STORY OF DEVELOPMENT

Story of Development:

Written by Gary Chipman:

We are trying to paint an image which is unique to the development of this product. The story is that we have a deep understanding of the pain points which operators are experiencing on location, and this is understood by none other than consultants on location running these types of products and have years of operational experience. Finally, the voices are being heard from the individuals like yourself who have a tremendous amount of experience, and they get to share that experience with a veteran engineering team to a produce a product which will greatly benefit the end user. It’s a product being developed by the field and for the field. Years of operational experience went into initiating this project which has grabbed the attention of the development team, universities, material and manufacturing experts. All of which teamed up to fully understand the process of what operations is calling for and how that all fits together in the development process. This process includes fully understanding operations concerns and considerations with current composite FracPlug technology, and where this technology has room for improvement. This launched a study with the premier composite companies in North America where the material was studied through a university, NAIT’s own Productivity and Innovation Center located in Edmonton, AB, Canada. The study was geared towards assessing various types of composite material in order to get a better understanding of performance factors in an array of different loading scenarios as per the application. The study was spear headed by a company which specializes in R&D dedicated to downhole tool design. Furthermore, the study was done in conjunction with Canada’s National Research Council and several premier composite vendors. The study was implemented to gain understanding of characteristics of composite material and how they relate to FracPlug design. This criterion was, performance capabilities, machinability, quality control measures, drill out time and debris size. This was all done in close collaboration with expert operational personnel to ensure the testing aligned with operational parameters. This information was inputted into criteria that was deemed to be the most important factors of the design:

1.Performance

2. Cost

3.Realiablilty

Problem:

There have been recent innovations in the composite FracPlug world that take an aim at reducing overall cost per product as well as reduce overall drill out times per stage. These innovations, although are unique, come at a cost, and what seems like upfront savings per plug, will cost more money in the long run.

Operational Pain Points:

1.Plugs Slipping Downhole During the Frac.

I.Failure of the lower slips will result in the FracPlug being forced down hole as pressure is applied during the Frac. This will cause some of the intended Frac to potentially leak into the perforated holes below, thus reducing the formation break down pressure in the intended zone.

II.This could cause a note in potential reservoir gains that differ from the SRV (Stimulated Rock Volume) simulation. Estimated revenue losses can be as high as $500,000.00 per stage.

III.This may also lead to strenuous drill outs as the plug is not secured in place from the lower slip. This could cause unwanted rotations of the plug, or even worse, push the plug down hole towards the next stage.

2.Dill Out Times, Actual versus Perspective.

I.Plugs in this day can be drilled out in as little as 5 minutes. This is typically analyzed by tagging a plug in a known depth and determining the time for the MHA to move furtherdown hole. However, the ROP (Rate of Penetration) between stages during these short drill out times is taking significantly longer. This leads to the questions, is the plug being drilled out in short times, or is the plug being pushed further down hole? These types of issues are typically representative of a lower slip failure of the plug during the Frac.

II.This issue of plugs sliding down hole during drill outs is multiplied as the debris is pushed further downhole, where the coil tubing has less ability to exert an axial force during drilling operations.

III.Again, unwanted rotation of the plugs during drill outs due to the failure of the lower slips, and the plug not being secured in place, which can cause further delays.

IV.Not having the plug be secured in location during drill outs causes the plugs to break up into larger pieces, making circulation dramatically more difficult.

V.Anti rotational means between stages has become standard practice to have the lower portions, the “stump”, interlock with the lower stage to prevent rotation during drillouts. That said, the “stump” needs to have a minimal length in order to prevent it from tipping when being pushed downhole. Having the part tip, would negate the antirotational design and allow for spinning between stages. Again, this looks to increase overall drill out times.

VI.Coil tubing costs are around $2,100.00/hour, this means that every additional hour of drilling increases overall costs. Furthermore, the longer the coil tubing is in operation can lead to a higher risk in a potential failure, which can further increase costs.

3.Leaking and Pressure Bypass of the FracPlug During the Frac.

I.Failure of the plug to contain the Frac pressure can significantly reduce the formation break down due to the drop in pressure from the leak.

II.This could cause a note in potential reservoir gains that differ from the SRV (StimulatedRock Volume) simulation. Estimated revenue losses can be as high as $500,000.00 perstage.

4.Cost of Quality.

I.One of the biggest issues that has come into affect, is operators simply looking at the cost per FracPlug, looking for the best price in order to lower the costs per stage.

II.These costs typically come at a price, whether they come from lower grade materials, lower QC measures or a lesser integrity plug. The cost of the product is minimal when compared to overall operational costs and potential issues that can arise, and need to be carefully considered.

Root Causes of Pain Points:

1.Composite Lower Slips.

I.In attempt to reduce overall cost as well as save time off drill outs per stage and potentially reduce debris size after drill outs.

i.Although the design intent is correct, composite lower slips have a far less performance rating than their counterpart, the metallic lower slip.

ii.Many FracPlug’s utilizing composite lower slip designs are only rated to 8,000 psi and rely on pressure below the FracPlug to support it during the Frac. This is what will get the FracPlug to “hold” an industry standard of 10,000 psi.

iii.Composite slips tend to break apart during high forces due to the nature of the material and the composition. This is one of the primary reasons FracPlugs tend to slip during operation.

2.Ceramic Slip Buttons.

I.In order to reduce overall metal content, as well as preserve potential damage on the pumps.

i.Again, the design intent is correct and ceramic material has high compressive strength and hardness. However, the material lacks the ability to withstand impact force, a large force which acts at an instant, such as during the Frac. This inability to withstand impact may cause the ceramic slip buttons to crack, break and even shatter. This type of failure also results in the FracPlug slipping downhole.

3.Powder Metal Buttons.

I.In an attempt to preserve potential damage on the pump.

i.Powder metal button run the chance of not meeting the proper hardness requirements or may have hardness levels below that of the casing. This prevents the FracPlug from being secured in place, thus providing a means for the plug to slip downhole during the Frac.

4.Casing out of Round.

I.Some casing can be our of round, meaning that the shape could be slightly oval, furtherleading to having less slip engagement than intended. This amplifies problems RootCauses 1 to 3 noted above.

5.Sealing Element Design Insufficient.

I.In an attempt to reduce costs as well as looking at the Element to reduce plug length.

i.Element design is a critical component when discussing how to contain the pressure of the Frac. Standard practices have engineers calculate the volumetric analysis of the Element against the casing and the mandrel OD. This calculation will determine how much stroke length is required to have the Element create a seal. If the stroke length is to high as compared to the volume it is trying to seal, one could overstress the Element which can lead to a premature failure during the Frac which causes tears in the rubber. This is a major concern when looking at some of the short versions of the FracPlugs on the market, where in order toreduce OAL of the plug, crucial Element length is sacrificed.

ii.Another consideration is using the proper rubber durometer (or hardness) for the particular FracPlug design. The higher the durometer (or hardness) the more resilient the rubber is. Moreover, the higher the durometer the higher set force required to set the element in order to create the seal against the casing. A critical balance must be analyzed for the FracPlug giving the plug the proper durometer for the application, but to ensure enough set force can be transmitted into the Element during the setting process. Not doing so can most certainly lead to a failure to contain pressure during the Frac.

iii.Equally important to the rubber Element is the backup design, in other words,components used to backup the rubber Element during the Frac. This is commonly done by means of composite pedals machined into the lower cone, and even additional backup rings made up of Teflon or PEEK. These components are critical in preventing the rubber from shifting during high pressure applications. Rubber will have a tendency to shift and move through gaps upon high pressure scenarios, which is what makes the material an effective seal.That said, there must be a means to prevent the rubber from extruding through gaps in a fashion that create leak paths, which will ultimately result in a pressure failure. Careful consideration must be given to backup designs as the rubber can extrude through gaps large enough between composite pedals of the lower cone to create a leak path. Furthermore, backup rings may help prevent this, but material considerations must be given to materials that behave poorly at elevated temperatures. Also, backup rings need to be strong enough to contain the rubber during the Frac, but also have enough elongation to allow the rubber to fully set as intended.

6.Composite Material Considerations.

I.Most FracPlugs typically utilize filament wound fibres for their designs. While this material does exhibit good qualities for a FracPlug design being cost effective and easily accessible, there are particular drawbacks.

i.One of the biggest issues with this type of material is the way in which it is manufactured. Being that individual strands are dipped in resin and wrapped around a mandrel where to form the desired tubing shape and size. This process happens very quickly, and should there be a defect between the wrapped layers, it is almost impossible to detect leaving particular QC issues. These QC issues can lead to speration of layers within the tubular, which can very easily go unoticed through the machining of the actual FracPlug components as the seperations could be internal. These seprations can result in catastropic failures of the plugs under higher levels of loading as they can act as shear planes. This can result in the plugs literally ripped apart during operation.

ii.Becauase each strand is idvidually doused in resin when wrapping, there is a higher total resin concentration making the materials hardness high in nature.This not only causes more difficulties while machining, but it also can lead to higher drill out times in operation. Also, on another QC side of things, there is currently no method for controlling the amount of resin with this type of manufacutring process.

7.Application of Set Force to the FracPlug.

I.The application of set force and how the FracPlug responds to setting are crucial design considerations that must be taken into account to reduce potential failure.

i.In terms of conventional FracPlugs, where there is an upper and lower slip, there must be a proper order of operations in terms of components that set. First, the upper slip must set and begin biting into the casing, this allows the set force to transfer into the Element package which will then generate the seal. Finally, the lower slips must set which will ensure the FracPlug is secured in location. There must be a calculated value to ensure that the Element package creates the seal before the lower slips break and begin to bite into the casing. If the lower slips begin to set to early, they will begin to cause frictional forces against the casing which will reduce the amount of force being transmitted to the Element, thus preventing an actual seal against the casing. This problem is commonly over looked, especially with plugs using composite lower slips which have a low break force and begin setting prematurely.

ii.With other designs of FracPlugs, designs using only lower slips or potential“wedge” style designs, this still needs to be taken into great consideration. Thats aid, the seal needs to be set before the slips are set. This is particularly difficult with wedge shaped designs as the only means of transmitting the set force is an upward pull which acts on the lower slips directly.

8.Shortened Length of FracPlug.

I.Shortening the FracPlug as much as possible to both reduce drill out times as well as minimize the debris in the well are Important factors. That said, this must be given careful consideration when designing a FracPlug, as having particular components length reduced can have detrimental effects.

i.Element package, as mentioned earlier, reducing the length of the rubber elastomer to a point where the rubber can be over stressed during setting which could lead to the part tearing apart during the Frac.

ii.The lower cone and lower slip are also critical components that need to ensure important length is not removed to an extent which can cause a failure. To much length removed in these regions can cause a collapse of the lower cone,which would result in the plug sliding down hole. In addition, it may also prevent the slips from properly setting into the casing by either not providing enough of a supported ramp and/or now allowing the slip to fully engage due to the reduced allowable stroke length. Also, if the lower slips are too short, they run the risk of failing during the Frac.

iii.Another critical section to look at which was also pointed at earlier is the“stump”. During drill outs, once the rubber has been removed, the frictional forces exerted on the mandrel from the rubber are no longer in place, causing the lower portion of the mandrel and the bottom connection to be pushed down to the lower stage. It is common to have anti-rotational geometry on the bottom connection so that it can interlock with the top portion of the mandrel on the stage below to prevent rotation during drill outs between stages. That said, if the lower portion and the bottom connection are to short, the “stump”can run the risk of being pushed on its side as it is run to the next stage which eliminates the intended anti-rotational means.

9.Ball on Seat.

I.It is important to consider the ball and seat sizing and profile when developing a FracPlug design.

i.When landing the ball on seat for the Frac, there needs to be sufficient interference, which mean how much of the ball is supported by the seat. If there is to little interference, the ball risks being pushed through the seat, or potentially having portions of the ball shear off during the Frac which would create a leak path. Also important, is the angle on the ball seat, which determines how the ball will wedge into the seat during high pressure applications. It is similar to interference in that the ball must have enough support so it will not break apart during the Frac.

ii.The size of ball is also something that needs to be considered, especially when discussing interlocking mechanisms between stages. The “stump” is required to be able to interlock while there is a ball on seat. This small but extra length of the ball on seat can hinder some of the castellation style designs that are present on many current FracPlugs, and will result in unwanted rotation between stages.

10.Procurement issues.

I.When operators are looking to reduce the cost per stage by only looking at the cost per FracPlug.

i.This can lead to a number of the reoccurring issues seen on this list, but ultimately, looking for the cheapest solution can lead to significant increases in operational time or losses in potential revenue gains. One must understand the product in order to be able to affectively procure a product for a desired application.

Gary L Chipman

CEO

337.789.1924