Avapolyoil Presentation

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Drilling Fluids & Services A Newpark Company

Avapolyoil / DeepDrill™ System

Presentation to “Company Name”

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What Is Avapolyoil / DeepDrill?

The Avapolyoil / DeepDrill fluid system represents our response to the drilling industries need for a high performance water-based alternative to oil- and synthetic-based fluids.

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What Is Avapolyoil / DeepDrill? DeepDrill™/Avapolyoil system is an innovative, field-

proven drilling fluid used effectively throughout North America, including deep-water gulf of Mexico drilling programs; It comprises a number of benefits derived from its unique membrane forming water-based chemistry

DeepDrill™/Avapolyoil can be used as an oil-based fluid replacement where overall drilling costs must be controlled and disposal costs minimized

DeepDrill™/Avapolyoil system is an environmentally friendly, inhibitive water-based fluid using basic fluid system technology to provide a stable well bore and enhance penetration rates and return permeability

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What Is Avapolyoil / DeepDrill? This system can be modified to accommodate almost

any well bore application on land or offshore

It has been successfully utilized in deep, cold-water applications and under conditions of high temperature and density

Gauge or near gauge holes, as seen from caliper logs, are typical for this fluid system

Torque and drag are significantly reduced, even in deviated well bores

Shale stability is enhanced and BHA and bit balling are significantly reduced

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What Is Avapolyoil / DeepDrill?

Methyl glucoside (MeG) and polyglycerol, together with the remaining constituents of the formulation, have demonstrated

• Excellent Shale Stability • Superb Lubricity • Enhanced Drill Rates, and• Exceptional Contaminant Resistance

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Where Has It Been Used? United States / Canada / North Africa / Mediterranean

• Onshore >90 wells• Offshore >50 wells• Deepwater >15 wells

Highest Mud Weight• 18.2 ppg (2.18 s.g.) in 6” hole size

Smallest Hole Size• 4.5” hole with 16.1 ppg (1.9 s.g.) mud weight

Hottest Hole• 385°F (196°C) with 17.6 ppg mud in 6.5” hole

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Science Behind Avapolyoil / DeepDrill

Goal:

Create an effective semi-permeable membrane in order to minimize the transfer of ions between the drilling fluid and the formation

Even if the activity of the drilling fluid is lower than the formation, the exchange of ions tends to destabilize the shale

Destabilizing ionic reactions within a shale can be minimized if a suitable nonionic polyol is used to reduce the activity of a fresh-water drilling fluid so that water is extracted from a shale by chemical osmosis

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Diffusion OsmosisNo Membrane – Water Based Fluid / Sand Interface

adf > as

(Fewer total Ions in drilling fluid)

adf < as

(More total Ions in drilling fluid)

Hydrated ions from each species diffuse from high

to low concentration

Water diffuses from sand

formation to drilling fluid

Water diffuses from drilling fluid to sand

formationWater

Ions

Water

Ions

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Diffusion OsmosisIdeal Semi-Permeable Membrane – Hydrocarbon Based Drilling Fluid /

Shale Interface

adf > as


adf < as


Ideal membrane prevents diffusion

of ions

Chemical osmosis

transfers water from shale

formation to drilling fluid

Chemical osmosis

transfers water from drilling fluid to shale

formation

Water Water

IonsIons

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Diffusion OsmosisNon-Ideal Semi-permeable Membrane – Water Based Fluid / Shale Interface

adf > as


adf < as


Diffusion osmosis transfers ions and associated water for each species from high to low

concentration even if adf = as

Chemical osmosis tends

to transfer water from

shale formation to drilling fluid

Chemical osmosis tends

to transfer water from

drilling fluid to shale formation

Water

Ions

Water

Ions

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Oil Emulsion - Calcium Chloride Internal Phase - 0.89 Aw

-0.064 mL/hr

Calcium Chloride - 0.54 Aw

-0.025 mL/hr

70% Methyl Glucoside / Ester Lubricant / Lignite – adf = 0.80

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Typical System Makeup Avapolyoil / DeepDrill 5 – 20%

• Primary Shale Inhibitor

Avaperm 0.5 – 1.0%• Supplemental Shale Inhibition(Depending on shale

type being drilled)

Avagreenlube 1 – 2%• Lubricant / Emulsifier

AvaLig NE 20 – 25 kg/m3

• Humalite Based Rheological Control

Visco XC 84 1 – 2 kg/m3

• Primary Viscosifier

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Case Histories

Albania

Green Canyon – Gulf of Mexico, USA

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Albania Project Located near the Adriatic coast of

Albania above the city of Vlora

First DeepDrill / Avapolyoil well drilled in Europe

Drilled to 5360m (17,585 ft)

1 year project – completed March 2005

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Past Experience

• The operator previously drilled an offshore well in the same block using a KCl-Polymer system

• While drilling the Miocene section, rheological problems and hole stability were encountered

• At elevated mud weights, dispersants were necessary to control mud properties

• Apart from expecting high mud weights and reactive shale, very little was known about the area

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Operator Objectives

• From past experience, it was realized that a highly inhibitive system would be needed

• For environmental reasons, OBM could not be used

• A system capable of reaching high mud densities, while maintaining rheological properties and hole stability

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Albania Project 16” Section

• Initially drilled to TD depth in 28 days with ROP’s averaging 5-10m/hr

• Hole remained stable throughout the interval (44 days) with no indications of swelling or sticky gumbo shale in the hole or at the shakers

• Lab results showed clay to be highly reactive• 28.5 CEC meq/100g (washed)• 29.2 CEC meq/100g (unwashed)

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Albania Project 16” Section

• Dilution rate came in below programmed• 5.2 vs 5.9 programmed

• Volume built was 300m3 less than programmed with MBT values never exceeding 45 kg/m3 (16 ppbe)

• No logging or casing problems were experienced

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Albania Project 12 1/4” Section

• Provided a well inhibited hole throughout the interval, despite the extended time the hole was left open (over 100 days)

• No problems experienced while maintaining fluid properties with mud weights of 2.05 s.g. (17.1 ppg)

• The only major hole problem was 1 incident of stuck pipe which pulled free when a stuck pipe pill was spotted after 4 days of being stuck

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Albania Project 12 1/4” Section

• Overall system requirements were met. A stable, well inhibited well bore was provided allowing the formation to be left uncased for an extended length of time

• No environmental risk or disposal costs normally associated with an oil-base mud system

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• Original hole and 2 sidetracks were drilled with conventional SW/PHPA muds. Swabbing, lost returns & packing off were encountered continuously throughout the 8 1/2” interval. Rates of penetration were hampered by hole instability.

• Based on previous LOT’s and other WBM problems (severe swabbing, ballooning, packing off, unable to stabilize the hole) operator desired SBM for next sidetrack.

• Modeling commenced to determine feasibility of using SBM

±1800’ WD

9 5/8” Set @ 9650’

Green CanyonGulf of Mexico

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Bit Jets 18 18 18 18

(max=12)Mud Weight= 15.6 ppg PV= 26

600 rpm= 64 YP= 12 (Jets above)300 rpm= 38 BHT= 162 F F/L Temp= 70 F An= 0.9940 1,810

3 rpm= 5 Solids%= 31.0 % Amb. Temp= 80 F Vn= 128.8 810 Sec Gel= 6 Water%= 14.0 % Test Temp= 150 F PSI (bit)= 235 b

GPM= 400 Oil %= 55.0 % HHPb= 55 0.59

Surface Losses= 125 HHPb/in2= 0.96 0.3218Stndpipe PSI= 3,800 Imp. Frce= 420 Jet #1= 7 Jet #7= 7

Gauge Reading= 3,800 Diameter= 0.33 ROP= 50 IF/in2= 4.1 Jet #2= 7 Jet #8= 8Bit Size= 8.500 Thickness= 0.33 % of PSI= 10.6 Jet #3= 7 Jet #9=

Tot. sys HHP= 519 Jet #4= 7 Jet #10=TVD= 12,289 ESD= 15.75 PV= 39 % HHP at bit= 10.6 Jet #5= 7 Jet #11=

Calculated MD= 12,289 600rpm= 96 YP= 18 Jet #6= 8 Jet #12=Calc. PSI Drop= 2,224 300rpm= 57 Stand Length= 93 ftDiff (Calc-Gauge)= -1,576 3rpm= 8 Seconds/Stand= 90 sec Swab ECD= 15.18 Frac Grad= 17.2Add't PSI Loss= 850 ESD at shoe 15.75 ECD @ Shoe= 16.23 Surge ECD= 16.17 Form B= 0.3028844 Pore Psi= 15.4

na= 0.426 Ka= 20.39 ReaL= ReaT= 3,686

420 0.071196 PSIInterval Length Hole Size Pipe Size Ann Vel Eff. Viscosity Rea Flow Type Lam Trans Turb Loss

DP in Riser 1,564 19.750 5.000 55 271 608 Lam 0.0394 2.1DP in 9 5/8" Csg 8,136 8.515 5.000 206 96 1,562 Lam 0.0154 255.4DP/HWDP in OH 2,436 8.500 5.000 207 112 1,350 Lam 0.0178 90.2BHA in OH 153 8.500 6.750 367 56 2,402 Lam 0.0100 20.0

(feet) (inches) (inches) (ft/min) (centipoise) 36812,289

Formula AA= 0.076120151 Formula BB= 0.26771321np= 0.75 Kp= 2.68 RepL= 2,440 RepT= 3,240

PSIInterval Length ID Vel Eff. Viscosity Rep Flow Type Lam Trans Turb Loss

5" DP 11,249 4.764 7.19 78.0 6,049 Turb 0.0073977 551.15" HWDP 887 5.000 6.53 80.8 5,559 Turb 0.0075667 34.9

6 3/4" BHA 153 3.000 18.13 55.2 13,557 Turb 0.0059602 61.0

(feet) (ft/sec) (centipoise) 64712,289 With additional Losses= 1,497

Optimization of Jets

Pipe ID

Total Annular PSI Loss=

Fanning Friction Factors

(inches) Total Drillstring PSI Loss=

Fanning Friction Factors

Drillstring Hydraulics

Riser Booster Pump GPM=

16.41ECD=

INPUT INFORMATION (blue values only)

Max H.H.P./I.F./BOTH?

Synthetic Based Mud (SBM)

Corrected Bottom Hole SBM Properties for Temp/PSI

Trip Data

# of Jets req'd?=Max PSI for bit=

Hydraulics Analysis Report

Annular Hydraulics

Optimum Constant=

Newpark Drilling Fluids, Inc.

Cuttings/Hole Cleaning AnalysisOptimum TFA=

(minimum 2 Jets calculated)

Bit Hydraulics

15.6 ppg64

400125

16.23

17.215.4

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• Drilled out bottom of 9 5/8” and found little or no cement

• Obtained L.O.T. of 16.8 EMW (Offsets had 17.2-19.2 EMW)

• Based on modeling, decided to displace to 15.6 ppg SBM

• Drilled out with directional assembly for 350’ while attempting to kick off to 35°

• Lost returns with 16.1 EMW recorded on PWD (inline with model predictions)

• Spotted various LCM pills with no success at regaining circulation

• Set RTTS and cemented shoe and ‘rat-hole’

Green CanyonDrilling with SBM

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• Displace to 15.1 ppg complex polyol fluid, obtained a L.O.T. of 16.3 EMW (0.5 ppg LESS than original L.O.T. for this sidetrack)

• Used the same drilling assembly as the SBM interval

• Reclaimed cemented ‘rat-hole’, control drilled at 50-80 ft/hour

• Drilled to »11,300’, set packer and evacuated (Hurricane) for a total of 6 days

Green CanyonDrilling with Complex Polyol Fluid

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• Tripped to bottom, after evacuation and raised MW to 15.6 ppg

• Drilled to TD with the same MW that the SBM had when losses were encountered without losing any mud

• Exhibited lower ECD’s while pumping at rates as much as 40% higher than SBM

• Logged hole (gauge) and ran 7” liner without incident or losses

Green CanyonDrilling with Complex Polyol Fluid

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PWD Data

9500

9750

10000

10250

10500

10750

11000

11250

11500

11750

12000

12250

12500

15.0 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 16.0 16.1 16.2 16.3

EMW (ppg)

Dept

h (M

D)

PWD Data-CyberDrill

PWD Data-DeepDrill

Surf MW-CyberDrill

Surf MW- DeepDrill

Calculated EMW-NDFModels

Evacuate for Tropical Storm(Left hole for 6 days)

Lost returns w/SBM

PWD 16.1 @350 gpm

Displace to Complex

Polyol

Same MW as SBM that lost

returns

Complex Polyol

flow rates= 440 to 490 gpm

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• Established ability to reclaim hole that had been invaded with SBM and NOT lose returns, despite a lower shoe test

• Matched ROP of SBM while drilling and sliding with same PDC bit and BHA

• Left hole uncirculated for 6 days and maintained superior hole stability, demonstrated by tripping to bottom

• Demonstrated lower ECD’s, even while pumping at 40% higher flow rates

• Drilled gauge hole

• No signs of gumbo, distinct cuttings returned throughout the interval

• Drilled hole that same density SBM could not without severe losses!

Green CanyonSummary

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Avapolyoil Presentation