Development of the RapidJet Method of Gas Well Deliquification

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Gas Well Deliquification Workshop Sheraton Hotel, February 23 25, 2015 Development of the RapidJet Method of Gas Well Deliquification Kelly Falk President - Source Rock Energy Daniel Booy Research Engineer - C-FER Technologies

Presentation Overview Jet pump principles and applications Jet pump misconceptions Conventional jet pump dewatering examples RapidJet - a low cost on demand dewatering system C-FER testing and analysis program Update on current status of RapidJet technology 2015 Gas Well Deliquification Workshop 2

Shallow Gas Well Dewatering Consortium Gas Well Dewatering Consortium created consisting of: Cenovus Energy EnCana Corp. Enerplus Corp. Petroleum Technology Alliance Canada (PTAC) C-FER Technologies contracted as technical services provider Goal: to test and assess a wide range of new technologies for shallow gas well dewatering 2015 Gas Well Deliquification Workshop 3

Jet Pump Principles Injection Pressure Velocity Power Fluid Fluid Returns Pressure Gas Flow Fluid Returns Pump Intake Pump Discharge Velocity Suction Pressure Formation Fluid 2015 Gas Well Deliquification Workshop 4

Jet Pump Principles Power Fluid Sizing Options: Fluid Returns Formation Fluid Nozzles DD CC BB A A+ B B+ CC C+ D E F G H I J Mixing Tubes 000 Gas 00 Flow 0 1 2 3 4 5 6 7 8 9 10 11 12 13 2015 Gas Well Deliquification Workshop

Jet Pump Principles Common Jet Pump Efficiency Misconception: Lift Rate / Pump Rate = Efficiency Power Fluid Sizing Options: Nozzles 0.87 LR / PR 0.53 LR / PR Mixing Tubes Horsepower Real Factor is Horsepower: Function of pump rate AND pressure Fluid Returns DD CC BB A A+ B B+ CC C+ D E F G H I J 000 00 Gas Flow 0 1 2 3 0.35 LR 4 / PR 5 6 7 0.31 LR / PR 8 9 10 11 0.27 LR / PR 12 13 Formation Fluid 2015 Gas Well Deliquification Workshop 0.23 LR / PR

Dewatering Using Jet Pumps Advantages: No downhole moving parts Handles high sand concentrations Not impacted by gas inflow Ability to circulate jet pump components out of the hole for pump servicing Highly scalable rate performance: 1 BPD to 3500 BPD (+) Able to completely pump wells off Applicable in shallow or deep wells Disadvantages: Surface pump skid cost 24/7 pump skid operation Winter operations 2015 Gas Well Deliquification Workshop 7

C-FER Testing Phase I Laboratory Flow Loop Flow loop designed to simulate shallow gas well to test dewatering systems Full testing program for low rate, 24/7 jet pump gas well dewatering 2015 Gas Well Deliquification Workshop 8

C-FER Testing Phase I Laboratory Flow Loop 2.7 HHP (1000 ft well) 0.54 HHP (200 ft well) Nozzles DD CC BB A A+ B B+ CC C+ D E F G H I J Mixing Tubes 000 00 0 1 2 3 4 5 6 7 8 9 10 11 12 13 2015 Gas Well Deliquification Workshop 9

Jet Pump Dewatering Completions Concentric Tubing: 1 x 1.9 1.25 x 2.375 1.5 x 2.875 Gas Flow Gas Wells Gas Flow FlatPak / ArmorPak: 2 x 1.25 2 x 1.5 FlatPak Tubing System 2011 Gas Well Deliquification Workshop 10

Jet Pump Dewatering Examples Well Parameters: 4,200 ft TVD / 5,080 ft MD Lifting 520 BPD with 30 HP jet pump skid

Jet Pump Dewatering Examples 30 HP Pump System Average Recorded Rate from Transfer Tank: 520 BPD Jet Pump Software Analysis:

Jet Pump Dewatering Examples Water Loading Shale Gas Well: Need to land pump at TD & pump well down to 50 psi BHP Jet Pump Landing Depth 2011 Gas Well Deliquification Workshop 13

Gas Production Rates (mcfd) Liquid Production Rate (BPD) Jet Pump Dewatering Examples Shale Gas Well - Jet Pump Dewatering: 250 250 200 200 Shale 150 Gas Wells 150 100 100 50 Gas Production Rate (mcfd) 50 Water Production Rate (BPD) 0 0 30/09/2009 02/10/2009 04/10/2009 06/10/2009 08/10/2009 10/10/2009 12/10/2009 14/10/2009 2011 Gas Well Deliquification Workshop 16/10/2009 18/10/2009 20/10/2009 14

High Rate Jet Pump Example Vertical oil well: 1,300 m Previous PCP Failure Rate: +/- every 3 months Jet pump installed Sep 2008: Initial Rate: +/-900 BPD TF System HP: Single phase power (< 50 HP) running at 30 HP Current Rate: 265 BPD TF Jet Pump Run-time: 6+ years

High Rate Jet Pump Example

Gas Well Jet Pump Dewatering Examples Low Rate Dewatering need for an efficient lift system: 10 well project / 2 wells per pad 2 x 1.25 FlatPak tubing system Wells pumped off: +/- 3 m3/well 2011 Gas Well Deliquification Workshop 17

Gas Well Jet Pump Dewatering Issues Surface Skid: Winterized pumping package with vessel Capital cost Maintenance cost Need for a low capital cost and low op cost solution for low water rate gas wells Estimated Capital Costs: Surface equipment: Benefit of $30,000 underbalanced to $60,000 dewatering Completion & W.H.: $25,000 to $30,000 Operating Cost Components: Fuel / power Engine / motor / pump service & repair 2011 Gas Well Deliquification Workshop 18

Rapid Jet Dewatering Solution RapidJet On Demand Shallow Gas Well Jet Pump Dewatering System: Cost effective Fast rig up / fast dewatering Underbalanced advantage Low maintenance Water transportation Pump maintenance at shop Automatic wellhead freeze protection Water Loaded Gas Well Flow Shallow Gas Wells Fast Economical Effective SREP RapidJet Pumps Water Loaded Gas Flow Well 2011 Gas Well Deliquification Workshop 19

JetPak Dewatering Solution JetPak TM Cleanout Process Dual Coiled Tubing String FlatPak Tubing System JetPak Pumping System Fluid Cleanout Mode Sand Jetting Mode 2011 Gas Well Deliquification Workshop 20

JetPak BHA Pressure & Temperature Job Data: Water & Gas Column Pres: 1,000 kpa / 145 psi Tool at Wellhead: 135 kpa / 20 psi Tool at Wellhead: 160 kpa / 23 psi Gas Column Pres: 165 kpa / 24 psi Well Pumped Off: 172 kpa / 25 psi Run In Hole On Bottom Pull Out of Hole

JetPak BHA Pressure & Temperature Job Data: 2 psi 4.4 BBLs in 30 min Run In Hole On Bottom Pull Out of Hole

JetPak Dewatering Solution Under Underbalanced Balanced Jet Cleanout Pump Performance Dewatering JetPak Cleanout 30 mcfd Sustained Incremental Production (56% Increase) Conventional Cleanout Damage JetPak TM Cleanout Process Dual Coiled Tubing String 2011 Gas Well Deliquification Workshop FlatPak 23

Phase II Jet Pump Testing Program Installation in controlled test well: 1565 ft deep with 4 1 / 2 un-perforated casing Jet pump system: JetVak jet pump body 2 x 1 1 / 4 CT FlatPak TM string FlatPakCT TM wellhead surface piping/connections 2011 Gas Well Deliquification Workshop 24

C-FER Testing Phase II Test Well Objective: Simulate RapidJet operations: High rate, short duration lifting Investigate pumped off performance 2011 Gas Well Deliquification Workshop 25

Phase II Jet Pump Testing Program C:7 NTC Results: Predictable lift rates performance increase with higher injection pressure Complete wellbore evacuation No issues with continuing to run jet pump in pumped off conditions Pump components measured to factory spec upon completion of testing 2011 Gas Well Deliquification Workshop 26

Cavitation Cavitation bubbles are unstable liquid vapor bubbles occurring when a sudden pressure drop in the power fluid stream exceeds the tensile strength of the liquid The intense pressure pulse (micro-jet) that occurs upon cavitation bubble collapse can be very destructive to material surfaces Cavitation does not occur from the inflow of formation gas into a jet pump Formation gas is stable and highly compressible so any inflow of formation gas can actually minimize or suppress cavitation Cavitation limits can be readily calculated and are used to avoid the occurrence of cavitation 2011 Gas Well Deliquification Workshop 27

Wellhead Freeze Protection upon pump-off the return leg is gasified RapidJet once isolated, the fluid will U tube and percolate, bringing the fluid level down below the wellhead for both fluid paths 2011 Gas Well Deliquification Workshop 28

RapidJet Solids Handling Extensive history of sand cleanout operations using SREP jet pumps: RapidJet Up to 40% inflow concentration Successful C-FER testing of sand-laden power fluid 1%, 5% & 10% inflow conc. Successful C-FER testing of lifting stagnent solids column on discharge side of jet pump: 24 hrs w. 5ft of clay/sand column 2011 Gas Well Deliquification Workshop 29

RapidJet Solids Handling Solution for packed sand build-up in casing: RapidJet Back-pressure jetting tool Closed for standard RapidJet operations Opens with over-pressure applied to one or both strings Back Pressure Jetting Tool 2011 Gas Well Deliquification Workshop 30

RapidJet Status Currently planning RapidJet system in two wells for Enerplus in early March 2015 Data and results pending JetPak TM Cleanout Process Underbalanced Cleanout Performance JetPak Cleanout 30 mcfd Sustained Incremental Production (56% Increase) Dual Coiled Tubing String Conventional Cleanout Damage FlatPak Tubing System JetPak Pumping System Fluid Cleanout Mode Sand Jetting Mode 2011 Gas Well Deliquification Workshop 31

Conclusions Tens of thousands of wells that could benefit from a cost effective viable gas well dewatering system Past jet pump experience and C-FER / Shallow Gas Consortium testing indicate the viability of an intermittent jet pump completion solution Expectations are for it to be cost effective and offer superior reservoir performance over other intermittent dewatering methods Two-well field trial currently occurring with Enerplus, and looking to implement technology with other operators as well 2011 Gas Well Deliquification Workshop 32

Conclusions Next Steps: Assess pilot wells Refine service procedures and job frequency Quantify reservoir performance Address economic efficiencies and broad scale applications 2011 Gas Well Deliquification Workshop 33

Thanks To ALRDC organization and staff Shallow Gas Consortium (Encana / Cenovus / Enerplus) C-FER Technologies JJ Tech 2015 Gas Well Deliquification Workshop 34

Copyright Rights to this presentation are owned by the company(ies) and/or author(s) listed on the title page. By submitting this presentation to the Gas Well Deliquification Workshop, they grant to the Workshop, the Artificial Lift Research and Development Council (ALRDC), and the Southwestern Petroleum Short Course (SWPSC), rights to: Display the presentation at the Workshop. Place it on the www.alrdc.com web site, with access to the site to be as directed by the Workshop Steering Committee. Place it on a CD for distribution and/or sale as directed by the Workshop Steering Committee. Other use of this presentation is prohibited without the expressed written permission of the author(s). The owner company(ies) and/or author(s) may publish this material in other journals or magazines if they refer to the Gas Well Deliquification Workshop where it was first presented. 2015 Gas Well Deliquification Workshop 35

Disclaimer The following disclaimer shall be included as the last page of a Technical Presentation or Continuing Education Course. A similar disclaimer is included on the front page of the Gas Well Deliquification Web Site. The Artificial Lift Research and Development Council and its officers and trustees, and the Gas Well Deliquification Workshop Steering Committee members, and their supporting organizations and companies (here-in-after referred to as the Sponsoring Organizations), and the author(s) of this Technical Presentation or Continuing Education Training Course and their company(ies), provide this presentation and/or training material at the Gas Well Deliquification Workshop "as is" without any warranty of any kind, express or implied, as to the accuracy of the information or the products or services referred to by any presenter (in so far as such warranties may be excluded under any relevant law) and these members and their companies will not be liable for unlawful actions and any losses or damage that may result from use of any presentation as a consequence of any inaccuracies in, or any omission from, the information which therein may be contained. The views, opinions, and conclusions expressed in these presentations and/or training materials are those of the author and not necessarily those of the Sponsoring Organizations. The author is solely responsible for the content of the materials. The Sponsoring Organizations cannot and do not warrant the accuracy of these documents beyond the source documents, although we do make every attempt to work from authoritative sources. The Sponsoring Organizations provide these presentations and/or training materials as a service. The Sponsoring Organizations make no representations or warranties, express or implied, with respect to the presentations and/or training materials, or any part thereof, including any warrantees of title, non-infringement of copyright or patent rights of others, merchantability, or fitness or suitability for any purpose. 2015 Gas Well Deliquification Workshop 36