document title well integrity management plan document ... · filename: arm-hss-gen-pln-004 rev 1...

Filename: ARM-HSS-GEN-PLN-004 Rev 0 Well Integrity Management Plan of 14

Document Title Well Integrity Management Plan

Document Number ARM-HSS-GEN-PLN-004

Rev Status Prepared by Checked by Approved By Date

A Draft for Review J Martin 19-June-2017

1 Issued for use J Martin Luke Titus

Chief Geologist R Cressey

CEO 23-Feb-2018


CONTENTS

1 INTRODUCTION ................................................................................................................... 3

1.1 Armour Energy 3

1.2 Purpose & Scope 3

1.3 Armour Well Integrity Policy 3

2 WELL INTEGRITY ................................................................................................................. 3

2.1 WIMP requirements 3

2.2 Well Design 4

2.3 Well Construction 4

2.4 Inspection and reporting 4

2.5 Personnel responsibilities 4

2.6 Well Types 5

2.7 Risk Assessment 5

2.8 Well Barriers 5

2.9 Well Operations and Intervention 5

2.10 Well Intervention Integrity Requirements 6

2.11 Well Handover 6

2.12 Repair Requirements 6

3 WELL ANNULUS PRESSURE MONITORING ...................................................................... 6

3.1 Testing and monitoring 6

3.2 Annuli Testing During Well Construction 6

3.3 Annulus Leak Testing on a new completion 7

3.4 Workover rig/ CTU interventions 7

3.5 Allowable Operating Pressure 7

3.6 Annulus Pressure Increase 7

3.7 Safety Hazard 7

3.8 Production Casing Corrosion Integrity 7

4 WELL WAIVERS/DISPENSATIONS ..................................................................................... 8

Appendix 1: Well Integrity Policy ............................................................................................... 9

Appendix 2: Example risk assessment during well construction outcomes ........................ 10

Appendix 3: Example risk assessment post well construction outcomes ........................... 13

Appendix 4: Surface Casing Vent Flow/ Gas Migration Testing and Reporting Form ......... 14


1 INTRODUCTION

1.1 Armour Energy

Armour Energy is focussed on the discovery and development of world class gas and associated liquids resources in an extensive and recently recognised hydrocarbon province in northern Australia, as well as in the state of Victoria. Armour intends to apply modern technologies to these previously explored and produced areas.

1.2 Purpose & Scope

The purpose of this Well Integrity Management Plan (WIMP) is to describe Armour Energy’s requirements for well design, construction, operations and maintenance activities in order to ensure that activities are carried out in a manner that provides a safe and secure environment for employees, contractors, visitors, members of the public and the environment.

This document also describes the well integrity monitoring requirements to enable Armour to operate wells in a uniform manner and in compliance with legislation, appropriate industry standards and procedures as well as Company policies.

1.3 Armour Well Integrity Policy

A copy of Armour’s Well Integrity Policy is provided in Appendix 1.

2 WELL INTEGRITY

2.1 WIMP requirements

The WIMP is intended to describe the management plan for well design, construction, and monitoring and maintenance activities. The plan includes a requirement to record testing results, any equipment failure, remedial actions taken to rectify the failure and any problem areas that require future attention and/or dispensation to continue operations.

In summary, the WIMP includes the following requirements:

• Ensure that sufficient trained, competent and experienced staff carry out the duties to which they are ascribed or obtain specialist advice and assistance as necessary to enable the discharge of the responsibilities in a satisfactory manner.

• Maintain a well file/register of all wells, together with well records including current and comprehensive downhole completion schematic and wellhead schematic. Records of any interventions or workovers should also be kept in the well file.

• Ensure that adequate notice to field personnel is given when wells are due for inspection and / or maintenance.

• Flag whenever the inspection or maintenance intervals of any item of equipment are amended, or if abnormal conditions of corrosion, erosion or other forms of deterioration are detected

• Ensure that repairs or renewals to equipment are carried out to correct specifications and vendor recommendations.

• Ensure that deficiencies are acted upon in a timely manner and that relevant and applicable problems are notified to the relevant responsible person or departments, including remedial action plans.

• Continually assess the effectiveness of the plan and associated detailed programs and adjust where optimisation can be effected.

• Arrange for original certification package for wellhead components to be maintained by the wellhead supplier. General audits should be conducted to ensure the suitability of the arrangement.


2.2 Well Design

Well design is to be carried out in accordance with appropriate industry practices to ensure that construction, operations and maintenance activities are carried out in a manner that provides a safe and secure environment for employees, contractors, visitors, members of the public and the environment.

Well design should use as reference appropriate legislation and standards, including as:

• Petroleum and Gas (Production and Safety) Act 2004

• Petroleum and Gas (Production and Safety) Regulation 2004

• Code of Practice for constructing and abandoning coal seam gas wells and associated bores in Queensland

• Alberta Energy Regulator, Directive 008: Surface Casing Depth Requirements

• Alberta Energy Regulator, Directive 009: Casing Cementing Minimum Requirements

• Alberta Energy Regulator, Directive 010: Minimum Casing Design Requirements

2.3 Well Construction

The Drilling Program and the Well Schematic shall incorporate the Well Design.

The Chief Geologist shall ensure that the drill operations and well construction are carried out in accordance with the design.

2.4 Inspection and reporting

Well inspections are to be carried on an annual basis for every well as a minimum. A well integrity report will be issued within two weeks following inspection by the Chief Geologist or his delegate as approved by the CEO. The inspection report shall include:

• Company contact information

• Test information, including: o Integrity status of each potential flow path o Test information (dates and results) o Well information (specific well details, general comments on well site including photos

of wellhead and lease) o Any recommendation for maintenance or corrective actions

The inspection shall be carried out to meet the requirements of this plan, and it shall be reported via the form as presented in Appendix 4.

2.5 Personnel responsibilities

Responsibilities for well integrity and assurance are defined as follows:

The CEO - has overall line responsibility for the development and implementation of the WIMP. This responsibility extends to the appointment of one or more competent persons, including the Chief Geologist.

The Chief Geologist - is responsible for the following:

• Ensuring that the WIMP requirements listed above are performed

• Closing out all actions arising from inspections

• Ensuring that all records are kept and stored in an efficient manner

• Report and document inspections and any maintenance

• Ensuring that all involved parties are kept informed of any significant aspects of the process


• The maintenance and timely review and revision of the plan as appropriate

• Capturing lessons learnt.

2.6 Well Types

Armour is currently in the exploration and production phase and all wells drilled by Armour at this stage are exploration and production wells. Thus, wells will be either plugged and abandoned or will be suspended for potential further exploration or appraisal activity or configured for production.

2.7 Risk Assessment

A risk assessment shall be carried out during the well planning phase, ie prior to mobilisation to drill a well. The risk assessment shall include a review of the risks associated with an uncontrolled escape of gas or well fluids to the environment.

The risk assessment process is to provide an outcome where mitigation of risks is achieved to yield well integrity operations where risks are managed to be ALARP (As Low As Reasonably Practical).

An example of well construction risk assessment outcomes is provided in Appendix 2. Well drilling programs are to include a well specific risk assessment outcomes.

An example of post drilling risk assessment outcomes is provided in Appendix 3.

2.8 Well Barriers

A minimum of two barriers shall be in place for all well activities and operations, including suspended or abandoned wells.

2.9 Well Operations and Intervention

Because barriers are protection mechanisms that allow operations to proceed in a controlled manner, the removal or failure of a single barrier should always be considered to have serious potential consequences.

Accordingly, during well operations and interventions it is important to ensure:

• Prior to commencing any well work, and removing any pressure control equipment, a minimum of two independent and tested barriers shall be available or installed in each flow path in the well where appropriate.

• The barriers shall be maintained throughout the duration of the work operation.

• Neither of the two barriers shall become nullified by other simultaneous activities.

• The two barriers shall comprise either: o Two independent and tested mechanical devices or, o Combination of one tested mechanical device and a hydrostatic column.

• Testing must be conducted to prove the integrity of each mechanical barrier.

• The level and quality of a hydrostatic column shall be monitored and maintained.

• In the event that one of the barriers fails or is lost, immediate priority within operational constraints shall be given to its reinstatement or replacement to regain the protection offered by two barriers.

• The removal of a barrier or replacement with an alternative shall only be implemented if it is demonstrated that the associated risks are acceptable (ie that they are lower than or equal to the current situation, or manageable to ALARP).

• Normally open devices shall be confirmed as leak-tight before being accepted as a well intervention barrier.


2.10 Well Intervention Integrity Requirements

The integrity of a production well system and operating parameters shall at all times remain within the boundaries of the well and completion design.

2.11 Well Handover

During construction, the integrity and function of each passive and active well barrier component within the well barriers shall be verified by means of:

• Leak testing

• Function testing as appropriate

• Verification by other methods

Any well design characteristic of significance to the integrity and safety of the well shall be clearly identified in the documents for the handover of a well to production. Handover documentation should include the following:

• Well completion data, well barrier test records, valve and fluid status

• Recommended minimum and maximum operating tubing and annuli pressure

• Recommended procedure for operation equipment

• Confirmation that all outlets are plugged / blanked off.

The Chief Geologist shall ensure that all newly installed equipment that constitutes part of the well barriers is tested to confirm its integrity in accordance with the well design and the Well Program.

2.12 Repair Requirements

Any failed test shall be reported promptly to the CEO and action shall be taken to determine next steps including request for dispensation and repair or replacement strategy as appropriate.

Failure of any Xmas tree or wellhead valve shall be repaired at the earliest opportunity subject to the maintenance of a safe and secure environment.

3 WELL ANNULUS PRESSURE MONITORING

3.1 Testing and monitoring

Annulus pressure monitoring shall be carried out annually.

Testing and monitoring is to provide assurance of the integrity of subsurface well barrier components and their interface with the wellhead. The principal requirements for the management of integrity of well annuli are:

1. Testing during installation of casing, tubing, downhole permanent barriers and wellhead components to confirm the integrity of all barriers that bound each annulus.

2. Monitoring of annulus pressure to confirm stability of pressures within defined limits. 3. Maintaining annulus pressure within defined maximum allowable limits 4. Identifying and resolving annulus integrity problems by performing annulus investigation and

remedial measures. 5. Monitoring production casing corrosion.

3.2 Annual Testing During Well Construction

Newly installed equipment that constitutes part of the boundary of an annulus shall be pressure or strength tested to confirm its integrity in accordance with the Well Program.


The status (and any potential deficiencies) of all annuli and annulus barriers shall be adequately documented.

All tubing and production casing strings will be pressure tested to 80% of burst pressure.

All test results will be recorded in Daily Reports

3.3 Annulus Leak Testing on a new completion

Pressure testing to confirm the integrity of all barriers that bound each well annulus is required on all new completions. Annulus valve operational integrity will be confirmed by leak testing before the valve can become exposed to pressure differentials.

The annulus valves, production casing string and tubing head are required to be leak tested prior to drilling out the cement plug and stage tool in wells which have an ECP fitted above the producing zones.

On wells which are cased and cemented through the producing zones, leak testing must be carried out prior to perforating.

All test results will be recorded in Daily Reports

3.4 Workover rig/ CTU interventions

All wellhead components must be pressure tested again when an intervention with a workover rig or coiled tubing unit (CTU) is carried out. All pressure tests shall be witnessed by the Rig Supervisor and documented in the Rig Daily Reports.

3.5 Allowable Operating Pressure

0 – 100 psi: Low Risk Range – possible thermal expansion

Over 100 psi: High Risk – possible packer failure or casing corrosion

3.6 Annulus Pressure Increase

An increase in annulus pressure on a well above maximum allowable annulus surface pressure requires immediate investigation and action. External factors should be considered including fracturing activities in the vicinity of the well in question.

3.7 Safety Hazard

A well represents a safety hazard if the following conditions are all met:

1. The recorded annulus pressure exceeds maximum allowable annulus surface pressure, and 2. The well is capable of flow without the assistance of artificial lift.

If the well represents a hazard, action must be initiated as soon as practical to return the well to a safe state. The action required will be specific to the well.

Although a well may not pose a safety hazard, consideration must be given to longer-term problems that may occur, e.g. corrosion of tubing and casing, if remedial actions are delayed.

3.8 Production Casing Corrosion Integrity

Armour is currently exploring and no production has commenced.


Gas analysis from wells to date indicate low/negligible carbon dioxide levels and the potential for corrosion of installed casing is consider very low or negligible. However, in future it may be that gas produced may contains levels of carbon dioxide that may cause corrosion and monitoring shall be implemented as appropriate.

Where wells are identified with risk of corrosion, calliper inspection of the casing can be considered.

4 WELL WAIVERS/DISPENSATIONS

Armour is currently at an exploration and production phase and as such is drilling only exploration and production wells. Well design and construction is carried out in compliance with legislation and at this stage there is no expectation to consider dispensation or deviation.

In future, should appraisal or production wells indicate minor integrity issues and maintenance may be delayed until a campaign of work is being carried out in the area, then a dispensation to facilitate delaying repair or maintenance work must be approved by CEO. Request for dispensation would be initiated via the Change Management Procedure.

Should integrity inspections indicate an annulus pressure above the maximum allowable annulus surface pressure then appropriate actions are to be implemented promptly to ensure the safety of the well.


Appendix 1: Well Integrity Policy


Appendix 2: Example risk assessment during well construction outcomes

Risk Potential Consequence Mitigation

Injury or equipment

damage while

handling tubulars

Injury to personnel and

damage to equipment.

Downtime and potential

loss of well.

JHA’s and SOP’s are to be done for each operation.

Crews to discuss the types of tubulars on site and how

they plan to handle them.

Washout of cellar Returns to surface, cellar

filling with water, erosion

around cellar, loss of

ground support for rig.

The conductor in most cases will be pre-installed prior

to the rig mobilising to location.

Use moderate flow rates initially to mitigate washing

out around conductor.

Remedial cementing if required.

Shallow gas whilst

drilling surface hole

Gas to surface without

BOP equipment.

If there is a likelihood of gas whilst drilling surface

hole then install BOP.

Cement losses on

surface casing

Poor integrity at the

casing shoe.

Lack of structural integrity

near surface to support

the wellhead and BOPs.

The integrity of the cement above the shoe will be

confirmed with a FIT test.

Top up cement jobs will be performed. Multiple small

top up jobs of 50 – 100 sacks each may be required to

obtain cement to surface.

Unable to build at

sufficient rate due to

soft formation

Unable to achieve desired

trajectory.

POOH and change motor bend assembly. Change

slide/rotate program to incorporate more sliding.

Poor intermediate

cement job

Casing not cemented to

surface.

Pressure at surface in 9-

5/8” x 7” annulus.

A lightweight cement will be used.

Casing wear while

drilling intermediate

and production holes

Loss of casing integrity Ditch magnet is to be run in the possum belly and

must be checked regularly (every 2-3 hours) by the

Derrickman.

Total losses in the

well

Well control Intermediate hole: do not drill ahead without curing

any losses.

Do not drill ahead if poor surface casing cement job

and an inadequate leak-off below the 9-5/8” shoe

value has been achieved.

Gas kick during

intermediate casing

run

Well control Well will be controlled or killed with heavy mud or

water.

Crossover from casing to drill-pipe available.



Intermediate casing

tight hole running in

hole

Stuck casing Wiper trip performed prior and casing not run unless

good hole conditions. Reamer shoe and torque rings

will be installed (if programmed) to ream and wash

casing to bottom.

Call RO immediately if tight hole.

Mud losses in

production hole

Formation damage / Mud

cost

Section will be drilled close to reservoir pressure.

Packing off around

BHA due to caving

coal in production

hole

Stuck pipe PWD will be run to monitor hole cleaning.

Gas flows from the well while drilling production hole

Gas to surface, possibly at high rates

11” BOP stack will be installed and pressure tested prior to drilling production hole.

Well will be controlled, killed with heavy mud or

water.

Mudloggers, agitator in possum belly and continuous

gas monitoring; Pason well monitoring equipment

Water flows from the well while drilling production hole

Water to surface, possibly at high rates, and likely to be too saline to discharge to grade

The discharges are into mud tanks for containment of any fluids.

The tanks will not be permitted to overflow.

Water will be trucked off site for disposal.

The flow may continue when pumping mud stops, if any associated gas flow is sufficient to lift the water from the well – follow procedures for live well operations.

Mud-man monitoring tanks and float sensors in tanks; Pason monitoring well monitoring equipment

Gas inflow to the drillstring while drilling or tripping

Gas escape on drill floor, potential danger to personnel

A float sub with dart type valve and a bit sub with flapper type valve will be run in all BHA’s to prevent gas inflow to the drillstring. Additional Strata retrievable string floats will be installed.

Weight of mud monitored and sufficient weight mud pill pumped prior to tripping

Mud-man monitoring



Gas leakage past rotating head onto the drillfloor

Gas escape to drill floor, potential danger to personnel

Gas is expected to be essentially to be a rich hydrocarbon and monitored by 24-hour mud loggers and Pason well monitoring equipment

Ensure that continuous gas monitoring is conducted at the rig floor.

The gas detector should also be used to confirm the effective operation of the primary jet, (i.e. confirm that gas readings above the BOP stack are zero with the primary jet running).

Gas kick whilst running production string to bottom

Well control possibility Stabbing valve and crossover available on rig floor. Well will be kept full while RIH.

Mud-man to monitor and record mud weight


Appendix 3: Example risk assessment post well construction outcomes

Well

Status

Failure Mode Possible Consequence Mitigation

Shut in Corrosion causing

failure at Tubing Head

or Casing Head Flange

Leak in TH/CH Periodic Wellhead inspections and

maintenance

Change out TH during workover as

required

Flowing Corrosion causing

failure at Tubing Head

or Casing Head Flange

Leak in TH/CH Periodic Wellhead inspections and

maintenance

Change out TH during workover as

required

Shut in Catastrophic wellhead

breakage caused by

impact

Large leak to

environment

Protect wellhead with fencing or

concrete blocks

Fence off wellheads. Gated/ locked

access road

Flowing Catastrophic wellhead

breakage caused by

impact

Large leak to

environment

Protect wellhead with fencing or

concrete blocks

Fence off wellheads. Gated/ locked

access road

Shut in Production Casing

corrosion

Gas leak in annulus,

pressure on annulus

Full cement returns to surface while

casing. Production packer with

corrosion inhibiter held in annulus

QA/QC all cement jobs. Use corrosion

inhibitor and production packers.


Appendix 4: Surface Casing Vent Flow/ Gas Migration Testing and Reporting Form

SURFACE

CASING

FLOW/GAS

MIGRATION

REPORT

Armour Energy Limited

Level 27, 111 Eagle St Brisbane QLD 4000 GPO Box 5261 Brisbane QLD 4001

T +61 7 3303 0620 | F +61 7 3303 0681 www.armourenergy.com.au

Company Contact Information

Well Name___________________________________ Permit #__________________ Company Name______________________ Contact Rep_________________________ Contact Number______________________ Contact email_______________________ Contracting Company_________________ Contractor Rep #____________________

Test Information

Vent Type (GM/SCVF) _____________ Date of Test________________________ H2S Present_________________________ Flow Substance_____________________ Flow Rate_______________________m3/d Flow Rate Measured With_____________ Stabilized Build-up Pressure_________psi Shut in Duration__________________hrs Pressure Recorder Type_______________ Gas Sample Collected________________ Fire, Public Safety or Env. Hazard_______ Wellhead Seal Failure________________

Well Information

Surface Casing Setting Depth_________m Cement Top_______________________m Leak-off Pressure Gradient_______kPa/m Source of Flow______________________ Depth of Usable Water Aquifers_______m Nearest Water Well_________________m Surface Casing Vent left (open/closed)_______________________________________ Burst Plate/PSV Installed______________ Pressure Rating__________________kPa Comments:______________________________________________________________

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