Directional Surveys and Associated Issues Rick Behal, P.G. Technical Permitting Engineering Unit

1. Directional Surveys and Associated IssuesRick Behal, P.G.Technical PermittingEngineering Unit

2. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

3. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

4. We live in a great age for drilling

5. How can we know for sure?

6. Vertical Well 100’ 90’

7. Drift Happens Geology is complex

8. Drift Happens EOR increases size of wellbore

9. Drift Happens Operators drill as many wells as possible on lease

10. An Example Drilling a 5280’ horizontal with 3 degree error in a particular direction would result in offset of 276’ in that direction! Lease Line Only 3°! Permitted Location 276’ Actual Terminus!

11. An Example Drilling a 5280’ horizontal with 3 degree error in a particular direction would result in offset of 276’ in that direction! • Typical horizontals in Eagle Ford are thousands of feet in length. • Typical lease line spacing is 330’. • Must be in compliance with spacing rules.

12. The RRC has a job to do • In the State’s Interest: • Protect property/lease lines • Protect O&G reservoirs/resources in the state • In the operator’s interest: • Keep drillers on task • Maximize production efficiency • Therefore: We require directional surveys of every well drilled or deepened with rotary tools* • *(TX Administrative Code, Title 16, Part 1, Chapter 3, Rule §3.11; SWR 11)

13. What is a Directional Survey? Set of location data measured via tools either in drill string assembly (measured-while-drilling, MWD) or lowered into wellbore after well is drilled (gyroscopic survey, GYRO) Plat view (2d) Directional Survey (3d)

14. Where can I find the Rules?

15. Where can I find the Rules?

16. Where can I find the Rules?

17. Where can I find the Rules?

18. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

19. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

20. Statewide Rule 3.11 (SWR 11) • Outlines requirements for Inclination and Directional surveys • Purpose: to accurately constrain well location in 3-D space (X, Y, Z) • *Different survey combinations required depending on wellbore profile*

21. Survey Types • Inclination surveys • Inclination and offset data only (Form W-12) • No coordinates or directional data • Directional surveys • Gyroscopic borehole survey (GYRO) • Measurement while drilling (MWD) • Provide coordinate data (X, Y, and Z) • Each survey type has different data and certification requirements. It pays to get it right the first time.

22. Statewide Rule 3.11 (SWR 11) INCLINATION SURVEYS Required of any well drilled/deepened with rotary tools First data point shall not exceed 500’ deep Data points not to exceed 1000’ apart Outlines several exceptions to the rule based on depth and spacing to lease lines

23. Statewide Rule 3.11 (SWR 11) INCLINATION SURVEYS Submitted on form W-12 by operator Performed by drilling company Certified by drilling company and operator Report horizontal offset without direction, so offset direction assumed to be toward nearest lease line

24. Form W-12

25. Form W-12 Shows cumulative displacement from vertical. Must not exceed distance to nearest lease line Shot points must begin within 500’ of the surface shall not exceed 1000’ apart.

26. Form W-12 Operator certifies that the well was not intentionally deviated from vertical. Accumulative displacement is given without a compass direction, must not exceed distance to nearest lease line. Drilling company representative certifies accuracy of the data

27. SWR 11: Vertical Wells Ideal Vertical Well N 0 1000’ W E 150’ W-12 accepted for entire depth

28. SWR 11: Vertical Wells Actual Well N 0 1000’ W E 150’ 155’ 155’ offset ?

29. SWR 11: Directional Surveys DIRECTIONAL SURVEYS Any intentionally-deviated well Data points no more than 200’ apart, *beginning within 200’ of the surface May begin immediately below surface casing depth (W-12 required in this case)

30. SWR 86: Horizontal Wells Surface Casing (W-12 accepted) Gyro or MWD required

31. SWR 11: Directional Wells Standard Directional S-curve Variation* Directional Survey Required Inclination Survey Accepted *Special permission required to drill an S-curve

32. Statewide Rule 3.86 (SWR 86) • Outlines requirements for Horizontal Drainhole Wells • Purpose: to establish standard requirements for horizontal wells • *Directional surveys required*

33. SWRs 11 & 86: Surveys • Common mistakes: • WRONG SURVEYS for wellbore profile • Surveys missing completely • Surveys lacking certification • Surveys don’t tie-in • Surveys attached for wrong well • Solution: • Survey company must correct and resubmit

34. Statewide Rule 3.12 (SWR 12) Outlines requirements for Submission and Certification of Directional Surveys: • Survey Company Name • Name and title of individual performing survey • Date survey was performed • Type of survey conducted • Complete well identification • Depths surveyed • Drilling permit plat with bottom hole location.

35. SWR 12: Proper Certification I, name, an authorized employee of THE SURVEY COMPANY, have verified the GYRO/MWD survey performed on 04/01/2013 to 04/02/2013, from 200’ to 15000’. The data are true, correct, complete and within the limitations of the tool. This survey was conducted at the request of OPERATOR for LEASE WELL# (API#) drilled in TRAVIS COUNTY, Texas.

36. SWR 12: Directional Surveys Directional Surveys must be submitted and certified by the company that performed the survey. They cannot be accepted directly from the operator.

37. SWR 12: Proper Certification • Common mistakes: • Uploading cover letter instead • Double-certifying another company’s interval • Certification completely missing • Solution: • Survey company must correct and resubmit

38. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

39. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

40. Submission Procedures Requirements of survey companies: • Must appear on list of approved survey companies* • Must have active P-5 (Organization Report) • Must upload certification letter as a separate file

41. Submission Procedures Surveys may be mailed via hardcopy to Austin: • This method takes at least two (2) weeks • Surveys submitted online are available immediately

42. Online Submission

43. Online Submission

44. Online Submission Surveys submitted online are available for use immediately. Directional Survey query (following slides) may be used to confirm submission Erroneous surveys can only be deleted by RRC internal users

45. Online Query

46. Online Query Search online by API number to verify submission

47. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

48. Presentation Overview Introduction Survey Requirements Submission Procedures Engineering Review

49. Engineering Review • Spacing • Lease line spacing • Between-well spacing • Permitted location • NPZs • Survey completeness • Tie-ins • Certification • Well construction • Wellbore profile • Abandoned wellbore • Required plugs and cementing

50. Eng Review: Tie-Ins • RRC will accept specific combinations of surveys that present a complete picture of the entire wellbore. • Key Concept: Tie-ins • All surveys must tie in at given depths with identical X,Y, and Z coordinates.