Integration of 3D-shared earth model with Drops Drilling Simulator to reduce drilling costs NFR project 150496/210 Presented in Stavanger 4 April 2003 Presented by Runar Nygård, Drops Technology AS © Drops Technology AS

Outline of presentation Project description What is drilling optimization? DDS – Drops Drilling Simulator-Technical description Results so far Summary © Drops Technology AS

Project participants Drops Technology AS Drops Technology AS was founded in 1997. It is a limited company incorporated in Oslo, Norway DROPS Technology AS sells services, program licenses and user access, based on DROPS’ drilling optimization simulator DDS 2.7 PGS-Tigress PGS-Tigress is 100% subsidiary of PGS PGS-Tigress is a software company for the Exploration and Production professionals with a suite of integrated tools The main product being TIGRESS (The Integrated Geoscience and Reservoir Engineering Software System). © Drops Technology AS

Project description Today the Drops Drilling Simulator needs drilling data as reference to build the physical drillability needed for the simulator to simulate drilling. This project will extend the drilling simulation capabilities so other data from logs and seismic attributes from a shared 3D earth model can be used as basis for drilling simulations. Using such information would also give better prediction of drillability variations related to different well paths. GOALS Implement DDS in Tigress shared earth model software Develop new models for drillability based on other type of data than drilling data Develop automatic well planning routine in Drops Drilling simulator © Drops Technology AS

Tigress Integrated software for all disciplines in petroleum exploration PC version is Linux based Powerful database (PDR) Open link to other software (data loading) © Drops Technology AS

Drilling optimization: Simulation tools Today’s oil and gas industry utilize simulators mainly in three of the four main operational engineering disciplines Reservoir, production and formation evaluation all use simulation tools to better evaluate different scenarios and to improve interpolation and economics In advance the production, reservoir and seismic/log analysis can be performed Drilling Engineering has a lack in planning tools available for the actual drilling process Drilling software is mainly related to the fluid system and well-rock interaction (well integrity) © Drops Technology AS

Drilling optimization: Learning Curve The Learning Curve has been slow and expensive. Even after 30-40 wells have been drilled in the same formations in a field there are still many combinations of bits and operating conditions that have not been tried Therefore you might not have reached the lowest drilling cost Utilizing a simulator that can simulate these combinations in a short period of time after the first well has been drilled, is definitely a strong tool © Drops Technology AS

Drilling optimization: Cost equation Required inputs are actual bit costs, rig rate, and other costs The simulator calculates rotating time (from ROP), connection time and trip time The individual bit run cost pr. meter and the cumulative cost pr. meter are used to evaluate the optimum in terms of economics Other costs, like: MWD/LWD, DD, down hole equipment, fluids, personnel, boats and other © Drops Technology AS

The Drilling Optimization Simulator simple overview An earlier drilled well well is the reference The simulator iterate a perfect match from the reference “drillbehind”. Output from this is a strength log, ARSL This strength log is used as basis for the next well Adjusted for lithology (formation thickness) and survey, the new well can be optimized © Drops Technology AS

Technical Approach Predictive ROP models have been developed in the past two decades ROP models exist for Rollercone, PDC and NDB/Geoset bits Describe the physical interaction between the bit and the rock as a function of the parameters that effect the bit performance. Different bits have different cutting mechanisms. The cutting mechanism is integrated over the entire bit face and converted to ROP in meter/hr. As the bit penetrates through the different formations the bit wears, which again effect the ROP. The ROP models use unconfined rock strength as an input The ROP models can be used to predict unconfined rock strength if ROP is known. The models have been verified in the laboratory and field © Drops Technology AS

© Drops Technology AS

Apparent Rock Strength Log (ARSL) Creation Procedure Each Bit-/BHA run is treated separately Simulations are performed for each bit with different ROP models dependent on bit type “Apparent rock strength” is calculated based on an initially assumed bit wear coefficient A new wear coefficient is then estimated and a multiple solutions iteration procedure for the entire bit run is performed until the calculated bit wear equals the actual bit wear The resulting “apparent rock strength” log is now specific for the formations in this area © Drops Technology AS

DROPS Drilling Optimization Simulator © Drops Technology AS

Needed input data for ARSL creation Drilling, mudlogger and bit data needed Drilling data - Depth, ROP, WOB, RPM, Flowrate, Plastic Viscosity, Mud Weight Mudlogger data - Formation thickness Percent lithologies, Pore Pressure Bit Data- Size, Type, Jets, Number of cutters and blades, Backrake, Siderake, PDC layer thickness, Backup Cutters Info., Depth In, Depth Out, Wear In, Wear Out, TFA and POA. © Drops Technology AS

Drops Drilling Simulator DDS Currently used in planning, follow up and post analysis of wells DDS is a Windows based application and the interface is user friendly, just “point and click” © Drops Technology AS

Drops Drilling Simulator DDS Control sheet window Cost is re-calculated based on every simulated change © Drops Technology AS

Drops Drilling Simulator: The ARSL Existing drilling data is used to calculate a ARSL (Apparent Rock Strength Log) The ARSL is used to plan and simulate the forthcoming wells in the field Assumption is that the drillability properties for each formation does not change from well to well The simulator does not take into consideration any 3D-effects like anisotropy in stress field or mechanical data Up to now there has been time consuming to simulate numerous different well trajectories © Drops Technology AS

Learning Curve for One Bit Learning Curve for 12.25 Section Using One Bit. 1800000 1700000 Bit A Bit B Bit C Bit D. Bit E 1600000 1500000 1400000 Total Cost for 12.25 Section, $ 1300000 1200000 1100000 1000000 900000 800000 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 Number of Simulations. © Drops Technology AS

Learning Curve Multiple Bits Learning Curve for 12.25 Section Using Multiple Bits. 1500000 1400000 Bit C Bit B Bit B Bit A Bit A Bit A Bit A Bit B Bit D Bit B Bit D Bit A Bit C Bit D Bit D Bit C Bit C Bit A Bit C Bit E Bit D Bit B 2 X Bit D 1300000 Total Cost for 12.25 Section, $ 1200000 1100000 1000000 900000 800000 20 40 60 80 100 120 140 160 180 200 Number of Simulations. © Drops Technology AS

Simulator results: ROP Measured and Calculated ROP vs depth 50 45 Measured ROP 40 Calculated ROP 35 30 ROP, m/h . 25 20 15 10 5 3650 3700 3750 3800 3850 3900 3950 4000 Depth, mTVD © Drops Technology AS

Simulator Results: Rotating Hours © Drops Technology AS

Simulation of Bit wear (Reported Wear 2-6) Bit Wear Evaluation 8 Bit Wear Evaluation Center 7 Gage Average 6 5 Bit Wear . 4 3 2 1 2854 3000 3050 3100 3150 3200 3250 3300 3350 3400 3450 3500 3550 3600 3650 3688 TVD (m) © Drops Technology AS

Drops Drilling Simulator: Real time Follow up In addition to being a planning tool, DDS has functionality for comparing the planned well program with the actual data from the rig Conduct rapidly decisions in unforeseen situations Re-simulate the planned program with new equipment, bits, etc. © Drops Technology AS

Software integration Task 1 Implement DDS in Tigress shared earth model software This has been done by running Drops using vm-ware in Linux All data needed for running DDS is stored in PDS. Vector based special bit information is implemented in Tigress as an drilling event Adjusting data for DDS based on new well trajectories is easily done in Tigress by using their G&G modules DDS 2.7 is now commercially for sale by Tigress This task of the project is finished as planned © Drops Technology AS

Results: Software integration © Drops Technology AS

Software integration © Drops Technology AS

Software integration © Drops Technology AS

Software integration © Drops Technology AS

ARSL based on other strength criteria When bit is penetrating the rock, different modes of failure occurs in the rock like, shearing, crushing and tension fracturing The drillability is the resistance of the rock being penetrated by the drill bits Drillability of the rock is a dynamic parameter However, Rock strength and drillability are closely connected In this ongoing work we have been able to establish rock strength based on different electric logs which is comparable with the ARSL based on drilling data. One exception is for harder zones which still some additional work remaining © Drops Technology AS

ARSL: From other sources © Drops Technology AS

Variation in properties: Anisotropy Anisotropy effects Stress field Rock strength may have anisotropic behavior Or large variations Effect when drilling: If directional change determine an increase in mudweight this will increase drilling time and increase wear © Drops Technology AS

Task 3 progress report Task 3. Develop automatic well planning routine in DDS By developing algorithms that make more of the drilling simulation automatically there is a possibility to increase the numbers of well scenario which is simulated A new bit routine is underway. This routine will make it possible to automatically simulate different bits for each section and thereby increase the numbers of simulations performed and increase the value of planning © Drops Technology AS

Summary Up to now our project followed its original progress Task one, the software integration went well Drops believe that being part of a larger software package to the oil companies will give economical results in near future We believe that drilling simulation will be common in the future so the time works for us, not against us We would like to thank NFR for giving a small company as ours the possibility to do research. Whiteout NFR support we would not have been able to do it © Drops Technology AS

Example: Day to day follow up 8 1/2” Section Time-Depth Curve 3500 3600 3700 3800 3900 4000 4100 4200 4300 4400 8.5 in Pilot 8.5in Simulated 8.5in Actual RPM recommendations not followed Measured Depth (m) Rig was informed that bit will wear out before TD Trying to save five hours resulted in a loss of 15+ hours (or about $100.000) ! Trip for Bit Change Bit Quits Drilling 5 10 15 20 25 30 35 40 45 50 55 60 Time (hrs) © Drops Technology AS