Reduction of Remedial Cementation of Production Liners… …through the use of Equipment, Procedures & People Nicole Baird: EPW-GOM TLP, Jackup & Platform Wells Team Lead Loran Galey: SIEP-EPT Well Performance Team – Cementing Expert (company logo)

Objectives Case for Action – NPT Related Trouble Time / Cost GOM Production Cementing Staircase – Equipment, Process, People 2007 – 2008 Results GOM Learnings Go-Forward Plans& Next Steps for 2008 – 2009+ Conclusions (company logo)

Case for Action 2004-2005 GOM operations experienced 26 NPT events Total Days associated with Prod Csg Cmt NPT = 25.2 days Total Cost (2008$$) associated with Prod Csg Cmt NPT = $4.4 MM Objective sands becoming depleted, 5000+ psi (34,475 kPa) Reduced Margins for cementing ECDs Max PP – Min FG margins of 0.6 ppg or less common (72 kg/m3) Compaction-induced wellbore failures TLP weight / space constraints prohibit use of specialty equipment Slimhole sidetracks, tighter clearances between csg strings more common (company logo)

Historical Production Csg Cement NPT Average reduction in NPT $ of 20% per year Year 2006 numbers impacted by Ursa A4ST 2008 YTD Numbers (as of June 20, 2008) NPT Cost associated with Prod Csg Cmt = $624,000: NPT Time = 1.9 days (company logo)

GOM Approach: What, Where, How & When Joint development with BTC Experts (Cowan, Galey) and Service Providers (HES, SLB) Focus on all aspects – Equipment, Slurry Design, Procedures, People Rotatable Liner Hangers Remote Plug Dropping Heads Lightweight Slurries for 14 – 15 ppg environment (1680 – 1800 kg/m3) Move from “pump to bump” mentality to “theoretical displacement” Manage the level of change – use small steps versus fundamental movements It’s about the “small” things that you do while drilling, post-drilling, and cementing that add up to big results! (company logo)

Staircase Approach: What, Where, How & When Integrated Team Effort Well Engr Staff Offshore Rig Team Technology Service Providers 2008 H2 Clear Fluid Displacement Technology for “Small Csg & Big Hole” Slimhole Use of D155 for Light Cmt 2008 H1 Swellables (Zonal Isolation, TOL) = Brutus, Mars, Auger Use of D155 for Low Cost Lightweight Cmt = Auger A10 2007 Remote Plug Dropping Head = Auger A2 Ream-down systems (hnr, shoe, etc) = Auger A8 & A13 Use of Focused T&D Plots = Auger A10 Swellable Placement = Auger A13 2006 Rotatable Hnrs (TIW) = Brutus A5ST3 LiteCrete Slurry Design = Auger A18 (company logo)

GOM Results to Date No remedial production cementation jobs since Ursa A4 (2006) Have experienced problems with equipment (liner hangers) which have caused NPT as a result of altering method of primary cementation (Brutus A7ST2 Versaflex activation, Mars A8 plugging of shoe track) LiteCrete dry bulk segregation at Auger is predominate cause of NPT in 2007 Drove trial use of D155 with conventional class H on Auger A10 & 2008 Summer Program Successfully rotated / reamed liners to TD as proactive measure Allowed rotation at TD Use of Remote Plug Dropping head enabled full rotation during cementation Joint Taskforce established to link pre-cementation activities (Hole Cleaning, Liner / Casing Running) and shift operational paradigms NET RESULTS, Year to date NPT cost = 1.9 days / $624,000 Of this, 1.3 days and $250,000 was due to failure of a TIW Xpak system post cementation on Brutus A1ST3 (company logo)

Auger A10 ST3: Swellable, D155, Depleted Sands Cmt. Technology Implemented Swellables for zonal isolation / cmt channeling Rotatable 7” liner and equipment, for reaming & rotation at TD of 25,000’ MD Use of D155 as alternative to LiteCrete Location of Swellable, CBL ran prior to swell time expended Objective Sand (Perforations): Depleted from 12.6 ppg to 6.7 ppg (6000 psi depletion) (company logo)

Brutus A7ST2: SH cementation (5.5”) after reaming to TD Initial 7 5/8” production liner stuck Redrilled section below 7 5/8” and ran 5.5” liner Rotated 5.5” liner from 21,384 to 22,150’ MD Full rotation while prep for cmt job No rotation established after stopping to drop Drill pipe dart Unable to set Versaflex Hanger due to high angles – circulated out primary cmt job during setting process CBL log of 2nd primary cementation attempt with EZSV – 6 days after liner on bottom. Successful job attributed to rotation (“smear effect”) of liner to TD & use of RSS system J2 sand (Objective Interval) Cemented 6 days after Lnr to TD (company logo)

Learnings & Continuous Improvement (1) Utilization of LiteCrete requires careful consideration Issues of Dry Bulk segregation Sensitive to mix water volumes & proper slurry recirculation for target density D155 as alternate to LiteCrete Advantages: One dry-blend cement (Class H) for entire job All liquid additives. Unused additives can be returned Flexibility to make last-minute slurry density changes Easier to sample and test 50% cost reduction compared to LiteCRETE Disadvantages: Rig space could limit job size. Deck space is needed for liquid tanks. Liquid additive hoses present additional tripping hazards More liquid additive volume onboard, therefore more risk of chemical spill (although D155 is non-hazardous) (company logo)

Learnings & Continuous Improvement (2) Use of swellables in oversized hole applications Low side channeling prevention Added “flow barrier” for multiple intervals (spaceout becomes critical) Multiple companies distributing product – engineer the design upfront Don’t overestimate the power of paradigms “Pump until you bump” “We’ll establish rotation once we get to TD” “What’s 0.1 ppg difference in ECD?” Shift the design one element at a time Know what you are changing and why  ensure buy-in Test more than just cement – mud interfaces (company logo)

Next Steps: Where do we go from here? Synthetic Based Mud Contamination New DP Dart & Casing Liner wiper plug designs Use of Higher Density Slurries (increased contamination resistance) Depleted Sands in GOM Use of Managed Pressure Drilling equipment for cementation operations Use of graphitic carbons (G-seal, vin-seal, etc) to serve as LCM plugging in cementation slurry designs Hole Cleaning Prior to Cementing / As Part of Cementing Use of “foamed flushes” ahead of cement slurries Use of “foamed spaces” as part of clean up cycle 3-Dimensional Modeling for Cement Displacement Efficiency Standard Use of KCl Additive for Prevention of Shale / Clay Swelling (company logo)

whereby small changes add up to big results Conclusions One of the most common practices, yet it can cause significant problems later in the life of the wells Sustained Casing Pressure Micro-annulus New practices, procedures & combinations can reap great benefits and not necessarily new technology Remote Plug Dropping Heads Class H slurries + different additive combinations Rotation & centralization for displacement efficiency Performance Improvement is all about doing everything you can right the first time, whereby small changes add up to big results (company logo)

Acknowledgements SIEP-EPT Well Performance Team, Fluids & Cementation Mike Cowan Loran Galey Ron Rock EPW Wells-GOM TLP, Jackup, Platform Drilling Engrs EPW Wells-GOM TLP, Jackup, Platform Completion Engrs Service Providers: Halliburton (Cementing, EasyWell), Schlumberger (Cementing), TIW (Liner Hangers), Baker (Liner Hangers), MI (Fluids) (company logo)