1. PROFESSIONAL PETROLEUM DATA MANAGEMENT ASSOCIATION Global Well Identification Workshop October 27 th 2011 Calgary, AB Trudy Curtis Bruce Smith Jeffrey Bonus 1

2. AGENDA Introduction – Trudy Curtis -Global Sub-Committee US Project Update – Bruce Smith -Project Update -Revising the API Numbering Standard for Today’s Drilling -What are the biggest pain points with the API Number? ERCB – Miriam Romero -ERCB Well Identification: Business Practice and Challenges Alberta Project Update – Jeffrey Bonus -Project Update – DRAFT Project Charter -What are the biggest pain points with the UWI Number? -When do you assign the Well Identification Number? -Who assigns the Well Identification Number? Australia – Trudy Curtis Stakeholder Analysis – Bruce Smith & Jeffrey Bonus -Canadian Companies Participation Next Steps 2

3. Introduction – Trudy Curtis Global Sub-Committee 3

4. 4 US Well Identification Project

5. 5

6. Global Framework Built on Foundation from “What is a Well?” definitions Input from Operators and Information Vendors that work in U.S., Canada and outside North America Current Status and Near Term plans -Developed first draft of Business Requirements -Realized more formal Stakeholder Analysis of current practice, issues and needs is required -Developed Stakeholder Analysis Interview and Analysis template -Performing interviews with stakeholders in Q4 2011 Need additional resources to complete this step, especially for outside U.S. -Will review and analyze results in early 2012 -Complete first version of Global Framework in Q1 2012 6

7. U.S. Well Identification Standard After completion of Global Framework, the U.S. project team will revise API Numbering standard API has contracted with PPDM to be steward for the revised Well Identification and Numbering standard -Revisions must include practical approaches given legacy practices Focus on U.S. Regulatory agencies -API numbers are set by U.S. regulators in most states -Project seeks more consistent approach, especially for identification of all wellbores including pilot holes, mis-steered laterals, junked wellbores -Stakeholder interviews with Regulatory agencies are happening in next 2 months 7

8. PROFESSIONAL PETROLEUM DATA MANAGEMENT ASSOCIATION Revising the API Numbering Standard for Today’s Drilling IOGCC Buffalo, NY October 18 th, 2011 8

9. TODAY’S TALK Describe the Project -Bismarck Introduction Why is this important to Regulatory Agencies? Examples Call to Action - Requesting Interviews with Regulatory Agencies 9

10. Revising the API Number Standard API Number standard last updated 1979 API has agreed that PPDM is steward of Well Numbering Standard Project team includes operators, regulators, information vendors Issue: Many wellbores are not being identified in regulatory filings or in regulatory databases Lack of information on these wellbores presents issues for regulators and operators 10

11. Original API Process (D12A Standard) 11

12. Definition: Well vs. Wellbore 12 Example: One Well with Two Wellbores Well: Single surface location and everything connected to it Wellbore: Unique path from surface to bottom hole

13. Example Horizontal Well : Permit to Drill 13 Horizontal Well is Proposed. Exact Depth of Target Zone will be determined by vertical “Pilot Hole”

14. 14 Example Horizontal Well : Vertical Pilot Hole Vertical Pilot Hole is Drilled. The information from this wellbore is used to decide the depth of the Lateral This wellbore is logged and may have cores and deviation surveys.

15. 15 Example Horizontal Well : Identify Target Zone Target Zone for Horizontal is identified from well logs. Cement Pilot Hole to kickoff Lateral into Target Zone Note: Pilot Hole drills below Target Zone Target Zone for Horizontal Cement Plug Pilot Hole

16. 16 Example Horizontal Well : Drill Lateral Lateral 1 mis-steered below Target Zone. Operator decides to sidetrack to position horizontal Lateral in the Target Zone Target Zone for Horizontal Lateral 1 Pilot Hole

17. 17 Example Horizontal Well : Prepare to Sidetrack Target Zone for Horizontal Lateral 1 Pilot Hole Cement Plug Set Cement Plug in Lateral 1 in preparation to Sidetrack

18. 18 Example Horizontal Well : Drill Lateral 2 Lateral 2 in Target Zone Lateral 1: Mis-steer Pilot Hole Lateral 2 is successfully drilled in Target Zone

19. 19 Example Horizontal Well: Complete Lateral 2 Lateral 2 in Target Zone Lateral 1: Mis-steer Pilot Hole

20. 20 Example Horizontal Well: “Missing” Wellbores Wellbores in Red are not reported by Operators in many states Lateral 2 in Target Zone Lateral 1: Mis-steer Pilot Hole

21. 5 Reasons that Missing Wellbores Matter 21

22. 1.All wellbores have plugging obligations--not just the producing wellbore 22 Why “Missing” Wellbores Matter

23. 2. Fluid movement—injected fluids can follow pathway of any wellbore that open 23 Why “Missing” Wellbores Matter

24. 3. Operators may be required to file information such as well logs for all wellbores, not just producing wellbores. 24 Why “Missing” Wellbores Matter Lateral 2 Lateral 1 Pilot Hole

25. 4. All wellbores must stay within the permitted lease boundaries and the permitted depths. 25 Why “Missing” Wellbores Matter Pilot Hole is deeper than the Lateral Map view shows bottom hole locations of each wellbore

26. 5. Anti-collision measures require all wellbores to be identified and have known paths 26 Why “Missing” Wellbores Matter 3-D Diagram of 9 wells drilled from a single pad

27. GWPC Resolution 11-1 in Support of Project 27 “BE IT FURTHER RESOLVED that GWPC work with PPDM Association’s Well Identification Workgroup in its effort to develop methods for consistently identifying all wellbores in the US.”

28. Asking Regulatory Agencies to Participate Our team is interviewing Regulatory Agencies about current practice and any plans for change We will be contacting your agency in next 2 weeks to set up a 20-minute interview PPDM Workgroup will work with IOGCC, GWPC and Regulatory Agencies to develop practical solutions -Development of best practices -Support of PPDM process (revised D12 a) -Potential model process 28 Today: Please see Don Drazan NY DEC or Bruce Smith with PPDM to set up a time for an interview. Or we will call you in the next 2 weeks to set up a time with your staff

29. Contact Information 29 Bruce Smith, PPDM 303 549 0772 Bruce.Smith@ppdm.org Don Drazan, NY DEC 518 402 8056 djdrazan@gw.dec.state.ny.us

30. US PAIN POINTS Regulators Operators Information Vendors Service Companies 30

31. 31 ERCB – Miriam Romero

32. 32 Alberta Well Identification Project

33. Project Charter -Board Approval Sponsors & Workgroup Participants 33

34. 34

35. ALBERTA PAIN POINTS Regulators Operators Information Vendors Service Companies 35

36. ASSIGNING UWI’S When do you assign the UWI? Who assigns the UWI? 36

37. 37 Australia

38. 38 Stakeholder Analysis

39. 39 Next Steps

40. CONTACT INFORMATION Bruce Smith -bruce.smith@ppdm.orgbruce.smith@ppdm.org Trudy Curtis -curtist@ppdm.orgcurtist@ppdm.org Jeffrey Bonus -jeffreyb@ppdm.orgjeffreyb@ppdm.org 40