advanced drilling: a technology focus area for conocophillips

“Copyright 2006 by ConocoPhillips Company. All rights reserved. No part of this publication may be reproduced in any form

without the express permission of ConocoPhillips Company.”

Advanced Drilling: A Technology Focus Area for ConocoPhillips

Michael WheatallDrilling Engineering and Operations Manager, Upstream TechnologyConocoPhillips, Inc.

Advanced Drilling: COP Focus AreasAdvanced Drilling: COP Focus Areas

• Drilling with Casing• Coiled Tubing Drilling• Extended Reach/Multi-Lateral/Designer Wells• HPHT Drilling• Managed Pressure Drilling• Wellbore Strengthening

Drilling with CasingDrilling with Casing

• World’s 1st DWC and Surface BOP from floating rig

• Conventional time: 91 hrs

• With CWD and Surface BOP: 29 hrs

Types of Casing Drilling2000+ Casing Sections

Types of Casing Drilling2000+ Casing Sections

51%

31%

18%

Non-RetrievableBHA Liner Drilling

(surface liners andtrouble zones)

Non-Retrievable BHACasing Drilling

(conductors, vertical wells,and drillable bits)

Retrievable BHACasing Drilling

(directional, multiple bit runs andformation evaluation)

Why Drill With Casing?Why Drill With Casing?CONVENTIONAL

DRILLING PROCESSSince 1901

CASING DRILLING PROCESS1998 – Future

CABLE TOOL PROCESS1850 – 1930

Rock Destroying slow FAST FAST

Hole Cleaning slow FAST FAST

Tripping FAST slow FAST

Stabilizer

Underreamer

Stabilizer

ponycollar

PDC Bit

External BHA

Crimp-on Stabilizer

Crimp-on Stabilizer

Crimp-on Stabilizer

CasingStabilization

ProfileNipple

Casing

Internal BHA

DLA

Stabilizer

SpacerCollar

How Do You Drill With Casing?How Do You Drill With Casing?

Lobo TrendLobo Trend• Casing Drilling began in 2001 to reduce trouble time• 120 wells (1.6 million feet of hole) have been drilled with casing• Lost circulation was almost completely eliminated• Zero stuck pipe incidents• An active drilling program continues where casing drilling candidates are selected based on expected problems.• The need to drill directionally is increasing.

BMT EastBMT East

Spud to Cementing of Intermediate Casing

200 - 300 sack balanced cement plug

7”Csg.

May 200210 days

8,103’

Casing Drilled

9 5/8”Csg.

4 1/2”Csg.

5 1/2”Liner

5,145’

7”Csg.

9,400’

Conv. Offset 2

9 5/8”Csg.

3 1/2”Csg.

Sept 200119 days

5 1/2”Liner

7”Csg.

6,917’

8,162’

Conv. Offset 1

9 5/8”Csg.

3 1/2”Csg.

7”Csg.

7,985’

5,272’

8,185’

Conv. Offset 3

9 5/8”Csg.

4 1/2”Csg.

BMT East C2 WellBMT East C2 Well

7”Csg.

$7,000 Trouble

8,143’

Casing Drilled

9 5/8”Csg.

4 1/2”Csg.

Conventional

9 5/8”Csg.

$184,000 Trouble

4,380’

Conventional Rig• Drilled & set surface csg• Lost circ at 4,380 ft• Could not cure lost circ.• Temp. abandoned well

Casing Drilling Rig• Moved over well• Drilled out plugs• Cured lost circ. by drilling ahead• Well completed

Casing Drilling CuttingsCasing Drilling Cuttings

Smear EffectSmear Effect

Whole Mud Sieve Analysis

0

10

20

30

40

50

8 20 50 100

140

200

>200

API Sieve Size

% S

olid

s R

etai

ned

Casing DrilledConventional Drilled

Fine

Ultr

a Fi

ne

Coa

rse M

ediu

m

Casing Drilling BenefitsCasing Drilling Benefits

• Safer operations – well control, pipe handling• Reduced trip time• Reduced open hole trouble time – 50% (Lobo)• Reduced drilling time - 15% (Lobo)• Reduced Cost• Uses conventional bits, BHAs and casing• Enhances UB and Managed Pressure Drilling

techniques

Less Subtle BenefitsLess Subtle Benefits• Don’t fight problems, case them off instead

• Rig loads smaller– Hydraulics needs are less– No overpull needed– No setback area

• “Drill pipe” (casing) is always new

Retrievable Casing DrillingBottom Hole Assembly

7” Casing SectionVertical Wells

DLA(Drill LockAssembly)

8 jts7 5/8-in.casing

7-in.23 lbmcasingto surf

TandemCasing(internal)Stabilizer

SpacerDrill CollarCasing

shoe

Under reamer(6 1/8 to 8 7/8”)

Tandem(external)Stabilizer

6 1/8” PDC bit

ConocoPhillipsWell 83

Casing Directional DrillingBottom Hole Assembly

with Steerable Motor

Under reamer(6 1/4 to 8 7/8-in.)

Bent Housing Motor4 ¾-in. then 5 ½-in.(1.5 deg bend)

casingshoe

TandemCasingStabilizer

Drill LockAssembly(DLA)

7-in.23 lbmcasingto surf

non-magdrill collar

VibrationsMonitoringsub

MWD

Float sub

6 ¼-in. PDC bit(3x15 nozzles)

Under reamer(6 1/8 to 8 7/8”)

TandemCasingStabilizer

DLA(Drill LockAssembly)

7” 23 lbCasingto surf

Casingshoe

Tandem(external)Stabilizer

Drill Collar

Filter sub

4 ¾-in. RotarySteerable System

94 ft67

5200 lbs

3 ½ IF

Conoco PhillipsWell 89

Casing Directional DrillingBHA w/ Rotary Steerable

for VerticalityTotal LengthStick-out Length

Hanging weight(in mud)

connections

SpacerDrill Collar

6 1/8-in. PDC bit(4x10 nozzles)

Well 91: Full Directional Test

-1200

-1000

-800

-600

-400

-200

0

200-600 -400 -200 0 200

Easting (E/-W), ft

Nor

thin

g (N

/-S),

ft

0

1000

2000

3000

4000

5000

6000

7000

0 1000 2000

Displacement, ftTV

D, f

tHorizontal PlotVertical Plot

target

Well 91Well 91

Well 79Well 79

SurfLoc

SurfLocTD

Conoco PhillipsWell 91

Casing Directional DrillingBottom Hole Assembly

With Rotary Steerable System

Jet Sub(1x10 nozzle)

Under reamer(6 1/8 to 8 7/8”)

6-in. StraightMotor

TandemCasing(internal)Stabilizer

DLA(Drill LockAssembly)

8 jts7 5/8-in.casing

7-in.23 lbmcasingto surf

Tandem(external)Stabilizer

MWD system

Filter sub

4 ¾” RotarySteerable System

6 1/8” PDC bit(4x10 nozzles)

Total LengthStick-out Length

Hanging weight(in mud)

112 ft85

6200 lbm

Casingshoe

RSS Drilling EfficiencyRSS Drilling Efficiency

• ROP was within 10% of offset vertical well• Casing drilling benefits captured:

– No lost circulation events– Minimal reaming time– No difficulties in setting casing– OBM not required

• Eliminated difficulty of Casing Drilling with steerable motor– No sliding problems– No motor stalling problems

• However – Vibrations were significant – Multiple RSS washouts

Key QuestionKey Question

• Can the straight hole benefits and initial directional successes realized in the Lobo Field be transferred to directional casing drilling in a higher cost offshore environment, such as Norway?

2005 Field Test Objectives2005 Field Test Objectives

• Directionally drill with larger casing sizes used at Eldfisk (10-3/4” & 7-5/8”)

• Identify and correct any problems with new tools

• Provide information required to qualify equipment and tools for use in Norway

• Perform directional casing drilling on a conventional rig similar to Norway platform rig

Split Block

Swivel with space forWireline BOP

Top Drive System

Casing Drive System

10 ¾-in. casing

7-5/8” Test Summary7-5/8” Test SummaryDisplacement (ft)

True

Ver

tical

Dep

th (

ft)

Previously drilled wellw/10 ¾” casing to 3769ft

600ft HZ drill 844 ftw/7 5/8” csg

TD 4884 ft

DLA/UR set/retrieval testsplanned at 0, 45, and 90 deg

0

500

1000

1500

2000

2500

0 600 1200 1800 2400 3000 3600

10-3/4” Test Summary10-3/4” Test Summary

0

500

1000

1500

2000

2500

3000

3500

4000

4500

-500 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500

DisplacementTr

ue V

ertic

al D

epth

(ft)

13 3/8” csg @2003ft

KOP: Build to 50 deg testing different rates (planned)

TD 5000ft

Actual Total Depth of the test was 2966 ft, with 15 degrees of inclination built.

(planned depth)

ConclusionsConclusions

• Both Directional Casing Drilling tests were a cost effective “dress rehearsal” for Eldfisk Norway

• Directional Casing Drilling technology was successfully transferred to new casing sizes

• Rotary steerable system in the pilot hole provides effective directional control

• Vibrations in the BHA are better understood, their effects have been reduced

On to Norway!On to Norway!

• Two Eldfisk wells will be casing drilled in May 2006

– 50 degree maximum angle

– 10-3/4” to 5100 ft (md)

– 7-5/8” to 10800 ft (md)

Coiled Tubing Drilling

• CTD is Drilling with One Long Joint• Still Need All Drilling Equipment

– Shelter– Solids Control– Pumps, Tanks, – Mast... Etc

• Combined CT/Rig

1st Generation Alaska CTD OperationWith Drilling Platform

Courtesy ConocoPhillips

Courtesy BP and ConocoPhillips

Coiled Tubing Drilling UnitCoiled Tubing Drilling Unit

Conventional Drilling packageConventional Drilling package

Arctic Coiled Tubing UnitArctic Coiled Tubing Unit

2nd Generation CTD in Alaska

Work Over UnitWork Over Unit

3rd Generation CTD Unit: Alaska

Courtesy BP, ConocoPhillips and Schlumberger

• Workover Rig in Grey• CTU in Orange• Unitized and Self-Powered

• Sister Rig Added to CTD Fleet

CTD: Why all the Interest?

0

27.52%

55.04%

82.56%

110.07%

137.59%

165.11%

192.63%

New W

ellNew

Well

New W

ellNew

Well

New W

ellNew

Well

Sidetrac

kSidetr

ack

Sidetrac

kSidetr

ack

Sidetrac

kSidetr

ack

Sidetrac

kSidetr

ack

Sidetrac

kSidetr

ack

Sidetrac

kCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/TCTD S/T

Wel

l Cos

t Pe

rcen

tage

100%

73%

31%

Program Dev. Costs - $/bblNew Wells - 100% $/BblSidetracks - 113% $/BblCTD S/T’s - 69% $/Bbl

Reserves Development Costs

Greater Kuparuk Area Greater Kuparuk Area

CTD Historical Well Count(includes incomplete wells)

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005

# Wells

# Laterals

High Rate 1D-11High Rate 1D-11

• Multi-lat C sand lateral & maintained motherbore

• First Two-window/two-lateral design – allows future isolation and re-entry into each lateral

• Longest KRU CTD Lateral on record:

Lat 1 : 2,202’ / 2,015’Lat 2 : 2,812’ / 2,584’

Initial well tests >5,500 bopd!

2005 CTD Accomplishments at GKA2005 CTD Accomplishments at GKA

Extended Reach Records for 2” CT (1D-34)

• Drilled depth 18350’ md (2.2:1)• Lateral length 2630’ md• Window milling depth 15721’ md• OH sidetrack depth 17935’ md

Pushing the Envelope: 1Q-04 Quad LateralPushing the Envelope: 1Q-04 Quad Lateral• 5224’ drilled footage• Lower quality A-sand• <20OAPI oil• Maximize pay exposure

Casing Drilling and CTD:

Proven Yet Still Evolving Technologies

What’s Next? …

Casing Drilling and CTD:

Proven Yet Still Evolving Technologies

What’s Next? …

Remote Land-Based Exploration WellsRemote Land-Based Exploration Wells

Challenged Economics for Rotary Drilling:

– Market driven drilling cost inflation– Mature basins: smaller structures/reserves– Shorter drilling seasons (Canada/Alaska)– Tighter environmental restrictions– Difficult logistics is major cost driver

Our ChallengeOur Challenge

Reduce cost of remote land-based exploration drilling by 50% while meeting formation evaluation requirements.

Plan of Attack: Think SmallPlan of Attack: Think Small

• Smallest hole sizes possible– Reduce materials and logistics cost

• Existing technologies and equipment• Leverage ConocoPhillips expertise

– Casing drilling– Coiled tubing drilling

• Requirements– 10,000’ depth capability– Formation evaluation

Rig Options StudiedRig Options Studied• Mining Industry Coring Rigs

– Depth limitations– Slow drilling in overburden– Major modifications to mud system and well control

• 1990’s Vintage Slim Hole Rigs (4-3/4” min hole size)– Small footprint – Rolligon, truck or heli-transportable– Lengthy move and set-up– Inefficient drilling (lacks automation)

• Automated Small Conventional Rig– Swift move and set-up– Drill efficiently– Reduced personnel exposure– Large, heavy load while moving

Western Canada Shallow GasWestern Canada Shallow GasFit for Purpose Hybrid Coil/Rotary Rig

Hybrid CT/Rotary Drilling UnitsHybrid CT/Rotary Drilling Units

• Wells drilled and cased in about one day– Two wells per day possible

• Typical 3000’ Well:– 7 inch surface casing

• 8-1/2” hole drilled with 3-1/2” CT or DP– 4-½ inch production casing

• 6” hole size drilled with 3-1/2” CT

Western CanadaWestern Canada

Coil Tubing Drilling Rigs

15 17 22 2536

67

020406080

2000 2001 2002 2003 2004 2005

Year

Hybrid Rig Count

CanadaCanadaWells Drilled by Rig Type

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005

Num

ber o

f Wel

ls

Hybrid Drilled Wells Conventionally Drilled Wells

Small FootprintSmall Footprint

Drilling with CT - Mast Down DesignDrilling with CT - Mast Down Design

Automated Pipe Handling SystemAutomated Pipe Handling System

Automated Pipe Tub TrailerAutomated Pipe Tub Trailer

Touch Screen Control PanelTouch Screen Control Panel

Drilling with CT - Mast Up DesignDrilling with CT - Mast Up Design

Automated Rig ControlsAutomated Rig Controls

Automated Pipe Rack with SkateAutomated Pipe Rack with Skate

Top DriveTop Drive

Zero Discharge Mud SystemZero Discharge Mud System

MovingMoving

Moving Moving

But … Can these Rigs Drill a 10,000’ Exploration Well?

But … Can these Rigs Drill a 10,000’ Exploration Well?

• 4500’ maximum depth with 3-1/2” CT

• 6000’ maximum depth with 2-7/8” CT

• Low capacity mast (150-200 klb)

• Small mud pump (650-850 hp)

Approach: Think Small & Work Well Design from the Bottom Up

Approach: Think Small & Work Well Design from the Bottom Up

• 4-1/8” final hole size– 3-3/4” bi-center bit (helps with ECD)– Contingency liner option (3-3/16”)– Extensive experience with this hole size to 18,000’ md

• Drilling Tools: proven and available– Wireline telemetry – Bent housing mud motors – MWD/GR/Resistivity

• 2-1/4” wireline logging tools• Conventional coring equipment• Complete with 2-3/8” or 2-7/8” SL tubing

Slim Hole Design

No Intermediate Casing

4-1/2” x 2-3/8”

Final Hole Size: 4-1/8”

Slim Hole Design

No Intermediate Casing

4-1/2” x 2-3/8”

Final Hole Size: 4-1/8”

Slim Hole Design

Intermediate Casing

7” x 4-1/2” x 2-3/8”

Final Hole Size: 4-1/8”

Slim Hole Design

Intermediate Casing

7” x 4-1/2” x 2-3/8”

Final Hole Size: 4-1/8”

Main Issue: Hybrid Rig LimitationsMain Issue: Hybrid Rig Limitations

• 4500’ depth limitation based on 3-1/2” CTD to TD

• 3-½” CT marginal for 8-1/2” surface hole drilling

• 10,000’ of 3-½” CT too much for current hybrid rigs and difficult to move

• Increases final hole size beyond needed 4-1/8”

Solution: Casing/Coil HybridSolution: Casing/Coil Hybrid

• Integrate casing drilling technology

• Casing drill surface hole and intermediate hole– Eliminates need for large diameter CT– Casing drilling plus slim hole design greatly extends

depth range for mast and pumps– Retrievable BHA not needed for straight hole sections

• 2-3/8” coil tubing to drill final 4-1/8” hole– Extends rig capacity 10,000’ depth

Formation Evaluation OptionsFormation Evaluation Options

• 2-1/4” Wireline Logging Tools– Array induction– Dual Laterolog– Compensated neutron– Compensated photo-density with PE– Compensated sonic– Standard gamma ray – MFT (pressure tester only) on wireline– High Resolution Micro Imager

• Conventional Coring • Well Test through Tubing

Summary: Casing/Coil Hybrid Advantages (over conventional rotary drilling)

Summary: Casing/Coil Hybrid Advantages (over conventional rotary drilling)

• Automated Rig Benefits– Reduced personnel exposure – Fast move and rig-up– Small location size– Top drive

• Slim Hole Well Design Benefits– Reduced tangible costs– Reduced mud and cement volumes– Reduced cuttings and waste fluid disposal– Reduced hauling– Facilitates zero discharge

Casing/Coil Hybrid AdvantagesCasing/Coil Hybrid Advantages

• Casing Drilling Benefits– Smaller rig, less fuel, reduced emissions – Reduced trip time– Reduced trouble time (smear effect and no

tripping)– No drill string – reduced hauling

• Coiled Tubing Drilling Benefits– Faster drilling (no connections)– Reduced trip time– Managed Pressure Drilling/Underbalanced Drilling– Facilitates use of Oil Based Mud

ConclusionsConclusions

• Cost reduction goal is achievable

• Casing/Coil Hybrid Drilling Concept is feasible using current technology and available equipment

• Other Applications Possible …

QUESTIONS?