Under Balance Drilling

Lesson 12Lesson 12Selecting an Appropriate Selecting an Appropriate

TechniqueTechnique

Read: UDM Chapter 4 Read: UDM Chapter 4

pages 4.1-4.54pages 4.1-4.54

PETE 689PETE 689 Underbalanced Drilling Underbalanced Drilling

(UBD)(UBD)

Harold Vance Department of Petroleum Engineering

Selecting an Appropriate Selecting an Appropriate TechniqueTechnique

• Potential applications and Potential applications and candidate technique.candidate technique.

• Technical feasibility.Technical feasibility.• Economic analysis.Economic analysis.


Required Data For UBO Required Data For UBO Candidate IdentificationCandidate Identification

• Pore pressure/gradient plots.Pore pressure/gradient plots.• Actual reservoir pore pressure.Actual reservoir pore pressure.• ROP records.ROP records.• Production rate or reservoir Production rate or reservoir

characteristics to characteristics to calculate/estimate production calculate/estimate production rate.rate.

• Core analysis.Core analysis.Harold Vance Department of Petroleum Engineering

• Formation fluid types.Formation fluid types.• Formation integrity test data.Formation integrity test data.• Water/chemical sensitivity.Water/chemical sensitivity.• Lost circulation information.Lost circulation information.• Fracture pressure/gradient Fracture pressure/gradient

plot.plot.



• Sour/Corrosive gas data.Sour/Corrosive gas data.• Location topography/actual Location topography/actual

location.location.• Well logs from area wells.Well logs from area wells.• Triaxial stress test data on Triaxial stress test data on

any formation samples.any formation samples.



Poor Candidates For Poor Candidates For UBDUBD

• High permeability coupled with High permeability coupled with high pore pressure.high pore pressure.

• Unknown reservoir pressure.Unknown reservoir pressure.• Discontinuous UBO likely Discontinuous UBO likely

(numerous trips, connections, (numerous trips, connections, surveys).surveys).

• High production rates possible at High production rates possible at low drawdown.low drawdown.


• Weak rock formations prone to Weak rock formations prone to wellbore collapse at high drawdown.wellbore collapse at high drawdown.

• Steeply dipping/fractured formation in Steeply dipping/fractured formation in tectonically active areas.tectonically active areas.

• Thick, unstable coal beds.Thick, unstable coal beds.



• Young, geo-pressure shale.Young, geo-pressure shale.• HH22S bearing formations.S bearing formations.• Multiple reservoirs open with Multiple reservoirs open with

different pressures.different pressures.• Isolated locations with poor Isolated locations with poor

supplies.supplies.• Formation with a high likelihood Formation with a high likelihood

of corrosion.of corrosion.



Good Candidates For UBDGood Candidates For UBD

• Pressure depleted formations.Pressure depleted formations.• Areas prone to differential Areas prone to differential

pressure sticking.pressure sticking.• Hard rock (dense, low Hard rock (dense, low

permeability, low porosity).permeability, low porosity).• ““Crooked-hole” country and Crooked-hole” country and

steeply dipping formations.steeply dipping formations.


• Lost-returns zones.Lost-returns zones.• Re-entries and workovers Re-entries and workovers

(especially pressure depleted (especially pressure depleted zones).zones).

• Zones prone to formation damage.Zones prone to formation damage.• Areas with limited availability of Areas with limited availability of

water.water.



Good Candidates For Good Candidates For UBDUBD

• Fractured formations.Fractured formations.• Vugular formations.Vugular formations.• High permeability formations.High permeability formations.• Highly variable formations.Highly variable formations.


• Once the optimum candidate has Once the optimum candidate has been identified, the appropriate been identified, the appropriate technique must be selected, technique must be selected, based on much of the same data based on much of the same data required to pick the candidate.required to pick the candidate.

Good Candidates For Good Candidates For UBDUBD


Candidate Decision Tree-Candidate Decision Tree-Sheet 1Sheet 1

Detailed engineeringDetailed engineering(cost, safety, reservoir,(cost, safety, reservoir,

Mechanical main drivers)Mechanical main drivers)

Previous history ofPrevious history ofunderbalancedunderbalanced

Operations (UBO)?Operations (UBO)?

Hydrocarbons anticipated

Go toSheet 2

No UBONo UBO

No UBONo UBO

No UBONo UBO

Lostcirculation

Stuckpipe

Harddrilling

(ROP/bit)

NoNo

YesYes

NoNo

NoNo

NoNo

NoNo

YesYes

NoNo

YesYes

YesYes

YesYes Cost/safetybenefits

CandidateCandidateYesYes

Drilling problems

anticipated


NoNo

Candidate Decision Tree-Sheet Candidate Decision Tree-Sheet 22

Depletedreservoir

Go toSheet 3

No UBONo UBO

No UBONo UBO

DrillingProblems

anticipated

Lostcirculation

Stuckpipe

HardDrilling

(ROP/bit)

NoNo

NoNo

NoNo

NoNo

YesYes

NoNo

YesYes

YesYes

CandidateCandidate

No UBONo UBO

YesYes

Reservoir damageProduction impairment

Cost /safetybenefits

NoNo

YesYes

No UBONo UBONoNo

YesYes

YesYes


This decision tree can be found on the IADC website This decision tree can be found on the IADC website (www.iadc.org).(www.iadc.org).

Click on Committees.Click on Committees.

Click on Underbalanced Drilling committee.Click on Underbalanced Drilling committee.

Click on decision tree.Click on decision tree.

Drillingproblems

anticipated

No UBONo UBO

NoNo

YesYes

No UBONo UBO

Candidate Decision Tree-Sheet 3

Lostcirculation

Reservoir damageProduction impairmentNo UBONo UBO

CandidateCandidate

NoNo

YesYes

YesYes

Cost /safetybenefits

YesYesStuckpipe

NoNo

HardDrilling

(ROP/bit)

NoNo

YesYes

NoNo

YesYes

NoNo

CandidateCandidate


Potential Applications and Potential Applications and Candidate TechniqueCandidate Technique


Low ROP Through Hard Low ROP Through Hard RockRock

• Dry air.Dry air.• Mist, if there is a slight water inflow.Mist, if there is a slight water inflow.• Foam, if there is heavy water inflow, Foam, if there is heavy water inflow,

if the borehole wall is prone to if the borehole wall is prone to erosion, or if there is a large hole erosion, or if there is a large hole diameter.diameter.

• NN22 or natural gas, if the well is or natural gas, if the well is producing wet gas and it is a high producing wet gas and it is a high angle or horizontal hole.angle or horizontal hole.


Lost Circulation Through Lost Circulation Through The OverburdenThe Overburden

• Aerated mud, if the ROP is high Aerated mud, if the ROP is high (rock strength low or moderate) of (rock strength low or moderate) of if water-sensitive shales are if water-sensitive shales are present.present.

• Foam is possible if wellbore Foam is possible if wellbore instability is not a problem.instability is not a problem.


Differential Sticking Differential Sticking Through The OverburdenThrough The Overburden• Nitrified mud, if gas production is Nitrified mud, if gas production is

likely, especially if a closed likely, especially if a closed system is to be used.system is to be used.

• Aerated mud, if gas production is Aerated mud, if gas production is unlikely and an open surface unlikely and an open surface system is to be used.system is to be used.

• Foam is possible if the pore Foam is possible if the pore pressure is very low and if the pressure is very low and if the formations are very hard.formations are very hard.


Formation Damage Through A Formation Damage Through A Soft/Medium-Depleted Soft/Medium-Depleted

ReservoirReservoir

• Nitrified brine or crude.Nitrified brine or crude.► string injection, if the pore pressure is string injection, if the pore pressure is

very low.very low.► parasite injection, if the pore pressure parasite injection, if the pore pressure

is high enough and a is high enough and a deviated/horizontal hole needs deviated/horizontal hole needs conventional MWD and/or mud motor.conventional MWD and/or mud motor.

► Temporary casing injection, if the pore Temporary casing injection, if the pore pressure is intermediate and a high pressure is intermediate and a high gas rate in needed.gas rate in needed.


• Nitrified brine or crude, con’t.Nitrified brine or crude, con’t.► String and temporary casing String and temporary casing

injection, if the pore pressure is injection, if the pore pressure is very low and/or if very high gas very low and/or if very high gas rates.rates.

• Foam, if the pore pressure is Foam, if the pore pressure is very low and an open surface very low and an open surface system is acceptable.system is acceptable.


Formation Damage Through A Formation Damage Through A Soft/Medium-Depleted Soft/Medium-Depleted

ReservoirReservoir

Formation Damage Through Formation Damage Through A Normally Pressured A Normally Pressured

ReservoirReservoir

• Flowdrill (use a closed surface system if sour gas is possible).


Lost Circulation/Formation Lost Circulation/Formation Damage Through A Normally Damage Through A Normally

Pressured, Fractured Pressured, Fractured ReservoirReservoir

• Flowdrill (use an atmospheric Flowdrill (use an atmospheric system if no sour gas is system if no sour gas is possible).possible).


Formation Damage Formation Damage Through An Through An

Overpressured Reservoir.Overpressured Reservoir.

• Snub drill (use a closed surface Snub drill (use a closed surface system is sour gas is possible).system is sour gas is possible).


Technical Technical FeasibilityFeasibility

• In evaluating the feasibility of candidate In evaluating the feasibility of candidate drilling techniques, a controlling factor drilling techniques, a controlling factor is the range of anticipated borehole is the range of anticipated borehole pressures which will be required for pressures which will be required for eacheach zone to be drilled.zone to be drilled.

• The upper limit for UB conditions is The upper limit for UB conditions is formation pore pressure.formation pore pressure.

• Lower limit will generally be regulated Lower limit will generally be regulated by the lowest pressure at which by the lowest pressure at which wellbore stability is ensured.wellbore stability is ensured.


• First step is to determine the First step is to determine the anticipated pressures.anticipated pressures.

• Step two is to determine which Step two is to determine which methods are functional within methods are functional within the anticipated pressure window.the anticipated pressure window.



• Other considerations are:Other considerations are:► Will there be sloughing shales?Will there be sloughing shales?► Are aqueous fluids Are aqueous fluids

inappropriate?inappropriate?► Will water producing horizons Will water producing horizons

be penetrated?be penetrated?► Will multiple, permeable zones, Will multiple, permeable zones,

with dramatically different pore with dramatically different pore pressures, be encountered?pressures, be encountered?



• Other considerations con’t:Other considerations con’t:► What is the potential for chemical What is the potential for chemical

formation damage, due to formation damage, due to fluid/fluid or fluid/formation fluid/fluid or fluid/formation interaction and is this an interaction and is this an overwhelming problem, overwhelming problem, regardless of what wellbore regardless of what wellbore pressure is used?pressure is used?

► Is there a potential for sour gas Is there a potential for sour gas production?production?



• Other considerations con’t:Other considerations con’t:► Are there features of the well Are there features of the well

geometry which dictate specific geometry which dictate specific underbalanced protocols?underbalanced protocols?

► What is the local availability of What is the local availability of suitable equipment and suitable equipment and consumables (including liquids consumables (including liquids and gases for the drilling fluids)?and gases for the drilling fluids)?



Borehole Pressure Borehole Pressure LimitsLimits

• Pore pressurePore pressure► The wellbore pressure must be The wellbore pressure must be

maintained below the formation maintained below the formation pressure in pressure in allall open hole sections.open hole sections.

► If there is no formation fluid inflow, If there is no formation fluid inflow, borehole pressures with dry gas, mist, borehole pressures with dry gas, mist, foam or pure liquid will be lower when foam or pure liquid will be lower when not circulating.not circulating.

► With fluid influx, borehole pressure can With fluid influx, borehole pressure can increase or decrease when not increase or decrease when not circulating.circulating.


• Pore pressurePore pressure Best practice is to use the:Best practice is to use the:

►Lower bounds for pore pressure Lower bounds for pore pressure prediction when choosing a prediction when choosing a technique.technique.

►While surface equipment While surface equipment capacity and drilling specifics capacity and drilling specifics should be based on an upper should be based on an upper bound.bound.



• Wellbore stability provides Wellbore stability provides the lower limit to the the lower limit to the allowable borehole allowable borehole pressures.pressures.

• Will be discussed later.Will be discussed later.



• Hydrocarbon production rates Hydrocarbon production rates can sometimes set the lower can sometimes set the lower bound, depending upon the bound, depending upon the surface equipment available.surface equipment available.

• Formation damage may effect Formation damage may effect the tolerable drawdown due to the tolerable drawdown due to fines mobilization in the fines mobilization in the producing formation.producing formation.



• Backpressure from a choke can Backpressure from a choke can sometimes be used to protect the sometimes be used to protect the surface equipment from excess surface equipment from excess production rates or pressures.production rates or pressures.

• This also increases the BHP.This also increases the BHP.• The allowable backpressure is The allowable backpressure is

limited by the pressure rating of limited by the pressure rating of the equipment and formation the equipment and formation upstream of the choke.upstream of the choke.



• When using compressible fluids, it is usually more cost effective to switch to a higher density fluid than to choke back the well.



• Applying back pressure will:► Increase the gas injection

pressure.► Increase the gas injection rate

required for acceptable hole cleaning.

► These both will increase the cost of the gas supply.



• With a gasified liquid, BHP can With a gasified liquid, BHP can usually be increased by reducing usually be increased by reducing the gas injection rate.the gas injection rate.

• When drilling with foam, back When drilling with foam, back pressure may be necessary to pressure may be necessary to maintain foam quality.maintain foam quality.

• Holding back pressure is most Holding back pressure is most beneficial when drilling with beneficial when drilling with liquids.liquids.



• Once the maximum tolerable surface pressure is reached, production rate can only be further reduced by increasing downhole pressure by increasing the effective density of the drilling fluid.



Implications of Drilling Implications of Drilling Technique SelectionTechnique Selection

• Pore pressure gradients vary with Pore pressure gradients vary with depth.depth.

• Formation strength varies with Formation strength varies with depth.depth.

• In-situ stresses vary with depth.In-situ stresses vary with depth.• The tolerable stresses, are affected The tolerable stresses, are affected

by by the inclination and orientation by by the inclination and orientation of deviated, extended reach and of deviated, extended reach and horizontal wells.horizontal wells.


• Production rates depend on Production rates depend on the length of the reservoir that the length of the reservoir that is open to the wellbore and on is open to the wellbore and on the underbalanced pressure.the underbalanced pressure.



• Once the borehole pressure limits, Once the borehole pressure limits, corresponding to wellbore corresponding to wellbore instability and excessive instability and excessive production rate, have been production rate, have been determined , a first pass determined , a first pass evaluation of the different drilling evaluation of the different drilling techniques can be performed.techniques can be performed.



Example 1Example 1

•Shallow, normally Shallow, normally pressured reservoir.pressured reservoir.

•No wellbore No wellbore stability problems.stability problems.

•Surface equipment Surface equipment can handle the can handle the anticipated AOF.anticipated AOF.

•Minimal water Minimal water inflow is expected.inflow is expected.


Stability regimes for the well described in Stability regimes for the well described in Example 1.Example 1.

Bore

hole

Pre

ssu

re (

psi)

Bore

hole

Pre

ssu

re (

psi)

45004500

40004000

35003500

30003000

25002500

20002000

15001500

10001000

500500

00

True Vertical Depth True Vertical Depth (feet)(feet)

0 2000 4000 6000 8000 0 2000 4000 6000 8000 10000 10000

•Depleted sandstone Depleted sandstone from 3,000 to 4,000 ft from 3,000 to 4,000 ft with a pore pressure with a pore pressure gradient of 5 ppg. Pore gradient of 5 ppg. Pore pressure above the sand pressure above the sand is 8 ppg.is 8 ppg.

•Lost circulation and Lost circulation and differential sticking is a differential sticking is a problem with mud.problem with mud.

•No instability problems No instability problems anticipated if borehole anticipated if borehole pressure is > 2 ppg.pressure is > 2 ppg.

•Production rate is low.Production rate is low.


Example 2Example 2

Bore

hole

Pre

ssu

re (

psi)

Bore

hole

Pre

ssu

re (

psi)

45004500

40004000

35003500

30003000

25002500

20002000

15001500

10001000

500500

00

True Vertical Depth (feet)True Vertical Depth (feet)

0 2000 4000 6000 8000 0 2000 4000 6000 8000 10000 10000

Stability regimes for the well described in Stability regimes for the well described in Example 2.Example 2.

•Pore pressure = 8 ppgPore pressure = 8 ppg

•Shale from 6,000-8,000’ Shale from 6,000-8,000’ requires a minimum requires a minimum wellbore pressure of 7 wellbore pressure of 7 ppgppg

•Target zone is 9,000’Target zone is 9,000’

•Reservoir itself is Reservoir itself is competent unless competent unless borehole pressure borehole pressure < 5 ppg< 5 ppg

•Expect high flow rates.Expect high flow rates.

•maximum drawdown maximum drawdown = 500 psi = 500 psi

•Pore p. at 9,000’ = 3,744 Pore p. at 9,000’ = 3,744 psipsi

•min BHP = 3,244 psi or min BHP = 3,244 psi or 6.93 ppg6.93 ppg


Example 3Example 3

Bore

hole

Pre

ssu

re (

psi)

Bore

hole

Pre

ssu

re (

psi)

45004500

40004000

35003500

30003000

25002500

20002000

15001500

10001000

500500

00


4000 5000 6000 7000 8000 9000 4000 5000 6000 7000 8000 9000 1000010000

Stability regimes for the wells described in Examples 3 Stability regimes for the wells described in Examples 3 through 5through 5

•Maximum Maximum drawdown = drawdown = 100 psi.100 psi.

•Equivalent to 7.79 Equivalent to 7.79 ppg.ppg.

•Diesel or crude Diesel or crude gives a pressure gives a pressure lower than this. lower than this. Plain water is too Plain water is too dense.dense.


Example 4Example 4

Bore

hole

Pre

ssu

re (

psi)

Bore

hole

Pre

ssu

re (

psi)

45004500

40004000

35003500

30003000

25002500

20002000

15001500

10001000

500500

00


4000 5000 6000 7000 8000 9000 4000 5000 6000 7000 8000 9000 1000010000


•Reservoir is depleted Reservoir is depleted to 6.5 ppg. Maximum to 6.5 ppg. Maximum drawdown is 500 psi. drawdown is 500 psi. The tolerable range for The tolerable range for ECD through the ECD through the reservoir would be 5.4-reservoir would be 5.4-6.5 ppg. A gasified 6.5 ppg. A gasified liquid would be liquid would be required.required.

•This would not supply This would not supply sufficient support for sufficient support for the shale above.the shale above.


Example 5Example 5

Bore

hole

Pre

ssu

re (

psi)

Bore

hole

Pre

ssu

re (

psi)

45004500

40004000

35003500

30003000

25002500

20002000

15001500

10001000

500500

00


4000 5000 6000 7000 8000 9000 4000 5000 6000 7000 8000 9000 1000010000


Evaluating Highly Evaluating Highly Productive FormationsProductive Formations

• Require detailed numerical Require detailed numerical analyses of circulating pressures.analyses of circulating pressures.

• Formation fluid influx interacts Formation fluid influx interacts with drilling fluids which effect with drilling fluids which effect borehole pressure - effecting borehole pressure - effecting influx rate.influx rate.


• When circulation stops, the influx lifts mud from wellbore.

• This changes the borehole pressure and the production rate.



• Choking back the well returns further Choking back the well returns further complicates the calculation of borehole complicates the calculation of borehole pressures and production rate.pressures and production rate.

• If the fluid is incompressible, If the fluid is incompressible, backpressure changes BHP by the backpressure changes BHP by the amount of pressure applied.amount of pressure applied.

• If the fluid is compressible, If the fluid is compressible, backpressure changes density, backpressure changes density, velocity, and BHP.velocity, and BHP.



• Uncertainty of input parameters Uncertainty of input parameters in simulators leads to in simulators leads to uncertainty in output. uncertainty in output.

• In many cases these In many cases these uncertainties can make uncertainties can make simulations in technique simulations in technique selection unjustified.selection unjustified.



Water ProductionWater Production

• Production of small quantities of water makes dry gas drilling difficult.

• If offset wells have a history of water production, dry gas drilling below the water zone is probably impractical.


• When misting, higher gas rates When misting, higher gas rates are required to prevent slug are required to prevent slug flow.flow.

• Slug flow can damage the Slug flow can damage the borehole and surface equipment.borehole and surface equipment.

• Higher injection rates and the Higher injection rates and the increased density in the annulus increased density in the annulus may require boosters on the may require boosters on the compressors.compressors.



• Large water influxes may require Large water influxes may require foams.foams.

• High disposal costs can sometimes High disposal costs can sometimes make mist drilling impractical.make mist drilling impractical.

• Higher density foams can decrease Higher density foams can decrease water influx, however the increased water influx, however the increased volume of make-up water may make volume of make-up water may make disposal still impractical.disposal still impractical.



• If high water influx makes If high water influx makes gas and foams impractical, gas and foams impractical, aerated mud or low density aerated mud or low density liquids may be required.liquids may be required.



Multiple Permeable Multiple Permeable ZonesZones

• If all zones are to be drilled If all zones are to be drilled UB, the circulating pressure UB, the circulating pressure must satisfy the borehole must satisfy the borehole pressure requirements for pressure requirements for all open permeable zones, all open permeable zones, simultaneously.simultaneously.

• Several factors can prevent Several factors can prevent this from happening.this from happening.


Factors Preventing UBFactors Preventing UB In All Zones In All Zones

• The ECD of compressible fluids The ECD of compressible fluids increases with increasing increases with increasing depth.depth.

• In vertical wells, it is possible In vertical wells, it is possible for a permeable zone close to for a permeable zone close to the bit to be overbalanced the bit to be overbalanced when a permeable zone higher when a permeable zone higher up hole, with the same pore up hole, with the same pore pressure gradient, is UB.pressure gradient, is UB.


• This effect is more pronounced in This effect is more pronounced in high angle and horizontal wells.high angle and horizontal wells.

• AFP increases along the borehole AFP increases along the borehole even if formation pore pressure even if formation pore pressure remains relatively constant remains relatively constant along the borehole.along the borehole.



• Changes in pore pressure gradient Changes in pore pressure gradient along the wellbore may be present.along the wellbore may be present.

• This can be due to abnormally This can be due to abnormally pressured formations, or partially pressured formations, or partially depleted formations.depleted formations.



Multiple Permeable ZonesMultiple Permeable Zones

• The major concern with The major concern with multiple permeable zones is multiple permeable zones is the potential for underground the potential for underground blowouts.blowouts.

• Extreme care must be taken Extreme care must be taken to prevent this from to prevent this from happening when pressure happening when pressure changes occur such as changes occur such as tripping, or connections.tripping, or connections.


If Cross Flows Cannot Be If Cross Flows Cannot Be Tolerated:Tolerated:

• Use a different drilling technique Use a different drilling technique that allows all permeable zones that allows all permeable zones to remain UB, if possible.to remain UB, if possible.

• Kill the well before suspending Kill the well before suspending circulation.circulation.

• Change the casing scheme so Change the casing scheme so that the upper formations are that the upper formations are cased of before penetrating the cased of before penetrating the lower zone in the hole.lower zone in the hole.


Sour GasSour Gas

• There must be no possibility There must be no possibility of releasing hydrogen sulfide of releasing hydrogen sulfide into the atmosphere while the into the atmosphere while the well is being drilled or well is being drilled or completed.completed.

• If any is produced during If any is produced during drilling it must be disposed of drilling it must be disposed of in a suitable flare.in a suitable flare.


• HH22S can become entrained in S can become entrained in any liquid in the wellbore, and any liquid in the wellbore, and must be completely removed must be completely removed from the fluid and flared before from the fluid and flared before any of the liquids are returned any of the liquids are returned to any open surface pits.to any open surface pits.

• The separation process should The separation process should be completed in a closed be completed in a closed vessel.vessel.


Sour GasSour Gas

• Sour gas can become entrained Sour gas can become entrained in foams. in foams.

• The foam must be completely The foam must be completely broken prior to separation.broken prior to separation.

• Unless effective defoaming can Unless effective defoaming can be guaranteed foams cannot be guaranteed foams cannot be used in closed systems, and be used in closed systems, and should not be used in the should not be used in the presence of Hydrogen Sulfide.presence of Hydrogen Sulfide.


Sour GasSour Gas

Drilling/Reservoir Fluid Drilling/Reservoir Fluid IncompatibilityIncompatibility

• It can be difficult to prevent It can be difficult to prevent temporary overbalance.temporary overbalance.

• Drilling fluids should be Drilling fluids should be tested for compatibility with tested for compatibility with formation fluids.formation fluids.


Hole GeometryHole Geometry

• A compressible fluid will have a A compressible fluid will have a greater ECD in deep wells than in greater ECD in deep wells than in shallow wells.shallow wells.

• Annular gas injection only reduces Annular gas injection only reduces the density of the fluids above the the density of the fluids above the injection point. Drillpipe gas injection point. Drillpipe gas injection may be necessary if long injection may be necessary if long vertical sections are to be drilled vertical sections are to be drilled with gasified liquid.with gasified liquid.


• Increasing ECD with depth Increasing ECD with depth may make it impossible to may make it impossible to maintain the proper foam maintain the proper foam quality in deep wells. quality in deep wells. Backpressure may be Backpressure may be required, increasing the gas required, increasing the gas supply needed.supply needed.

• Increasing hole size makes Increasing hole size makes hole cleaning more difficult.hole cleaning more difficult.



• Large hole sizes may require Large hole sizes may require larger diameter surface larger diameter surface equipment. Larger surface equipment. Larger surface diverter equipment may not have diverter equipment may not have the pressure rating of smaller the pressure rating of smaller resulting in lower back pressure resulting in lower back pressure capabilities.capabilities.



Naturally Fractured Naturally Fractured FormationsFormations

• In fractured formations, high In fractured formations, high viscosity drilling fluids, viscosity drilling fluids, circulating at low rates may circulating at low rates may prevent hole enlargement prevent hole enlargement and still maintain UB. and still maintain UB.

• Stiff foams may be the Stiff foams may be the preferred candidate.preferred candidate.


LogisticsLogistics

• Water supplies may be Water supplies may be limited in some areas, and a limited in some areas, and a technique that limits water technique that limits water use may be chosen.use may be chosen.

• Availability and access to the Availability and access to the gaseous phase can influence gaseous phase can influence the choice of gas used.the choice of gas used.


• Offshore locations generally Offshore locations generally do not have the same space do not have the same space available as land locations.available as land locations.

• Equipment used on surface Equipment used on surface locations may not be suitable locations may not be suitable for offshore locations.for offshore locations.

• Modular closed systems must Modular closed systems must be used offshore.be used offshore.


LogisticsLogistics

• The high production rates The high production rates necessary for offshore wells necessary for offshore wells to be economically viable to be economically viable may make them unlikely may make them unlikely candidates for UBD.candidates for UBD.


LogisticsLogistics

Economic AnalysisEconomic Analysis

• Rules of thumb.Rules of thumb.► UBO increases costs 1.25 - UBO increases costs 1.25 -

2.0 times the cost per day 2.0 times the cost per day over conventional.over conventional.

► but may be accomplished in but may be accomplished in 1/4 to 1/10 of the time.1/4 to 1/10 of the time.


• Rules of thumb.Rules of thumb.► In permeable rock ROP may In permeable rock ROP may

be increased from 30% to be increased from 30% to 300% as well goes from 300% as well goes from overbalanced to balanced.overbalanced to balanced.

►Below balance ROP will Below balance ROP will increase another 10-20%.increase another 10-20%.

► In impermeable rock, ROP In impermeable rock, ROP will increase 100-200%.will increase 100-200%.




Gas and mud effect on drilling time (after Moore, Gas and mud effect on drilling time (after Moore, 197419745656).).

Dep

th (

feet)

Dep

th (

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40004000

30003000

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80008000

70007000

60006000

50005000

1000100000

90009000

0 20 40 60 80 100 0 20 40 60 80 100 120120

Drilling DaysDrilling Days


Dep

th (

feet)

Dep

th (

feet)Rotating Time Rotating Time (hours)(hours)0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80

90 100 90 100

500500

00

10001000

15001500

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25002500

30003000

Air and water effect on drilling time (after Moore, Air and water effect on drilling time (after Moore, 197419745656).).

Steps for Economic Steps for Economic AnalysisAnalysis

1.Determine the expected penetration rate or drilling time of each candidate hole-interval, if the operation were to be carried out conventionally.

2.Estimate the daily cost of conventional drilling operations for each prospective hole-interval based on empirical data.


3.3.Multiply the conventional daily Multiply the conventional daily cost by an underbalanced factor cost by an underbalanced factor (1.3-2.0, depending on difficulty (1.3-2.0, depending on difficulty of the operation) to get the of the operation) to get the expected daily cost of UBO.expected daily cost of UBO.

4.4.Apply the expected Apply the expected underbalanced operating cost by underbalanced operating cost by the anticipated underbalanced the anticipated underbalanced drilling ROP to get the total cost drilling ROP to get the total cost for each interval.for each interval.

Steps for Economic Steps for Economic AnalysisAnalysis


Factors that Effect the Factors that Effect the Economics of UBDEconomics of UBD

• Penetration rate.Penetration rate.• Bit selection.Bit selection.• Bit weight and rotary Bit weight and rotary

speed.speed.• Mud weight.Mud weight.


Completions and Completions and StimulationStimulation

• UBO does not save completion time.UBO does not save completion time.• But, if you are going to drill UB to But, if you are going to drill UB to

prevent formation damage, you prevent formation damage, you better complete UB.better complete UB.

• Mitigation of formation damage in Mitigation of formation damage in wells that will need to be wells that will need to be hydraulically fractured (except hydraulically fractured (except naturally fractured) may be a poor naturally fractured) may be a poor and unnecessary economic decision.and unnecessary economic decision.


Formation EvaluationFormation Evaluation

• Real time formation Real time formation evaluation possible.evaluation possible.

• UB coring possible.UB coring possible.


Environmental SavingsEnvironmental Savings

• Closed systems make Closed systems make smaller reserve pits and smaller reserve pits and locations possible, but locations possible, but there is additional costs there is additional costs of rental of the systems.of rental of the systems.


Fluid TypeFluid Type

• The bottom line controlling factor may be the specific fluid system adopted. Each fluid type has technical and economic advantages and limitations.


Drilling Drilling Method Method

or Fluid or Fluid SystemSystem

SavingsSavingsProblems and/or Problems and/or

Potential Potential ExpendituresExpenditures

AirAir

High penetration rates and reduction in rig time.

Possible problems if water flow is encountered

Low bit cost Hole erosion, if poorly consolidated.

Low water requirement

Possibility of downhole fire, if hydrocarbons are encountered.

No mud removal Supplementary equipment rental.

Low additives cost Is not suitable for H2S




SavingsSavings Problems and/or Potential Problems and/or Potential ExpendituresExpenditures

Gas(Nitrogen orNatural Gas)


Problems if water flow is encountered.Cost of gas and/or rentals.



Cost is high if a market for the gas exist.

No mud removal Rig safety.

Low additives cost Supplementary equipment rental If H2S is expected, consider a closed system.




SavingsSavings Problems and/or Potential Problems and/or Potential ExpendituresExpenditures

Mist


Problems if substantial water flow is encountered. Gas Cost if air not used.



Shale stability.

No mud removal

Disposal of waste water/gas and supplementary rental cost.

Air-mist not suitable if H2S is present.

Modest additives cost.

Equipment rental.






Stable foam


Considerable foamer cost. Gas cost if air not used.

Low bit cost. Careful metering required.

Low water requirement. Specialized metering equipment.

High solids carrying capacity. Defoaming.

Good hole cleaning capability.

Compatible with oil, salt water, calcium carbonate and most formation contaminants.

Considerable cost.

Can safely entrain a considerable volume of gas into aqueous foam, rendering in non-flammable until sumped.

Separation and disposal.

Can handle large flows of water.

Water disposal






Stiff Foam


Considerable mud and chemical cost.Gas cost if air is not used.

Low bit cost. Fluid degradation possible if oil, salt water or calcium chloride are encountered.

Low water requirement. Specialized metering equipment.

High solids carrying capacity.

Defoaming.

Good hole cleaning capability.




SavingsSavings Problems and/or Problems and/or Potential ExpendituresPotential Expenditures

Gasified Liquids

Higher bottomhole pressures.

Expense of running a parasite string or a temporary casing string.Higher gas rates are required.Slow pressure response if a parasite string is used.Low underbalance pressure may cause transient departures from underbalanced conditions and advantages to impairment reduction may be lost.

Improved directional drilling in comparison to dry gases or mist (refer to chapter 6).

Tool problems with drilling injection.

Reduced drillstring wear. Supplementary surface equipment.

Reduced potential for downhole fires in vertical holes with aqueous fluids.

Corrosion potential (and requirement for inhibitors 62) is air is used.


Drilling Method Drilling Method

or Fluid Systemor Fluid SystemSavingsSavings Problems and/or Problems and/or

Potential ExpendituresPotential Expenditures

Flowdrilling

Higher borehole pressures reduce the possibility of instability.

Supplementary surface equipment and safety measures.

No gas supply system. Excessive production is possible.

Conventional mud motors and MWD units can be used.

Safety issues associated with oil and gas on drill site.

Mudcap Drilling

Can be used in situations where surface pressure is too high for flowdrilling.

Supplementary equipment and safety considerations.

Snub Drilling or CT

Can be used at pressures too high for conventional units and underbalanced drilling equipment.

Snubbing or CT unit.

Closed Systems

Environmental savings Equipment rental and operating cost

Can handle H2S. Better monitoring returns.

Cannot be used with explosive mixtures.


Cost Comparisons - Cost Comparisons - Case 1Case 1

Nitrogen vs. Pipeline Nitrogen vs. Pipeline GasGas

General AssumptionsGeneral Assumptions

Flowrate…………………………………...3,000 cfmFlowrate…………………………………...3,000 cfmGas Price……………………………… $2.00/mcfGas Price……………………………… $2.00/mcfTrucking Distance……….... 50 miles (one Trucking Distance……….... 50 miles (one way) way) Drilling Hours/day……………....………… …… 20Drilling Hours/day……………....………… …… 20Average Gas Drilling Days/well…………… ….12Average Gas Drilling Days/well…………… ….12Diesel Usage/hour/unit…………….10.7 gallonsDiesel Usage/hour/unit…………….10.7 gallonsDiesel Fuel Price…………………... $ 0.80/gallonDiesel Fuel Price…………………... $ 0.80/gallonStandby Days (Equipment)/well…..……......... Standby Days (Equipment)/well…..……......... 44


Cost Comparisons - Case 1Cost Comparisons - Case 1Nitrogen Drilling System CostNitrogen Drilling System Cost Pipeline Gas Drilling CostPipeline Gas Drilling Cost

Compressors (8) @ $135/unit/day

$ 12,960 Pipeline gas 43.2 mmcf @ $2.00/mcf

$ 86,400

Boosters (2) @ $200/unit/day (air use)

$ 4,800 Booster (2) $300/unit/day (gas use)

$ 7,200

Membrane Skids (2) @ $1,500/unit/day(1,800 cfm/skid)

$ 36,000 Drill Gas Unit (installed on location)

$ 1,000

Trucking/Transportation Fuel (delivered)

$ 9,200 Gas Line (2,000 feet) $ 1,800

25,680 gallons * $0.80/gallon $ 20,540 Trucking/Transportation Fuel (delivered)

$ 1,800

Mist Pump $ 1,500 5,138 gallons @ $0.80/gallon $ 4,110

Equipment Standby (4 days) $ 1,800 Mist Pump $ 1,500

Equipment Standby (4 days) $ 700

Total Nitrogen Drilling Total Nitrogen Drilling Cost/wellCost/well

$ $ 88,60088,600

Total pipeline Gas Total pipeline Gas Drilling Cost/wellDrilling Cost/well

$ $ 104,510104,510


Item Liquid N2

Portable N2 Generating System

Drilling ProgramDrilling Program 90 days 90 days

NN22 1,500 scfm 1,500 scfm

Duration of NDuration of N22 requirementrequirement

240 hrs (10 days) 240 hrs (10 days)

NN22 Purity Purity Minimum 95 % (by volume)

Minimum 95 % (by volume)

NN22 Pressure Pressure 5,000 psi 5,000 psi

NN22 requirement requirement

1,500 scfm * 60 min/hr *

24 hr/day *10 days = 584,000 sm3

= 834,000 liters liquid N2

= 139 tanks

1,500 scfm * 60 min/hr * 24 hr/day *10 days =

584,000 sm3

Method of NMethod of N22 SupplySupply

Trucked in liquid N2(equipment rental)

On-site membrane(equipment purchase)

Cost Comparisons - Case Cost Comparisons - Case 22


ItemItem Liquid NLiquid N22Portable NPortable N22

Generating SystemGenerating System

LogisticsLogistics

139 liquid N2 tanks, 1 evaporator and 1 diesel skid (141

containers)

4 skid maximum, 14 tonnes each, 1 power unit, 14 tonnes (5 containers)

Cost of UtilitiesCost of Utilities

(liquid N(liquid N2 2 , , electricity, diesel)electricity, diesel)

$ 1,284,000

Electrical power: 1,400 kW * 10 days * 24 hrs @

$0.05/kWh= $ 16,800

(Power unit rental included in capital cost)

MaintenanceMaintenance None10 % of interest and

depreciation$ 32,000

Capital CostCapital Cost NoneInterest and depreciation over 10 years $324,000

TOTALTOTAL Approximately $ 1,300,000

Approximately $ 375,000

Cost Comparisons - Case Cost Comparisons - Case 22



• On the basis of available On the basis of available technology, select the potential technology, select the potential drilling systems to be evaluated.drilling systems to be evaluated.

• Tabulate the tangible and Tabulate the tangible and intangible costs for each system.intangible costs for each system.

• Rely on previous history and Rely on previous history and recognize the inevitability of recognize the inevitability of statistical variation.statistical variation.


• Perform basic cost/ft drilling evaluations.Perform basic cost/ft drilling evaluations.

Where:Where:CCTT……total cost/foot.……total cost/foot.B…….bit cost.B…….bit cost.CCrr……hourly rig cost. ……hourly rig cost. t……..rotating time.t……..rotating time.T…….round trip time.T…….round trip time.F…….footage per bit F…….footage per bit run.run.

CT = [B+Cr(t+T)] / F(4.12)(4.12)



Assess Drilling CostsAssess Drilling CostsItemItem Air DrillingAir Drilling Mud DrillingMud Drilling

IntervalInterval From 4,000 to 7,000 ft From 4,000 to 7,000 ft

Interval Length (F) (ft)Interval Length (F) (ft) 3,000 3,000

Penetration Rate Penetration Rate (ft/hr)(ft/hr)

30 15

Rotating Time (t) (hr)Rotating Time (t) (hr) 100 200

Bit Life (hr)Bit Life (hr) 100 100

Bits RequiredBits Required 1 2

Unit Bit CostUnit Bit Cost $ 4,800/bit $ 4,800/bit

Bit Cost (B)Bit Cost (B) $ 4,800 $ 4,800

Trip ScheduleTrip ScheduleTrip in to 4,000 ft

Trip out from 7,000 ft

Trip in to 4,000 ftTrip out from 5,500 ft

Trip in to 5,500 ftTrip out from 7,000 ft

Total Trip FootageTotal Trip Footage 11,000 ft11,000 ft 22,000 ft22,000 ft

Unit Trip TimeUnit Trip Time

(hr/1,000 ft)(hr/1,000 ft)1.51.5 1.51.5


Assess Drilling CostsAssess Drilling CostsItemItem Air DrillingAir Drilling Mud DrillingMud Drilling

Trip Time (T) (hr)Trip Time (T) (hr) 16.5 33

Hourly Operating Hourly Operating CostCost

(C(Crr))$ 375/hr $ 250/hr

Cost / ft Cost / ft

[B+C[B+Crr(T+t)]/[F](T+t)]/[F][9,600+250(33+200)] / [3000]

$ 22.62 /ft

Competitive Cost for Competitive Cost for Air DrillingAir Drilling

[4,800+Cr(16.5+100)] / [3000]

= $ 22.62tCr = $ 541.29/hr

Barrels of Water That Barrels of Water That Can be Disposed of atCan be Disposed of at

$ 1.00/bbl$ 1.00/bbl

($541.29 - $375)/ $1.00 =166 * 24 = 3,984 BWPD


$ 5.00/bbl$ 5.00/bbl

($541.29 - $375)/ $5.00 =33 * 24 = 798 BWPD


$ 10.00/bbl$ 10.00/bbl

($541.29 - $375)/ $10.00 =16.6 * 24 = 400 BWPD



Cost

($/f

t)C

ost

($/f

t)

0 500 1000 1500 2000 2500 0 500 1000 1500 2000 2500 3000 3000

Economic water volume production (modified after Carden Economic water volume production (modified after Carden 1993199311).).

Barrels of Produced Water per DayBarrels of Produced Water per Day

2424

2525

2323

2222

2121

2020

1919

1818

1717

1616

1515

Accelerated ProductionAccelerated Production

• Earlier production can improve the NPV

NPV = 1 / (1+DR)t = (1+DR)-t

NPVNPV = net present value = net present value (discounted (discounted value of asset). value of asset).DRDR = discount rate.= discount rate.tt = discount time, years. = discount time, years.


Improved Improved Production/ReservesProduction/Reserves

• The absolute and relative The absolute and relative increase in production should increase in production should be calculated, or estimated.be calculated, or estimated.

• Productivity Index, PI should Productivity Index, PI should be calculated based on be calculated based on whether the well is vertical, whether the well is vertical, horizontal, oil, gas, radial, horizontal, oil, gas, radial, transient flow, or pseudo-transient flow, or pseudo-steady state flow (see page steady state flow (see page 4.48).4.48).


• Well Inflow Quality Indicator, Well Inflow Quality Indicator, WIQI, is the ratio of the PI for an WIQI, is the ratio of the PI for an impaired to that for an impaired to that for an undamaged well.undamaged well.



KK 50 mD50 mDHH 25 feet25 feetµµ 2 cP 2 cP BBoo 1 bbl/sbbl1 bbl/sbblrree 1,980 ft1,980 ftrrww 0.4110.411SS variablevariableOrientationOrientation verticalverticaldepthdepth 10,000 ft10,000 ftreservoir pressurereservoir pressure 4,300 psi4,300 psi

BHPPBHPP 3,000 psi (pseudo-steady 3,000 psi (pseudo-steady state)state)

Considering the following example for Considering the following example for evaluating PI:evaluating PI:



SkinSkin Production Rate Production Rate (BOPD)(BOPD) PIPI WIQIWIQI

00 761 0.572 1

11 674 0.507 0.89

22 604 0.455 0.79

55 462 0.348 0.61

1010 331 0.249 0.44

100 55 0.041 0.07




Pro

du

cti

on

Rate

(B

OP

D)

Pro

du

cti

on

Rate

(B

OP

D)

0 1 2 5 10 0 1 2 5 10 100 100

Economic water volume production (modified after Carden Economic water volume production (modified after Carden 1993199311).).

SkinSkin

800800

700700

600600

500500

400400

300300

200200

100100

00 00

0.140.14

0.280.28

0.420.42

0.560.56

0.70.7

0.840.84

0.980.98

1.121.12

Well I

nfl

ow

Qu

ality

In

dic

ato

r W

ell I

nfl

ow

Qu

ality

In

dic

ato

r P

rod

ucti

vit

y I

nd

ex

Pro

du

cti

vit

y I

nd

ex


ExampleExampleOil well

Revenue Interest = R = 0.375Working Interest = WI = 0.5

Gross Income (per net bbl)Crude Price = $20.00/bbl

LessTransportation = $1.00/bblProduction taxes = $6.00/bbl

LeavesGross Income (per net bbl) = $13.00/bblEstimated Op. Expense = $5000/well monthNumber of wells = 5


Case 1Case 1

All five wells drilled in the All five wells drilled in the first year with a first year with a conventional mud system.conventional mud system.


YearYear 11 22 33 44 55 66 77 TotalTotal

Estimated Estimated FutureFuture OperationOperation UnitUnit

ss

(1)(1)

Gross LeaseGross Lease

ProductionProduction

- bbl201,204

170,280

122,952

96,720 77,960 55,388 18,024 742,528

(2)(2)

Net ProductionNet Production

To OperatorTo Operator

R * (1)bbl

75,452 63,855 46,107 36,270 29,325 20,771 6,759 278,448

(3)(3)

Gross IncomeGross Income


(2) * $13.00

$980,870

830,115

599,391

471,510

380,055

270,017

87,8673,619,824

(4)(4)

DevelopmentDevelopment

CostCost

$750,000

0 0 0 0 0 0 750,000

(5)(5)

Number ofNumber of

Producing WellProducing Well

MonthsMonths

- - 60 60 48 48 36 36 24 312

(6)(6)

OperatingOperating

ExpenseExpense

(5) * $5,000

$300,00

0300,00

0240,00

0240,00

0180,00

0180,00

0120,00

01,560,00

0

Case 1 (Base Case)Case 1 (Base Case)



Estimated FutureEstimated Future OperationOperation UnitsUnits

(7)(7)

CapitalCapital

ExpenditureExpenditure- $ 20,000 20,000 20,000 20,000 20,000 20,000 20,000 140,000

(8)(8)

Share of Share of

Operating andOperating and

Capital ExpensesCapital Expenses

WI * [(4)+(6)+(7)

]$

535,000

160,000

130,000

130,000

100,000

100,000

70,0001,225,000

(9)(9)

Cash Flow toCash Flow to

OperatorOperator(3) – (8) $

445,870

670,115

469,391

341,510

280,055

170,017

17,8672,394,824

(10)(10)

5% Annual5% Annual

Deferment FactorDeferment Factor© - 0.9740 0.9276 0.8835 0.8414 0.8013 0.7632 0.7268 0.9010

(11)(11)

Present WorthPresent Worth

Of Cash FlowOf Cash Flow(10) * (9) $

434,277

621,599

414,707

287,347

224,408

129,757

12,9862,157,73

6

© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]

DCRDCR annual deferment factors, applicable to equal payments at the end of each monthannual deferment factors, applicable to equal payments at the end of each monthduring a specific interval of year between (t-1) an t years from now.during a specific interval of year between (t-1) an t years from now.

ii effective annual compound safe interest rate as a decimal fraction.effective annual compound safe interest rate as a decimal fraction.tt time in yearstime in years


Case 1 (Base Case)Case 1 (Base Case)

Case 2Case 2

Same as Case 1 with the Same as Case 1 with the exception that there is exception that there is higher production to higher production to reduced formation damage reduced formation damage from UBD.from UBD.



Estimated Estimated FutureFuture OperationOperation UnitsUnits

(1)(1)



- bbl 221,324187,308

135,247

106,392

85,756 60,927 19,826 816,781

(2)(2)



R * (1) bbl 82,997 70,241 50,718 39,897 32,159 22,848 7,435 306,293

(3)(3)



(2) * $13.00 $1,078,956

913,127

659,330

518,661

418,061

297,018

96,6543,981,806

(4)(4)


CostCost$ 750,000 0 0 0 0 0 0 750,000

(5)(5)

Number ofNumber of


MonthsMonths

- - 60 60 48 48 36 36 24 312

(6)(6)

OperatingOperating

ExpenseExpense

(5) * $5,000 $ 300,000300,00

0240,00

0240,00

0180,00

0180,00

0120,00

01,560,00

0

Case 2 Case 2




(7)(7)

CapitalCapital


(8)(8)

Share of Share of



WI * [(4)+(6)+(7)]

$535,000

160,000

130,000

130,000

100,000

100,000

70,0001,225,000

(9)(9)



543,956

753,127

529,330

388,661

318,061

197,018

26,6542,756,806

(10)(10)

5% Annual5% Annual


(11)(11)



529,814

698,600

467,663

327,019

254,862

150,364

19,3722,483,88

3



© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]


Case 2 Case 2

Case 3Case 3

Same as case 2 with the Same as case 2 with the exception that development exception that development costs for the five wells are costs for the five wells are $150,000 less, due to $150,000 less, due to improved drilling while improved drilling while underbalanced.underbalanced.



Estimated Estimated FutureFuture OperationOperation UnitsUnits

(1)(1)



- bbl 221,324187,308

135,247

106,392

85,756 60,927 19,826 816,781

(2)(2)



R * (1) bbl 82,997 70,241 50,718 39,897 32,159 22,848 7,435 306,293

(3)(3)



(2) * $13.00 $1,078,956

913,127

659,330

518,661

418,061

297,018

96,6543,981,806

(4)(4)


CostCost$ 600,000 0 0 0 0 0 0 600,000

(5)(5)

Number ofNumber of


MonthsMonths

- - 60 60 48 48 36 36 24 312

(6)(6)

OperatingOperating

ExpenseExpense

(5) * $5,000 $ 300,000300,00

0240,00

0240,00

0180,00

0180,00

0120,00

01,560,00

0

Case 3 Case 3


Case 3 Case 3 Year 1 2 3 4 5 6 7 Total


(7)(7)

CapitalCapital


(8)(8)

Share of Share of



WI * [(4)+(6)+(7)

]$

460,000

160,000

130,000

130,000

100,000

100,000

70,0001,150,000

(9)(9)



618,956

753,127

529,330

388,661

318,061

197,018

26,6542,831,806

(10)(10)

5% Annual5% Annual


(11)(11)



602,864

698,600

467,663

327,019

254,862

150,364

19,3722,551,45

8



© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]


Summary of all CasesSummary of all Cases(Present Worth of Cash)(Present Worth of Cash)

CaseYear

11 22 33 44 55 66 77 TotalTotal

11 434,277

621,599

414,707

287,347

224,408

129,757

12,9862,157,73

6

22 529,814

698,600

467,663

327,019

254,862

150,364

19,3722,483,88

3

33 602,864

698,600

467,663

327,019

254,862

150,364

19,3722,551,45

8


Summary of Summary of ExamplesExamples


Pre

sen

t W

ort

h o

f C

ash

Flo

w (

$)

Pre

sen

t W

ort

h o

f C

ash

Flo

w (

$)

1 2 3 4 5 6 1 2 3 4 5 6 7 7

Projections Over Seven Projections Over Seven YearsYears

YearYear

700,000700,000

600,000600,000

400,000400,000

300,000300,000

200,000200,000

100,000100,000

00

500,000500,000

Documents

Under Balance Drilling