Well Integrity Basics, Prevention, Monitoring, Red Flags & Repair Options



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Well Integrity Basics, Prevention, Monitoring, Red Flags & Repair Options George E. King, P.E. Distinguished Engineering Advisor, Apache Corporation Presented to: United States Energy Association DOE Well Integrity Briefing 21 November 2014 Washington DC

Sources of US Total Energy Supply Fossil Energy is 82% of supply 2

Energy Sources with Ground Disturbance Impacts or Dependencies

Risk = Frequency of Occurrence vs. Impact Slide 4 Risk exists in every action. What is operationally safe? Occurrence & impact create a threat level that we can understand & accept or reject based on what we believe: hopefully on assessment of facts. SPE 166142, Barrier vs. Well Failure, King

Basics of Well Integrity NORSOK Definition: Application of technical, operational and organizational solutions to reduce risk of uncontrolled release of formation fluids throughout the life cycle of a well. Maximum challenge in stimulation? Maximum challenge in production? Plug & Abandonment Life?

Status of the Well Integrity Issue How many wells leak? Where, why and what? How much do they pollute? What is special about leaking wells? What are the pathways? route of spills? 15.2 million US residential water wells (integrity?) 1 million Class V injection wells (?) Old wells in Northeast (no location & no records)

Review of Well Studies: >650,000 wells Area # Wells Type Wells Barrier Failure Freq. Range (w/contain) OH 64,830 D&C shoe test fail (74)* Take worst case Prod. 39 TX 253,090 D&C Failures, shoe test fail* (10) **Prod (56) fail assumed Texas 16,000 Horizontal Multi frac wells Mn Cedar Creek 0.035% in (34,000 wells 1983 2007), 0.1% old wells worst Well Integ Freq. w/ leak path ~0.06% (total) 0.02% 0.02% old era wells, 0.004% new era wells 0 0 671 Vertical 5.5% Unk Alberta 316,000 All well types used in the study. (Sources of data in SPE 166142) (4.6%) unk if active leaks or single barrier fail. (4.6%) unk if active leaks or single barrier fail. SPE 166142, Barrier vs. Well Failure, King Leaks to GW by sampling 0.005% to 0.01% producers 0.03% 0.07% injector Slide 7

Area US Gulf of Mexico US Gulf of Mexico Number of Wells 11,498 (3542 active Sustained Casing Pressure Type of Wells Platform based wells 4,099 Shoe Test failures during drilling* Barrier Failure Freq. Range (w/ containment) 30% overall with first annulus SCP of 50% of cases. 90% of strings w/ SCP have less than 1000 psi. 10% are more serious form of SCP (Wojtanowicz, 2012) 12% to 18% require cement repair to continue drilling Norway 406 offshore 18% 0 GOM /Trinidad Matagorda Island 623 Integrity Failure (leak path in or out) 0.01% to 0.05% of wells leaked 0.00005% to 0.0003% of prod oil spilled 1980 thru 2009. 0 (all repaired before resuming drilling) 2,120 Sand Control 0.5 to 1% 0% subterranean ~0.0001% via surface erosion potential 17 Compaction failures; casing shear & sand fail Sumatera 175 without maintenance 80% to 100% the high number is due to high pressure and formation compaction. 43% 1 to 4% Wells routinely shut in and repaired prior to restart. Slide 8 SPE 166142, Barrier vs. Well Failure, King

Well Study Review >650,000 wells Failure Factors Recognized: Type of Well Maintenance Culture Era of Construction Geographical Location Age of Well Specifics of Design & Construction Usage Change Single barrier compromised by tubing leaks. SPE 166142, Barrier vs. Well Failure, King

Background Context Methane Seepage from Soils Oil & Gas Seeps are indicators of oil & gas beneath the surface Many natural seep flows diminished as wells were drilled & produced. SPE 166142, Barrier vs. Well Failure, King

Other Context - Comparing Spills and Seeps History Drake s 1859 well hit flowing oil at 69.5 ft. Hart s 1821 Shale gas well found flowing gas at 28 ft. Water, Oil & Gas commonly cohabitate shallow formations in oil producing areas. Lakeview Gusher, CA Onshore, 1910 Santa Barbara Blowout, CA, 1969 Tanker Grounding, MA, 1976 Tanker Grounding, AK, 1989 Tanker Grounding, TX, 1990 Sabotage, Kuwait, 1992 Tanker Grounding, LA, 2000 Pipelines Ruptured by Hurricanes, Barge Collision, LA, 2008 Tanker Collision, TX, 2010 Pipeline Corrosion, MI, 2010 Macondo Blowout, GOM, 2010 Natural Seeps, Coal Point, CA, Yearly Natural Seeps, GOM, Yearly 1,000 10,000 BARRELS 100,000 Single Estimate High Value Range 1,000,000 10,000,000

Prevention of Well Integrity Problems Initial planning and creating effective barriers goal of first well construction effort lowest cost opportunity for problem prevention. Adding/modifying barriers later is expensive. Fracturing and acidizing What is required in well construction? A place for temporary barriers. Barriers that stand up to cyclic pressure.

Slide 13 Well Barrier Failure vs. Well Integrity Failure Barriers are containment elements - Can individually isolate design loads. If one barrier fails, the next barrier accepts the load. Multiple, nested barriers = redundant barrier system. No Leak Path Well integrity failure = if all barriers fail in series = leak path Is formed Barrier Number Press Durability Casing + Cmnt 2 to 7 Very High Very High Hanger + Seal 2 to 4 High High replace easy. Pipe body 1 to 3 High Very High w/ corros. maintenance Packer, Plug 1 to 2 Mod. Mod. Safety Valve 1 Mod. to High Mod. Valves, Spools in Prod. Tree 4 to 20+, tandem? Mod. to High Mod easy repair SPE 166142, Barrier vs. Well Failure, King

Cement Every Annulus to Surface? Full Annulus Cementing? May NOT be the best plan. Most full cement columns require a two stage cement job requires perforating or DV tool may decrease well integrity. Careful positioning of cement top in inner annulus allows monitoring of pressure build up or monitoring type of fluid flow if leaks are seen. Repair options increase when open annulus exists including downsqueezes & inner pipe removal. Note: local conditions can dictate fewer casing strings. Placing end of casing in strong, low permeability formations increases isolation success. Placing salt water and fresh water zones behind different casing strings nearly eliminates potential for salt water intrusions behind the pipe.

Example Completion & P&A Slide 15 The Completion Enables Successful P&A SPE 170949 Environmental Risk P&A - George King & Randy Valencia

How Much Cement is Needed for Isolation? Every inch of cement is NOT required to be perfect. Slide 16 Quality of cement is more important than the volume. Over 10,000 psi can be held with less than 50 ft of cement, but 200 to 300 ft is routinely used. Isolation can only be measured with a pressure test. Bond logs are not always best tool ~10% channels missed. Instances of false negatives. SPE 166142, Barrier vs. Well Failure, King

The Best Tool for Evaluating Cement Quality is the Pump Chart 1 Filling surface equipment w/ fresh water 8 Cement density variance was a special tail in slurry used? 2 Pressure test two leaks in surface connection & a successful test 3 Pump spacer to separate mud from cement 4 Constant density spacer between mud in the well and cement 5 Shut down to drop bottom plug & switch to on the fly cement 6 Pumping cement within density guidelines, but barely. 7 Cement free fall heavy cement pushes mud faster than vol. inj. 9 Shut down to flush surface lines and drop the solid top plug. 10 Bottom plug lands, diaphragm ruptures & cement into annulus. 11 Free fall make up more flow in than out pressures equalizing 12 Cement lift pressure too low check return volumes and timing. 13 Top plug bumps (lands in the shoe track) placement complete. 14 Hold back pressure on casing if float valve fails. (not in this case).

Cement Evaluation Tool Value & Limits Amplitude 1. Transit Time 2. Gamma Ray Log 3. Collar Locator 4. Amplitude 5. Variable Density Log Issues: Cement must develop strength before CBL is useful (>72 hours) CBL will not predict or confirm pressure isolation. Properly run CBL 90% reliable in finding channels of >10% total annular space Many wells show effective isolation, even when CBL shows only 30% to 75% of bond as good. CBL utility is determining cement presence & info on bonding across zone of investigation. Fast formation may act like free pipe when bonding is good. Cement sheaths less than ½ to ¾ may look unbonded even when seal is good. Gas bubbles decrease signal. Void spaces increase amplitude. Pipe thickness changes cause amplitude shift Tool eccentering & microannuli reduce amplitude

What are documented occurrences and impacts from fracturing? Conclusions from actual tests, trials & case studies is the only risk from deep well (>2000 ft) hydraulic fracturing is: Low risk in transport & produced water storage Very low risk in well construction. Virtually no risk in fracturing. Table 2 Fracturing Risk Events Event Event Description Event Event Description 1 Spill transport of fresh or low salt water 10 Frac ruptures surface casing 2 Spill 15 gal biocide 11 Cooling pulls tbg string out of packer. 3 Spill 50 lb. dry additives 12 Frac opens mud channel, well < 2000 ft. 4 Spill 150 gal from truck wreck 13 Frac opens mud channel, well > 2000 ft. 5 Spill 2500 gal from refueler wreck 14 Frac intersects another well in pay zone. 6 Spill frac tank of water, no additives 15 Frac intersects properly abandoned wellbore. 7 Spill frac tank of water with food grade polymer 16 Frac intersects improperly abandoned wellbore. only 8 Spill 10 gal. diesel during refueling 17 Frac to surface or groundwater through the rock, well > 2000 ft. deep. 9 Spill 100 bbls of produced water 18 Frac produces earthquake that can be felt at surface. 19 Frac intersects a natural seep. 20 Frac produces emissions in excess of limits. 21 Normal frac operations no problems Source: SPE 152596 download from www.fracfocus.org or www.www.onepetro.org

Monitoring Well Integrity The Era of construction is the first indicator of the stability of well integrity. => couplings & cement Is a base line set and a trend line maintained? Simple, regular monitoring can be inexpensive. Are the working limits of the asset known and strictly observed? Monitoring is more effective when a company has a culture of proper maintenance. Are wells P&A d when practical value is gone? (does shut in have a required end point?)

Well Failures & Improvements in Development Eras Time Era Operation Norms Era Potential For Pollution 1830 to 1916 Cable Tool drilling, no cement, wells vented High 1916 to 1970 Cementing isolation steadily improving. Moderate 1930 s Rotary drilling replace cable tool, BOPs Moderate & Lower 1952 Fracs reduce # wells. Better pipe & cement Lower from Frac aspects 1960 Gas tight couplings and joint make up Moderate 1970 Cement improving, Horizontal Wells introduced Lower 1988 Multi frac, horizontal wells, pad drilling Lower reducing environmental land footprint 90% 2005 Well integrity assessment, premium couplings, adding barriers & cementing full strings. Lower after 2008 to 2010 (STRONGER Reg Review) 2008 Chemical toxicity & endocrine disruptors Lowest yet, most states sharply reduced. Real time well integrity needs caught up with design and studied early warning & avoidance. inspection requirements. When evaluating well integrity, ALWAYS look at era of construction. Slide 21 SPE 166142, Barrier vs. Well Failure, King

What are Groundwater Pollutants Today & where do oil & Gas Wells Fit in this Picture? Used Texas as a Study Case. Over a million penetrations through the 29 major & minor aquifers in Texas. Texas is #2 in total Groundwater withdrawals with ~ 80% going to Agriculture & Municipalities. If the water was really polluted by O&G wells, we d see it quickly in Municipal & Ag. Slide 22 SPE 166142, Barrier vs. Well Failure, King

Red Flags Looking Into the Future There are very few well integrity failures that do not show signs of their approach. Major issues Corrosion possibly creates more damage than all other failures combined. To predict future problems look at the past. What era of technology was the well built in? What level of maintenance has the asset received? Who is responsible?

Repairs Sequence of Outcomes: Safety impact Contamination impact Containment issues Remediation potential Retribution and punishment Repair methods success Convention squeeze (cement & sealer) Pipe removal Better initial design/application

Gas migration >>200+ yrs. Old - highly regional - many causes - 1000 s of seeps. SPE 166142, Barrier vs. Well Failure, King

Conclusions Slide 26 1. Risk of GW pollution from producing well is low. 2. Barrier failure rates and well failure rates vary widely. 3. Barriers may fail without creating a pollution pathway. 4. Failure of wells of a specific time era are artifacts of that era; not reflective of wells completed today. 5. The nation s 15 million residential water wells may be conduits for methane migration. SPE 166142, Barrier vs. Well Failure, King

Society of Petroleum Engineers Well Integrity Symposium 3 potential training courses (June 1) General integrity overview Integrity inspection points Well integrity for stimulations in new & old Wells 2 day symposium (June 2 & 3)