Regal Services Regal Drilling Well Delivery Process Regal

Regal. Services Regal Drilling: Well Delivery Process Regal Services 35, C. R. Avenue, 1 st Floor, Kolkata-700012 West Bengal, India

Regal. Services Regal Introduction to Well Delivery Process "The Idea" to "Delivering the Promise" for a New Well What is a Well Delivery Process? Ø Ø set of activities across time for planning, executing and closing a well project tools and techniques to manage resource allocation stage gates with proper responsibility allocation captures lessons learnt and best practices Application Ø Scalable format for all wells: Ø Long term, detailed process for exploration wells Ø Short duration, simpler process for development wells Well Delivery Process is a subset of Value Delivery Systems or Capital Value Process or Opportunity Realization Process (different terms used by different firms). The application of WDP is in capturing lessons learnt, and providing tools that can be applied across organizational boundaries: RACI and Peer assist.

Regal. Services Regal Well Delivery Process Flow • Defines the direction of information flow, loops involved for repeat actions and clear milestones • 5 process stages present in WDP Scope Design Plan Operations Well Delivery Process Template for a process stage Closeout

Regal. Services Regal Well Delivery Process Stages Ø Scope Ø Question answered: Can we do it? Ø Objective of Phase: Feasibility and Concept Identification Ø Design Ø Question answered: What will it be? Ø Objective of Phase: Develop selected Concept into a mature well design Ø Plan Ø Question answered: How do we make it happen? Ø Objective of Phase: Operational plans and procedures to construct the well design Ø Operations Ø Question answered: Well execution Ø Objective of Phase: Deliver the well/s Safely, On Time and On Budget meeting all the well objectives set by the Asset Project Manager Ø Closeout Ø Question answered: How well did we deliver? Ø Objective of Phase: Wrap up and capture lessons

Regal. Services Regal Well Delivery Process Flexibility • cascading model for successive sub projects with a similar approach

Regal. Services Regal Well Delivery Process Flexibility example : XXX Ø With same planning, the process can be limited to operations and closeout phase • Final Well Cost • Drilling Program • Risk Management Plan • DDR’s/HSE Reports • Field Cost • Lessons learned Operations Closeout • Well Handover • Final Field Cost • DDR’s/HSE Reports • Lessons Learned • Eo. WR • Final Cost reconciliation • Performance review • Lessons Learned Ø Please note this model requires: Ø Ø Ø JV approvals in place, Existing long term contracts. Continuous equipment replenishment Inventory “on the ground”. Standardized equipment (to allow for changes 2 -3 weeks

Regal. Services Regal WDP flowchart summary 1. Scope 2. Design Input Preliminary SOR Time writing code Final SOR Well Prognosis Time writing code Well feasibility and concept review report Activities Government regulatory assessment Logistical assessment Offset well reviews Stick Diagrams Industry Benchmarking Preliminary Casing, Wellhead, Cementing Designs Preliminary Mud Programs Preliminary Time & Cost vs Depths Potential Long Lead Equipment and Schedule Logistical plan Site Surveys / Shallow Gas Assessment / Meteorological Data (if required)/Boreholes (CPTs) Casing, Cementing & Wellhead Design Mud Program Cost for the Design Cost & Time vs Depth curve Procurement Plan for services and tangibles Project Quality Plan. Order Long Lead Equipment Output Well feasibility and concept review report Time and Costs Estimate +/- 50% Planning AFE Project Plan Well Construction Basis of Design Bill of Materials Purchase Requests Issued Risk Register

Regal. Services Regal WDP flowchart summary 3. Plan 4. Operations Well Construction Basis of Design Bill of Materials Purchase Requests Issued Risk Register Well Prognosis Operational Programs and Procedures Final Cost Estimate Risk Register for Phase HSE Bridging Documents Reporting System in Place (Well view) Activities HAZIDS/HAZOP Technical Limit Workshops Training (HSE or Technical) & Team Building Drill Well On Paper (DWOP) Set KPIs for the wells Logistics and Mobilizations plans Operational Programs and Procedures Probabilistic Cost Estimate Well Control Contingency Plan HSE Bridging Documentation Emergency Response Plan Contract Executions & Contractor Onboarding Rig and Vendor Audits and Acceptance HSE Coaching / Stop the Job / Stop Cards HSE Investigations & Reporting (KPIs) Incident Investigations QA/QC Control Daily Drilling Reports Capturing Lesson Learnt / After Action Reviews Opportunity Register Risk Assessments Partner & Government updating Government permit compliance Internal Management Updates Output Operational Programs and Procedures Time and Costs Estimate Risk Register for Phase HSE Bridging Documents Deliver the well/s, Daily Drilling reports Final Cost Estimate. HSE & DDRs Reports Lesson Learned Input

Regal. Services Regal WDP flowchart summary 5. Closeout Input Drilling reports Final Cost Estimate. HSE & DDRs Reports Lesson Learned Activities HSE Review Cost Reconciliation Full Performance Review Close out of any investigations Wrap up meeting with all service providers Capture all Lessons and new practices learned Status of Material and Inventory Resource re-allocation to new projects Final Cost Estimate Final Drilling Report Output Final Well Report Final Cost Reconciliation HSE & Performance Reviews Lessons Learned

Regal. Services Regal Well Delivery Process Project Plan • Intended to act as a sample • Timeline for the Well Delivery Process • Estimate of the days/weeks required for every stage with dependent successive stages • Helps to plan the procurement activities better • Risks and uncertainties in the system can be accounted for • Can be modified as the project progresses, to keep a reality check on the milestones and deliverables. Sample Project Plan Summary

Regal. Services Regal Approximate Planning Times for WDP • • • XX Development wells* XX Exploration wells* XX Dev & Exp wells** Land well (in India, outside RJ)** JU well (in India)** JU well (outside India)** HTHP JU/Semi wells ** DW Wells (in India)** DW wells (outside India)** = = = = = 2 – 3 weeks 2 – 4 weeks 18 – 20 months 18 - 24 months 18 - 24 months 24 – 30 months *Assumes all contracts and tangibles in place. Team in place. Indicates ability to change the plan. **Assumes no contract/tangibles in place (14 -18 months to contract and deliver tangibles). Assumes recruit new team

Regal. Services Regal Well Delivery Process Highlights • Well Delivery Process flowchart: Flowchart defining different activities and stage gates for all phases. • Well Delivery Process manual: A guide to understand the WDP • Template to follow for different stages: – – – Input required/expected Activities to be performed Key deliverables Output Stage gate • RACI matrix: Matrix defining the key stakeholders for every activity phase wise. People Responsible, Accountable, Consulted and Informed to be defined. • Project Plan: MS Project Plan showing the timeline for the Well Delivery Process. • After Action Review: Long term review session which shall be a platform to share lessons learnt, best practices and introspective feedback for the team.

Regal. Services Regal Stage Gate Reviews • Completion of the deliverables set for the stage • Usage and updating of tools employed in the stage • Budget and resource deviation during the stage from the allocation at the initiation of the stage • Budget and resource allocation for proceeding to the next stage After Action Reviews Ø Ø Ø On time deliveries of milestones Exceptions to processes Management of changes undertaken Budget compliance Lessons learnt and best practices

Regal. Services Regal Possible Implementation Concerns • Management commitment: An effective WDP requires serious management commitment. The investment required in the planning phase and milestones, requires a certain amount of pressure from the management. • Process tools: WDP tools can act like black boxes. The input and output is very clear, but the methodology may not be. However, they can be developed as standard templates (e. g. simple spreadsheets or MS Excel). This way, not just the tool, but the ownership of the tool stays with the team. • Effective application: Usage on a regular basis and updating based on changing needs. The tool needs to be flexible enough to change according to requirement. Also, appropriate training and skills need to be present to understand the tool and make it a part of routine. • Keenness to listen: Spotting opportunities to improve planning and management requires inclusion of stakeholders. This not only includes learning from the past and applying it in your planning, but also learning from your service providers and their experiences. • Time optimization: Parallel engineering can help reduce the process time for drilling wells.

Regal. Services Regal Examples of things we do as part of Well Delivery Process

Regal. Services Regal Drill Well on Paper (DWOP) • Pre-requisites: – Finalized Well design – Draft Drilling program – Contracts in place. • Process: — Technical meeting involving all contractors, internal & external stakeholders (JV) held generally 1 -2 months before campaign start. — Detailed operational procedures are discussed in sequence as in a live well. — Operations include logistics, mob plans of services as well. • Outcome: ― Procedural changes/inputs for finalizing Drilling program. ― Any show stoppers regarding equipment or services.

Regal. Services Regal Risk Register • Pre-requisites: – Draft Drilling Program – DWOP conducted. • Process: — Drilling internal meeting held post DWOP. — Risks pertaining to well conditions (temp, press, trajectory, etc. ) as well as operational procedures (well control, cementing, etc. ) are identified. — Impact, severity & likelihood of each risk is assessed. — Then each risk is categorized into High, Medium or Low. — Finally mitigations against each risk is identified & listed. • Outcome: – High & Medium level risks to be stressed in final Drilling program. – Risk matrix to be included in final Drilling program.

Regal. Services Regal HAZID/HAZOP • Pre-requisites: – Operation-specific detailed procedures. • Process: — HAZID/HAZOP study is conducted either in-house or using a third party expert generally after the DWOP session — Conducted for a specific high risk operation like MPD, well testing, etc. — First hazards occurring from any element of the operation are analyzed (HAZID). — Then hazard operability study is conducted for each identified hazard (HAZOP). • Outcome: – HAZID/HAZOP matrix to be included in Final Drilling program. – Also to be part of the specific operation program.

Regal. Services Regal AFE for a well is Authorization For Expenditure. • It is the final estimate of the overall cost which would be incurred for the complete campaign & is presented to management for approval. • Made after the well design is finalized & other technological requirements are known. • Typically includes: – – – – Tangibles (casings, wellheads, etc. ) Drilling services rentals (DD, cementing, casing running, etc. ) Drilling rig rental Drilling fluids & chemicals Cement & additives Logistics Jetty, AHTS & helicopter rentals (if offshore) • AFE is the final step in well planning.

Regal. Services Regal Technology Innovation

Regal. Services Regal Technology Innovation Manage Pressure Drilling: • Manage Pressure Drilling (MPD) Technology is used to drill narrow Pore Pressure- Fracture Pressure wells. Typical example of such wells are HT/HP and deep-water wells. Key drivers for MPD are as follows: • Reduce non-productive time arising from kicks, lost circulation and stuck pipe when the well is drilled conventionally. • Minimize overbalance to o Increase ROP o Avoid differential sticking o Prevent lost returns o Reduce invasive formation damage • Maintain constant bottom hole pressure to avoid wellbore ballooning • Identify tight gas zones • Enable faster kick detection because if better flow measurement • Enable dynamic well control methods

Regal. Services Regal MPD P&ID Diagram-Simplified

Regal. Services Regal Technology Innovation Micronized Barite mud: • Micronized Barite employs micronized weighting material (barite) to address a number of drilling problems, including barite sagging. WARP Fluids Technology deliver more addedvalue benefits compared with conventional mud systems. • Micronized Barite Technology is ideal for horizontal and extended-reach wells due to no barite sagging tendency. • Micronized Barite Fluids Technology provides lower plastic viscosities over conventionally weighted fluids with the same yield point. • Improved solids-separation efficiency results in less dilution, optimum product performance and reduced costs. • Improved pressure drops in narrow annuli make Micronized Barite Fluid Technology the ultimate alternative to brine-weighted fluids. • Systems using Micronized Barite Fluids Technology have demonstrated improved QHSE characteristics compared to conventionally weighted brine systems. • Micronized Barite Fluids Technology has improved torque in open and cased holes by as much as 25% compared to offset wells drilled with conventional weighting agents.

Regal. Services Regal Technology Innovation Riser Analysis: • Risers are used to drill and complete wells in deep- and ultra-deep water are typically deployed from MODUs (mobile offshore drilling units) example drill ships, semi-sub rigs. • Riser analysis aims at determining the best riser assembly for a given rig, mud weight, water depth, sea state, current, tensioner system, hook load limit, and riser joint inventory. • Focus of Riser Analysis is to assure that the riser system and floating MODU stay within proper load and motion limits and that the riser system is capable of safely enduring any fatigue or corrosion damage that may occur. • A typical example is shown in next slide:

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Regal. Services Regal Additional services • • • Work over operation – water shut off Increase productivity Rectify annular pressure problem Redesign existing well – cost saving Drill to limit process – huge cost reduction Simplify completion design – reduce cost Supply of well consumables Supply of rig equipments Well services : Mud, logging, coring directional drilling For one shore land accusation, site preparation Rig and equipment inspection - confirm suitability.

Regal. Services Regal Additional services • • • Well test services for onshore and off shore For off shore : Set up and manage off shore supply/shore base Set up and manage helicopter base Train local personal

Regal. Services Regal Thank you for your valued Time… For more information, please contact… 35, C. R. Avenue, 1 st Floor, Kolkata-700012 West Bengal, India T: +91 33 2357 2591, F: +91 33 2357 6800, E: siladitya@regaltech. net W: www. regaltech. net