STEELSEAL® Engineered, Specialty Lost Circulation Material © 2012 HALLIBURTON. ALL RIGHTS RESERVED. customer CHALLENGE Curing Lost Circulation © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 2 Why Baroid? © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 1925 Filed patent for first barite-based drilling fluid 1930 First mud school 1932 First mud-testing procedures and kit 1939 First mud-logging service 1940s Pioneers service by air and sea 1950s Invents foam drilling technology 1960s Invents oil-based fluid, Invermul® system 1970s Develops new fluids for hostile geology 1980s Develops mud loop testing, improves waste management 1990s Pioneers biodegradable invert drilling fluids 2000s Rolls out first families of clay-free synthetic and high performance water-based fluids 2010s Introduces automated mud monitoring equipment to industry 3 CONSISTENT QUALITY Our Technical and Operational Process Identify the Challenge Solution Creation Operations Program Operations Execution Critical First Well Execution © 2012 HALLIBURTON. ALL RIGHTS RESERVED. Knowledge Capture Problem Resolution 4 Present the Value BAROID Laboratory Support Baroid scientists and engineers work with state of the art equipment and an extensive global database in order to perform comprehensive testing analysis on a global scale. Baroid’s Laboratory Services include: © 2012 HALLIBURTON. ALL RIGHTS RESERVED. Analytical technical support Bioassay technical support Reservoir fluids technical services Drilling fluids technical services Industrial drilling products lab Quality assurance Research and development 5 customer CHALLENGE While an effective wellbore strengthening program is your best defense against lost circulation, complete prevention is not always possible. The lack a well thought-out remediation plan for lost circulation could cause: Increased Non-Productive Time Decreased Wellbore Value Heath and Safety Issues © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 6 customer CHALLENGE Curing lost circulation becomes more difficult based on formation type and rate of fluid loss Classifications of Fluid Loss* Seepage: <10 bbl/hr Partial: 10-50 bbl/hr Severe: 50-100 bbl/hr Total: >100 bbl/hr – no returns *The range for each classification vary between operators © 2012 HALLIBURTON. ALL RIGHTS RESERVED. may 7 customer CHALLENGE The risk of lost circulation become more prevalent when drilling formations with: High Permeability Natural Fractures Low ECD Margins (Induced Fractures) © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 8 Baroid’s SOLUTION STEELSEAL® Lost Circulation Material Highly resilient, dual composition carbon-based material Background or Pill treatments Deforms to stress in a multitude of fracture sizes Increased material resiliency © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 9 Baroid’s SOLUTION STEELSEAL® lost circulation material has a resiliency which allows it to “mold” itself to all stress regimes within any fracture, promoting fracturing plugging, and providing superior sealing © 2012 HALLIBURTON. ALL RIGHTS RESERVED. Resiliency up to 120% Similar materials show resiliency of <40% Highly effective in HP/HT environments Constant and effective fracture sealing in turbulent down hole conditions 10 key FEATURES Resiliency up to 120% Typical Graphite Compatible in oil-, water-, and synthetic based fluids STEELSEAL® High concentrations used with no adverse effects to drilling performance Increased lubricity in WBM Non-magnetic material Will not effect downhole logging tools © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 11 customer BENEFITS Cost Effective – Reduce fluid loss and NPT with improved fracture sealing – Can be used as pre-treatment to prevent seepage – Increased ROP Increased Drilling Performance – Improved fracture plugging, effective in HP/HT wells – Increase lubricity in water-based fluids, reduced torque and drag – No adverse effects to drilling equipment or rheological properties Versatile – Deform to stress in multitude of fracture sizes – Effective in HP/HT wells – Specifically designed particle size distribution © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 12 value PROPOSITION STEELSEAL® Engineered, Specialty Lost Circulation Material A highly resilient lost circulation material that gives operators a technically superior solution to mitigate seepage, partial or severe fluid loss rates, preventing nonproductive time and saving money. © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 13 CASE STUDY: STEELSEAL® LCM and BARACARB® bridging agent help Apache improve wellbore stability and cut costs by 50% Location: Neuquén, Argentina CHALLENGE At 1,800 m measured depth (MD), a short trip was initiated to the conductor shoe at 400 m. After the trip, wellbore instability and excessive cuttings prevented a return to bottom. Significant non-productive time (NPT) and costs were associated with stuck pipe, casing issues and additional trips to condition the wellbore. SOLUTION Baroid personnel recommended an engineered WBM formulation To address wellbore instability issues, the system was further customized with STEELSEAL® Lost Circulation Material and BARACARB® Bridging Agent additions to seal microfractures and strengthen the formation during drilling operations. RESULTS Based on total rig costs, the Apache Corporation was able to save USD $1.15 million on the well drilled with the engineered fluid recommended by Baroid The actual mud costs for the Baroid fluid were also 9% lower than planned. © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 14 CASE STUDY: STEELSEAL® LCM sweeps help avoid downhole losses while drilling depleted zone in surface interval Location: Texularia Sand/Muscar Field, Venezuela CHALLENGE PDVSA planned to drill through the Textularia sand in the La Pica formation, a severely depleted zone in the surface interval of the MUC-123 well Previous offset wells in the Muscar field encountered severe lost returns and stuck pipe while drilling the 17-1/2” surface section The challenge was to provide an engineered fluid solution that would permit the operator to drill the 17-1/2” hole in a safe and timely manner and set surface casing to total depth without further occurrences of lost circulation SOLUTION Baroid engineers recommended implementing an LCM sweep program when approaching the depleted sand to seal off the sand and prevent or minimize losses The unique STEELSEAL® lost circulation was used because of its ability to expand or contract without being dislodged by changes in differential pressure RESULTS The successful application of the STEELSEAL® LCM sweep pills combination allowed PDVSA to avoid costly remedial operations and eliminate non-productive time (NPT) The offset wells was drilled with zero NPT, saving $160,000 in fluid costs compared to the previous Muscar wells © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 15 related DOCUMENTS Sales Data Sheets Case Histories Website © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 16 BAROID DRILLING FLUID SOLUTIONS Water Based Fluids Invert Emulsion Systems Wellbore Stability Lost Circulation Materials Wellbore Clean-Up and Displacement Packages Breaker Systems for Polymer and Solids Removal Lost Circulation in Pay Zones Solutions © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 17 discover BAROID ecosystem Click on image above to launch ecosystem, then click on Launch Interactive ► Where people, processes, and technology are brought together to build customized solutions, optimize performance and deliver distinctive service quality. www.halliburton.com/baroid © 2012 HALLIBURTON. ALL RIGHTS RESERVED. 18