© 2016 Chevron Corporation

Jack / St. MaloFirst 18 Months of Performance

and the Journey Ahead

Travis Flowers – Chevron

API Delta ChapterNew Orleans, LAAugust 23, 2016

2© 2016 Chevron Corporation

Introduction

Agenda

� Key Messages

� JSM Firsts

� Project Overview

� Early Performance &

What’s Ahead

� Enabling Technologies

� Best Practices & Lessons Learned

� Q&A

3© 2016 Chevron U.S.A. Inc.

Key Messages

• The Technology development and

focused reservoir learnings early in the development are keys to success in

Lower Tertiary

• Long-term relationships and

collaboration with Service Providers

and Co-owners enabled technology

• Robust design and reliable operations

are paying dividends

• Favorable early-time performance, but

still many learnings ahead

4© 2016 Chevron Corporation

Industry’s...

Largest Displacement Semi-Submersible

First Deepwater ESTMZ Execution

Largest & Deepest Subsea Boost Pumps

Chevron’s...

First Deepwater Wilcox

First Subsea Multi-Phase Meters

First Subsea Sampling Skid

Longest Subsea Tie-back in GoM

Heaviest Casing String Run

Highest Depletion Pressures

JSM Firsts

5© 2016 Chevron Corporation

Project Overview

Julia

25 miles

Collaboration among co-owners enabled critical technologies & infrastructure for multi-field development around the Walker Ridge Regional Host

Chevron U.S.A. Inc. (operator)

Union Oil Company of California

Maersk Oil Gulf of Mexico Four LLC

Petrobras America Inc.

Statoil Gulf of Mexico LLC

Exxon Mobil Corporation

Eni Petroleum US LLC

Jack / St. Malo Stage 1

� Floating Production Facility

� Located in WR 718

� Water Depth: 7,000’

� Capacity: 170,000 bopd

� 3 Drill Centers, 10 Wells

� Subsea Facilities

� Single-Phase Subsea Pumps

� 2 Export Lines (oil & gas)

� Expansion/Tie-Back

Provisions for Julia & others

6© 2016 Chevron Corporation

Walker Ridge Regional Host (FPU) Layout

Power Capacity: 80 MW

Oil Export: 4000 psi

Gas Export: 3450 psi

Living Quarters: 159 POB

7© 2016 Chevron Corporation

Empire

State Bldg.

Wilcox Reservoirs

Opportunity

� Thick Interval w/ Significant Oil in Place

� Substantial Reservoir Pressure

Challenges

� 26,000 – 29,000 Ft. TVD

� Low Permeability

� Heterogeneous, Vertical Flow Barriers

� Primary RF w/ Minimal Aquifer Support

� Low Bubble Point

� Extreme Borehole Depletion Stresses

� Challenging Subsalt Seismic Imaging

� 7000’ of water 200 miles offshore

Typical Log Section 1400’

10 mD

Eiffel

Tower

Louisiana

State

Capital

8© 2016 Chevron Corporation

Regional Geology

4-way salt-cored anticline

structures in the Lower Tertiary

Wilcox trend consisting of weakly

confined to unconfined turbidite

channel and fan complexes

deposited in deep submarine

setting

JSM Stage 1 Development:

� 4 Wells in Jack

� 5 Wells in St. Malo

� Centrally Located FPU

� Single-Phase Subsea Boost

Pumps

9© 2016 Chevron U.S.A. Inc.

Project Performance

� On-time & under budget

� 8 wells producing over 100 MBOEPD

� ESTMZTM** completions yielding better

than forecasted well productivity

� Excellent facility up-time; subsea pumps

online

� Incident free tie-back of Julia Field

� Expect all Stage 1 wells online by 1Q17

� Second stage of development in

execution; Third stage in planning

� OBN seismic influencing resource

maturation

*Shared in 4Q 2015 investor relations data**ESTMZ™ system is a trademark of Halliburton

0

25

50

75

100

125

Gross ProductionMBOED

Actual Monthly Average 2015 Projection*

2015 2016 2017 2018

10© 2016 Chevron Corporation

0

20

40

60

80

100

120

MB

OE

PD

Production

Operational Summary

tie-back

3 wells

4 wells

5 wells

6 wells

8 wells

7 wells

1st oil

FL

pigging

70%

75%

80%

85%

90%

95%

100%

Re

lia

bilit

y

Operational Reliability

� Many firsts with “serial #1” equipment

� Largest, most remote CVX GoM facility

- 159 personnel-on-board, 200 miles offshore

- Three drill centers & five manifolds w/ subsea

sampling and subsea multiphase flowmeters on

each well

- 60+ miles of flowlines & risers

- Largest & deepest seafloor boost pumps

- 9 subsea JSM wells + 2 Julia wells (and

growing)

- Systematic H2S management & flow assurance

- Successful tie-back and ramp-up of Julia Field

� World class safety, spill rate & reliability while managing new facility learnings &

top-quartile operating expense

11© 2016 Chevron Corporation

� Detailed ramp-up plan executed smoothly

� Stable operations & regulatory alignment enabled data capture

� Calibrated multi-owner allocation process

� Tracers confirmed contribution from all zones

� Well performance exceeded expectations

Ramp-Up Planning & Execution

Ramp-Up Deliverables

Stable Ramp of “Clean” vs “Dirty” Wells ����

Calibrate Measurement & Allocation ����

Data at Initial Conditions ����

Establish kh and initial skin ����

Skin vs. drawdown/depletion ����

Completion integrity ����

Zonal contribution ����

Well Performance Flow Back BU #1 BU #2 BU #3

PTA KH (md-ft) 5400 5400 5400 5400

Total Skin -4.5 -4.7 -4.6 -4.5

Depletion (psi) 2800 1600 2480 3745

12© 2016 Chevron Corporation

Initial Productivity &

Well PerformanceLow initial skin

PI DegradationWithin range of expectations

8,500psi Borehole

Depletion1st three wells

Effective Areal

ConnectivityNew well MDT’s

FaultingOBN interpretationSimulation HM

Subsea Pumps Pumps online

Water Production Very low BS&W

Effective vertical

drainage

New well MDT’sRESMAN results

OWCs

10,000psi Borehole

Depletion

2015 step-out Undrilled Fault Blocks

Depletion Drilling &

Completions

Negative Signpost Positive

Early-Life Signposts & What’s Ahead

Key Signposts

� Well performance vs. Borehole depletion

� Reservoir connectivity

� Subsea pump performance

� Delineation results

� Depletion D&C effectiveness

0

2

4

6

8

10

12

0 5 10 15

Bo

reh

ole

De

ple

tio

n (

kp

si)

Cumulative Oil (MMBO)

Subsea Pumps

Full Depletion Level (10.5 kpsi)

Borehole Depletion vs. Cumulative Production

Potential Pore Deformation (8.5 kpsi)

Hollow Cylinder Collapse Strength (7 kpsi)

Managing depletion pace through key stresses with

sustained well productivity to 9,000 psi

Proceeding toward highest depletion levels in

Chevron operated oil fields worldwide

13© 2016 Chevron Corporation

Enabling Technologies

� Enhanced Single Trip Multi-Zone (ESTMZ) Frac Pack

� RESMAN Production Tracers

� Subsea Boost Pumps (single-phase and multi-phase)

� Topsides & Subsea Multi-Phase Flow Meters

� Ocean Bottom Node Seismic (OBN)

14© 2016 Chevron Corporation

Best Practices & Lessons Learned

� Consistency in Personnel, from Planning through Execution Enabled Success

� Co-Owner Collaboration Enabled Critical Technologies & Infrastructure

� Parallel Contingency Plans During Commissioning Kept Project on Schedule

� Early Regulator Engagement and Alignment Supported Execution

� Clear Ramp-Up Objectives Enabled Organizational Alignment & Execution

� ESTMZ FracPack Stimulations are Effective at Depletion Levels Seen to Date

� OBN Seismic Provides Improved Clarity and Potential for 4D monitoring

JSM is still very early in its life... With many exciting learnings ahead...

15© 2016 Chevron U.S.A. Inc.

Q&A

© 2016 Chevron Corporation

Optional Slides

17© 2016 Chevron U.S.A. Inc.

Efficient CompletionsSingle-trip Multizone Frac Pack Technology

• High production rates enabled by frac pack completion

• Thick oil sand intervals require

three to five frac packs for effective stimulation

• Reservoir pressures, interval lengths, and completion design

require improved perforating

gun to survive downhole

conditions

• In a five zone completion,

Single-trip Multizone technology

saves 10 trips in the hole and reduces completion time by ~28 days per well

Conventional Completion (5 zone)

� 14 trips for completion installations

including five perforation runs

� 64 days for sandface completion

ESTMZTM* System Completion (5 zone)

� 4 trips for completion installations including one

perforation run

� 36 days for sandface completion

*ESTMZ™ system is a trademark of Halliburton

Enhanced Single-trip Multizone(ESTMZTM* system)Designed for long lower tertiary completions

1,400’TVD

18© 2016 Chevron U.S.A. Inc.

Seafloor BoostingIncreases Recovery and Improves Flow Rates

Artificial lift challenges:

� Improve production profiles by lowering wellhead pressure

� Enable long tie back distance

� Reliability of electric submersible pumps and fluid compatibility for gas lift

Design competition strategy:

� Extend water depth and power for

subsea single phase pumps (SPP)

Solution:

� Collaborate with Co-owners &

OneSubsea to develop the Single-

phase Pump for JSM:

• 3 MW motor power rating

• 13,000 psi shut-in pressure rating

• 60,000 BOPD capacity

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Subsea Pumping Shaft PowerUnit Motor Power vs. Installation

Year of Installation

Un

it M

oto

r P

ow

er

(MW

)

Jack / St. MaloGOM

DraugenN. Sea

Perdido

Cascade Chinook

Jack / St. Malo Single-phase Pump*

*Photo courtesy of OneSubsea, a Schlumberger company.

19© 2016 Chevron U.S.A. Inc.

Ocean Bottom Node Imaging Technology

� Technology extension for nodes with longer seabed

endurance (1149 nodes/4 OCS blocks)

� Synergy of back-to-back surveys: On-time & budget

� Improved characterization of subsalt faults/compartments

� Baseline for potential 4D seismic

� Improved illumination impacting well placement

Little signal reflected Good signal reflected

OBN

WAZ

20© 2016 Chevron Corporation

Jack / St. Malo Field History

St. Malo Field – 2005 vintageJack Field – 2010 vintage

Jack / St. Malo Activity

Field

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Jack

St. MaloFID

Discovery date Exploration / Appraisal Drilling Development Drilling

First Oil

Well test

21© 2016 Chevron U.S.A. Inc.

Partnering Internally and Externally for SuccessESTMZTM* System Development

2006

• Technology Selection

Workshop2007• Partnership with Halliburton to

develop ESTMZTM* system• System Integration Test at

Halliburton’s Carrollton, TX

2008• Erosion test at Halliburton’s

Duncan, OK location

• Cased hole field trials at

Chevron’s Rangely Field2011

• Additional field trial at

Chevron’s Lost Hills Field2012

• Cased hole ESTMZTM* system• (4 zone) with flow test

*ESTMZ™ system is a trademark of Halliburton

*

Rangely Field Trials

St Malo Well Test

Field Development

Erosion Tests

System Integration Tests

Initial Concept / Design