Upstream Well Planning Guide

Well Planning Process Guide
April 2004
Proprietary
Master Table of Contents
Master Table of Contents
Section
1 Introduction
2 Overview of the Well Planning Process
3 Expectations (The "Top 20")
4 Detailed Outline of Planning Phases, Responsibilities,
Milestones, and Measures
5 Guidelines for Regional Processes
6 Measurements
7 Acronyms and Definitions
8 Examples and Best Practices
9 Process Health Review Checklist
Appendices
A Well Planning Process Examples
A-1 EMEPMI
A-2 Mobil North Sea Limited
A-3 U. S. Production
April 2004 Proprietary

Section
Upstream

Introduction
Proprietary
Introduction to the
Well Planning Process Guide 1
Table of Contents
1.1. Introduction ........................................................................................... 3
1.2. How to Use this Book ........................................................................... 4
1.2.1. Introduction and Instructions ...................................................................... 4
1.2.2. Overview .................................................................................................... 4
1.2.3. Well Planning Expectations (The “Top 20”) ................................................ 4
1.2.4. Detailed Phase Outlines............................................................................. 4
1.2.5. Guidelines for Regional Processes ............................................................ 4
1.2.6. Monthly Reporting ...................................................................................... 5
1.2.7. Definitions .................................................................................................. 5
1.2.8. Examples and Best Practices..................................................................... 5
1.2.9. Annual Process Health Review Checklist ................................................... 5
1.2.10. Appendix .................................................................................................... 5
1.3. Well Cost Reduction Teams ................................................................. 6
1.3.1. Phase I (September 2002 - July 2003) ....................................................... 6
1.3.2. Phase II (August 2003 - March 2004)......................................................... 6
April 2004 Proprietary Section 1 - 2

Introduction to the
1.1. INTRODUCTION
Well cost reduction is a theme that reverberates across our entire Upstream business.
Whether it is a deepwater exploration prospect in the Gulf of Mexico, a new
development installation in West Africa, or the 101st infill well in a 30 year-old field, the
emphasis on reducing drilling and completion costs has never been greater. As average
reserve size shrinks and well complexity increases, we must apply our best processes,
technology and resources to achieve improved cost performance if we are to sustain
profitability.
Well cost reduction has been the subject of numerous studies over many years.
Common characteristics of these studies are that they have tended to be area specific,
limited in duration and short on follow-up. In August 2002, an Upstream-wide Well Cost
Reduction (“WCR”) team was commissioned to examine well cost drivers, and to
explore factors that could improve global D&C cost performance. As part of its work
scope, the WCR team reviewed and categorized the recommendations of 15 recent
cost reduction studies. The leading category influencing costs centered on well
planning. What became evident was that competing business drivers often compromise
our ability to effectively plan and execute a “lowest cost” drilling program. The WCR
team went on to conclude that improved collaboration, alignment and stewardship of the
well planning process between a Drill Team and its Business Unit customer could result
in 15-25% lower D&C costs. Cost reduction beyond that level would require new
technology, or novel ways of applying existing technology.
The recommendations of the WCR team were endorsed by Corporate Management in
July 2003. As a consequence, a Phase II WCR team was formed to establish the
process and measures required to achieve a cost reduction target of 25%. This booklet
establishes our Upstream well planning expectations. It also outlines processes,
identifies responsibilities and details stewardship requirements. The governing objective
of this document is to improve collaboration between the Drill Team and the customer
within a timeframe that allows cost reduction opportunities and tradeoffs to be
considered. While some expectations may seem onerous, the local Drill Team and
Business Unit should consider themselves empowered to adjust the process to
accommodate local needs. For instance, it may not be necessary to conduct DWOP
(drill well on paper) exercises for every well in a 10-well program if those 10 wells are
similar. The emphasis should be to ensure the spirit of the well planning expectations
are met.
Senior Upstream Management has agreed that improved collaboration,
scheduling and decision-making are shared Upstream responsibilities in the well
planning process, and are essential if we are to achieve cost reduction targets. The
measures incorporated in this process are intended to highlight areas the WCR team
believes can significantly impact ultimate D&C costs. These measures will be
stewarded by each Drill Team and submitted as part of the monthly Field Drilling
Manager's Report process. Key well planning performance indicators will be
periodically reviewed with Senior Management as part of overall drilling stewardship
reporting.

Introduction to the
1.2. HOW TO USE THIS BOOK
1.2.1. Introduction and Instructions

This section provides background on WCR team activities and recommendations, and
specifies how the Well Planning Process Guide should be used.
1.2.2. Overview
This section gives an overview of the well planning process, and how it links to the
Drilling Stakeholder Alignment Process and the Upstream Project Management System
(UPMS). The major expectations and milestones in well planning are indicated with
respect to Gate Review timing.
1.2.3. Well Planning Expectations (The “Top 20”)

These are the well planning principles to which each Drill Team and Business Unit
should subscribe. Note that these are not presented as “requirements,” since needs
and circumstances vary around the globe. However, these expectations are considered
“Best Practices” by the WCR team based on personal interviews, observations, or
experience. Examples that illustrate the value of meeting these expectations are
provided in Section 8. The Drill Team and Business Unit together should make every
effort to achieve these expectations. The annual “Process Health” self assessment
checklist (Section 9) measures the degree to which these expectations are being met.
1.2.4. Detailed Phase Outlines

This section details the steps within planning phases and indicates functional
responsibilities. Milestones are also indicated. Drill Teams and Business Units
(referred to collectively as “multi-functional teams”) should use this as a starting
point to document their own region-specific well planning and approval process.
Guidelines for regional processes are provided in Section 5. It should become evident
that the Drill team alone is not solely responsible for well planning; the client
organization also shares that responsibility. The emphasis throughout these phase
outlines is to ensure that all groups with a vested interest in the outcome have early
input into the well plan, and cost reduction ideas are weighed and discussed before the
final design basis is selected.
1.2.5. Guidelines for Regional Processes

Additional guidance is provided in this section to aid Drill Teams and Business Units in
developing and documenting their own region specific process. The detailed phase
diagrams provide a good basis, but regional differences are to be expected. It is also
understood that most groups will be modifying existing processes to more closely match
the expectations in this planning process framework document.

Introduction to the
1.2.6. Monthly Reporting
Consensus opinion says that better planning leads to improved performance. Study
after study have concluded that more time to plan, better data sooner, i.e., an improved
process, can lead to lower drilling costs. Consequently, we need to measure the
effectiveness of our Upstream well planning process if we are serious about cost
reduction. The Drilling Organization via the Business Planning group already stewards
costs, deviations and savings as part of the monthly F&O reporting function. However,
process efficiencies are not a part of their current stewardship role. To monitor the well
planning process, a number of easily tracked measures will be required for all wells. A
well planning process worksheet documenting key planning events for each FRR’d well
will be required to accompany the monthly Field Drilling Manager report submitted to
Business Planning. Exceptions to this requirement will be extremely short duration
wells drilled in groups under one AFE (e.g., Western Canada). These wells can be
reported in groups that make sense at a local level. This information will be kept on a
database to evaluate trends for reporting purposes. Each Drill Team is also encouraged
to utilize its own data and work with the Client Business Unit to address areas needing
improvement as part of the annual process health check (see Section 9).
1.2.7. Definitions
As with any process that is stewarded, clear definitions are needed to ensure data
consistency. This section provides detail on various measures and terms. One term
that bears mentioning is the concept of “vision” days. This term is defined and
introduced as a benchmarking expectation for all wells.
1.2.8. Examples and Best Practices

This section provides a number of aids and examples demonstrating savings that can
be achieved by embracing a collaborative well planning process.
1.2.9. Annual Process Health Review Checklist

An efficient system always employs a follow-up/feedback step to ensure improvements
are incorporated into the process. It is expected that each Drill Team and Client
Organization will conduct an annual assessment of their relationship with respect to the
Well Planning Process Expectations using the checklist provided. This assessment will
be included in year-end reporting.
1.2.10. Appendix
This section provides process examples from global Drill Teams.

Introduction to the
1.3. WELL COST REDUCTION TEAMS
1.3.1. Phase I (September 2002 - July 2003)

Bill Kline, Team Lead URC Tom Cogswell EMDC
Dennis Petrie, Facilitator URC Pete Claypool EMEC
Dean Mutti/Mark Biegler URC Mike Effler EMEC
John Barnhill EMDC, Drilling Rodney Bane EMPC
Burt Baker EMPC
1.3.2. Phase II (August 2003 - March 2004)

John Barnhill, Team Lead EMDC, Drilling Gerald Lee EMEC
Bill Grieve EMDC, Drilling Rodney Bane EMPC
Bill Rondon EMDC, Drilling Neil Bockoven EMPC
Sig Joiner EMEC Tom Besly EMPC

Section
Upstream

Overview of the Well Planning Process
Proprietary
Overview of the Well Planning Process 2
Table of Contents
2.1. Overview ................................................................................................ 3
2.2. Linkage to the Current Stakeholder Alignment Process ................... 5
2.3. Linkage to the Upstream Project Management System..................... 6

2.1. OVERVIEW
The well planning process is separated into five phases.
Define Opportunity: This is the first phase of the process and is

Define intended to test the viability of the prospect before any detailed planning
Opportunity begins. Screening costs are requested by the Business Unit and
representatives from all interested disciplines come together to discuss
the prospect, well life cycle issues and the screening economics. Even
at this early stage, cost saving ideas are captured. A preliminary well
design and timeline are generated. A timeline ensures that schedule
drivers are understood, and any long lead regulatory or procurement
activities are initiated at the appropriate time. If screening economics
meet the local hurdle and there is sufficient Business Unit management
endorsement, the prospect moves to the next phase with the delivery of
a detailed well data package (or detailed CER) to the Drill Team.
Detailed Evaluation of Opportunity: This phase is intended to facilitate
Detailed a multi-functional collaborative evaluation of the prospect, resulting in a
Evaluation of minimum cost well design and an AFE quality cost estimate. Resources
Opportunity are assigned by function, and the multi-functional team (MFT) should
discussdiscusses the cost / benefits of various options, ultimately
ensuring that the full life cycle of the well has been considered. The final
well location is chosen. A detailed geologic assessment is performed,
and detailed well plans and formation evaluation plans are developed.
This is the phase with the most potential for cost saving. Once an AFE
estimate is generated, either an advanced commitment or full AFE is
approved to allow moving to the next phase for operational planning.
Operational Planning & Optimization: The focus in this phase is on
Operational
Operational performing the necessary detailed planning, procuring services and
Planning &
Planning & equipment and writing the detailed procedures necessary to execute the
Optimization
Optimization operation. Operations personnel are assigned and engaged to review
the plan and optimize steps for improved efficiency. For complex or high
cost wells, a drill well on paper (DWOP) exercise may be conducted
early in the phase to collect peer, expert and contractor input on the well
plan. Permitting, SH&E plans and risk assessments are conducted or
developed. The milestones at the end of this phase are an approved
AFE (if not secured in the previous phase) and a drilling program ready
for execution.

Execute Well Operations: This phase begins with rig mobilization or
spud, depending on the situation. The drilling program is stewarded
Execute
Execute and progress is reported by the Drill Team, but the need for close
Well
Well collaboration with the MFT still remains. Periodic updates and
Operations
Operations discussion of the latest developments are important, particularly if the
well design affords flexibility for further cost optimization dependant
upon the well results (eliminate casing strings, adjust pipe setting
points, etc.). The MFT will also discuss upcoming key decisions that
may be required, such as setting pipe, completion design, production
testing, P&A, etc.
Evaluation and Learning: This final phase is often given minimal
Evaluation
attention but is an important step in the process. The normal
Evaluation performance reconciliations are compiled and reported, but it is also
and
and
Learning important to review what was learned on the well program. Parameters
Learning
that influence the well plan are also reviewed to see what might be
gained for future application. Pre-drill predictions and actuals are
compared for pore pressure, shallow hazard assessments and
formation tops. The final well report is generated.

2.2. LINKAGE TO THE CURRENT STAKEHOLDER
ALIGNMENT PROCESS
Upstream Well Planning Process
Opportunity Minimum Cost Design Funding Spud FRR
E
E valua
valua tion
tion
an
an d
d
Le
Le arning
arning
EExe cutee
xe cut Evaluation & Learning
WWell
ell • Well operati ons / results
Operat
Op ions
erations • Performance compared
to key objectives
All Wells
Operat
O ional
perational • Production p erformance
Planning Well Operations
P lanning & & • Executi on compared to expectati ons
Optim
O izat ion
ptimizatio n • Stewardship
D etailed
Evaluation of Operational
Opportunity Planning
• Final permitting
Opportunity • Procurement
D
Def
efine
ine
Evaluation • Full AFE funding
O
Oppport
portunity
unity
• Peer reviews
• Mini mum cost
Viability of well design
Opportunity • AFE q uality cost
• Multi-functi onal estimate
review team
• Screening economics
• Clearly defined
obj ectives
Stakeholder Alignment
Exploration
(High Cost Wells)
Gate 0 Gate 1 Gate 2 Gate 3
Development
Gate 1 Mtg A Mtg B Gate 2 Mtg C
Production
Gate 1 Gate 2 Gate 3 Gate 4

2.3. LINKAGE TO THE UPSTREAM PROJECT
MANAGEMENT SYSTEM
Upstream Project Management System (UPMS)
Evaluation Definition Detailed Design Drilling

Planning for Development Construct. Oper.
(Partial List) Gate 1 Gate 2 Gate 3 Gate 4 Gate 5

“Class V Definition” “Class III
Definition”
1. Development Business
Planning
Update POS • Update POS •
POS • Class V Econ. • Class III Econ. •
Screening economics •
2. Commitment/
Appropriations
Adv. Funding • Adv. or Full Fund. • Full Funding •
Commit/Approp. Plan •
4. Technical Definition PDM (Inc. Drilling) • DBM • DBM Updates •
5. Execution
Identify Programs • Early PEP • PEP • Update PEP •
6. Cost/Schedule
Securing Estimates • Class V Est. • Class III Est. •
7. Procurement W BS Developed • Final Contract.

Strategy •
Upstream Well Planning Process
Define Detailed Operational Execute Evaluation

Operational Execute
Opportunity Evaluation of Planning & WellEvaluation and
Planning &
Optimization Well and Learning
Opportunity Optimization
Operations
Operations
Learning
Project Vs. Single Well Post Gate 3 (Full Funding)
Common Expectations • Individual wells follow planning process
• Multi-functional teams (MFT’s) engaged early to • Cost and scope reconciliation is to Class II or
evaluate variety of development options III (whichever applies)
• MFT members all contribute to PDM and later, DBM • Appropriate MOC in place to document scope
• Drilling requirements are clearly defined in PDM change
• The most economical life cycle approach is identified • Previous phases (Define Opportunity or
Detailed Evaluation) revisited if appropriate
• Recycle is common in early planning phases
for scope change
• Regional process recognizes and accommodates
• Emphasis on MFT involvement remains
changes and associated recycles
• Drilling planning continuity maintained through
transition from Planning Group to Drill Team

Section
Upstream

Expectations (The "Top 20")
Proprietary
Expectations (The "Top 20") 3
Table of Contents
3.1. Expectations (The "Top 20") ................................................................. 3

3.1. EXPECTATIONS (THE "TOP 20")
1 A region-specific planning and approval process for all wells is

documented, understood and jointly owned (and stewarded) by the Drill
Team and Business unit.
The suggested framework in Section 4 should be used as a starting point to
develop a region-specific process. Guidelines for regional processes are
provided in Section 5.
2 Within each region, the well planning and approval process identifies key
interfaces, particularly those responsible for decisions and/or approvals
at critical points in the process.
It is important that each Drill Team and Business Unit be clear on the
endorsements or approvals required as a drilling prospect advances through the
planning process. It is also expected that marginal prospects or substantial
cost/risk issues will be identified and elevated to an appropriate level of
management for endorsement prior to investing significant resources in
planning.
3 The EM Stakeholder Alignment process is followed for high cost wells.
Each Upstream Company has slightly different guidelines and cost hurdles.
Refer to the most recent Stakeholder Alignment Process memorandum issued
by Drilling Business Planning.
4 Drilling and completion plans are developed using a multi-functional team
(“MFT”) approach, with key stakeholders represented for the well life
cycle.
These stakeholders include Geoscience, Reservoir, Drilling, Subsurface, and
Facilities. Support groups such as Procurement and SH&E/Regulatory are also
consulted as needed to identify potential issues that could influence well cost
and/or timing.
5 The Business Unit uses a formal cost estimate request (“CER”) document
to initiate well screening.
The CER conveys critical information, key objectives, and assumptions
necessary to initiate preparation of preliminary well plans and screening
estimates. The same CER form may be used for both screening and AFE
quality estimates, depending on the level of detailed well planning data
supplied.
6 The Business Unit uses screening estimates to evaluate viability of
drilling prospects to avoid excessive cost estimate recycling while
various well planning scenarios are considered.
A MFT should review the options and assess the viability of the prospect
ensuring that all stakeholder needs are represented. AFE quality estimates
should not be requested until the optimum well plan, profile and objectives are
agreed and documented.

7 A project timeline that incorporates reasonable well planning time is
established and agreed by the Drill Team and Business Unit during
Opportunity Definition.
The Field Drilling Manager or his designee will be the ultimate judge in
assessing the reasonableness of the timeline, given the desired objectives. A
key deliverable at the conclusion of Opportunity Definition is a complete and
accurate well planning data package (supplemental or complete CER form).
8 A well design basis ("WDB") is agreed and documented, allowing
sufficient time to adequately plan and design well construction including
the procurement of long lead equipment without requiring spot
purchases.
The WDB document includes all reservoir and geologic information necessary
for well planning, and is prepared by the Business Unit (typically led by
Geoscience). It also incorporates completion objectives. As previously
indicated, this document may take the form of a detailed or supplemental CER.
Emphasis should be to clearly document well objectives and supply the Drill
Team with the necessary data to commence detailed well design and generate
an AFE quality cost estimate. The period between the receipt of this data
package and spud is stewarded to emphasize the importance of minimizing
rush efforts that limit procurement and planning time.
9 Drilling and completion complexity indices are determined by the drilling
and completion engineer(s) early in the planning process.
Complexity indices are used to help identify cost drivers and can be used by
Drilling Management to assign appropriate human resources. The drilling and
completion engineer(s) should engage appropriate Drilling Technical personnel
to discuss complexity drivers on wells with a DCI or WCI of 4.0 or greater.
10 Cost reduction ideas are identified during the “Opportunity Definition”
and “Detailed Evaluation” phases.
While not limited to these phases, the ability to influence and reduce costs is
highest during the early planning phases of a well. A minimum cost approach
that addresses the well’s life cycle needs should be considered the base case,
and factors that raise the cost above minimum are documented and agreed by
the MFT. These incremental costs should be highlighted in the funding
package (see Expectation 13).
11 Where appropriate, the complexity of the proposed well plan and well cost
tradeoffs are reviewed and agreed as part of a general Drill Well on Paper
(DWOP) session.
A DWOP on every well is not expected or practical. However, high exposure
wells, first wells in a series or wells of significant complexity should have a
DWOP session attended by all stakeholder groups, including key contractors if
available. Potential drilling hazards should be identified, evaluated, and follow-
up responsibilities assigned. The timing of the DWOP should allow for
adequate follow-up prior to spud.

12 The basis for developing cost estimates as well as the cost risk
sensitivities used in economic analyses are jointly understood and
supported by the Drill Team and Business Unit.
As a general rule, AFE estimates should be based on target curve performance
which fully considers empirical data and is effectively conditioned for
appropriate risks (NPT or other contingency). At a regional level, the Drilling
Operations Manager and Business Unit counterpart can agree to modify the
AFE basis, considering well complexity, level of uncertainty, partner issues, etc.
Apart from reducing costs, the budget management objective over a reporting
period is for AFE variance to be less than 10%. In modeling economic
sensitivities, it is important that cost risks be realistically portrayed.
13 Steps taken to reduce costs (planning savings) are documented as part of
the funding package.
Similarly, factors that drive well cost above the minimum cost considered
achievable are clearly highlighted in the funding package, as are key risks and
uncertainties. Here, “minimum cost” represents the lowest overall cost for the
well’s life cycle.
14 A Vision time curve (days vs. depth) is developed for each well.
This represents the aggregation of best (trouble-free) times for every activity in
the well construction process, taking into account ExxonMobil’s past
performance in the area as well as that of offset operators if known. The intent
of the Vision curve is to define the current technical limit in the area. Actual
days vs. Vision is a reported KPI. All wells should have vision, target and
budget curves. Stewardship to time is important, since reducing time usually
reduces cost. However, low day rate rigs may be less sensitive to time and
more so to other cost drivers. Reducing costs is the overall objective.
15 ExxonMobil D&C time and cost performance is regularly benchmarked
against that of offset operators to the extent that data is available.
We should make use of OBO partner information where we are entitled to the
data, and obtain offset operator information from public sources where possible
to benchmark local performance. Time data is generally much easier to
reconcile than cost data, so at a minimum, ExxonMobil's drilling and completion
time should be benchmarked against that of other operators to see what can be
learned.
16 The rig schedule is actively managed to minimize stops/starts.
The Business Unit should steward the degree to which 90-day “approved” and
additional 90-day “working” rig lines are maintained. An inventory of approved
wells allows for improved planning and reduced costs, while maintaining
continuity in rig crews contributes significantly to improved efficiency during
execution.
17 There is a system in place to ensure that the appropriate technology is
used and that learnings and best practices from across the organization
are incorporated in the well plan.
Local learnings are made available to the global organization via the EMDC
Drilling Best Practices network.

18 As part of follow-up, the D&C engineer(s) should be aware of the
production performance of their recently completed wells.
It is also incumbent on the Business Unit to inform the Drill Team of production
performance issues that may be related to the well design or completion
practices. Significant differences relative to expectation should be
collaboratively investigated to better understand the root cause and identify
improvements that can be applied to future wells.
19 Key well planning process measures are stewarded by Drill teams, and
provided to Drilling Business Planning as part of monthly reporting.
The format included in Section 6 is used to report planning process measures
for each well or group of wells if grouped by one AFE. Drilling Business
Planning uses the data to report well planning process efficiency to Senior
Management.
20 Each Drill Team and Business Unit will meet annually to assess their
working relationship and the degree to which these well planning
expectations are being met.
The Drill Team has the lead for organizing this meeting. The format in Section
9 should be followed. A copy of the completed assessment should be
forwarded to the Drilling Operations Manager and the Business Unit
management counterpart.

Section
Upstream

Detailed Outline of Planning Phases,
Responsibilities, Milestones, and
Measures
Proprietary
Responsibilities, Milestones, and Measures 4
Table of Contents
4.1. Define Opportunity................................................................................. 3
4.2. Detailed Evaluation of Opportunity....................................................... 4
4.3. Operational Planning & Optimization ................................................... 5
4.4. Execute Well Operations ....................................................................... 6
4.5. Evaluation and Learning........................................................................ 7

3
4.1. DEFINE OPPORTUNITY
This step of the process should effectively assess the viability of an opportunity with a
multi-functional review team. Viable opportunities will proceed to detailed evaluation.
Client Geology
Expectations
Procurement
Engineering
Engineering
Engineering
Subsurface
Operations
Regulatory
Reservoir
Facilities
Geology
Drilling
Critical Process Steps
• Initiate screening CER P L P P

• Assign multi-functional team to screen opportunity P L P P P P P
• Kick-off meeting to discuss opportunity and define key P L P P I I I
M objectives
• Develop well design / development options P L P P P P I

• Develop screening estimate(s) L P P P P P C C
• Run screening economics P L
• Hold MFT meeting to review screening economics P L P P P P I I
Cost Reduction Opportunities
• Identify cost drivers and risks (DCI and / or WCI) L P P P P P P P

M
• Identify ways to manage cost drivers L P P P P P P P
• Compile critical information including key objectives using P L P P P P
a control document (e.g., USP cost estimate request)
Key Deliverables
• Objectives clearly defined L

• Preliminary regional pore pressure screening / prediction L
(IP3)
• Preliminary regional shallow hazards identification L

• Overall project timeline L
• Well planning timeline L
• Screening economics L
• Preliminary well design L
• Detailed CER / well planning package L
M
Key Milestones
• Multi-functional endorsement of the opportunities sent

forward for detailed evaluation
• Business Unit Management supportive of screening results
P = Participate; L = Lead; I = Informed; C = Consult; M Measured

3
4.2. DETAILED EVALUATION OF OPPORTUNITY
This process step is intended to facilitate a multi-functional collaborative evaluation of

the opportunity, resulting in a minimum cost well design and budget quality cost
estimate. Viable opportunities will proceed to operational planning.
Client Geology
Procurement
Engineering
Engineering
Engineering
Subsurface
Operations
Regulatory
Reservoir
Facilities
Geology
Drilling
Expectations
M • Assign required resources by functional groups P L P P P P I
• Detailed well design(s) L P P P P C C C

• Detailed final geological assessment L P
• Detailed final reservoir assessment P L P

• Develop FE Plan, SI analysis, IP3 P L
• Perform detailed economics P/L L/P
• Approve well design basis and location P L P P P P I
• Documented collaborative cost / benefit analysis of options P L P P P P P C

and contingencies
• Evaluation and integration of appropriate technology into L P P P P P P P

the well design including proactive engagement of URC,
Drilling Technical and Central Engineering personnel.
M • Multi-functional team review (including operations L P P P P P P P

personnel) to test robustness of design
• Identify rig options, availability, cost reduction opportunities L P C P P

• Capture previous lessons learned in well design L
• Fit for purpose benchmarking L P P P P P P
Key Deliverables
• Minimum cost well design including documentation of L

design basis
• AFE quality cost estimate L

• Finalized well location L
• Site specific pore pressure estimate and shallow hazards L
analysis
• Initiate long lead permitting and procurement L

Key Milestones
• Final well location approved by multi-functional team L

• Advance commitment funding or AFE L

3
4.3. OPERATIONAL PLANNING & OPTIMIZATION
Detailed operational planning, final permitting and procurement, and full AFE funding
based on an operationally optimized, minimum cost well design.
Client Geology
Procurement
Engineering
Engineering
Engineering
Subsurface
Operations
Regulatory
Reservoir
Facilities
Geology
Drilling
Expectations
• Assignment of operations personnel, maintaining continuity L P P P P

from design phase across functions
• Validation and optimization of the well design by the L P P P P C C C

operations team
• Preparation of the drilling, completion, or testing program L P P P P C P P
• Procurement and mobilization of services L P P

• Secure regulatory permits L P/C P
• Multi-functional full funding review to include objectives, L/P P/L P P P P
geological overview, well design summary, planning,
savings, and key issues / risks with associated costs
• Formal risk assessment/hazard ID L P P P P P P/C P/C
M • Technical limit exercise (DWOP, Vision) with asset team L P P P P P P/C P/C
and contractor personnel.
• Identification of opportunities to optimize program if actual L P P P P P P/C P/C

conditions vary from design assumptions.
• Optimization of evaluation program P P/L L/P P P C
M • Procurement optimization P P P P L
Key Deliverables
• Approved drilling program with performance objectives L

• Well Evaluation Plan L
• Follow-up and closeout of issues identified in risk L
assessment and DWOP
Key Milestones
• Full funding of well operation
• Ready to commence operations

3
4.4. EXECUTE WELL OPERATIONS
Execution and stewardship of well operations.
Procurement
Engineering
Engineering
Engineering
Subsurface
Operations
Regulatory
Reservoir
Facilities
Geology
Geology
Drilling
Expectations
Client
• Perform operations in accordance with program L I P I I I I I
• Operational update meetings with multi-functional team to L P P C C I P C

report performance and optimize forward plan.
• Review and approve final well operation recommendations P L P P P I I P
at key decision points during execution(completion, testing,
TP&A or P&A)
• MFT to compare design assumptions to actual conditions L P P P P I I C

encountered, adjust well plan to capture savings
opportunities through MOC process.
Key Deliverables
• Performance stewardship documentation including cost L

M reconciliation, NPT and actual performance vs. Vision
• Well documentation communicated to asset team L
• Completed wells delivered to production L
Key Milestones
• Well operations complete, rig released from location

3
4.5. EVALUATION AND LEARNING
Timely review of well operations and results to evaluate performance compared to key
objectives and performance measures.
Procurement
Engineering
Engineering
Engineering
Subsurface
Operations
Regulatory
Reservoir
Facilities
Geology
Geology
Drilling
Expectations
Client
• Operations performance review against well plan and L P P C C

stated objectives (e.g., PWCR)
• Preparation of well operations summary and final well L P
report
• Evaluation of well planning process indicators L C C C C C
• Multi-functional meeting to identify key lessons learned L/P P P P/l P P

(both positive and negative) and recommendations for
future operations
• Contractor review focusing on contractor(s) impact on L P P P P P P
performance compared to original plan and lessons
learned
• System to ensure lessons learned are communicated to L
the team and global organization
Key Deliverables
• Pre / post review of pore pressure / fracture gradient L

M prediction reliability and site investigation learnings
• Final Well Report L
• Comparison of performance and objectives L
• Well planning process performance review L
Key Milestones
• Lessons learned captured and shared

Section
Upstream

Guidelines for Regional Processes
Proprietary
Guidelines for Regional Processes 5
Table of Contents
5.1. Guidelines for Regional Processes ...................................................... 3
5.2. Cost Reduction Brainstorming List ...................................................... 5

5.1. GUIDELINES FOR REGIONAL PROCESSES
Note: The term "region" is used throughout this guide to refer to the area served by the
local Business Unit and Drill Team. There is no intended link between the term as it is
used in this guide and any geographic region that some Upstream Companies may
define under the management of a particular vice president or other senior manager.
Each region currently has a well planning process that contains some of the process
steps and elements that are described in the well planning process framework. The
degree to which the existing process has been formally documented and understood
will impact the level of work required by a multi-functional team to revise their existing
process to meet the expectations of the well planning process framework. The regional
process should meet all the expectations contained in Section 3 unless a conscious
decision is made not to do so with the endorsement of local management (same level
that reviews the annual assessment). The Drilling Engineering Manager and Business
Unit counterpart of each region will be jointly responsible for leading a multi-functional
team in establishing the regional well planning process. The multi-functional team will
be responsible for ensuring that their organization is fully aligned with the regional
process once it is developed and fully mapped out.
1 Utilize the framework in Section 4 as a starting point.

The suggested framework in Section 4 outlines critical process steps, cost
reduction opportunities, key deliverables, and milestones. It also suggests which
groups should be involved for each step. All or some of these may be appropriate
for a particular region. Additions may also be in order to address unique issues not
covered in this framework. This is particularly true when the “region” is a new
development project. In this case, there will be several modifications necessary to
the framework to appropriately address project team responsibilities, particularly in
the early planning phases where recycles are common while the overall
development plan is still evolving. Remember that the emphasis is to ensure that all
groups with a vested interest in the outcome have early input into the well plan, and
cost reduction ideas are weighed and discussed before the final design basis is
selected.
2 Gatekeepers should be identified for the well planning phases.
The gatekeeper is a line management representative who stewards progress
through the phase and is in a position to assess whether the key deliverables and
milestones have been achieved. The gatekeeper determines whether it is
appropriate to move on to the next phase. If issues arise, the gatekeeper is
responsible for elevating them and getting management endorsement before
moving to the next phase. Depending on the phase, the gatekeeper could be in the
Business Unit or in Drilling.

3 Drill Teams and Business Units should consider establishing an informal
economic hurdle, below which wells are unlikely to be approved.
This can help avoid unnecessary recycling of cost estimate requests.
4 Cost estimating methodology, as well as the basis for modeling cost risk in
economic sensitivities should be agreed.
The desire for aggressive cost estimates must be balanced against the appetite
for AFE supplements. As indicated in Section 2, the funding basis can be
adjusted to fit the business need, but this should be documented and agreed.
5 The formal cost estimate request form (CER) should be tailored to the local
needs of the parties involved.
The CER conveys critical information, key objectives, and assumptions necessary
to initiate preparation of preliminary well plans and screening estimates. The
same CER form may be used for both screening and AFE quality estimates,
depending on the level of detailed well planning data supplied. In documenting
the regional process, the minimum data requirements for both screening and AFE
quality estimates should be defined. The CER form for an exploration well may
look completely different from one for an established production unit. As long as
the agreed necessary well planning data is provided, the format is only of local
importance. It is understood that a formal CER is rarely used in development
project planning. The mechanism used to capture/document well planning
information is the PDM and later the DBM, as opposed to a CER. Sample CER
forms are included in the Appendix.
6 The CER, when sent to Drilling, should be signed by a Business Unit
supervisor (first line or above).
Subsequent data supplements or revisions should be sent by the same
supervisor. A common Drilling complaint in times past has been that well
planning data was either not received in a timely fashion, dribbled in little by little,
or changed frequently after detailed design had begun. Data quality and
timeliness does matter to the well planning process. The supervisor responsible
for transmitting well data via a CER or revised CER should be sensitive to this
need.
7 Typical well planning time requirements should be conveyed by the Drill
Team and understood by the Business Unit.
Adequate well planning time often competes with other business drivers like the
need for volumes, competitive situations, etc. However, the Business Unit should
have a good idea of the time needed to plan a typical well (following this planning
guide) so that business plans and rig schedules can be managed accordingly.
8 The rig schedule should be actively managed in a collaborative manner.
The 90/180-day guideline in Section 3, Expectation 16, may need adjustment
based on local activity. Emphasis should still be to minimize stops and starts.
Consistent rig lines pay dividends in cost and efficiency savings.

9 Process measures in addition to those required in Section 6 should be
considered locally where they can help foster the well planning process.
The regional Drill Team and Business Unit are empowered to adopt any
additional process measures deemed useful. For instance, a creative way of
monitoring rig schedule changes or the approved well backlog might be beneficial
in some areas. Reporting of these additional measures to Business Planning is
optional. Regional teams also have the flexibility to report, as a group, short
duration wells budgeted under a single AFE (e.g., Western Canada pad
programs). These types of wells should be grouped and reported in a fashion that
satisfies the spirit of the well planning expectations.
10 The multi-functional team should use the list of questions that follows
(Section 5.2) as a starting point for brainstorming cost reduction
opportunities in the early phases of planning.
A regional list of thought-provoking questions should be developed to help identify
opportunities for cost reduction.
5.2. COST REDUCTION BRAINSTORMING LIST
This is not an all-inclusive list. The Drill Team and Business Unit should use this as a
starting point in brainstorming ideas to achieve the best economic strategy and well
plan during the Detailed Evaluation of Opportunity phase.
1. Is the optimum rig available for this well?
2. Is it more economical to package this well with others and perform as a program?
3. What is the optimum tubing size that balances the incremental hole size cost with
production rate?
4. Is the surface location positioned to minimize site costs?
5. What is the combination of site location and directional well profile that yields the
lowest overall cost?
6. If this is a “straight hole,” how tightly does deviation need to be controlled? (faster
ROP vs. deviation control)
7. Have the geologic target (boxes) been sized to balance reserve capture with
directional drilling costs?
8. Has the anticipated full well life cycle been considered in the well design?
9. Can an existing wellbore be used, from which to sidetrack?
10. Has future well work or recompletion potential been considered in the design?
11. If this is an exploration well, has a slim hole approach been considered?
12. Have the options that drive the well cost above minimum been valued?
(cost/benefit)
13. Are there completion hardware or production measurement options that would add
future value?

14. Is sand control needed?
15. Have all completion options (techniques) been considered?
16. Have all drilling fluid options been considered?
17. Can part of the work be done with a smaller rig? (e.g., workover rig)
18. Has competitor performance data in the area been reviewed?
19. Are there any cheaper procurement alternatives? Would more time reduce the
costs?
20. Has all available geologic and reservoir data been obtained, validated, and used in
the design?
21. Is there anything different (now) about the field or objectives from prior experience?
(depleted zones, shallow charged sands, etc)
22. Have all groups (Reservoir, Subsurface, Facilities, etc.) with a vested interest had a
chance for input on the well design / development plan?
23. Has the Drilling Technical team been consulted on issues driving well complexity?
24. Is this the best time of year to drill this well? (hurricanes, rainy season, other
logistics challenges)
25. Have requested design options that drive well cost significantly above minimum
been endorsed by Senior Management (prior to the formal funding request)?
26. Has a fit-for-purpose formation evaluation program been reviewed?

Section
Upstream

Measurements
Proprietary
Measurements 6
Table of Contents
6.1. Well Planning Process Measures Form ............................................... 3
6.2. Define Opportunity................................................................................. 4
6.2.1. Date of Kick-Off Meeting ............................................................................ 4
6.2.2. Date the Well Planning Data Package is Received by Drilling .................... 4
6.2.3. Assessment of Data Quality ....................................................................... 4
6.3. Detailed Evaluation of Opportunity....................................................... 5
6.3.1. Names of Assigned Multi-Functional Contacts ........................................... 5
6.3.2. Date of Multi-Functional Meeting to Discuss Lowest Cost Approach .......... 5
6.4. Operational Planning and Optimization ............................................... 5
6.4.1. Incremental Costs for Materials and Services (Including Rig)..................... 5
6.4.2. Date of DWOP Meeting.............................................................................. 6
6.5. Execute Well Operations ....................................................................... 6
6.5.1. Actual Days vs. Vision Days to FRR........................................................... 6
6.6. Evaluation and Learning........................................................................ 6
6.6.1. DCI and WCI (Pre-Drill vs. Post-Drill) ......................................................... 6

Measurements 6
6.1. WELL PLANNING PROCESS MEASURES FORM
Well Country
Drill Team FDM
Spud Date FRR Date
Date of Client Kickoff Meeting
Date well planning package data received by Drilling

Days considered necessary for optimum planning
Assessment of data package Satisfactory Cost Impact

If cost impact, indicate driver(s) Timeliness Accuracy or Uncertainty Missing Data
Provide details:
Key Data/Design Factor Predicted Actual Cost $K
$
$
$
$
Assignment of functional contacts and dates:
Date Function Assigned Name of Last Person No. Changes
Drilling/Completion Engineer(s)
Drilling Operations Superintendent
Lead Drilling Rig Supervisors
Client Geologist
Operations Geology
Reservoir Engineer
Subsurface Engineer
Facilities Engineer
Procurement Contact
SH&E Contact
Date of multi-functional team meeting to address lowest cost approach
Incremental (non-optimum) costs of materials and services (including rig)
Date of DWOP Meeting Date Final AFE approved
Actual Days to FRR Date drilling program approved
Vision Days to FRR P&B, Class III, or initial screening est. $ M, days
Final AFE $ M, days
Pre-Drill Post-Drill
DCI
WCI (If applicable)
Form to be submitted for every well following FRR with the monthly FDM Report.

Measurements 6
6.2. DEFINE OPPORTUNITY
6.2.1. Date of Kick-Off Meeting

Holding a kick-off meeting with the Client and functional stakeholder groups is an
important first step in identifying well objectives and early design considerations. The
Client Organization has the responsibility to invite the other functional groups through
pre-established group contacts and to facilitate their participation. Recording the date
of the meeting reinforces the need for it to occur, and when compared to spud date, can
indicate if the process is being initiated early enough to allow adequate time for
planning.
6.2.2. Date the Well Planning Data Package is Received by

Drilling
A key deliverable at the end of this phase is a detailed package of geologic and
reservoir data necessary to move to the next phase of well planning and design. This
data includes well objectives, surface and target location, restrictions, target size,
lithology, PP/FG information, completion needs and offset information. Some Business
Units convey this information in the form of a detailed well cost estimate request
(“CER”). Others may refer to it as the basis of design document or geologic data
package. Whatever the designation, this requirement is not satisfied until all information
needed for well planning is conveyed to Drilling. Intermittent piece-mealing of data is
discouraged, and any subsequent data revision should be conveyed by the same
signatory that conveyed the original package. Receiving well data specific to the
planned location with sufficient time to plan has been a recurring theme in many recent
well cost studies. Consequently, comparing the spud date to the date the well data was
received will be monitored as a means of reviewing system effectiveness.
6.2.3. Assessment of Data Quality

Equally important to the timely receipt of the well planning data package is the quality
and completeness of the information. This has a direct impact on the well design, and
to the extent that timeliness, data accuracy, or missing data results in a less than
optimum design, the incremental cost of that impact should be noted. The Drill Team
assesses the overall data package as either “Satisfactory” or as having a “Cost Impact."
If “Cost Impact” is chosen, the drivers that contributed to the incremental cost are
indicated. These drivers are Timeliness, Accuracy or Uncertainty, and/or Missing Data.
Key cost drivers are then provided along with predicted vs. actual values, if applicable,
and the incremental cost associated. These are chosen from a menu of items such as
pore pressure in the zone of interest, depth of abnormal pressure, etc.

Measurements 6
6.3. DETAILED EVALUATION OF OPPORTUNITY
6.3.1. Names of Assigned Multi-Functional Contacts

Recording the names (and effective dates) of the assigned functional group contacts
including Procurement and SH&E requires that each group supervisor acknowledge a
degree of ownership in the project and that responsibilities be assigned. This is the first
step toward forming an asset team that can then meet to discuss the preliminary well
plan, brainstorm cost tradeoffs, and ensure all functional interests are included in the
final plan. Since the Drill Team is usually not co-located with the Client Organization, it
is important to facilitate a team spirit to the degree possible. Early assignment of group
contacts helps to promote communication. Of equal importance is the assignment of
operations personnel as planning progresses to ensure the plan is optimized from an
operations perspective. It is recognized that personnel will change from time to time. To
help track this frequency, the number of changes within each function is recorded. In
the event a change occurs, the date the initial person was assigned is captured, but
only the name of the last person assigned is recorded. Clearly, fewer changes improve
continuity, which can have a direct impact on results.
6.3.2. Date of Multi-Functional Meeting to Discuss Lowest

Cost Approach
A vital element in the well planning process is the identification of the minimum cost
approach. However, this often requires compromise or tradeoff of cost vs. benefits.
Required hole size at total depth, tubing size or formation evaluation are just a few
examples of this. It is important for the collective group to discuss these types of issues
and agree on the design basis as well as the justification for costs above the minimum.
Recording the date of this meeting reinforces its importance.
6.4. OPERATIONAL PLANNING AND OPTIMIZATION
6.4.1. Incremental Costs for Materials and Services

(Including Rig)
Procurement of goods and services is an important factor in the well cost equation.
Lead-time directly influences the efficiency of the procurement process, and when time
is insufficient, special/spot purchases and rush deliveries are required to meet
deadlines. Likewise, the use of a less than optimum rig to meet schedule requirements
or other business needs adds an incremental cost. All of these schedule-driven costs
may not be obvious in the final reconciliation, but need to be highlighted in order for
management to weigh cost vs. benefit. The appropriate business decision may still be
to spend the money. However, these incremental costs are avoidable, and should be
tracked to help identify process deficiencies.

Measurements 6
6.4.2. Date of DWOP Meeting
For complex or high-cost wells, a "Drill Well on Paper" exercise is important to ensure
all pertinent factors and best practices are considered in the well design, and that
operational issues have been considered. Stakeholder representatives, technical
experts, peers, operational personnel, and contractors can all contribute to achieve the
desired outcome. It is also important to conduct this session while there is time to
implement recommendations made during the meeting. By recording the date of the
DWOP and documenting a follow-up list with assigned responsibilities, its importance is
emphasized, and the time between it and spud can be measured to assess the
effectiveness of the process. As previously noted, a DWOP meeting may not be
required for every well.
6.5. EXECUTE WELL OPERATIONS
6.5.1. Actual Days vs. Vision Days to FRR

This is important for two reasons. One, a vision curve defines the limit of what is the
absolute best time theoretically possible. Two, it challenges and focuses the collective
Drill Team, not only to improve design aspects, but also execution efficiency. The
benefit of stewarding to true “Vision” is that it provides a better indication of our drilling
performance relative to absolute best. Detailed reconciliation of actual performance to
the true Vision will highlight opportunities for improvement as well as best practices that
can be shared with the global organization.
6.6. EVALUATION AND LEARNING
6.6.1. DCI and WCI (Pre-Drill vs. Post-Drill)

Complexity drives drilling and completion costs. Our ability to assess complexity is an
important aspect of preliminary well planning, and it should influence the resources
allocated to a project. Comparing the pre-drill case to the post-drill case can help
identify deficiencies in planning assumptions, or, highlight the degree of change
between what was expected and what was encountered. Both issues affect well costs.

Section
Upstream

Acronyms and Definitions
Proprietary
Acronyms and Definitions 7
Table of Contents
7.1. Acronyms................................................................................................ 3
7.2. Definitions............................................................................................... 4
7.3. UPMS D&C Cost Estimate Definitions .................................................. 7

7.1. ACRONYMS
AFE Authority for expenditure

CER Cost estimate request
DBM Design basis memorandum (see well design basis definition)
DCI Drilling complexity index
DWOP Drill well on paper
EM ExxonMobil
EMWI ExxonMobil working interest
F&O Financial & Operating
FE Formation evaluation
FRR Final report from rig
IP3 Integrated pore pressure prediction
KPI Key performance indicator
MFT Multi-functional team
MOC Management of Change
OBO Operated by others
PDM Project Development Memorandum
PEP Project Execution Plan
POS Project Objectives and Strategy Statement
PWCR Preliminary well cost reconciliation
SI Site investigation (shallow hazards)
UPMS Upstream Project Management System
USP ExxonMobil Production Company (US)
WCI Wellwork complexity index
WCR Well cost reduction
WBS Work Breakdown Structure
WDB Well design basis

7.2. DEFINITIONS
Budget (AFE) The funding basis for the well. This includes an appropriate
allowance for geologic uncertainty, complexity, and NPT that may be
encountered during the execution phase.
Cost Estimate A formal document provided by the client organization to Drilling,
Request requesting either a screening or AFE quality cost estimate for a
drilling prospect. This document includes the necessary data
required by Drilling to develop a preliminary well design for the
purposes of cost estimating. The quality of the cost estimate is
directly proportional to the quality of data provided by the client. The
CER should be conveyed from the client to the Drill Team at a level of
management that has been predetermined to have the appropriate
approval authority. Subsequent additions or changes should follow
this same guideline to ensure that casual changes to data are not
made that could have significant design or cost impact. A detailed
CER (AFE estimate), a well design basis or a detailed well data
package are all terms used to identify the information needed for
detailed well design.
Drilling The relative measure of complexity for a particular well design. This
Complexity index is used to allocate resources and identify well design
Index parameters of particular challenge that require specialized expertise
(e.g., consulting with the appropriate expert in Drilling Technical). It is
also used to compensate for well mix in comparing drilling
performance year to year.
DWOP “Drill Well on Paper” – This is a review of the proposed well plan
performed in a group setting that includes stakeholders, operations
personnel, peers, technical experts and major contractors if available.
This meeting is sometimes called a technical limit exercise or peer
review, but regardless of the name, the intent is to walk through the
preliminary well plan and discuss challenges, ideas and alternatives.
A DWOP is not a risk assessment, although it can be used to identify
risks that could be included in a formal risk assessment. The
objective is to leverage the collective experience and ideas in the
room to develop the best and most efficient well plan possible. This
also infers the exercise be conducted early enough in the planning
phase to be able to incorporate the suggestions that result from the
DWOP meeting.
Key A measure that demonstrates the efficiency of a process or the
Performance degree to which a goal is met. KPI’s are best utilized by comparing
Indicator performance from one period to the next, and over time, give an
indication of program success.

Regional “Regional” in this guide refers to the well planning process agreed
Processes between a local Business Unit and Drill Team. The term is used in a
general sense to distinguish local adaptations of the global framework
created by various Business Units and Drill Teams. Each Business
Unit and Drill Team should have their own documented regional
(locally adapted) process.
Risk Where well planning is concerned, this is a collaborative (multi-

Assessment / functional) review of drilling hazards. Likelihood, consequences and
Hazard ID mitigation factors are identified along with cost impact. To be
effective, this exercise must be conducted in a group setting, with all
vested interests represented. In additional to this exercise, the Drill
Team may conduct a scenario-based risk assessment with the major
contractors to address operational risks.
Target A realistically achievable days vs. depth curve for a well plan, which
employs aggressive performance assumptions and a relatively low
amount of NPT. Depending on the offset data available, a target
curve might represent the best single (actual) well performance to
date, with adjustments made for other variables. These adjustments
might include learning curve affects, first well to be drilled in several
years with now depleted zones, etc. The development of a target
curve requires engineering judgment of what is realistically
achievable if things go well. As opposed to a Vision curve, which is
rarely achieved, a target curve is achievable.
Vision The aggregation of best times for each operation on a drill well that
represents the minimum cumulative time that is theoretically possible
in the area. A Vision curve is most meaningful in a development area
with substantial offset / historical data. Conversely, a vision curve for
an exploration prospect relies more on assumption and interpretation,
since the closest offset may be miles away. In any case, the Vision
days vs. depth curve sets the benchmark for the technical limit as it
incorporates demonstrated performance with readily available
technology. Stewardship to the vision curve gives an indication of
performance relative to theoretical best. The vision curve for an
established area should be updated any time a particular phase or
operation is improved. Reality dictates that Vision performance will
rarely be met, since it is rare that a well will be drilled with no NPT.
Well Design The document that defines well objectives and provides all necessary
Basis information needed for well design. This includes target locations and
sizes, surface locations, formation pressure and fracture gradient
information, drilling hazards and minimum hole size. It also includes
testing or completion requirements if applicable. In many areas, the
detailed CER serves as the WDB document.
The well design basis typically refers to an individual well, whereas a
design basis memorandum (“DBM”) is usually associated with a
development project containing several wells. The DBM is a key

deliverable in the planning phase of projects (reference Upstream
Project Management System Guide). It documents information
necessary for Class III technical definition, which encompasses not
only drilling, but all aspects of development project design.
Wellwork Similar to the DCI, this measures the relative complexity of the
Complexity completion design, and is used to highlight areas where a
Index completions' expert should be consulted.

7.3. UPMS D&C COST ESTIMATE DEFINITIONS
Upstream Processes
Upstream Project Management System
Planning for Development Framework
Opportunity
OpportunityCapture
Capture Explore Select Concept
Explore Appraise Select Prelim Engineering
Concept Prelim Engineering Detailed
Detailed Design Implement Produce
Design Implement
Acquire Discover Gate 1 Gate 2 Gate 3 Gate 4 Gate 5
Estimates: Screening Class V Class III Full Funding Actual
Drilling Function Lead

New Projects Team Drill Team New Projects Team Field Drill Team
Areas of Overlap
For Exploration Well(s) or Full / Phased Field Development

Item always included Screening Estimate Class V Estimate Class III Estimate Full Funding Estimate
MIRU & Rig Upgrade • Update of Screening • Update of Class V • Update of Class III Estimate
Costs Estimate Estimate
Rig & Above Rig $/Day
D&C Days
NPT Basis
Start up/Planning costs
Program Risks
Differences
Planning Basis • Off set data/analogs • PDM design and ePEP • DBM design and PEP • Detailed Design and schedule
schedule schedule • Actual contracts
• CAPEX profile provided • Planned bottomhole • Planned bottomhole location for
location for each well each well
• CAPEX profile provided • CAPEX profile provided
Uncertainty • +40%/-30% • + 25% • + 15 - 20% • + 10%

Section
Upstream

Examples and Best Practices
Proprietary
Examples and Best Practices 8
Table of Contents
8.1. Case Histories ........................................................................................ 3
8.1.1. Bintang Development Program - Malaysia ................................................. 3
8.1.2. Tartaruga Deepwater Exploration Prospect - Brazil.................................... 3
8.1.3. Callicore & Heliconius Exploration Prospects - Trinidad ............................. 3
8.1.4. Hibernia OPA-1 ERD well - Eastern Canada.............................................. 3
8.1.5. Chad Completions - Africa ......................................................................... 3
8.2. Bintang - A Multi-Well Field Development............................................ 4
8.3. Tartagura - A Deepwater Exploration Prospect ................................... 5
8.4. Callicore & Heliconius - Deepwater Exploration.................................. 6
8.5. Hibernia OPA1 - World Class Performance.......................................... 7
8.6. Chad Completions - Accelerating Learning ......................................... 8

8.1. CASE HISTORIES
8.1.1. Bintang Development Program - Malaysia

This 10-well gas development drilling program experienced a 16% project savings
through early multi-functional team collaboration, early definition and agreement on
objectives and a batch drilling approach. The cost savings benefits of batch operations
in this case outweighed the value of the deferred production.
8.1.2. Tartaruga Deepwater Exploration Prospect - Brazil

Early initiation of well planning (12 months) using a multi-functional team resulted in a
flexible well design utilizing IP3 and a slim hole approach. Procurement was optimized
despite a limited rig market, and partners were willing to participate with a more
palatable well cost. Results surpassed expectations with actual costs 40% below AFE
and only 2.3% NPT.
8.1.3. Callicore & Heliconius Exploration Prospects -

Trinidad
Close multi-functional team collaboration and planning led to an acceptable
compromise with the Regulator in satisfying an exploration license commitment while
minimizing costs. Pressure data from the previous campaign along with IP3 allowed the
wells to be placed down-structure in a position to minimize risk and cost while still
assessing prospect viability and satisfying lease commitments. In doing so, at least
$7.0M was saved.
8.1.4. Hibernia OPA-1 ERD well - Eastern Canada

Extensive planning and close collaboration of the multi-functional team resulted in a
record-setting ERD well being drilled to 31,000’ with only 6% NPT. Adequate planning
time, frequent inter-group communication and attention to detail in the application of
leading edge technology led to an ultimate saving of $90M when compared to the
subsea satellite alternative.
8.1.5. Chad Completions - Africa

Learning curve benefits of a continuous program are evident in Chad. In fact,
expectations have been exceeded in both drilling efficiency and completion
effectiveness. A multi-functional team incorporating EM Upstream’s collective technical
expertise is now delivering completions with skins far better than expected. This
improved productivity may ultimately reduce the number of wells required in this 250
well development project.

8.2. BINTANG - A MULTI-WELL FIELD DEVELOPMENT
Batch drilling leads to substantial savings
Project Objectives
• Develop a commercial gas resource with ten wells and two satellite platforms
• Optimize reservoir management by employing large bore single and dual completions with
multiple selectivity
Challenges
• Project timing accelerated by one year due to government contract requirement for first gas
by 1Q03
• Rig operations compressed, requiring significant simultaneous operations
• Shallow gas issues at platform locations; complex completion designs that were new to
EMEPMI
Planning & Teamwork

• Multiple, multifunctional meetings held early in process to balance needs and risks
• Team members identified 6 months prior to spud
• Adequate planning time resulted in well designs and execution strategies being well defined
• Detailed batch drilling analysis performed showing savings vs. production delays and well
dependency/sequencing impact
Execution & Results

• Met the 1Q03 first gas target; in fact, exceeded production build-up target by 32%
• Ten wells drilled for $4.4M below AFE with only 4% NPT – lowest ever for EMEPMI
• Excellent batch drilling results - $4.3M savings plus able to optimize completion zone
strategy
• Total project savings of $7.2M (16%)
Learnings
• Early personnel resource definition and adequate planning time is critical for project success
• Project success also depends on an increased level of effective, early communication
between all parties, including contractors
• Early finalization of project requirements and data input is needed to minimize last minute
scope changes and inefficiency
• It is important for the multifunctional team members to be able to comprehend the overall
project scope, and then prioritize/rationalize their individual requirements to achieve an
optimized solution for the Company
• Batch drilling proved to not only provide cost saving opportunities that outweighed
production delays, it also allowed additional flexibility for completion optimization and
reserves capture.

8.3. TARTAGURA - A DEEPWATER EXPLORATION
PROSPECT
Given adequate planning time, a collaborative
approach can deliver impressive cost-saving results
Project Objectives
• Drill a deepwater exploration well offshore Brazil during the initial lease term
• Attract partners to leverage costs while evaluating the prospect to determine whether or not
to enter into a second lease term and 2 well commitment
Challenges
• Heavily regulated area – permits required 9-12 months
• Only one rig in the area - required upgrades; cost to import a different rig prohibitive (>$10M)
• Well would set a new ExxonMobil operated water depth record – 7959 ft.
• Nearest offset 20 miles away; pore pressure not calibrated
Planning & Teamwork
• Initiated well planning and permitting 12 months in advance of spud
• Multifunctional team focused on project objectives and opportunities for optimization with
frequent interaction on follow-up issues
• Performed a thorough shallow hazards assessment and applied the IP3 process to better
assess pore pressure
• Developed a slim well design with flexibility to deal with pore pressure uncertainty
• Deployed operations personnel 2 months prior to spud to actively participate in risk
assessments and planning
Execution & Results
• Negotiated an option on the in-country rig including upgrades
• Attracted two partners to participate, given the attractive well cost using the in-country rig
• Flexible well design accommodated pore pressure gradient – eliminated the 9-5/8” string
• Drilled the well for $11.4M below AFE of $28.8M, including only 2.3% NPT
• Prospect was fully evaluated
Learnings
• Maximum value can be created during the planning phases of a well by a multifunctional
team that has an understanding of each other’s objectives and sensitivities
• Benefits of adequate planning time
• Developed flexible well design through a collaborative engineering and geoscience
approach
• Negotiated optimum rig solution including upgrades avoiding costly mobilization
• Secured optimal third party services without excessive importation

8.4. CALLICORE & HELICONIUS - DEEPWATER
EXPLORATION
Planning time, close collaboration and accurate
data made the difference
Project Objectives
• Drill the third and fourth wells of a seven well commitment, offshore Trinidad
• Negotiate with the Ministry of Energy (MOE) to waive the depth commitment, and only drill
commercially prospective lithology
• Negotiate a mutually satisfactory conclusion to the exploration commitment with the MOE
Challenges
• Significant abnormal pressure and wellbore stability problems prevented initial wells from
reaching commitment depth (3000 ft± short of TD)
• No commercial hydrocarbons identified in the abnormal pressure section
• Deepwater location subject to eddy currents – caused significant downtime on previous
campaign
Planning & Teamwork
• Multifunctional team established credibility early with the MOE during the permitting process
which carried on through drilling
• Significant collaborative technical work was done to optimize the drilling strategy including
IP3, shallow hazards assessment and satellite imaging of eddy currents
• Well locations were intentionally positioned down-structure to avoid worst pore pressure
column effects, thereby eliminating a casing string while still remaining prospective
Execution & Results
• Negotiated a shallower commitment depth with the MOE prior to submitting permits to drill
• Secured further approval form the MOE to terminate wells at the transition to abnormal
pressure with evidence that all prospective zones had been evaluated ($4.0M± savings)
• Well positioning enabled pushing 20” casing deeper, eliminating the need for 16” casing
($3.0M savings)
• Eddy currents were closely monitored, and large dynamically positioned work boats were
used to minimize downtime from currents and swells
Learnings
• The negotiations with the MOE were successful because the multifunctional team addressed
overall prospect viability (geological setting and hydrocarbon potential as well as drilling
cost) rather than focusing too heavily on one aspect or the other. An element to this success
was adequate time to evaluate and plan.
• Calibration of the pore pressure regime during the first campaign allowed very accurate pore
pressure predictions to be made for these two wells. This was critical for maintaining
adequate drilling margins while eliminating the 16” casing sting and reducing overall well
costs.

8.5. HIBERNIA OPA1 - WORLD CLASS PERFORMANCE
A deliberate, well planned technical approach

emphasizing teamwork and attention to detail
delivered remarkable results
Project Objectives
• Develop significant A-Block reserves with a 31,000 ft extended reach well from the platform
rather than a much more expensive subsea option ($90M incremental cost)
• Acquire sufficient open hole data to confirm A-Block reserve potential and establish
connectivity with previously drilled up-dip gas injector
Challenges
• Contemplated well design would set a new world record for extended reach drilling
• High production rates (21 KBD) required large bore completions, special metalurgy and
offshore Canada’s deepest downhole gauge monitoring system installed to date
• Weak, unstable shales along the extended intermediate section as well as high circulating
pressures and surge/swab issues
Planning & Teamwork
• Planning was initiated well in advance of spud – approximately 12 months prior.
• Detailed basis of design documents were prepared to ensure alignment on principle project
objectives and formation evaluation strategy
• Multifunctional team conducted frequent technical work sessions throughout the planning
phases
• Significant energy was applied to identifying technical issues having to do with all aspects of
drilling and completion; action plans were developed and resolutions were documented
• Heavy emphasis was placed on training operations personnel and incorporating all available
technical expertise
Execution & Results
• World record ERD well drilled, logged and completed with only 6% NPT
• Reservoir objectives were fully met – A-Block reserves were upgraded and connectivity was
confirmed
• Substantial savings ($90M) was realized over the subsea satellite option
Learnings
• Prudent use of an adequate planning cycle allowed definition of critical technical boundaries
and identification of the key technologies required to extend the ERD envelope.
• Effective use of the multifunctional team was achieved through well documented technical
workshops
• As a result of the planning effort, communications during the execution phase were
significantly enhanced.

8.6. CHAD COMPLETIONS - ACCELERATING LEARNING
The benefits of a continuous program, an effective team
approach and a drive to accelerate learning are combining
to make the most of an aggressive budget
Project Objective
• Complete 250± wells with cost effective sand control and artificial lift to maintain maximum
pipeline throughput
• Planning expectations: 7 days (FRR to FRR) and initial skins of 4-6
Challenges
• Project budget significantly constrained, reducing available funds per well
• Appropriate sand control method varies by well depending on the reservoir profile
• Project funding basis incorporated aggressive assumption for completion skin effects
• First oil obligation required that early completions be optimized – a long learning curve not
acceptable
Planning & Teamwork
• Multifunctional team assembled offsite for team building and agreement on
objectives
• Jointly defined roles, responsibilities and expectations of each member
• Established a combined subsurface reporting structure for the project and functional
VP’s
• Established weekly MFT meetings to review issues and agree on priorities
Execution & Results
• Significant learning curve demonstrated early – current completion time average is 4.4 days
• Completion techniques are delivering skins far better that industry expectation for this type of
reservoir (average skin of 0 to –1, compared to industry experience of 10-15)
• First oil target achieved; fewer wells may be possible given the superior completion
performance
Completion Quality Performance

Completion Time Performance
25.0
20
15
Days (FRR to FRR)
20.0
Initial Skins
15.0
10
10.0 5
5.0 0
0.0 -5
Sequential Well Completions (Miandoum & Kome) Sequential Well Completions (Miandoum & Kome)
Learnings
• A multifunctional team with early alignment on objectives, roles and responsibilities is critical
to the success of a project.
• The learning curve can be effectively compressed (accelerated) with a disciplined approach
to capturing improvements, clear and open communication and a can-do spirit

Section
Upstream

Process Health Review Checklist
Proprietary
Process Health Review Checklist 9
Well Planning Process Health Review Checklist
Date of Assessment: Business Unit:
Drill Team: BU Participants:
Drilling Participants:
Check One:
1 = Never; 2 = Not much; 3 = Somewhat; 4 = Frequently; 5 = Always 1 2 3 4 5
1. Is a region-specific planning and approval process documented and
followed?
2. Are the key interfaces identified, and are significant issues raised early for
Management endorsement?
3. Is the ExxonMobil Stakeholder Alignment Process followed if applicable?
4. Are multi-functional teams collaborating on preliminary well planning and

is EMGS Procurement and SH&E involved in preliminary screening?
5. Is a formal document used to convey well planning data from the BU, & is
a management of change process used to make revisions to that data?
6. Are screening cost estimates used early with a minimum of recycling?
7. What is the degree to which actual well planning time meets optimal
requirements?
8. Is a basis of design agreed and documented prior to detailed well
planning?
9. Are pre-drill DCI and WCI used to identify cost drivers to the BU?
10. Is a minimum cost approach used in well planning where factors that drive
costs above minimum are openly discussed and agreed upon by the BU?
11. Is a DWOP exercise conducted as often as reasonably practical?
12. Is the basis for funding as well as the cost risk used in economic analyses
established, understood, and supported by both the DT and BU?
13. Are the steps taken to reduce costs as well as cost drivers documented in
each well funding package?
14. Is a true vision curve developed for every well?
15. Is offset operator performance monitored and benchmarked where

possible?
16. Is the rig schedule actively managed to avoid stops and starts?
17. Does the Drill Team have a structured method of incorporating

appropriate technology and leveraging best practices from the global
community?
18. Are completion results reviewed/discussed and learnings applied?
19. Are key well planning process measures monitored and reported?
20. Do the Drill Team and Business Unit meet periodically to assess/ improve
their working relationship?
Overall Assessment
Follow-up Action:

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Well Planning Process Guide

Master Table of Contents

April 2004 Proprietary

Well Planning Process Guide

April 2004 Proprietary Section 1 - 2

April 2004 Proprietary Section 1 - 3

1.2.1. Introduction and Instructions

1.2.3. Well Planning Expectations (The “Top 20”)

1.2.4. Detailed Phase Outlines

1.2.5. Guidelines for Regional Processes

April 2004 Proprietary Section 1 - 4

1.2.8. Examples and Best Practices

1.2.9. Annual Process Health Review Checklist

April 2004 Proprietary Section 1 - 5

1.3.1. Phase I (September 2002 - July 2003)

1.3.2. Phase II (August 2003 - March 2004)

April 2004 Proprietary Section 1 - 6

Well Planning Process Guide

April 2004 Proprietary Section 2 - 2

The well planning process is separated into five phases.

Define Opportunity: This is the first phase of the process and is

April 2004 Proprietary Section 2 - 3

April 2004 Proprietary Section 2 - 4

Upstream Well Planning Process

Opportunity Minimum Cost Design Funding Spud FRR

Gate 0 Gate 1 Gate 2 Gate 3

Gate 1 Mtg A Mtg B Gate 2 Mtg C

Gate 1 Gate 2 Gate 3 Gate 4

April 2004 Proprietary Section 2 - 5

Upstream Project Management System (UPMS)

Evaluation Definition Detailed Design Drilling

(Partial List) Gate 1 Gate 2 Gate 3 Gate 4 Gate 5

4. Technical Definition PDM (Inc. Drilling) • DBM • DBM Updates •

Identify Programs • Early PEP • PEP • Update PEP •

Securing Estimates • Class V Est. • Class III Est. •

7. Procurement W BS Developed • Final Contract.

Upstream Well Planning Process

Define Detailed Operational Execute Evaluation

April 2004 Proprietary Section 2 - 6

Well Planning Process Guide

April 2004 Proprietary Section 3 - 2

1 A region-specific planning and approval process for all wells is

April 2004 Proprietary Section 3 - 3

April 2004 Proprietary Section 3 - 4

April 2004 Proprietary Section 3 - 5

April 2004 Proprietary Section 3 - 6

Well Planning Process Guide

April 2004 Proprietary Section 4 - 2

• Initiate screening CER P L P P

• Develop well design / development options P L P P P P I

• Identify cost drivers and risks (DCI and / or WCI) L P P P P P P P

• Objectives clearly defined L

• Preliminary regional shallow hazards identification L

• Multi-functional endorsement of the opportunities sent

• Business Unit Management supportive of screening results

P = Participate; L = Lead; I = Informed; C = Consult; M Measured

April 2004 Proprietary Section 4 - 3

This process step is intended to facilitate a multi-functional collaborative evaluation of

Critical Process Steps

M • Assign required resources by functional groups P L P P P P I

• Detailed well design(s) L P P P P C C C

• Detailed final reservoir assessment P L P

• Documented collaborative cost / benefit analysis of options P L P P P P P C