Successful Application of Innovative Reaming-While-Drilling Technology in Williston Basin Wells

1. Successful Application of Innovative Reaming-While-Drilling Technology in Williston Basin Wells Presenters Lee M. Smith - Greg Scott Western Energy Products and Services

2. The Challenge • Challenge – eliminate dedicated reamer run in Bakken wells; ream-while-drilling (RWD) application • Introduction of 5 7/8” OD PDC reamer for use in 6” lateral section: non-mag and steel body tools • Successful installation of multiple swellable packers – up to 40 per well • Significant savings per well (up to 3 days rig time)

3. Geology

4. Williston Basin Bakken • Oil reservoir, dolomite layered between two shales • Produces oil, gas and natural gas liquids • Depths from 8,000 to 10,000 ft • Lower shale, middle sandstone and upper shale • Middle sandstone varies in thickness, lithology

5. Hazards of Bakken • 30+ formations from surface to target • Potential aquifers • Sticking salt, bentonite beds • Sloughing shales • Known H2S

6. Williston Basin Well Design • 8 ¾-inch vertical hole section to KOP in target formation at 9,000’ to 10,000’ TVD • 8 ¾” inch hole builds angle to horizontal in Bakken at around 11,000’ TVD • Lateral up to 10000’ • 20,000’ MD @TD • Multiple swell packers to TD

7. An Innovative Solution Incorporate PDC Reamer to drill/ream in 6” hole • Eliminates need for dedicated reamer run • Delivers high quality wellbore for multiple packer completion

8. PDC Reamer Tool Delivery to Isolated Rig Location

9. Introduction to PDC Reamer -Reamer functionality compared to stabilization alone -Reamer reliability proven in multiple applications -Reamer advantages over use of stabilizers alone -Reamer design advantages for added durability - Design features for greater reliability, durability Un-aware of PDC Reamer Advantages Not using PDC Reamer Concerned about PDC Reamer Reliability - Review PDC Reamer reliability features -Review Run Histories and Customer Testimonials Why Thinks PDC Reamer is good but costs more than conventional stabs - Discuss PDC Reamer advantages compared to stabs -Explain durability features of PDC Reamer -Show Savings Case Histories Customer -Review PDC Reamer reliability features -Run Histories and complete re-design Yes Using PDC Reamer Experienced Lost Cutters ? -Explain durability features of PDC Reamer -Discuss PDC Reamer application features -Stress Run Histories and Customer Testimonials No

10. Introduction to Drilling Tools PDC Reaming Tool– Customer Approach • A PDC Reamer is fit for any application that is expected to face stuck pipe problems • Key words that trigger a need for a PDC Reamer are: • Heavy back reaming • Mobile or transient formation • Moderate fractured and faulted formation • Swelling shales • Salt layers and salt domes • Unconsolidated formations • Tight spots • Key seats • Poor hole cleaning • Inter-bedded formations or hard stringers • NPT during POOH

11. PDC Reamer Tool Reamer with drilling functionality • Reduce back reaming time • Removal of Irregularities for smoother POOH • Better hole quality Removes hole irregularities by: • Scraping • Cutting (Shearing) Dual cutting mode ideal for transition drilling

12. PDC Reamer Features PDC cutters on leading edges of blades : • Allow re-opening holes to avoid having stuck pipe during POOH • Reduce torque and drag in highly irregular holes • Improve hole gauge and shape by removing ledges and irregularities • Allow opening key-seats & ledges • Acts as backup hole opener when bit gets under-gauge • Cutter design and distribution to match application severity

13. Design Advantages • Use of stud cutters to introduce in-string drilling • Blade design provides proper cutter support to eliminate cutter shear • Blade design ensures 360 degree coverage • Hydraulic profile optimizes mud flow and resists balling

14. Impact on Performance • Balanced cutting structure with cutter redundancies ensures optimized cutting and long life • Reaming inserts arranged to provide continuous reaming and outstanding hole quality • Reamed volume matched to tool life for uniform tool wear Cutting Elements Scraping Elements

15. Drill / Ream Parameters • Multiple RWD BHA designs incorporating both non-mag steel body PDC Reamer tools • Test steerability, torque and successful installation swell packers • Compare RWD BHA to previous lateral BHA – slick and stabilized • Results / findings – torque increase from 7 to 13 with 20% increase in rotary ROP • Optimal RWD BHA – 30ft spacing between PDC reamers positioned on top of lower BHA using steel body tools; 30ft spacing between PDC reamers in lower BHA using non-mag tools • Able to drill out 7” casing shoe

16. Introduction to Drilling Tools PDC Reaming Tool – Introduction and Background • Well profiles are becoming more complex and access to reservoir intervals is becoming more challenging • New drilling technology and methodology: • Multi-lateral wells • Deep horizontal wells • Extended reach drilling • High Pressure High temperature wells • High Angled J-Profile ; S-Shaped wells • It is critical to optimize drilling efficiency and reduce Non-Productive Time (NPT) • A PDC Drilling Tool is a tool that reduces the hazards of having stuck pipe; a feature that significantly reduces NPT

17. Introduction to Drilling Tools PDC Reaming Tool – Operations Concept Cutting Elements • A PDC Reaming Tool is a reamer with drilling • functionality • The design intent is to: • Reduce back reaming time • Removal of Irregularities for smoother POOH • Better hole quality • Traditional Reamer removes hole irregularities by: • Scraping • Tool removes hole irregularities by: • Scraping • Cutting (Shearing) • Cutting mode renders this tool unique when dealing with holes with excessive irregularities (transient formations) Scraping Elements

18. Introduction to Drilling Tools PDC Reaming Tool – Main Functions • Blades leading edges doped with PDC cutters to: • Allow re-opening holes to avoid having stuck pipe during POOH • Reduces torque and drag whilst in reaming in highly irregular holes • Improve hole gauge and shape by removing ledges and irregularities • Allows opening key-seats & ledges • Acts as backup hole opener when bit gets under-gauge (Dual action tool) • Cutter matrix design and reaming insert distribution can be varied to match application severity

19. Introduction to Drilling Tools PDC Reaming Tool – Main Functions Over-Pressured Formations Moderate Fractured & Faulted Formations Reactive Formations Mobile Formations Ledges and Doglegs Unconsolidated Formations Hole Cleaning Key Seating

20. Introduction to Drilling Tools PDC Reaming Tool - Construction • Tool design addresses several design intents and utilizes several features • For drilling: • Tool utilizes the use of stud cutters to introduce in-string drilling • Tool blade design solves the problem of stud cutters shear through proper cutter support

21. Introduction to Drilling Tools PDC Reaming Tool - Construction • For stability: • Spiral Blade design ensures 360 degree coverage • For hydraulics: • Mud way profile optimizes mud flow and resists balling Blade 360 Coverage

22. Introduction to Drilling Tools PDC Reaming Tools - Construction • For performance: • Balanced cutting structure with cutter redundancies ensures optimized cutting and long life • Reaming inserts arranged to provide continuous reaming and outstanding hole quality • Reamed volume matched to tool life for uniform tool wear Cutter Pairs Backup Gage Cutters

23. Introduction to Drilling Tools PDC Reaming Tool - Construction • For productivity: • Design process is automated, this allows for fast customization • For manufacturing: • Stud cutters allow the use of traditional 4 axis milling • Tool configurations of same size use same turning profile (for inventory)

24. Fishing side doped with PDC cutters Fishing side doped with PDC cutters Optimized TCI distribution on gauge part Optimized TCI distribution on gauge part Introduction to Drilling Tools PDC Reaming Tool - Models Single Action Tool Dual Action Tool Down-hole side covered with reaming TCI inserts Down-hole side doped with PDC cutters Full coverage spiral

25. Introduction to Drilling Tools PDC Reaming Tool - Models 6 Blade Tool Larger Mud Way Cross section and more TFA than a 6 Blade Same reaming capacity as a 6 Blade Tool Same number of cutters as a 6 Blade Tool Longer tool and longer crown length

26. Introduction to Drilling Tools PDC Reaming Tool - Features Upper cutter set opens from neck to hole gauge Oriented stud cutters for optimum cutting Chamfered blade for proper PDC cooling and cleaning 360 Blade coverage Omni Axi-symmetric cutter distribution for balanced drilling & reduced vibrations cutter design Cutters deeply inserted in blade for elimination of shear plane OMNI mud-ways, optimized to minimize balling potential OMNI TCI distribution, optimized for uniformity of reamed surface and balanced insert wear Lower cutter set opens from bit under gauge to hole gauge

27. Subject Well #1 • BHA : PDC reamer above 5 ¼” 6/7 motor with 1.5bend; UBHO; 2 x NMDC; PDC reamer • Begin reaming lateral 10,500’ • Flow rate =205 GPM • 65 RPM surface rotary +165 RPM at motor for 230 RPM

28. Well #1 Re-Cap • 32 hours reaming, 9000’ feet open hole, on bottom drilling at 19,495’ depth • Average 25 ft/hr in rotary mode and 12 ft/hr sliding mode • Rig limited to 4250 psi differential; difficulty with second slide in getting required high side tool face • Planned, 10-20 stand short trip • Reamed the last 800’ to TD at 20,232’ • BHA POOH and 21 swell packers successfully run

29. Subject Well #2 • BHA : 6-inch PDC bit; 4-3/4” 7/8 fixed housing motor with 1.5 bend; 5 7/8-inch NM PDC reamer; UBHO; NMDC; NM PDC reamer • Ream lateral hole from 10,500’ to 15,552’ • Ream-while-drilling from 15,552’ to TD at 19,576’

30. Well #2 Re-Cap • Run in to ream at 5000’ to bottom, holding angle over 4024 feet • RWD from 15,552’to TD at 19,576’ • 5.14% sliding in 24.5 hrs • 94.86% rotating with 49.58 rotary hrs • Rotating ROP of 77 ft/hr over 3817 feet • Sliding ROP of 9 ft/hr over 207’ • Eliminated dedicated reamer run • 21 swell packers successfully installed

31. Subject Well #3 BHA : 6-inch PDC bit; 5” 4/5 fixed housing motor with 1.5 bend; UBHO; NMDC - 2; XO; steel PDC reamer; HWDP – 1; steel PDC reamer Drill out 7” shoe with RWD BHA Ream-while-drilling from 10,320’ to TD at 19,820’

32. Well #3 Re-Cap P/U RWD BHA and drill out 7” casing shoe RWD from 10,320’ to TD at 19,820’ 9.2% sliding in 10 hrs 90.8% rotating with 98 rotary hrs Rotating ROP of 88 ft/hr over 9000 feet Sliding ROP of 35 ft/hr over 350’ Eliminated dedicated reamer run 30 swell packers successfully installed

33. Ream-While-Drilling BHA Design • Optimal RWD BHA • 30-foot spacing between PDC reamers positioned on top of the lower BHA using steel body tools • 30-foot spacing between PDC reamers in the lower BHA using non-mag tools RWD BHA concerns: • 60-foot spacing between PDC reamers had a dropping tendency in rotary • PDC reamers run without any spacing created to stiff an assembly and was difficult to steer/orient while sliding.

34. ‘Best Practice’ RWD • Surface handling PDC reamers: Care should be taken in picking up and laying down of reamer tools to insure no surface breaking / chipping of the PDC cutters and TCI • When reaming back to bottom with PDC reamers in the lateral drilling BHA, it is recommended to ream at 250-300ft/hr due to the 1.5 degree bend in the motor • PDC reamers are only effective while in the rotary mode so it is necessary to ream or back ream each slide interval to insure a smooth well bore.

35. Conclusions: Use of PDC Reamer • 100% successful swellable packer installations • No issues with steerability • Increase in rotary ROP – smooth well bore, greater on bottom WOB • Low / manageable torque • Versatile RWD BHA using both non-mag and steel body PDC reamer tools • Eliminated dedicated reamer run • 3 days rig time savings per well

36. Rockin’ (reaming) in the Bakken • Innovative solution using PDC Reamer proven in multiple wells • Reamed in excess 750,000’ of hole / over 50 wells in ND/MT • Eliminates need for dedicated reamer run • Saves average of 3 days/well • $225K savings per well • Established ‘best practice’ for Williston Basin wells

37. Acknowledgments • This new technology, through the combined efforts of proven North Dakota operations groups, rig and service companies, has eliminated the dedicated reamer run at TD while delivering good wellbore condition that enables multiple swellable packers to be run in a single, fast trip. We have worked with a number of operators , drilling contractors and service contractors – we appreciate their support in moving this project forward. • Additionally we would like to thank our TERCEL manufacturing plant for their support on this project Omar Ahmed, Duane Shotwell and Michael Byerley . We as also would like to thank our WEPS / AER field service personnel William Collins , Mitchell Fenske and Alicia Kerr.