To: Frances Abbots-Guardiola SIEP-EPT-SEN

CC: Arnold Valentin, SIEP-EPT-WN

From: Mike MDJ Easton, SIEP-EPT-WN

Date: 3/27/2023

Re: Well Design Review: North Papua, Indonesia : Niengo Prospect

Wells

Requirement

Niengo field development with 4 drilling sites, 3 onshore in swamp, one offshore in shallow water.
Field approx 35km x 10km (at moment assume 3/4 area onshore, 1/4 offshore).

 Total wells needed 12 gas production wells, plus 1 water re-injector

 Onshore wells: 3 pads initially with 2 wells drilled from each for start up (i.e. 6 wells)
 Offshore WHP (6 slot jacket, simple, unmanned): Drill all 3 wells for start up, plus the water
re-injector to dispose of produced water
 Start-up date 2014, with 9 production wells (need 8, with 1 'swing' well)

2nd phase drilling in 2021 when come back and drill 3 more wells, 1 each from each one of the 3
onshore pads. (So we do all the offshore wells for start up, so no need to re-mob for 2nd drilling
phase..........)

Summary

Onshore: 50/50 Well Costs $14.40 mm per well

Offshore: 50/50 Well Costs $25.29 mm per well
 Feasible well designs

30 60° 70° 75° 82°

Well Inclination

Industry Drilling Envelope

Imperial Metric
Departure (m)
Agip 0 2,000 4,000 6,000 8,000 10,000 12,000
0 BP,Chevron
BP,
Chevron
ThunderTexaco,
Thunder
ChevronTexaco,Horse
Texaco,
Horse Tonga
Field,
Field,
Petronius
Field,
GOM Field,
GOMGOM
GOM
Field, GOM
Encana, Germain Field, Canada
Amerada Hess
Maersk, Al Shaheen Field, Qatar
BP, Wytch Farm Field, UK Land
BHP Total, Austral Field, Argentina
BP, Wytch Farm Field, UK Land
BP 2,000
ExxonMobil, Chayvo Field, Sakhalin
BG
Statoil, Gullfaks Field, North Sea - Norway
Chevron Texaco, Petronius Field, GOM
Chevron Texaco 4,000 ExxonMobil, Hibernia B-16 36 Field, Canada
BP, Gyda Field, Norway
Conoco Phillips

ExxonMobil
6,000
TVD (m)

Maersk Shell, Princess 2 (Eastern) Field, GOM

Shell, Serrano 3 Field, GOM
Marathon Chevron Texaco, Field, GOM
BP, Thunder Horse Field, GOM
8,000
Norsk Hydro
BP, Thunder Horse Field, GOM
RWE-DEA
Lone Star, Oklahoma Field, US Land
Chevron Texaco, Tonga Field, GOM
Shell 10,000 BP, Kaskida Field, GOM

Statoil

Total

Unocal 12,000 GNPP Nedra, Kola Peninsula Field, Russia

Updated September 2006
Woodside Nicholas Robertson
nicholas.robertson@bp.com
Other
14,000
Drilling outstep at 1500m

We recommend for initial planning purposes that a maximum outstep of approx.

3.8km is used at the level 0/1 planning stage for this project at a TVD of 1500m. This
is equivalent to a 75° tangent, with a shallow well kick-off. This gives full flexibility in
well construction and completion design and risks are reasonable.

Although the industry has drilled outsteps of over 8000m at this depth in Quatar, I believe
that these are done with rotary steerables in limestone, with long open hole subhorizontal
sections. Any form of cased & cemented hole/ completion above 75° at these shallow
TVD’s becomes technically very challenging due to hole stability, fracture gradient, high
ECD’s and friction factors. Above 82° inclination all tubulars have to rotated/floated into
the hole due to buckling. The risk profile and costing of such wells is much higher and
also more uncertain, and in a frontier region such as North Papua, not advisable to
consider as a base case.
Well Costs Niengo Onshore/Offshore

Niengo is located on the North coast of North Papua, (formerly Irian Jaya) Indonesia, in
mangrove swamp/river delta and previous wells have been drilled using barge mounted
or heli lifted rigs. The mangrove swamp/delta area extends about 40 km inland. Offshore,
shallow water Jack-up operations will require a standard jack-up rig.

Average well ;
Stove pipe 30" 125
Intermediate casing 13 3/8" 1,680
Production casing 9 5/8" 3,440
Production Liner 7 3,730

Dry hole days vs depth Indonesia onshore/offshore vs Papua New Guinea

160.00
Conclusion PNG has much harder, more difficult to dril formations. Totally
different spud-TD times (75 days vs 22 days to 3700m)
140.00

120.00 INdonesia 2006

Indonesia 2005
Indonesia 2004
100.00
PNG Trend 2000 - 2006 Indonesia 2003
PNG
Ind Onsh
Assumed time
Days

80.00
PNG onsh 00-06
North Papua Expon. (Indonesia 2005)
60.00 Expon. (Indonesia 2004)
Expon. (INdonesia 2006)
Indonesia Trend 2000 - 2006 Expon. (Indonesia 2003)
40.00 Expon. (PNG onsh 00-06)

20.00

0.00
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Depth

Using Rushmore data 2000 – 2006, Drilling times for PNG and Indonesia were
compared. PNG drilling appears much harder as can be seen from the trends on the
attached graph. With no data for North Papua, a compromise time composed of best PNG
drilling times was taken. Hence the dry hole well time for a 3750 m well of approx 40
days spud –TD in North Papua appears reasonable for highly deviated wells.
A: Onshore Drilling

Well time 40 days spud-TD, total well time 55 days

Footage Once-off Daily

Cost /m Cost Cost /day
$ 655.22 $ 3,889,613 $ 58,263.75

Base Well Cost (including Activity allowance 27%) $10.398 mm

50/50 well cost including contingency (38%) $14.40 mm

Allowance, Cost estimate

Contingency, (level 1)
North Paua Niengo deviated onshore development well
Accuracies P50
(%) US$mm
Identified scope (direct/indirect cost) 9.03
Activity allowance (NPT-related cost) 27% 1.37
Base cost estimate 10.40
Contingency 38% 4.00
Total cost estimate (50/50) 14.40

10/90 estimate (indicative - level 1) 25% 10.80

90/10 estimate (indicative - level 1) 40% 20.15

Identified Scope
Direct cost (well construction):
P Time-related cost is based on deterministic or high-level probabilistic time estimate.
L Well construction Dry hole (cost based on NET time) Y
A Well construction Completion (cost based on NET time) Y
N Well Testing (cost based on NET time) N
Rig move (cost based on NET time) N
Pre-spud activities (cost based on NET time) N
excl.
Indirect cost:
Rig mob / demob (mob/demob fee) N
N Contingency materials (surplus stock) N
P Logistics N
T Civil works N
  Owners cost N
  Other (rig contract commitments, etc) N

Please note that costs do not include site preparation or rig move costs

Notes for Project Cost Estimation

The location in swamp area in North Papua will potentially require high site preparation
and logistics costs.

Logistics in North Papua will be very difficult, with severe problems with customs and
equipment importation. However the size of industry in Indonesia means that
conventional drilling equipment will be available. As it is difficult/impossible to re-
export equipment, contractors are unwilling to support new/high technology equipment in
general.

Swamp/remote location preparation and support in Papua/PNG has historically been very
high.
In 1990, for land drilling, costs of $2.55mm mob/demob costs, site prep costs of
$2.49mm and transportation/logistics costs of $5.32mm were recorded for the Pecten
Langia-1 well.
Other operators record logistics costs in 1990 of $20 – 40K per day in PNG.

Well Optimisations: - Recommendation for slimhole rigs and holes if possible, with
minimum size pads. In PNG, Chevron had very small pads towards end of their recent
program to minimize site preparation costs. Heli-potable light coring rigs have been used
by InterOil for exploration and appraisal drilling, and are locally available – 7 5/8, 5 ½, 3
½ being used for gas wells – 3 ½” monobore wells.
Onshore Contingency matrix
 B: Wellhead Jacket Drilling, shallow water Jack-up Rig, Offshore Operations

Rig rates for East Asia of $170,000 were assumed:

4 wells are required from a wellhead jacket in shallow water

jan-07 jan-07 jan-07 jan-07 jan-07 jan-07

2007 2008 2009 2010 $30** 2010 $40** 2010 $60**

Rig operating rate: Jack-up, Asia Standard Jack Up (300 ft) 170 170 160 80 115 160

Drilling time
Spud-TD days 40 days
Total time 55 days

Cost per well

Base Well Cost (including Activity allowance 27%) $19.335 mm

50/50 well cost including contingency (37%) $26.48 mm

Allowance, Cost estimate

Contingency, (level 1)
Niengo North Papua Indonesia Offshore shallow water Accuracies
P50
(%) US$mm
Identified scope (direct/indirect cost)   15.98
Activity allowance (NPT-related cost) 27% 3.35
Base cost estimate   19.34
Contingency 36% 6.96
Total cost estimate (50/50)   25.29

10/90 estimate (indicative - level 1) 25% 19.72

90/10 estimate (indicative - level 1) 40% 36.81

Identified Scope
Direct cost (well construction):
P Time-related cost is based on deterministic or high-level probabilistic time estimate.
L Well construction Dry hole (cost based on NET time) Y
A Well construction Completion (cost based on NET time) Y
 N Well Testing (cost based on NET time) N/A
Rig move (cost based on NET time) Y
Pre-spud activities (cost based on NET time) N/A
excl.
Indirect cost:
Rig mob / demob (mob/demob fee) N/A
N Contingency materials (surplus stock) N/A
P Logistics N/A
T Civil works N/A
  Owners cost N/A
  Other (rig contract commitments, etc) N/A

Please note: no Boats, offshore logistics, aviation/helicopters have been included in

this cost estimate.

No owners costs are included.

Offshore Contingency Matrix