UNDERBALANCED HORIZONTAL DRILLING COULD IT BE THE ULTIMATE COMPLETION TECHNIQUE?

UNDERBALANCED HORIZONTAL DRILLING COULD IT BE THE ULTIMATE COMPLETION TECHNIQUE? JIM HUGHES / SUNSTONE TECHNOLOGIES, LLC 1. INTRODUCTION Horizontal underbalanced drilling can create a completion technique that delivers more productivity because the reservoir s permeability that has been connected to the horizontal wellbore has not been damaged. There is the potential to eliminate the cost of fracturing, packers, and wellsite surface footprint costs, and yet still have a better well. For horizontal underbalanced drilling to reach this future as a completion option, three issues regarding its application in the reservoir need to be addressed: Proper well construction techniques The integration of equipment and services needed to drill horizontally underbalanced The development of new technology and equipment to refine the process The application of horizontal underbalanced drilling is so broad and complex that, for the sake of simplicity and clarity, this discussion is limited to the use of gaseated drilling fluids and flow drilling techniques as part of the completion process to improve productivity in competent reservoirs. 2. GASEATED FLUID AND FLOW DRILLING Underbalanced conditions exist in a wellbore when the hydrostatic pressure exerted by a column of fluid is less than the formation pressure. This underbalanced condition is often achieved by the injection of a gas into the drilling or return fluid to create a gaseated fluid, Preface cont. Page 1

thereby reducing its density as discussed in Chapter III. The process typically requires gas compression and surface pressure control equipment. This intentional and controlled method of using compressed gas to lower hydrostatic pressure by creating a lightweight fluid is what differentiates gaseated underbalanced drilling from flow drilling, which is another type of underbalanced drilling. Flow drilling relies on reservoir conditions and not on compression equipment to create the underbalanced state. Flow drilling, which is discussed at length in Chapter II, is a drilling technique that developed in the US Austin Chalk because the reservoir is characterized by lost circulation. Losing circulation lowers the fluid column in a well, and as a result, the hydrostatic pressure is lowered causing a well to become underbalanced. This was usually an unplanned but anticipated event, so controlling a series of kicks while drilling was what generally defined flow drilling. Drilling in over-pressured formations is another condition that can be taken advantage of to create flow drilling conditions. Flow drilling in over-pressured formations uses techniques and procedures similar to those described in Managed Pressure Drilling operations. 3. UNDERBALANCED + HORIZONTAL DRILLING = UBHD Drilling underbalanced is one of the key procedures used in a reservoir to prevent formation damage 1. The reduction or elimination of formation damage has proven to be an effective component in the effort to improve productivity by reducing skin damage. In the past, eliminating skin damage in a reservoir with high permeability and porosity was not a priority with many companies. After all, if a reservoir with 600 millidarcies of permeability had 50 percent of its pore throat system plugged with fines from an overbalanced drilling operation, theoretically there would still be 300 millidarcies of permeability. This is probably the reason for the old saying, You can t hurt a good reservoir. Preface cont. Page 2

Unfortunately, the same overbalanced mud system applied to a reservoir with only 10 millidarcies of permeability usually reduces the permeability in the near wellbore region to zero, hence the need to use a technology such as hydraulic fracturing to reconnect the reservoir to the wellbore. Low permeability reservoirs benefit the most from fracturing because they are extremely susceptible to damage from overbalanced drilling. They are generally drilled the same way medium to high permeability reservoirs are drilled. In other words, they are drilled with little regard for the damage being done to the reservoir because conventional completion practices have typically restored productivity to an acceptable level by reconnecting the wellbore to the reservoir. Horizontal drilling is another technology that has come a long a way in the past 25 years. It can be utilized both as an exploration and a completion tool. The primary benefit of including horizontal drilling as part of the completion process is that the wellbore can be steered at a bearing that is perpendicular to the primary stress direction, thereby connecting natural fracture permeability to the wellbore. It also increases the wellbore exposure to the reservoir, which increases the drainage area. An obvious benefit of a larger drainage area is a reduction in the number of wells needed to develop a field. The application of horizontal drilling is important in the exploitation of reservoirs that have limited primary permeability. Horizontal drilling has the potential to overcome this condition by intersecting the secondary permeability that is derived from natural fractures. As a result of being able to connect fractures to a wellbore, horizontal drilling technology has turned what were assumed to be non-productive reservoirs into economic successes. Fractured reservoirs drilled vertically will usually have a single highly elliptical drainage pattern due to permeability anisotropy, whereas horizontal wells drilled in the appropriate direction in the same reservoir will connect multiple elliptical drainage patterns to the wellbore, resulting in greater production. Horizontal drilling combined with underbalanced Preface cont. Page 3

drilling creates a completion technique that delivers more productivity because the reservoir s permeability that has been connected to the horizontal wellbore has not been damaged. 4. NATURAL FRACTURES The initial propagation of a natural fracture is normal to the bedding plane 2. Thus, fractures are near vertical in beds that are flat, which accounts for the need to drill horizontally to connect secondary permeability to the wellbore. Fractures are usually described by their aperture as being either macro or micro. It is generally understood that macro fractures are ones that can be detected with the naked eye (>40µ), and micro fractures are undetectable by a person with 20/20 vision (<40µ). Fracture permeability can be calculated from the following formula: k f = 8.444 X 10 6 w 2 f where w f is the width of the fracture in microns 3. 4.1 Micro Fractures It is important to remember that a micro fracture with an aperture of 25µ (the size of a white blood cell) can exceed 50 darcies of permeability. The short length of a micro fracture is the characteristic that reduces its effective permeability. Fortunately, micro fracturing density can be very high; thus, the distance from fracture to fracture is very short. Studies have shown that there can be as many as 80 micro fractures per one inch of rock 4. Other issues with micro fractures are that they are easily plugged from fines when drilled overbalanced, and can become blocked by water in a water wet reservoir after being drilled with a water-based fluid or after being hydraulically fractured. This is especially true in a reservoir that is under-saturated with respect to water. Micro fractures have high capillary pressures and do not clean up well, thereby reducing the effective permeability. 4.2 Natural Completion Preface cont. Page 4

Because of natural fractures, the collective use of a non-damaging drilling technique such as underbalanced drilling and formation-compatible drilling fluids combined with horizontal drilling (UBHD) has the potential to become the ultimate completion technique. This technique will maximize productivity from many oil and gas reservoirs and has the potential to improve the recovery efficiency two to three fold for a given period of time 5. An example of a perfect natural completion that utilized drilling underbalanced with no fluid contamination are the early wells that were drilled in California (USA) with cable tools, the original underbalanced technique. These prolific wells were technically high angle wells because a horizontal well by definition is a wellbore that is drilled parallel to the bedding plane. In California, many reservoirs can have dips that exceed 70. Thus, vertical wells drilled with cable tools were able to dramatically increase their chances of hitting fractures because they were drilled at a more or less 70 angle when measured from the bedding plane. 5. UBHD WELL CONSTRUCTION The number one challenge when using horizontal underbalanced drilling as a completion technique is staying underbalanced or at balance 100% of the time 6. This is critical because it only takes a few minutes to damage a wellbore from overbalanced conditions. The use of a proper fluid system can help mitigate some of the damage problems and is particularly helpful during periods of reservoir/wellbore pressure balance. The challenge includes staying underbalanced or at balance even when the time comes to get off the well. Constructing a well using the concentric casing technique is particularly suited for UBHD because it is simple to employ, and it ensures that the underbalanced conditions are maintained at all times 7. With concentric casing, a dual annulus drilling system is created, and the drilling fluid is not gaseated in the drill pipe 8. Instead, the return fluid is gaseated Preface cont. Page 5

downhole through ports that connect the inner annulus to the outer annulus. Compressed gas is pumped down the outer annulus. Two distinct advantage of this technique are the ability to have better control over the degree of underbalance by locating the communication ports at an optimal depth downhole and gas injection can continue without interruption while making a connection. 6. THE DRILLING FLUID DECISION If drilling an underbalanced wellbore into a reservoir to reduce formation damage, then careful attention needs to be paid to the selection of the drilling medium in order to protect permeability. The basic choices for creating a gaseated fluid include gases such as air, nitrogen, or natural gas and liquids such as oil or water. 6.2 Liquid Phase Considerations The proper selection of the liquid phase is especially important in tight sandstones. Tight rocks are noted for having high capillary forces. The potential to imbibe the liquid phase can be stronger than the underbalanced condition if the inappropriate fluid is selected. For example, sandstones that are water wet should be drilled with oil because a nonwetting fluid cannot be drawn into a water wet formation 9. If water is used and spontaneous imbibition 10 occurs, the permeability can be reduced through a well-documented formation damage mechanism known as phase trapping. Because of their normally high clay content, sandstones can experience reduced permeability when a water-based fluid makes contact with reactive clay minerals 11 such as smectite. Many operators see the greatest potential for underbalanced horizontal drilling (UBHD) in sandstones because it is able to significantly reduce permeability damage due to swelling clays, as well as having a potential for greater fracture intensity 12 than limestones. 6.3 Solids Control Equipment Preface cont. Page 6

Another often ignored decision of an underbalanced operation is the selection of solids control equipment for the liquid phase of a gaseated fluid in a closed loop operation. High solids content in the liquid phase adds hydrostatic weight to the system. Of course solids control equipment is not needed if a blooie line is used and goes straight to a pit. In this type of operation, a one pass fluid can be used, which means the fluid that is returned from the well never goes back down the well. 7. TRIP AND COMPLETE WITHOUT KILLING THE WELL An important operational issue to address when planning an underbalanced horizontal well is how to rig down from a live well without killing the well with a heavy drilling fluid. A discussion of three practical options follows. 7.1 Snubbing Snubbing can be used to secure a pressurized well bore by using special equipment and a specially-trained crew. This operation is reasonably safe, but when a regular snubbing unit is used, it can be expensive in both time and equipment. Rig-mounted snubbing cylinders have been successfully used in Canada to avoid nonproductive time (NPT) from rigging up and to limit the cost of a specialized crew. Snubbing is extensively discussed in Chapter VI of this book. 7.2 Downhole Casing Valve A retrievable downhole casing valve can be installed when a concentric casing string is run into the well. This allows the operator to shut the well in while tripping out of (or into) the hole and when rigging down. This is a good tripping and liner running solution because it keeps all reservoir pressure below the valve and does not limit the length of the bottom-hole assembly (BHA). 7.3 Drill-In Liner Preface cont. Page 7

A third option is the use of an expendable drill string (drill-in liner) and bottom-hole assembly (BHA) to drill the lateral. (Underbalanced liner drilling is discussed in Chapter VIII.) This option becomes available when the target formation is thick and steering is not required to stay in zone. The expendable components include tubing with premium connections for the drill string, a non-return valve (NRV) installed near the bit, properly spaced stabilizers to create a packed-hole assembly to hold the angle, and a drill bit. The procedure for planting the string involves pre-planning. Surface equipment requires a tubing head that is installed below the blow-out preventer (BOP) stack to land a tubing mandrel. When the time comes to shut the well in, the mandrel is screwed onto the tubing and is then lubricated through the BOP stack, using the annular preventer and the rotating control device. There must be enough space between these two pieces of surface control equipment to accommodate the length of the mandrel. Once the mandrel has passed through the stack, it can be landed in the tubing head to secure the well for rigging down. The tubing can be perforated later. This is also a good technique for testing reservoir stability without risking expensive BHAs. However, landing the mandrel must occur before the tubing becomes completely immobile due to wellbore collapse. 8. ACHIEVING COST CONTROL EQUALITY If UBHD is to become an acceptable completion option, cost control equality must be achieved. This means that the cost of utilizing UBHD as a completion practice must become as predictable as currently available conventional completion techniques. If the estimated cost to use a technology is unreliable, its use will always be limited. The unfortunate history of UBHD is that it generally exceeds the AFE. Three basic operational changes must occur to achieve cost control equality: A single service company provides and manages the primary pieces of equipment needed to carry out the process on one field ticket. Preface cont. Page 8

The number of personnel needed to provide the technology is reduced through cross-training. Conventional equipment is automated and tailored for the UBHD operation. Currently, performing the UBHD operation can necessitate up to a dozen different companies requiring 30-40 people. The list of services and equipment needed for the operation can include: A top drive drilling rig A rotating pressure control head and BOP stack Four phase separators A data acquisition service Compression equipment Nitrogen membrane units Directional drilling services and equipment Downhole tool rentals such as a deployment valve and multilateral junction equipment Solids control equipment Gyro orientation service Wireline unit Snubbing services Coordinating this many service providers can become a costly logistical nightmare for an operator who is attempting to orchestrate the arrival of several companies to avoid unnecessary standby time. Having multiple companies on location can also cause high cost overruns when one company s piece of equipment is late or in need of repair which may cause the operation to be shut down. The other service providers who are on standby will continue to charge the operation because their equipment is not the problem. This situation Preface cont. Page 9

is the primary cause for cost overruns. Having one company responsible for the entire operation can eliminate many of the logistical issues that can plague an operation. 8.1 COMBINATION DRILLING AND COMPLETION RIG Multi-lateral UBHD becomes a real challenge when the drilling rig is not capable of efficiently handling all of the required UBHD completion procedures. A good example of a company s effort to improve the performance of the drilling rig for UBHD operations was Engineering Drilling Machinery (now owned by TTS Sense) of Norway. They developed a rig that used a rack and pinion system to replace conventional draw works, blocks, etc. This means they have eliminated the need for conventional snubbing equipment because the rack and pinion drive allows the rig itself to perform subbing operations. They even automated the rig so that only one person was needed to trip pipe. 9. NEW UBHD TECHNOLOGY Underbalanced drilling has evolved from conventional air drilling, a drilling technique that primarily targets non-reservoir rocks in order to increase penetration rates and eliminate lost circulation. This drilling method has been used for over fifty years, and is just lately seeing new improvements. Over the past twenty years other new technology has been developed because more operators want to drill the reservoir underbalanced to improve productivity. New equipment was needed to create inert downhole environments, to control high surface pressures while drilling, and to shut-in wells downhole to eliminate killing the well. This need resulted in the development of items such as nitrogen membrane units, high pressure rotating control devices, and downhole deployment valves. The tools and ideas that follow are in the process of being implemented. Whatever improvements are made, time and equipment costs are critical elements for drilling in the Preface cont. Page 10

continental US, both in non-conventional reservoirs and in the re-development of assumed to be depleted oil fields. 9.1 Artificial Flow Drilling A technology that could have a significant impact on the future of UBHD employs artificial lift while drilling to lower the hydrostatic column in a well to create the underbalanced condition 13. The conventional UB method utilizes compression equipment to inject gas into the stand pipe or return annulus of a concentric wellbore. The objective is to lower the density of the wellbore fluid, thereby reducing the hydrostatic pressure at the bottom of the hole to a level that is lower than the pressure contained within the formation being drilled. Other methods have been proposed which could be described as artificial flow drilling, where the underbalanced condition is caused by a lowering of the fluid column in a well. The combination of a dual casing string with a jet pump (aka concentric jet pump) may be a solution 14. Jet pumping technology has been used as a means of artificial lift for more than 40 years 15. The jet pump is simple in design because there are no moving parts. It requires a power fluid (instead of compressed gas), which can be pumped down the outer annulus between the concentric string and the production casing. The most significant advantage of the concentric jet pump is that it eliminates the cost of the nitrogen and compression equipment that are normally used to induce underbalanced conditions. The only requirement is a second triplex pump at the surface to pump clean power fluid (also known as fluid under pressure) to energize the jet pump. A currently available Equivalent Circulating Density (ECD) Tool is a mud-driven turbine, and while it reduces bottom-hole pressure in the range of Equivalent Circulating Preface cont. Page 11

Values, it does not provide as much reduction in bottom-hole pressure as does a gaseated system. Schlumberger has reported using gas lift valves to aid in equalizing lift, but this is not the exact system that is needed. 9.3 Smart Drill Pipe A distinct advantage of having a tool joint that plugs together in specific orientations is that it provides a simple means to directly connect one or more wires 16,17. This type of connection allows for a continuous wire that can be installed to provide more reliable and improved data. Wires can now be installed under an internal drill pipe coating or in the wall of a thermoplastic drill pipe liner. This allows real time information to be gathered while drilling using a gaseated system without induction coils, repeaters, and battery packs. This type of connection also allows simple stoking practice to orient the downhole tools without using a gyro 18,19 because an imaginary line can be maintained in the drill string from surface to TD. 9.4 Short Radius Rotary Steerable Drilling Tool Another way to reduce the cost of UBHD is to shorten the radius of curvature and thereby reduce the time it takes to drill from vertical to horizontal by using a short radius rotary-steerable BHA 20 that can achieve build rates up to 75 /100 (25 /10m) and then drill horizontally for long distances. 9.5 Sub-surface Casing Valve Tripping pipe while a well is flowing can be dangerous and expensive, especially if snubbing equipment is required. A tool that has proven to be a better option than snubbing 21 is a sub-surface safety valve (downhole casing valve 22 ) placed at depth. One new version of the valve can be actuated by a casing jack 23 that lifts and lowers a concentric string of casing. This method to shut in a well Preface cont. Page 12

downhole has proven to reduce cost and improve safety in an underbalanced operation. An improved casing valve needs to be simple in operation, inexpensive, and reliable; and it should not require special crews. 9.6 Rotating Control Device (RCD) In the UBHD world there is a new low cost, higher pressure-rated rotating control device (RCD) being developed. The diverter is short in height, about one meter tall (3 ) and will have a working rotating pressure near 5,000psi (3500kPa). It will not require an external cooling system 24 because the element and bearings will be pressure balanced. Reducing the pressure differential across the element will eliminate the heat issue and thus do away with the need for a separate hydraulic unit to cool the head, thereby dramatically reducing the day rate cost. 13. CONCLUSION Formation damage has been proven to significantly inhibit the recovery of hydrocarbons. This could explain why the average recovery factor for oil in the US is only 5 to 15 percent 25. Today operators are in a unique position to recover a significantly larger percentage of oil and gas from existing fields by employing non-damaging horizontal drilling technology in the reservoir as a completion method. We should thank Howard Hughes, Sr. for this opportunity because of his invention, the tri-cone bit. While the use of the tri-cone bit brought faster penetration rates than cable tool drilling, it also caused formation damage by the overbalanced mud system that is used when drilling with a roller cone bit. Thus, the challenge before our industry today is to properly apply the UBHD completion technique in assumed to be depleted oilfields and recover another 15 percent or more of the oil in place without any exploration risk 26,27. Preface cont. Page 13

1 Bennion, D.B., and Thomas, F.B., UNDERBALANCED DRILLING OF HORIZONTAL WELLS: DOES IT REALLY ELIMINATE FORMATION DAMAGE? SPE paper 27352; Presented at the SPE Intl. Symposium on Formation Damage Control, Lafayette, Louisiana, February 7-10, 1994 2 Nelson, Ronald A.; GEOLOGIC ANALYSIS OF NATURALLY FRACTURED RESERVOIRS Gulf Professional Publishing 2001 3 Tiab, Djebbar and Donaldson, Earle C., PETROPHYSICS: THE THEORY AND PRACTICE OF MEASURING RESERVOIR ROCK AND FLUID TRANSPORT PROPERTIES Gulf Publishing Company 2004; P.429 4 Laubach, Stephen E., PRACTICAL APPROACHES TO IDENTIFYING SEALED AND OPEN FRACTURES AAPG Bulletin, V. 87, no. 4 (April 2003), pp. 561-579 5 Cade, R., Jennings, J., and Vickers, J., PRODUCERS MONETIZE ASSETS WITH UBD Hart s E&P, January 2003 Issue 6,9 Bennion, Brant D., Thomas, F. B., and Bennion, Douglas W., UNDERBALANCED DRILLING, PRAISES AND PERILS, SPE Paper 35242 presented at the SPE Permian Basin Oil & Gas Recovery Conference, Midland, Texas, March 27-29, 1996 7 Saponja, J., CHALLENGES WITH JOINTED PIPE UNDERBALANCED OPERATIONS, SPE Paper 37066 presented at the 1996 SPE International Conference on Horizontal Well Technology, Calgary, Alberta, November 18-20 8 Ralmalho, John; CHANGING THE LOOK AND FEEL OF UBD REQUIRES INDUSTRY TO BREAK OUT OF CONVENTIONAL THINKING Drilling Contractor Article, July/August 2007 Issue, pages 62-67 10 Hoffman, Monty DAMAGING RELATIVE PERMEABILITY BY DRILLING, COMPLETION AND PRODUCTION OPERATIONS The Mountain Geologist; October 8 2008, Volume 45 No. 4 Issue pp.99-105 11 Civan, Faruk, RESERVOIR FORMATION DAMAGE, Gulf Publishing Company, 2000, Chapter 2, pp. 10-48 12 Aguilera, Roberto NATURALLY FRACTURED RESERVOIRS Penwell Publishing Company 1995 2 nd ed; p.9 13 US Patent # 6,877,571 DOWNHOLE DRILLING ASSEMBLY WITH INDEPENDENT JET PUMP, Hughes, W. James; 2005 14 Suryanarayana, P. V., Hasan, Kalid ABM., and Hughes, W.J., TECHNICAL FEASIBILITY AND APPLICABILITY OF A CONCENTRIC JET PUMP IN UNDERBALANCED DRILLING, SPE/IADC paper 91595 presented at the 2004 SPE/IADC Underbalanced Technology Conference, Houston, Texas, October 11-12 15 Figueroa, Jorge BITOR - Subsidiary of PDVSA; Hibbeler, Jeffrey; Duque, Luis; Perdomo, Lenin BJ Services C. A., SKIN DAMAGE REMOVAL USING COILED-TUBING VACUUM: A CASE STUDY IN VENEZUELA'S ORINOCO BELT, SPE paper 69532-MS 2001 16 US Patent # 6,666,274 TUBING CONTAINING ELECTRICAL WIRING INSERT, Hughes, W. James; 2003 17 US Patent # 7,226,090 ROD AND TUBING JOINT OF MULTIPLE ORIENTATIONS CONTAINING ELECTRICAL WIRING, Hughes, W. James; 2007 18 US Patent # 5,950,744 METHOD AND APPARATUS FOR ALIGNING DRILL PIPE AND TUBING, Hughes, W. James; 1999 Preface cont. Page 14

19 http://www.hunting-intl.com/well-construction/premium-connections/seal-lock-connections/seallock-ht-s-timed.shtml 20 US Patent # 7,373,995 METHOD AND APPARATUS FOR DRILLING CURVED BOREHOLES, Hughes, W. James; 2008 21 Ross, Elsie; GIVING SNUBBING THE SNUB New Technology Magazine, Jan/Feb 2003 Issue 22 US Patent # 7,537,062 FLAPPER VALVE AND ACTUATOR Hughes, W. James; 2006 23 US Patent #6,745,842 CONCENTRIC CASING JACK, Hughes, W. James; 2004 24 US Patent # 7,380,590 ROTATING PRESSURE CONTROL HEAD, Hughes, W. James; 2008 25 http://en.wikipedia.org/wiki/extraction_of_petroleum 26 Shirley, K., Find Draws Illinois Basin Attention, AAPG Explorer Magazine, July 2002, pp. 10,12,17 27 Haselton, Thomas M. and Kirvelis, Ringys UAB Minijos Nafta; Pia, Giancarlo Weatherford International and Fuller, Tom, Weatherford (UK) Ltd. WELLS YIELD DIRECT OBD-UBD COMPARISON, Drilling Contractor Article, Preface cont. Page 15