Diapositiva 1

Buenos Aires, 9 de agosto de 2012

Drilling Experience and Lessons Learned fromKey US Shale Plays

Quan Guo and Jim Friedheim

M-I SWACO, A Schlumberger Company

Agenda

Introduction

Gas shale is different from conventional shale

Every gas/oil shale is different

Drilling experience from key US shale plays

Eagle Ford

Haynesville

Marcellus

Lessons learned from US shale play drilling

Summary and Conclusions

Key Challenges for Shale Gas

Key Challenges

Technical

Economic

Environmental

Gas/Oil Shale is Different

High Reactivity Shale

•Massive structure

•Lack of bedding planesor evident laminations

•Soft

•Plastic

•Sticky

•CEC >20 meq/100g

•Predominance ofSmectite

Moderate Reactivityshale

•Moderate laminatedstructure

•Bedding structure

•Easily broken

•Not plastic

•CEC 10-20 meq/100 g

•Presence of smectiteand Illiteapproximately similarproportion

Low Reactivity Shale

•Strongly laminatedstructure

•Fissile

•Brittle (Break alonglamination)

•Hard and firmconsolidation

•Not sticky

•CEC <10 meq/100g

•Predominance of illite

Unconventional resource requires unconventional thinking

Every Shale Play is Different

Haynesville

Depth = 10,500 – 13,500 ftTVD

MW = 15 – 16 ppg

Temperature = 300 – 325° F

Total Clay Content = 33%

Fayetteville

Depth = ~ 1,000 – 7,000 ftTVD

MW = 9 – 10 ppg

Temperature= ~ 135 ° F

Total Clay Content = 12%

Marcellus

Depth = 5,000 – 8,500 ft TVD

MW = 12 – 14.5 ppg

Temperature= ~ 180° F

Total Clay Content = 29%

Eagle Ford

Depth = 6,000 – 14,000 ft TVD

MW = 10 – 14 ppg

Temperature = 225 – 250° F

Total Clay Content = 8%

Barnett

Depth = 6,500 – 8,500 ft TVD

MW = 9.5 – 10.5 ppg

Temperature= ~ 180 – 220 ° F

Total Clay Content = 27%

Bakken

Depth = 11,000 ft TVD

MW = 10.5 ppg

Temperature= ~ 150° F

Total Clay Content = 16%

Agenda

Introduction

Gas/oil shale is different from conventional shale

Every gas/oil shale is different

Drilling experience from key US shale plays

Eagle Ford

Haynesville

Marcellus

Lessons learned from US shale play drilling

Summary and Conclusions

Eagle Ford Shale

Over 200horizontal wellsfrom 31 operators

80% OBM & 20%WBM

Eagle Ford variesfrom 6000 to14,000 ft TVD

Lateral length from4000 to 6000 feet

Eagle Ford Shale

Drilling days variesfrom 15 to 36 daysfor WBM, or 15 to~30 days for OBM,depending welllength

OBM showsadvantages forlonger wells, but notso for shorter wells

Eagle Ford Shale

The industry is makingprogress over the years –Learn from the USexperience!

Some operator performssignificantly better thanothers – Learn fromothers!

Haynesville Shale

Over 200horizontal wellsfrom 17 operators

85% OBM & 15%WBM

Haynesville shalevaries 10,500 –13,500 ft TVD

Lateral length from3000 to 7000 feet

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Haynesville Shale

WBMs are mostlyused for shallowwells.

OBMs are mostly fordeep wells, becauseof HTHP.

Drilling days varyfrom 35 to ~50 days,depending on welllength.

Total Drilling Days

Water Based Mud Wells

P10

P50

P90

8000

n/a

11000

13000

Oil Based Mud Wells

P10

P50

P90

15000

16500

17500

19000

Haynesville Shale

Haynesville shale is a HTHPshale gas play.

Again, the industry ismaking progress over theyears – Learn from the USexperience!

Marcellus Shale

Over 200 horizontalwells from 13 operators

Most of the surface &intermediate holes aredrilled with air or mist.

60% SBM & 40% WBM

Marcellus shale varies5,000 – 8,500 ft TVD

Lateral length from3000 to 8000 feet

Marcellus Shale

WBM and SBMperform equally well.

OBM showsadvantages for verylong wells.

Large gap betweengap among the betterand worse performersfor wells with similardepths.

The industry is stilllearning & has a largeopportunity forimprovement.

Agenda

Introduction

Drilling experience from key US shale plays

Eagle Ford

Haynesville

Marcellus

Lessons learned from US shale play drilling

Summary and Conclusions

In-Depth Analysis & Lessons Learned

Summary of Lessons Learned

Eagle Ford Shale

Over 200 wells from 31 operators were analyzed

Key wellbore instability issues are reactive Midway shaleand mud loss in the Austin Chalk

These issues are managed by well design, drilling fluidsselection and wellbore strengthening

Grinding and hole cleaning is a common problem for longhorizontal wells

The industry is making progress over the years – Learnfrom the US experience

Some operator performs significantly better than others –Learn from others and know which partners to work with!

Summary of Lessons Learned

Haynesville Shale

Over 200 wells from 17 operators were analyzed

Key wellbore instability issues are gas kicks and losscirculation when transitioning to the Hosston and CottonValley formations

Drilling days varied from 25 to 50 days in majority of theinvestigated wells, depending on well length

Downhole tool failures due to HTHP, were the main causesfor drilling days significantly over 50 days

OBM is the drilling fluids of choice, again, due to HTHP

The industry is making progress over the years

Some operator performs significantly better than others

Summary of Lessons Learned

Marcellus Shale

Over 200 wells from 13 operators were analyzed

Drilling days with WBM and SBM were very close

Key issues are wellbore instability while drilling the curvesection and hole cleaning problems while drilling thehorizontal section

Failure mechanisms from shale-drilling fluid interactionwere de-lamination, resulting in “coffee-ground”-likecuttings

Removing “coffee-ground” cuttings from drilling fluids wasdifficult and made drilling fluids re-use a challenge andincreased the cost of drilling waste disposal

No clear progress over the years in drilling days, or theindustry is still learning to improve

Summary and Conclusions

Every shale play is different

Drilling data of over 1000 wells from key US shale playshave been analyzed, particularly with respect to drillingfluids (OBM vs WBM)

Key drilling issues and solutions have been identified foreach of the shale plays

The industry is making progress over the years – Learnfrom the US experience

Some operator performs significantly better than others –Learn from others and know which partners to work with

Cutting grinding, hole cleaning and lubricity are thecommon problems for long horizontal wells

The total drilling days or well costs for similar wells canvary significantly, indicating a large opportunity forimprovement

Gracias