Welltec Argentina – New Base, Bright Future

Earlier in Q4 Welltec opened its first base in Argentina to service customers exploring and developing unconventional shales. On December 20th, Welltec successfully performed its first job there, conveying tools in a long horizontal section and allowing the operator to initiate production from the well. Two additional jobs are planned to be carried out early in 2016.

CONTACT

Ricardo Quintero
VP Business Development, Americas
rquintero@welltec.com

The new base and office is located in Buenos Aires and will primarily serve clients operating in the Vaca Muerta Formation in the Neuquén Basin.

Located in west-central Argentina and covering a vast area of 137,000 km2, the Neuquén basin has been producing for more than 100 years. However, in recent years operators have begun increasing investments in developing the Vaca Muerta oil and gas field, exploring for unconventional reserves.

The basin is estimated to hold significant potential, a shale bounty that potentially can transform the outlook for the Western Hemisphere, resulting in support of the provincial governments through the generation of infrastructure, jobs and revenues.

“This is a very interesting and developing area, where operators will be present for the next decades,” says Ricardo Quintero, VP Business Development. “Of course, Welltec will be there to assist the operators performing well interventions on electric line.”

With a good pipeline of jobs already lined up, Ricardo Quintero expects activity to increase significantly over the coming months. “We are off to a great start here in Argentina and the jobs keep coming in. We really look forward to serving our clients and doing what we do best; helping reduce cost while increasing their production and recovery.”


Interim Report Q3 – 2015

In the third quarter of 2015, Welltec® revenues declined to USD 57 million. The development reflects the prolonged industry downturn as operators continue to adjust their operations in response to the low oil price environment and continued global oversupply of oil, but also currency headwinds arising from the USD appreciation compared to the same period last year.

EBITDA reduced accordingly to USD 22 million with an EBITDAmargin of 39% underpinned by further cost reduction initiatives completed during the third quarter. Furthermore, increased focus on automation and in-sourcing within manufacturing and engineering continue to generate significant cost savings and improve the internal supply chain and global delivery infrastructure.

Net cash flow was lower than previous quarters due to lower operating cash flow and the semi-annual interest payment in July, partly offset by lower capex.

CONTACT

Michael Krabbe, Chief Financial Officer,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

Outlook

As industry fundamentals continued to deteriorate in the third quarter, Welltec® is revisiting the full year revenue guidance to USD 240-245 million and a full year EBITDA-margin around 39%.

Jørgen Hallundbæk, CEO: “The third quarter was yet another difficult quarter as the industry was impacted by volatile oil prices, low rig counts, reduced budget etc. Furthermore, it’s evident that operators are struggling to generate cash flow at current oil price levels due to historical capex commitments, changing activity levels and restrictive dividend policies.

Putting things in perspective, even if the underlying oil price fundamentals would improve near term, current expectations are not that of an immediate recovery. Thus consensus is clear; production optimization of existing assets is the cheapest and fastest way to improving cash flows and returns in a low oil price environment, and ultimately building sustainable businesses.

This is what Welltec is all about!”

Investor conference call
Welltec® will discuss its results during an investor conference call today at 5 pm CET. An accompanying slide presentation is available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”. The conference call can be accessed by dialing in a few minutes before the 5 pm CET start and informing the operator that you are dialing in for Welltec’s investor conference call, ID 7081740.

Conference Call Access Numbers:
Denmark: +45 3271 1658
UK: +44 (0)20 3427 1918
US: +1 212 444 0481

The call will be webcast simultaneously and available online following today’s live transmission.

Company Profile

Welltec® is a leading provider of intervention and completion solutions to the oil and gas industry. Our pioneering technology challenges conventions to increase recovery in a safer and more sustainable way, enabling operators to optimize the management and development of their assets throughout the life cycle.

We address the factors that maximize value creation, disruptively innovating to increase reservoir contact over an extended life cycle, in a fraction of the time, energy and logistical effort of the conventional alternatives. The effect is one of increased net present value through higher returns and reduced risks. Our Flex-Well® approach serves to maximize production and increase total recovery while lowering operational and total development costs. Our game-changing solutions extend the productive life of wells and enable clients to pursue fields that would not otherwise be economically viable.

Our unique approach provides for safer operations, removing considerable infrastructure costs and operational effort. Our lightweight technology lowers the complexity and hazard potential of operations, reducing the risk to personnel and allowing smaller work crews, fewer lifts and lighter loads. We reduce dependency on rigs, significantly reducing the industry’s energy consumption and carbon emissions. The ability to operate in extended reach and horizontal wells allows operators to drill multiple wells from the same topside location, thereby further reducing the environmental footprint.

Our technology created the market for robotic well intervention and continued market leadership is the result of constant innovation, rigorous IP protection and a commitment to completely addressing our clients’ challenges. Our completion concept represents the next paradigm shift for the industry, with a simple yet revolutionary approach that allows operators to tap into the full value of their reservoirs at a much lower level of invested capital and with an unprecedented degree of flexibility. As an example, the simple application of expandable metallic well annual barriers (WAB®) overcomes the traditional shortfalls of cementing to enable a lower completion as minimal or intricate as the reservoir characterization itself. Fields can be developed and maintained from fewer topside locations and brought on line faster, for longer.

In an industry characterized by maturing fields and increasing depletion, the premium attached to technology which aids in reversing these trends will continue to gain momentum. Our technology safeguards people and returns on investment, enabling clients to unlock more value from their assets and to address reservoir complexities and uncertainties with a greater number of options.

Important Notices

Any statement in this announcement that is not a historical fact is a “forward-looking statement”. Such statements may include opinions and expectations regarding Welltec® and its future business, management’s confidence and strategies as well as details of management’s expectations of new and existing programs, technology and market conditions. These forward-looking statements rely on assumptions concerning future events that are subject to a number of risks and uncertainties, many of which are outside Welltec’s control, and which could cause Welltec’s actual results to be materially different from these forward-looking statements. While Welltec® believes that its assumptions concerning future events are reasonable; there are inherent difficulties in predicting certain important factors that could impact the future performance or results of Welltec’s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. Welltec® expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.


Zonal isolation: In any well, in any type of reservoir

The WAB® is designed to address a number of the industry’s biggest challenges. Besides being a primary barrier, as discussed in the first part of the interview, the WAB also allows operators to establish zonal isolation with inflow control, as it facilitates cement assurance. Johnny Bårdsen, a specialist in completion technology, explains how operators can benefit from this latest innovation within completion technology and gain significant time-savings and increased production.

The WAB serves several purposes. What can operators gain by applying WAB’s for zonal isolation?

It’s in the word. Operators can gain reliable zonal isolation that will be engineered to the whole solution. It’s simply about splitting the reservoir into compartments. And this can be done with very high ΔP capability that allows you to accommodate a wide range of fluid types, which other products cannot.

For example, if you plan to perform an acid stimulation job, you will need to be able to handle the high ΔPassociated with the high pressure injection down the annulus as well as the exposure to the acid itself. The developed solution would then be engineered for the injection phase, but also, it needs to be capable of functioning for the life of the well during the operational phase.

This means maintaining the zonal isolation, as well as the compartmentalization, when the pressure of the reservoir is now higher than that in the annulus. The WAB’s can deliver this solution. This now gives the operator access to a much larger footprint of a well’s reservoir exposure when drilling and completing a well.

In addition, completing a well by setting WAB’s and WFV’s (well flow valves) in the open hole provides tremendous time savings versus a double skin completion or a single skin with cement and perforations.

 

Today’s wells need zonal isolation

We will get back to the topic of inflow control in a second. But first, can zonal isolation be established in any well or are there limitations?

In general, you can establish zonal isolation in any well and in any different kind of reservoir. And a lot of the world is now going for the so-called ‘hard oil’, where you more or less need zonal isolation on every single well.

The effectiveness of the solution will depend on the homogeneity of the reservoir though. With high homogeneity of the reservoir you typically have the same pore pressure, production porosity and permeability across the reservoir. In such cases, you can support and guide the production flow to a very great extent. Also, you can potentially isolate if you have water or gas coning, allowing you to optimize and extend the production over a longer time.

If you have low homogeneity of the reservoir it will impact the overall production, but in practice, having controllable ‘compartments’ allows the operator to mitigate his risks by allowing control of discrete portions of the well. Heel toe effects can be minimized and excessive water production or undesired gas breakthroughs can be shut-off. So yes, in general, zonal isolation makes sense and can be used in every type of reservoir and in the vast majority of wells. It’s a matter of engineering the right solutions for their well.

 

Full control of flow

Inflow control is a distinctive part of zonal isolation. Why is inflow control needed?

Inflow control is about being able to control your zonal production. There’s no point in creating a zone if you cannot control the flow from that zone. That’s why you have the well flow valve available, which you can position in the zone with a given production flow area through the valve.

Within a zone there can be one valve or a vast number of valves, depending on the flow rate desired. But what it gives you is the ability to control your flow area, which means you can either chose to hold back on production in a specific zone or not. If needed, you can actually close in that zone completely and maintain another one so that you can actively drain your different compartments.

And off course, the flow valves will always be designed for the application in question, giving the client optimal conditions for zonal isolation and increased recovery.

 

Mechanical foundation when cement is required

That WAB can also be used for cement assurance as a way of strengthening barriers. How does this work and what can operators gain from it?

We define the Welltec® Annular Barrier as a primary barrier and we have the background to support that. However, a barrier may be defined differently by the regulators in the different areas you are working in. So in the cases where cement is a 100% required due to regulatory matters, we offer a mechanical solution that can assist to anchor and secure the casing.

In such cases, the WAB’s provide a foundation for the cement. For example, if you want to do a stage cement job, one of the biggest challenges is to actually spot and get the cement where you want it. In such a case, the WAB can be used as a cement diverter, which basically forms the foundation of the cement. Here, you expand the WAB, get a pressurized barrier against your reservoir, but you put a cement port collar above the WAB. From here, you open that collar up then force cement outside, with the WAB as the foundation.

For many operators, this will be a very good solution where cement is needed to anchor and support the casing. Potentially, the operators can also have the WAB as the primary barrier, while at the same time not actually defining or referring to it as a primary barrier because of the regulatory guideline and rules.

 

Enabler for new wells

What other challenges do operators struggle with that the WAB can help solve?

When operators develop the fields, they may require water injection or gas injection or other reservoir management objectives. This means that the parameters of the formation that you drill through in order to penetrate the reservoir changes during the life of the well. Many times you actually have pressure regimes that have changed so much over time that you can’t drill anymore because you can’t isolate and support it with cement.

In cases like this, the WAB can provide the defense against surface annulus pressure. [edt: Read how the WAB as a primary barrier addresses the challenge of sustained annulus pressure in the first part of the interview: Rethink your completion strategy]. Basically, with regards to developing old fields, or maintaining production from them, the WAB is an enabler for being able to drill the additional wells and isolate the potential inflow zones that have appeared over the producing life of the wells. In this way, the WAB is not just a barrier for surface annulus pressure; it can also be an enabler for new wells.

 

Proven technology

Is the market ready to adopt this technology?

The market is in a flux given the downturn. Some operators will not be open for new ideas. But you have technology strong markets like in the North Sea – a really technology driven market geared to maintaining and getting as much out of the formations as you potentially can, which have and will continue to drive new solutions such as this one.

And based on all our testing qualifications and our track record, the WAB technology is not new anymore. It has been accepted and adopted by many clients, including most of the IOC’s and many NOC’s.

So now it’s as much a matter of helping the operators to change their thinking a little bit, and above all, to assist them in looking at what potential value the solutions can give them in all the different variations of their challenges. With this new and proven technology we offer, we can help operators prepare to take on the decision of changing the structure of their wells and to enable new wells in the future.

Read completion cases

JOHNNY BÅRDSEN

Johnny has extensive experience within the oil and gas industry. Among others, he worked several years for Baker Hughes and Statoil before joining Welltec in 2012 as Sales director for Well Completion Solutions in Scandinavia. Recently, Johnny won the Best Presentation Award at SPE Bergen, focusing on the WAB® and the Flex-Well® concept.


Q3-2015 Report and Investor Conference Call announcement

Company announcement no.9/2015: Welltec® will disclose its interim quarterly financial report for Q3-2015 on Thursday, November 19, 2015 and will discuss the results during an investor conference call at 5pm CET.

CONTACT

Michael Krabbe, Acting CFO,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

An accompanying slide presentation will be available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”.

The conference call can be accessed by dialing in a few minutes before the start and informing the operator that you would like to participate in Welltec’s investor conference call, conference ID 7081740.

The conference call will also be webcast simultaneously on a listen-only basis. Please log in via the “Investor” section of the website in due time to test your browser. A replay of the webcast will then be available following the transmission.

Conference Call Access Numbers:
Denmark: +45 3271 1658
United Kingdom: +44(0)20 3427 1918
USA: +1212 444 0481

Company Profile

Welltec® develops and delivers technology and solutions intended to transform the oil and gas industry. Our game-changing solutions are dedicated to optimizing the management and development of clients’ assets, both in the form of well completion technology and intervention services required to ensure performance and integrity. We operate in all types of onshore and offshore well environments, including the most extreme and hostile, such as deepwater, subsea, extended reach, heavy oil and unconventional gas and oil wells. Our lightweight solutions are based on a vision to improve safety while reducing environmental risks, fuel consumption and carbon footprints.


Oil & Gas Summit: Jørgen Hallundbæk in panel debate

Recently, oil and gas professionals, government officials and leaders of major oil companies participated at Oil Gas Denmark’s Oil & Gas Summit 2015. Founder and CEO of Welltec, Jørgen Hallundbæk, participated in a panel debate where he emphasized that the technology to maximize oil recovery is here and that opportunities are prolific.

CONTACT

VP Marketing
Brian Sidle
bsidle@welltec.com

‘Here in the North Sea, the upstream industry faces some big challenges. None are more prevalent than having to adjust from a US$100/barrel world to the current price environment. So is there any good news coming from the North Sea?’

This was the discussion invitation and outset for yesterday’s summit, which sought to examine the challenges and possibilities in the current climate. In recent years a decline in production, ageing facilities and increasing operational costs have been the reality for most of the oil and gas sector in the North Sea, causing serious market adjustments.

But despite the current downturn and the various challenges facing the sector which have forced companies across the globe to reduce costs to levels that match the current situation, Jørgen Hallundbæk highlighted that the technology to increase recovery rates is available. Operators can work with reductions in CAPEX to their budgets and still produce oil in a safe and cost effective manner. They just need to be more receptive to some of the available technology around them.

“Some operators have taken this downturn as an opportunity to open their doors and question if there are ways they can change their business models and their approaches to reservoir drainage, resulting in a collaborative environment with us as a service provider. Today with a lot of companies being cash-flow negative, they are truly willing to listen to something they have not done before”, said Jørgen Hallundbæk.

It is widely known that Norway has high recovery rates and is skilled at draining their reservoirs. But why has Norway been so much better at applying new technology? inquired the moderator.  

“At the time we came about in Norway, they were facing a low oil price, mature assets and declining oil production. Something had to be done. They had infrastructure in place which they could exploit if they could reach further out, hence allowing them to extract more oil. Back then, their recovery factor was just getting close to 30% percent and now, primarily because of their technology approach, they are well above 50% percent”, said Jørgen Hallundbæk, who for more than two decades have partnered with Statoil in Norway.

The conference took place in Copenhagen on October 21st at DR Koncerthuset and was hosted by Oil Gas Denmark – a trade organization for all companies in the upstream oil and gas production sector.

Watch the panel debate

 

 

Photo: Hans Søndergaard


Welltec® sees increased demand for services as operators shift focus

International oil and gas industry solutions provider, Welltec®, has reported a marked increase in demand for its services in the North Sea as operators scale down drilling operations. The company, which is headquartered in Denmark and has bases globally, says a reduction in investment in new wells in the the North Sea has resulted in resources being redirected towards enhancing oil recovery from existing wells.

CONTACT

VP Intervention
Christian Krüger
ckruger@welltec.com

Welltec® explains the low price of oil has resulted in a rise in requests for the company’s groundbreaking intervention services.

In real terms, this has equated to a 47% rise in intervention work over the 4 year period from 2012 to 2015 with firms making use of the vast range of technology in the Welltec® portfolio.

NorthSeaActivityVsOilprice-03

In particular, the oil price plunge in 2015, down 50% compared to 2012, has driven the increased demand for intervention services. This is a development that corresponds with operators’ trend of cutting capital expenditures such as drilling activities, and shifting focus towards intervention – a trend recently documented by a leading oil and gas consultancy agency.

Welltec’ s innovative solutions are designed to increase oil recovery and activate deferred production while at the same time reducing lifting costs, allowing operators to get the best results in the current climate.

Christian Krüger, vice president of intervention at Welltec® said: “This new development is a necessary reaction from the industry and shows that the current downturn has prompted operators to search for new strategies to maintain or increase production.

“In the light of the current low oil price, we are seeing operators focus on protecting and optimising their existing assets and our solutions are designed to increase recovery while at the same time reduce lifting costs, allowing our customers to maintain positive cash flow.

“Just as other industry downturns historically have prompted innovation, the current downturn in the oil and gas industry opens up new possibilities and a chance for the industry to change its mindset, which presents a golden opportunity for companies which can offer an effective, lower cost alternative.”

Welltec® has a range of intervention solutions available to clients, aimed at maximising oil recovery from existing wells – extending the lifespan of fields and at a much lower cost than fresh drilling.

The solution portfolio include include mechanical, milling, clean-out and conveyance services, which provide clients in the North Sea and globally with efficient methods of intervention to keep production up and costs down.

The press release has been published on: 
Aberdeen Business News
Your Oil and Gas News
Oil Voice


Welltec wins ‘best stand’ at KIOGE

We did it in 2011, again in 2012, anew in 2014, and now, in 2015, we have received yet another design award for ‘best stand’, this time at KIOGE in Kazakhstan.

CONTACT

VP Marketing
Brian Sidle
bsidle@welltec.com

The award-winning stand at KIOGE (Kazakhstan International Oil and Gas Exhibition and Conference) is custom designed and built up around a powerful visual concept. In a simple and straight-forward manner, it communicates several Welltec intervention and completion solutions, and, in particular, the value operators can gain from them.

With live demonstrations of Well Tractors®, Well Strokers®,  Well Millers® and various videos and animations illustrating complex operations in a simple way, the stand invited the clients attending the exhibition to engage with the people as well as the tools at hand.

KIOGE took place from October 6-9 and is one of Kazakhstan’s most established and best attended oil and gas trade events. The exhibition and conference is a meeting place for both oil and gas professionals, government officials and leaders of major commercial companies.

In 2011, Welltec won the best stand award at SPE Bergen followed by a similar award at one of the industry’s biggest events, Offshore North Sea, in Stavanger in 2012. 2014 saw an award for best stand at APPEA in Australia

A big thanks to the exhibition team and our colleagues in Kazakhstan for a great stand and exhibition.


Documented right down to the smallest detail

The new Transformation Center in Denmark, which manufactures the award-winning completion product, the Welltec® Annular Barrier, is now celebrating its one-year anniversary. Facility manager, Vagn Nielsen, takes stock and unveils a state-of-the-art quality system.

CONTACT

Vagn Nielsen
Facility Manager
+45 8841 8501

It has been 12 months since the new Transformation Center opened. How have the past months been?

Things have gone very well and the production is up and running. Currently we are working on orders for some major operators from the Western as well as Eastern hemispheres. And we have already delivered many products for the North Sea and the Middle East.  All deployments have been exclusively successful.

And the employees are fantastic. They will stand shoulder to shoulder with each other to continue making this a success. The atmosphere is good, and people are great at cooperating and helping each other.

 

Complete traceability

You mention state-of-the-art manufacturing quality, what has been implemented?

Yes, indeed. It has been an exciting and successful process, where we have established and configured procedures in a way that matches our needs.

For example, we have integrated complete traceability into the new facility giving us and our customers full control of all applied material. All the way down to the individual piece of raw material that is used to create the smallest parts, from cradle to grave. We can simply control and ensure the highest quality on every single piece that is a part of our delivered products.

You almost go to extremes with traceability. Why is that?

There are several aspects to it. But the main reason is that the Welltec® Annular Barriers (WAB®) are new technology; steel that gets expanded. And once a WAB® has been expanded and set, you can’t just replace it with a new one, it’s permanent. Therefore it’s paramount that the products perform as required, which is why we ensure that every single WAB® is of the highest quality. The tracking and monitoring is one of many aspects that help us guarantee reliability.

 

Full transparency

Looking back the past 12 months, what are you most proud of?

Our clients’ reception of what we have done, that is for sure one of the successes.

But also, the results from establishing good processes. For example, our welding procedures where we operate with a bar code system, everything has to be scanned in every step of the way and if something doesn’t match, the work can’t be done. This ensures that all bits, people and materials meet the criteria established for the highest quality product – criteria that we require to be met before we even begin welding.

In addition, the extra feature we’ve created, where clients can follow the entire process through a live video camera. In this way, they can get fully acquainted with the processes as it is carried out as well as seeing where the quality data comes from during the welding.

Clients can monitor visually the welding and by personal remote-inspection ascertain that we are adhering to the required limits.

Why is this relevant to the customers?

The fact that we work with full transparency around our production has been received very well. It gives clients confidence in our quality processes, evidence that we don’t at any level compromise the quality of their product.

Also, we often have clients who travel from the other side of the globe to inspect the manufacturing. Now this can be done without the physical presence which both saves time and flight tickets and creates a much leaner manufacturing process.

 

More like a laboratory

What other highlights has there been during the past 12 months?  

Our facility in general, the high degree of tidiness and orderliness, has been received with great respect. This should be common throughout the oil and gas industry, one could say, but from the feedback we’ve received I think we’ve raised the bar here as well.

From the very beginning, Welltec’s approach has been that you cannot create quality products in a mess. That goes for all our production facilities and production machinery: they all have to be entirely top notch. This is clearly reflected on our premises, which are bright, friendly and clean – you could say more like a laboratory than a manufacturing plant.

The new facility is called a “Transformation Center”. What is meant by that?

It’s a place where you contribute to not just changing things, but changing things radically and setting a new standard for our industry. We feel the products we make can do just that.

And products that make big changes like this can’t be left to uncertainty during manufacturing.  They are produced under optimal conditions for creating quality work that meets the high quality demands of the industry. At the end of the day, this is what makes the transformation possible and why we call it a Transformation Center.

VAGN NIELSEN

Vagn has extensive experience in building up and managing new business units. Starting out as Quality Manager at Danfoss in Denmark, he later changed to the wind sector working for both NordTank (later named Micon/Vestas) and Nordex. Before joining Welltec, Vagn was employed at AH Industries and was responsible for establishing a new sales division in the United States. Today, Vagn heads the daily operation and phasing in of new procedures in the Esbjerg facility.


European award program celebrates Welltec for innovation and excellence

The largest business awards program in Europe, European Business Awards 2015/2016, announces Welltec as a National Champion.

CONTACT

VP Marketing
Brian Sidle
bsidle@welltec.com

The European Business Awards is an independent European awards programme that celebrates innovation and excellence, aiming to draw attention to Europe’s best businesses and what they are doing.

In this first stage of the competition, judges have selected the best 33 companies, the National Champions, from thousands of entries. The second judging phase will begin in December 2015.

Adrian Tripp, CEO of the European Business Awards says, “Now, more than ever … we need brave enterprising businesses who invest in innovation and excellence to lead the way”,

and he continues to state that the programme “is an opportunity for Europe’s brightest businesses to gain the recognition they deserve on a global stage”.

We are very proud to have received this honour, and are humble to compete with the best and most succesful companies from across Europe.

Read more about European Business Awards


Rethink your completion strategy

New technology addresses two of the industry’s biggest challenges; cementing and sustained surface annular pressure. A specialist in completion technology, Johnny Bårdsen encourages operators to rethink and apply a more holistic approach considering the entire life-of-the-well during the planning phase.

CONTACT

Johnny Bårdsen
Sales Director for Well Completion Solutions in Scandinavia
+47 51 64 06 50

It has been said that the Welltec® Annular Barrier (WAB®) can revolutionize the industry. How is that?

The WAB can simply eliminate the need for cement. Likely, this is the most revolutionary thing you can do in today’s oil and gas industry. Cement has been around from day one. But today the operators are basically saying that a least 40% – 50% percent of the wells that uses cement as the primary barrier have challenges with sustained annular pressure (SAP).

Typically, this is due to the pressure / temp cycle of cement. Over time it becomes brittle. Channels are then created in the cement, which the pressures and the accompanying HC’s (gas) can migrate between zones or come back up to surface.

 

Well integrity: A cementless barrier

The WAB can be applied as a cementless primary barrier. Will the industry embrace this new piece of technology?

Yes, I believe so. It has been run as such already, following the ISO14310 V0 leak criteria qualification. While developing the product we saw that the WAB could also support well integrity applications. As I see it, it is a really disruptive change in the industry. It’s simply a fundamental change.

We take a reliable, mechanical solution, that is engineered for the specific well application and verify it as a barrier. It will likely change the industry’s thinking about using a complex fluid/cement solution to run the barrier envelope in the well, in the construction phase.

You can now construct and complete your wells for a barrier that is designed for your well in the construction phase, which can function effectively throughout the operational phase . And it can also be an enabler for an easier or a planned P&A operation.

Can you clarify?

By positioning the WABs in the correct place in the open hole, you will have a pressure barrier for your P&A operations.  You do not to have to challenge yourself anymore to guess reservoir pressures from surface, faced with the uncertainty of whether or not your downhole barriers are ‘leaky’.

 

Avoid expensive surface control equipment

In what ways do you think the industry can improve its procedures?

Today, I think a big challenge is the enormous complexity of the wells. Also, the kind of information that the operators think they need for the production phase of the life.

Let me clarify. Today operators complete these wells with all kinds of surface control equipment on the well. As soon as any of this surface control equipment fails, you either have to live without the information or you have to recomplete the wells, because it’s part of the completion.

Another tendency is that a lot of engineers within the industry think they are really dependent on this information at surface – in order to be able to act on the production profiles of the wells. However, in real life, a lot of the time, many are so afraid of actually operating these solutions that they basically end up just monitoring them.

But why are they so careful? 

Because the equipment keeps failing after a time. Also, by including all these components in the well you also complicate the plug and abandonment side of the well. You have all the control ends. You have all the components that you put down the well, and you have to capture coming back out, to try and plug and abandon the well.

 

Optimize with low-risk interventions

What would be a better and more cost-efficient approach?

Go back to the beginning where you construct and complete the wells.  A completion concept, in which you have a reliable, mechanical barrier as the main component, is much simpler but yet with the capability of zonal isolation and inflow control (edt. Read about zonal isolation and inflow control in the second part of the interview). This can be accomplished by the use of intervention methods instead of working with control line. This is an efficient way to significantly reduce the initial cost of the well. At the same time it enables the well to be maintained by interventions, and with intervention equipment that doesn’t have to be reconstructed to fit these over-complex wells.

In the end, if you want to optimize the well through the life, you have to do some intervention.  So why don’t you construct the wells with a much more robust and easy solution to actually run and to maintain the well? And you now have a solution you can actually compare to time for running it, setting it up, and getting it down there.

What I mean is, that if you’re running a full-bore solution, you have access with all your intervention tools. You can optimize, you can do clean-outs, you can maintain the production flow clean, and you’re actually able to do the work that is needed. You don’t have to design specific intervention tools to go through a valve or a pick-up scenario, which is not in the design in the first place. Now you have a well that is designed for maintaining and being optimized for intervention in the future.

 

Full-bore, optimized for maintaining the well

So it’s basically a matter of increasing recovery?

Exactly. And maintaining a life-of-well concept on the wells. Compared to the smart well solutions and intelligent well solutions, which are typically very costly with surface control, this Flex-Well® concept offers a much simpler solution with greater potential.

My point is, if you have to do anything intervention-wise, for example, if this well starts to produce sand or scale it’s a challenging intervention job to perform. So instead, why don’t you go back and put the finger in the ground and say: okay, we will have sand, we will have scale; we need to optimize this well; we need to intervene this well at some point!

With the Flex-Well® solution we will have a well flow valves solution that is full-bore, optimized for maintaining the well of life and potentially also to go down there, clean out the well or position plugs, or isolate the valves by closing the sleeves etc. You will maintain an optimized well for the life of the well and you won’t have to do all the particularly challenging intervention work. Instead, you will reduce the risk of intervention work significantly because you have optimized the well for that, already in the construction phase.

 

Data: Back up your decision-making base

How can you monitor the well?

The data monitoring is basically a solution that you can download with the intervention tools. When operators know their reservoirs and production profiles, they will see if anything  changes at surface. Based on that you can order an intervention job to do some sort of investigation. During the investigation you can download the pressure and temperature profile of the well external to the completion and then act on it. If you compare this to the intelligent wells today, with this information potentially available at surface, you won’t be able to operate, for example, the downhole valves, because they are scaled up or you have lost communication to the valves, etc. You would still have to mobilize intervention, but then it is a challenging intervention job, because you have all the restrictions and problems in the well.

Instead, by looking at the life-of-well concept again, i.e. the Flex-Well® concept, you’ll have full bore, you’ll have set up the well for future potential intervention and optimizing the well. Also, you’ll have zonal isolation, you’ll have inflow control, and you have the data to back up your decision making base for how you’ll act on the challenges in the well.  Finally, you can intervene and fix without having to recomplete the well. And again, you are also prepared for the permanent P&A of the reservoir. You don’t have to be facing bad cement jobs that need to be fixed up. You can basically just go ahead, plug back, isolate, go back to the next part you have to isolate and then go from there.

So all in all, you are set for life. You just need to take a decision to reconfigure, to rethink a little bit, and see the benefits of constructing your wells in a way that enable interventions to optimize the well if needed.

JOHNNY BÅRDSEN

Johnny has extensive experience within the oil and gas industry. Among others, he has worked several years for Baker Hughes and Statoil before joining Welltec in 2012 as Sales director for Well Completion Solutions in Scandinavia. Recently, Johnny won the Best Presentation Award at SPE Bergen, focusing on the WAB® and the Flex-Well® concept.