“Slickline Fatigue Tracking Software Delivers Economic Benefits” November 14, 2010 ICoTA Round Table Calgary, AB Ed Smalley 1

Today’s Highlights Drivers for New Slickline Technology New Technology to Monitor SL Fatigue Life Slickline fatigue model development Corrosion life reduction Slickline Inspection Example Results

Why Focus on Slickline Fatigue Life? Cost, Safety, and Expand Market Fatigue Life Monitoring Goals Extend Life / Reduce SL Expenditures Improved Safety (SL failures @ surface) Reduce Downtime / Fishing Operations Increased Customer Confidence in SL Operations

Causes of Slickline Failures Mechanical Damage Abrasion, severe bending (kinking) Corrosion Rust, acid, H2S, CO2 Fatigue Damage Sheave wheel, overpull Failure Causes can be Interrelated - Example: Cracks caused by corrosion can exacerbate fatigue damage Technology to Quantify both Corrosion & Fatigue Life

Slickline Data Acquisition & Fatigue Data Acquisition System Acquires depth and weight channels Display & record data during field operation Calculates: Fatigue damage caused by SL movement/tension Displays: % Fatigue Life Used vs. length of SL Slickline history (cuts, re-spooling events, etc.)

SL Fatigue Model Development (Fatigue vs. Crack Propagation) Fatigue Damage Damage (bending) accumulates until crack initiation Crack Propagation (following crack initiation) Repeated bending causes crack propagation until a failure (fracture) occurs CT Fatigue – includes only crack initiation DP Fatigue – usually includes only crack propagation Slickline Fatigue – includes effects of both

Large Test Machine (SL Fatigue Model Development) Air Piston (tension)

Large Test Machine (16” and 19” Sheave Diameters) Each blue sheave actually is 2 sheaves together, one 19” and one 16”. So we can do testing with 2 sheave diameters, but only one drum diameter. The drum has a diameter of 20”.

Large Test Machine (Spilt-Drum Used for Testing) Point out the split drum. When the sample stretches so much that the piston approaches the end of its stroke, we have to stop, release the tension, and rotate one side of the drum, with respect to the other side, to take up the slack.

Bending Diameter to Initiate Yielding: Plastic Fatigue from Bending Events (Bending Strain Inversely Proportional to Sheave Size) d (in.) Dy 0.092 19.7 0.108 23.1 0.125 26.8 0.140 30.0 Bending Diameter to Initiate Yielding: Dy = dE σy Where: Dy = Bending diameter at which yielding begins d = Diameter of slickline E = Modulus of elasticity (30 x 10-6) σy = cyclic yield stress (~140k PSI typical, varies by material)

Strains from a Type 1 SL Rigup (SL Fatigue Model Development) eSp eSl eSu time strain The magnitude of the strains is inversely proportional to the diameter of the sheave (the larger the sheaves the smaller the bending strain and the longer the fatigue life). The reverse strains, shown in red, are the most detrimental, causing the most SL fatigue damage. For this type 1, there are two “strain reversals, which occur at the Sl (lower sheave), one when RIH and one when POOH RIH POOH Sp = power sheave Sl = lower sheave Su = upper sheave

Strains from a Type 2 SL Rigups (SL Fatigue Model Development) eSp eSd1 eSu eSl time strain Type 2a eSp eSd1 eSu eSl time Adding a single depth sheave causes another set of bending events, but the number of strain reversals remains the same – 2. Type 2b strain Sd1 = depth sheave 1

Strains from a Type 3 SL Rigups (SL Fatigue Model Development) eSp eSd2 eSu eSl time eSd1 Type 3a eSp eSd2 eSu eSl time eSd1 Adding a 2 sheave depth system again increases the number of bending events, but again the reverse bends remains at 2, so there is a marginal increase in fatigue damage. Type 3b Sd2 = depth sheave 2

Model Results / Tension = 0 (SL Fatigue Model Development) Estimated trips to failure is 1314

Model Results / Tension = 2,000 lbs (SL Fatigue Model Development) Estimated trips to failure dropped to 1046 with tension

Corrosion / Tracked Fatigue De-Rating (Portable Slickline Fatigue Tester) Portable SL Fatigue Test Machine Wellsite use Rapid Testing of Short SL Samples Rotation of SL sample imparts bending strain Repeatable results Determine Life Reduction Due to Corrosion From tests of actual SL being ran in the field

Corrosion Life Reduction Maximum Corrosion @ Downhole End: Hottest corrosive wellbore fluids Longest period of time in well Exposure to atmosphere when on drum Corrosion Testing Samples taken from downhole end during life of SL Test samples in portable tester Compare test results to SL fatigue model If worse, add a corrosion factor to fatigue results

Portable Slickline Tester (Corrosion De-rating & Maximum Remaining Fatigue Life) Records Revolutions to Failure Rotation of SL imparts bending events Convert revolutions to fatigue life Sample length = 34 cm Multiple Sheave Sizes 30-61 cm (12-24 in)

Sheave Size Adjustment (Portable Slickline Tester) Adjustable Tailstock Position to Match Sheave Size

Fatigue Model vs. Data Comparison (SL Fatigue Model Development) Briden Supa75 0.125” Everything red and purple is for the small machine. Everything blue is for the large machine. The results from the large and small machine agree very well – thus testing with the small machine is sufficient except for high tension testing. Tests on the small machine with and without cooling were almost the same – thus cooling not needed. Lines are Tipton’s fatigue model results. The kink in the blue lines at 20” is because the drum of the large machine is always 20”. When the sheaves are below 20” the sheaves dominate the bending. When the sheaves are above 20” the drum dominates the bending.

SL Inspection vs. Fatigue Tracking Inspection Systems Can Locate: Defects Cracks or pits Diameter changes Necking Inspection Systems Cannot: Measure fatigue damage Estimate SL life reduction due to the defects Estimate remaining SL fatigue life The point here is that the SL fatigue life calculation, combined with corrosion tests, should give a much more accurate means of tracking the life of a SL than an inspection system.

Slickline Job Data (Example: Tension & Depth vs. Time)

% Fatigue Life Used Output (Example)

Slickline – Case History 1 Background Sandvik 2RK66 0.108” slickline Slickline data acquisition system used to record field job data Depth, tension, sheave size & configuration Field Data 37 Individual job records (i.e. work on a single well) Up to 7 downhole trips per well Slickline History Time in service: 90 Days

Slickline (Case History 1) Assumptions Fatigue Calculated as GD31MO 0.108” Slickline Several Jobs Not Recorded (<10% of total) Rig Up: Dual-wheeled Measuring Head Upper & lower sheave wheels (‘Type 3’ rigup) 6 m Slickline Cut Off after Each Job (avg.) No Exposure to Corrosive Environments

Fatigue Calculation (Case History 1) Tension Results Slickline Retired with Only 20% Fatigue Life Used ! Wasted $ for Unnecessary Line Replacement Fatigue Life Used

Conclusion Slickline Fatigue Software Portable Fatigue Tester Display/record job data Record line cuts & spooling events Real-time remaining fatigue life Can be utilized with DAS provided by numerous manufacturers Generates post-job customer reports Portable Fatigue Tester Test for corrosion Fatigue life de-rating Questions?