DRILLING PROGRAMME

Capella L17H
October 21th, 2011

Version 2.0

COPY No. 1 (See copy distribution list)

Omb Block

AUTHORIZATION AND APPROVAL

Prepared by: _______________________________ Oscar Alfonso Diaz Osorio. Drilling Director

Date: Oct - 2011

Date: Oct - 2011 _______________________________ David Ricardo Pedreros Exploration Geologist Reviewed by: Date: Oct - 2011

_______________________________ Zheng Zhenguo Drilling Deputy Manager Approved by: Date: Oct - 2011

_______________________________ Juan Carlos Ramn Exploration and Business Vice President

_________________________________ Yu Dunyuan Drilling Vice President

WELL PROGRAMME DISTRIBUTION LIST Copies of this document sent to: a) Operations central files (original EEC Bogot file

sign-off copy)* b) Drilling Vice President & Manager c) Drilling Deputy Manager Yu Dunyuan Zheng Zhenguo

d) Exploration and Business Vice President Juan Carlos Ramn e) Drilling Director f) Kerui 7502 Drilling Crew Oscar A. Diaz O. Luis Alfonso Ramirez

Contents
Contents .............................................................................................................. 4 1 G&G Summary.......................................................................................... 7
1.1 Well proposal ................................................................................................................ 7 1.2 General information ...................................................................................................... 8 1.3 G&G well objectives .................................................................................................... 9 1.4 G&G target/objective description, coordinates and shape ......................................... 10 1.6 Formation Tops / Dip / Dip azimuth / lithological description ................................ 13 1.7 G&G TD Criteria ..................................................................................................... 14 1.8 TD contingencies ..................................................................................................... 17 1.9 G&G Critical Issues related to Objectives and target/reservoir contingency requirements ........................................................................................................................... 17 G&G Target and objectives critical issues ........................................................................ 17 1.10 G&G Well Evaluation Requirements (logging/coring/sampling) ........................... 18 Open Hole LWD ............................................................................................................... 18 Anticipated testing requirements ...................................................................................... 18 1.11 Offset well information ........................................................................................... 19 1.12 Pore Pressure Prognosis .......................................................................................... 20 1.13 Offset Wells Fluid Contacts ..................................................................................... 20 1.14 Well testing Requirements ....................................................................................... 20

2. Drilling Equipment ..................................................................................... 17

2.1 Requirements for equipment selection ....................................................................... 17 2.2 The Drilling rig and key equipment configuration ..................................................... 17

3Casing Program ......................................................................................... 18

3.1 Casing program design ............................................................................................... 18

4Well Path Planning .................................................................................... 20 5Requirements for Wellbore Quality ........................................................ 22

5.1 Hole quality standards in horizontal development well ............................................. 22 5.2 Cementing quality standards ...................................................................................... 23

6BHA Program ............................................................................................ 24 7Drill Bit Program recommendation ........................................................ 24

7.1 Bit type selection recommended................................................................................. 25 7.2 Drilling parameter recommended ............................................................................... 25
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8Drilling Fluid Program ............................................................................. 25

8.1 Guidelines for drilling fluid application ..................................................................... 25 8.2 Drilling Fluid Design Principle .................................................................................. 26 8.3 Drilling fluid systems and basic formulations ............................................................ 26 8.5 Drilling fluid volumes and reserve of drilling fluid materials .................................... 27 8.5.1 Expected drilling fluid volumes .............................................................................. 27 8.6 Solids control equipment and application requirements............................................. 27 8.7 Requirements for Drilling Fluid Test Instruments ...................................................... 28 8.8 Requirements for Drilling Fluid Management on the Surface ................................... 28

9Cementing Program .................................................................................. 29

9.1 Guidelines for ensuring cementing quality and oil well life ...................................... 29 9.2 Selection of Cementing and Completion Technologies.............................................. 29 9.3 Casing String Design .................................................................................................. 30 9.4 Cementing pipe string design ..................................................................................... 31 9.5 Selection and placement of centralizers ..................................................................... 32 9.6 Cement Slurry Design ................................................................................................ 32

10Reservoir Protection Program ............................................................... 34 11Well Control Program ............................................................................. 35

11.1 Selection of well control equipment ......................................................................... 35 11.2 Requirements for BOP System Inspection and Testing ............................................ 37 11.3 Installation of the BOP System ................................................................................. 38

12Operation Guidelines for Each Hole Section ........................................ 39

12.1 Pre-spud preparation and site construction ............................................................... 39 17 1/2 hole section .......................................................................................................... 40 12.3 12 1/4hole section ................................................................................................... 41 12.4 8 1/2" hole drilling .................................................................................................... 43 12.5 Precautions for drilling hazards ................................................................................ 43

13Wellhead equipment for completion ..................................................... 47

13.1 Casing head specification ......................................................................................... 47 13.2 Wellhead protection .................................................................................................. 47 13.3 Completion requirements ......................................................................................... 47

14HSE requirements ................................................................................... 49

14.1 Basic requirements ................................................................................................... 49 14.2 Liquid and solids waste managment program .......................................................... 50 14.3 Waste management objects (HSE)............................................................................ 50
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15. Logistic issues............................................................................................. 51 16Requirements for drilling information report ...................................... 51 17Drilling cycle forecast.............................................................................. 52

1 G&G Summary
1.1 Well proposal
Energy PLC Suc. Colombia is proposing to drill Capella-L17H Horizontal Development Well from the Capella-L location, under Omb E&P Contract in Capella Field as a horizontal well towards the mid area of Capella field. Capella-L17H will be drilled as horizontal well and is located in Los Pozos Village (Colombia) (Figures 1 to 3). Capella Structure is a faulted anticline NE oriented about 28 Km NE-SW by 4.5 Km NW-SE (Figure 4 to 7).

Capella-L17H will be conducted as a Horizontal well to reach and navigate through the Mirador Sand reservoir (producing in Capella Wells), in a central position in the Capella structure (Figure 4 to 7). Capella-L17H would TD about 5190, 20ft MD, therefore it is not expected to reach Mirador OWC (-2159ft TVDss), based on the same contour interval that was encountered by the Capella-L11 Well, (Figure 8).

Capella-L17H is designed to produce from Mirador Upper Sand. This well will be conducted in horizontal profile to navigate about 274, 4 meters up dip in SE direction through Mirador Sand Horizon 2 to confirm the oil production increasing shown in horizontal wells from location F.

Figure 1. Capella-L17H location trajectory from Capella-L toward Capella-F location

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The principal risks associated with the well are:

Minor changes of the Mirador Sandstones. Navigate the most along Mirador Sand # 2. Sidetrack if real trajectory is too different from plan. Prognosis top depth from seismic information could change after drilling depth real section. Water coning as we found the OWC in Capella L11.

Figure 2. TVDss Map Top Mirador with Capella-L17H trajectory with SE direction that will navigate up dip in the western flank of anticline

1.2 General information

Table 1-1 Well general identification Description Required well operations Purpose/Target: Proposed Well Name: Target Horizons: Lahee Well Classification: Well Type: Drilling Classification: Completion Size: Well Location: County La Macarena (Meta) Horizontal Well Capella-L17H Mirador Sand Horizon 2 Development Development

Data

Comments

Well Surface Coordinates GAUSS (Bogot Origin): Target Coordinates: Well Bottom Coordinates GAUSS (Bogot Origin): Primary Target: Objective Depth: Navigation Distance Ground level elevation: Rotary Table Elevation: Expected well total depth: Proposed Spud Date:

N = 724.792,72 m E = 943.584,93 m N = 724.432,31 m E = 943.929,19 m N = 724.233,93 m E = 944.118,68 m Mirador Sand Horizon 2 -2105 ft (Subsea TVDss) 4290,1 ft MD 3338,0 ft TVD 274,35 m, 900ft Location GLE 1212.92 ft 1232,92 ft amsl (Aprox. 20 above GL) 5190,2 ft MD 3338,0ft TVD ( -2105 ft TVss) November 4th, 2011

1.3 G&G well objectives

Increase production rates through increasing drainage length of Mirador Sand A, by drilling 274m (900ft) up dip in Mirador Sand Horizon 2 from Capella-L location (Figure 5, 8 and 9). Drill Capella-L17H Horizontal well in Southeast direction with 136 average Azimuth (Figure 3). Drill Capella-L17H horizontal well parallel to Capella-F10H, Capella-12H ST and Capella-F13H (Figure 4). Navigate the most within horizon 2 of Mirador Sand A, while drilling horizontal well (Figure 8). Stay higher than OWC @ -2159ft TVDss, found in Capella-L11 that reached only Horizon 1 with oil (Figure 8 and 9). Test the oil production capability of the Mirador sandstones and verify the continuity of producer sands and petrophysical properties. Control Mirador Sand Horizon position by acquiring Resistivity and GR logs with LWD tool. Control the lower part of Arrayan that creates wash-outs. Take into account lessons learn in Capella F7, Capella-F10H, Capella-F12H ST and Capella-F13H. Deliver well in full compliance with the well Integrity requirements.

1.4 G&G target/objective description, coordinates and shape

Capella-L17H will be drilled from the following cellar center coordinates in Capella L location: Center cellar Coordinates GAUSS (Bogot N = Origin) E= 724.792,72 m 943.584,93 m

Capella-L17 Horizontal Capella-L17 Horizontal will be drilled to reach the next target coordinates until the bottom as follows (Figure 3 and 4): Capella-L17 Horizontal Entry Point -Target Coordinates GAUSS (Bogot Origin): N = 724.432,31 m E = 943.929,19 m Capella-L17 Horizontal Well Bottom Coordinates GAUSS (Bogot Origin): N = 724.233,93 m E = 944.118,68 m

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Figure 3 Vertical Profile and Plane View of Capella-L17H Plan

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Figure 4 Plane View of Capella-F10H, Capella-F13H, Capella-F12HST, Capella-F16H drilled and Proposed Capella-L17H Plan over TVDss Mirador Structural Map.

1.5 Reservoir description

Mirador reservoir data Gross Thickness 45 feet TVD (Mirador Horizon 2) Mirador Sand Oil Water Contact -2159 feet TVDSs Target Coordinates at top of N =724.432,31 m reservoir GAUSS (Bogot Origin) E =943.929,19 m Target shape and area Faulted anticline (22,000 acres) Last reservoir pressure 1312.69 psi at 3362 feet (TVD)

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1.6 Formation Tops / Dip / Dip azimuth / lithological description

Prognosis Horizontal Hole FORMATION Quaternary Fm. Arrayn Fm. Mirador Fm. Mirador Horizon 2 Max TD TVD (feet) 0 155,00 3298,00 3338,00 3333,00 Top TVDss (feet) 1212,93 1077,93 -2065,10 -2105,10 -2100,10 MD (feet) 0 155,00 3888,90 4290,10 5190,20

* TVD BRT = TVDSS + GLE + RTE

(Assume RTE = 20 ft)

Note: The drilling program indicates the Capella-L17H well TD depth @ +/- 5190 ft MD. However in case of Sand A thickness variation, the plan is to resume drilling up to EEC central offices geologist indications.

Arrayn Formation
This formation was made up primarily of multicolor soft claystones and siltstones with minor sand. These sediments frequent plant imprints and carbonaceous material. In the middle section the change was evident from claystone into silty shales, medium light green gray, medium light gray and pale brown, brittle some fossil with small (0.5 cm) gasteropods. Some shale dark gray, carbonaceous very piritic was also reported. In the lower section of the formation, the shale became predominantly medium dark gray brown, silty, brittle. This shale severely caved, in affecting the normal drilling operation and obstructed the logging of the well. The Arrayn formation uncomformably overlies the Mirador formation.

Mirador formation
Mirador Formation is the target in Capella-L17 H well. Mirador average gross thickness is about 120ft and in this area of Capella F location has been divided into Upper Mirador Sand that has three horizons separated by mudstones thin intervals, and the lower Mirador that is mainly mudstone. Based on drilling results of Capella-F7 and CapellaF10H, the expected lithology is: Unconsolidated sandstones composed mainly by quartz, predominantly medium grain size, with minor presence of coarse to very coarse grains, rounded to subrounded, locally subangular, poor sorting. According to borehole image data, sequence average dips are 6 /90 (azimuth). It occurs intercalated with shale and mudstone.

Cretaceous Fractured conglomerates

Polimictic conglomerate made up of quartz and a notable presence of metamorphic rocks. Very hard,
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blocky, predominant pebbles and cobbles grain size. Mineral accessories as pyrite, galuconite and mica are present. Siltstone gray and dark gray, consolidated, blocky to sub blocky, locally laminar.

1.7 G&G TD Criteria

Capella field play is defined as an NE trending anticline fault-bounded (Figure 2). Capella-L17H will be drilled in the central-south part of the structure, where Mirador Sand shows good reservoir properties in thickness, porosity and permeability. Capella-L17H optimal path planning was based on the current knowledge of integrated geological information from Ombu 3D Seismic, and Capella-L11, Capella-F7, Capella-10H & Pilot, and Capella-F12ST. Seismic response in Ombu 3D inline 236 over Capella-L17H is the same over Capella-F10 H at Mirador level, so is expected similar conditions in this well. Capella-L17 H was planned to navigate up dip in the west flank of anticline from Capella L location toward Capella F location (Figure 5), through the same horizon that Capella-F10H (Figure 5).

Figure 5 Time Seismic Inline 236 over Capella-L17H, and Capella-F10H, showing the horizontal well trajectory that was navigated in the crest of anticline through Mirador Horizon 2 with Capella-F10H and the planned trajectory to navigate with Capella-L17H in the western flank of anticline.

After drilling Capella-F7, Capella-L11 and Capella-F10 Pilot, were defined three horizon of Mirador

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Upper Sand (Figure 6, 7 and 8), where petrophysical analysis shows the higher potential in Horizon 2 and 3 of Mirador Upper Sand; Capella-F10H production increasing have confirmed this evaluation. Oil water contact was found in Capella-L11 at -2159ft TVDss, for this reason Capella-L17H is planned to navigate higher than OWC at -2159ft TVDss (Figures 6, 8 and 9). Mirador average thickness in these well is about 120ft, with Horizon 1 average thickness about 25ft, Horizon 2 average thickness about 45ft and horizon 3 average thickness about 30ft; Mirador base with average thickness about 20ft (Figure 6).

Figure 6 TVDss Well Cross correlation across Capella-L11, Capella-F7, and Capella-F10 Pilot, showing Upper Mirador with three defined horizons and the Oil water contact at -2159ft TVDss. Capella-L17H will navigate 500 m far away from Capella-L11 to Capella-F7 through horizon 2.

Capella F10 Pilot dipmeter analysis indicates Mirador Formation characterized by piled cylindrical electro-sequences, with bimodal paleo-stream indicating a flow regime NE SE (Figure 7).

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Figure 7 Piled channel sequence (Horizons 2 & 3 of Upper Sand Mirador) in Capella-F10 Pilot. Capella-L17H will stay in horizon 2 while drilling horizontal section

Figure 8 Depth cross section across arbitrary line over Capella-L11, Capella-L17H and Capella-F7, showing Cap-L17H horizontal well trajectory that will navigate up-flank toward the Southeast in Mirador Horizon 2. Capella-L17H trajectory will be higher than Oil water contact found in Capella-L11 at -2159ft TVDss (Vertical scale is different to horizontal scale).
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Figure 9 TVDss Well Cross correlation showing Capella-L11, Capella-L17 H prognosis, Capella-F7, Capella-F10H & Pilot and Capella F12ST. Capella-L17H is planned to stay in horizon 2 as Capella-F10H. In Capella-L11 this horizon was found below Oil Water Contac (Green line in the section) and is the best producer horizon in existing horizontal wells.

1.8 TD contingencies
Planned TD in Capella L17 H is 5190,2ft MD (3333ft TVD, -2100ft TVDss), however TD contingencies must be taken into account if while drilling the sequence is muddier than expected.

1.9 G&G Critical Issues related to Objectives and target/reservoir contingency requirements
G&G Target and objectives critical issues
G&G target is Mirador Sand A at -2105 TVDss in entry point (N: 724432.30 E: 943929.20) with 274m navigation in Mirador Sand A interval staying mostly in Horizon 2. Pilot well will not be drilled to confirm Capella-L17H Mirador Top and Sand A thickness variation in advance. Variation of petrophysical properties in Mirador Sand A could be present take at count the variation in Sand A quality reservoir properties through Capella wells.

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1.10

G&G Well Evaluation Requirements (logging/coring/sampling)

Open Hole LWD Horizontal well:

LOG INTERVAL BOTTOM TD

SYSTEM

LOG MFR (Multi Frequency Resistivity), GR

LOG INTERVAL TOP 200ft MD before Mirador Prognosis Top

Commentaries

LWD REMARKS:

Geological model will be updated with real data while drilling Capella L17H, therefore prognosis depth could change. Real depth will be notice for logging plan updating.

Geological Sampling
Two sets of wet samples each 30ft below the 13 3/8 casing (350t) up to TD. Two sets of dry samples each 30ft below the 13 3/8 casing (350ft) up to 50ft above proposed Mirador Formation Top, from this point samples each 10ft up to TD.

Note: Even though, no samples will be storage for the interval (Surface to 350ft) a description of these interval must be done every 30ft.

Anticipated testing requirements

The testing program will depend on the analysis of data obtained while drilling the well.

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1.11

Offset well information

Capella-L17H offset wells are Capella-L11 and Capella-F7 vertical wells and Capella-F10H, Capella-F12HST, Capella-F13H and Capella-F16H horizontal wells (Figure 10). Capella-F10H, F13H, F12H and F16H existing horizontal wells path have been oriented toward South and have been drilled from location F. Capella-L17H path will be oriented in the same direction of F10H,

F12HST, F13H from location L (Figure 10).

Figure 10 Vertical offset wells Capella-F7 and Capella-L11 and horizontal offset wells Capella-F10H, Capella-F12H, Capella-F13H and Capella-F16H.

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1.12

Pore Pressure Prognosis

Pore pressure data Offset wells used Reservoir pressure (ft, TVDss ) measurements (Psia) @ from 1314 psi -2118 Capella-A1

Reservoir Mirador Sand A

Data obtained from PBU

Comments At 3362 ft TVD

1.13

Offset Wells Fluid Contacts

Mirador Oil Water Contact in Capella Field was found at -2159ft TVDss based on Capella-L11 petrophysical evaluation. Possible Fractured Conglomerate oil water contact from Capella logs answers, oil-gas shows and production test is defined at -2256ft TVDss. This is based on production test results from Capella-F7 well that recorded data in the aquifer, together with gas-oil shows and log interpretation. However, uncertainty around the Fractured Conglomerate OWC exists with petrophysical evaluation, oil and gas shows in Capella wells under -2256ft TVDss (Figures 5, 7 and 8).

1.14

Well testing Requirements

Well Production tests requirements Requirement

Test

Fluid samples at surface Take continuously during test, samples for oil conditions and water at well head.

Initial Test / /Conglomerate

PCP lifting will be installed and will be Mirador developed the production test, 5 days flowing period at stable condition. Followed at least 4 days closed. Same test for each zone.

Comments / Purpose Monitoring properties changes during early production time (density, viscosity, salinity, water and oil samples for full characterization, etc). Identify formation damage, build IPR curve and plan stimulation jobs from skin damage identified. Use pressure and temperature downhole sensors, packer in annulus and check valve in tubing for good closure. (Packer will be used or not after results ontained from capella-Z19).

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2. Drilling Equipment
2.1 Requirements for equipment selection
The drilling depth in Ombu Block is generally about 3000ft ~ 4000ft (TVD), and the maximum load in drilling operations is about 135klbnet weight in air). Based on the rig load selection principle and well control equipment requirements, it is determined that the load capacity and configuration of the rig equipment to be selected should satisfy the requirements for 750hp. Taking the great load into consideration, before the rig is moved to location, all equipments, especially the derricks, substructure, hoisting system, rotary system, etc. should be tested and qualified, to ensure safety of the system when hoisting the maximum casing load with all stands remaining on the drill floor. All equipments should be in good condition. Equipment protection and safety devices should be completely provided. The power and driving system should be efficient. The mud circulating, cleaning and treatment system should be able to meet the requirements for flow rate, mud property maintenance and mud storage in different hole sections.

2.2 The Drilling rig and key equipment configuration

Table 2-1 The Drilling rig and key equipment configuration Power & load Number Remark 375klb 375klb 375klb 375klb 375klb 375klb 750hp 250 ton 1000hp 810kW 320kW 3000psi 3000psi
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No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Name Derrick

1 1 1 1 1 1 1 1 1 2 3 2 1 1

Crown block Traveling block Hook Swivel Rotary table Drawworks Top drive Electromagnetic brake Mud pump Diesel engine Generator Double-ram BOP Killing manifold

No. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Name Choke manifold Driller's console Choke control console

Power & load 3000psi

Number 1 1 1 1 1 1 1 2

Remark

Remote control console Surface high pressure manifold and hoses Desander 45kW Desilter Shale shaker Degaser Centrifuge Hydraulic tongs Mud mixer Mud filling device Circulating tank Mud reserve tank 1400ft
3

45kW 11kW 69kW

Derrick2000

1 1 1 7 1 4 1

1400ft3

3Casing Program
3.1 Casing program design
Table 3-1 Casing program design Casing / liner description Surface casing Intermediate casing Slotted Liner Hole size (in) 17 1/2 12 1/4 8 1/2 Casing size (in) 13 3/8 9 5/8 7 MD (ft) 345 3891 5175 TVD (ft) 345 3298 3333 Cementing section (ft) 0345 03891

Note: In the drilling process, intermediate casing setting depths will be adjusted according to the top of real drilled formations.

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Table 3.2 Explanations on casing program design Hole size (in) 26 17 12 8 Section TD (ft MD BRT) 0 35 35 350 350 3894 3894 5190

Total Depth Criteria Sufficient depth to obtain competent shoe for conductor. (Civil Works) Pass through the Quaternary conglomeratic sandstone formation to case off and confirm enter in the Arrayan sandstone with intercalation of sand. Pass through Arrayan sandstone with intercalation of sand. Case off the Mirador Top Formation. Mirador Formation and unconformity to well TD. Slotted liner completion

Fig. 3-1 Casing program design schematic

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4Well Path Planning

Table 4-1 Well path planning parameters

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Fig. 4-1 Vertical Profile and Plane View of Capella-L17H Plan

5Requirements for Wellbore Quality

5.1 Hole quality standards in horizontal development well The survey interval should be less than 300ft in vertical section. MWD should be used to do real time survey from build section to TVD. Dogleg rate in vertical section should be less than 2/100ft. Dogleg rate of long radius should less than 4/100ft in build section and turn section. Dogleg rate of intermediate radius and short radius should be controlled based on trajectory design. Wellhead Housing Inclination should be less than 0.5.
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Horizontal section(ft) 0-1500 1500-3000 3000

Table 5-1 Target rectangle width(ft) 6 6 6

length(ft) 30 45 60

Notes: If the thickness of payzone is more than 20ft, the width should be less than 9ft. If the thickness of payzone is more than 15ft, the width should be less than 6ft. If the thickness of payzone is less than 15ft, the width should be less than 3ft. 5.2 Cementing quality standards 5.2.1 Quality of cement bond CBL: the relative magnitude of acoustic amplitude is less than 15%, good; less than 30%, normal; more than 30%, bad. VDL: the pipe arrivals are no or weak and formation arrivals are clear, good; weaker and clearer, normal; strong and weak, bad. 5.2.2 Level of cement The cement should be returned to surface in viscous oil thermal production well. 5.2.3 Effective zones isolation If isolation length of individual zones is more than 30ft, the effective isolation length should no less than 15ft. If isolation length of individual zones is less than 30ft, the effective isolation length should no less than 50% isolation length. If isolation length of individual zones is less than 5ft, these zones are treated as one zone.

5.3 Casing pressure test

Table 5-2 Casing pressure test Casing size 57 9-5/810-3/4 Production well 2000psi 1500psi Injection well 20003000psi 1700psi Gas well 3000psi 2000psi Pressure drop allowance 70psi/30min 70psi/30min

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6BHA Program
BHA configuration for this block should be determined based on BHA optimization concept. In actual drilling operations, BHA can be adjusted in time according to characteristics of formations being encountered. The selected BHA should be compatible with the formation to improve ROP and realize the objective of drilling operations which is based on contractors experiences.

6.1 Proposed BHA for each hole section

Table 6-1 Proposed BHA for each hole section No 1 2 3 Section (ft) 0350 3891 5190 BHA 17 1/2 Bit+8 DC2+17 1/4 stabilizer1+8 DC4+5 DP 12 1/4 Bit+8 1/2 1.5PDM 1+8 1/2 MDC1+8 1/2 LWD+8 NMDC1 +5 HWDP6+6 1/2 drilling jar1+5 HWDP21+5 DP 8 1/2 Bit+6 3/4 1.5PDM 1+6 3/4 MDC1+6 3/4 LWD+6 3/4NMDC1+5 HWDP6+6 1/2 drilling jar 1+5 HWDP21+5 DP

6.2 Drill string strength check data

Depth of neutral point (ft):3275 Table 6-2 Strength check data of drilling tools Location of neutral point: 5 OD DP Strength Check Data Name Yield Spud of OD thickness Steel Weight Length Tensile Torsional MISES strength No. drilling (in) (in) grade (lb/ft) (ft) 2 coefficient coefficient coefficient ( lb/in ) tools 1 HWDP 5 1 48.63 885.82 35.54 14.52 2 DP 5 0.362 G-105 19.5 3939.7 105000 28.26 15.83 5.11

7Drill Bit Program recommendation

Based on bit type selection methods, formation rock characteristics in Capella Block and drilling data from offset wells in this area, bit types are selected properly and hydraulic parameters are designed exactly to achieve the objective of improving ROP, increasing bit footage and reducing drilling cost. In the drilling process, bit type can be adjusted in time according to actual bit application on site and the experiences of contractor.

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7.1 Bit type selection recommended Table 7-1 Bit type selection program No 1 2 Formation QA AM Size (in) 17 1/2 12 1/4 Bit HAT127 PDCM316 Quantity 1 1 section (ft) 350 3894 footage (ft) 350 3544

3 M 8 1/2 1 1296 PDCM316 5190 Note: In the drilling process, bit type can be adjusted according to actual conditions on site. 7.2 Drilling parameter recommended Table 7-2 Drilling parameter recommended Bit order 3
Drilling parameters Hydraulic parameters Hole Nozzle Flow SP Bit Circ. Jet Bit Spec. Annu. Power section WOB RPM Impact (mm) rate pre. PD PD vel. HP HP vel. usage (ft) (kN) (r/min) (kN) (L/s) (MPa) (MPa) (MPa) (m/s) (kW)(W/mm2(m/s) ) ()

1 QA 0350 2 A M 3894 12,12, 60 120 48 17.72 2.2215.511.08 73.47 44.22 2.42 1.38 36.85 12,12 100 180 10,10, 60 100 30 120 10,10 80 21 3 7 1.3 81 39 2.1 1.1 32

Note: Data in the table are theoretically calculated values that can be adjusted properly on site according to actual operating conditions. SP pre.=Stand pipe pressure; Bit PD=Bit pressure drop; Circ. PD=Circulating pressure drop; Jet vel.=Jet velocity; Bit HP=Bit hydraulic power; Spec. HP=Specific hydraulic power; Annu. vel.=Annular velocity.

8Drilling Fluid Program

8.1 Guidelines for drilling fluid application Drilling fluid type: High quality water based drilling fluid will be used. Drilling fluid properties: Based on formation pore pressure and collapse pressure and according to actual drilling conditions, adjust drilling fluid properties properly and perform near-balanced drilling. The Mirador formations are prone to sloughing and tight hole. The drilling fluid should have good inhibiting property and sloughing resistance and can maintain reasonable rheological property to clean the wellbore. While drilling in reservoir, pay more attention to reservoir
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Formation M

5190

protection. While drilling in the reservoir, observe changes of drilling fluid properties carefully and adjust drilling fluid properties in time. It should be noted that don't weight drilling fluid blindly to avoid fracturing and contaminating the reservoir. In drilling horizontal section, the drilling fluid should have good lubrication, good rheology for cuttings carrying out. 8.2 Drilling Fluid Design Principle Drilling fluid application should be beneficial to discovering and protecting the reservoir, to collecting geologic data, to fast and safe drilling, to removing oil & gas, to preventing and treating complex downhole troubles and to environmental protection. Formations to be encountered in this well are prone to sloughing, lost circulation and pipe sticking. Therefore, drilling fluid should be able to resist sloughing, lost circulation and have the capacity of protecting the reservoir. Drilling fluid design for this well is conducted according to ctual drilling data from offset wells. The main purpose is to discover and protect the reservoir by performing near-balanced drilling. 8.3 Drilling fluid systems and basic formulations According to characteristics of formations to be encountered in Capella Field, drilling fluid should maintain low solids and lower filter loss and have good inhibiting and rheological properties to ensure safe and fast drilling. The key is to protect the reservoir.

8.3.1 Drilling fluid systems

Table 8-1 Drilling Fluid Types for Each Hole Section

No 1 2 3 Hole Sizein Sectionft 17-1/2 0350 12 1/4 8 1/2 3503894 3894 ~ 5190 Mud type Bentonite+Fresh water Inhibitive polymer anti-collapse+Lubricator Low density - No solid polymer + shielding protection material.

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8.4 Design of drilling fluid properties

Table 8-3 Drilling fluid property for each hole section Drilling fluid properties 0350ft ppg sc/qt cc lb/100
8.8 9.0 40 - 50 N/C

Properties Mud weight Funnel viscosity API Fluid Loss Gels ft2 pH Yield point ft2 Plastic viscosity Solids Kf

3503894ft
9.2 10,3 50 60 3- 6 4/6/9 7/15/20 9.0 9.5

3894 5190ft
8.6 8.8 50 - 70 3- 5 4/6/9 7/10/15 9.0 9.5 15 - 20 11 - 16

lb/100 cp %

15 20 15 18

<10 <0.1 <0.05

8.5 Drilling fluid volumes and reserve of drilling fluid materials 8.5.1 Expected drilling fluid volumes Table 8-4 Expected drilling fluid volume for each hole section Surface circulation Well bore Additional Spud No. bbl volumebbl volumebbl 1 503 145 289 2 503 403 681 3 503 600 600

Totalbbl 937 1587 1700

8.6 Solids control equipment and application requirements

Solids control equipment should be provided as required. The shale shaker, desander, desilter and centrifuge will be used for the four-stage sand removal to control sand and solids contents within a reasonable range and create conditions for improving ROP. Screen mesh of the shale shaker should be replaced in time according to formation changes. Screen mesh should be increased with the increase of formation hardness. Application of the desilter will be decided according to actual drilling requirement. For solids control equipment and application requirements, see the table below.

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Hole section 17 12 8

Table 8-5 Solids control equipment and application requirements Solids index Shale shaker Desander Centrifuge Solids Running Treating Running Treating Running Cs content Mesh time volume time volume time (ppg) (%) (%) (%) (gal/min) (%) (gal/min) (%)
8.8 - 9.0

9.2 10,3
8.6 - 8.8

0.3 0.1

68

>60 >60

100 100

880 680

100 100

264 264

100 100

8.7 Requirements for Drilling Fluid Test Instruments Drilling fluid test instruments should be provided as listed in the table below to ensure that drilling fluid properties can be tested and maintained in time on the rig site. All instruments should be calibrated before sending to the rig site and they should also be often calibrated when they are in use to enshure the accuracy of the measured data. Table 8-6 The least offering of drilling fluid test instruments Name Quantity Name Drilling fluid densimeter 2 MBT measuring equipment Marsh funnel viscosimeter 2 Stopwatch 6-speed rotary viscosimeter 2 Alarm clock API medium pressure filter press 1 Electric mixer Solids content tester 1 Electric stove 2 Timer pH-meteror pH indicator strip Mud cake friction meter 1 1000ml mud cup Sand content tester 2 Filtrate analyzer & tester

Quantity 1 2 1 2 2 1 10 1 set

8.8 Requirements for Drilling Fluid Management on the Surface Requirements for killing fluid reserve system are: The reserve volume should meet the given demands and the killing fluid can be pumped directly to the circulating system. Storage tanks should be provided as required for reserving killing fluid. Two long- shaft mixers operating normally should be installed on each storage tank. Storage tanks should be connected with the lines for the short way circulation and the killing fluid should be able to be pumped to the circulating system directly. It required that each circulating tank of the surface circulation system should be provided with two mixers and the drilling fluid gun will work normally. Rain & water protection facilities should be provided for the circulating, reserving and weighting
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systems. It is required that an additive make-up tank with the volume of no less than 350ft3 should be provided, and the mixers should meet the demands of making up the additives. To meet the demands of curing the losses, it is required that a LCM tank with two mixers should be provided whose volume is 530700ft3. Drilling fluid materials should be stored in a special room. If they have to be placed in the open air, pads and covers should be used to protect them from rain and moisture. Drilling fluid should be treated on the basis of test results to prevent downhole troubles or accidents resulting from improper treatment. The bottom of the waste liquid pit and the cuttings pit should be lined with impermeable materials to avoid seepage of polluted water and prevent cuttings from piling up directly on the ground.

9Cementing Program
9.1 Guidelines for ensuring cementing quality and oil well life Try to control hole enlargement ratio within 10% and prevent very irregular borehole. Casing centralizers should be placed properly. While running casings in hole, note to move casings and ensure they are in the center of the wellbore. On the premise of ensuring borehole safety, try to increase cement injection rate and improve displacement efficiency. Reasonable cement slurry system: Select low filtration, sand-cement slurry. Control free water in the cement slurry to zero and water loss to less than 100ml to improve thermal stability of the cement slurry. Ensure continuity of the cementing operation.

9.2 Selection of Cementing and Completion Technologies

9.2.1 Requirements of cementing and completion

Height of the cement plug within the casing should conform to the design requirement. All the drilling fluid within the annular space of the cemented interval should be displaced by cement slurry. No drilling fluid is allowed to be left. Cement sheath between the casing and the borehole wall rock should have sufficient cementing strength that can withstand the impact of the pipe string being run in hole. After the cement is set, no oil, gas and water should flow out from outside the casing and there
29

should be no channeling among various pressure systems in the annulus. The set cement should withstand invasion of oil, gas and water for a long period of time and the effect of high temperature.
9.2.2 Selection of cementing and completion technologies

Completion method will be selected based mainly on characteristics of reservoir rock, reservoir features and requirements of oil production technology in order to reduce reservoir damage, improve production capacity and prolong oil well life. Cementing selection as follow. Surface casing using conventional cementing. Production casing using screen top cementing, cement plug return to surface. Table 9-1 Basic Parameters for Cementing and Completion Hole size (in) 17 1/2 12 1/4 8 1/2 Casing size (in) 13 3/8 9 5/8 7 Casing setting depth (ft) 345 3891 Cement returning depth (m) Surface Surface Cementing & completion mode Conventional Conventional Slotted liner from 3741 MD to 5175 MD

Spud No. 1 2 3

Remark

9.3 Casing String Design

9.3.1 Casing string design principle

Casing design is to ensure that the maximum stress on the casing in all the life time of the well is within the allowable safety range so as to protect the oil & gas well. The design principle is as follows: Requirements for drilling, production and payzone modification technologies can be satisfied. In casing design, the influences of collapse, burst and stress changes in the process of exploitation should be taken into consideration. The balance between casing strength and casing string mechanics should be established. To ensure that safety is put on the first place, casing design consideration is based on the assumption that the casing is in the most dangerous downhole condition. Safety factors for casing string strength design are as follows. Collapse resistance: 1.125, burst resistance: 1.125, tensile: 1.8. On the premise of meeting strength requirement, the cost should be as low as possible.
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9.3.2 Casing string design and strength check

According to drilling & development program for this Block, in casing selection, besides meeting strength requirements, the influence of the casing on oil well life should also be taken into consideration. Casing string design is shown below. Table 9-2 Casing string design and strength check Safety factor Wall Unit MD Steel thickness Thread weight Tensile Collapse Burst (ft) grade mm (lb/ft) St Sc Si

Casing / Casing liner size description (in) Surface K55 10.92 61 31.45 7.92 11.78 13 3/8 345 BTC casing Production 9 5/8 3891 N80 8.94 43.5 6.71 9.05 5.74 BTC Casing Slotted 10.36 29 7 5175 N80 BTC liner Note: a. Casing strength designs are calculated based on formation pressure data provided by the geologic design. Cementing design should be proved again on site according to actual conditions. b. All casing collapse strengths are calculated based on 100% empty casing. c. Threads of all casings are required to be coated with high temperature thread sealant. d. Related cementing tools and accessories must match the threads of casings. Their strength should not be less than that of the casings in the specific hole section. Enough short casings with variable, threads should be got ready. Table 9-3 Casing data Unit Wall weight Thread thickness kg/m type mm (lb/ft) 10.92 BTC 61 8.94
10.36

OD In 13 3/8 9 5/8 7

Steel grade
K55 N80 N80

Tensile strength klbs

962

Collapse strength psi

1.540

Burst strength psi

3.090

BTC
BTC

43.5
29

1005
676

3810
7,020

6330
8,160

9.4 Cementing pipe string design Table 9-4 Cementing pipe string design Spud No. 1 2 3 Casing size in 13 3/8 9 5/8 7 Cementing pipe string float shoe +casing string +landing joint float shoe +1 casing+float collar + casing string +landing joint Shoe + pup joint of sloted liner + Ring seal sub + Sloted liner + thermal extention loint + Liner hanger

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Fig. 9-1 Detail 7 Casing Capella L17H Three Phases

9.5 Selection and placement of centralizers Spring centralizers will be used. In the reservoir section, one centralizer is placed every 2 casings, and in other hole sections, one centralizer is placed every 4 casings. Centralizers will be placed per API Standards to ensure that casings will be run in hole smoothly and be centralized. 9.6 Cement Slurry Design
9.6.1 Cement slurry design principle

Properties of the cement slurry must be stable under downhole temperature and pressure. The cementing slurry should be set and reach the specific strength within the fixed WOC time. The set cement should have very low permeability.

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9.6.2 Selection of cement slurry

The cement slurry system with low water loss will be selected to improve thermal stability of the cement sheath, adding quartz sand to cementing slurry by 30~40%. Additives such as water loss reducer, defoamer, dispersant, etc. should be added. Additives to be used should satisfy the requirements of cement slurry properties, ensuring operation safety and cementing quality and benefiting reservoir protection.

9.6.3 Requirements of cement slurry properties for the reservoir

Cement for oil wells must be tested carefully before use to check its properties. Properties of cement slurry with additives should be tested, including tests on density, thickening time, free water and rheology, tests on tensile strength of the cement bond as well as tests on compatibility of the cement slurry with the preflush and drilling fluid.

Table 9-5 Cement slurry property parameters for the reservoir Properties Density (g/cm3) Rheologycm Water lossml Free water contentml Thickening timeh Tensile strength
9.6.4 Cement volume calculation

Property requirement 1.90 25cm 100ml/1000psi30min 0 Total cementing time +1h 24hr2000psi

Remark

Table 9-6 Cement volume calculation Enlarge Excess Cementing rate of Size Cementing Slurry Density cement Quantity No caliper (in) type Type (ppg) (klb) sectionft Inner string Class 1 17 1/2 15.4 15 50 98 0350 stabbing G Cementing Lead 2 12 1/4 above the top Class 13.6 10 80 118 02791 of Screen G Cementing Tail 12 1/4 27913891 above the top Class 15.4 10 80 47 of Screen G Note: Cement volume and cement returning depth are theoretical data which should be revised in operations according to measured data.
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10Reservoir Protection Program

The drilling fluid system that is compatible with the reservoir will be used and drilling fluid properties should be controlled to reduce formation contamination as much as possible. Measures to be taken are as follows: a. Polymer drilling fluid system will be used to reduce and prevent harmful substances from invading the reservoir. b. Control the low density solid content in the drilling fluid and avoid solids from migrating and damaging the reservoir. c. For drilling fluid used in the payzone section, API filter loss is controlled to 5cc. Prevent water sensitivity effect from damaging the reservoir. Adopt the shielding & temporary plugging technique and use kerite additives to prevent harmful substances from invading the reservoir. Perform near-balanced or underbalance drilling technology. Predict formation pressure in time and adjust drilling fluid density correspondingly. According to related technical regulations, the additional density is controlled to 0.42-0.83 ppg in the reservoir and to 0.58-1.25ppg in the gas zone. While tripping out of hole, the effective hydrostatic pressure in the wellbore should be a little greater than or equal to that of the formation pressure. Keep stable rheological property of the drilling fluid and avoid too great changes. It should be ensured that while drilling in the reservoir, all properties are always conformable to the requirements of reservoir protection and borehole stability. Control tripping speed to avoid pressure surge and reduce contamination to the reservoir. If it is required to weight the drilling fluid while drilling in the reservoir, use the weighting materials that can be acidized and dissolved.

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11Well Control Program

11.1 Selection of well control equipment Select pressure ratings of the well control equipment according to the predicted formation pressure of Capella oilfield. The BOP selection program is shown in Table 11-1. Table 11-1 Wellhead equipment and pressure testing requirments Testing requirements Pressure Allowable Test Name Type holding pressure pressure time drop (psi) (min) (psi) Simple wellhead Casing head 2 Double ram Choke/kill manifold T 10 3/47-21(3000psi) 2FZ 28-21(3000psi) JG-21/YG-21(3000psi) 3000 3000 3000 10 10 10 100 100 100

Spud No. 1

Figure11-1 Wellhead equipment for 17 hole section

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Figure11-3 Wellhead equipment for 12 1/4 hole section

Figure11-3 Wellhead equipment for 8 1/2 hole section

36

Figure 11-3 21MPa choke/kill manifold 11.2 Requirements for BOP System Inspection and Testing Requirements for testing well control equipment should conform to regulations of the Industrial Standards. The BOP system includes BOPs, spool, choke/kill manifold, control system as well as liquid and gas lines. The tubular & tool company will be responsible for inspecting them piece by piece and making tests on them per requirements. When all pieces of equipment is qualified, fill in the qualification certificates, check the test records, sent the equipment to the rig site and hand them over to the drilling crew. All threads should be well protected during transportation to prevent them from damage. The whole set of well control equipment will be tested in the well control workshop with fresh water. The ram BOP will be tested to rated pressure for at least 15 minutes. Pressure drop is allowed which should not exceed 100psi for the ram BOP. Before drilling in the reservoir and after replacing the parts of well control equipment, make tests again with blanking plugs or pressure test plugs. For testing the choke/kill manifold, the test pressure for all valves before the choke valve is the same as that for the ram BOP, and the test pressure for all valves after the choke valve is one pressure rating lower than that for the ram BOP. When testing each valve, all valves before and after it should be opened. Only after testing, can all valves return to required standard on/off position. Various internal blowout prevention tools should also be tested to rated working pressure.
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11.3 Installation of the BOP System

11.3.1 Installing the wellhead components

Installing the spool. Holes in both sides of the spool should face both sides of the derrick door. Installing ram BOP. Hand wheels of the manual locking device and the control rod should be located on both sides of the derrick door. Outlet of the side flange will face the direction of the derrick door. According to the size of the drilling tool to be used, install pipe rams with corresponding size. Put plates marking the types and sizes of the rams in the driller's console and in the remote control console in order to avoid wrong closing when blowout occurs. The manual locking device should be completely installed and well connected, and a plate marking the number of turns should be put on the hand wheel.

Relief manifolds will be installed on both sides of the derrick. The choke manifold will be installed on the right of the derrick (the drilling fluid outlet side), and the kill manifold will be installed on the left of the derrick. The relief/choke manifolds should be unblocked and be secured by cement base. Distance between the outlet of the manifold and the wellhead should be no less than 250ft.

After installation of the BOP system, adjust the crown block, the rotary table and the BOP stack. Centers of them should be aligned vertically and the offset should be no more than 0.4in. After adjustment, fix the BOP stack to the substructure with wire ropes.

11.3.2 Installing the control system

The remote control system (i. e. the accumulator) should be installed in a place about 100ft away from the wellhead, usually in the diagonal direction of the derrick. The remote control system should be installed in a skid-mounted prefabricated house. Ditches for draining water will be dug around the house. Oxygen bottles and combustibles are not allowed to be placed near the house.

The driller's console (i. e. the main control panel) will be installed on the drill floor close to the driller's working post for the convenience of the driller's operation. Installing the pipelines. Before installing the hydraulic and air pipelines, each pipe should be cleaned by compressed air and be connected correctly as required. When connecting the air lines, the air valve and the air bypass valve of the air pump should be closed which can only be opened when they are to be used. All pipes should not be bent, broken and fired. They should be put in order and be well fixed. The control lines should not be used for welding and other purposes.
38

Connecting the electrical lines. When connecting the electrical lines, check again to see whether electric parameters are correct. The electric power supply should be connected before the main switch on the rig site and be controlled with individual switches, so that when electric power of the rig site is turned off due to occurrence of a blowout, the use of the control system will not be affected. Electrical lines for the transceiver and long-distance search lights should also be connected before the main power supply.

11.3.3 Test-run of the BOP system

Before test-run, check all connections of the pipelines to see whether they are connected correctly. Make test-runs with and without load respectively. Check leackage of all connections and working conditions of all valves and pipelines. Solve the found problems in time after pressure is released.

Open and close BOPs and relief valves twice by trial to see whether the switches are in good working condition.

12Operation Guidelines for Each Hole Section

12.1 Pre-spud preparation and site construction The length of the front field is at least 150ft. Requirements for enough rig site area for special operations shall be satisfied. Foundations for the derrick, diesel engines, mud pumps and the tanked circulating system shall be firmly fixed. Ensure high quality of the bottom construction and the height difference of basic planes is less than 0.12in. The effective capacity of the mud reserve tank is no less than 8500ft3 and water reserve tank no less than 17500ft3 should make use of plastic cloth to prevent water rush and seepage and meet application requirement. There should be no buildings except the dog house and other facilities within the overturning radius of the derrick. Equipment should be installed flatly, stably, smoothly, completely, firmly, effectively and properly according to specifications to ensure the quality of installation. The crown block, rotary table and wellhead shall be calibrated to make sure that they are aligned, and the deviation should be no more than 0.4in. Requirements of circuit installation: electric power for drill floor lamp, derrick lamp, engine

39

room lamp, pump room lamp, dog house lamp and dormitory lamp, search light, motor circuit and alarm circuit should be transmitted through nine separate power lines and be under centralized control in the dog house. Lighting equipments of drilling fluid tank, derrick, engine room and pump room should be safety, explosion-proof, in good condition, no electrical leakage, no fire spark. Power house should be equipped with lightning arrester. Search lights of well site and storage tank/pool should be enough to meet the lighting requirements for rig site operations. The capability of water supply equipment shall be higher than 700ft3/h. The maximum water supply capability of pool or tank shall be higher than 3500ft3/h. The ground surface under the drill floor and pump room or places around the rat hole and mouse hole must be faced with cement to avoid water seepage into the base which affects the base safety. The ground surface under the drill floor, engine room and pump room should be higher than the rig site surface and available with external drainage. Ditches shall be dug for draining off water and be connected to the sewage pit whose effective volume is no less than l00m3. The well site should be flat and smooth. All the drill tools should be steadily placed on pipe rack. Disordered placement is strictly prohibited to avoid drill tool accidents caused by surface damage. Before spud, all the power and mechanical equipments should be tested run for 2h with load. Ensure that oil&water&gas lines are sealed and the switches of valve are flexible without leaking. Do not spud until all things are qualified. Prior to drilling operation, the drilling crews should be convened to understand clearly the geologic and engineering design and complete all preparatory work with definite guiding ideology.

17 1/2 hole section Ensure that the 26 hole is vertical. WOB increases with the weight of drill collars in the given range. Trip out and measure the hole angle. Drilling operation is not allowed until successful measurement of the hole angle is achieved. Run in 13 3/8 casing and cementing a. When running casings, threads of the casings should be tightened to specified torque. Prohibit thread alternating, undertonging and electric welding between threads. If there is a
40

 symbol at the pin end of casing, screw on the thread of the casing to the bottom line of the symbol and fill up casing with drilling fluid. b. When running casings, bind float shoe, float collar and intermediate casing with thread gum. If thread gum is unavailable, joint them with electric welding. c. Cement slurry must return to surface. Properly select BHA. Check the weight indicator. Start drilling with light WOB and keep the borehole vertical. The hole angle should be smaller than 0.5, otherwise take measures to straighten the hole. Add stabilizers with is matched with the bit diameter at the upper part and lower part of the first drill collar to ensure a regular borehole and successful casing job. Make up connections quickly, make good control of running in speed and dont start the pump too fast. Drill string should be reciprocated when circulation stops due to some reasons to prevent pipe-sticking. The time drill string stay in hole should not exceed 5min. 12.3 12 1/4hole section Safety measures a. Check the equipment in advance to ensure continuous operation and avoid interrupted operation. b. Feed WOB evenly, drill the soft and hard interface successively and make up connections quickly. Keep the pump working for a long time (start early and stop late. Variation of flow rate should be smooth. c. The drill bit should contact the bottom hole steadily. Make a survey before tripping out of the bit or after continuous footage of 500ft for each bit. If the hole angle is a bit larger, replace the current BHA with deviation-correction BHA. d. Make good control of tripping speed. Find drags or pipe-sticking timely and treat them in accordance with operation specification. e. Drilling fluid should be maintained and treated in accordance with the design requirements. Corresponding LCM should be reserved on the rig site. Enough high quality drilling fluid should be stored at site according to design requirements. f. Prevent anything from falling into the borehole.

Raise the mud inhibitive capability, mud must have good functions of hole wall protection and hole cleaning. In drilling this section, flow rate should be higher than 700gpm, pay more attention of cuttings bed, recommended short tripping or backreaming per 24hours. Precaution the differential
41

pressure sticking pipe or casing. Prepare the casing accessories and cementing tools to realize cementing above the top of screen. One kind of BHA to realice trajectory of building up, turning direction, holding on and horizontal sections Bit bouncing, deviation trend, lost circulation and drill tool accidents are problems encountered in drilling operation. Therefore, appropriate drilling technology should be worked out in view of the feature of the drilling interval. The key concerns are to keep a vertical borehole, drill rapidly and do well in near-balanced drilling and trajectory controlling. Strengthen management of equipments especially the drill pump. Normal operation of drilling equipment should be assured and prevent operations from being interrupted frequently. Before the drill collar drilling out the surface casing shoe, WOB should be controlled in the range from 10klb to 18klb. The second gear should be used for drilling. After the drill collar drilled out the casing shoe, WOB should be gradually increased to 60klb to 80klb. Avoid borehole deviation and ensure the wellbore quality. Survey the hole angle before tripping out or after drilling every 1000m to 1500ft in order to monitor and follow the hole trajectory timely. During drilling process, pay attention to the downhole situation. If borehole wall sloughing is encountered, adjust drilling fluid properties timely to ensure normal downhole operation. Prevent downhole problems and accidents caused by borehole wall sloughing and lost circulation. Before spudding, all equipments especially the electric circuit part and well control equipment shall be inspected completely. Strictly perform the blowout prevention drills to achieve the control of well head in each shift. At the same time, engineering and geological technical personnel should inform drilling crews of technology details for drilling the oil and gas reservoir. The post responsibility system should be implemented. Drill tools should be strictly managed. Carefully check the drill tools to be run in hole. Persist in switching within the drillstring and check thread alternating to avoid drill tool accidents. Operators should strengthen the sense of responsibility and observe and analyze down hole situation in time. In case the pump pressure drops, stop drilling to analyze the reason. If no reason can be searched out, put out of hole and check. Persist in making good use of solids control system. Add appropriate amount of lubricant to control the frictional coefficient of mud cake in the designed range. The time of drill tool being static in hole should not exceed 3min to avoid pipe-sticking. Strictly inspect the rig tools. Prevent anything from falling into the borehole to avoid
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pipe-sticking. 12.4 8 1/2" hole drilling

Solids should be controlled as lower as possible. Change mud by new clean mud, reduce the mud weight and other properties to design Pay more attention to the differential pressure sticking pipe and casing

Adopt the shielding & temporary plugging technique to prevent harmful substances from invading the reservoir. Prepare different types and parcels of LCM on the location. In drilling this section, flow rate should be higher than 500gpm, especialy in horizontal section, pay more attention of cuttings bed, recommended short tripping or backreaming per 24hours. Precaution the differential pressure sticking pipe or casing.

MWD/LWD tools should be in good condition. Before running in hole test them carefully on the surface or in shallow depth of the hole. The dogleg should be controlled within permit rang. Real well trajectory should follow the design one and keep the trajectory smooth.

12.5 Precautions for drilling hazards

12.4.1 Leak protection

During drilling process, adjust drilling fluid properties. Select the designed lower range value of drilling fluid density if possible to keep near-balanced drilling. Before encountering the leakage interval, lost circulation materials should be prepared in advance. Condition drilling fluid properties in accordance with design requirements and prepare to add lost circulation materials at any time.

When running in hole, the running speed should be under control. After drill to 1500ft, auxiliary brake should be used. The time for running in a stand should not be less than 30s to prevent inducing drilling fluid loss because of the excessive high pressure surge caused by the excessive high speed.

If weighting operation is needed with active oil&gas during drilling process, density should be gradually increased according to the circulation. It should be increased 0.4 to 0.8 ppg for each circulation cycle until the overflow disappears. Prevent downhole situation becoming complex caused by blindly weighting operation.

During running in process, circulate drilling fluid in stages. Running in to the bottom directly and then starting pump to circulate is strictly prohibited. Start pump with a low flow rate to
43

push through the hole, and then pump with normal flow rate. Strictly prevent leakage caused by opening pump too fast. Designated personnel shall observe the changes of drilling fluid level at all times. In case lost circulation occurs both when drilling in and running in, pull out of hole at once if leakage volume up to 180ft3. Continuously pump drilling fluid to the hole and prepare for loss-curing.
12.4.2 Well trajectory control

Equipment should be installed flatly, stably, smoothly, completely, firmly, effectively and properly according to specifications to ensure the quality of installation. The crown block, rotary table and wellhead shall be calibrated to make sure that they are aligned, and the maximum allowable deviation should be no more than 0.4in.

Make sure that the weight indicator, parameter recorders and pressure gages are sensitive, accurate and in good condition. Before running in MWD/LWD tools, they need to be tested on the surface, when running in hole in shallow position, do test again to ensure they are in good condition. When drilling in surface layer, keep balance of the drilling hose. Drill with low WOB. The hole deviation angle should be less than 0.5. Well straightening operation should be performed if hole deviation angle is too large.

When maintaining equipments or treating drilling fluid, reciprocate the drill string by a wide margin to circulate drilling fluid. Rotational circulation should not be in a position with a high flow rate for a long time to avoid deviation caused by a large hole.

A new bit should not be drilled to the bottom without break. Start pump with low flow rate when near the bottom. Start rotary table with bottom gear for slowly running to bottom. After running the bit with 10-40klb WOB about half an hour, WOB should be gradually increased to normal value.

While drilling in, strictly control the borehole quality to meet the requirments of designed well profile.

12.4.3 Pipe-sticking prevention

When drilling horizontal section, differential pressure sticking pipe and casing will easily happen, the efficient prevention ways should be taken. Short tripping and backream need to be used every 24 hours or 800ft to keep the hole in good condition. When the drill string isnt in the hole for a long, mud cake will become thicker a nd sticker. In this situation, pay more attention to pipe sticking when run in hole with drill string.
44

For hole cleaning, circulation time should be more than two bottoms up. In high deviation hole, cuttings often settle down, flow rate should be kept as high as possible, meanwhile, raise the rotating speed properly. Drill string in static in the hole is no more than 3 minutes whatever operations carry out.

Once the differential pressure sticking happen, try to keep circulation at any time. Prepare release agent and soak the pipe as quickly as possible. To reduce differential pressure the weight of release agent need to be as low as possible.

Before running in E-logging tools or casing, ream the hole thoroughly. Rock bit and slick collars is the best string used to ream the hole. Increase flow rate as possible; observe the cuttings return till no cuttings on the shale shaker.

Dont stop running in casing too much time whatever operations carry out. Dont fill in mud when casings are running in horizontal section. Run casing to the bottom as quickly as possible, and then circulate mud for cementing.

Well trajectory need to be controlled in good profile, high dogleg will produce high resistance. Montor well profile to evaluate this resistance; take the right way to run casing to the bottom. Prior to spudding in, rig equipments, well head, instruments should be inspected by relevant personnels from company. Equipment should be installed flatly, stably, smoothly, completely, firmly, effectively and properly according to specifications. Drilling operation can not be performed until meet the acceptance requirements.

Inspection requirements before every spudding in a. The driller should inspect wear information of the drilling line. Slip and cut off the drill line if there are 12 broken wires in a pitch of strand. b. The driller should carefully check the brake system, fixation condition at the both end of drilling line and the regulating situation of the brake band adjusting screw. c. Inspect whether the weight indicator is accurate, whether the hang weight conform to the actual weight of drill tools, whether the curve of auto recorder is clear and whether have abnormal records. d. Carefully check whether gas circuit and crown block saver are reliable.

Strengthen the movement of drill string. The time drill string being static in hole should not exceed 3min. If drilling operation can not be performed, move drill string up and down by a wide margin.

If drill string can not be moved because of equipment failure, 2/3 of the hang weight should be pushed slowly to the bottom hole. Repair the equipment as soon as possible. After repairing the equipment, circulate drilling fluid to pull out of hole rather than drill ahead.
45

Make up connections quickly. Especially at the time of faster penetration, the time make a connection should not be more than 3min. Pump stop time should be cut down (stop pump late and start pump early) to reduce the settle sand.

Condition drilling fluid before drilling in. Circulate with high flow rate and pull out of hole after at least 2 bottoms up. Running operation to hole bottom should not be performed in one time. Start pump to circulate stepwise and run in hole until normal. Do not force to pull up or run in with too more weight for a tight hole over 225klb. Make connection with a Kelly, start pump to push through the hole and circulate to normal, then go on tripping.

When drilling in, if pump pressure raise, hang weight drop, returned drilling fluid volume reduce and rotary table reverse occur, stop drilling ahead or making connections. After pulling drill tool to normal interval, borehole should be returned to normal by flushing, making wiper trip and reaming to precede operation.

In water swelling formation or unconsolidated formation, condition drilling fluid properties and control water loss to avoid drags and stuck pipe caused by tight hole, hole sloughing or thicker mud cake.

Footage of every bit should not be more than 1000ft. Otherwise, make short trip to ensure a smooth hole. The length of trip interval should be longer than that of drilling interval to prevent drill pipe sticking in mudstone due to tight hole.

If pump pressure drop is found when drilling in, stop drilling ahead to find the reason. If any problem can not be found on surface, pull out of hole to inspect drill tools. During drilling process, if drill time decreases, bit bouncing, pump pressure raises and pipe-sticking when picking up drill tool are found, stop drilling at once to condition properties of drilling fluid. At the same time, move drill tool up and down for long distance with high speed rotation, increase the circulating capacity to remove ballings on bit or stabilizer.

If bit balling occurs, the bottom gear should be used for tripping out. Fill up drilling fluid continuously. If drilling fluid can not be filled in the annular space, fill in from drill tools. The tripping speed should be not too high to prevent down hole problems caused by swabbing.

Prevent anything such as tools, screw and dies from falling in hole while operating at the wellhead. While the well is empty, bit box can be used to cover the wellhead. Drill tools to be run in hole should be carefully inspected according to regulation. Drill tool should not be run in hole if unqualified.

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13Wellhead equipment for completion

13.1 Casing head specification T 9 5/8 7 -21 (3000psi). The last casing head should be below the ground for the convenience of rig quick moving. Consider about the top level of casing head, it must be keeped as the same level as ground 13.2 Wellhead protection Keep the cellar clean. The casing head must be kept horizontal with a level ruler. After installation of the wellhead, tighten the four conners of the well head with guys and align the casing head with the center of the rotary table. Two sets of casing head wear-proof casing must be available. Install one set during operation and check and replace it periodically. Supplement immediately if no backup equipment is available. All flange and handwheel must be made up to the specified torque, wellhead cap must be installed before installation of the the Christmas tree. Carry out sealing compound injection and pressure test operation in accordance with regulations to ensure reliable sealing. 13.3 Completion requirements Drift the hole to the artificial hole bottom with standard drift diameter gauge and testing drift diameter gauge. Tally the tubing being run into the hole and make records based on running sequence. There should be no oil, gas and water invasion into the casing or leaking out of the casing after completion. Upper end surface of the top flange (lower end surface of the tubing spool) for casinghead hanging the production casing can not be 1.3ft higher than the surface. If its position is excessive low, it shall be adjusted by using lift nipple. It must be adjusted while running in 7 casing. The 7 casing hanger shall be seated on the top of the lifting nipple. The Christmas tree shall be installed uprightly and firmly in accordance with relevant regulations. The well site shall be smooth and neat withou mud, oily dirt and water accumulation. The rat hole and mouse hole must be backfilled and tamped, and a warning sign shall be set up. If mud, fresh water and mud materials are needed for testing, the drilling company is responsible to deliver the field stocks to the test company. In principle, the materials required in the testing
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program must be managed by the test company after testing. Except for the materials specified in the agreement between the drilling company and the test company, the other materials out of the testing program must be managed by the drilling company after testing. The well completion data documents shall be complete, accurate and tidy, and shall be delivered before the specified date. The casing head shall be fully installed with pressure gauge and outgoing pipeline (fixed firmly). The cementing quality is good with no oil&gas channeling and no pressure in the annulus. The following working procedures shall be done during well completion period: 1. Run in all of production casing and then carry out cementing.The cement job must be qualified. The production casing string was successively seated and hanged on the casing head with good sealing. Inject sealing compound and perform pressure test. The pressure test must be qualified. No fluid invasion into the casing or leakage out of the casing.(The above mentioned jobs will be confirmed by signatures of drillin crew leader and supervisor). 2. Drift the casing with test drift diameter gauge. It shall be confirmed by signatures of drilling crew leader and supervisor. 3. Run the drill string to the artificial hole bottom. Displace the hole with fresh water, then stabilize for 24h, no overflow occurs, circulate and observe possible oil, gas and water invasion. The pressure test is qualified which confirms the success of the cement job and good isolation of the casing. Displace the hole with mud which can control all the pay zones. 4. The well tested with the former rig will be delivered to the test company. 5. The following work will be done for the well tested with another rig: a. Pull drill string out of hole and fill up mud simultaneously (no overflow). b. Disassemble BOP stack. c. Pull the production casing out of the tubing hanger or cut it from 1ft above the top flange of the casing head (no deformation on the end surface, no junks left in the hole). d. Clean the top flange of the casing head, tubing hanger thread, dope corrosion inhibiting oil on the tubing hanger thread, daub grease in the steel ring groove or inject engine oil fully. e. Cover strawhat-type protective cap (keep the lower edge at the same level with the top flange of the casing head), secure the foure corners with four screws. f. Clean the casing head, cellar. Install all the valves (double valves for each side of
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casing head), stopcock, pressure gauge. The bleeding lines for various casing heads shall be installed and fixed firmly. g. Deliver the well to the test compmay when the rig has been moved from the well site. Provide complete documents which fully demonstrate the well conditions. Perform pressure test and cofirm the success of the test with the presence of both parties and carry out a written transfer procedures.

14HSE requirements
14.1 Basic requirements Implement the laws, regulations, standards and systems on safety, environment protection, professional health, fire fighting, emergency solutions,etc, which are established by the resource country, cocal government and Sinopec. Companies engaged in development of oil ang gas resources shall obtain the Safety Production License and establish the HSE management system which involves sigle well safety and environment risk analysis. Peform HSE check and drill. Provide sufficient pollution-control equipment and realize standard pollutant discharge. Drilling crew shall establish a HSE leadership group with clear working duties. The follwing ideas shall be followed by the drilling crew: safety first, precaution crucial, all staff participation, comprehensive management, environment improvement, health protection, scientific management, sustainable development. Pursue the goal of no accident, no damage to human health, any environment damage and first-class HSE achievement in China. Drilling crew shall hold the effective certificates in accordance with the relevant regulations of the resource country and local government. The drilling crew shall provide effective inspection reports or certificates and signs for the following equipment: safety equipment and safety accessories, special equipment, measurement instruments, H2S detection device, derrick, etc. Drilling crew qualification and personnel requirements: The toolpusher and HSE management personnel shall hold Safety Production Management Certificate ; a. All the personnel shall hold HSE operation certificates; b. Special operating personnel (electrical operation, metal welding, boiler operator, crane operator, etc.) shall hold Special Operation Certificate ; c. Toolpushers, drilling engineer (technician), security personnel, stud driller, driller, assistant
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driller, derrickman shall hold effective Drillers Operation Certificate and Well Operation Certificate. d. Cooks shall hold effective health certificates. e. All the people who work in a place where H2S may exist shall accept H2S traninning and obtain H2S Protection Technique Traninning Certificate . Incorporate in a single system the observations made and reported by all the service companies. Ongoing campaigns and incentives for reporting of unsafe conditions and actions Establish mechanisms focused on example-based change in mentality. Effective procedure for analysis, tracking and closing of reports. Tracking and daily report of RIT cards to operations coordinator to guarantee effective closing. Stricter control at supervisory levels in respect to observance of PPE usage policies Strict tracking of reprimands for failure to comply with use of PPE.

14.2 Liquid and solids waste managment program In accordance with the Environmental management plan a zodme area will be available in the location to mix and dispose water-based cuttings. The solids and liquid waste management program is intended to reduce waste generation by reutilizing resources. This may be accomplished through proper management of the solid control equipment, where centrifugal decanters play a very important role. Moreover, water must be managed on the basis of a culture aimed on saving and recycling.

14.3 Waste management objects (HSE) Full compliance with parameters for disposal of solids and liquids Reduction of costs on account of drilling and/or completion fluids and industrial water recycling Optimum use of water-based cutting disposal zones Full compliance with water disposal parameters for discharge or irrigation Full compliance with parameters for disposal of oil recovered from batteries Recovery of associated fluids in cuttings and recycling in water No environmental damages Perfect presentation and mechanical conditions of equipment Skilled and unskilled personnel, trained on operations and HSEQ
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Involvement in planning and evaluation of performance indicators.

15. Logistic issues

Tracking of observance of speed limits Verification of observance of escort vehicles usage policies Mandated use of secondary roads skirting entry to Los Pozos township Establishment of a single procedure for entry and presence of persons at the location. Strict compliance on the part of access controllers. Require prior information on movement of personnel and/or tools. Establishment and tracking of the calendar of managerial visits (Coordinators). Verify continuity in monitoring of operational parameters with drilling equipment. Establishment of per-capita consumption goals to optimize water use. Establish mechanisms for water reuse Verification of proper storage. Chemical contamination incident (direct exposure). Good labeling of chemicals in resistant materials Drill in A Sand in different phase that conglomerate. Move waste collection points to points that are not at the entry to locations Insist on recycling campaigns Employ sensors for same parameters taking readings from different points. Keep parameter monitoring equipment even for completion operations Analyze and establish mechanisms for proper shift handover Require and review inspection certificates of all tools reaching the well Tracking of the inspection and maintenance calendar for equipment and tools used in the operation. Request and keep at the field a backup of tools and spares with a significant chance.

16Requirements for drilling information report

Daily drilling report

Daily mud report Survey report Directional daily report

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Cementing operation report Daily mud logging report Wireline logging report Down hole troubles and accidents curing reports Final drilling report

17Drilling cycle forecast

Table 17-1 Drilling schedule

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Figure 17-1 Drilling time prediction

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