UNDERBALANCED

The SURE Path to Underbalanced Success

Quick Look Screening

Using only a small number of input variables, novel RST
screening software and methodologies efficiently screen
hundreds of potential underbalanced candidates to target
those suitable for more in-depth analysis.

Damage Assessment
Employ proprietary Weatherford probabilistic RDA
software to rigorously assess the impact of drilling related
formation damage for underbalanced and conventional
overbalanced techniques.

Production Modeling
Develop risk-based field production forecasts employing
industry accepted analytical modeling and/or numerical
simulation techniques.

Economic Modeling
Conclude the SURE process with risk-based cost and event
analysis to enable underbalanced implementation

SURE = BETTER DECISIONS + HIGHER RETURNS

The Weatherford Suitable Underbalanced Reservoir Evaluation

Process (SURE) gives you a simple, fast and reliable way to pick the

underbalanced candidates in your fields.

 Why Underbalanced?
And Why SURE?

When underbalanced drilling succeeds, it can work wonders:

discovering hidden production zones, speeding drilling by
eliminating lost circulation and differential sticking, and
Reservoir Drilling
accelerating production by reducing formation damage. The & &
result - increased ultimate recovery and improved net present Production Completion
value (NPV).
Yet too often, underbalanced fails to live up to its potential -
either because unsuitable reservoirs are drilled or
Geology
inappropriate drilling technology is applied. Until now, there &
was no easy and reliable way to identify underbalanced Geophysics
prospects, to highlight the technical challenges presented by
them, or to quantify the results that could be expected.
Weatherford's SURE team and our new Suitable The SURE Team
Underbalanced Reservoir Evaluation (SURE) Process change
all of this. SURE simplifies the candidate selection process
The SURE team will not
with the Reservoir Screening Tool (RSTTM); provides in-depth
TM claim to be the ultimate
analysis with the Reservoir Damage Assessment (RDA ) experts in reservoir and
software; and produces a risk-based economic model to aid production, drilling and
decision making. Accelerate your underbalanced learning completion, or geology
curve, lower your underbalanced opportunity finding costs, and and geophysics. But the
increase the probability of a high return on your underbalanced novel and unique SURE
investment with SURE - the quick and certain way to find your process used by the team
underbalanced candidates. gives a heightened level of
understanding where
these disciplines converge
OVER UNDER in the domain of
BALANCED BALANCED
underbalanced drilling. We
Difficulty handling No problem with
understand the
unpredicted influx influx - handled by relationship between
of gas or water the UBD underbalanced drilling and
separation system
formation damage better
Massive formation Reduced than any other
damage formation damage
underbalanced systems
Missed productive Production provider. Leveraging this
zone flowing from
unsuspected expertise, we have
zone developed the analysis
Lost circulation No lost circulation tools needed to help you
capitalize on
Differential Drill to total depth
sticking underbalanced drilling’s
advantages.
Poor removal of Better cuttings
cuttings leads to removal can
slow drilling, more double ROP and
bit damage maximize bit life
Production limited Production
by formation increased by 50-
damage 1000%
Net Present Value NPV of well
- is the well increased by two
profitable? to 10 times or
more
1
An Overview of SURE

Think of the SURE process as a selective funnel that finds

your underbalanced candidates from hundreds of prospective
reservoirs. It starts with the SURE Reservoir Screening Tool
(RST), novel software that, using minimum input variables,
takes only hours or a few days to screen your potential
underbalanced reservoirs. Based on the RST results, the
Weatherford SURE team gathers and prepares additional data
for in-depth analysis of selected reservoirs using the Reservoir
Damage Assessment (RDA) tool in concert with other
nonproprietary software packages. The RDA rigorously
predicts damage and its effect on field production forecasts to
enable a comparison of overbalanced and underbalanced
cases. The RDA then continues to output a risked probabilistic
economic model, essentially a business case comparing the
two drilling techniques.
With the SURE Process, you get solid data showing you risk-
based probabilities of success and alerting you to the most
critical execution factors that will impact each well. As a “reality
check”, we can provide comparative analysis of a prospect’s
potential viability based on analog wells. You can then see the
performance achieved by reservoirs like yours, eliminating
expensive learning curves.

Phase 1: Low Resolution Screening

100+ reservoirs Screening Use risk-based reservoir criteria
RST

Underbalanced Y N Conventional
Go / No Go techniques
candidate
INCREASING CERTAINTY

Phase 2: High-resolution analysis

In-depth Compile and validate core data,
analysis production data and analog well
data, build statistical distributions

10 good candidates Analog Database & Scientific Analysis Tools

Reservoir Damage Assessment
RDA

Risked NPV & EUR Comparative Analysis

Risked AFE Analysis

Underbalanced Y N Conventional
Go / No Go techniques
candidate
2-4 winners

Design, Engineering, Execution Post Well Analysis

2
 SURE Phase I: Quick Look
Reservoir Screening with RST™

To run the Reservoir Screening Tool (RST), we input basic

reservoir data - the drive mechanism, presence of fractures,
risk of borehole instability, reservoir heterogeneity, and
minimum/most likely/maximum values for porosity, water
saturation, reservoir thickness, pressure, clay content, etc.
This is data you probably have at your fingertips.

RST Process Methodology

In RST, we have incorporated a number of modules through
which each candidate reservoir is run. These modules are a
combination of classical formation damage theory coupled with
our proprietary experience of underbalanced analog reservoirs
around the world.
The RST employs a Monte Carlo simulation as an integral part
of the software. The possible values for each uncertain
reservoir variable are defined by a probability distribution.
Within the simulation, the software randomly picks possible
reservoir values from each of these probability distributions to
calculate an underbalanced risked suitability rating. At the end
of several thousand iterations, RST produces a distribution of
the scores for each reservoir. Risked Suitability scores range
from -100 (stick to conventional techniques) to +100 (drill UB
without hesitation), with 0 as the break-even point.

Critical Geographic
Cost
Input Data Experience, Degree
Factor
of Difficulty

Productivity Distribution for Candidacy

Geologic
Improvement X < = 46.6 X < = 55.69
Indices 5% 95%
Factor .20
Mean = 52.02716
.18
.16

EUR .14
Damageability
Improvement .12
Indices .10
Factor
.08
.06
.04
Treatability Exclusionary .02
Indices Factor 0
42 46 50 54 58

3
 Distribution for Reservoir Suitability
X <= - 38.13 X <= - 28.93 X <=34.3 X <=50.32 X <=69.72 X <=83.51
5% 95% 5% 95% 5% 95%

Asset 4 Asset 1 Asset 2 Asset 3

Mean= - 87.12 Mean= - 38.52 Mean= - 5 Mean= 78.88

-100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 100

Non-Candidate Poor Average Good Excellent

The probabilistic range of RST scores for four candidate reservoirs

Exclusionary Factors
We know that some reservoirs are simply too technically
challenging to be drilled underbalanced. So, RST accounts for
exclusionary factors. These may include, regardless of other
positive indicators, high reservoir pressure, borehole instability RST Sensitivity
or an extremely low pore pressure gradient.
Analysis
Correlations for Total
kh -0.682

Sensitivity Analysis Swi -0.639

Porosity -0.6

As well as statistical distributions of a reservoir’s suitability for kv

UBS Cost Multiplier
-0.516

-0.37
underbalanced drilling, the RST enables sensitivity analysis. Vsh 0.321

For each reservoir studied, tornado charts are provided that Conventional $/m -0.183

help you understand which input variables have the greatest h 0.016

Reservoir Pressure -0.004

correlation to the risked suitability score. The type (positive or -1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1.0

negative), and strength of correlation indicate the degree to Correlation Coefficients

which the range of each input variable is influencing the range

of outcome. The underbalanced score
of this reservoir is more
highly correlated to kh than
underbalanced systems
cost multiplier. Also, to a
lesser extent clay content
(Vsh) is correlated positively
with the score, signifying
the influence of this on
candidacy.

4
 Analogs for comparison 80

P95

RST produces an analog comparison graph, as illustrated to Mean

Dirty P5
the right. Here are five analog reservoirs, each with its RST 70 fractured
sandstone

score in terms of probabilities and means, plus the two Dirty,

homogenous
reservoirs under evaluation. The bar at the bottom shows the 60
sandstone

Productivity Improvement Factor (PIF) of overbalanced versus

RST™ Score
underbalanced “like drilled” wells. Based on analogs, the Vugular
50 carbonate
Candidate 1 well might expect a PIF of between 3 and 5.

40 Homogenous Sub-saturate
sandstone fractured
carbonate
Laminated,
heterogenous
RST Deliverables 30 Thin,
sandstone

intercrystalline
limestone
At the end of an RST screening study, you are presented with
a quick look summary report containing: 20
PIF 7-10 3-5 4-5 2-7.5 2-5
ANALOG ANALOG ANALOG ANALOG ANALOG CANDIDATE CANDIDATE
! The suitability rating of each candidate reservoir in the form 1 2 3 4 5 1 2

of statistical distributions
The RST Score Comparison
! A ranking of each candidate reservoir within all reservoirs Chart shows performance of
analog wells
examined
! A comparison of the candidate reservoirs to analog
reservoirs with proven underbalanced drilling success
! Discussion on factors influencing the scoring of candidates
! Sensitivity analysis
Based on this information, you may or may not want to
proceed with the in-depth analysis phase of the SURE
process.

Suitability RST™ Score Recommendation

Excellent 70 to 100 Drill Underbalanced

Drill Underbalanced or
Good 40 to 69
Proceed to SURE Phase II
Average 0 to 39 Proceed to SURE Phase II
Continue SURE Phase II
Poor -21 to 0
or Eliminate Candidate
Non-candidate -21 to -100 Eliminate Candidate

5
SURE Phase II:
In-depth analysis with RDA™

The goal of SURE Phase II is to give you a risk-based

approach to underbalanced systems payback for RST
screened reservoirs. Phase II predicts and compares formation
damage and productivity for overbalanced and underbalanced
drilled wells. The first step of the in-depth analysis is amassing
a wealth of geological, production and reservoir data, focusing
on detailed reservoir definition (lithofacies, x-ray diffraction,
cores, etc.) and the results of previous drilling and completion
techniques. Gathering this data is a joint effort between the
SURE Team and the client. After a formal QA/QC assessment,
robust data is then input to Weatherford’s proprietary Reservoir
Damage Assessment (RDA) software.

Reservoir Damage Assessment

Developed in cooperation with Hycal Energy Research
Laboratories, the Reservoir Damage Assessment software is a
uniquely rigorous model that predicts radial isotropic near
wellbore formation damage. Additionally RDA considers
damage effects on productivity due to factors such as areal
positioning and partial penetration. The software models 11
formation damage mechanisms for non-stimulated
underbalanced or overbalanced wells. We created this model
based on classical damage theory augmented with pseudo-
empirically calculated damage assessments mined from a
large database of core and laboratory data contained within
RDA.
The calculated permeability reduction due to each damage
mechanism is segregated as near and deep, along with an
effective radius of damage. The reduction in permeability due
to damage is converted into skin to feed a Babu & Odeh-based
analytical model within RDA. Alternatively, for more complex
reservoirs, the permeability reductions can be input into a
numerical simulator for a more rigorous productivity evaluation.
We then use the production forecasts produced as input to the
next stage of the Phase II SURE process - economic
modeling.

6
 Oil Based Fluid Potential for Hydrocarbon
Phase Trap Dependent on Value
of Sor,
Conduct Oil Based Phase
Wettability Non-Water Wet Trap Test if Oil Based Fluid
Use Contemplated

Water Wet Water Based Fluid

Possible Water Based Phase
Trap,
Conduct Water Based Phase
Oil Based Fluid Water Based Fluid
Trap Test

Mobile/Immobile APT > 1.0

Calculate APT
Hydrocarbon Phase
Index
Present?

APT > 1.0 6.11

YES NO

Potential for Hydrocarbon
Phase Trap Dependent on Value
of Sor,
Conduct Oil Based Phase
Trap Test if Oil Based Fluid
Use Contemplated
Possible Severe Hydrocarbon Possible Water Based Phase
Phase Trap Potential, Trap,
Conduct Basic/Incremental Conduct Water Based Phase
Hydrocarbon Phase Trap Test
Trap Test

Program flow to determine dry gas reservoir phase-trap potential - only one
of dozens of similar modules that comprise the RDA software.

RDA Probabilistic Simulation Distribution for

Clay Sensitive Damage
The RDA software is a probabilistic risked variable model that 6
X = < 0.16
5%
X < = 0.37
95%

informs your underbalanced implementation decisions. The 5

Mean = 0.257

“top line” of the model is your primary success measure - NPV. 4

The model’s next level is your contributing variables to NPV - 3

production forecast and drilling cost. Each of these has a 2

series of interrelated components. For example, ROP and BHA 1

failure rate directly impact your drilling costs. Continuing with 0

0.187 0.274 0.362 0.449

this methodology, we have built a highly detailed model

including all the variables contributing to the NPV of an RDA risks critical input
underbalanced or overbalanced well. We express the parameters that are
interrelationships between all the model variables as numerical related to damage such
algorithms and correlations. When we run RDA, a Monte Carlo as permeability, vugs and
simulation randomly picks values for each variable using that API fluid loss. Using
variable's input distribution. The simulation honors any Monte Carlo simulation
algorithms and correlations among input variables, applying all within RDA, a risked
equations and logic of the model. After thousands of iterations, assessment of each
a risk-based dataset of factors influencing ultimate project NPV damage mechanism is
is produced. determined. The
Ultimately, the point is not what is happening in this model, but example above shows a
that the software is incredibly detailed, complete and risked range of
technically rigorous. It compresses the expertise from multiple permeability reduction
disciplines into a single, comprehensive formation damage associated with a clay
evaluation tool, unique in the industry. damage scenario.

7
Relative Economics of Underbalanced
Drilling
Underbalanced drilling may look promising from a
technical standpoint, but what about cost? The SURE
process continues using the RDA software to make a
variety of comparisons between overbalanced and
underbalanced scenarios. The RDA models risked AFE
costs employing a probabilistic methodology. It includes
daily costs of course, but more important are the events
that differentiate underbalanced from overbalanced. The
AFE tool models underbalanced differentiators such as rig
crew efficiency, time to drill reservoir section, surface
equipment failure, and equipment logistics.
For each of these differentiators, the SURE team inputs a
cost and an associated probability. Say, for example,
there is a 40% chance of hole-sticking in the OB case,
and the time to rectify the situation could be 1 to 5 days.
This is the input distribution for the Monte Carlo
simulation, which builds an output probability distribution
of time wasted due to hole sticking.
The probabilistic approach taken by the risked AFE
analysis is the only realistic way of examining alternatives
- there is no way to predict what will happen with 100%
certainty. Note that the AFE also accounts for the ways in
which underbalanced may cost more than overbalanced.
For example, the additional amount of surface equipment
required for underbalanced increases the potential cost of
surface equipment failure.
The AFE tool also facilitates comparisons. Do you plan to
use a relatively untrained crew? We can model that by
increasing the number of BHA failures or hole-sticking
incidents, and compare that to the labor cost differential.
Concerned about the potential cost of surface equipment
failure? We can compare the cost of backing up
equipment to the cost of failure if there is no backup
available.

8
 The answers you need

We understand that you have many drivers to stick with Production Forecast
160

conventional overbalanced drilling practices - cost constraints, 140

risk averseness or lack of underbalanced systems familiarity.

GAS FLOW RATE (Mm3/day)

120

However, SURE removes one of these constraints: the need 100

80

for you to deploy valuable engineering resources to screen 60

underbalanced candidate reservoirs. The SURE process gives 40

you a rigorously calculated understanding of the size of the 20

-0

“underbalanced prize” and the risks associated with delivering YEARS

it.
Understandably, in an overview brochure such as this, we can
only touch on the capabilities of Weatherford's SURE Process
to select underbalanced drilling candidates. The route through
the SURE process varies from one study to the next, and there
are many possible ways to “slice and dice” the data to assist Distribution for Cost
P95 P5
1.0
you in underbalanced implementation decision making. OBD Cost
Mean = 11.62
0.8

Regardless, we have all of these tools rolled into one 0.6

UBD Cost
Mean = 14.36

comprehensive process, built around a totally unique formation 0.4

damage assessment analysis. As a result, you don't need to 0.2

become an expert to take advantage of the potential that 0

underbalanced offers. 10 11.75 13.5

Cost in MM USD
15.25 17

Underbalanced drilling isn't for every well. But with SURE, you
can find out just where underbalanced will work for you.
At the end of the day, the ultimate SURE equation is this:

UB vs. OB NPV Distribution

YOU + SURE = BETTER DECISIONS + HIGHER RETURNS

1.0

0.8 NPV-OB
Mean = .855

NPV -UB
0.6 Mean = 6.048

0.4

0.2

0
-2 0 2 4 6 8 10 12
Values in Millions

The RDA software

predicts formation damage
to provide you with a
risked production forecast
and cost analysis. RDA
then uses this in concert
with a risked economic
model showing, in this
case, the financial benefits
of drilling underbalanced.

9
 UNCERTAINTY
1. Screen candidate reservoirs using Reservoir Screening Tool

EVALUATION
COST
Conventional
1 WEEK

No Go / Go UBS Candidate
QUICK
LOOK

Technique

Continue Study
GATHERING
2 WEEKS

2. Gather and Validate Data from operator (detailed drilling fluid

DATA

description, detailed lab work). This phase also involves confirming

data validity and weight analogs, and building
statistical distributions.
INCREASING
QUALITY &
PROCESSING
2 WEEKS

ANALYSIS OF
DATA

DATA DECREASES
THE UNCERTAINTY
3. Apply Analysis Tools, the core of which is the Reservoir &
Damage Analysis (RDA™) Software. This phase also uses OF
ANALYSIS
1 WEEK

RESULTS
TOOLS

conventional decline curve analysis on production data to build

analogs at inter-well and field scales.

4. Present the Results - SURE applies risk analysis using Monte

Carlo simulation to drilling, completion, formation damage and
reservoir engineering parameters.
INTERPRET
1 WEEK

RESULTS

Conventional No Go / Go UBS Candidate

Technique

Design, Engineering & Job Execution

WEATHERFORD UNDERBALANCED SYSTEMS (UBS)

Helping you safely improve the productivity of your reservoirs’ assets at less

lifecycle cost by enhancing drilling and reservoir performance through a portfolio

of reservoir analysis techniques, fluid systems, well engineering personnel, and

the industry’s largest fleet of UBS surface and downhole equipment.

10
 Weatherford
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
Phone: 713-693-4000
Fax: 713-693-4300
Email: SURE@weatherford.com
www.weatherford.com

Weatherford products and services are subject to Weatherford’s standard terms and conditions. For
more information concerning the full line of Weatherford products and services, please contact your
authorized Weatherford representative. Unless noted otherwise, trademarks and service marks noted
herein are the property of Weatherford.

© 2004. Weatherford. All rights reserved. Brochure number UBS 690.00