The shale gas and tight oil revolution was a technological one, built on advances in horizontal drilling and multistage fracturing that unleashed production from source rock once thought to be inaccessible.
But despite its earth-shattering impact, both literally and figuratively, it remains a relatively young revolution, with much still to learn and to be gained by producers as the technology improves.
In particular, the progression from predominantly vertical wells to extended reach horizontal wells that are now reaching record lengths poses new challenges to build reliable tools that can withstand ever-harsher downhole conditions.
And the shift to unconventional reservoirs is adding costs to deal with their often-higher levels of sour oil and gas.
The Energy Excellence Awards finalists in drilling through completions show that better subsurface communications, cheaper and faster downhole tools and safer options to deal with potential risks are key to driving the technology forward, knocking costs down further as companies seek ways to thrive in the lower-for-longer commodity price environment.
AMGAS provides a sweet solution to sour problem
Highly toxic sour gas and fluids have been the bane of oil and gas production in parts of western Canada throughout the industry’s history. The extremely poisonous, highly corrosive and explosive nature of hydrogen sulfide (H2S) makes it a troublesome problem to deal with. And with more wells being drilled in North America in H2S prone unconventional reservoirs, producing more sour gas and crude oil than ever, it has become an expensive one too.
Beyond the potential danger to workers in the oil and gas industry, H2S can have negative environmental impacts as a result of venting, which can lead to the creation of sulphur dioxide, as well as creating harmful corrosive effects on pipelines and other equipment.
It’s a problem AMGAS Services Inc., a finalist in the Drilling through Completions category of the inaugural Energy Excellence Awards, has gone a long way toward solving with the development of AMGAS CLEAR. A process that allows for the safe and efficient removal of H2S from sour crude oil, condensate and water without introducing any chemical into the liquids, CLEAR has created a number of associated environmental benefits for its users.
The process is ideal for high and variable H2S concentrations, according to the company, resulting in no converted sulphides remaining in the fluid. It is designed to prevent any chemical overtreatment or under-treatment, improving operational efficiency and minimizing costs. The technology provides producers the opportunity to safely deal with H2S on their own locations with trained personal, lowering risks and impact on the public.
“In short, AMGAS CLEAR technology can provide opportunity to our partners. This technology provides the opportunity to save on substantial costs associated with transportation and disposal of fluids in addition to costs of fresh water and large volume storage options,” said Steve Martinson, AMGAS team member – general manager.
Besides the economic benefits, CLEAR will save millions of litres of fresh water from being removed permanently from the water cycle. And by treating sour fluids onsite, “our partners have the opportunity to completely remove the risks associated with transportation of sour, pressurized fluids from our highways in and around the communities that they do business,” Martinson told the DOB.
There have been challenges in navigating the current regulatory framework to cement CLEAR as an option for its industry partners in a variety of scenarios and applications, he added. “AMGAS has been extremely fortunate to work with industry partners committed to introducing innovative technologies to their programs.”
AMGAS worked closely with clients to implement the use of the technology to best address specific needs for fluid recycling. It also worked with the Alberta Energy Regulator to trial the technology for use in high H2S environments.
“Although CLEAR has been commercially available in Canada and around the world for quite some time, we have recently worked closely with the AER to address challenges and gain additional verification and vetting through additional controlled field trials. The success of our field trials has proven to be extremely valuable as we strive to bring the benefits of our CLEAR technology to a wider array of industry partners,” Martinson said.
Its development was timely, helping the Calgary-based company, which was launched as a family business in 1989, to weather the recessionary period the industry is only now emerging from.
The environmental benefits of the CLEAR system have been substantial and have surpassed all original expectations and considerations, according to AMGAS. In a cost-conscious, competitive marketplace there have been substantial gains for its clients as they look to institute solutions that are safe and efficient, while providing cost savings, the company said.
Persistence pays off for Thruster Energy
Pure determination brought another potentially groundbreaking new technology to market recently, with the commercial launch of the Universal Jet Thruster (UJT) by Calgary-based Thruster Energy Corp.
Given the early failures of the technology concept, few would have blamed inventor and Thruster founder and president Dave Griffith for throwing in the towel. But perseverance eventually brought the UJT to full commercialization.
With today’s horizontal wells routinely exceeding total-measured-depth to total-vertical-depth ratios of four and as high as 12, drillers face new challenges from high friction and nominal weight on bit. Doglegs complicate that by adding high friction areas, inducing strain on the rigid bottom hole assembly (BHA).
The UJT’s innovation is to maximize well cleaning in such wells using a 45-degree reverse jet sub to set debris in motion toward the heel, using thorough radical jet cleaning to eliminate beaching of debris. With the entire flow diverted upward at the 45-degree angle, it creates a jetting force that aids the tools to naturally trudge forward and effectively pull the BHA downhole, using hydraulic force to the advantage of the BHA instead of fighting it, Griffith said.
When the tool encounters an obstacle, flow is automatically reversed to deal with the obstruction. After the restriction is milled, drilled or washed away, the tool reverts to jet position and all flow is directed back uphole in reverse jetting fashion.
The UJT allows companies to achieve drilling depths that are beyond what is achievable from the use of agitation tools alone, allowing them to achieve longer laterals along with the use of today’s standard extended reach tools, he said.
Early iterations simply could not stand up to the harsh downhole conditions and the tool encountered catastrophic failures on its first and seventh runs, explains Griffith, who sold his previous company, DSI Thru-Tubing Inc., in 2014. At that point, it became extremely difficult to trail the tool as improvements were made, he said, since companies saw it as presenting a high risk to their wellbores. “That really slowed down the ability to move forward.”
What kept him going was the knowledge the technology worked, and represented a big step forward if the reliability could be proven, he said. “We went back to the drawing board because in those few wells that we ran that didn't fail, we were seeing some very positive results, so the technology was sound.”
A secondary problem was the tool coming out of the hole with such wear and damage that they were unable to run a second job. Further refinements were needed.
“We were still getting some great data, so we made a version 3.0, and now we are actually finally there,” Griffith said. “That is just shy of three years of work. I have spent about $1.6 million of my own money to get this to where it's over the finish line, so it is quite a heavily invested technology. But we still believe, and especially in light of the last tranche of wells we have just done, that it will be a staple product in not only coiled tubing applications for extended reach, and threaded pipe, but also in the drilling industry which we haven't even dabbled in yet.”
Among other things, the UJT succeeded in dramatically reducing the time spent milling bridge plugs in-hole, while effectively eliminating debris downhole and drastically reducing the risk of getting bit stuck while pulling out. And users have seen a 75 per cent decrease in chemical costs, he said.
The results included a record well for Chevron in New Mexico, where the producer recorded the lowest time ever achieved in the well to drill out multiple plugs, the least amount of chemicals pumped, the least amount of fluid needed and the best debris cleanout, Griffith said. The technology is now used by some of the largest producers in North America, including Royal Dutch Shell plc, Chevron Corporation and Crescent Point Energy Corp.
The technology has been “a game changer” for the company, Griffith said, generating more revenue in the last five months than in the previous two fiscal years combined while stimulating demand for the use of Thruster’s eight other complementary downhole tools as the company transition from a research-focused firm into full-scale commercial operations.
Subsurface Internet drives Unified Telemetry platform
The relentless drive for shorter drilling times and the pursuit of cost efficiencies on the wellsite has made the reliability of measurement while drilling (MWD) equipment critical in the eyes of producers, according to Evolution Engineering Inc., which maintains that aggressive drilling practices combined with growing extended reach wells has resulted in the harshest downhole drilling environment in the history of directional drilling.
Evolution integrated electromagnetic (EM) and mud-pulse telemetry technology into one MWD system in its patented Unified Telemetry platform, providing the directional drilling industry with “unparalleled reliability” and high data rate capability in such challenging downhole environments, said Paul Crilly, Evolution president and chief executive officer. “This reliability translates into lower drilling costs by reducing or eliminating trips from the hole to replace failed drilling equipment. This cost reduction is critical to E&P companies in our lower commodity price environment.”
The advantages of EM telemetry are well known and are of particular importance to improving drilling times in regions like the Duvernay, Permian, Mid-Continent and where formations are problematic to EM communications, the company said.
Unlike dual or twin telemetry, Unified Telemetry independently utilizes each telemetry system to perform cross-telemetric diagnostics and sends these results to surface. Data can include real-time shock, vibration, stick-slip, pressure, gamma, rotating inclination and azimuth, and over 90 other variables, the company said, with the system built to support the integration of real-time rotary system and resistivity technology.
Its high data rate, large bandwidth communication technology provided in a one-size-fits-all probe design puts the company on the road to developing what it calls the Subsurface Internet.
With two telemetries working concurrently, the speed at which downhole information is communicated allows operators to make better drilling decisions in real time. “Ultimately, this means better wellbore placement to improve the productive capacity of an oil or gas reservoir while significantly reducing the time and cost to drill a well.”
Evolution’s technology is “designed radically different” than previous systems developed over the last 30 years, noted Crilly, which required a great deal of collaboration with both suppliers and early users, as well as “changing a drilling industry mindset” used to the old technology.
One of the most visible differences from traditional MWD systems is its length of 17 feet into which Evolution has compressed mechanical and electronic components that historically would have taken 90 feet, which translates into additional performance reliability and enhanced data collection as a result of being closer to the drill bit.
Developing and commercializing new technology has numerous challenges, said Crilly. “Our technology has to withstand incredibly harsh downhole environments of wellbores up to 25,000 feet in length with extreme pressure, temperatures and shock and vibration levels that can destroy virtually anything man-made.”
To achieve technology innovations like this, Evolution collaborated with a number of supplier partners to develop components that had not been designed or manufactured previously for MWD equipment, he said. “For instance, we co-developed a new high energy density lithium battery with revolutionary size and performance specifications with an international lithium battery manufacturer to power our downhole technology.”
The company has also been fortunate to have several early adopters willing to deploy and test the technology. “Working closely with adopters of Unified Telemetry technology, we have been able to quickly field test and refine our original design to maximize field performance. One of these early adopters is now Evolution’s largest customer and enjoys a leading market position in the directional drilling industry,” Crilly said.
Headquartered in Calgary, with North American service and support operations headquartered in Conroe, Texas, the company designs and manufactures its systems in-house. With over 25 full-time engineers, Evolution has one of the largest independent downhole engineering teams in the world.
With an intellectual property portfolio that incorporates 290 issued and pending patents, Evolution has grown from a startup to a thriving, profitable MWD technology provider with operations in Canada and the U.S., counting some of the largest producers in North America as clients.
The Energy Excellence Awards will be presented at a reception on May 2, 2019 at Devonian Gardens in Calgary. Click here to buy tickets!