Baroid High-Performance Invert Emulsion Fluid Systems

Why Baroid? 1925 Filed patent for first barite-based drilling fluid 1930 First mud school 1932 First mud-testing procedures and kit 1939 First mud-logging service 1940s Pioneers service by air and sea 1950s Invents foam drilling technology 1960s Invents oil-based fluid, INVERMUL® system 1970s Develops new fluids for hostile geology 1980s Develops mud loop testing, improves waste management 1990s Pioneers of first biodegradable/synthetic invert drilling fluids 2000s Rolls out first families of clay-free synthetic and high performance water-based fluids 2010s Introduces automated mud monitoring equipment to industry Baroid has years of expertise and experience in the drilling fluids industry. We patented the barite-based drilling fluid in 1925 and were the first to roll out clay-free synthetic and high performance water-based drilling fluid systems in the early 2000’s.

CONSISTENT Quality: Technical and Operational Process The cornerstone of our organization is process execution. Our processes get to the heart of what drives value for your operation in order to design and deliver solutions that maximize value. These processes are crucial in our ability to improve response time and deliver high quality, custom solutions consistently around the globe.

BAROID Laboratory Support Baroid scientists and engineers work with state of the art equipment and an extensive global database in order to perform comprehensive testing analysis on a global scale. Baroid’s Laboratory Services include: Analytical technical support Bioassay technical support Reservoir and completion fluids technical services Drilling fluids technical services Industrial drilling products lab Quality assurance Research and development Baroid scientists and engineers work with state of the art equipment and an extensive global database in order to perform comprehensive testing analysis on a global scale. Services include: Analytical technical support Bioassay technical support Reservoir fluids technical services Drilling fluids technical services Industrial drilling products lab Quality assurance Research and development

OPERATOR Challenge Hole Cleaning Wellbore Stability Lost Circulation Non-productive Time Barite Sag HSE/Compliance High Temperatures Stuck Pipe Logistical Costs Reduced ROP

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems Engineered invert emulsion fluids that provide superior performance over conventional inverts Customized application of organophillic clay and lignite free fluid technology Diverse family of fluid solutions to provide maximum drilling performance and overall well-bore value

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems INNOVERT® - Synthetic/Refined Parafin Invert Emulsion Fluid System Ideal for deepwater, shelf, and land drilling Stable up to 450º F (232º C) Available for all formation types Meets North Sea regulations ENCORE® - Olefin Based Invert Emulsion Fluid System Ideal for deepwater and shelf drilling Provides environmental compliance ACCOLADE® - Ester/Olefin Based Invert Emulsion Fluid System Ideal for deepwater and shelf drilling Stable up to 300º F (149º C) Exceeds environmental compliance in GOM INTEGRADE® - Diesel Based Invert Emulsion Fluid System Ideal for shelf and land drilling Stable up to 430º F (221º C) Diesel reliability with increased drilling performance

Baroid High-Performance IEF’s BAROID Solution Conventional IEF’s Baroid High-Performance IEF’s Fluid Design Organophilic Clay & Lignite 1960’s Clay Technology Higher solids Not tolerant to water flows and LGS Fatty Acid & Polymers No organophilic materials Low solids for faster penetration rates High tolerance to water / solids contamination Rheology More solids & losses = more chemical and base oil used to stabilize fluids Unique fragile gel structures for lower downhole losses Cost Higher wellbore construction costs due to lost circulation Lower product and base oil used Reservoir Performance Possible formation damage, reduced return permeability Superior return reservoir permeability Baroid’s high-performance fluid systems are also customized to deliver maximum drilling efficiency in every location and formation type

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems Free of organophillic clays Organophillic clay and lignite are not used in clay-free fluids because they can negatively impact drilling performance and reservoir producibility Increase rate of penetration Decreased risk of formation damage Increased production of reservoir

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems Robust, yet fragile gel technology Unique fragile gel structure minimizes surge/swab, to allow: Essentially no sag during downtime Logging success Easy trips Casing strings run without losses Successful primary cementing Staging is now optional

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems Robust, yet fragile gel technology Although the fluid is heavier, the clay-free system reaches it’s peak more rapidly and flow is initiated almost 30 seconds faster compared to conventional systems Eliminate pressure spikes Reduce risks of lost circulation Adequately clean wellbore

BAROID Solution Baroid’s Family of High-Performance Invert Emulsion Fluid Systems Increased Sag Resistance Baroid’s family of invert emulsion fluids are able to not only provide increased ECD control, but do so without sacrificing hole cleaning efficiency and resistance to barite sag Thinner fluid at higher shear rates to control pressure Flat viscosity at lower shear rates forming fragile gels and preventing barite sag

CUSTOMER Benefits Increased Drilling Performance Organophillic clay-free systems with fragile, yet robust gel strength Increased ECD control and excellent hole cleaning Superior return permeability, low lift pressure Increased penetration rates Superior Hole Cleaning Reduced NPT associated with barite sag, lost circulation and ECD control Improved logistics and rig space use Custom Application Decreased wellbore limitations Real time response to chemical treatment Stable performance over a wide temperature and density range Customized to meet environmental requirements around the world

Baroid High Performance Invert Emulsion Fluid System Baroid’s field proven family of engineered, high-performance invert emulsion drilling fluids are customized for every job to deliver faster drilling in the most challenging drilling operations while reducing NPT Drill Faster Reduce Risks

CASE STUDY: Using ACCOLADE® System Saved Operator over $491K on 63° Sidetrack Location: Gulf of Mexico CHALLENGE After evaluating a well drilled with a salt/PHPA water-based fluid system, the operator decided to drill a 63° sidetrack to reach target sands at a different angle. The operator requested a drilling fluid that would help improve formation evaluation by minimizing washout. The selected drilling fluid system would also be required to help minimize risk of stuck pipe in the high-angle wellbore and provide sufficient wellbore stability to allow the well to be logged and evaluated extensively. SOLUTION The Baroid team recommended the ACCOLADE® synthetic-based system to help maintain optimal wellbore stability and reduce the risk of stuck pipe or lost-in-hole tools. During the planning phase, DFG™ hydraulics modeling software was used to determine optimal fluid and drilling parameters for hole cleaning and drilling efficiency. RESULTS Drilling was completed without incident and the operator was able to log the well extensively with no complications, including shooting sidewall cores. Production casing was run to bottom with no problem. Based on savings earned by avoiding fishing operations and the cost of lost-in-hole tools, switching from the water-based system to the ACCOLADE system saved the operator an estimated $491K.

CASE STUDY: Using ACCOLADE® System Saved Operator over $491K on 63° Sidetrack Location: Gulf of Mexico CHALLENGE: The operator was drilling a 63° sidetrack to reach target sands at a different angle. The operator requested a drilling fluid that would help improve formation evaluation by minimizing washout, minimize risk of stuck pipe and provide sufficient wellbore stability SOLUTION: The Baroid team recommended the ACCOLADE® synthetic-based system DFG™ hydraulics modeling software was used to determine optimal fluid and drilling parameters RESULT: Based on savings earned by avoiding fishing operations and the cost of lost-in-hole tools, switching from the water- based system to the ACCOLADE system saved the operator an estimated $491K. CASE STUDY

CASE STUDY: INNOVERT® clay-free high performance, invert emulsion system introduced into Norwegian market, offering an environmental HP/HT drilling fluid solution Location: North Sea CHALLENGE Expanded environmental regulations in Norway have increased demand for drilling fluid systems that can meet drilling challenges, remaining environmentally acceptable. This facilitated Halliburton’s introduction of the first clay-free drilling fluid system for the prospect SOLUTION Baroid fluid engineers developed a program to introduce the clay-free INNOVERT® high-performance invert emulsion system. To facilitate drilling in the high temperature zone of the 8 ½ section a customized treatment was developed by Baroid at their Tananger Fluids Lab. ROP was maintained between 40-50 m/hr for the majority of drilling, with a period of ROP at 80 m/hr, with no major downhole losses or hole cleaning issues. RESULTS Drilling with the clay-free INNOVERT invert emulsion fluid reduced losses from previous wells by 23%, representing $104,477 USD in cost savings. In addition, with the development of a certified HP/HT fluid system, resulted in further savings of $372,717 USD for a total well savings of $483,372.53 USD.

CASE STUDY: INNOVERT® clay-free high performance, invert emulsion system introduced into Norwegian market, offering an environmental HP/HT drilling fluid solution Location: North Sea CHALLENGE: Expanded environmental regulations in Norway have increased demand for drilling fluid systems that can meet drilling challenges, remaining environmentally acceptable. SOLUTION: Baroid fluid engineers developed a program to introduce the clay-free INNOVERT® high-performance invert emulsion system. RESULT: Drilling with the clay-free INNOVERT invert emulsion fluid reduced losses from previous wells by 23%, representing $104,477 USD in cost savings. In addition, with the development of a certified HP/HT fluid system, resulted in further savings of $372,717 USD for a total well savings of $483,372.53 USD. CASE STUDY

CASE STUDY: INTEGRADE® Fluid System Reduces Base-Oil Usage and Increases ROP Location: US Oklahoma CHALLENGE An operator recently sought a solution to reduce its total fluid cost while drilling in the Cana Woodford in Central Oklahoma. The original system proved to be a poor solution because it required excessive base-oil usages (between 28,000 and 31,000 gallons of diesel) just to drill the 8-¾-in. production section. SOLUTION Baroid recommended the use of INTEGRADE® high-performance fluid system to reduce diesel requirements. The INTEGRADE system, 70/30 oil-water ratio, was considered as an option to reduce the amount of diesel that the customer would have to use, resulting in reduced transportation costs and retention of drilling fluid on the cuttings. The INTEGRADE solution not only reduced the total fluid cost to the customer, but it also aided to increase the average ROP due to its clay-free nature. RESULTS The wells drilled with INTEGRADE fluid system proved to have a higher ROP than the wells drilled with the conventional oil-based system. This solution successfully reduced the total fluid cost to the customer, thereby lowering average diesel usage by 39%. Through reduced retention on cuttings and the 9% reduction in transportation costs, the customer was able to save substantially on its overall fluid costs, and an average of $35,000 was saved per well.

CASE STUDY: INNOVERT® clay-free high performance, invert emulsion system introduced into Norwegian market, offering an environmental HP/HT drilling fluid solution Location: North Sea CHALLENGE: Expanded environmental regulations in Norway have increased demand for drilling fluid systems that can meet drilling challenges, remaining environmentally acceptable. SOLUTION: Baroid fluid engineers developed a program to introduce the clay-free INNOVERT® high-performance invert emulsion system. RESULT: Drilling with the clay-free INNOVERT invert emulsion fluid reduced losses from previous wells by 23%, representing $104,477 USD in cost savings. In addition, with the development of a certified HP/HT fluid system, resulted in further savings of $372,717 USD for a total well savings of $483,372.53 USD. CASE STUDY

CASE STUDY: ENCORE® Clay-Free, Synthetic-Based Fluid Helped Operator Overcome Stuck Pipe and Wellbore Stability Issues in 57° Well in the Gulf of Mexico Location: Gulf of Mexico CHALLENGE The operator was planning a high-angle development well in a shelf field in the Gulf of Mexico. Previous wells drilled at lower angles with a variety of water-based fluids had experienced wellbore stability issues, stuck pipe, bit and bottomhole assembly (BHA) balling and slow rates of penetration (ROP). SOLUTION Based on analysis of the previous wells drilled in the area, Baroid personnel recommended clay-free ENCORE® synthetic-based fluid. The 13,421-ft interval was drilled with one PDC bit and neither bit nor BHA balling was an issue. The hole remained stable, and after cleaning up the hole, trips were problem-free. RESULTS Operational benefits included trouble-free trips, no lost BHAs, and no need to sidetrack for wellbore stability issues. Based on a spread rate of $210K a day, the 10-day savings in rig time amounted to $2.1M.

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