PROFESSIONAL PETROLEUM DATA MANAGEMENT ASSOCIATION Global Well Identification

PROFESSIONAL PETROLEUM DATA MANAGEMENT ASSOCIATION Global Well Identification Workshop October 27 th 2011 Calgary, AB Trudy Curtis Bruce Smith Jeffrey Bonus 1

AGENDA Introduction – Trudy Curtis - Global Sub-Committee US Project Update – Bruce Smith - Project Update - Revising the API Numbering Standard for Today’s Drilling - What are the biggest pain points with the API Number? ERCB – Miriam Romero - ERCB Well Identification: Business Practice and Challenges Alberta Project Update – Jeffrey Bonus - Project Update – DRAFT Project Charter - What are the biggest pain points with the UWI Number? - When do you assign the Well Identification Number? - Who assigns the Well Identification Number? Australia – Trudy Curtis Stakeholder Analysis – Bruce Smith & Jeffrey Bonus - Canadian Companies Participation Next Steps 2

• Introduction – Trudy Curtis • Global Sub-Committee 3

US Well Identification Project 4

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Global Framework • Built on Foundation from “What is a Well? ” definitions • Input from Operators and Information Vendors that work in U. S. , Canada and outside North America • Current Status and Near Term plans - Developed first draft of Business Requirements - Realized more formal Stakeholder Analysis of current practice, issues and needs is required - Developed Stakeholder Analysis Interview and Analysis template - Performing interviews with stakeholders in Q 4 2011 • Need additional resources to complete this step, especially for outside U. S. - Will review and analyze results in early 2012 - Complete first version of Global Framework in Q 1 2012 6

U. S. Well Identification Standard • After completion of Global Framework, the U. S. project team will revise API Numbering standard • API has contracted with PPDM to be steward for the revised Well Identification and Numbering standard - Revisions must include practical approaches given legacy practices • Focus on U. S. Regulatory agencies - API numbers are set by U. S. regulators in most states - Project seeks more consistent approach, especially for identification of all wellbores including pilot holes, mis-steered laterals, junked wellbores - Stakeholder interviews with Regulatory agencies are happening in next 2 months 7

PROFESSIONAL PETROLEUM DATA MANAGEMENT ASSOCIATION Revising the API Numbering Standard for Today’s Drilling IOGCC Buffalo, NY October 18 th, 2011 8

TODAY’S TALK • Describe the Project - Bismarck Introduction • Why is this important to Regulatory Agencies? • Examples • Call to Action - 9 Requesting Interviews with Regulatory Agencies

Revising the API Number Standard • API Number standard last updated 1979 • API has agreed that PPDM is steward of Well Numbering Standard • Project team includes operators, regulators, information vendors • Issue: Many wellbores are not being identified in regulatory filings or in regulatory databases • Lack of information on these wellbores presents issues for regulators and operators 10

Original API Process (D 12 A Standard) 11

Definition: Well vs. Wellbore Example: One Well with Two Wellbores Well: Single surface location and everything connected to it Wellbore: Unique path from surface to bottom hole 12

Example Horizontal Well: Permit to Drill Horizontal Well is Proposed. Exact Depth of Target Zone will be determined by vertical “Pilot Hole” 13

Example Horizontal Well: Vertical Pilot Hole is Drilled. The information from this wellbore is used to decide the depth of the Lateral This wellbore is logged and may have cores and deviation surveys. 14

Example Horizontal Well: Identify Target Zone for Horizontal is identified from well logs. Cement Pilot Hole to kickoff Lateral into Target Zone Note: Pilot Hole drills below Target Zone Cement Plug Target Zone for Horizontal Pilot Hole 15

Example Horizontal Well: Drill Lateral 1 mis-steered below Target Zone. Operator decides to sidetrack to position horizontal Lateral in the Target Zone for Horizontal Pilot Hole 16 Lateral 1

Example Horizontal Well: Prepare to Sidetrack Set Cement Plug in Lateral 1 in preparation to Sidetrack Cement Plug Target Zone for Horizontal Pilot Hole 17 Lateral 1

Example Horizontal Well: Drill Lateral 2 is successfully drilled in Target Zone Lateral 2 in Target Zone Pilot Hole 18 Lateral 1: Mis-steer

Example Horizontal Well: Complete Lateral 2 in Target Zone Pilot Hole 19 Lateral 1: Mis-steer

Example Horizontal Well: “Missing” Wellbores in Red are not reported by Operators in many states Lateral 2 in Target Zone Pilot Hole 20 Lateral 1: Mis-steer

5 Reasons that Missing Wellbores Matter 21

Why “Missing” Wellbores Matter 1. All wellbores have plugging obligations--not just the producing wellbore 22

Why “Missing” Wellbores Matter 2. Fluid movement—injected fluids can follow pathway of any wellbore that open 23

Why “Missing” Wellbores Matter 3. Operators may be required to file information such as well logs for all wellbores, not just producing wellbores. Lateral 2 Pilot Hole 24 Lateral 1

Why “Missing” Wellbores Matter 4. All wellbores must stay within the permitted lease boundaries and the permitted depths. Pilot Hole is deeper than the Lateral Map view shows bottom hole locations of each wellbore 25

Why “Missing” Wellbores Matter 5. Anti-collision measures require all wellbores to be identified and have known paths 3 -D Diagram of 9 wells drilled from a single pad 26

GWPC Resolution 11 -1 in Support of Project “BE IT FURTHER RESOLVED that GWPC work with PPDM Association’s Well Identification Workgroup in its effort to develop methods for consistently identifying all wellbores in the US. ” 27

Asking Regulatory Agencies to Participate • Our team is interviewing Regulatory Agencies about current practice and any plans for change • We will be contacting your agency in next 2 weeks to set up a 20 -minute interview • PPDM Workgroup will work with IOGCC, GWPC and Regulatory Agencies to develop practical solutions - Development of best practices - Support of PPDM process (revised D 12 a) - Potential model process Today: Please see Don Drazan NY DEC or Bruce Smith with PPDM to set up a time for an interview. Or we will call you in the next 2 weeks to set up a time with your staff 28

Contact Information Bruce Smith, PPDM 303 549 0772 Bruce. Smith@ppdm. org Don Drazan, NY DEC 518 402 8056 djdrazan@gw. dec. state. ny. us 29

US PAIN POINTS • • 30 Regulators Operators Information Vendors Service Companies

ERCB – Miriam Romero 31

Alberta Well Identification Project 32

• Project Charter - Board Approval • Sponsors & Workgroup Participants 33

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ALBERTA PAIN POINTS • Regulators • Operators • Information Vendors • Service Companies 35

ASSIGNING UWI’S • When do you assign the UWI? • Who assigns the UWI? 36

Australia 37

Stakeholder Analysis 38

Next Steps 39

CONTACT INFORMATION • Bruce Smith - bruce. smith@ppdm. org • Trudy Curtis - curtist@ppdm. org • Jeffrey Bonus - jeffreyb@ppdm. org 40