Data Driven. Solution Focused. CAPP Guidelines H 2 S Release Rate Assessment and Audit Forms July...

Data Driven. Solution Focused.

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CAPP GuidelinesH2S Release Rate Assessment and

Audit Forms July 2012 Presentation

Presented by Andy NewsomeWednesday October 3, 2012

Welcome

• H2S understanding required for compliance and to avoid any negative impact on public safety

• ERCB continually evolving regulations and audit requirements means we as an industry need to have processes and tools that will evolve as well

DisclaimerThis is not a full review of the CAPP guidelines. We recommend you take the time to review the guidelines in its entirety.

Today’s goals:•Due Diligence•Educate •Ease Anxiety

Agenda

10:10 am – 10:15 am History

10:15 am – 11:00 am CAPP Guidelines

11:00 am – 11:30 am Questions & Answers

11:30 am – 12:00 pm Networking and Refreshments

History

CAPP Guidelines exist to:•Clarify Requirements

•Streamline Methodology

•Best Practices

•Templates

July 2012 H2S Release Rate Assessment and Audit Forms

CAPP Guidelines Review

1 Introduction

July 2012 H2S Release Rate Assessment and Audit Forms Page 1-1

“Regulators in Western Canada mandate the preparation of an H2S release rate before an application to drill a well can

be submitted.”

“Regulators in Western Canada mandate the preparation of an H2S release rate before an application to drill a well can

be submitted.”

Too many times research is done after the fact

1 Introduction – Guideline Changes


• Maps no longer apply

• Determine the H2S release rate (RR) potential for all wells

“The industry is now required to determine the H2S release rate potential for all wells, regardless of the H2S concentration.

Consequently, the maps no longer apply.”

“The industry is now required to determine the H2S release rate potential for all wells, regardless of the H2S concentration.

Consequently, the maps no longer apply.”



“elaboration of search area requirements,”“elaboration of search area requirements,”

Regulators’ Perspective

Too hard to create rules to encompass all scenarios

Industry’s Perspective

The more subjectivity, the harder it is to comply



“removal of the outdated EPZ calculations and provision of guidance for using the ERCBH2S program for calculating the EPZ based on the maximum H2S release rate as determined from

the guidelines in this document”

“removal of the outdated EPZ calculations and provision of guidance for using the ERCBH2S program for calculating the EPZ based on the maximum H2S release rate as determined from

the guidelines in this document”

• Directive 71 took over EPZ calculation rules

• CAPP Guidelines and H2S Search were impacted

1 Introduction – Other Guideline Changes


• “Clarification of when net pay adjustments are necessary”• “Streamlining of the calculation procedure”• “Updates to horizontal well calculations to account for multiple

stimulations”• “Addition of commingling guidelines”• “Inclusion of newer best-practice procedures that were not

documented in the previous guidelines”• “Addition of acid gas injection guidelines”• “Addition of guidelines for producing wells (post-testing phase)”• “Alignment with Alberta ERCB regulations and British Columbia

OGC regulations”

• “Clarification of when net pay adjustments are necessary”• “Streamlining of the calculation procedure”• “Updates to horizontal well calculations to account for multiple

stimulations”• “Addition of commingling guidelines”• “Inclusion of newer best-practice procedures that were not

documented in the previous guidelines”• “Addition of acid gas injection guidelines”• “Addition of guidelines for producing wells (post-testing phase)”• “Alignment with Alberta ERCB regulations and British Columbia

OGC regulations”

Please review the rest of the changes on your own:

1 Introduction


The EPZ includes residents or

areas with high public usage

The well is located within 5.0 km of an

urban density development

(>50 dwellings)

The well is a critical or special

sour well

Determine level of expertise and types of resources required

“It is the user’s responsibility to determine the appropriate level of analysis required for each specific application;…“It is the user’s responsibility to determine the appropriate level of analysis required for each specific application;…


2.1 Maximum H2S Release Rate Determination

“The H2S RR for each potential zone that may contain H2S gas is determined by multiplying the maximum H2S content and AOF rate

as determined by the geological and engineering review of the available data. The paired data points need not be from the same

well. The sum of the RRs from each zone becomes the cumulative RR for the drilling, completion/servicing, and

suspended/producing RR, as applicable to the project.”

“The H2S RR for each potential zone that may contain H2S gas is determined by multiplying the maximum H2S content and AOF rate

as determined by the geological and engineering review of the available data. The paired data points need not be from the same

well. The sum of the RRs from each zone becomes the cumulative RR for the drilling, completion/servicing, and

suspended/producing RR, as applicable to the project.”



• Identify every potential zone

• For each zone

• Search H2S and flow rate sample set

• Assign both a representative sample

• Calculate RR

• Provide cumulative rate for entire well

H2S Search:



“The H2S RR is used as an input to calculate an EPZ. The EPZ is calculated using the ERCBH2S…”

“The H2S RR is used as an input to calculate an EPZ. The EPZ is calculated using the ERCBH2S…”

ERCB Directive 71: “The licensee must use ERCBH2S properly, prior to filing the ERP, to calculate the size of the EPZ for sour gas with a hydrogen sulphide (H2S) concentration of 0.1 moles per kilomole (mol/kmol) (0.0001 mole fraction or 100 ppm) or greater.”

ERCB Directive 71: “The licensee must use ERCBH2S properly, prior to filing the ERP, to calculate the size of the EPZ for sour gas with a hydrogen sulphide (H2S) concentration of 0.1 moles per kilomole (mol/kmol) (0.0001 mole fraction or 100 ppm) or greater.”

2.2 H2S Release Rate Assessment – H2S Release Rate Process Flow


Requirement to Drill Well

Need geological prognosis

•If you consider H2S prior to approving well, Surface Land / Geology can follow the basics of these guidelines too



Summarize formations that may

be productive. Identify casing

points/hole sections



• Start with all formations

• Identify all relevant formations (sour or not)

• Know well design (casing) beforehand



Collect and validate gas analysis data. Collect flow data for sour zones

• Representative data points for every formation

• ‘Geologically analogous’

• Validation – not just collection



Complete engineering adjustments for each

formation (unstimulated conditions)



• Use formulas from guidelines in sections 5 and 6

• Apply well specifications against H2S Search RRs to determine adjustment



• RRs for all operations

• Address drilling and completion operations individually

• Ensure chosen sample is best and most representative flow rate

Complete engineering adjustment for

completion interval (stimulated condition)



Determine H2S RR for Each Hole Section, Completion

Zone, and Producing Zone



Directive 56 – Schedule 4.3

Drilling

Completions

Production

All forms cumulative

Calculate target zones – all forms cased

Similar to Completions



Determine Well Classification for

Drilling, Completion, and Producing

Operations



Directive 56 – Table 7.1

•Identifies Well Classifications

•Based on:

• Maximum H2S content

• Potential H2S RR

2.3.1 Release Rate Cases - Drilling Case


“If multiple casing strings are cemented in place during a drilling operation, then separate RRs can be determined for each hole

section.”

“If multiple casing strings are cemented in place during a drilling operation, then separate RRs can be determined for each hole

section.”

• Casing points splits potential release rate in two

• Intermediate hole release rate

• Main hole (after uphole zones isolated)

• Higher of the two (or more) is to be applied as drilling RR



“An assessment of shallow formations (above the top of the Mannville) is generally not necessary if deeper zones will contribute

to the H2S release rate of the well…”

“An assessment of shallow formations (above the top of the Mannville) is generally not necessary if deeper zones will contribute

to the H2S release rate of the well…”

• Should expect shallow zones to be sweet

• Shallow sour zones are suspect



• Only if deeper zones to be penetrated are sour

• If shallow zone is sour, likely an erroneous or ‘discountable’ sample

• Deal with the test or discount the form and document

“…unless it is known that the shallower zones may significantly impact the H2S release rate.”

“…unless it is known that the shallower zones may significantly impact the H2S release rate.”



“During drilling operations, the formations are considered to be unstimulated. Therefore, flow adjustments to a skin value of zero

may be made to offset data from a stimulated zone…”

“During drilling operations, the formations are considered to be unstimulated. Therefore, flow adjustments to a skin value of zero

may be made to offset data from a stimulated zone…”

• Post stimulated flow rates are flagged

• Use more representative sample

• Apply formulas from Sec 5, apply adjustment in H2S Search

2.3.2 Release Rate Cases – Compl./Servicing Case


“Most often, the primary target represents the highest H2S release rate potential. However, in some cases, a secondary zone may

represent the highest stimulated H2S release rate…”

“Most often, the primary target represents the highest H2S release rate potential. However, in some cases, a secondary zone may

represent the highest stimulated H2S release rate…”

• Reference formation with the higher H2S

• Exceptions to this are in the guidelines

2.3.2 Release Rate Cases – Compl./Servicing Case


Ensure you:

• Research reference well to understand test conditions

• Reference other data sources for clarification

“Vertical flow analysis may be conducted to further adjust from sandface AOF to surface AOF. If completion operations are restricted

to “wellhead on” techniques…”

“Vertical flow analysis may be conducted to further adjust from sandface AOF to surface AOF. If completion operations are restricted

to “wellhead on” techniques…”

2.3.3 Release Rate Cases - Producing Case


“..same issues identified for completion H2S RR calculations apply to producing…also used to set the “level” designation of the well…”

“..same issues identified for completion H2S RR calculations apply to producing…also used to set the “level” designation of the well…”

• Level designation summary, found at:

http://ercb.ca/ids/pdf/id97-06.pdf

• Compare well design and flow rate to reference well

• Consider tubing configuration/potential flow restrictions

• Apply results to summary sheet

• Update level designation summary pre and post drilling

2.3.4 Release Rate Cases - Commingling


“For any of the drilling, completion/servicing and producing cases, situations may arise where more than one sour formation is open to

flow into the wellbore…”

“For any of the drilling, completion/servicing and producing cases, situations may arise where more than one sour formation is open to

flow into the wellbore…”

• Cannot just add two RRs must consider backflow pressures too

2.3.4 Release Rate Cases - Commingling


• Tests spanning multiple formations:

• Potential formation misassignment

• Potential flow from multiple sources

“If one or more of the offset analogue wells has only multi-zone AOF data, and the proposed well will be completed in only one of those zones , then the analogue AOF test may be adjusted…”

“If one or more of the offset analogue wells has only multi-zone AOF data, and the proposed well will be completed in only one of those zones , then the analogue AOF test may be adjusted…”

3.1 Data Sampling - Search Area


“…concentrations tend to vary… within a single well from sample to sample...”“…concentrations tend to vary… within a single well from sample to sample...”

“…better understanding of the geological analogue allows the analyst to restrict data to more representative samples…”

“…better understanding of the geological analogue allows the analyst to restrict data to more representative samples…”

“…as the number of data points in a representative sample set increase, the confidence of the data quality also increases.”

“…as the number of data points in a representative sample set increase, the confidence of the data quality also increases.”

• 10 wells provided for each formation

• Proximal search often gives best geological representation

• Involve geology when unsure



• Doesn’t mean ALL samples within 3x3 townships

• Consider all present pools within 3x3 townships as potentially analogous

• Board Order System. http://ercb.ca/data-and-publications/

orders/board-order-system

“…3x3 twp study area…to define appropriate geological analogies from which representative H2S and AOF samples can be obtained.”

“…3x3 twp study area…to define appropriate geological analogies from which representative H2S and AOF samples can be obtained.”



“…smaller review areas may be sufficient if data can be obtained. Conversely, the best geological analogues may be more distant…”“…smaller review areas may be sufficient if data can be obtained. Conversely, the best geological analogues may be more distant…”

• Dependent on your area and available data

“minimum five representative analogous samples for H2S and AOF… However, search area may become so large that it extends beyond any geological correlation…less than five samples is warranted.”

“minimum five representative analogous samples for H2S and AOF… However, search area may become so large that it extends beyond any geological correlation…less than five samples is warranted.”

Should be sufficient

All 10 wells found within 5-10km

Farthest sample found >30km

Consider expanding search area



“Data points are representative if they cannot be discounted for technical reasons. If samples that have a higher H2S concentration than the sample selected are discounted, then the applicant must support the decision with geological or engineering reasoning.”

“Data points are representative if they cannot be discounted for technical reasons. If samples that have a higher H2S concentration than the sample selected are discounted, then the applicant must support the decision with geological or engineering reasoning.”



• Factors to consider when authenticating both gas analyses and flow rates:• Formation assignment • Distance • Test date • Sample type

• Most common feedback from ERCB:• “Document/explain your

work”

Resources provided by XI:

•Browse Feature•Assign a different sample•Re-assign test•Engineering/Geological Discussion•Footnotes•Data alerts and flags•InfoXchange



Data Alerts, Flags, and Footnotes



Alerts Issues

•Non Identified Sour•Spans multiple formations•Suspicious interval•InfoXchange record



“Analysts may find some samples show “trace” H2S concentrations that are not quantified or show very low concentrations in areas

that are typically considered to be sweet.”

“Analysts may find some samples show “trace” H2S concentrations that are not quantified or show very low concentrations in areas

that are typically considered to be sweet.”

• Will help industry in reducing the number of wells licensed as sour unnecessarily



• “All samples with H2S show values at less than 50 ppm conc”

• “Over 80% of the representative samples are sweet (0% H2S)”

• “The Operator believes the trace samples are erroneous.”

• “All samples with H2S show values at less than 50 ppm conc”

• “Over 80% of the representative samples are sweet (0% H2S)”

• “The Operator believes the trace samples are erroneous.”

• If met it can allow analysts to discount trace H2S samples

3.1.1 Data Sampling - Drilling Inside Existing Pool


Penetrating an existing pool

(Must be able to demonstrate)

Highest H2S concentration

Data sampling insufficient

Only reference data samples from pool itself

Use unless it can be discounted or you can demonstrate a trend to

prove otherwise

Consider outside data points

3.1.1 Data Sampling - Drilling Inside Existing Pool


10 Gas Analyses for Pekisko Max H2S content: 0.37%(Pekisko A identified)

Pekisko APool Max: 7.23%

3.1.2 Data Sampling - Drilling Outside Existing Pool


Guidelines:

• Start within 5 km

• Minimum of 3 reference pools

• The pool max of a multi-well pool is the most representative, and considered one test (geologically analogous pools only)

• You are not forced to find data simply to meet the requirement

H2S Search:

• Minimum 5 km, all samples considered, 10 highest chosen

• Beyond 5km, 10 wells found.

• Any pools identified, Pool Max provided

• Get more data if needed

Banff Pools identified in search (within 5 km)

3.1.2 Data Sampling - Drilling Outside Existing Pool

10 Gas Analyses for Banff Max H2S content: 0.17%


3.2 Data Sampling - H2S Sampling and Data Quality


• Use for revising your production RR post completion

• Identify which sample types are more reliable

4.1 Geologic Interpretation of Potentially Sour Formations


Guidelines:

• Consider every potential formation individually

H2S Search:

• Stay conservative, make sure all are addressed

• Reliable geological prognosis

• Footnotes provided for formation related alerts and to document results

4.2 Gas Cap Versus Oil Leg Flow Rates


Regulations

If the gas analysis is

taken from a solution gas

sample

Can result in a high release rate for your

well

Calculate a release rate for the gas cap and

oil leg individually

July 2012 H2S Release Rate Assessment and Audit Forms Page 4-9/10

4.3 Wellbore Design Considerations and Slant Wells

Regulations:

• Intermediate casing can have significant effect on H2S RR and EPZ planning

• Slant wells <30 ∘ can be considered vertical

H2S Search:

• Split Summary

July 2012 H2S Release Rate Assessment and Audit Forms Page 4-9/10

5 Engineering Adjustments6 EPZ Modeling

Engineering Adjustments• 5.1 Calculate AOF• 5.2 Adjustment for Reservoir Pressure• 5.3 Adjustment to Zero Skin• 5.4 Adjustment for Net Pay or Contacted Reservoir Length• 5.5 Adjustment for Contacted Reservoir Length• 5.6 Adjustment for Stimulation of Wells• 5.7 Adjustment From Sandface AOF to Wellhead AOF • 5.8 Acid Gas Injection Wells

EPZ Modeling

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