Extended-Reach Slant Drilling Application MacKay River SAGD Project

Dwight Teotico & Amy van Thiel June 3, 2008

* Marque de commerce de Petro-Canada - Trademark

Introduction - Objectives Oil Sands in Alberta MacKay Area Overview Objectives for MRX MRX Extended Reach Planning Execution & Accomplishments Going Forward

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Oil Sands in Alberta

Athabasca Oil Sands
Spans 40 000 square km Over one trillion barrels of OBIP

10% accessible through economical surface mining methods Thermal in-situ method
Injection of steam to reduce viscosity of oil Well pairs drilled horizontal, parallel and vertically aligned First field tested at AOSTRAs Underground Test Facility Environmental surface impacts are minimized

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MacKay Area Overview

Located 60 km northwest of Fort McMurray Petro-Canadas first commercial SAGD project. Estimated lifespan of 25 to 30 years
ALBERTA
Mining Area CROWN

Oil Sands Regions

Edmonton MacKay River

Calgary

Fort McMurray
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March 24, 2006

MacKay Area Overview (Cont.)

Executed Drilling Programs

Pad 20/21 Pad 22/23 Pad 40 Pad 24/25 25 well pairs (Sept. 2001) 21 well pairs (Jul. 2005) 2 well pairs (Jan. 2005) 20 well pairs (Apr. 2008)

Current Drilling Program

H Pattern 4 well pairs to be completed June 2008
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Objectives of MRX
Design the optimum well pairs
Ensure bitumen supply of 40 000 bbl/day at central facility Design injector and producer to minimize liquid level build-up Optimize SOR by even steam chamber development

Conventional or Larger Extended Reach Well Bores

Reduction of logistics costs Reduction of drilling costs Reduction of facilities costs

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Extended Reach Cost SAVINGS

Original plan

-> 4 pads to drain 8 patterns (54 pairs)

Revised plan -> 2 pads to drain 5 patterns (42 pairs) Reduction in pads equated to a savings for several areas
Drilling Facilities Logistics
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Rig Utilization
Horizon 301
650 m Surface Rig Vertical or 45 degree slant drilling capability Utilized due to scheduling constraints

Precision Drilling 295SL

2200 m Super SingleTM 45 degree slant drilling capability Designed for specialty drilling such as SAGD

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Geology

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Geological Challenges

Formations SURFACE - Unconsolidated sand, boulders, and gravel seams INT. - High clay content MAIN - Unconsolidated saturated highly porous bitumen pay Limited True Vertical Depth Surface Casing (Kick of Point) ~ 60 mTVD ICP of ~ 135 mTVD Slant drilling with aggressive build rates Extreme pull downs
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Well Design Challenges

Large diameter hole/casing sizes for surface and intermediate strings BHA Design Unconventional Torque and Drag Issues Torque limitations for installation of slotted liner Directional profile constraints
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MRX Planning and Preparation

Encapsulating Drilling Fluid System
Eliminate accretion issues Reduces abrasiveness Allows for mechanical solids separation Provides lubricity

Hole Cleaning Capability

Maintain minimum annular velocity Moderation of drilling rate to match hole cleaning capability Mechanical cleaning methods Premium fluid handling and solids control equipment
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March 24, 2006

MRX Planning and Preparation

Mud Cooling System
Increased well bore stability Decreased torque and drag Reduction in cuttings volume

MGT Conveyance
SAGD producers were ranged to the existing OB wells SAGD injectors were ranged to the producers Tractor Coiled Tubing

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MRX Directional Planning

Challenges
Maintaining angle in sand on surface hole Drilling at base of producing zone without entering non-producing Limestone formation Ranging constraints

Directional Planning & Execution

Maximum planned dogleg of 8s on build sections Close directional control to reduce DLS and tortuosity

Extended reach drilling technologies investigated

Rotary Steerable AG-itator Slider

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711mm Hole Opener

Top Section Bottom Section

Used to ream open 311mm pilot hole to 711mm ~ 7000 lbs

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Liner Running Installation Limits

Torque limitations under combined loading of tension/ compression

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SAGD Extended Reach Well Design

PETRO-CANADA MR1 SAGD 7" WELL DESIGN PRODUCER
Spud @ 45deg inclination
G.ELEV (m): (see survey) KB. ELEV (m) : (see directional plan) Class I BOP (Diverter)

INJECTOR
Surface Casing 13 3/8" (339.7mm) Surface Casing

9 5/8" (244.5mm) Interm. Casing,

7" (177.8mm) Inj./Prod Slotted Liner

177.8 x 244.5mm Debris Seal Packer

INJECTOR

PRODUCER 2 Blank Joints Overlap

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Accomplishments

PC NNP1 1533mMD, 131mTVD, 1480m V.S. 11.3:1 V.S to TVD ratio

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Accomplishments NNP1

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Going Forward
Continued Well Design
Casing/Tubing Configurations Slotting Design Cement Integrity

Drilling Challenges
Equipment Limitations Rig Modifications

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Questions

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