1. An Alternative To Diesel For Landing Drilling Operations Lee Conn M-I SWACO Can Non-Aqueous Fluids (NAF) Be Designed to Enhance Soil Quality?

2. Non Aqueous Base Fluid Selections Base Fluid Environmental Staircase Diesel Mineral Oil / EMO Internal Olefins/Ester Linear Alfa Olefins Paraffin Since the 1980’s, there has been a strong demand to continue to improve environment characteristic of base fluids being used offshore

3. Environmental Testing Protocols & Regulations Established

4. Primary Drivers for Base Fluid Selection Environmental - Regulatory compliance - Seabed impacts Commercial - Cheaper Base Fluids - Availability - Logistics Technical - Lower Viscosity

5. Comparison of Base Fluids

6. Land Drilling Operation Diesel Still The Base Fluid Of Choice Globally Advantages Diesel oil is the cheapest Diesel oil is more readily available Diesel oil has good temperature stability Diesel oil provides good hole stability Diesel oil tolerates contaminants as well Disadvantage Environmental Acceptability - Toxic Compounds - Slow degradation Rates Poor Human Exposure Characteristics - High vapor emissions - Aromatic & Cyclic hydrocarbons in the vapor, and consider carcinogenic

7. Waste Management Hierarchy Reduction at Source Recycle & Reuse Recover Treatment ResponsibleDisposal Long Term Liability Drilling Fluids & Waste Management Options

8. Waste Management / Disposal Options For NAF Cuttings Thermal - Incineration - Indirect heat for base fluid recovery (re-use base fluid) Injection Haul to registered disposal site Cuttings treatment - Stabilization, bury on site Bioremediation

9. Non Aqueous Fluid (NAF) Design Strategy Objective – Creating a Soil Enhancing Product Identify - environmental issues with traditional formulations - root causes in the chemistry of the additives - products that enhance rather than damage the environment Build a cost effective and technically competent mud system based on selected additives Design a cost-effective and dependable bio-remediation process that will meet a consistent environmental performance standard

10. Testing for Land Treatment

11. Diesel Environmental Issues With NAF Systems Review of Drilling Fluid Components

12. Hydrocarbon Base Fluid Chemical Structure Aromatics Cyclic Compounds Olefins Linear Paraffins DECREASING TOXICITY FOR THE SAME Mol. Wt. CCCCC CCCCC C C CC C C CC C C C C Low molecular weight, linear structure biodegrades under aerobic conditions. Aromatics & cyclic more toxic than linear structures of same molecular weight.

13. Environmental Acceptance Crude Oil Diesel/MO Linear Paraffins/ Olefins ¹LTMO/²EMO/ Iso-Paraffins 1 Low toxicity mineral oil 2 Enhanced mineral oil Highly Biodegradable Slow and incomplete biodegradation Decreasing Toxicity

14. Bioremediation of diesel GC/MS Diesel GC/MS Diesel after bioremediation  Incomplete Degradation  Non degradable toxic residuals Increased probability of future environmental liability

15. Bioremediation of mineral oil MO/EMO -Aromatics are removed and many normal paraffins are branched. -While less toxic than diesel they biodegrade slower than diesel. Unresolved hydrocarbon isomers, including cyclic and branched hydrocarbons.

16. Bioremediation of linear paraffins GC/MS Linear Paraffins GC/MS Presence of hydrocarbons after bioremediation Complete degradation No toxic residuals

17. Composting Results using Various Base Fluids LP concentrations fell from 13% to ~1% in 10 days. EMO concentrations did not fall significantly over 20 days LTMO concentrations fell to 5.5% after 20 days. Linear components of diesel fell to 3.3% after 20 days with much slower subsequent degradation. LPLTMOEMO

18. Base Fluid Biodegradation & Toxicity Testing

19. Chloride Diesel Environmental Issues With NAF Systems Review of Drilling Fluid Components

20. Internal Phase Plant Toxicity Water Column Toxicity Toxicity due to the high concentration of chlorides Toxicity due to the high concentration of salts Electrical Conductivity Lack of Biodegradation Chlorides Are The Main Concern

21. CMA gives optimal environmental performance with minimal residual conductivity. Acetates and Nitrates enhance soil productivity with minimal water column toxicity. INTERNAL PHASE - Fluid Design Concept

22. Chloride Barite Diesel Environmental Issues With NAF Systems Review of Drilling Fluid Components

23. Weighting Agent Barite does not enhance the quality of the soil where cuttings may be used for landfarming Hematite or Ilmenite promises to enhance the quality of iron poor soils, or with CaCO3 that can minimize issues with heavy metals and can be beneficial for plant growth.

24. Non Aqueous Fluid (NAF) For Land Drilling Operation The Solution - Unique Invert emulsion fluid designed solely for improved cleaning and remediation of contaminated cuttings - Design to meet environmental discharge regulations (with correct processing) and improves HSE - Recommended Fluid Design: Linear Paraffin or Linear Olefin CMA, KAc, or CaKNO3 Hematite, Illmenite, or CaCO3

25. NAF-Land has standard mud properties similar to those of typical Synthetic- and Oil-Based Muds

26. History of Success

27. Primary: Enhance production in tight gas sands  Sandstone has < 10 md permeability  Sensitive to WBM due to high clay content Secondary: Improve drilling performance  Stabilize shale units to reduce risk of hole problems experienced in previous wells  Cavings, ballooning, loss circulation, stuck pipe, side- tracks, well-abandonment  Sensitive to WBM due to high clay content New Zealand Land Drilling Operations Drivers For Fluid System Change

28. 1Must be a synthetically produced base fluid  “oil” has poor environmental image  lower toxicity usually associated with synthetics  Optimize environmental factors  high aerobic biodegradability  low toxicity  chlorides free  Low health & safety risk  avoid low flash points base fluids as they are classified as flammables  Field compatible mud properties of high mud weight fluid  avoid high viscosity => high ECD’s => loss circulation Selection Criteria For Invert Emulsion

29. Utilizing a combination of best available technologies / experience for system choice. Internal phase + Continuous Phase NitratesLinear Paraffins Experienced Based System

30. Intervals: 16", 12.25", 8.5" MW:: 11.5 ppg - 16.0 ppg SWR: 80/20- 85/15 PV: 22 - 27 cps YP: 17 - 13 lb/100sq.ft Aw: 0.8 - 0.7 ES: 400-600 volts HTHP FL: 1.0-3.0 mL Mud Properties & Drilling Performance

31. Rig-Site Handling of Cuttings Blending with sawdust => haul-off

32. Disposal Method – Vermiculture Bioremediation Worm farm already established Still active today for processing drill cuttings received from land operation The end product of vermiculture is sold as fertilizer

33. Bangladesh - Landfarming Location - Tea plantation - Rice plantation Drilling fluid - Base – linear paraffin with traces of branched molecules - Acetate Internal Phase - barite Designated area protected by earthen barriers

34. Bangladesh - Landfarming Management - Organic material: rice hulls - Use of local work force - Frequent tilling to guarantee aeration of the soil - Use of fertilizers

35. Bangladesh - Landfarming Site Closure - Reduction in TPH to 1% according to internal standards and best practices - Area covered with local vegetation - Duration of project: 6 months - Total volume of cuttings treated: 3000 m³

36.  Bio-remediation processes using Diesel can necessitate long time (1-3 years) and/or large land mass to meet regulations.  Changing the fluid formulation to an optimized highly degradable, low toxicity NAF decrease remediation times reduce environmental impact. Lower health & safety risk to personnel  Bioremediation processes have to be optimized for local conditions. Summary