil and gas industry
moves on. Based on the water depth
increases that Roelofsen mentioned,
the industry will need
the results before
the end of this
decade.
35
COVER STORY:
WELL COMPLETIONS
COVER STORY:
WELL COMPLETIONS
Companies focus R&D

on improving downhole
completion efficiency
ith the continued shift from vertical to horizontal wells and from natural gas to oil and gas
liquids, operators have been learning how to cost-efficiently complete wells to drain
reservoirs and extend the productive life of those wells.
The industry has done a great job of lowering drilling costs and getting wells drilled much faster
and more efficiently. The focus now is on making the well completion phase more efficient and driving down those well completion costs by taking a hard look at the resources and equipment needed
to complete these wells, said Garrett Frazier, director of marketing and sales for Magnum Oil Tools.
Mark Hopmann, vice president of completions for Weatherford, asked, Whats different about completions today than 10 years ago? Ten years ago we were more interested in completing the well to
have a production conduit to the surface. Our focus today is completing a well to have discrete control of intervals in the formation. Because of that, youve seen a dramatic rise in the amount of money
that our customers are spending on completions.
Operators and producers are looking for

ways to make sure that all of the clusters
in a given well are producing in a way
that maximizes both production and
the life of the well.
If you go back and look at worldwide surveys of what was being spent on completions, in 2003
they were spending around [US] $3 billion a year worldwide on completions. In 2013 they are spending $9 billion or $10 billion on completions alone, Hopmann said. A lot of that increase is not related
to the number of wells drilled; it is because were increasing the complexity of the completion itself to
allow us to have that discrete compartmentalization.
Compiled by Scott Weeden, Senior Editor, Drilling
Domestic and international shale plays also are demanding new technology. If we look at what
the operators have been asking for over the last few years, they want to do more stages for less,
have assurance that their fracs are going where they desire, and have confidence they are getting
the ultimate recovery from their reservoir. Operators want to do more stages and inject their frac in
the zone of interest while reducing risk and environmental impact. So how can we make this a
repeatable process? How can I be a good steward of my environment? And [how do I] do all that
while ensuring I have effectively stimulated my entire lateral? asked Joe DeGeare, director of business development, NCS Energy Services.
I think integration is going to be absolutely critical to drilling internationally because it is about
problem-solving. And problems that you will find in basins outside the US are different than the problems we have in the Wolfcamp, said Jeff Meisenhelder, vice president, unconventional resources,
Schlumberger. We are going to have to look starting with geology and all the way through the
completion and production process at integrated solutions that will be the central focus in a
specific way.
E&P asked these and other industry experts to discuss technologies that are improving completions and the direction the industry is headed with cutting costs and increasing production.
Editors note: Many of the following comments were originally made at the DUG Permian Conference
in Fort Worth, Texas, April 2 to 4, 2013.
36
37
COVER STORY:
WELL COMPLETIONS
Continuity with rigs,

crews makes big difference
The rigs that make the most hole are the ones that have been in the area the longest.
Mark Sundland
Anadarko Petroleum Corp.
nadarko, through its acquisition of UPR, has horizontal drilling experience going back more than
20 years, developed primarily in the Austin Chalk and
related plays. That has proven to be an advantage in
the current portfolio. Only five years ago 10% of the
wells we drilled were horizontal. Today it is 100% horizontal, and the efficiency gains have been astounding.
Five years ago we had 27 rigs and drilled about
3 million ft [915,000 m]. Last year we had 28 rigs
almost the exact same rig count and drilled 7.5
million ft [2.3 million m]. And 2012 was phenomenal.
We try to minimize nonproductive time (NPT) so
that we are on bottom drilling as much as possible.
We view rig moving time as NPT, so with skid rigs
drilling on pads, we keep moving time to a minimum.
We are drilling wells twice as fast as competitors right
across the lease line. Our 10-rig Eagle Ford program
is making more footage than some companies 20-rig
programs. A lot of that efficiency comes from pad
drilling with these skid rigs, which are on the majority
of our rigs in the Lower 48.
One observation I have made through benchmarking is that it is not all about technology. It is about how
you run your business. At Anadarko we have the advantage of being well capitalized, allowing us to keep programs going year after year. We tend to keep the same
drilling rigs going long-term, with the same crews, the
same directional drillers, and the same company men.
It is really the guys in the field who make the difference. That continuity is huge. There is a perfect correlation: The rigs that make the most hole are the ones
that have been in the area the longest.
We see other operators who tend to pick up a rig,
drop a rig, and get another rig. It just does not lead to
continuity. Our focus on continuity helps the service
companies know, Okay, every six days we are going to
38
be cementing for Anadarko. You get into this rhythm,

and it improves the efficiency of everything. If you are
focused on continuity, you do not flip rigs up and
down very much. We keep the rigs working, keep the
crews together, and it works out best for everybody.
When we are talking about new technologies in completion and stimulation, we have to remember the influence of geology and the statistical nature of well results.
When evaluating a particular method, you cannot just
use the results from one or two wells. You have to talk
about pilot programs for technology comparisons. You
really need a side-by-side comparison of statistically significant samples rather than a single best well sample.
There is a lot of discussion around taking the shale
plays to the international arena, but I think it is going to
be difficult to translate what we are doing here overseas.
What we have seen in the US is a perfect storm where
you have got the right rigs, the right bit and motor combinations, and aggressive directional drillers who understand the nuances of horizontal drilling. The quality of
your directional drillers will make or break you. The
problem that I see with taking this technological success
international is where are those directional drillers
going to come from in Poland or Australia?
The demand for qualified people just in the Lower
48 is going to make it hard to transfer their expertise
overseas. How are you going to get a directional driller
from South Texas to say, I want to spend my next
hitch in Poland? It will happen eventually, but it is
not going to happen overnight.
We have seen so many tremendous efficiencies in rig
designs and directional systems. We are always asking
ourselves, Wheres that next thing? For example, we
are looking at rig fuel alternatives. We have got three
rigs running on bifuel using a mixture of diesel and
our own field gas, and those are very promising. What
we are finding, though, is that you have to have a certain substitution rate of natural gas vs. diesel to make
it work. So a bifuel system may not always be the best
answer, depending on your activity profile in a given
play, so we are looking at all kinds of alternatives. Fuel
management may sound small, but it is a pretty significant part of our cost. We look at everything, no matter
how small, because it all adds up to big savings and
more competitive economics in the long run. n
oT v
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On a recent Granite Wash
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A i
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Estimated Ulti mate Recovery (MMCFE)
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Contact Baker Hughes and find out how we can optimize
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12
BAKER
HUGHES
COVER STORY:
WELL COMPLETIONS
Sliding-sleeve systems
cut completion time, costs
Reducing well interventions lowers costs.
Garrett Frazier
Magnum Oil Tools
International
n the US shale plays well completion costs can account

for upwards of 60% of the total cost associated to drill
and complete a multistage horizontal well. The majority
of the completion cost is devoted to the horsepower,
proppant, and fluids needed to frac these wells. As the
trend of increasing the number of frac stages per well

continues, costs also are increasing.
Another significant cost in the well completion phase
is the method of isolating the frac; i.e., plug and perf
(PNP) or a ball-activated sliding-sleeve system. After the
well has been fraced, well intervention is needed to
remove the frac isolation method chosen and to clean
up the well, which can be time-consuming and costly.
This year the estimated number of total US wells to
be drilled and completed is approximately 47,000 to
50,000. About 72% of the rigs in the current US rig
count are drilling horizontal wells. About 80% of the
wells in the US shale plays will be completed with the
PNP method, and the remaining 20% will use a ball-acti-
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40
COVER STORY:
WELL COMPLETIONS
vated sliding-sleeve system method. There are pros

and cons to these completion methods, and the
debate is ongoing as to which is the best method in
terms of total costs and total production.
Sliding-sleeve technology is going to play a significant role in the future of well completions, but there
will always be a market for PNP. Depending on the
geology, the formation can dictate which completion
method is appropriate. From an operational perspective PNP might take five to seven days to complete a
horizontal well barring any major problems, while a
ball-activated sliding-sleeve system might take one to
three days to complete the same number of total
stages. So there is efficiency to be gained with the
ball-activated sliding-sleeve system in regard to total
well completion time.
There have been recent technological advances in
cemented ball-activated sliding-sleeve systems. Halliburton, Peak Completions, and I-Tec all have a
cemented sliding-sleeve system. The limits are being
W-1i
C O M P L E TI O N S
INNOVATIO N
I QUAD
I EXPCRIGNCE
The Magnum Long Range frac plug is a slim outer

diameter, composite tool designed for horizontal
and vertical wells encountering casing restrictions.
(Image courtesy of Magnum Oil Tools International)
pushed with these cemented sliding-sleeve

systems, yielding some encouraging results.
Although the ball-activated sliding-sleeve system is more efficient with respect to time,
the well intervention cleanout procedures
can be time-consuming and costly.
The problem with this system is that frac
balls made from composite material often get
stuck on the ball seats during the frac. The
stuck frac ball will not allow hydrocarbons
from stages toward the toe of the horizontal
well to flow to the surface; therefore, well
intervention such as coiled tubing (CT) or a
rig is needed to remove the stuck frac balls.
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CONFERENCE AGENDA HIGHLIGHTS:
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DAY 1:TUESDAY, 27 AUGUST 2013
the Emerging
Shale Boom in
WORKSHOP : Maximizing Reserve Bookings

Join Netherland, Sewell & Associates Inc. (NSAI) experts and two top executives from operating companies working in
resource plays as they present a half-day workshop focusing on reserve estimations and assessments in coal-seam gas,tight gas
and shale reservoirs , Learn about what characteristics to look for in resource plays, what rock types are working best, what to listen
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Asia Pacific
for in company presentations , how to evaluate well tests and production trends, how to determine type curves and their validities,
Secure an
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and more. For a complete workshop agenda, go to dugaustralia.com

Opening Reception
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In the dynamic world of

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Australia is already a
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The IEA estimates Australia has 700 Tcf of

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DAY 2: WEDNESDAY, 28 AUGUST 2013

Lessons Learned in North America
Australasia 's Resource Plays
Capital Market Appetite for
Global Resources
Cooper Basin Unconventionals

Ongoing Challenges & Opportunities
CSG Panel: Ongoing Challenges

& Opportunities
The Making of North America 's
Eagle Ford Play
Shale, Deep Coals & Tight Gas Panel:
Today & Going Forward
Securing Social Licence

The Santos Resource Play Story
Western Australia Resource Plays:
The Perth & Canning Basins
Best Practices in Resource-Play,
Drilling & Comp letions
Real-Life Trips & Traps in Resource Plays

Emerging Asia Pacific Resource Plays
Government & Company Outcomes for
Hydraulic Fracturing, Surface Issues

& Communities
Identifying Australia 's Shale-Oil
Resources
Asian LNG Panel: Buyers,
Markets & Movers
DAY 3: THURSDAY, 29 AUGUST 2013
What is your company 's strategy
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nwrket at dugaustralia.com
Shales Across the North

American Continent
The Big Build Out: Projects
Underway & Forecasted
Operations Roundtable: The
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Viettl the comp lete agenda at dugaustralia.com
A D V E N T ENE
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David Breeze
Executive Directo r
SPONSORS
Diana Hoff
We President
Technology and Engineering
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Billy Ray Smith
Business Developme nt Manager
Statoll
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Jean-Francoi s Rich y
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Bruce Clement
New Ven tures
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David Wrench
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John G. Hattner
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COVER STORY:
WELL COMPLETIONS
Magnum saw a need to develop a frac ball that can hold

up to extreme frac pressures, will not get stuck, and will
dissolve on its own to eliminate the need for the well
intervention process. Magnum developed a frac ball that
dissolves simply with well temperature called Magnum
Fastball. There are no chemicals or special processes
needed to make the Magnum Fastball dissolve.
This means the sliding-sleeve market now has available a
dissolvable frac ball that will not impede production and
could eliminate costly well intervention to drill out stuck
frac balls. The ball shifts the sliding sleeve, holds up to the
extreme frac pressures, and dissolves at a predictable rate
as a function of well temperature after fracing.
The Magnum Smart Sleeve eliminates the need for
tubing-conveyed perforating and is designed to open at
predetermined applied surface pressure. Once the pressure is applied, the sleeve will open, allowing an acceptable injection rate into the formation. By using this
technology, the E&P company can eliminate the tubingconveyed perforating process. Depending on the cost of
the CT unit or rig, this means savings to the E&P company of US $60,000 to $100,000 per horizontal well.
As the pace of domestic well completions races on,
several E&P companies throughout the US shale plays
are having trouble with compromised or failed casing.

To address this problem, Magnum developed a frac plug
for horizontal and vertical wells encountering casing
restrictions such as casing patches, over-torqued collars,
severe doglegs, and collapsed casing. The Magnum
Long Range frac plug is a slim outer diameter, composite frac plug that can be conveyed to depth through
these restrictions and set to isolate the portion of the
well that needs to be perforated and fraced. To date,
more than 100 wells once deemed not fit for completion
have been revived by using this plug. Three Society of
Petroleum Engineers (SPE) papers have been written
on this technology: SPE 159751, SPE 146559, and
CSUG/SPE 137839.
As expectations for domestic production continue
to rise, so does the pressure for technology to help
improve efficiencies all along the upstream energy value
chain. These days, operators and service companies can
no longer afford to apply yesterdays technologies to the
completion challenges of the future. What is the good
news? Service companies are stepping up to invest in
new completion technologies that promise better results
for E&P companies and more production, more
quickly, for the economy as a whole. n
Single-point injection reduces

frac horsepower
A CT-deployed isolation assembly with a sliding sleeve allows each stage to be precisely placed.
Joe DeGeare
NCS Energy Services
t the 2011 DUG Eagle Ford Conference in San Antonio, Texas, it was stated by a major operator that its
goal was to increase the number of stages to accelerate
production and enhance the ultimate recovery.
NCS offers a technology that combines a coiled tubing(CT-) deployed isolation assembly with a sliding sleeve.
With more than 20,000 sleeves that have been run in the
past two years in wells that have reached 3.2 km (2 miles)
in lateral length, we have a repeatable and reliable sys44
tem. At each stage the resettable bridge plug is tested for

integrity, and the sleeve shifts are positively identified with
three separate signatures, including pressure, weight, and
indicator sequence.
With single-point injection, surface rates, hydraulic
horsepower, fuel consumption, emissions, noise levels,
personnel, truck traffic, and pad size can be reduced
while rates per initiation point remain the same or are
increased, ensuring each stage is precisely placed. Stages
can be added on the fly, and screenouts are reversed or
avoided by monitoring dead string (real-time bottomhole) pressure. The sleeves are full inner diameter with
no ball seats, upsets, or plugs to remove). Operation time
is similar or reduced due to the ability to circulate stimulation material, eliminate pump-down times, and eliminate rig up and rig down between stages with lubricators
and explosives. When the last stage is treated operators
are left with a production-ready wellbore with no restricJune 2013 | EPmag.com
MAKE A
CLEAN BREAK.
C\
J
These sliding sleeves are used with a CT-deployed isolation assembly
for single-point injection. (Image courtesy of NCS Energy Services)
tions and no milling operations. These features improve

risk management and minimize environmental impact
along with providing the most operational flexible system
in the market.
For example, in an Eagle Ford completion, a frac is bullheaded down the casing. One might assume that a fourcluster stage pumping at 80 bbl/min would treat each
cluster equally at 20 bbl/min. However, recent studies
have shown that this is not the case. These studies have
shown as little as one-third of clusters are actually contributing to production.
With the NCS Multistage Unlimited system, the annular
frac would be designed for up to 35 bbl/min; thus, horsepower requirements are reduced by two-thirds. Operational time also is reduced compared to plug and perf
jobs by eliminating the pumpdowns of composite plugs
and shaped charges. Fluid requirements are decreased by
eliminating the need to bullhead the treatment.
Also, by doing single-point injections, operators have the
ability to enhance frac coverage and reduce the chances
of communicating with neighboring wells. With the ability
to monitor and record real-time bottom pressure and the
usage of memory gauges below the tool assembly, they
obtain greater information during and after the treatment
and for future frac design in adjacent wells.
Regarding a recent Permian basin well, the operator
said, This system has the potential of letting us add one
to two additional wells in our acreage due to the controlled frac.
For new technology, we are looking at running fiber
optics on some wells in Latin America. The use of fiber
optics across our sleeves will give the operator the ability
to monitor pressure and temperature during the frac and
potentially for the life of the well. The goal of NCS Energy
Services is to support the operator in improved estimated
ultimate recovery through novel completion systems and
to leave nothing behind. n
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45
COVER STORY:
WELL COMPLETIONS
Focus shifts from wellbore

to reservoir completion
By dividing the reservoir into discrete intervals,
the operator can individually stimulate each interval.
Mark Hopmann
Weatherford
would say in general what is happening in the completions industry right now is that our focus is changing
from completing a wellbore to completing the reservoir
itself. I think the major issues we hear from a lot of the
operators are on the cost side. As the wells become more
complex, they are worried about cost. We have to continue to work on the efficiency side to find ways to
develop these things more quickly. We have to find
ways to make the overall operation more economical
for the customer.
What we are trying to do in this completion of the
reservoir is divide it up into discrete intervals or compartments downhole. One focus of completing the
well is to allow the operator to individually stimulate
these compartments.
The second focus is to control the production from
each of the wellbores or each of the compartments. If a
horizontal section is divided up, individual flow is coming from various parts of the wellbore. How can that be
In the MazeFlo self-mitigating mode for sand control, sand accumulates on the secondary screen and packs off between the
screen and housing. (Image courtesy of Weatherford)
46
controlled and homogenized? Inflow control devices

can be used downhole and would allow operators to regulate the drawdown across the wellbore as well as delay
the onset of water or gas production.
Let me divide the new technologies that Weatherford
is pursuing into three categories. The first one would be
offshore wells, our traditional completion-type equipment. One of the key technologies we are going forward
with is radio frequency indentification (RFID) technology. The big focus for exploring this technology is being
able to control the tools downhole without intervention.
On a land well, the intervention cost is US $30,000 or
$40,000 to get a coiled tubing unit. Offshore that cost
goes up astronomically.
If we can find ways to complete all the work we need
to do in the wellbore by simply dropping these RFID
tags down, then that is the way new technology is going.
We are running RFID to set packers and open valves
to allow our customers to remotely plug the wellbore,
circulate, and then remotely open and clean up the
well. The big push here is efficiency and safety in the
offshore environment.
The second focus would be on unconventional
resources. We are continuing to expand our portfolio
on sleeve-type systems for multizone fracturing and the
openhole packers. The emphasis is to come out with
technologies that eliminate the taper in the string.
Operators are effectively limited on the number of
zones they can have by the number of different ball
seats they can fit into a particular geometry.
We are focused on what we call the i-ball stimulation
sleeve. It is a single-ball solution that can open any number of sleeves with one size of ball. By eliminating string
taper, we increase the number of zones up to virtually an
infinite number. We reduce the amount of friction and
therefore horsepower needed to pump the fluid downhole because everything is going through a larger diameter bore.
The third technology we are concentrating on is in
the sand control arena. We are partnered with ExxonMobil to develop a technology for a self-mitigating sand
screen. The trade name is MazeFlo. The tool is divided
into compartments, each with an inner and outer
screen. The theory is that if the outer screen member
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COVER STORY:
WELL COMPLETIONS
0
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fails, the inner screen will take over, with increased inflow resistance. This
increased resistance will cause the well to flow to other undamaged sections
of the production horizon. We believe this can replace gravel packs as a
long-term solution.
We are trying to increase the efficiency of land-based wells, particularly
unconventional, by completing those wells to handle multiple forms of artificial lift. We run in the tubing string with a pump seating nipple integral to
the string. Then we modify the lift technology to whatever is most appropriate
for the stage the well is in. We would install a jet pump to enable flowback
and then switch over to a gas-lift application during normal production.
Finally, we would go back in with a reciprocating rod pump. Effectively,
we can go through the entire life cycle of three different types of pumps
with only one completion design.
In looking at some of the bigger problems yet to be solved, I think there
is a big issue we have to work out technology-wise when we move into the
Lower Tertiary play in the Gulf of Mexico, where deepwater and HP/HT
issues are combined in the same well. We have operators talking to us now
about 20,000-psi completion equipment. Combining that with something
that is in 3,030 m (10,000 ft) of water and a 6,060-m (20,000-ft) well puts the
operator 9,150 m (30,000 ft) deep in a wellbore. Trying to get accurate tool
placement using traditional technology at these depths is a challenge.
Another huge problem in shale is determining where the frac is going. We
perform fracture stimulations where we will pump a quarter of a million pounds
of sand into a zone. We see operators trying to solve that issue either with tracers and microseismic or trying to find alternate ways to understand exactly what
is happening with that rock when they are performing massive fracs. n
r
,
Engineered completion
designs boost effectiveness
There is a whole cornucopia of technologies that is available
to aid in efficiency.
Jeff Meisenhelder
Schlumberger
think the real issue for completions is to get from being very efficient to being
efficient and effective. We see that a high percentage 25% or 35% of perforation clusters do not produce. This is something that we know how to fix with
engineered completion designs. By grouping completion stages and clusters
according to reservoir quality and completion quality, we can get 100% of
perforations producing. That makes everything more effective and drives
cost per unit down. That is what I would say is the next step.
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zone throughout the lateral drilling process. (Image courtesy of Schlumberger)
We are going to see more deployment of data acquisition tools that can help us
with, first of all, completions engineering and better completion design. I do not
think we are going to see the reinvention of full-blown LWD tools necessary for
that purpose because people do not want to put costly tools into the laterals. We
will see more nonintrusive technologies developed. There are ongoing trials using
cuttings and much more sophisticated tools in mud logging to enable logging the
well without ever putting tools into it. That is going to be a big step forward.
Coming back to unit cost, where I see a major potential gain is that we still
drill a lot of wells that are not economic. That number could be 30%, 40%,
or higher depending on the gas price. That leads to a huge opportunity in
not drilling wells that are not economic. That will have a big impact on our
unit cost and field economics. We are going to have to do that through a
combination of technologies, integration, and developing new solutions.
We are going to have to use some tools that we have not used very much. For
example, we can use seismic to help us find the spots that we do not want to
drill. That is what we really need to know. There is a lot of room still for deeper
integration of geology. And lets face it: We do not fundamentally understand a
lot of the principles of these kinds of reservoirs. We do not fundamentally
understand oil transport in shales.
There is a lot of physics that still need to be done. As we develop that physics,
we are going to get much more sophisticated about where we place wells, how we
place them vertically, how we place them laterally, and how we complete them.
That will be the next step change in performance. That is the big opportunity.
Regarding integration, it is not about a common software platform that has all
the data in it. That, to me, is another efficiency tool. I think integration really is
getting the team focused on specific problems and working those problems
from each of their disciplines to reach a common solution.
When we talk about integration, we talk about activities at the well site and
what I would call coordination, project management, logistics, or choreography.
But real integration is about getting the team to solve a problem using all the
disciplines to reinforce each other. If operators do that, they get a much better
answer. It is a much more difficult task. It requires some of the tools that I just
mentioned, but it really requires a good innovator, a strong team leader. And
those skills, in the industry, are very scarce.
There is a whole cornucopia of technologies that are available to aid in efficiency. But really, it is the choreography at the well site that has brought all these
things together and eliminated downtime, waiting on water time, waiting on
diesel, or waiting on Schlumberger and brought it down to the most efficient use
of everybodys time for both the operators and the service companies. That, in
turn, has driven prices down because everybody is using their assets at pretty
much 100% capacity. In a sense, it is not just the technology; the project management aspect of it has been equally important. n
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51
COVER STORY:
WELL COMPLETIONS
Efficiency, effectiveness are key

to completion success
Operators have to consider the value proposition of proposed technologies
and of making the economics work.
process that can gather information in order to make
decisions more quickly.
There also is a growing interest in sliding-sleeve technolRobin Robinson
ogy. There will be more technologies involving dissolving
Baker Hughes
completion components to improve efficiency. There have
been significant advances in the longer laterals with the
efficiencies that come from this technology. Also, pad
drilling has been a game-changer, particularly in the
southern basins where it is more developed and advanced.
he future of horizontal wells is in optimizing the fracWith shale plays operators have to consider the value
turing and production that operators get as a result. A
proposition of proposed technologies. It is all about making
future development will be the tools that are around the
the economics work. The technologies that are used to
drilling process that give us insight into the completion
develop the shale plays have to bring value. It is critical to
the success of the project that the end
results are increased production in less
time while weighing the cost. For the
most part, benchmarking always comes
down to two issues: efficiency and effecTOP
tiveness. One way to be more effective is
for operators to share more production
&hhz
-,aA
issues with service companies to develop
better solutions; however, the public
w .oilandgasjobsearch.com
data available are at least six months old.
World's Premier Oil & Gas Job Site
For efficiency one of the metrics we
look at is how many wells are being
drilled by each rig each quarter because
i
it is a good indication of how efficiently
we are working together. The Permian
Join over 570,000 oil and gas professionals
has seen a big improvement in the total
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number of wells drilled. From 2011 to
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Mobile site launched
great efficiency improvement since they
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are maintaining the same pace of wells
drilled by each rig every quarter. We are
seeing that the operators who have
gained insight into the geology that they
Drihing Supervisor
Project Manager
Sandi A'obla
Aberdeen
are working in are getting more into a
Electrical
Engineer
Civil Eng ineer
Norway
Brazil
well factory mode, which will bring even
greater efficiencies.
The industry wants to know what we
can do in the fracturing process to
reduce the huge volumes of sand and
water that are required. It is going to
ILAND GA
"ORM
careerbuilderg
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COVER STORY:
WELL COMPLETIONS
impact the Permian as well as international countries

where we perform work. It is something that obviously
needs a long-term solution. Additionally, identifying the
most optimal location to perforate is still being developed.
Shared learning is paramount because there are some
components that are common to all shale plays. There
also are some that are basin-specific and some that are
well-specific. Team leaders have to be careful not to inundate the organization with too much information.
One of the challenges is the organizational structure in
many companies with separate drilling, completion, and
production organizations. Information is not shared easily across these departments, and there are sometimes
conflicting objectives.
When we look at these plays, what we see are more and
more opportunities to cross those lines to take advantage
of the growing information to place the bore in the sweet
spot. Completion opportunities can be identified based
on the information collected in the drilling process.
Pulling together the service companies and the operators
is going to be a key to advancing efficiencies. One of the

solutions that we have been driven to in some areas is the
idea of vertical integration, where on some limited scale
we are supplying our own services. It is possible that these
solutions also may be solutions for some international
locations as well, although we are not yet 100% self-sufficient. We are still going to have to count on other support services following along and being there for
operators to use.
As a service company, there are big challenges in performing equipment maintenance as soon as necessary
due to the decrease in time from spud to total depth. It
requires a huge investment from us, but we have been able
to maintain equipment because we have decentralized
facilities, allowing us to complete the work locally, and we
have the necessary inventory to keep things running. Wells
do not take as long now, and rig moves do not take as long,
so our turn-around time is limited. But we are meeting the
challenges to get those tools in for maintenance, into working condition, and back out to the well site.
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IMPROVING
EXPLORATION
SUCCESS
DAS aids in permanent

field monitoring
New DAS system provides complete wellbore evaluation.
David Hill, OptaSense Ltd.
he ability to permanently monitor oil and gas wells is

becoming essential given the importance of EOR and
increased regulatory control of well integrity. Fiber-optic
distributed acoustic sensing (DAS) can provide a solution to this once an optical fiber is installed in a well.
After several years working closely with Shell, OptaSense recently signed a further three-year development
contract with that company. Now OptaSense is able to
offer its DAS technology and services to the rest of the
oil and gas industry.
How it works
Using a sensing principle called coherent optical time
domain reflectometry, DAS injects a laser pulse down a
single-mode optic fiber. As it travels along the fiber, a
minute amount of the light is backscattered to a receiver.
Any acoustic or vibrational disturbance along the fiber
alters the backscattered light from that local region. At
the receiver this change in the backscatter is processed,
and the acoustic disturbance is recorded. Since the speed
of light in a fiber is constant, by accurately timing the
arrival of any change to the backscatter at the receiver, users can determine where the disturbance occurred
along the fiber.
In practice this means that along
a fiber of, for instance, 6 km (3.6
miles), up to 4,000 independent
simultaneously sampled acoustic
channels at 1.5-m (5-ft) spatial resolution can be resolved. Alternatively,
if higher fidelity signals are required,
conserving amplitude and phase
coherence, 800 channels of 7.5-m
(25-ft) spatial resolution can be cap-
tured simply by changing the settings in the receiver

unit in the control room.
Implementation
The practical implementation of this technology means
that once connected to an optical fiber installed in a well,
DAS provides continuous monitoring along that well
from top to bottom. For applications requiring permanent monitoring, this provides a unique capability to listen to the well during all stages of its life from drilling to
abandonment. DAS can be used in a wide variety of applications such as a permanent receiver array for vertical
seismic profile (VSP) measurements through completions as a means of listening to the fluid and proppant
uptake during hydraulic fracturing or in the production
phase where the DAS can be used to measure the flow
rates along each producing zone in each well.
DAS for VSP

VSPs are conventionally acquired with geophone arrays to
image the seismic setting of a well. DAS provides the ability for the first time to image wells that previously were
inaccessible to conventional geophone arrays. Using fiber
permanently installed behind casing, semipermanently
Permanent DAS is being used in a variety

of downhole applications in areas such as
borehole seismic, completions, and production. (Images courtesy of OptaSense)
56
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IMPROVING
EXPLORATION
SUCCESS
installed on the production string, or temporarily installed

via wireline or on coiled tubing, it is now possible to make
economical VSP measurements directly in wells that are
either too hot, too high-pressure, highly deviated, or have
restricted access. For instance, high-temperature steam
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injection wells can be instrumented with DAS using fiber

that can withstand temperatures in excess of 300C
(572F) so that VSP images can be repeatedly made to
determine the extent of the steam front. In highly deviated wells where it is impossible to insert a geophone
array, VSP images can be made by
attaching the sensing fiber-optic cable
to the production string. And in producers and injectors where space
restrictions prevent conventional seismic sensors from being deployed, lowprofile fiber cable can be deployed.
The ability to take repeated timelapse measurements on a dense array
of many hundreds of virtual sensors,
with full coverage of the well from
r
top to bottom without well intervention, provides a unique capability for
enhanced imaging of the reservoir.
This has been used and certified for
monitoring of, for instance, CO2
injection.
The DAS-VSP service provided by
OptaSense is fully integrated with various seismic source controllers, ensuring accurate timing. If Vibroseis is
used as a seismic source, real-time correlation and stacking of the data produces standard seismic data files (in
SEG-Y format) with fully populated
headers. The data also can be
remotely quality-controlled and
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58
During the treatment and subsequent production in unconventional

oil and gas, DAS can be used to monitor microseismic events, especially
those larger magnitude events that
originate at existing fault locations.
Because of the broad bandwidth and
high dynamic range capabilities of
the DAS technology, the large lowfrequency seismic signals generated
at existing fault locations can be
accurately measured. Furthermore,
the long-array sensing aperture permits geolocation if sensing fibers are
deployed in multiple wells.
IMPROVING
EXPLORATION
SUCCESS
NEXT GENERATION
FORMATION EVALUATION
ENRICHED
Accelerated insights into
shale resource plays
OptaSense provides a complete suite of software tools providing real-time monitoring and
006
analysis of DAS measurements.
Fracture profiling
Hydraulic fracturing is being increasingly used to improve oil and gas productivity
in tight reservoirs. Using fiber attached behind the casing and cemented in place
or in openhole sections, it is possible with DAS to monitor the entire fracturing
process at the treatment zone, including packer deployment, perforation detonation, sleeve opening, fluid and proppant entry, and plug setting. This in situ monitoring provides the ability to visualize and hear exactly what is happening along
the well and in particular at the treatment zone.
With a fiber permanently installed behind the casing, it is now possible to monitor the effectiveness of the hydraulic fracture stimulation process at each treatment stage. The DAS hydraulic fracturing profiling service continually monitors
and records the acoustic signals measured by DAS, the temperature measured by
a fiber-optic distributed temperature sensing system, and the pump rates provided by the pumping contractor on site. This information is combined during
each stage treatment to provide an estimate of the fluid and proppant uptake at
each of the perforations. This information can be used in real time by the completions engineer in the field or remotely to optimize the treatment and increase
well productivity or in post-job analysis.
Production profiling
In addition to the capabilities offered by DAS for reservoir evaluation, permanent
production flow logging is now possible with fiber installed on casing or tubing
with measurements taken on a continuous basis or at regular intervals using the
OptaSense drive-by acquisition service. OptaSense is working to provide the ability to continually measure flow rates along the well without the need for well intervention and with no interference to the flow.
Furthermore, in existing or abandoned wells without fiber permanently
installed, DAS can be used on a wireline to detect and locate anomalous behavior
such as casing leaks and packer failures.
DAS is a rapidly developing technology that is gaining significant attention in
many aspects of the oil and gas industry. OptaSense is helping to pioneer this new
technology and has recently been awarded Hart Energys Meritorious Engineering Award for its DAS-VSP service.
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IMPROVING
EXPLORATION
SUCCESS
Integration leads to optimization

Collaboration between the disciplines of geoscience, engineering,
and real-time microseismic monitoring improves exploration success.
Gareth Block and Kevin McKenna,

SIGMA Integrated Reservoir Solutions
n the slim-margin world of unconventional resource

plays, optimization is critical. With operators investing
roughly US $150 billion to drill and complete wells this
year, according to Drilling Contractor, operators face
the realization that as many as one-quarter of their fracturing jobs will fail to meet performance objectives. This
risk is an expensive lesson for an industry that prides
itself on effective asset management.
Lower field performance is more than a suboptimal
return on opex and capex. It highlights significant gaps
in the ability of some oil companies to answer key questions about their reservoirs. E&P companies operating
onshore in the US plan to drill approximately 35,000
wells this year, according to Simmons & Co., with up
to 40 stages per well.
With an average cost per stage of $150,000 to
$200,000, technology that eliminates the need for just
10% of those stages would save the industry $630 million
in one year, Jorge Machnizh, SIGMA3 CEO, said. We are
helping clients leverage imaging and fracturing technologies to capture these savings and simultaneously achieve
greater levels of EUR [estimated ultimate recovery] for
their wells.
Integrated solutions can give companies confidence

about where to drill, where and how to fracture and
complete, and where to invest next by helping address
critical questions such as:
What areas will be the most productive and
profitable?
How do we drill the fewest wells and leverage their
trajectories to make the most of reservoir properties,
including geomechanical attributes such as brittleness and features like natural fractures?
How do we design wells that best connect natural
and induced fractures with the least number of
hydrofrac stages? and
What hydrofracturing engineering and completion
techniques will maximize our production and return
on investment?
Key to this effort is a real-time dynamic earth modeling
(RTDM) workflow that integrates real-time completions
data and microseismic event visualization in tandem with
geologic modeling and field-scale reservoir property predictions to optimize drilling and completion programs
(Figure 1).
Geoengineering workflows must be tuned to integrate and interpret large volumes of valuable data from
the field and to deliver operationally useful feedback in
a meaningful timeframe, Machnizh said. Optimal performance can only be achieved through the use of an
integrated subsurface model that can be updated just in
time to enable critical decision-making. RTDM workflows combine real-time field data with 3-D reservoir
modeling and visualization. They provide users with
access to predictive information about key operational
issues including geosteering, hazard avoidance, and frac
stimulation performance.
Value-driven results
FIGURE 1. CRYSTAL combines microseismic interpretation, hydrofrac

data, and geomodel predictions to enhance real-time decision-making. (Images courtesy of Sigma3 Integrated Reservoir Solutions)
60
Engineers strive for optimization. Unfortunately, current industry tools make it difficult or impossible to analyze the massive amounts and variety of data types that
impact well performance and successful field management. SIGMA3 has created a single unified platform that
was designed specifically for engineering collaboration.
This platform facilitates collaboration between traditional silos. Silos impact organizations by preventing
proper data management and communication between
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IMPROVING
EXPLORATION
SUCCESS
geoscientists and engineers (and even among

different engineering teams). This can lead
to project delays and lost opportunities. To
remove these barriers, Sigma3 combined software development tools with a cloud-based
architecture. With the platforms focus on
simplicity, field engineers, asset managers,
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around around the concept of real-time collaboration, office- and field-based teams are
FIGURE 2. The map on the left shows cumulative Niobrara production, while the
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map on the right shows the probability of 25,000 bbl cumulative.
from every opportunity.
The suite makes it easy to access, analyze,
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Invest where it counts
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traditional silos. The only way to succeed in low-margin
with its requirements for real-time interactive decisionunconventional plays is to truly integrate geoscience and
making and longer term analysis and optimization. A
engineering teams. The use of innovative frac and compleGIS interfaces directly with reservoir models, wellbore
tions experience and sophisticated microseismic acquisischematics, and microseismic data in the same work
tion, processing, and interpretation techniques, along with
space. Temporal data like net pressure or microseismic
true collaboration, provide the bridge to taking things to a
events can be displayed in an intuitive way. And complenew level of accuracy and return on investment.
tion designs can be corroborated using predictive data
analytics from nearby wells.
Data integration
SIGMA3 also is releasing its latest version of CRYSTAL,
an expert-level platform for geophysicists and modelers.
This provides the tools necessary to convert 2-D and 3-D
seismic data into high-resolution reservoir models useful
for field management. When 3-D seismic data are available, the workflows provide valuable information about
reservoir quality and hydrofracture effectiveness as well
as information about stratigraphy and reservoir architecture. When quality 3-D seismic data are not available,
new time- and cost-efficient technologies such as borehole seismic imaging and wellbore trajectory imaging
are able to provide high-resolution near-well images to
support real-time operations.
The platform allows users to perform detailed well ties
using highly deviated or horizontal wells, build complex
structural frameworks, calculate volumetric curvature to
image faults and fracture networks, and run stratigraphy-constrained deterministic and stochastic inversions
to predict reservoir properties and hydrocarbon placement (Figure 3). Each of these technologies is linked to
a common platform so that completion and drilling
engineers, asset managers, geoscientists, and others can
share data in real time with full transparency.
62
FIGURE 3. The integration of ThinMAN inversion for resolution

enhancement with powerful volumetric curvature analysis provides enhanced detail of folding, faulting, and fracturing.
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The promise of
full waveform inversion
Though hugely compute-intensive, the FWI method holds promise
in capturing waveform information in seismic data.
Rocky Roden, Contributing Author
ne of the most popular phrases in the geophysical

community today is full waveform inversion (FWI).
FWI was initially developed almost three decades ago in an
attempt to obtain from seismic data quantitative information about subsurface rock properties on a very detailed
scale. Over the last few years there have been some
encouraging results employing FWI in seismic processing
marine and land data. FWI iteratively updates an estimated subsurface model and computes corresponding
synthetic data to reduce the difference (the data misfit)
between the synthetic and recorded data. The objective of
FWI is to match the synthetic and recorded data in a comprehensive way such that all information in waveforms
(e.g., traveltimes, amplitudes, converted waves, multiples,
etc.) is accounted for in the data misfit (Figure 1).
The FWI technique is attractive in its potential capability to estimate a subsurface model that generally produces
higher resolution results than conventional processing
methods and algorithms used today. Another advantage
of FWI over conventional inversion techniques is that
FWI can estimate multiple parameters such as velocity,
density, and attenuation. This method aims to recover
the true model by iteratively minimizing the difference
between observed and modeled data and can be formulated in either the time or
frequency domain.
FIGURE 1. This general workflow for FWI shows the initial model
containing information from legacy velocities, well logs, and nonseismic measurements for velocity analysis. (Data courtesy of
Kapoor et al, 2012; images courtesy of Rocky Roden)
64
Remaining challenges
There are drawbacks to FWI. This approach is very compute-intensive, requiring numerous iterations of the
model to converge on an acceptable solution, and often
the methods used to converge to an acceptable solution
can produce spurious results. In addition, FWI is an
underdetermined inverse problem with many solutions,
most of which make no geologic sense. These problems
are related to a typically large number of model parameters and to the absence of low frequencies in the recorded
seismic data.
FWI has primarily been used in defining velocity models for
prestack depth migration and imaging (Figure 1). Another
use for FWI is to determine reservoir properties from this
inversion process, but the industry is in the early stages of
this application. In current commercial practice, both
approaches simplify the physics of wave propagation,
emphasize only some parts of the total recorded wavefields,
and seek to match only some of the properties of those
wavefields. These approximations and compromises are
made both to reduce the total compute cost of FWI and to
circumvent the necessity to invert for multiple parameters
that may be ill-constrained by the available data.
When building velocity models for seismic processing,
one of the difficulties with FWI is accurately determining
the misfit between the data and the model. Classical FWI
involves the minimization of a least-squares misfit function
between the calculated and observed data. Common
approaches employ nonlinear gradient-based optimizations where complex strategies for regularizing the process
(filtering, weighting, and mute of the data, etc.) are used
to mitigate the nonlinearity inherent in the entire process.
One of the challenges with FWI using gradient or
gradient-descent methods is the convergence to the local
minima, which makes the technique very sensitive to the
starting velocity model, especially when 3-D is considered.
This is illustrated in Figure 2, where an initial starting
model was input into the FWI process and, after several
iterations, a local minimum of the misfit was determined.
However, because of the nonlinearity of the forward modeling process, this local minimum as well as several other
spurious local minima may be determined. Therefore, in
GI
WORTHINGTON
C Y L I N D E R
A W o r t h n g to n I n d us tr i es Company
FIGURE 3. These general inversion

approaches are employed today.
FIGURE 2. A data misfit results after several iterations,
FWI could be the inversion approach
producing local and global minima depending on the
of choice to determine reservoir
starting models. (Data courtesy of Ma, 2010).
properties in the future.
this approach a starting model too far from the true model can produce erroneous results that may induce an improper interpretation.
Acquisition parameters
Optimally, an FWI with a starting model close to the true model can converge to
a global minimum and the true model. To lessen the sensitivity of the initial
velocity field, low frequencies and long offsets are required, enabling FWI to
update the low-frequency component of the velocity model. This demonstrates
that FWI can be used for velocity updates if the acquired data have enough low
frequencies and long offsets. Particularly, the shallow part of the model could be
significantly enhanced by use of FWI and can result in a more improved depth
image overall. In practice, a velocity macromodel generated by traditional
approaches from traveltime tomography or migration velocity analysis may serve
as an initial model for FWI.
Therefore, geophysicists have to make decisions when applying FWI because of
the large amount of data to be simultaneously involved in the process and the
numerous unknown parameters. These issues related to FWI have led to different
strategies such as stochastic methods like the genetic algorithm and simulated
annealing to address them. In contrast to deterministic gradient-based methods
where it is often unclear whether the final result is near the global minimum and
the true model, stochastic methods search for the global minimum of the misfit
function even in the absence of a good starting model. Stochastic methods do
not require the calculation of gradient-descent values after several iterations.
Only forward modeling is needed to evaluate the desired results.
Unlike deterministic methods that generate a single best model, stochastic
methods yield statistical information about the range of acceptable models. One
significant drawback to this stochastic approach toward FWI is that the more forward model evaluations that are generated, the higher the computational cost.
The convergence to acceptable results is at times beyond practical existing computing capabilities.
The promise
From an interpretive perspective the desired outputs from FWI are reservoir properties such as porosity, fluid type, and permeability. Seismic data responses are not
necessarily a direct result of variations in reservoir properties but are due to variations of the elastic properties of the earth. It is up to the interpreter to unravel
these relationships between reservoir properties and elastic properties from seismic
data in a reliable manner. This is where FWI holds such promise. As Figure 3 indicates, FWI is theoretically the most advanced inversion approach of the methods
employed in the industry today. Perhaps in the not-too-distant future FWI will
enable reservoir property maps to be routine outputs from the seismic interpretation process.
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65
LAND
SEISMIC
Integrated high-density point-source,

point-receiver land seismic
A case study from the UAE includes complex depth imaging.
Peter van Baaren, Mohamed Baioumy,

Christopher Cunnell, Ghada Mohamed,
Alexander Zarkhidze, and Erick Zubay, WesternGeco;
Abdulla Al Qadi, Crescent Petroleum
he seismic method has been used in the exploration

business since the early 1920s. Since then there has
been a dramatic increase in the number of measurements acquired. Despite continuous growth in computer processing capacity and affordability, several
assumptions and approximations often have been
required for the practical application of processing
algorithms in seismic imaging.
The integral summation method proposed by Kirchhoff in the 19th century is widely used in the process of
migration, which focuses seismic reflection energy and
positions it in the correct location in space and time or
depth. Prestack time migration (PSTM) has become a
standard stage processing; however, it assumes that the
downgoing and upcoming ray paths from subsurface
reflections are symmetrical. In complex geological environments such as thrust belt regions, there are likely to
be steeply dipping reflectors and complex nonsymmetrical raypaths.
Advances in computer hardware and software in the
last decade have allowed many processing shortcuts and
approximations to be reduced. Processes that have now
become viable for application to large 3-D datasets
include prestack depth migration (PSDM), which overcomes the assumption of symmetry in PSTM.
A 3-D seismic survey was acquired using an ultra-high
channel point-receiver recording system and broadband
source in a difficult geological and logistical environment
in a structural exploration play at the edge of the prolific
oil-prone Arabian plate. This play extends from the
United Arab Emirates (UAE) through to Oman, where
the stable Arabian plate was deformed by the Late Cretaceous orogeny, resulting in structurally controlled traps.
During this time the allochthonous Semail Ophiolite and
Hawasina Complex were emplaced into the survey along
thrust faults. As a result, imbricate layers of fast- and slowvelocity material with dips up to approximately 60 proj66
FIGURE 1. This common shot gather from a far receiver cable

(left) shows interference from other vibrators and (right) after
attenuation of this noise. (Images courtesy of WesternGeco)
ect up to just below a low-velocity surface layer of sand.

Further compressional deformation occurred in the
Miocene to Oligocene with the collision of Arabia and
Eurasia. An advanced processing sequence was applied to
the data, including PSDM.
Point-source and point-receiver acquisition

The advent of ultra-high count continuous recording systems and new coherent noise removal techniques allows
great flexibility in designing full-azimuth survey geometries that deliver optimal noise attenuation and dense
sampling of the seismic signal. The WesternGeco UniQ
integrated point-receiver land seismic system is capable of
supporting more than 200,000 live channels. High-channel capability enables the recording of long-offset, fullazimuth point-receiver data at high trace densities.
In addition to high-fidelity measurement of the
upcoming seismic wavefield, dense sampling of various
types of coherent noise enables it to be effectively
removed or analyzed to provide additional subsurface
A T
W
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Wire less Seismic Acquisition

A seamless integration with the environment
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It may be a jungle out there, but CGG is always prepared. Whether your jungle has trees,swamps , protected
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Passion for Geoscience

cgg.com/land
GG
LAND
SEISMIC
information. A survey design study considered how to

meet the geophysical objectives of the UAE survey while
maximizing acquisition productivity, and potential methods were modeled to determine the most cost-effective
solution. As a result of this modeling, it was decided to
deploy only 40,000 channels for efficient recording.
The data were acquired with single 80,000-lb ft vibrators
using a special Vibroseis sweep to generate useful energy
below 6 Hz. Sweep time was 18 sec with listening time of
6 sec. The spacing between source and receiver lines was
200 m (656 ft). The sampling interval along source and
receiver lines was 12.5 m (41 ft).
The use of source productivity enhancement techniques enabled the shooting of the required number
of vibrator points (VPs) within the two-month period
planned for the survey. These techniques are used to
allow a vibrator to start its sweep before the end of the
sweep and listening time of another vibrator while minimizing interference between the two in the recorded
data. The managed spread and source technique is
based around optimizing the sequence of acquisition
of vibrators that are in position and ready to record
with certain rules. These rules include that vibrators
must be separated by a minimum distance, sweep times
must be separated by a minimum time interval, and the
appropriate receiver spread must be available. Implementation of the rules is managed automatically with
no operator intervention.
Vibrators were distributed across the block both north

and south of the spread. Each vibrator moved up at its
own speed, so the sequence that the vibrators were
shooting was a random pattern. This random sequence
ensured that interference crosstalk and harmonic
energy were random and of different energy levels in
the common receiver direction and hence could be
readily attenuated in processing. Figure 1 shows an
example of data with interference from other vibrators
before and after attenuation of this noise.
Data processing
Surface wave propagation across the near surface was
complex, with multiple modes and large lateral velocity
variations generating both direct and scattered noise
with significantly higher amplitudes than the desired signal. Simultaneous shooting introduced source interference noise. The signal-to-noise ratio of the individual
seismic traces was low, so a careful and targeted
approach to noise attenuation was required to avoid
damaging signal.
Noise attenuation was followed by a signal processing
sequence that included surface-consistent processing
and iterations of time-domain velocity picking and residual statics. A robust algorithm was applied that combines
robust surface-consistent deconvolution, surface-consistent amplitude correction, and noise attenuation in one
pass to provide relative amplitude preserved data.
Near-surface characterization
FIGURE 2. In this example of a shallow-stack section the top

panel has basic elevation statics applied. The bottom panel has
model-based statics. The shallow velocity model is shown in the
middle panel.
68
The near surface on top of which the sources and

receivers are placed has a large influence since it introduces travel-time variations between receivers and VPs.
Accurate definition of the shallow velocity structure is a
key step for onshore PSDM and reliable extraction of
rock properties from the imaged data. The surface of the
survey area is characterized by sand dunes and outcropping formations. The near surface is complex, with
steeply dipping layers, faults, extreme lateral and vertical
velocity variations, and vertical velocity inversions.
Because of this complexity, the refraction layer-based
solutions normally used would be inaccurate.
A new methodology was used to unravel the near surface and produce a detailed velocity model from which
time corrections (statics) could be derived. The method
was based on analysis of the surface-waves analysis and
inversion to a geologically consistent near-surface velocity
model. This was integrated and validated using other
near-surface data such as analysis of refractions and
upholes. Figure 2 is an example of stacked data before
and after application of the model-based statics.
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LAND
SEISMIC
Imaging
To be able to position reflections accurately in 3-D space
requires an accurate 3-D velocity model of the subsurface,
development of which is performed in an iterative
approach using several imaging techniques of increasing
fidelity. For this survey, the imaging process started with
Kirchhoff PSTM and then moved to Kirchhoff PSDM
before finally incorporating a migration algorithm using
the most exact solution to the 3-D wave equation modeling for both upgoing and downgoing wavefields called
reverse time migration (RTM). Time migration positions
data in space and time (x, y, and t), while depth migration and RTM place the events in 3-D space (x, y, and z).
The initial velocity model, used as a starting point, was
a long scale-length representation of the geologic model
(Figure 3). It was built using two wells within the survey
area plus information from three wells located slightly
outside the survey boundaries. The two wells inside the
project area clearly delineated the high-velocity carbonates present in the allochthon and also indicated the
slow-velocity Lower Aruma shale located between the
allochthon and deeper Thamama carbonate. The well
located outside the eastern edge of the survey contained
the allochthonous Semail Ophiolite.
The two wells to the west and northwest of the survey
indicated an absence of fast-velocity carbonates normally
found in the allochthon and had slower velocities down
to the Thamama, suggesting that the western edge of
the allochthon was close to the western edge of the survey. Between well locations, the initial model was derived
from velocity analysis on PSTM data. An interpretive
approach was used and was closely guided by the well
velocities, preliminary interpretations of the allochthon,
and indicators from nonseismic data (gravity).
The velocity model was updated using multiple iterations of cell-based common image point tomography,
starting by targeting shallow zones above the fast-velocity
carbonates and then extending down to update the
entire model. Each iteration output PSDM gathered data
using the latest velocity model. Analysis of the gathers
identified where and how the model should be updated.
In such a complex geologic setting with interbedded shaley sediments and carbonates, anisotropy plays an important role in the imaging. Because of the significant dips
across the survey area, tilted transverse isotropy was built
into the velocity model.
As expected in an area of complex geology, the final
RTM 3-D volume shows improvement in event continuity and focusing compared to the equivalent field brute
stack and PSTM volumes (Figure 4). Imaging directly
70
FIGURE 3. The initial velocity model was a long scale-length representation of the geologic model.
FIGURE 4. A crossline and an inline show (left) initial brute stack

and (middle) final PSTM image, both in the time domain. The
right panel is the final RTM image in depth. Vertical exaggeration is approximately 5:1.
into the depth domain has enabled a revised and more

accurate geological model of the survey area.
Acknowledgments
The authors thank Crescent Petroleum and WesternGeco for permission to publish this article. Appreciation also is extended to
the many people who contributed to this project, including Luis
Herrera, Edgar Akobyan, Dave Morrison, Roger May, Olga
Zdraveva, Andreas Laake, Ahmed El-Zahaar, Abdallah Ibrahim,
Ayman Zaghloul, Wael Gamal El Din, and Ehab Metwaly.
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LAND
SEISMIC
Renewed challenges of
3-D seismic acquisition programs
Leaseholder issues can sidetrack the best land acquisition schemes.
Jim White, DAS
multitude of new wireless systems have been successfully deployed and used in recent 3-D programs
around the globe. Taking advantage of the cableless logistics of such a system as well as the reduced cost per channel incurred, most seismic companies have designed 3-D
programs that have seen dramatic increases in channel
count utilization.
Survey challenges
The efficiencies gained with the use of such systems have
allowed operators to increase data acquisition production.
But this has put a strain on the other phases of a geophysical operation. When a 3-D program in the US is dissected
from start to finish, specific phases can be identified that
make up the process. These include design, permitting,
surveying, seismic drilling (where applicable), data acquisition, data processing, and data interpretation. Each
phase has its own challenges, and generally one phase
cannot go forward without the others being successfully
completed before it. However, one phase has the greatest
impact on a programs timely success, especially in the US.
As seismic exploration continues to migrate into more
frontier and urban areas of the country, the front-end
service providers are becoming more critical to the overall
success of a 3-D seismic program. Specifically, the permit
phase of the seismic process has become the Achilles
heel. With the increased size of the programs and the difficult logistics facing the permit approval process, the time
and resources needed to successfully complete the job
have increased dramatically. Throwing additional
resources at the issue will have little to no impact on

reducing the time needed to finish the job. The result is
that, even with the better recording technology and the
efficiencies of the data recording phase, the speed of a
seismic program will still be limited by its slowest phase
the permitting. With most seismic operations idle crew
time can have a seriously damaging effect on company
profitability. Most investment analyst discussions pertaining to publicly traded seismic contractors have a recurring
theme: disappointment in the delays in execution. Therefore, more companies have committed to a better understanding of how they can manage their front-end services
and how to better use the resources available to them.
A proactive approach
The end recipients of a successful seismic program are the
oil and gas exploration companies, and their vested interest is paramount to helping solve the issue. The importance of their commitment is integral to paving the way to
a trouble-free seismic effort. Since leasing is the initial step
in an exploration effort, this process will set the stage for
the rest.
One way for E&P companies to alleviate the logjam is to
take a proactive approach to their oil and gas lease terms.
Too often, permit groups have been surprised by comments from landowners that, according to their lease, a
seismic program was not to be conducted. When faced
with an uncooperative leaseholder who has refused seismic entry (even though their lease allowed for it), oil
companies have been reluctant to exercise their rights
to do so. It is a simple process to correct this through
restraining orders or court injunctions. Additionally, a
simple nudge letter from the E&P company can act as
Seismic drilling in pristine areas continues to be a challenge for
the industry. (Images courtesy of DAS)
72
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LAND
SEISMIC
Seismic surveyors finish off the day

to a setting sun.
a great catalyst to heighten the awareness of all of the

uncooperative landowners.
Like a well-trained military platoon, once a leader falls
in line, all will follow. It seems the rationale from these
companies for the absence of any effort to force their way
is predicated upon the attitude that they do not want to
make waves with the landowner in the event that further
easement (exploration drilling or pipeline right-of-way) is
needed. The result of such inaction is a poorly acquired
3-D survey with limited geophysical attributes when imaging the subsurface. It should be noted that there seems to
be some frustration internally at the E&P companies
because most of the lack of effort comes from their land
departments and not from their geology and geophysics
groups. Clearly, a united effort from both internal groups
could help solve the issue, thereby saving much time and
effort and ensuring a well-imaged subsurface 3-D survey.
Seismic imaging is critical to all exploration efforts. Seismic imaging can bring inherent value whether a well is
drilled or not. If a well is not drilled due to seismic imag-
ing interpretation, those data have brought value to

both the oil company and the landowner. With all of
the emphasis on environmentally friendly approaches
to exploration, ridding the environment of unnecessary
dry holes can only support this cause.
As seismic technology continues to develop, the oil and
gas industry will need to be constantly aware of certain
limitations on its ability to speed up the process. Contractors must continue to reach out to the E&P companies to
take a more concerted effort toward seismic programs and
to help out where they can since it is likely that the problem of permit limitations will only get more challenging
moving into the future.
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DEEPWATER
RIG ADVANCES
Making deep water pay by first

drilling wells digitally
Todays software platforms can be employed to optimize deepwater operations
every step of the way long before the rig arrives on location.
Keith Tushingham and Ayn Becze, Schlumberger
ith a US $1 million/d average spread rate, deepwater operations demand that risk and uncertainty be
properly quantified. Operators would probably agree that
optimal use of integrated software mitigates risk; however,
they may disagree as to when software can have the most
impact on the deepwater process.
Validating deepwater prospects in an integrated E&P software platform is essential for success. Petroleum systems
modeling software is used to evaluate basin history and
understand its chronostratigraphic and structural development the thermal maturation of the source rock, expulsion of hydrocarbons over time, and eventual entrapment.
Prospect assessment is undertaken to model geologic
complexity, quantify risk, and examine the full range
of possible risked-prospect volumes. Using exploration
economics software to simulate exploratory drilling,
appraisal, and development activities delivers the range
of expected after-tax economic value. This enables oil
and gas companies to choose the best prospects and
drilling options, with a clear understanding of geological
and economic chances of success.
Enhancing seismic data to reveal the best drilling targets is key given the complex geological environment and
salt geometries that often mask potential deepwater targets and affect image quality. The seismic data also provide overburden information as well as foresight into
possible geomechanical issues, which account for 40%
of all drilling incidents. Wider azimuth surveys image
subsalt, advanced raytracing algorithms return energy
sources correctly, and prestack gathers help interpret
poorer data quality areas to illuminate subtle targets and
further reduce uncertainty.
This basin-to-prospect assessment is accomplished
within the Petrel E&P software platform, which supports
integration of basin analysis, prestack interpretation, geomechanical information, and economic analysis in a single environment.
Offset well information is then analyzed within the wellbore software platform to provide context for well plan76
Geomechanical risks for drilling, well construction, and well

survivability can be assessed and mitigated in the E&P software
platform. (Images courtesy of Schlumberger)
ning. The velocity model used for interpretation and modeling is refined and continues in real time while drilling
the first exploratory wells. Due to the pore pressure anomalies and irregular drilling conditions expected, a huge
focus is placed on the geomechanical model. Even at this
early stage the engineering team begins to create a concept design of how the field, if proven, will be developed.
Earth model uncertainties are analyzed in the E&P software platform using specific reservoir simulation software. Optimization and experimental design techniques
allow rapid analysis of multiple realizations to evaluate
numerous development alternatives with a clear understanding of the uncertainty related to reservoir properties, volumes, and the potential number of wells required.
Using integrated Microsoft communication technology,
the drilling team joins the collaboration space in the E&P
software platform environment to discuss and review
potential well plan options.
Well and network planning

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DEEPWATER
RIG ADVANCES
try for initial wells.

detailed flow modeling,
The trajectory is optiincorporating dynamic
mized based on pore
flow phenomena. Underpressure information
standing dynamic fluids
to maximize the safe
behavior is critical in subdrilling window and
sea environments. Given
optimize well and casthat long multiphase
ing design. Pore presflowlines are commonly
sure information
exposed to extreme
combined with litholtemperatures, simulation
ogy, stresses, and fluid
of transient conditions
behaviors establish the
to inhibit hydrates or
expected ROP allowother solids formation
Drilling operations software simulates dynamic pressure and flow-rate condi- is imperative in the overing users to better
tions to optimize well control procedures such as managing kick incidents.
understand whether
all system design.
ROP fluctuations are
Production advantages and beyond
due to lithology changes or drill bit failure.
Real-time information enables drillers to geosteer and
Production operations software gathers, cleanses, and
monitor formations to adhere to the optimized trajectory
aggregates all operational data types and events, including
and honor formation changes as they drill. Predictive capameasurements from real-time SCADA systems. It transbilities using look-ahead drilling tools assist when crossing
forms data into visual information, allowing engineers to
high-risk areas such as over-pressured zones or areas of
monitor operations from well tests and allocated volumes
high instability. The collaborative model is automatically
to the performance of electric submersible pumps (ESPs)
updated with real-time formation data, and properties are
to the levels of potentially erosive sand production and
redistributed and calibrated using seismic attribute data.
indicators on the condition of wells and equipment.
The reservoir engineering team can now establish the
Flow models built in multiphase flow simulation softrequired number of wells and their locations to successware during the development phase are continuously
fully develop the field using optimization routines.
updated with high-frequency measurements by the proOffshore deepwater operations now legally require
duction operations platform to reliably identify the causes
relief well contingency plans and kick-tolerance models.
of production problems. The same data can be visualized
Drillbench drilling operations software and dynamic
in oilfield management software where production engimultiphase flow simulators are used to design and model
neers can assign appropriate well decline rates and
wellbore and mud system dynamics. Well integrity plandecide when artificial lift or secondary recovery methods
ning includes an evaluation of realistic potential blowout
are required. Sensitivity tools in flow simulation software
scenarios, blowout flow simulations, and relief well condefine the number of ESP stages required to optimize
straints for intersection and kill operations. Drilling operproduction. Multiple scenarios are modeled to produce
ations software can be used to design these plans as well
the optimal pump configuration. Performance can then
as to evaluate potential technical and logistical problems.
be monitored and modeled to predict failures and issues.
Accurate monitoring and forecasting allows the approThe production team creates multiple models for the
priate allocation of capex and opex through the life of the
wells and flowlines to evaluate design alternatives. Initial
field in dedicated planning, risks, and reserves software.
casing design, flowline sizes, routings, and associated facilActual production data are brought back into the E&P
ity requirements are estimated based on expected producsoftware platform to update the history match of the
tion rates, fluid types, and production system constraints.
reservoir model.
Nodal analysis is run on each well to design the prelimiApproaching a deepwater project from exploration to
nary lift system specifications.
Ensuring flow in deepwater environments requires
production using a fully integrated software system with
designing and operating facilities within given tolerances
predictive modeling significantly mitigates the inherent
such as temperature, pressure, fluid composition, and
risks. From the first tentative exploration stages to planseabed topography changes. This allows users to plan for all
ning artificial lift requirements and optimizing produclikely eventualities, not just intervene when a problem
tion long-term, software can be used every step of the way
occurs. OLGA flow assurance simulation software allows
to ensure operators get it right the first time.
78
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DEEPWATER
RIG ADVANCES
Deepwater advances depend

on transition to closed-loop rigs
With the growth of a fleet of CLD-ready rigs, deepwater drilling operations are
poised to benefit from advantages based on closed-loop systems.
Andrew Barry and Guy Feasey,

Weatherford
losed-loop drilling (CLD) systems are the foundation

for the evolution of floating rigs able to effectively
address the challenges of ever-deeper drilling horizons. A
CLD system enables drilling modifications in three key
segments: riser gas handling; reactive early kick detection,
which is an adjunct to riser gas handling achieved with the
addition of mass-flow measurement; and a proactive suite
of managed-pressure drilling (MPD) methodologies
that are bringing nontraditional solutions to complex
deepwater drilling challenges.
These proactive methods, categorized as pressurized
mud-cap drilling, constant bottomhole pressure, dualgradient drilling, and returns flow control, provide a variety of specialized solutions. As these mature, the MPD
methods also are proving to be the basis for new technologies that further enhance deepwater drilling capabilities.
Despite the success of CLD systems and the potential
presented, the use aboard semisubmersibles and drillships
is limited by a host of cost, personnel, and deployment
constraints. Fully realizing CLD benefits in deepwater
applications requires a focused industry effort to develop
guidelines, procedures, and standards for equipment procurement, rig modification and design, and training.
Modifications were made to a semisubmersibles upper riser

package to accommodate the multipoint slip joint, RCD, and
80
CLD process
riser gas handling package for a pressurized mud-cap drilling
CLD refers to a process that circulates drilling fluid within

a contained, pressurizable system vs. conventional drilling
circulating systems that are open to the atmosphere. A
rotating control device (RCD) closes the loop by containing and redirecting annular flow from the wellbore away
from the rig floor to an automated MPD choke manifold.
Traditionally, the RCD is installed atop the BOP. On a
deepwater vessel, a more sophisticated RCD is installed
below the tension ring as an integrated part of the marine
riser system. The first RCD designed with below-tensionring capabilities was recently developed by Weatherford
and is being successfully used in deepwater applications.
variant of MPD operations in the deepwater South China Sea.

(Images courtesy of Weatherford)
Within the closed loop created by the RCD, changes in

pressure are easily detected and effected. Pressure and
mass-flow measurements provide real-time data that
inform manual or automated changes in choke settings.
Manipulating the MPD choke manifold varies annular
backpressure at the surface, which immediately increases
or decreases downhole wellbore pressure. Specialized software monitors, analyzes, and precisely controls the process.
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RIG ADVANCES
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Deepwater CLD
This manner of managing wellbore pressure lends itself to a variety of specialized
MPD methodologies that are key enablers in drilling wells that challenge or
defeat conventional drilling operations. In the Asia-Pacific region, for example,
pressurized mud-cap drilling provides the means to drill carbonate formations
where total circulation losses defeat the basis of conventional circulating systems.
For deepwater drilling the MPD solution takes the form of constant bottomhole pressure methods, which provide the precise wellbore pressure control
required to navigate extremely narrow drilling windows between pore pressure
and fracture gradient. The ability to dial in and hold a specific downhole pressure without changing mud weight provides a high degree of control and a first
response to fighting kick/loss cycles, wellbore instability, stuck pipe, and other
pressure-related problems.
MPD operations also introduce a new level of well control ahead of traditional
BOP and mud weight procedures. While conventional well control capabilities
remain fully functional, MPD enables a response that may preclude that use and
provides the data for a more informed well control response.
MPD advantages in deep water have been demonstrated in many challenging
or otherwise impossible applications around the world. For example, in a recent
deepwater well drilled offshore West Africa, an unstable zone and sharp changes
in pore pressure and fracture gradient led to the failure of two conventional
drilling attempts. MPD operations successfully mitigated the instability and kicks,
and the well was successfully drilled without borehole stability issues, underreaming, or contingency liners.
Riser gas handling

As the industry moves toward transitioning deepwater rigs over to CLD-ready
status, the modified rigs will have enhanced riser gas handling capabilities. However, it requires more than just a drillstring isolation tool and flow spool to make
a rig CLD-capable. Additional considerations in upgrading existing rig systems
may include higher volume mud-gas separators, higher circulating rate capabilities, and riser pressure capabilities. Also, any existing architecture constraints of
telescopic joints, ball joints, tension rings, etc., must be addressed.
In newbuilds these considerations will become part of the design parameters
and requirements, and thus CLD-capable rigs will be the default. The addition of
an early kick detection or MPD manifold to the riser gas handling system provides the rig operator with a proactive system that mitigates the specter of unanticipated gas in the riser.
In drilling the West Africa well, MPD provided an effective means of identifying
and handling riser gas. Riser gas occurs when a gas influx entrained in an oil-based
mud breaks out of solution as it is circulated to the surface. This typically occurs
about 610 m to 914 m (2,000 ft to 3,000 ft) below the drill floor. At this point the
gas is above the BOP in the riser and beyond conventional containment.
The gas is conventionally vented by using the rig diverter system, but this practice limits control and increases risk. With an MPD system the expanding gas is
quickly detected, surface backpressure is proactively applied, and the gas is circulated out to the mud-gas separator.
CLD rigs
Extending these CLD advantages to a broader scope of deepwater wells can offer
safety, operational, and economic rewards. But deployment can be hampered by
DEEPWATER
RIG ADVANCES
Riser degasing systems enable advanced riser gas handling

capabilities and facilitate the application of MPD techniques.
the ability of semisubmersibles and drillships that were

originally built for conventional open-to-the-atmosphere
circulating systems to readily accommodate a CLD system.
This lack of readiness manifests itself in a number of
ways. It is felt in defining the physical parameters such as
riser component configurations and inside diameters
(IDs), rotary table IDs, deck requirements, the availability
of experienced personnel, and basic cost efficiency. Ultimately, this low degree of readiness creates a bottleneck in
the deployment of MPD equipment.
Because MPD is used on a limited number of wells, each
MPD application typically begins anew. Variables such as
rig configuration and type of MPD application complicate
the transition. A lengthy training process for rig and operator personnel on safety and operational procedures is
often required. The relatively small number of applications
also makes MPD capital equipment expensive and lengthens the procurement times even for ancillary equipment.
Increasing industry access to MPD capabilities ideally

would be driven by mandates set by local and international governing bodies during applications for deepwater
drilling. In lieu of such commitments, a coordinated
effort between the E&P companies, drilling contractors,
and service companies to create a CLD infrastructure is
required. The most obvious means of achieving this would
be for the E&P companies to create the demand by requiring drilling contractors to standardize the integration of a
riser degasing system with the ability to incorporate an
RCD, thus allowing plug-and-play MPD.
Transferring the capital and thus the ownership of the
CLD-enabling equipment (a riser degasing system with an
RCD body) to the drilling contractor would require a new
set of competencies for the drilling crew but would serve
as a means to more efficiently use personnel on the rig.
Bridging these competencies would allow the service companies to focus on specific subsurface-related problems as
defined by the drilling engineering team and allow the
correct CLD methodology to be implemented.
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SAND AND PROPPANT/

FLUID MANAGEMENT
Proppant management
can improve return on investment
Proper selection of proppants impacts the cost of well completion
as well as production over the life of the well. Proper education and communication
will ensure the right proppant is selected.
Andrea Hersey, Momentive Specialty Chemicals Inc.
s the oil and gas industry rushes ahead to develop

unconventional resources, significant emphasis
has been placed on well optimization to maintain this
upward progression. Part of the increase in activity
is due to the E&P industrys ability to manage costs
while growing its long-term production. What once
were new technologies of horizontal drilling and multistage completions are now commonplace, and that
requires a significant amount of proppant and fluids
to enhance production.
Since proppants account for a large percentage of operational costs and well performance, E&P companies are
focused on best practices for managing this segment to
help guide decisions. Important considerations such as
proppant type and selection factors, lab testing vs. realworld performance, and new technologies are used to
make the right choice to get the best results.
size, strength, density, and cost, along with reference

(baseline) conductivity as a performance indicator. However, there are other multiple selection factors that must
be taken into account such as proppant fines generation
and migration, proppant embedment in the fracture face,
resistance to cyclic stress changes, and proppant flowback
and pack rearrangement in the fracture.
Baseline conductivity tests are still not able to take
many of these factors into account. Additional tests have
been created to better mimic the conditions that proppants are exposed to downhole. Effective conductivity
is a term used in the wet hot crush test that takes into
account all these factors by derating the baseline conductivity based on the results of the performance testing.
Proppant fines generation can be measured by performing this test, which exposes the proppant to temperature, fluid, and closure stress for a specified length of
time. This is unlike the traditional crush test, which is run
at dry, ambient conditions and was initially designed only
as a quality-control test and not as a performance test.
Common proppant types

Some of the types of proppants commonly used
are curable resin-coated sand (CRCS), precured
resin-coated sand (PRCS), uncoated frac sand
(UFS), and uncoated ceramic (UC). CRCS is the
only proppant type that bonds downhole, creating
a unified proppant pack to help keep the fractures open and prevent proppant flowback. This
leads to enhanced fracture flow capacity, maintaining proppant pack integrity and long-term
production increases.
PRCS is an older technology. The proppants
have a resin coating that encapsulates fines but
will not consolidate downhole. Therefore, it does
not give the added benefits of CRCS. UFS and
UC are uncoated substrates that have no resin
coating, so they do not bond in the fractures.
Different proppant types CRCS, UFS and UC are shown after being
84
Proppant selection factors and testing
tested with the wet hot crush test at 8,000 psi. (Images courtesy of
The traditional factors for selecting a proppant are
Momentive Specialty Chemicals)
SAND AND PROPPANT/

FLUID MANAGEMENT
Even more realistic is the cyclic stress test, which cycles

varying stresses on the proppant pack. The test mimics
the stress seen over the life of a well and measures the
percent fines generation to show how the integrity of the
proppant pack is maintained. Published research shows
that just a 5% addition of proppant fines can lead to a
60% decrease in fracture flow capacity, according to Society of Petroleum Engineers (SPE) paper 3298. CRCS has
the least amount of fines generated of all proppant types,
according to SPE paper 135502.
Another important and often overlooked factor for
proppant performance is quality. Proppant quality should
begin with the raw material entering the process, including quality checks during the manufacturing process and
to the well site, and finish with the continued performance over the life of the well. Evidence of poor quality
such as severe dusting, which causes a performance and
safety hazard, can be seen on site.
The operator must understand what the suppliers
proppant quality process is and check with field personnel to see how the proppant is handling on location. Also,
special attention needs to be given to those companies
trying to break into the proppant market.
Key E&P performance indicators

In addition to laboratory testing, proppant selection factors also must be tied to real-world production results by
comparing cumulative production, declines, and estimated ultimate recovery. Production studies also should
determine the return on investment by identifying at
what point the increased production overcomes any additional cost. For example, although CRCS has shown
increased performance over UFS, the additional cost
must be justified and time to payout calculated.
An additional way of looking at performance is on a
macro prospective. Statistically speaking, the larger the
dataset, the more normal the distribution becomes. Many
of the small operational differences become less impactful on the dataset. Another important cost assessment is
any added operational costs, even those seen on the production side. If proppant flows back and damages surface
and artificial lift equipment, significant incremental costs
are incurred. These are in addition to the lost production
and downtime for any repairs and replacements.
New technology
Momentive Specialty Chemicals released its Black Pro
and OilPlus proppants, both of which have unique resin
chemistries. Black Pro proppants have a quick bond time,
so the well can be turned around faster. These also have
resin rehealing characteristics, which are important for
The data from a Bakken case history showed CRCS resulted in a

34% average production increase per well over UFS.
maintaining proppant pack integrity during the cyclic

stress encountered over the life of the well. OilPlus proppant is designed for oil-rich and liquid-rich reservoirs to
enhance oil production and has been used in every major
oil play in North America.
E&P-driven specification
E&P engineers are now commonly specifying to the service company what type and specific proppant they want
based on key selection factors and well conditions. Even
when specifying, it is important to understand the type
and performance differences between the proppants to
ensure correct specification.
For instance, if a resin-coated proppant is specified on
the job design, this could be interpreted as either a CRCS
or a PRCS since both have a resin coating. Since both
types of proppant cost relatively the same, the preferred
option for the operator is a CRCS. Proper education and
communication will ensure the right proppant is delivered to the well site.
Big picture planning

The key to proppant management is to look at the big
picture and see how all the pieces interrelate, from laboratory testing to production results. One datapoint in isolation will not tell the whole story. The challenge for the
E&P company, which is the end user, is to ask questions,
seek out experts, and continue to be aware of the new
technology available. With this in mind the overall driver
for the industry should be a question of how to make better wells and how to do so more efficiently.
85
SAND AND PROPPANT/

FLUID MANAGEMENT
Improving performance while

reducing footprint using NADF
Advances in at-site treatment of NADF cuttings waste now enable the use of these fluids
for best operational performance with the smallest drilling waste footprint possible.
Tom Trigg, TWMA
here is a perception by some operators and regulators

that water-based drilling fluids (WBDFs) are better
environmental choices than nonaqueous drilling fluids
(NADFs) and that enhanced WBDFs may someday deliver
the performance of NADFs. However, NADFs are still
unrivaled for providing formation stability, lubricity, temperature stability, solids tolerance, hydrate suppression,
and protection from dangerous gases and for meeting
other operational challenges when drilling todays difficult wells.
When WBDFs consist of simple formulations useful in
shallow-hole drilling situations, they may be environmentally preferable. But when drilling deeper, more difficult
wells, the more complex WBDF concoctions formulated
may not be as environmentally acceptable.
It is true that the continuous liquid phase or carrier
fluid of NADF is the nonaqueous base fluid (NABF),
while the continuous liquid phase of WBDF is water or
brine. However, using TWMAs thermomechanical desorption processing solutions the TCC RotoMill or TCC
RotoTruck more than 99% of the NABF can be successfully recovered from the NADF cuttings waste stream.
With the advent of TWMAs at-site thermomechanical
desorption capability, the solution to both operational and

environmental challenges often is to drill with NADF and
treat the drill cuttings outfall to remove and recover the
NABF. By coupling NADF and at-site treatment, operators
are able to recoup drilling waste treatment costs since they
can recover and reuse undamaged NABF at site.
Not known or considered in detail by many operators or
regulators is the potential of this emerging at-site cuttings
treatment capability to enable optimal operational performance while simultaneously reducing the environmental footprint.
Volume comparison
Of concern is the extremely large volume of increasingly
complex WBDF required compared to the much smaller
volume of NADF to perform the same drilling operation.
As an example, consider the use of WBDF to drill 3,048
m (10,000 ft) of 8.5-in. hole a gauge hole volume of 702
bbl. Solids removal efficiency for WBDF varies widely, but
70% is considered above average. This means that of the
formation drilled, typical solids removal equipment on the
rig may remove only seven-tenths or less. This is because
even the most high-tech WBDFs are dispersive to many
formation solids. The resultant 30% of fine-drilled solids
that remain entrained in WBDF must be adjusted to an
acceptable solids content typically to a target equal to or
less than 6% drilled solids by dilution.
The dilution volume required to dilute the 30% of
drilled solids down to the 6% drilled solids tolerated in
WBDF will generate 3,509 bbl of new WBDF dilution. This
represents about 5 bbl of dilution generated for each barrel of gauge hole drilled. Most of this large volume
becomes waste.
To meet the ever-increasing challenges of todays highly
complex well architecture, organic materials including
hydrocarbons may be required and used to improve the
lubricity of WBDF. With a treatment of 5% of an organic
lubricant added and maintained in the drilling fluid, the
volume of lubricant added to the 3,509 bbl of WBDF genThe TCC RotoTruck easily fits within the footprint of a drilling
pad in South Texas. (Images courtesy of TWMA)
86
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FLUID MANAGEMENT
erated is 175 bbl. With a lack of practical

and effective solutions to remove
entrained lubricant from WBDF waste
streams, this volume of organic materials
will ultimately end up in the environment.
Also, in attempts to improve inhibition,
various salts and other materials are common additives to WBDF. But similar to the
situation with organic materials, current
methods for removing salts from WBDF
Using thermal processing technology, a TCC RotoTruck recovered NADF on locawaste streams are ineffective or impractition in South Texas.
cal. Therefore, even if clean liquid could
so only the 10% of solids not removed would require
be effectively recovered, it could still have high salt
dilution to solids-content specifications. Drilling the same
content, usually rendering it unacceptable for reuse.
702 bbl of formation with NADF necessitates only 1,170
Offshore, salt content in WBDF waste discharge
bbl of dilution or only 1.7 bbl of dilution per barrel of
is probably of slight environmental consequence,
hole drilled.
but onshore it has significant implications for
For example, 702 bbl of cuttings multiplied by 0.1
groundwater and soil contamination.
equals 70.2 bbl of cuttings not removed by solids removal
Due to their inhibiting capability, NADFs often achieve
equipment; 70.2 bbl of cuttings not removed divided by
solids removal efficiencies equal to or greater than 90%,
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SAND AND PROPPANT/

FLUID MANAGEMENT
6% solids targeted for NADF would generate only 1,170

bbl of NADF dilution.
Approximately 702 bbl or more of NADF will accompany the wet NADF formation cuttings from the solids
removal equipment (a one-to-one ratio of NADF to cuttings is common), and another 702 bbl of NADF will be
required to fill the new hole drilled. So 1,404 bbl of NADF,
or 2 bbl of NADF per barrel of formation drilled, are
required to replace NADF lost with cuttings from the
solids removal equipment and to fill the new hole drilled.
This is more than enough to dilute unremovable drilled
solids to specification.
Reuse solutions
Unlike much of the WBDF generated and then disposed
of with cuttings, NABF lost on cuttings can now be essentially totally removed and recovered for reuse. Thermomechanical desorption processing technology can reduce
NABF content on NADF cuttings outfall to less than 1%,
and this low content of NABF is proven to have a negligi-
ble impact on the environment. This is even more true if

NADFs are compounded using an ultra-low aromatic content NABF.
In the preceding comparative examples there would be
150 bbl less of organic material and usually much less salt
from NADF cuttings waste after treatment than from
inhibitive WBDF wastes.
Thermomechanical desorption processing technology
can be positioned on onshore or offshore rigs to suit individual projects. Whether onshore, offshore, or in remote
locations, this solution can take advantage of the drilling
performance capabilities of NADF while simultaneously
improving environmental performance and recovering
NABF for reuse.
If a drilling operation would benefit from the use of
NADF, the question from operational, environmental, and
overall cost perspectives is, Why not couple NADF and atsite thermomechanical desorption to improve drilling performance, reduce environmental footprint, and recover
valuable NABF?
Bakken Shale / North Dakota

Multiple wells:avg.96oo-ft laterals
Avg.24-hr IP rate: 2578 boe/d
9o-day avg.production rate:795 boe/
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on numerous wells. He knows we 'll work as a team to improv
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89
SAND AND PROPPANT/

FLUID MANAGEMENT
Making the case for advanced

ceramic proppants
New proppant shows increase in oil, gas production volume and speed during field-testing.
Mark Mack, Oxane Materials
he purpose of a hydraulic fracture treatment is to construct an areally extensive conductive proppant pack in
the reservoir. Two key challenges are transporting the
proppant all the way into the fracture and the resulting
pack remaining highly conductive for the life of the well.
In low-permeability reservoirs hydraulic fracture
design focuses more on creating fracture length than
conductivity because surface area strongly influences
production. Surface area is more important in ultra-low
permeability reservoirs such as shale. Hydraulic fractures
are often designed to promote development of a fracture
network because surface area in a network of created
and natural fractures is much larger than in a simple
planar fracture.
In a 20-well field test OxBall, an advanced ceramic proppant, was shown to improve cumulative 12-month production by 20% relative to conventional intermediate-strength
proppant (ISP).This improvement is a result of the properties of this engineered proppant. The beads are lighter due
to a hollow core and are strong because they are ceramic.
For example, an engineered proppant bead with the
strength of typical ISP is 20% lighter than ISP with roughly
the same density as sand. In contrast to conventional topdown ceramic proppant manufacturing, a bottom-up
process is used to coat ceramic cores with layers of mixedmetal oxide. The process yields beads consistent in
strength, size, sphericity, and surface smoothness. Consistency is achieved by controlling the internal porosity of
the individual beads (Figure 1). The properties of these
engineered beads can translate into superior proppant
transport and conductivity in slickwater fracturing.
Transport and conductivity
FIGURE 1. An advanced ceramic proppant (top left) is more

spherical and smoother than conventional ceramic proppants
(top right). The cross section of a single bead of the engineered
proppant (bottom left) shows the hollow core and microporous
shell compared with the numerous large pores, which weaken
the conventional ceramic proppant (bottom right) (Images
courtesy of Oxane Materials).
90
Historically, proppant transport into hydraulic fractures

was managed by pumping viscous fluids in which proppant grains settled very slowly due to gravity. Ideally, very
little proppant settled into a bank at the bottom of the
fracture during pumping. After pumping when the fracture closed, the proppant was held in place by the closure
pressure exerted by the reservoir rock.
In the modern era thin fluids such as slickwater are used
to increase hydraulic fracture surface area and reduce
cost. Unfortunately, these fluids lack the viscosity to prevent rapid density-driven proppant settling. The much
lower density of the engineered beads increases the distance the proppant flows into the fracture before falling
into the bank at the bottom of the fracture.
Hollow ceramic beads have a higher coefficient of restitution than typical ceramic beads and a much lower
propensity to cluster when settling. Proppant transport in
slickwater fractures is governed by very different physics.
Instead of a small bank at the bottom of the fracture,
much of the proppant quickly forms a dune similar to a
sand dune in the desert. The proppant dune advances
along the fracture by saltation, in which particles on the
surface of the dune are repeatedly resuspended into the
flowstream and carried a little further before redepositing.
SAND AND PROPPANT/

FLUID MANAGEMENT
The active surface layer of a dune of the beads is thicker

because the beads are lighter than standard ceramic proppants and the coefficient of restitution is greater. The
beads are more easily resuspended and swept higher into
the flowstream, which carries the beads further before
redepositing. The combined effects of friction, density,
and coefficient of restitution thus result in deeper penetration of the proppant beads into the fracture.
The conductivity of a proppant pack is key to production. Conventional wisdom suggests that conductivity is
not very important in unconventional reservoirs because
even poor pack permeability is much higher than the
reservoir permeability the so-called infinite-conductivity fracture. However, it has been shown that good conductivity is required even far from the wellbore. In that
region the fracture is so narrow that every grain counts.
Near the wellbore, the fracture must be conductive to
avoid choking the oil and gas streaming from the entire
created fracture network into the limited area around
the wellbore.
FIGURE 2. The offset well production is compared with OxBall

production over a 12-month period. Production scale is not
shown per operators request.
The properties of the engineered proppant are key to

transport in this environment. The spherical beads exhibit
a lower friction coefficient than conventional ceramic
proppants, resulting in a shallower dune. A given volume
of proppant will travel farther into the fracture. For example, with the lab-measured difference of 23 vs. 30 angles
of repose, these beads will move almost 30% deeper into
the fracture, even if all the other properties were identical.
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SAND AND PROPPANT/

FLUID MANAGEMENT
improvement from using the engineered proppant peaked

around 20% at three months, dropped as low as 10% at 12
months, and then began to improve. At 16 months the
cumulative production from the wells with engineered
proppant was 14% higher than that from the offset wells.
Operational changes to the job schedule affected the
three-month results. Over a longer timeframe of six to 12
months, interference was observed between closely spaced
wells so that wells in the corner of a section performed better than wells on the edges, which in turn outperformed
interior wells. A full statistical analysis adjusting for these
effects isolated the effect of the proppant as an average
of 20% improvement in 12-month cumulative production.
In Figure 2 the offset well production is compared with the
OxBall production, adjusted for the effects of well location
and proppant stage volume variations. The benefit of
pumping the engineered proppant ranges from a low of
7% to a high of 34% in these wells.
Standard conductivity tests demonstrate how the properties of the individual beads of the engineered proppant
translate into better performance, especially at higher
stresses where the conductivity is as much as 75% higher
than conventional ceramic proppants.
Field test results

The ultimate test of any new stimulation technology is the
impact on the production of oil and gas. By the end of
March 2013 the engineered proppant had been pumped
into 34 wells for five different operators by five different
pumping companies. One operator in the Permian basin
performed a 20-well field test specifically to determine the
benefit of using the engineered proppant. Ten wells were
stimulated with OxBall and 10 direct offsets with conventional ISP. As a result of numerous serious operational
issues on one job, only nine pairs could be used for analysis.
For three of the pairs, the field operation went very well,
and the wells were in comparable locations. Production
results could be compared directly. The production
References available.
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SAND AND PROPPANT/

FLUID MANAGEMENT
New options in scale,

bacteria management
New control chemistries help operators keep wells producing
and prevent degradation of production value.
Shahnoz (Nozi) Hamidi, BWA Water Additives
n the business of recovering oil and gas and keeping

wells producing at high yield, scale and bacteria are
unwanted obstacles. Specialty chemicals such as polymeric scale inhibitors and microbiocides play an important role in removing these obstacles as well as reducing
the risk of related side effects such as microbiologically
induced corrosion. Choosing the right specialty polymer
to prevent the buildup of topside scale and to inhibit the
formation of scales downhole can mean all the difference
in uninterrupted well production and prolonging the
need for squeeze treatment. Equally important is choosing the proper specialty microbiocide that can effectively
control sulfate-reducing bacteria (SRB), which can lead
to souring of gas, as well as acid-producing bacteria
(APB), which can lead to premature corrosion.
High-performance scale inhibition
their profile of persistence (in the environment), bioaccumulation, and toxicity. In the North Sea, for example,
UK and EU operators tend to adopt the requirements of
the Convention for the Protection of the Marine Environment of the Northeast Atlantic (also known as the OSPAR
Convention). North Sea operators are often concerned
about the environmental profile of chemical treatments,
particularly biodegradability. Like phosphonates, typical
biodegradable polymers such as polyasparate (PASP) also
fail in HP/HT environments.
New oilfield anti-scalant

In response to these regulations and the general industry
need for high-performance scale inhibitors that work
under HP/HT conditions, BWA Water Additives has introduced Bellasol S65, a biodegradable anti-scalant effective
for both barium sulfate and calcium carbonate scale inhibition and hydrothermally stable to 180C (356F) at pH
Level 12. Bellasol S65 meets the highest OSPAR standards
and also is biodegradable (70.2% in 28 days per Test 36 by
the OECD). Bellasol S65 is compatible with other oilfield
additives and is not weakened by the presence of oxidizing biocides used at normal dosages.
As more wells are being drilled at greater depths, higher

temperatures and higher pressures are being encountered. In these harsh environments, typical low-cost scale
control agents like phosphonates
functionally fail as they cannot withstand such high pressures and temperatures. Additionally, in an HT/HP
environment, the rate of inorganic
scale formation increases greatly, thus
exceeding the typical performance
profile of phosphonates and requiring
high-performance scale inhibitors that
can control not only common scale
species like barium sulfate and calcium carbonate but also iron and difficult-to-remove scales such as lead
sulfide and zinc sulfide.
Further complicating an operators
choice of scale inhibitor options is
that in some areas regulations have
FIGURE 1. Dynamic tube block tests show that Bellasol S65 outperforms PASP for calcium carbeen developed that limit the use
bonate inhibition even at lower dosages than PASP. (Images courtesy of BWA Water Additives)
of certain chemistries based on
94
SAND AND PROPPANT/

FLUID MANAGEMENT
FIGURE 2. Bellacide 350 exhibits rapid biocidal activity against SRBs under
typical hydraulic fracturing conditions.
plugging, and APBs can cause premature corrosion of well infrastructure.

One of the oldest, cheapest biocides used in
the industry is bleach, which presents significant worker safety and handling risks and can
prematurely corrode infrastructure. Other
widely used biocides include nonoxidizers
such as glutaraldehyde and glutaraldehyde
blends. These nonoxidizing biocides provide
fast but not long-lasting kill of bacteria and,
more importantly, present safety and handling
risks as glutaraldehyde is classified as a skin
sensitizer. Oil and gas companies have been
abandoning such biocides in favor of
chemistries that are easier and safer to handle.
Fast-acting, long-lasting biocide
FIGURE 3. This figure shows Bellacide 350s effectiveness against APBs

after 28 days.
Although Bellasol S65 was developed with a goal of

achieving best-in-class biodegradability, BWA is finding
that global oil and gas companies are choosing it purely
for its performance profile. Figure 1 depicts simulation of
actual oilfield conditions via dynamic tube block tests that
are more severe than typical static jar tests. This figure
shows that Bellasol S65 outperforms PASP for calcium
carbonate inhibition even at lower dosages than PASP.
When dosed at 4 ppm and 2.5 ppm, PASP fails in less
than 30 and 60 minutes, respectively, as evidenced by a
change in pressure greater than or equal to 1 psi. Bellasol
S65, however, continues to inhibit calcium carbonate
even after two hours.
Biocides for improved health, safety

Biocides are commonly used to kill bacteria and to prevent the accumulation of biofilm. Biofilm is difficult to
remove, accumulating downhole and adhering to the surface casing of the well. Once accumulated, biofilm can
cause energy issues due to increased frictional resistance
and can provide an active food source for bacteria such as
SRBs and APBs. SRBs can lead to souring and formation
In response to the industrys desire for better

biocides that are safer to handle, BWA introduced Bellacide 350, a high-performance
nonoxidizing biocide and safer alternative to
traditional biocides used in the oil and gas
industry. Bellacide 350 is based on tributyl
tetradecyl phosphonium chloride, one of the
first biocidal actives approved by the US Environmental Protection Agency nearly a decade
ago. Bellacide 350 is not a skin sensitizer, is
not subject to any exposure limits, and thus is
safer to handle than glutaraldehyde.
Although Bellacide 350 was developed with a specific
safety and handling goal in mind, BWA is finding the
industry is choosing its new biocide due to its unusually
high performance. Unlike typical oxidizers that are simply
fast-acting and typical nonoxidizers that are simply longlasting, Bellacide 350 exhibits both capabilities.
As shown in Figure 2, the biocide exhibits rapid biocidal activity against SRBs under typical hydraulic fracturing conditions (with pH Level 7 and total dissolved solids
content of 20,000). In one hour Bellacide 350 achieved
complete kill at dosages 75% less than glutaraldehyde.
At typical high downhole temperatures, this biocide has
a long-lasting complete kill impact on APBs, thus controlling microbially induced corrosion. Figure 3 shows its
effectiveness against APBs after 28 days.
Another important advantage of Bellacide 350 is its
compatibility with oilfield treatment fluids, which can
become damaged by biocides that interact negatively with
viscosifier or friction-reducer components. Compared to
traditional biocides, Bellacide 350 is more tolerant of
anionic polymers and is well suited for use in combination with cellulosic fracturing fluids.
95
UNCONVENTIONALS:
PERMIAN BASIN
Resurgence in the Permian basin

Technology opens new areas while unlocking additional potential
in established Permian basin plays.
Staff Report
hanks to the recent resurgence of activity in the Permian basin, an area well-versed in the roller coaster
nature of the business, operators in the area are once
again singing its praises. Activity in the basin is humming right along, and it is a tune that many in attendance at the recent Hart Energy DUG Permian Basin
conference in Fort Worth, Texas, were excited to hear.
Pros and cons

In taking a closer look at some of the hot plays and what
drives their popularity, Mike Wichterich, president of
Three Rivers Operating Co. II LLC, opened his presentation by exploring the Wolfcamp shale, the Bone Spring
formation, the Wolfcamp shale, and the Cline shale.
What is great about this area is we have lots of well
control, Wichterich said. Well control means we generally understand where the rock is. The mystery is how it
gets developed.
This is perhaps not so mysterious after all. Wichterich
examined each play by studying the number of wells
drilled each year. The Wolfberry and Bone Spring both

have exhibited similar tendencies. Over the years wells
are drilled out to the edges of the play, and subsequently
the density of wells near the center increases. The Wolfcamp is showing similar tendencies, and it is likely that
the Cline will follow suit.
However, he said that the relative depths of these plays
mean that the Cline and the Mississippi, which are
deeper plays, will struggle to be as economic as their
shallower neighbors.
To date, were seeing that the Cline has some really
good wells, he said. But we havent seen better wells
than the Wolfcamp. Its probably a little less economic,
at least today.
Overall, he said, the Midland basin is notable for its
drilling inventory. The four largest producers average
almost 12 years of drilling inventory. The wells are
expensive, and many of them need to be drilled to
achieve economies of scale.
If you have a 250-mile by 300-mile [402-km by 483km] basin, thats 48 million acres, he said. Lets say
that only 10% of that acreage is prospective. Now were
down to 4.8 million acres. If we divide by 1,000, thats
4,800 units like the one Pioneer paid [US] $180 million
for. Thats $686 billion of investment.
Pioneer does not have $686 billion. Apache does not
have $686 billion. Were going to see a lot of players
come into this. It will not be the Pioneer and Apache
shale; it will be the all of the people in this room shale.
Its a phenomenal play, he added.
One Approach to the Wolfcamp

A widespread, thick, consistent, repeatable play, the
southern Midland basins Wolfcamp oil shale play has
attracted some of the worlds major players. J. Ross Craft,
president and CEO of Approach Resources, shared with
conference attendees how the company is maximizing
the Wolfcamps resource potential through horizontal
drilling techniques.
Apache has identified 520,000 net acres that are Cline prospective and plans more than 20 horizontal wells to test the formation in 2013, according to John Christmann, vice president for
Apaches Permian basin unit. (Images courtesy of Tom Fox)
96
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UNCONVENTIONALS:
PERMIAN BASIN
This play could have 14 billion barrels to 20 billion

barrels of recoverable reserves on it, which would make
it the largest find in US history, Craft said. I think
thats a major accomplishment.
With just slightly under 100 MMbbl of proven reserves,
99% of which are in the Permian basin, Approach operates 167,000 gross acres in the area. The company has
identified more than 2,000 horizontal drilling locations
targeting the Wolfcamp oil shale play and is currently
running three horizontal rigs.
Since focusing its resources on the Wolfcamp shale,
Craft said the companys oil percentage ratio has gone
up nicely, with strong organic production growth
driven by oil from its horizontal drilling operations.
Weve tripled oil production since 2009, and now it
looks like we have derisked a big chunk of our acreage,
he said.
The Wolfcamps thickness sets it apart from other
plays. With the upper portion measuring 274-m to 335-
m (900-ft to 1,100-ft) thick at depths of 1,676 m to 2,438

m (5,500 ft to 8,000 ft), completions can be challenging
at times. But thats what makes this place so unique,
Craft said.
He noted the plays three productive benches, which
enable the company to drill stacks to tap its enormous
potential with estimated oil and gas in place of 119
MMboe to 182 MMboe per 640 acres. The play is located
in the peak oil generation and early gas generation window. With a porosity of about 7%, the Wolfcamp also has
a high density of natural fractures observed in whole
cores, image logs, and 3-D seismic data.
I cant emphasize enough that its not the drilling
of these wells, its the completion of these wells that
makes them do what they do, Craft said. When drilling
the plays three benches the A, B, and C benches
Approach used slickwater instead of gel and limited
friction-reducing agents. You have to be careful in the
A bench. If you get too far up in the A bench and you
Permian basin gives company its best economics

Formations plays lead to promising returns.
s a holder of one of the largest leasehold positions in

the Permian basin, Devon Energy continues to experience strong growth in the area. The Permian, sitting at
the top of Devons risked resource list at 2.8 Bboe, is home
to around 3,600 producing wells for the company.
There are several reasons the Permian attracted
Devon, Andy Coolidge, Devons vice president for the
Permian basin, said. Its truly an amazing basin with
thousands of feet of stacked pay and a long history of
production. There are a lot of different ways to make
money in the Permian from several different zones to
choose from at a wide range of depths.
With exploration and development programs in multiple Permian plays, including the Delaware, Bone
Spring, Wolfcamp shale, and Cline shale, Devon
increased production to an all-time high of more than
68 Mboe/d in 1Q 2013, up 21% from 1Q 2012. Currently, Devon has 29 rigs operating in the Permian.
In Devons Delaware and Bone Spring horizontal
plays, the company has 185,000 net acres. Oil and NGL
account for about three-fourths of production.
Some of the companys best economics are in the
Permian basin, and some of the Permians best economics are in the more conventional plays like the
Bone Springs-Delaware sands, Coolidge said. While
98
theyre not as unconventional as the Wolfcamp shale or

the Cline, they stack up very well.
In September 2012 Devon closed a $1.4 billion joint
venture agreement with Sumitomo Corp. a deal that
gave Sumitomo a 30% interest in Devons approximately 650,000 acres in the Cline shale and Midland
Wolfcamp shale. Devon serves as operator in the plays.
We are very excited about the Midland Wolfcamp
shale, Coolidge said. In 2012 we drilled about 21
wells there and plan to drill up to about 92 wells this
year. Were seeing strong results and good production.
In the Cline shale area on the eastern bank of the
Midland basin in West Texas, Devon has been steadily
ramping up drilling.
Our partnerships acreage in the Cline shale is
556,000 net acres after our agreement with Sumitomo,
Coolidge said. We have about 11 wells drilled to date
and plan on drilling about 30 wells in 2013.
He added that the company is in the early stages
of evaluation in the play, and its strategy is to drill
a wide range of areas that cover several counties for
data collection.
We are very encouraged with some of the early
results, but we have a ways to go before we turn that
into development, he said. We are still exploring. n
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break out of the Wolfcamp, you have a major frac gradient change,
he said.
Using slickwater can prevent drilling operations from getting too
much height, which can be a helpful factor to consider when looking
at fracability.
It takes more than one run to drain this thing, Craft said. And think
about this when you have 1,200 ft [366 m] of column: Think of this not as
individual wells, but as how are you going to drain the column. Thats how
you have to look at it.
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Cline activity climbs

Acquiring substantial Permian basin resources was the easy part. For
Apache Corp., creating an orderly process to accelerate development of
34,000 Permian basin locations spread across 1.6 million net acres
roughly a 50-year inventory is the challenge.
There is a ton of resource out there for us to get after over the next several decades, John Christmann, vice president for Apaches Permian basin
unit, told attendees at the conference.
Apache came across its substantial tight oil formation holdings in the Permian basin the old-fashioned way: After spending significantly on Permian
acquisitions that culminated in 2010 with $7 billion for BPs North American onshore assets and $3.9 billion for Mariner Energy, the company found
itself atop multiple prospective tight formation oil plays, including the
Cline shale.
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Apache currently operates more than 12,000 wells in

the Permian basin. Its holdings are scattered across the
regions three major geologic provinces, including the
Delaware and Midland basins and the Central basin platform that separates the two sub-basins into a butterflyshaped geologic province.
Most of the companys focus in 2013 will be on its Midland basin properties. According to Christmann, Apache
has nearly 1,000 Wolfcamp shale locations in the Midland basin with a potential 347 MMboe and another
3,321 potential locations in the Cline shale with a potential 642 MMboe. The company also has more than
17,800 locations that can be drilled vertically in the Midland basin that could produce 1.7 Bboe.
To date, Apache has proved up reserves in 11 horizontal plays in the stacked formation cornucopia
that comprises hydrocarbon potential in the Permian
basin. Apache will target nine plays horizontally in
2013 including the Avalon shale, Bone Spring, and
upper Wolfcamp in the Delaware basin and the
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Apache is currently running a six-rig vertical program at Deadwood and is looking at downspacing from
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TOPSIDES
SOLUTIONS
Reducing risk, delivering benefits

for topsides inspection
An aerial ROV solution has given Centrica a vital eye in the sky to help it carry out
improved offshore inspection operations with lower risks.
Mike Astell, Centrica Energy Upstream
il and gas operators are increasingly engaging

remotely operated aerial vehicle (ROAV) technology to reduce personnel risk and improve efficiency by
cutting back on nonproductive time required for asset
inspection activity.
Advances in ROAV design mean the small-scale vehicles, which use helicopter rotor technology and feature
high-definition cameras, can be deployed to complete
visual checks while operations are still under way.
Previously, such activity was carried out using rope
access specialists, which required a full shutdown of the
asset and posed a high-risk activity in often challenging
weather conditions. These projects can traditionally last
for several days.
ROAVs can enable operators to survey assets without the
need for shutdown or exposing teams to additional risk.
ROAV use pioneered in East Irish Sea

Centrica Energy Upstream has pioneered the use of
ROAVs in offshore inspection in the East Irish Sea,
with flights carried out by remote technology specialist
Cyberhawk achieving major cost and time savings. Similar to underwater ROVs in subsea operations, which
can be deployed in place of divers, the aerial technology
has been created by adapting principles used in military
hardware. The craft are similar to unmanned aerial vehicles (UAVs) or drones that are normally used in warzones and have been specifically developed for use in
civilian applications.
An ROAV is elevated on eight rotors, is less than 1 m
(3 ft) in length, and weighs less than 4 lb. The technology
carries still, video, and thermal cameras. Battery-operated, it avoids the need for liquid fuel to be used on site,
meaning one less hazard.
While the craft are capable of flying several kilometers
beyond control equipment, they are operated within the
line of sight to meet strict safety and regulatory provisions.
They are operated by a specialist offshore ROAV pilot,
who controls the crafts position in the air, and an off104
shore inspection engineer, who monitors the live video

feed streamed from the air, analyzing data and capturing still images.
All ROAV activity is regulated by the Civil Aviation
Authority. All craft must be operated within line of sight
in the UK to ensure they do not pose a hazard to other
airspace users.
Temperature extremes
Built predominantly from carbon fiber, the technology
can operate in extremes of temperature with work carried out in the last British winter where air temperature
with wind chill was as low as -15C (5F) with 25-knot
winds while surveying asset components with temperatures running to 300C (572F).
High-definition camera arrays provide detailed
imagery in a live feed to inspectors and engineers on
the asset floor offering a step change from the use of
full-scale helicopter inspection and people deployed on
rope systems used to date, both above and below deck.
Centrica deployed an ROAV, operated by Cyberhawk,
to inspect the flare tip on the Morecambe Central Platform in the East Irish Sea off the west coast of the UK,
At Centricas Central Morecambe Platform complex in the East

Irish Sea the operator used the ROAV solution to inspect the
condition of the flare tip while still flaring instead of having to
deploy inspection teams using traditional rope access methods. (Images courtesy of Centrica Energy Upstream)
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"'
TOPSIDES
SOLUTIONS
Images can be streamed live back to inspectors on the topsides

platform deck. Centrica is now planning to use the ROAV solution
to carry out inspection work on other platforms in the area.
representing the first time this new inspection technique had been used in the area.
Flare tips operate at very high temperatures in excess
of 300C and face extreme weather far out at sea, where
they are open to corrosion. There is the potential for
them to crack and, in a worst-case scenario, they can
detach from the asset.
The ROAV acts as a diagnostic tool, providing information on the condition of our assets without the need
to expose inspection teams to the risks attached to
any rope access operation, Gary Livingston, senior
mechanical integrity engineer at Centrica, said. An
ROAV was deployed to take detailed close visual inspec-
tion images of the flare tip on Central while it was still

burning ahead of planned works to replace it during a
forthcoming shutdown.
Completing the flare tip inspection in service in this
manner was previously not possible using traditional
rope access techniques since they must be carried out
during the planned shutdown itself to be safely completed, he continued.
Live streaming images

Images sent back to inspectors on the deck, streamed
live in the same manner as a subsea ROV, showed no
degradation of the flare tip beyond that recorded at a
previous inspection, allowing postponement of the
work until a longer shutdown scheduled for the following year.
ROAVs have been tested flying under decks and
drilling derricks in the North Sea, and the technique
was recognized during industry association Oil and Gas
UKs 2012 Business Efficiency awards.
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106
TOPSIDES
SOLUTIONS
We carried out focused R&D to allow our remote

inspection solutions, initially used for the inspection
of flare and chimney stacks at onshore refineries, to be
used specifically in the more challenging offshore environment, Craig Roberts, CEO of Cyberhawk, said.
Using an ROAV to inspect live assets enables operators to assess conditions and make informed decisions
about shutdowns, reducing the risk of budget and
timescale overruns and often enabling shutdowns
to be postponed if asset condition is better than first
thought, he added. Cyberhawks ROAV also reduces
or eliminates the need for Centrica staff or contractors
to work at height, dramatically reducing the overall project safety risk. These cost and safety benefits represent a
step change for the industry.
Other operators are now following that lead, and
the potential for ROAVs to be used for more than
inspection work definitely exists as the flight range of
the airframes is extended and the quality of imaging
technology continues to improve, he said.
Completing a close-up inspection of a flare tip in service was

previously not possible, with temperatures in excess of 300C and
any inspection having to wait for a planned shutdown due to
safety reasons.
The remote monitoring program will now be extended

by Centrica to include the inspection of the underside of
a number of its other East Irish Sea platforms.
The use of ROAVs to inspect assets and components
before shutdown was initially established as best practice
at onshore refineries after being employed to enable
better planning of turnarounds and shutdowns.
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107
TOPSIDES
SOLUTIONS
Winch system
lightens load on Perdido
Having a facility more than 300 km (186 miles) offshore connected
to ultra-deepwater subsea equipment that needs regular servicing means operators
are looking for topsides solutions that can reduce cost.
Martijn Schols, Doedijns Group International
he Perdido spar is the worlds deepest direct vertical

access spar and is operated by Shell on behalf of its
partners BP and Chevron. The platform is a massive
structure, weighing 55,000 tonnes, nearly as tall as the
Eiffel Tower, and moored in 2,450 m (8,000 ft) of water.
It acts as a production hub for three fields Great
White, Tobago, and Silvertip in the Walker Ridge area
of the Gulf of Mexico and has been producing since
March 2010. The spar receives, processes, and exports
oil and gas from reservoirs located within a 48-km (30mile) radius. The Tobago field, in 2,925 m (9,596 ft) of
water, is the worlds deepest subsea completion.
With 22 direct vertical access wells connected to the
spar and an additional 13 tiebacks from subsea completions, this means the equipment must be changed out
and serviced at regular intervals.
Rather than deploying offshore service vessels to the
remote development, located approximately 322 km
(200 miles) off the coast of Texas, the Perdido spars
design includes a winch system that allows the platform
to service the subsea equipment itself.
Payload challenge
Handling payloads up to 43 metric tons in 2,925-m water
depth can be a challenge. A traditional steel wire rope to
reach this length would weigh almost 40 metric tons.
This would double the necessary lifting capacity of the
winch, resulting in an increase in its required size and
therefore causing significant structural modifications to
the spar something that Shell did not want as it focused
throughout the Perdido project on lightening the topsides weight as much as possible.
To solve this problem, it was decided to move ahead
with a traction winch using fiber rope.
The winch was designed from concept all the way to
installation by Logan Industries, based in Hempstead,
Texas. Logan is part of Doedijns Group International
(DGI) of the Netherlands.
108
Shell carried out a stringent exercise to ensure the weight

of the Perdido spar platforms topsides was as light as
possible, but the inclusion of the winch with its economic
benefits in terms of the reduced use of offshore vessels
was deemed necessary. (Image courtesy of Shell)
The traction winch that was designed for the Perdido

spar is comprised of the following components:
Storage reel with 3,048 m (10,000 ft) of synthetic
rope;
Traction winch drum with an 80-metric-ton line pull
capacity, a line speed of 15.24 m/minute (50
ft/minute) at full load, and special design capstan
and idler sheaves to accommodate elongation
changes in the rope;
Hydraulic power unit (HPU);
Turndown sheave with load indicator; and
Controls.
Storage reel
The storage reel is driven by a hydraulic motor and
planetary gear reducer in conjunction with a bullgear.
Outer diameter (OD) is based on a minimum D/d ratio
of 20:1.
TOPSIDES
SOLUTIONS
Samson provided 2.4-in.-diameter Quantum 12-fiber

rope weighing 85% less than wire rope of a similar size
and length. This greatly reduces the deck weight as the
rope is neutrally buoyant and adds no weight to the payload. This allows the winch to work at full capacity
regardless of depth.
It also has a break strength of 240 metric tons and 12strand construction and uses DSM Dyneema SK-75 fiber
as the main strength member.
Traction winch drum

The drum has rope parallel grooving with the drums
offset for proper reeving and spooling. The drum OD
is designed to consider the dynamic minimum-bend
radius. The idler drum has a through-shaft and is
mounted with spherical roller bearings on each end.
The driven drum consists of independent sheaves for
the rope to lie in. The number of grooves is based on
the tractive effort required for a single drum drive with
the other traction roll sheaves acting as an idler.
The idler roll has independent groove sections like
sheaves to allow the rope to pre-stretch and float as
much as possible with minimal slippage.
Turndown sheave
The rope is routed over the turndown sheave to the main
powered traction roll on the traction winch portion.
On Shells Perdido spar the turndown sheave is placed
next to the traction winch, and the rope path will take it
directly down to the water so that items can be picked up
from a boat and deployed directly subsea. The turndown
sheave has a load pin that measures loads being picked
up or lowered, line count, speed, and direction.
A dedicated HPU was provided for all system controls
and functions. The HPU contains a suitably sized reservoir, heat exchanger, various hydraulic components,
and plumbing.
This unit is equipped with dedicated motor starters and
circuit breakers enclosed in an explosion-proof enclosure.
The unit is tested with the winch and storage reel for overall system performance. The entire system, including HPU
and controls, is rated for Class 1/Division 2.
line speed as well as line direction. This system is supplied with weights for the rope free end to keep the line
tight when retrieving the rope under light or no load
since the normal operation will be mostly paying out
with a load, then coming up unloaded. This tractive
drive is controlled to operate only when retrieving the
rope and is open in the payout mode.
The controls are set up for manual operation of the
take-up reel and the traction system independently.
When shifted to traction system mode they are synchronized with the load sense of the reel and the PLC, but
the unit is still controlled with a single joystick for payout and retrieve.
Performance so far
To date the winch on the Perdido spar has made more
than 250 runs down to the seabed with a 100% satisfactory level. The winch also is still using the original rope.
A recent pull to failure test showed the rope is still
at its original breaking strength.
DGI/Logan is now looking to develop winches with
higher capacities. Nowadays more and more operators
look for winches with a higher capacity as recent installations clearly show the many advantages they offer for the
efficient (and affordable) operation of offshore vessels
and platforms.
Controls
All functions are controlled by a programmable logic
controller (PLC) and are shown on the operator screen.
They also can be recorded or tied to a remote readout.
The PLC also monitors the low-side tension and the
high-side tension to keep the take-up reel tension up to
the proper pull rate to prevent slippage. The overboarding sheave is instrumented to measure load tension and
The soft rope traction winch, designed and built by Logan

Industries, is able to handle significant payloads in deep
water due to the use of synthetic fiber rope. The winch has
carried out more than 250 runs down to the seabed to
retrieve and service equipment and is still using the original rope. (Image courtesy of DGI)
109
industry
IMPACT
Azimuthal deep resistivity sensor

maps formation layers
Geosteering tool guides horizontal wells through the reservoir.
Mary Hogan, Associate Managing Editor
hen Halliburton introduced the InSite ADR

azimuthal deep resistivity sensor in 2008, oil and
gas operators were increasingly focused on recovering
reserves from complex reservoir structures. With characteristics such as relatively thin target zones, complex faultblock structures, steeply dipping beds, pinch-outs, and
lenses, these reservoirs require accurate positioning of
wells within tight targets. The InSite ADR sensor offers
control in the guidance of horizontal wells through the
reservoir by measuring the resistivity of the formations
around the tool. The technology won the formation evaluation category of Hart Energys 2008 Meritorious
Awards for Engineering Innovation.
During that time, the industry had been advancing
the geosteering technique, which uses real-time
responses from LWD sensors in the drilling assembly to
determine the position of the well within the geological
structure. Drilling tools such as rotary steerable systems
and conventional steerable motors are then used to
keep the well trajectory in contact with the reservoir.
Conventional resistivity sensors could detect bed
boundaries or fluid contacts several feet away from the
horizontal path. These techniques were reliable in relatively simple structures where the well was steered relative to a single, well-defined boundary, but in thin or
complex reservoirs, these tools were not able to distinguish, for example, between shale beds above and
below the well path, Tim Parker, product manager of
LWD for Halliburtons Sperry Drilling services, said.
Compared to previous LWD resistivity tool designs,
the InSite ADR brought improvements in resistivity
measurement quality. It also brought two advantages
for geosteering applications, including the introduction
of azimuthal sensitivity and deep-reading geosignals in
addition to the resistivity measurements. With azimuthal
sensitivity, the volume of the measurements is biased
toward one side of the tool. By rotating and scanning
360 around the wellbore, the tool can create a 3-D resistivity map of the surrounding formation. It is now possible to determine whether a particular tool response was
110
due to a boundary above or below the wellbore, allowing

for much better decision-making in steering the well,
Parker said.
Derived from the electromagnetic signals from the
tools transmitters, geosignal sensitivity extends further
from the wellbore than that of resistivity measurements.
This increases the range in which boundaries can be
detected. The geosignals are also azimuthally sensitive,
and it is these which allow us to calculate the distance as
well as the direction to boundaries up to 18 ft [5 m]
from the wellbore, Parker said. The combination of
azimuthal sensitivity with deep-reading measurements
provided a much more detailed picture of the surrounding reservoir than had previously been possible. This, in
turn, allowed more precise positioning of the wellbore,
greater exposure to the productive zone of the reservoir,
and ultimately increased production.
The tool has been used in more than 3,000 runs since
its introduction and has logged more than 1,700 km
(1,060 miles) of borehole in 35 countries. In the Eagle
Ford shale in Mexico an operator used the tool to
geosteer a well for a total of 2,374 m (7,789 ft), including the landing interval and the lateral production
interval of 1,311 m (4,300 ft) within a gas production
zone that was 3 m (10 ft) thick. The improved confidence associated with the wellbore position allowed the
well to be drilled quickly, cutting the planned drilling
time by more than half and saving 12 days rig time,
Parker said.
The company continues to improve the service, primarily through enhancement of the interpretation
software rather than the physical tool design. We now
have a much more sophisticated set of algorithms than
we did in 2008, establishing more accurate and complex interpretations of the data acquired by the tool,
Parker said.
The InSite ADR sensor remains the companys primary geosteering service, with shallow-reading, highresolution borehole imaging tools often used to complement the technology. The company is developing tools
that can operate in harsher environments and provide
more detailed information about the reservoir structure
around the wellbore.
JV
IP
MIDYEAR
MEETING
I
I
11,0?0.
dWL
REGISTER TODAY
83RD MIDYEAR MEETING
JUNE 23-25 + THE RITti-CAR6TON,LAGONANI GUEL + DANA POINT, CA
SUNDAY,JUNE 23
MONDAY,JUNE 24
TUESDAY,JUNE 25
Cooperating Associations Lunch
Golf Tournament
Former IPAA Chairmen Breakfast
Finance Committee*
Endangered Species Act and

Land Access Conference
Board of Directors Meeting

Liaison Committee *
General Session
Networking Lunch
Spouse/Companion Activity: Tour of Richard

Nixon Library and Lunch in the Rose Garden
Committee Meetings
Conversations With Industry Leaders
Welcome to California Reception
Membershi p Luncheon
Roustabout Dinner ***
Industries Working Together:

Manufacturing & Oil and Gas
Board of Directors Dinner**
The Future of U.S.Shale and the

Role of the Independent
Movie Screening: Switch Energy Project
Committee Members Only
International Reception-Focus on Mexico
Board Members and Registered Spouses Only

-Roustabouts and Registered Spouses Only
Closing Dinner
HOTEL RESERVATIONS
ANJ
A block of guest rooms has been set aside at The

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attendees. There are two types of rooms to choose
from : Run of House Rooms $285 and Run of
Ocean Rooms $325 .
Midyear Meeting. All rooms are subject to state

and local taxes and a resort fee.All reservations
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will be accepted on space and/or rate availability.
Book your reservation by calling the hotel directly

at 800.241.3333 . Be sure to reference IPAA' s
Please go online for the most up-to-date information and to register: ipaa.org/meetings -events.
For more information call 800.433.2851.
tech
WATCH
Technology gap widens between

high-specification, legacy drilling rigs
Safety and inspection requirements in the US GoM post-Macondo have
shifted the preference by operators to high-specification floaters.
Edward Muztafago, Societe Generale
nother 50 to 70 newbuild deepwater high-specification floaters could be ordered over the next five
years. Nearly 190 new floaters will have been delivered
between 2008 and year-end 2016. The trend toward highspecification offshore drilling rigs has gotten impetus
from regulations and requirements following the blowout
on the Macondo well in the Gulf of Mexico (GoM).
Floating rig demand is making another step-change to
favoring dual BOP-equipped rigs, which is one of the reasons for acceleration in the current rig retirement cycle.
The dual BOP is only one of the new components that
operators are including on rigs today. The industry will
start to see dual mud tanks capable of better dealing with
deepwater wells that require changing mud weights while
going through different zones. There also are very basic
changes that need to be made, like increasing deck space
to better accommodate dual BOPs. This may not necessarily be a high-tech solution but would help eliminate a limitation to a lot of the older rigs.
Pressure controls, dual mud tanks, and backup acoustic
systems to actuate the BOP are the most common rig
enhancements. The lack of the backup acoustic was one
of the shortcomings of the Macondo disaster. This type of

system is mandatory in other areas such as the Norwegian
sector of the North Sea.
Operators push technology

New technology such as dual-gradient drilling is being
emphasized by operators like Chevron. The functionality is
slightly different with dual-gradient technology in that
operators fill the riser with seawater, which allows better
pressure control, and use drilling mud below the mud line.
Operators also are watching the bottom line. Not all of
the improvements are related to new technology. When
looking outside just the rig itself, operators are placing
more preference on a contractors track record of reliable
uptime. At US $600,000-plus for day rates, anything that
causes an operator to have to absorb some type of cost
from downtime is becoming more and more cost-prohibitive.
Drilling contractors are looking ahead as well. There are
four drillships that Transocean built that are capable of
holding 20,000-psi BOPs when that equipment becomes
available. To handle those BOPs, the rigs have to have an
even greater variable deck load for both the BOPs and the
heavy wall piping that is capable of handling the pressure.
Equipment testing is paramount
Deepwater drilling demand continues to increase, overwhelmingly favoring modern high-specification drilling rigs. (Images
courtesy of Societe Generale)
112
In terms of certification for the GoM, most rigs located in

the region already have been certified. As the primary
region for testing, the GoM now faces more of a testing
requirement vs. a certification requirement. Rig owners
and operators are now shutting rigs down on a weekly
basis to test BOPs, which creates more downtime in the
BOPs than the industry has seen before.
In the GoM there likely will be a greater percentage of
dual BOP-equipped rigs than elsewhere in the world simply because of the testing requirement. Nobody wants
another Macondo. While there always is the potential that
the regulatory requirements may relax in the future, the
geological requirements do not change. The GoM is a very
gas-prone basin, which can be quite problematic when it
comes to blowout and pressure control issues. Even if the
regulatory environment is relaxed, there likely will not be
tech
WATCH
Following the Macondo disaster the majority of new drillships

are being built with dual BOPs and dual-gradient capacity.
much of a pullback among the contractors and operators

from the more frequent testing of pressure control.
Replacing legacy rigs

The majority of the legacy rigs second-generation, thirdgeneration, and even a lot of the early fourth-generation
floaters already have been upgraded to the maximum
water depth capability. Looking out over the next three or
four years, there is a fairly healthy inventory of midwater
drilling targets to go through. Beyond that timeframe, the
industry is shifting increasingly into deeper waters that,
from a legacy rig standpoint, lie beyond the capabilities of
those third- and fourth-generation rigs. Those rigs simply
cannot be upgraded.
Diamond Offshore, which is a company Societe Generale does not cover, upgraded its Victory-class rigs, which
is the exception rather than the norm for legacy rigs.
Once operators get into deeper water, they will need
newer rigs that have greater water depth capability, including the later fourth-, fifth-, and sixth-generation drillships
and semisubmersibles.
The retirement cycle has yet to begin in earnest. Effectively, the cycle is one of functional obsolescence of older
rigs and has been heavily driven by the Macondo incident
and the higher standards post-Macondo. The next-generation rig demand for the leading edge of rig technology
including dual BOP-equipped drillships is moving the
industry farther away from the legacy rig. The industry is
starting to see more of an operator preference for dual
BOPs. Originally that preference came more from drilling
contractors as they were taking on the bulk of the cost
for tripping the BOPs. A number of the recent fleet status
reports from the drillers have confirmed that the operators
are putting higher preference on dual BOPs, which will
then put legacy rigs at an even greater disadvantage.
Emphasis on OEM replacement parts

Post-Macondo, the aftermarket for replacement parts has
focused almost entirely on original equipment manufacturer (OEM) services. Some retrofitting was done on the
Deepwater Horizons BOP, and OEM parts were not used,
according to press reports. Prior to Macondo, there was at

least one second-tier pressure control manufacturer that
was implementing a strategy to pursue maintaining other
manufacturers BOPs. That type of strategy has now gone
out the window. It would not be surprising to see about
90% of the aftermarket business being OEM-driven now.
That can be verified by looking at what companies like
Cameron, National Oilwell Varco, and others have said
about the overall tightness in the supply chain as operators say they only want the OEM to work on their BOPs.
If a BOP fails its test, it has become paramount at this
juncture for operators to refuse to contract the rig. To prevent test failures, at least one of the companies that Societe Generale covers has implemented a no exception
rule. In other words, if there is a scheduled maintenance
for BOPs whenever that frequency may be even if the
seals and other components look good, the parts are
changed. It may be overkill, but that shows the emphasis
that companies are placing on safety. Operators are likely
demanding it as well.
1
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Environmentally Seiund
Oilfield Waste Disposal
in Northeast Mexi o
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one step;
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recuperation andfinal disposal of oil

and water based oilfield waste.
Patent Pending
Middle of Burgos and

EagleFord/Mexico
(956) 245-5575
www.sano.mx
rdmartinez@sano.mx
113
tech
TRENDS
Composite mat can prevent

contamination of ground soil
The Dura-Base advanced composite mat from Newpark
Mats and Integrated Services, a unit of Newpark
Resources, is designed to withstand bearing loads in
excess of 600 psi. The mat is produced from a nonslip
composite formulation and can last five times as long as
a wooden mat, the company said in a press release. The
composite mat also is designed to weigh 50% less than a
wooden mat and can enhance worker safety through
improved ground stabilization. The technology, which
can prevent soil disturbance, does not require any bolts
or fasteners to hold it in place as it is a single part,
according to the company. The mat absorbs spills and
can prevent contamination of ground soil. newpark.com.
As well as improving collaboration, Studio Manager provides

security and data access controls to the scalable Studio database, which is specifically designed to handle E&P project data.
(Image courtesy of Schlumberger)
age and access data, interpretations, annotations, and

knowledge from the Petrel E&P software platform. The
technology also lets data administrators configure quality attribute tags, including application rules for users
to help track interpretation context, state, and data
quality. Studio Manager helps information managers
ensure a more productive, collaborative, experience
among Petrel platform users sharing interpretations
and related knowledge, the company said. slb.com.
Downhole monitoring technology

assists in hydraulic fracture mapping
The Dura-Base advanced composite mat can withstand bearing
loads in excess of 600 psi. (Image courtesy of Newpark Mats
and Integrated Services)
New platform offers enhanced

E&P data management
Schlumberger has announced the release of Studio
Manager, part of the Studio E&P data management environment in which technical and information management professionals can collaborate and quickly access
data in context from related sources, the company said
in a press release. With specifically designed applications, Studio Manager allows users to browse, correct,
and organize E&P data, as well as improve productivity.
The technology, designed to manage E&P project data,
includes security and data access controls. Incorporating
industry-standard technology such as Oracle Database
and Microsoft SQL Server, Lync, SharePoint, Exchange,
and Office, the Studio environment allows users to man114
MicroSeismic Inc. introduced its new EventPick downhole monitoring technology for use in hydraulic fracture
mapping, equipped with compressional- and shear-wave
first arrival picking capability, according to a company
press release. In areas unsuited for surface-based microseismic acquisition, the technology can be used to evaluate well stimulation results in real time. Operators can use
these results to achieve proper well spacing, select fluids
and proppants, determine reservoir boundaries, and
make changes to pressure pumping schedules. Using
advanced interpretation, the processing software can provide automated triggering on microseimic events, according to the company. Results are delivered within a month
and can help operators optimize completions and map
out future drilling activity. microseismic.com.
Seismic acquisition vessel

includes 24 streamer reels
Petroleum Geo-Services unveiled its latest version of the
Ramform design, the Ramform Titan seismic acquisition
tech
TRENDS
platform. The new vessel is equipped with a stern that

measures 70 m (230 ft) and 24 streamer reels, the company said in a press release. The new vessel includes
safety features like increased working and storage space,
stable capacity for more than 6,000 tons of fuel and
seismic equipment, an automated back deck, two sternlaunched workboats, and two 40-person lifeboats with a
scoop rescue system. The vessel also includes an upgraded
GeoStreamer-based seismic package, according to the
company, as well as amenities including a 225-sq-m (2,422sq-ft) sports hall, gym, theaters, TV and game rooms, 60
single cabins, and 10 twin cabins. pgs.com/titan.
Industrial gloves offer

increased protection at job site
Wells Lamont Industrial has designed its MechPro
Grand Explorer gloves to be more ergonomic and offer
increased protection, according to a company press
release. The high-visibility
back and padded reflective knuckle straps can
create awareness and can
help reduce injuries on
job sites. The gloves also
offer American National
Standards Institute Level
2 cut protection, according to the company, and
vinyl molded fingers allow
MechPro Grand Explorer indusfor dexterity and additrial gloves can offer increased
tional protection. Featurprotection at an oil and gas job
ing either a full synthetic
site. (Image courtesy of Wells
or a full leather palm, the
Lamont Industrial)
gloves can be used in a
variety of applications,
including oil and gas. wellslamontindustry.com.
saved a day of drilling using the technology, according

to Ulterra. ulterra.com.
Dissolvable frac balls can eliminate drill-outs

The Magnum Fastball from Magnum Oil Tools International dissolves on its own under heat, which can eliminate the need for drill-outs, according to a company
press release. This also can eliminate the necessity of
well intervention for stuck frac balls or loose frac ball
fragments. These dissolvable frac balls can be used with
sliding-sleeve systems or composite frac plugs and, once
dissolved, allow free flow of hydrocarbons. The frac balls
have been field-tested at 20 bbl/min, according to the
company, and come in sizes ranging from in. to 4.6 in.
Their environmentally friendly chemical composition
also prevents the frac balls from getting stuck in the ball
seat. magnumoiltools.com.
Strain measurement system securely

attaches to submerged pipe
BMT Scientific Marine Services, a subsidiary of BMT
Group Ltd., announced in a press release that its strain
measurement system and attachment scheme has been
granted US Patent No. 7,891,254. The technology, which
can be combined with the insulation layer on ultra-deepwater steel catenary risers, monitors pipe strain in a less
intrusive way than previous systems allowed. In addition,
the system can help reduce or eliminate disruption of the
pipe insulation layer. Because major changes in pressure
and temperature can cause the outside dimensions of
submerged insulated pipes to change, finding a way to
securely attach strain sensors to the pipe is important.
The company plans to apply the technology to two projects in Brazil after successfully using the system offshore
Nigeria on production gas export risers to monitor bending strain. scimar.com.
PDC drill bit can increase stability, ROP

Ulterra introduced its CounterForce polycrystalline diamond compact (PDC) bit design technology. The tool
can lower bit torque and vibration and create more efficient failure of rock, the company said in a press release.
The technology is designed to increase stability and
ROP by maintaining a consistent torque signature, with
cutters that work to increase crack propagation and
lower lateral vibration. In a case study from the Permian
basin, the company noted how the technology was used
to finish a Wolfcamp lateral, with the operator reporting
a 42% faster ROP than with direct offsets. The operator
BMTs strain measurement system and attachment scheme

allow strain sensors to be securely joined to submerged pipe.
(Image courtesy of BMT Scientific Marine Services)
115
REGIONAL REPORT:
CHINA
Chinas energy appetite still growing

China is hungry for energy, looking to sustain and grow its conventional oil and gas
production, invigorate its unconventional sector, and kick-start the exploitation
of its potentially huge shale gas reserves.
he ongoing battle to increase Chinas production levels to meet the countrys soaring energy demand
means ensuring a steady stream of conventional field
developments coming onstream while also opening up
alternative resources.
US contractor DMAR Engineering recently landed a
FEED contract from state-owned China National Offshore
Oil Corp. (CNOOC) for development options on the
Liuhua 11-1 and Liuhua 16-2 oil fields offshore China.
CNOOCs research institute is currently studying the
best development options for the fields in the eastern
South China Sea, which lie in water depths of 340 m (997
ft) and 404 m (1,326 ft). A tension-leg platform (TLP)
with full drilling capacity is being evaluated as one possible development solution, with a semisubmersible production platform as the other realistic option.
CNOOC will decide by mid-2013 which development
option to push ahead with. The operator said that the
TLP would be the countrys first deepwater floating production platform and first dry tree production platform.
It also would be the first TLP to be made in China.
first output achieved from the A5H and A2 development

wells on the WZ-6-12 wellhead platform, reported partner
Roc Oil. The project will run on a trial production period
until the next batch of three production wells is completed and brought online within the next few weeks.
Roc reported operations at the WZ-6-12 platform would
be constrained for a number of weeks while drilling and
commissioning work was finalized.
The partners will use the jackup drilling rig HYSY-931
to drill three additional development wells, while the successful A6 and A7 wells drilled late last year also will be
equipped for production.
Following the completion of drilling at WZ-6-12, the
drilling rig will be moved to the WZ-12-8 West wellhead
platform to carry out the final phase of development
drilling for the Beibu Gulf project in 3Q 2013.
The Beibu Gulf development plan incorporates two
remote wellhead platforms and one joint processing platform, which will be connected by bridge to the CNOOC
WZ-12-1A platform complex and will use existing water
injection and gas processing facilities.
CNOOC operates the Beibu Gulf project with a 51%
stake, while Roc has a 19.6% interest, Horizon Oil holds a
26.95% interest, and Oil Australia has a 2.45% interest.
Beibu Gulf field flows
Ordos basin reserve boost
CNOOC also recently started production from its Beibu

Gulf project in the South China Sea.
The installation, hookup, and commissioning of offshore facilities for the project had been completed and
Chinas national energy chiefs have been strongly backing

ways of boosting the countrys natural gas production,
which currently accounts for just 4% of the countrys
total energy mix (oil is currently estimated at 70%).
The government wants to double the gas share by 2015.
As China looks to increase its existing gas reserves for
future development, it is efforts by companies such as
Australias Sino Gas & Energy that will be typical. Sino
has achieved a major increase in proven and probable
reserves at its two production-sharing contracts (PSCs)
in the onshore Ordos basin.
The company said independent assessor RISC Operations determined that estimated proven and probable
reserves in the PSCs had increased by a factor of nearly
Steven Hamlen, Contributing Editor
Shell is the operator of the onshore Changbei block in the Ordos

basin in partnership with CNPC. Here, workers check the gas connectors at the Changbei gas plant. (Image courtesy of Shell)
116
REGIONAL REPORT:
CHINA
15 from a January 2012 assessment of 22 Bcf to 327 Bcf.

Sinos share of the reserves is 93 Bcf. Total unrisked midcase reserves and resources have been estimated at 5.7
Tcf, which represents a 56% increase.
The assessment was based on 12 wells drilled last year,
70 km (43 miles) of seismic data from an infill drilling
area in the northeastern corner of Linxing East, and 100
km (62 miles) of data from a previously unexplored portion to the southwest of the block, in addition to 100 km
of north/south running seismic at Sanjiaobei. Our intention is to progress development, as the economics of the
domestic natural gas market in China continue to suggest
attractive returns, while existing pipeline infrastructure,
which traverses our PSCs, presents low-cost access to market, Robert Bearden, Sino managing director, said.
The US Energy Information Administration estimated China has 1,275 Tcf of technically recoverable
shale gas reserves more than Canada and the
US combined.
In a bid to kick-start its own shale boom, China has
been offering acreage in recent months, with the countrys Ministry of Land and Resources (MLR) handing
out exploration rights for 19 shale gas blocks to 16
companies in January. The licensing round received
152 bids from 83 companies, indicating the strong level
of interest in its shale potential. The MLR expects the
winners to invest US $2.06 billion into developing the
shale blocks, most of which lie in south-central and
southwest China.
Shell gets Sichuan basin nod

Shale gas potential
China also has the worlds largest estimated shale gas
reserves but is currently way behind compared to the
huge success being enjoyed in the US.
Shell has been a keen player in China for many years,

spending around $1 billion per year and working with
state-owned partner China National Petroleum Corp.
(CNPC) in the Sichuan and Shaanxi provinces.
Partners
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117
REGIONAL REPORT:
CHINA
Recently Shell was given the green light to start work

with CNPC on the Fushun-Yongchuan Block shale gas
PSC in the Sichuan basin. The companies have not disclosed details of the contract, but the approval suggests
that Beijing has developed the regulatory framework
needed to attract more international investment that will
help to develop its fledgling shale sector.
Shell CEO Peter Voser said his company is gearing up
for what he described as a significant drilling season in
2013 and 2014. Voser added that Shell and CNPC are
continuing to explore which drilling locations are best
suited for long-term development and production and
said the company is committed to helping Beijing achieve
its shale gas production targets.
China has set a target of producing some 229.5 Bcf a
year of shale gas by 2015 and as much as 3.53 Tcf a year
by 2020, up from virtually zero in 2012.
pursued by China as it seeks to widen its range of

resource supplies. UK-based Greka Drilling, for example, recently completed its first exploration well for
CNPC at a CBM play in the Qinshui basin in the
onshore Shanxi province.
Grekas CEO Randeep Grewal said the contractor
was in talks regarding further drilling work with CNPC
after this probe. The low level of CBM drilling to date
in China means there is potential for more work for
the company in the coming months and years.
The sheer size of the block, drilled to date only by
traditional oil drilling rigs capable of drilling vertical
wells that are later fraced, illustrates the vast opportunity
that these third-party contracts represent for Greka
Drillings business, he said.
As well as being its first probe with CNPC, the well
also was the first exploration probe for the company.
Greka also has been conducting production drilling
for its demerged affiliate explorer, Green Dragon Gas,
and has a 100-well deal with Sinopec.
Grekas Chinese CBM well

Coalbed methane (CBM) activity is another area being
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118
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EPmag.com
NORTH AMERICA
Study shows reserves in Polars Hemi Springs project
A new geological study at Polar Petroleum Corp.s Hemi
Springs project in Alaskas North Slope region shows total
recoverable petroleum reserves of approximately 558
MMbbl, the company said in a press release. The project is
located on the southern boundary of the Prudhoe Bay
field and southeast of the Kuparuk River field. The study
assigned estimated recoverable reserves of 298.7 MMbbl
of oil from the Ivishak formation, 139.7 MMbbl of oil from
the Kuparuk formation, and 119.8 MMbbl of oil from the
Schrader Bluff formation/West Sak formation.
Repsol ends Alaska campaign with three oil discoveries
Repsol has completed its winter exploration campaign
in Alaska with three new good-quality hydrocarbon discoveries in the North Slope region, according to a company
news release. The Qugruk 1 (Q-1) and Qugruk 6 (Q-6)
wells produced two hydrocarbons shows, with encouraging results during production tests, Repsol said. In the
Qugruk 3 (Q-3) well, hydrocarbons were identified at
multiple levels. Wells Q-1, Q-3, and Q-6 reached depths
of 2,493 m (8,179 ft), 3,214 m (10,545 ft), and 2,637 m
(8,652 ft), respectively. The company operates the consortium with a 70% stake, with 70 & 48 LLC, a subsidiary of
Armstrong Oil and Gas, with a 22.5% interest and GMT
Exploration Co. with a 7.5% interest.
GULF OF MEXICO
Chevrons St. Malo field produces 13,000 b/d of oil
Chevron Corp. has tested a Lower Tertiary well in the
companys St. Malo field, located in Walker Ridge Block
678 in the Gulf of Mexico (GoM), according to a press
release. The #3-PS OCS G21245 well flowed 13,000 b/d
of oil from multiple sets of perforations in the Lower
Tertiary at 8,146 m to 8,538 m (26,727 ft to 28,013 ft).
The well was drilled to 8,619 m (28,276 ft) and bottomed to the east beneath Block 678. Water in the area
is 2,146 m (7,040 ft) deep. Chevron holds a 51% operated interest in St. Malo field, with partners Petrobras
(25%), Statoil (21.5%), ExxonMobil (1.25%), and
Eni (1.25%).
120
Phobos probe hits oil for Anadarko

Anadarko Petroleum confirmed in a press release that its
Phobos-1 well in the deepwater GoM encountered approximately 76 m (250 ft) of high-quality oil pay in Lower Tertiary-aged reservoirs. The well is likely to be developed via a
subsea tieback to the operators nearby Lucius field, which
is due to be developed via a truss spar facility. Phobos lies
18 km (11 miles) south of the operators Lucius discovery
and is located in Sigsbee Escarpment Block 39. It was
drilled to a total depth of 8,740 m (28,675 ft) in approximately 2,591 m (8,500 ft) of water. Anadarko operates
Phobos with a 30% working interest with partners Plains
E&P Co. (50%) and ExxonMobil (20%).
MIDDLE EAST
Petrofac consortium lands $3.7 billion Abu Dhabi contract
Petrofac announced Petrofac Emirates, its joint venture
with Mubadala Petroleum, has been awarded a contract by
Zakum Development Co. (ZADCO) for the Upper Zakum
UZ750 field development in Abu Dhabi. The contract is
worth approximately US $3.7 billion and has been secured
by Petrofac Emirates in consortium with Daewoo Shipbuilding and Marine Engineering Co. Ltd., according to a
news release. The project comprises the engineering, procurement, construction, transportation, and commissioning of island surface facilities on four artificial islands.
These facilities will commence operations during 2016.
Oil Searchs Taza 1 well flows oil in Iraq
Oil Search Ltd. reported its Taza 1 ST2 well flowed oil at
rates of 400 b/d to 500 b/d and 1 MMcf/d of gas, according to a press release. The well, drilled to a depth of 3,351
m (10,994 ft), tested the Euphrates formation and part of
the Dhiban formation. The well test will continue to gain
more information on the fluid properties and flow rates,
Oil Search said in the release. Participants in Taza 1 are
Oil Search (Iraq) Ltd. with a 60% interest, Total E&P Kurdistan Region of Iraq with a 20% interest, and the Kurdistan regional government with a 20% interest.
SOUTH AMERICA
Sagitario presalt well strikes oil offshore Brazil
Petrobras made a new Santos basin presalt discovery
offshore Brazil. Exploration well #1-SPS-98 (1-BRSA1063-SPS), also known as Sagitario, has 31API gravity
oil, but no production rates have been disclosed. Oil was
found in carbonate reservoirs below the salt layer at a
depth of 6,150 m (20,177 ft). The well is still being
drilled to 6,950 m (22,802 ft) to define the bottom of
international
HIGHLIGHTS
the oil reservoir. This is the first well to be drilled in

Block BM-S-50 and is west of the main Santos basin presalt discovery. Petrobras is the operator of Block BM-S50 and #1-SPS-98 (1-BRSA-1063-SPS) Sagitario with a
60% interest in partnership with BG E&P Brasil, holding
a 20% interest, and Repsol Sinopec Brasil with the
remaining 20% interest.
Ecopetrols Venus-2 finds crude oil in Colombia
Ecopetrol SA reported in a news release that it has proven
the presence of crude oil at Venus-2, an exploratory well
located within the municipality of San Martin, Meta
province, in Colombia. Initial tests carried out using an
electrosubmersible artificial lift yielded an average crude
oil production of 630 b/d of 17API gravity and a water
cut of 39%. Ecopetrol plans to continue its exploratory
activities on Block CPO-11 in the coming weeks. The
Venus-2 well is part of the CPO-11 block, governed by the
December 2008 E&P agreement between Ecopetrol and
the National Hydrocarbons Agency. Ecopetrol holds a
100% interest in the block.
ASIA-PACIFIC
Beach vertical well in Queensland
produces from Permian zone
In western Queensland, Australia, Beach Energy Ltd.s
#1-Halifax well in permit area ATP855P produced 2.2
MMcf/d from a Permian zone after 14 fracturing stages,
the company said in a press release. The company plans
further testing as the gas-fluid ratio in the wellstream
increases. Drilled to 4,267 m (14,000 ft), the well is producing from gas-saturated Permian zones. Beach is the
operator of ATP855P and the #1-Halifax well with a 60%
interest in partnership with Icon Energy, which holds
the remaining 40% interest.
Pan Orient discovers oil pay at well onshore Thailand
Pan Orient Energy Corp. announced in a press release
that the L53-G2 exploration well onshore Thailand is
currently on a 90-day production test producing 24API
gravity oil at a rate of approximately 350 b/d with a
0.5% water cut from 7 m (23 ft) of perforations in 8 m
(26 ft) of oil pay in the K40-D sand. The well encountered a combined total of 20 m (66 ft) of net oil pay
averaging 28% to 32% porosity in the K40-D, C, B, and
A sands. The L53-G2 well was drilled to a total measured
depth of 1,650 m (5,413 ft) from the L53-G well pad
approximately 3 km (2 miles) south of the L53-A field
well pad. Further drilling will be required to define the
full extent of the accumulation.
EUROPE
BMT set to provide forecasting services for Caspian Sea
BMT Argoss, a subsidiary of BMT Group Ltd., secured a
long-term contract to provide a major oil company with
weather forecasting services for all of its north Caspian Sea
operations, both offshore and onshore, BMT said in a
press release. The scope of BMTs work includes the provision of all forecasting services including metocean and aviation as well as all operational support, including
maintenance of meteorological equipment on all of the
installations. BMT will provide 24/7 service and, where
necessary, forecasters and metocean service specialists will
travel to offshore installations to provide forecasts.
North Star vessels will
support BPs North Sea
operations
North Star Shipping, a division of the Craig Group, has
been awarded a five-year
multiservice contract with
BP with a value of US $98
million and a possible exten- The Grampian Dee vessel is one of
four being contracted by BP to supsion of five years. The conport its North Sea operations. (Image
tract includes tanker assist,
courtesy of North Star Shipping)
platform supply, and emergency and response rescue
vessels, all supporting BPs operations in the North Sea.
Four vessels, with a possible fifth to be added, are being
contracted, including the Grampian Talisker, Grampian Frontier, Grampian Conquest, and Grampian Dee.
AFRICA
African Petroleum makes discovery
at well offshore Liberia
African Petroleum Corp. of London reported an oil discovery at exploration well #1-Bee Eater offshore Liberia.
The venture hit 48 m (157 ft) of Narina-equivalent oilbearing Turonian sandstone out of a 135-m (443-ft) oil
interval. According to the company, the discovery was in
the Turonian fan by way of a large step-out west of the
original #1-Narina oil discovery. The extension of the Turonian oil play from the #1-Narina discovery toward #1-Bee
Eater will help determine the oil-bearing part of the 300sq-km (116-sq-mile) Turonian fan. The #1-Bee Eater was
drilled to 4,100 m (13,451 ft) in 1,067 m (3,501 ft) of
water. African Petroleum is the operator of blocks LB-08
and LB-09 and #1-Bee Eater with a 100% interest.
121
on the
MOVE
PEOPLE
IMV Projects, a Wood Group
Mustang company, named
Tom Fransham (left) its first
vice president of HSEQ.
Colin Couchman (right) has
assumed responsibilities as
relationship director within
the oil and gas team at Barclays Corporate Banking.
BMT Argoss, a subsidiary of BMT
Group Ltd.,
selected Shane
Amaratunga (left) as director of internal affairs and Wilfred Aaldriks (right)
as director of external affairs.
BHP Billiton announced a new senior
management team, which includes
Andrew Mackenzie, CEO; Peter
Beaven, president of copper; Tim
Cutt, president of petroleum and
potash; Dean Dalla Valle, president of
coal; Geoff Healy, chief legal counsel;
Mike Henry, president of HSEC, marketing, and technology; Graham Kerr,
CFO; Daniel Malchuk, president of
aluminum, manganese, and nickel;
Jane McAloon, president of governance and group company secretary;
Jimmy Wilson, president of iron ore;
and Karen Wood, president of people
and public affairs.
Mike Earlam (left) has taken
the reins as president of Offshore Installation Services.
Scott Metzger has taken over duties as
president of the Spill Control Association of America.
Tiandi Energy welcomed Dr. Kevin O.
Meyers, former ConocoPhillips senior
vice president of E&P, and Dr. Stephen
A. Holditch, former head of Texas
A&M Universitys Petroleum Engineer122
ing Department, to its corporate advisory team.

SIGMA3 Integrated Reservoir Solutions
Inc. promoted Kevin McKenna to vice
president of technology solutions.
Following implementation of a new
organizational structure, Noble Energy
announced new leadership including
Gary W. Willingham, senior vice president of the US onshore region; J. Keith
Elliott, senior vice president of the eastern Mediterranean region; Susan M.
Cunningham, senior vice president of
the US Gulf of Mexico, Africa, and
Frontier region; John T. Lewis, senior
vice president for corporate development; Charles J. Rimer, senior vice
president for global operations services; and Rodney D. Cook and Ted. D.
Brown, senior vice presidents and advisors to the president and CEO.
David Dragone has assumed responsibilities as executive vice president of
human resources at CGG.
UniversalPegasus International
selected Bobby Hitt as senior vice president of quality.
Adam A. Veltri joined the energy law

team at Steptoe & Johnson PLLCs
Denver practice.
Multi Products Co.
appointed Andy
Rickly (left) as operations manager and
Dave Schuman (right) as senior technical advisor.
Coretrax Technology Ltd.
appointed Jim Hepburn
(left) as operations manager.
Swire Oilfield Services named
Dan Davies (right) as commercial manager of the East
Africa region.
Greenes Energy
Group selected Ray
Naquin Sr. (top
left) as senior advisor, Stuart LeBlanc (lower
left) as northern regional
manager, and David Lang
(right) as mid-continent
regional manager of the testing and
services business unit.
COMPANIES
Det Norske Veritas appointed Terry
Loftis as chairman of the Rig Owners
Committee.
Mitch R. Thilmony joined LoneStar
Geophysical Surveys as HSEQ
director for the companys seismic
acquisition division.
Black Elk Energy Offshore Operations
LLC named Bruce Koch as CFO.
John K. Allcorn (left) has
taken over duties as senior
vice president of sales at Willbros Group Inc.
TNT Crane & Rigging Inc. promoted
Kregg Lunsford to president.
Takatuf, the human capital unit of

Oman Oil Co. (OOC), and Petrofac
are teaming up to open a technical
training Center of Excellence in
Oman. The center will initially serve
OOC employees and may expand later
on to serve the rest of the oil and gas
industry.
The Compressed Gas Association and
the Gases and Welding Distributors
Association presented Coastal Welding
Supply Inc. with the distributor safety
award during their 68th annual convention in Colorado.
CyrusOne plans to expand its multitenant digital energy West Houston
on the
mp?
MOVE
MARKETING | SALES | CIRCULATION
Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com
Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com
United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546
Regional Sales Manager

JULIE B. FLYNN
Tel: 713-260-6454
jflynn@hartenergy.com
Regional Sales Manager

HENRY TINNE
Tel: 713-260-6478
htinne@hartenergy.com
Advertising Sales
Representative
ERIC MCINTOSH
Tel: 713-260-6471
emcintosh@hartenergy.com
Sales Manager
Eastern Hemisphere
DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com
Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com
Subscription Services
E&P
1616 S Voss Road, Suite 1000
Houston, Texas 77057
Tel: 713-260-6442
Fax: 713-840-1449
custserv@hartenergy.com
List Sales
MICHAEL AURIEMMA
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
campus after purchasing an adjacent

32-acre parcel of land.
which will grow to a capacity of 5,000

b/d of water.
Cooper Valves relocated to its new corporate headquarters in Stafford. The

new facility includes a manufacturing
shop and warehouse.
TAM International Inc. opened a new

location in Erbil, Iraq, to better serve
oil and gas companies in the Kurdistan
region.
Rockwater Energy Solutions Inc.

expanded its presence to Western
Canada, offering its above-ground storage tanks to companies in the region.
BWA Water Additives joined the Rice

Brine Chemistry Consortium, part of
Rice Universitys Civil and Environmental Engineering department. The consortium seeks to solve brine production
problems in the oil and gas industry.
Proserv established a global R&D center in Norway, which will focus on subsea controls and communications
technologies.
Ridgeline Energy Service Inc. opened
a new water treatment facility near
Punxsutawney, Pa. The company also
expanded its New Mexico facility,
Aquatech opened a central water treatment facility in Tioga County, Pa., to

serve shale gas producers.
Industrial Scientific expanded its presence in Pittsburgh, Pa., with the opening of a new global distribution center.
ADVERTISER INDEX
Baker Hughes Incorporated . . . . . . . . . . 39
BGP International . . . . . . . . . . . . . . . . . . . 69
Boots and Coots . . . . . . . . . . . . . . . . . . . . . .6
BWA Water Additives . . . . . . . . . . . . . . . . .54
Cameron . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Canary . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
CGG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
Champions Pipe & Supply . . . . . . . . . . . . .79
Checkers Industrial Safety Products . . . . 88
Check 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
Cimarex . . . . . . . . . . . . . . . . . . . . . . . . . .IFC
Cudd Energy Services . . . . . . . . . . . . . . . 97
Dawson Geophysical . . . . . . . . . . . . . . . . .73
Deep Casing Tools . . . . . . . . . . . . . . . . . . .82
Delmar Systems, Inc. . . . . . . . . . . . . . . . . 107
Dragon Products, Ltd. . . . . . . . . . . . . . . . . 13
E&P . . . . . . . . .28, 42-43, 63, 81, 92, 105, 119
Emerson . . . . . . . . . . . . . . . . . . . . . . . . . . .19
FlexSteel Pipeline Technologies, Inc. . . . .47
FTS International . . . . . . . . . . . . . . . . . . .100
Gardner Denver (GARD) . . . . . . . . . . . . . .50
GEFCO . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
Graybar . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Great Wall Drilling Company . . . . . . . . . 30
IHRDC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
Ikon Science . . . . . . . . . . . . . . . . . . . . . . . .57
Inova . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
IPAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
John Crane Production Solutions Inc. . . .101
K+S KALI GmbH . . . . . . . . . . . . . . . . . . . . 40
Magnum Oil Tools International . . . . . . . 55
Mewbourne College of Earth & Energy . 16
M-I Swaco . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Momentive . . . . . . . . . . . . . . . . . . . . . . . . 17
NCS Energy Services, Inc. . . . . . . . . . . . . .32
National Oilwell Varco . . . . . . . . . . . . . . . .21
Oil and Gas Job Search . . . . . . . . . . . . . . .52
OneSubsea . . . . . . . . . . . . . . . . . . . . . . . . .15
Paradigm . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Partners In Drilling . . . . . . . . . . . . . . . . .117
Peak Completions . . . . . . . . . . . . . . . . . . . 41
PGS Exploration (UK) Ltd. . . . . . . . . . . . 2-3
PGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Precision Drilling . . . . . . . . . . . . . . . . .49, 51
Rainbow Ceramics . . . . . . . . . . . . . . . . . . .89
Repsol . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Roxar Software Solutions . . . . . . . . . . . . . 61
SANO . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Schlumberger . . . . . . . . . . . . . . . . . . . .BC, 5
Society of Petroleum Engineers . . . . . . 118
Superior Energy Services, Inc. . . . . . . . . . 48
Supreme Services . . . . . . . . . . . . . . . . . .102
Sun Coast Resources, Inc. . . . . . . . . . . . .102
TAM International . . . . . . . . . . . . . . . . . .IBC
Tank Connection . . . . . . . . . . . . . . . . . . . .93
TBC-Brinadd . . . . . . . . . . . . . . . . . . . . . . . 77
Tensar . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Tetra Technologies Inc. . . . . . . . . . . . . . . 87
TGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Total Equipment and Service . . . . . . . . .103
TSC Drillpipe . . . . . . . . . . . . . . . . . . . . . . .83
United Rentals . . . . . . . . . . . . . . . . . . . . . . 23
Universal Pressure Pumping, Inc. . . . . . . .99
Verenium Corporation . . . . . . . . . . . . . . . .45
Weatherford . . . . . . . . . . . . . . . . . . . . . . . 25
Worthington Cylinders . . . . . . . . . . . . . . .65
October 2012 | EPmag.com123
last
WORD
Seismic for unconventionals

Can seismic technology improve success rates in the E&P of oil and gas
from shale and tight sand?
Jeff Meisenhelder, Schlumberger
eismic surveying objectives used to be focused primarily on providing images of the subsurface to identify
likely structural traps for drilling. In unconventional
plays, while structure remains important, factors such as
stratigraphy and stress also control the success of drilling
and completions campaigns. Continuous advances in
acquisition and processing technology have led to everimproving quality and reliability of seismic data, and
these data now can be trusted to provide an increasing
range of valuable information about lithology and other
important reservoir conditions.
In unconventional plays the desired contributions
from seismic data are accurate depth images, high-resolution seismic velocities, and calibrated prestack inversion products. The inversion products are especially
important in workflows that integrate the seismic data
with well logs, core data, and other measurements. The
purpose of that integration is for improvement in identifying lateral and vertical variation within the reservoir
compartments and characterizing reservoir quality and
completion quality to optimize well positioning and
hydraulic fracturing strategies.
Factors contributing to good reservoir quality include
high gas saturation and kerogen content, high matrix permeability and porosity, and high pore pressure. Factors
contributing to good completion quality include strong
fracture containment, fracturable formations, and mineralogy in particular detecting clays with high rock-fluid
sensitivity. While seismic data alone cannot confirm all of
these factors, when combined with other measurements,
they can provide an indication of the most prospective
well locations. Hurdles that must be addressed in the seismic contribution include suppressing noise, comprehending anisotropy, and resolving heterogeneity.
Modern point-source and high channel-count pointreceiver land seismic acquisition systems are able to reduce
noise in the seismic signal and improve the temporal and
spatial resolution of the resulting images. Resolution is further improved by using broadband vibroseis source techniques and recording with high-fidelity geophone
accelerometers. Broad bandwidth, especially low-frequency
acquisition, is essential for accurate inversion to derive
124
rock properties. Improvements in processing include surface wave inversion, which enables improved correction
for near-surface effects that can degrade the seismic
image, which is of particular importance when performing
prestack depth migration. Full-azimuth acquisition, combined with anisotropy-comprehending amplitude-vs.-offset
inversion, can indicate local stress directions and help optimize well orientations and fracturing efficiency.
The azimuths of minimum and maximum stress directly
impact the optimum direction for a horizontal well and its
completion. The process of high-pressure hydraulic fracturing is constrained by the in situ stresses in the rock.
Fracture geometry in unconventional reservoirs is controlled by both the magnitude and direction of maximum
stress, the contrast between maximum and minimum
stresses, and the complex heterogeneous rock fabric itself.
Horizontal wells are normally drilled in the direction of
minimum stress to create multiple hydraulic fractures
transverse to the wellbore azimuth, as reservoir simulation
generally indicates optimum reservoir performance under
these conditions. Drilling performance, including ROP
and wellbore stability, also is impacted significantly.
The stress regime can be characterized from a description of the azimuthal anisotropy of seismic velocities.
Faster velocities can correspond to the maximum stress
direction and/or the orientation of natural fractures. Several seismic studies have shown that, regardless of regional
stress regimes, local stresses vary considerably in magnitude and direction.
In an example from the Fayetteville shale (SPE 147226)
a reservoir model was developed integrating petrophysical, sonic, image, core, stimulation, production, microseismic, and processed surface seismic data. This dynamic
reservoir model was used to history-match the short-term
and long-term production performance and its variations
across the exploration area. The reservoir characterization and dual-porosity simulation model was found to be
consistent with variations in the gas production history of
different perforation clusters, providing confidence in
the workflows.
Further advances in acquisition and processing technology, coupled with integrated workflows combining multiple types of measurements, will make high-quality seismic
data an increasingly valuable tool for maximizing production in unconventional plays.
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EPMAG.

Sand and Proppant/

EXPLORATION & PRODUCTION

IMPROVING EXPLORATION SUCCESS

COVER STORY: WELL COMPLETIONS

DAS aids in permanent field monitoring

Integrated high-density point-source,

Renewed challenges of 3-D seismic acquisition

DEEPWATER RIG ADVANCES

Making deep water pay by first drilling

Deepwater advances depend on transition

SAND AND PROPPANT/

Proppant management can improve return

Improving performance while reducing footprint

Making the case for advanced ceramic

New options in scale, bacteria management

Companies focus R&D

Data abound indicating that

Reducing risk, delivering benefits for

Winch system lightens load on Perdido

DEPARTMENTS AND COMMENTARY

DIGITAL OIL FIELD

DRILLING AND COMPLETION

ABOUT THE COVER

A Magnum Oil Tools International crew installs a

ONLINE CONTENT JUNE 2013

Shell moves forward with Stones project in deepwater GoM

Apache hits hydrocarbon pay

CNOOC, BG Group sign LNG Australia deal

AVAILABLE ONLY ONLINE

OTC 2013: Collaboration is

Joint industry projects can lead to

Future LNG export field takes shape

Cairn India bets on

The company has undertaken an

The power of information in

Geoscientists can gain confidence in

1616 S. VOSS ROAD, STE 1000

Read more commentary at

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Associate Managing Editor

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JOHN M. GILMORE JR.

Hart Energy dives deep

DID YOU KNOW

2013 Halliburton. All rights reserved.

Global warming: tilting at windmills

June 2013 | EPmag.com

FIGURE 2. Humans add very little to the overall mix of greenhouse

numbers are swamped by natural variability. We saw a

Good for plants

alarmed. Look at CO2 concentrations over geologic

Yet when CO2 concentration increases, plant life loves

June 2013 | EPmag.com

Growing to go the distance