Copyright 2006 by ConocoPhillips Company. All rights reserved.

No part of this publication may be reproduced in any form without the express permission of ConocoPhillips Company.

Advanced Drilling: A Technology Focus Area for ConocoPhillips

Michael Wheatall Drilling Engineering and Operations Manager, Upstream Technology ConocoPhillips, Inc.

Advanced Drilling: COP Focus Areas

Drilling with Casing Coiled Tubing Drilling Extended Reach/Multi-Lateral/Designer Wells HPHT Drilling Managed Pressure Drilling Wellbore Strengthening

Drilling with Casing

Worlds 1st DWC and Surface BOP from floating rig Conventional time: 91 hrs With CWD and Surface BOP: 29 hrs

Types of Casing Drilling 2000+ Casing Sections

Retrievable BHA Casing Drilling
(directional, multiple bit runs and formation evaluation)
18%

Non-Retrievable BHA Casing Drilling

(conductors, vertical wells, and drillable bits)
51%

31%

Non-Retrievable BHA Liner Drilling

(surface liners and trouble zones)

Why Drill With Casing?

CABLE TOOL PROCESS
1850 1930

CONVENTIONAL DRILLING PROCESS

Since 1901

CASING DRILLING PROCESS

1998 Future

Rock Destroying Hole Cleaning Tripping

slow slow

FAST FAST
slow

FAST FAST FAST

FAST

How Do You Drill With Casing?

Casing Stabilization
Profile Nipple Crimp-on Stabilizer Casing Crimp-on Stabilizer Spacer Collar pony collar Stabilizer PDC Bit

Internal BHA External BHA

DLA Underreamer Stabilizer

Stabilizer

Crimp-on Stabilizer

Lobo Trend
Casing Drilling began in 2001 to reduce trouble time 120 wells (1.6 million feet of hole) have been drilled with casing Lost circulation was almost completely eliminated Zero stuck pipe incidents An active drilling program continues where casing drilling candidates are selected based on expected problems. The need to drill directionally is increasing.

BMT East
Conv. Offset 1 9 5/8 Csg. 7 Csg. Conv. Offset 2 9 5/8 Csg. 7 Csg. Conv. Offset 3 9 5/8 Csg. 7 Csg. Casing Drilled 9 5/8 Csg.

5,145

5,272

7 Csg.

6,917 5 1/2 Liner 8,162 3 1/2 Csg. 3 1/2 Csg. 5 1/2 Liner 7,985 9,400 4 1/2 Csg. 8,185 4 1/2 Csg. May 2002

8,103

Sept 2001 19 days

Spud to Cementing of Intermediate Casing

200 - 300 sack balanced cement plug

10 days

BMT East C2 Well

Conventional 9 5/8 Csg. Conventional Rig Drilled & set surface csg Lost circ at 4,380 ft Could not cure lost circ. Temp. abandoned well Casing Drilling Rig Moved over well Drilled out plugs Cured lost circ. by drilling ahead Well completed Casing Drilled 9 5/8 Csg.

4,380

7 Csg.

8,143 4 1/2 Csg. $184,000 Trouble $7,000 Trouble

Casing Drilling Cuttings

Smear Effect
Whole Mud Sieve Analysis
% Solids Retained Medium 50 40 30 20 10 0 Coarse

Fine

Ultra Fine

Casing Drilled Conventional Drilled

14 0

20 0

10 0

20

50

API Sieve Size

>2 00

Casing Drilling Benefits

Safer operations well control, pipe handling Reduced trip time Reduced open hole trouble time 50% (Lobo) Reduced drilling time - 15% (Lobo) Reduced Cost Uses conventional bits, BHAs and casing Enhances UB and Managed Pressure Drilling techniques

Less Subtle Benefits

Dont fight problems, case them off instead

Rig loads smaller

Hydraulics needs are less No overpull needed No setback area

Drill pipe (casing) is always new

7-in. 23 lbm casing to surf 8 jts 7 5/8-in. casing

DLA (Drill Lock Assembly)

Retrievable Casing Drilling Bottom Hole Assembly 7 Casing Section Vertical Wells

Tandem Casing (internal) Stabilizer Spacer Drill Collar

Casing shoe

Under reamer (6 1/8 to 8 7/8)

Tandem (external) Stabilizer

6 1/8 PDC bit

Drill Lock Assembly (DLA) 7-in. 23 lbm casing to surf

Vibrations Monitoring sub

MWD Tandem Casing Stabilizer

ConocoPhillips Well 83 Casing Directional Drilling Bottom Hole Assembly with Steerable Motor

Float sub casing shoe non-mag drill collar Bent Housing Motor 4 -in. then 5 -in. (1.5 deg bend)

Under reamer (6 1/4 to 8 7/8-in.) 6 -in. PDC bit (3x15 nozzles)

DLA (Drill Lock Assembly) 7 23 lb Casing to surf

Tandem (external) Stabilizer

Conoco Phillips Well 89 Casing Directional Drilling BHA w/ Rotary Steerable for Verticality
Total Length Stick-out Length 94 ft 67 5200 lbs

Tandem Casing Stabilizer Drill Collar Spacer Drill Collar

Hanging weight (in mud) connections

Casing shoe

3 IF

Filter sub Under reamer (6 1/8 to 8 7/8) 4 -in. Rotary Steerable System

6 1/8-in. PDC bit (4x10 nozzles)

Well 91: Full Directional Test

Vertical Plot
Displacement, ft
0 0 1000 2000
-600 200 -400

Horizontal Plot
Easting (E/-W), ft
-200 0 200

1000

Well 79

TD Well 79 Surf Loc

Surf Loc

2000

-200

Northing (N/-S), ft

TVD, ft

3000

-400

-600

4000

-800

5000

Well 91 Well 91
-1000

6000

target
-1200

7000

7-in. 23 lbm casing to surf 8 jts 7 5/8-in. casing

DLA (Drill Lock Assembly)

Conoco Phillips Well 91 Tandem Casing Directional Drilling (external) Bottom Hole Assembly Stabilizer With Rotary Steerable System
Total Length Stick-out Length Hanging weight (in mud) 112 ft 85 6200 lbm

Tandem Casing (internal) Stabilizer 6-in. Straight Motor

MWD system

Casing shoe

Filter sub Under reamer (6 1/8 to 8 7/8) 4 Rotary Steerable System

Jet Sub (1x10 nozzle) 6 1/8 PDC bit (4x10 nozzles)

RSS Drilling Efficiency

ROP was within 10% of offset vertical well Casing drilling benefits captured:
No lost circulation events Minimal reaming time No difficulties in setting casing OBM not required

Eliminated difficulty of Casing Drilling with steerable motor

No sliding problems No motor stalling problems

However
Vibrations were significant Multiple RSS washouts

Key Question
Can the straight hole benefits and initial directional successes realized in the Lobo Field be transferred to directional casing drilling in a higher cost offshore environment, such as Norway?

2005 Field Test Objectives

Directionally drill with larger casing sizes used at Eldfisk (10-3/4 & 7-5/8) Identify and correct any problems with new tools Provide information required to qualify equipment and tools for use in Norway Perform directional casing drilling on a conventional rig similar to Norway platform rig

Split Block Swivel with space for Wireline BOP Top Drive System Casing Drive System 10 -in. casing

7-5/8 Test Summary

Displacement (ft)
0 0 600 1200 1800 2400 3000 3600

True Vertical Depth (ft)

500

DLA/UR set/retrieval tests planned at 0, 45, and 90 deg

1000

Previously drilled well w/10 casing to 3769ft

1500

2000

600ft HZ

drill 844 ft w/7 5/8 csg TD 4884 ft

2500

10-3/4 Test Summary

Displacement
-500 0 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500

500

1000

True Vertical Depth (ft)

1500

13 3/8 csg @2003ft

2000

KOP: Build to 50 deg testing different rates (planned)

2500

3000

Actual Total Depth of the test was 2966 ft, with 15 degrees of inclination built.

3500

4000

4500

TD 5000ft (planned depth)

Conclusions
Both Directional Casing Drilling tests were a cost effective dress rehearsal for Eldfisk Norway Directional Casing Drilling technology was successfully transferred to new casing sizes Rotary steerable system in the pilot hole provides effective directional control Vibrations in the BHA are better understood, their effects have been reduced

On to Norway!
Two Eldfisk wells will be casing drilled in May 2006
50 degree maximum angle 10-3/4 to 5100 ft (md) 7-5/8 to 10800 ft (md)

Coiled Tubing Drilling

CTD is Drilling with One Long Joint Still Need All Drilling Equipment
Shelter Solids Control Pumps, Tanks, Mast... Etc

1st Generation Alaska CTD Operation With Drilling Platform

Combined CT/Rig
Courtesy ConocoPhillips

2nd Generation CTD in Alaska

Coiled Tubing Drilling Unit Conventional Drilling package

Work Over Unit Arctic Coiled Tubing Unit

Courtesy BP and ConocoPhillips

3rd Generation CTD Unit: Alaska

Workover Rig in Grey CTU in Orange Unitized and SelfPowered Sister Rig Added to CTD Fleet
Courtesy BP, ConocoPhillips and Schlumberger

N ew W el l

Well Cost Percentage

27.52% 55.04% 0 165.11% 192.63% 110.07% 137.59% 82.56%
ew W el l l l el el l W W W el W ew ew

N N N N ew ew N Si

100%

Reserves Development Costs

73%

CTD: Why all the Interest?

New Wells - 100% $/Bbl Sidetracks - 113% $/Bbl CTD S/Ts - 69% $/Bbl

Program Dev. Costs - $/bbl

31%

el de l tr Si a c k de tr ac Si de k tr ac Si de k tr Si a c k de tr ac Si de k tr ac Si de k tr ac Si de k tr Si a c k de tr ac Si de k tr ac Si de k tr ac k C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T C TD S/ T

Greater Kuparuk Area

CTD Historical Well Count
(includes incomplete wells)

30
# Wells

25 20 15 10 5 0

# Laterals

1998 1999 2000 2001 2002 2003 2004 2005

High Rate 1D-11

Multi-lat C sand lateral & maintained motherbore First Two-window/twolateral design allows future isolation and reentry into each lateral Longest KRU CTD Lateral on record: Lat 1 : 2,202 / 2,015 Lat 2 : 2,812 / 2,584

Initial well tests >5,500 bopd!

2005 CTD Accomplishments at GKA

Extended Reach Records for 2 CT (1D-34) Drilled depth Lateral length Window milling depth OH sidetrack depth 18350 md (2.2:1) 2630 md 15721 md 17935 md

Pushing the Envelope: 1Q-04 Quad Lateral

5224 drilled footage Lower quality A-sand <20OAPI oil Maximize pay exposure

Casing Drilling and CTD: Proven Yet Still Evolving Technologies Whats Next?

Remote Land-Based Exploration Wells

Challenged Economics for Rotary Drilling:
Market driven drilling cost inflation Mature basins: smaller structures/reserves Shorter drilling seasons (Canada/Alaska) Tighter environmental restrictions Difficult logistics is major cost driver

Our Challenge
Reduce cost of remote landbased exploration drilling by 50% while meeting formation evaluation requirements.

Plan of Attack: Think Small

Smallest hole sizes possible
Reduce materials and logistics cost

Existing technologies and equipment Leverage ConocoPhillips expertise

Casing drilling Coiled tubing drilling

Requirements
10,000 depth capability Formation evaluation

Rig Options Studied

Mining Industry Coring Rigs
Depth limitations Slow drilling in overburden Major modifications to mud system and well control

1990s Vintage Slim Hole Rigs (4-3/4 min hole size)

Small footprint Rolligon, truck or heli-transportable Lengthy move and set-up Inefficient drilling (lacks automation) Swift move and set-up Drill efficiently Reduced personnel exposure Large, heavy load while moving

Automated Small Conventional Rig

Western Canada Shallow Gas

Fit for Purpose Hybrid Coil/Rotary Rig

Hybrid CT/Rotary Drilling Units

Wells drilled and cased in about one day
Two wells per day possible

Typical 3000 Well:

7 inch surface casing 8-1/2 hole drilled with 3-1/2 CT or DP 4- inch production casing 6 hole size drilled with 3-1/2 CT

Western Canada
Coil Tubing Drilling Rigs Hybrid Rig Count
80 60 40 20 0 2000 2001 2002 2003 2004 2005 Year 15 17 22 25 36 67

Canada
Wells Drilled by Rig Type
25000

Number of Wells

20000 15000 10000 5000 0 2000 2001 2002 2003 2004 2005

Hybrid Drilled Wells

Conventionally Drilled Wells

Small Footprint

Drilling with CT - Mast Down Design

Automated Pipe Handling System

Automated Pipe Tub Trailer

Touch Screen Control Panel

Drilling with CT - Mast Up Design

Automated Rig Controls

Automated Pipe Rack with Skate

Top Drive

Zero Discharge Mud System

Moving

Moving

But Can these Rigs Drill a 10,000 Exploration Well?

4500 maximum depth with 3-1/2 CT 6000 maximum depth with 2-7/8 CT Low capacity mast (150-200 klb) Small mud pump (650-850 hp)

Approach: Think Small & Work Well Design from the Bottom Up
4-1/8 final hole size
3-3/4 bi-center bit (helps with ECD) Contingency liner option (3-3/16) Extensive experience with this hole size to 18,000 md

Drilling Tools: proven and available

Wireline telemetry Bent housing mud motors MWD/GR/Resistivity

2-1/4 wireline logging tools Conventional coring equipment Complete with 2-3/8 or 2-7/8 SL tubing

Slim Hole Design No Intermediate Casing 4-1/2 x 2-3/8 Final Hole Size: 4-1/8

Slim Hole Design Intermediate Casing

7 x 4-1/2 x 2-3/8

Final Hole Size: 4-1/8

Main Issue: Hybrid Rig Limitations

4500 depth limitation based on 3-1/2 CTD to TD 3- CT marginal for 8-1/2 surface hole drilling 10,000 of 3- CT too much for current hybrid rigs and difficult to move Increases final hole size beyond needed 4-1/8

Solution: Casing/Coil Hybrid

Integrate casing drilling technology
Casing drill surface hole and intermediate hole
Eliminates need for large diameter CT Casing drilling plus slim hole design greatly extends depth range for mast and pumps Retrievable BHA not needed for straight hole sections

2-3/8 coil tubing to drill final 4-1/8 hole

Extends rig capacity 10,000 depth

Formation Evaluation Options

2-1/4 Wireline Logging Tools
Array induction Dual Laterolog Compensated neutron Compensated photo-density with PE Compensated sonic Standard gamma ray MFT (pressure tester only) on wireline High Resolution Micro Imager

Conventional Coring Well Test through Tubing

Summary: Casing/Coil Hybrid Advantages

(over conventional rotary drilling)

Automated Rig Benefits

Reduced personnel exposure Fast move and rig-up Small location size Top drive

Slim Hole Well Design Benefits

Reduced tangible costs Reduced mud and cement volumes Reduced cuttings and waste fluid disposal Reduced hauling Facilitates zero discharge

Casing/Coil Hybrid Advantages

Casing Drilling Benefits
Smaller rig, less fuel, reduced emissions Reduced trip time Reduced trouble time (smear effect and no tripping) No drill string reduced hauling

Coiled Tubing Drilling Benefits

Faster drilling (no connections) Reduced trip time Managed Pressure Drilling/Underbalanced Drilling Facilitates use of Oil Based Mud

Conclusions
Cost reduction goal is achievable Casing/Coil Hybrid Drilling Concept is feasible using current technology and available equipment Other Applications Possible

QUESTIONS?