Agenda 1. Opening Remarks David French 2. Drilling and Capital Costs Craig Nardone 3. Expanding Our Margin Kris Gustafsson 4. Water and Polymer Flood David French 5. 5 Year Development Plan Suneel Gupta 6. Question and…
Drilling Capital Costs Craig Nardone, VP Exploration and Development 3
Drilling Progress Report Recent Future Past Improvements Initiatives Drilling Costs: Drilling Costs: Drilling Costs: Average horizontal Horizontal wells drilled Additional savings well drilled in 14+ in 12+ days due to from SCM of…
Hz Well Construction Costs Drill, Complete and Equip 1,400,000 1,289,256 1,261,230 1,200,000 Rig 21% Other 30% 1,082,178 1,000,000 1,011,932 800,000 Directional 600,000 18% Complete & Equip. 400,000 9% Mud…
Drilling Cost Improvements Average Horizontal Well Drill Cost and Depth 2323 2376 1,600 2,400 Average Drilling Cost US M 2272 2256 Average total depth (md) 1,400 2,300 1,200 2,200 1,192.23 1,000 1,092.18 2,100 800 903.13…
Drilling Time Improvements Average Drill Curve Days 0 2 4 6 8 10 12 14 16 0 Surface Hole Manage Drilling Variability Range of depths, field areas and zones 500 Surface Question and review build angle, well Casing path, ICP,…
Well Design Completion Design: In 2012 conducted mechanical analysis and manufacturing quality control review of slotted liners Liner redesign improved metallurgy strength and decreased slotted open area Zero liner failures with the…
Future Initiatives Procurement: Future drilling costs savings based on Supply Chain management of drilling materials (casing, cement, mud, completion equipment) Completion: Liner slot size, sand control, designed for 100% greater…
Expanding Our Margin Kris Gustafsson, Technical Director 11
Diluent Progress Report Recent Future Past Improvements Initiatives Treating: Used to Facilities: Treating: help break out water Turnaround of Proactive tank content in treating at treating facilities to cleaning single well…
Oil Density by Zone 160 140 120 100 Horizontal Wells 80 D1 Marinza Heavier Oil Lighter Oil 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 Q1 Bubullima Marinza L Driza U Driza Gorani 17
Diluent History Monthly Diluent Usage (% of Net Oil Production) 16.0 12.00 14.0 11.00 Raw Crude API Gravity 12.0 10.00 10.0 Diluent % 8.0 9.00 6.0 8.00 4.0 7.00 2.0 Lighter oil & operational improvements 0.0…
Energy Consumption Progress Report Past Recent Future Improvements Initiatives Simple Well Power: Pilot Well Power: Implement New Well All single well Power: Introduced natural batteries and wells on gas and electric Further expand…
Energy Source Cost Comparison Single Well Daily Operating Cost 250.00 200.00 150.00 100.00 50.00 - Diesel Propane Electricity Natural Gas Approximate values based on a type well making 113 bbls per day total fluid…
Electrification Trial Results 22
Diesel Consumption Pilot Results Pad L26A - 12 Well Diesel Consumption: Diesel vs. Electric Top Drive 2,500 Diesel 2,000 Electric (liters/day) 1,500 52% Reduction 1,000 500 0 Average Usage Further…
Propane/Natural Gas Power Units 180 Current Well Drive Energy Source 160 140 32% 61% Number of units installed 120 7% 100 80 Propane/Natural Gas Diesel Electric 60 40 20 0 24
Future Energy Strategy No longer purchasing diesel drives Electrify existing pads Temporarily use existing diesel skids on new drill locations Prepare existing pads to be fit with electric drives ahead of arrival in country 20,000…
Well Servicing Progress Report Recent Future Past Improvements Initiatives Pumps: One design Pumps: Low efficiency Pumps fits all pumps used pumps Innovate and throughout field Understanding improve PC pump Source of Failure:…
Well Servicing Unit Cost Look-Back Loose Pump Trials Ramping-up Rod Lift Programs Initiated 6.00 New Rod Fishing Tool Invented 5.00 4.00 /bbl 3.00 2.00 1.00 - Q1 - 2012 Q2 - 2012 Q3 - 2012 Q4 - 2012 Q1 - 2013…
Pump Change Frequency Look-back Pump Change / Quarter / Active Well 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 28
Tubing and Rod Failure Frequency Look-back Tubing Failures / Quarter / Active Well 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 Rod Failures / Quarter / Active Well 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 Opportunities…
Tracking Failure Mode and Run-times for PC Pumps Failures Stator Condition General wear Burnt Blisters 1% 4% 6% Rotor stuck Other 2% 19% Clean-out Scored 36% 20% Missing Pump rubber change 32% 18% Debonded 4% Hole-in-…
Well Servicing Strategies Continue efforts on researching optimal PC pump design for our tough downhole operating conditions, deeper than typical PC pump applications (multi-stage, thick elastomer) Customize pump design on a…
In-Field Transportation Progress Report Recent Future Past Improvements Initiatives Single Well Pad Site Connect Our Batteries: Optimization: Infrastructure: Required trucking of Portion of the field Significant oil, water, diesel…
In-Field Transportation Overview Production Trucked Into Facilities, 50,345 bopd (8,004 m3/d) Water Trucked to Disposal, 12,442 bopd (1,978 m3/d) 63,000 bpd (10,000 50.3% 12.4% m3/d) (63% of total transported volumes) are…
North-West Gathering System Estimated to be complete January 2015 Install proper gas gathering line Reduce existing trucking by: 6,300 bpd (1,000 m3/d) north of river 2,500 bpd (400 m3/d) south of river 14.0% of potential total…
North-East Gathering System Estimated to be complete January 2015 Install proper gas gathering line Reduce existing trucking by 12,250 bpd (1,950 m3/d) 19.5% of potential total trucked volumes to be flowlined 35
West Gathering System & Water Line Estimated to be complete December 2014 Install proper gas gathering line Install internally coated produced water line Reduce existing trucking by 7,850 bpd (1,250 m3/d) 12.5% of potential…
Future In-field Transportation Strategy Build Main Pipeline Corridor in Patos-Marinza Tie-in near-by existing wells with a focus on high volume areas and well pads closest to treating facilities Tie-in remote facilities based on…
Expanding our Margin - Q&A 38
Water and Polymer Flood David French, Chief Executive Officer 39
How it Works Water/Polymer Flooding: Very simple concept. Injecting water or polymer into the reservoir to displace oil Water flood: use produced or saline water (viscosity 1 cp) Polymer flood: adding a chemical (partially hydrolyzed…
Process Flow Produced Water Polymer Flood Source water Polymer mixing Source water wells tanks unit Water Flood Polymer solution transport HP dilution Injection pumps and well set ups pumps HP pump skids Treating…
Reservoir Flood Illustration Simulation demonstrates the water or polymer sweeping from the edge injectors toward the center producing well 42
Illustration Type Curve Early Stage 250 Oil rate plateau for 4-8 months Oil rate peak response (increasing water production Fully Supported Producer rate during period) 200 1 well converted at 12 months ( 50 bopd) Oil Rate…
Reservoir Description Patos-Marinza is a multi-layer unconsolidated sand reservoir Up to 300m gross & 200m net oil pay Driza Formation 50 m 7 reservoir zones Polymer flood pilot in Lower Driza sands D3, D4, D5 PF…
Check list Can we inject Injection of water/polymer at economic rates Ability to inject at sufficient rates Ability to maintain injection Avoidance of formation damage/plugging Reservoir pressure increase/stabilization Reservoir…
Water Flood Pilot Characteristics Current Water Flood Patterns: M0 Marinza Reservoir Zone 3 Injectors, 4 Offset Producers General: Pattern Type: Horizontal line drive Well Spacing: 100m Geology/Petrophysics: Net Pay: 6m…
Water Flood Results: M0 Oil Rate (bopd) M0 Pilot Results 100 10 May-12 Oct-12 May-13 Oct-13 May-14 Oct-14 May-15 Oct-15 Actual Oil Rate +5% Recovery Conversions Primary Type Curve +12% Recovery 51
Water Flood: Continuing to Monitor Can we inject Injection of water/polymer at economic rates Avoidance of formation damage/plugging Reservoir pressure increase/stabilization Reservoir pressure to increase at injectors then stabilize…
Polymer Flood Pilot Characteristics Current Polymer Flood Patterns: D5, D4, D3 Lower Driza Reservoir Zones 9 Injectors, 9 12 Offset Producers General: Pattern Type: Horizontal line drive Well Spacing: 100m Geology/Petrophysics:…
Polymer Flood: Continuing to Monitor Can we inject Injection of water/polymer at economic rates Avoidance of formation damage/plugging Reservoir pressure increase/stabilization Reservoir pressure to increase at injectors then…
Water and Polymer Summary We are strongly encouraged by the results and will continue to expand the water and polymer flood pilots to test additional areas of the field and reservoir zones with 14 conversions in 2014 and 25…
Polymer and Water flood - Q&A 62
5 Year Development Plan Suneel Gupta, Chief Operating Officer 63
Primary Development Continue primary drilling of Patos-Marinza through horizontal wells Large drilling inventory of high quality locations across multiple reservoir zones Future locations of 1000+ wells with lateral well spacing…
Primary Production Forecast 45,000 40,000 Primary Development achieves 10 15% growth per year over the next few years 35,000 30,000 Oil Rate (bopd) 25,000 20,000 15,000 10,000 5,000 0 2014 2015 2016 2017 2018 2019…
EOR Development Strategy Initial Phase Selection (2013 2014): Focused on reservoir control and oil quality to evaluate injection rates, production response and facilities. Initial phase in South Lower Driza zones Second Phase…
Prudent Pace of Development Continued focus on primary drilling with 6 rigs EOR conversions of 25 30 wells per year Prudent Pace of Development program is re-adjusted annually and semi- annually based on performance and…
Thermal 2000 m Focused on shallower areas of field < 1000m but depends on technology employed Focused on areas with low density of Albpetrol wells or where old wells can be properly suspended Data collection in 2014: Initial…
5-Year Development Plan 2014 2015 2016 2017 2018 The Opportunity Primary 10 15% Annual 150 170 Drilling 6 Drilling Production Horizontal 9.72/share, based on 2013 Program Rig Program 2P Reserves Case Growth Wells/Year Firm…
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