2017 capl conference what will be unconventional next 2017 capl conference what will be unconventional next? “Well Completions” Art Flaws VP Drilling and completions Canbriam Energy Inc. Sept 2017

Agenda Canbriam: Background and facts Common completions systems used in Unconventional plays What’s on the horizon? Future Challenges for the Industry

Canbriam: Background Private Company: Formed in 2007/2008 to chase “unconventional plays” Completed two Farm-ins in NEBC Farrell Creek 94-B-1 (Montney) - Dry gas - Over pressured 15-18 kpa/m Altares 94-B-8 (Montney) - Liquids rich gas (~15 bbls/mmcf LPG and 30 to 50 bbls/mmcf free Condie) - ~300m of Montney Fm. - Being developed over 4 targets - over pressured to highly over pressured (18 to 23 kpa/m) Processing Capacity ~40,000 boe/day through 2 – 100% owned refrigeration plants Current production capability ~35,000 boe/d (80% gas)

Completions in Unconventional plays (General) Completion design Completion system – “connecting the wellbore to the reservoir” Fluid systems - unconventional plays predominantly frac’d with Slickwater systems Sand is transported by fluid velocity and NOT suspension as with older style gelled fracs historically performed on conventional reservoirs Water is the main component (fresh, produced or blend) Chemical program Friction reducer Scale control, biocides, scale inhibitor, surfactants Stimulation design – Stage spacing (m), proppant type and loading (Tonnes/m), pump rate (m3/min) Some Unconventional plays are being frac’d with slightly gelled fluid to provide viscosity to gain frac width and help carry higher concentrations of sand This presentation will discuss at a high level the different technologies being used to contact the reservoir

Common Completion systems used in Unconventional Plays Plug and Perf (P&P) Open Hole Ball Drop (OHBD) Cemented Sleeve Ball Drop (CSBD) Cemented Sleeve Pinpoint Annular (CSPA) Disclaimer: Everyone has their favorite system that works for them in their area. Not all completion systems are applicable in all areas due to: Depth, Formation, Pressure, Drilling challenges

Plug and Perf (P&P) Casing Frac Casing is cemented full length during drilling operation Perf guns and bridge plugs are run on wireline (pumped down) The plug is set above the last frac interval The stage is perforated in 3-5 intervals then the guns are pulled to surface The stage is frac’d and the process is continued for the rest of the well Widely used in Canada and the US Advantages Proven technology High rate: resulting in high sand concentrations Suitable for many casing sizes and pressures Theoretically no limit to HZ length Disadvantages Frac efficiency is poor (not all perfs are stimulated) resulting is inconsistent stimulation of the reservoir Poor entry efficiency can create large frac length impacting offset wells Casing is cemented full length during drilling operation Perf guns and bridge plugs are run on wireline (pumped down) The plug is set above the interval just frac’d Stage is perforated in 3-5 intervals then the guns are pulled to surface The stage is frac’d and the process is continued for the rest of the well Widely used in Canada and the US Advantages Proven technology High rate: resulting in high sand concentrations Suitable for many casing sizes and pressures Theoretically no limit to HZ length Disadvantages Frac efficiency is poor (not all perfs are stimulated) resulting is inconsistent stimulation of the reservoir Poor entry efficiency can create large frac length impacting offset wells 20-30 m Perf Spacing 80-90 m Stage Spacing, 3-4 Perf Clusters

Open Hole Ball Drop (OHBD) Casing Frac System consists of packers and ball seats run as part of the casing string Packers are hydraulically set in the HZ and the casing is cemented above the packers Widely used in Canada and the US Advantages Proven technology High rate resulting in High sand concentrations Suitable for many casing sizes and pressures Cost effective: a well can be frac’d in a short period of time Disadvantages Since a large section of the Hz is open, the exact location of frac is unknown Due to limited ball/seat sizes and stage spacing, Hz length is limited More on this RE: Hybrid systems Courtesy of Weatherford

Cemented Sleeves Ball Drop (CSBD) Casing Frac System consists of sleeves and ball seats run as part of the casing string The casing is cemented full length Can be single entry point or multiple entry points to simulate limited entry P&P Gaining momentum in Canada and the US Advantages Emerging technology in shallow lower pressure reservoirs High rate resulting in High sand concentrations Cost effective: a well can be frac’d in a short period of time Disadvantages Currently limited to lower pressure reservoirs Due to limited ball/seat sizes and stage spacing, Hz length is limited More on this RE: Hybrid systems Courtesy of Trican

Cemented Sleeves Annular Frac (CSAF) System consists of sleeves or ports run as part of the casing string Casing is cemented full length Frac Operation consists of combination Coil and Frac ops. Single sleeve is located and opened by a tool located at the end of the coil Frac is pumped down the casing/coil annulus Gaining momentum in Canada and the US Advantages Pinpoint fracturing - exact location of frac is known Overcomes inefficiency of other completion systems Theoretically unlimited number of sleeves can be run High sand concentrations Cost effective - lower pump rates result in lower horsepower requirements Downhole pressure is monitored during the frac via the coil Ports can be closed after stimulation Dual downhole pressure gauges can be used to optimize stage spacing of future wells Disadvantages Frac rates can be limited by Hz length (friction) Hz length limited by coil length and well trajectory Courtesy of NCS Multistage

Casing Frac or combination of casing and annular fracs Hybrid Systems Casing Frac or combination of casing and annular fracs Multiple systems are run as part of the casing string Usually consists of a ball drop style of completion at the toe and P&P or Annular frac system for the heel section Gaining momentum in Canada and the US Advantages Longer laterals can be completed reducing overall well costs Theoretically unlimited number of intervals can be completed Disadvantages D&C operations become higher risk with longer laterals and multiple completions systems run

What’s on the Horizon? Emerging Technology Longer Laterals to reduce overall development costs, enhance EUR and increase IRR The majority of the drilling costs are spent getting down to the zone of interest Innovation in Drilling and Completion technologies have made this possible More aggressive stimulations to increase IP and EUR Companies experimenting with higher proppant loading and shorter stage spacing resulting in more fracs Tools/techniques to help increase frac efficiency and save money Advances in frac chemistry, fluid systems and Proppant types Micro-seismic and Passive Frac Imaging (PFI) for optimized frac placement Downhole Fiber optics to monitor frac location 3D Seismic interpretation to better define reservoir characteristics 3D Reservoir modelling integrated with 3D seismic to optimize well spacing and recoveries SMART completion systems ReFrac Technology

Future Challenges for the Industry Unconventional reservoirs are highly variable. Unconventional plays span large areas reservoir quality and fluid types vary widely - multiple completion systems are effective Once a resource play is identified, the completion system must be tailored for the specific area; a learning curve is required. Water usage Parent/Child interaction Becoming more of an issue as infill development intensifies Contributing factors: reservoir thickness, well spacing and age of “parent wells” Cracking the nut on normally pressured (or close to normally pressured) unconventional reservoirs (especially liquids rich reservoirs) Companies are testing different fluid systems to make these plays work Long term production has been a challenge

Appendix

Parent/Child interaction ----- Child wells: being completed ----- Parent wells: offset producers