Performance Through Engineering Extended Reach/Horizontal Drilling Solutions EXTENDED REACH / HORIZONTAL DRILLING

Performance Through Engineering Pay Zone Deliver Lowest cost/bbl of oil produced Maximum Production Minimum damage drill-in cleanup completion Teamwork Lowest Cost per Foot Planning, benchmarking, evaluation Fastest ROP No unscheduled events No LTA or environmental incidents Flawless execution Teamwork Commercial and Technical Issues Extended Reach/Horizontal Drilling Solutions

Performance Through Engineering Extended Reach/Horizontal Drilling Solutions Technical Challenges: Drilling: Reaching Targets Wellbore Stability Cementing Completion: Production Techniques Formation Damage Issues

Performance Through Engineering Fluids Related Issues and Challenges: Hole cleaning and suspension Wellbore stability Non-damaging fluid through the payzone Extended Reach/Horizontal Drilling Solutions

Performance Through Engineering M-I has the systems, technology, and the facilities to meet the fluid needs for Extended Reach/Horizontal Drilling, including: Extended Reach/Horizontal Drilling Solutions Expert hole-cleaning technology Barite sag prevention F LO -P RO ® drill-In systemsF LO -P RO ® drill-In systems EXIT

Performance Through Engineering The ability to clean and maintain stable wellbores becomes critical when hole angles exceed 30 degrees inclination and higher. Hole Cleaning Issues

Performance Through Engineering Stuck Pipe Lost Circulation Torque and Drag Poor Cement Jobs Loss of Well Control High Costs Loss of Well Stuck Pipe Lost Circulation Torque and Drag Poor Cement Jobs Loss of Well Control High Costs Loss of Well Problems Related to Poor Solids Transport M-I flow loop studies investigate the reasons for poor cleaning M-I flow loop analysis can predict fluids that prevent problems Computer analysis can simulate variable conditions to predict optimum properties M-I is a leader in extended reach/ horizontal fluid design Hole Cleaning Issues

Performance Through Engineering Temperature Pressure Eccentricity R600.. R3 Diameter Pipe OD, ID,TJ Angle Cuttings bed Density Rotation Velocity Length M-I understands each wellbore element that affects hole cleaning behavior and adjusts fluid properties and recommends practices to maximize hole cleaning ability. Hole Cleaning Issues

Performance Through Engineering Ester-Based Fluids Olefin-Based Fluids M-I has performed extensive research on water-base, oil-base, and synthetic-base fluid behavior to provide the ideal fluid for the right project Hole Cleaning Issues Back

Performance Through Engineering Barite Sag BARITE SAG IN HIGH-ANGLE AND EXTENDED-REACH WELLS Barite bed formed in an inclined wellbore Barite ‘Sag’ is a physical phenomenon that occurs in high-angle wells. M-I has investigated its cause and prevention. Sag in fluids has not truly been understood and has led to severe well problems.

Performance Through Engineering Barite Sag Boycott Settling of Barite and Cuttings Barite sag is caused by: Dynamic settling Static settling Slumping Barite sag must be addressed by the overall drilling process

Performance Through Engineering Barite Sag A primary indication of sag: Variation in mud density while circulating bottoms up after a trip or logging/ casing run

Performance Through Engineering Barite Sag Barite sag bed, seen from bottom Annular velocity and pipe movement are key operational considerations Elevated low-shear-rate viscosity and suspension are key mud adjustments Barite sag can be minimized, but not totally eliminated Well Type - ERD wells most critical, especially for small margin between pore pressure and fracture gradient Well Environment - Temperature and pressure effects critical for mud design Angle/Profile - Sag occurs at angles >30°, but recent tests show 60-75° critical M-I has determined the keys issues that cause sag in fluids:

Performance Through Engineering Barite Sag M-I has determined the keys issues that cause sag in fluids (cont.): Mud Type - Sag occurs in all types, but OBM and SBM are problems Mud Weight - Sag occurs > 12 ppg. Above this weight, insensitive to density Rheology - Elevated low-shear-rate viscosity greatly reduces sag Weight Material - Sag depends on specific gravity and particle size Rotary vs. Sliding - Sag worst when sliding. Pipe rotation helpful, especially when eccentric Rotary Wiper Trips - Reduce sag in between periods of extended sliding Time - Sag increases with time. For excessive time, consider staging in hole Sag Bed Back

Performance Through Engineering F LO -P RO ® F LO -P RO Rheology engineered, non-damaging Drill-In fluid for horizontal and deviated wells

Performance Through Engineering F LO -P RO ® F LO -P RO fluids possess a unique rheological behavior to completely eliminate cuttings bed formation. F LO -P RO ’s main constituents, F LO - V IS ® and F LO -T ROL ®, are designed to be non-damaging and allow for easy wellbore cleanup, maximizing production.

Performance Through Engineering F LO -P RO ® ROP Wellbore stability Hole cleaning Solids removal Lubricity Inhibition Formation damage Clay hydration Fines migration Incompatible water Solids plugging Emulsions Drilling Completion F LO -P RO Drill-In Fluids are designed for optimum drilling and maximum productivity. These systems are engineered to handle :

Performance Through Engineering F LO -P RO ® F LO -P RO systems are specially designed with time independent viscoelastic properties to achieve ultimate suspension and cutting-removal performance. We use specialized testing equipment to ensure performance. Velocity profile of FLO-PRO fluids

Performance Through Engineering F LO -P RO ® F LO -P RO systems are formulated to minimize formation damage by selectively using the proper components for a specific reservoir. F LO -P RO Components F LO -V IS ® - clarified biopolymer for viscosity F LO -T ROL ® - special, modified starch for filtration S AFE -C ARB™ - “sized” carbonate bridging agent Non-damaging, easily removed F LO -P RO filter cake

Performance Through Engineering F LO -P RO ® F LO -P RO DESIGN CHART F LO -P RO can be designed to meet all drill-in targets

Performance Through Engineering F LO -P RO ® Density Ranges

Performance Through Engineering F L O - P R O F LO -P RO ® Hundreds of wells have already utilized and received the benefits of using F LO --P RO. Outstanding results have been achieved, including: Maximized ROP Reduced Drilling Costs Improved Production Easier Completions Reduced Environmental Concerns Back