IADC UBO Committee Classification System for Underbalanced Wells

♦ Level 0 - performance enhancement only; no hydrocarbon containing zones

♦ Level 1 - Well incapable of natural flow to surface. Well is 'inherently stable' and is low level

risk from a well control point of view.

♦ Level 2 - Well capable of natural flow to surface but enabling conventional well kill methods and limited consequences in case of catastrophic equipment failure.

♦ Level 3 - Geothermal & non-hydrocarbon production. Maximum shut-in pressures less than UBD equipment operating pressure rating. Catastrophic failure has immediate serious conse-quences.

♦ Level 4 - Hydrocarbon production. Maximum shut-in pressures less than UBD equipment op-erating pressure rating. Catastrophic failure has immediate serious consequences.

♦ Level 5 - Maximum projected surface pressures exceed UBO operating pressure rating but are below BOP stack rating. Catastrophic failure has immediate serious consequences.

A matrix is referenced below to easily classify the majority of known underbalanced applications. This system combines the risk management categories defined above (Levels 0 to 5) with a sub-classifier to indicate if wells are drilled “underbalanced” or with a “low head” using underbalanced technology. In order to provide a complete method of classifying the type of technology used for one or more sections of a well, or multiple wells in a particular project, a third component of the classification system addresses the underbalanced technique used. Please see the Glossary of Terms following the matrix for explanation of the items shown below.

IADC UBO Committee Classification Matrix

CLASSIFICATION LEVEL 0 1 2 3 4 5

A - Low Head or B - UBD A B A B A B A B A B A B

Gas Drilling 1 1 1 1 1 1 1 1 1 1 1 1

Mist Drilling 2 2 2 2 2 2 2 2 2 2 2 2

Foam Drilling 3 3 3 3 3 3 3 3 3 3 3 3

Gasified Liquid Drilling 4 4 4 4 4 4 4 4 4 4 4 4

Liquid Drilling 5 5 5 5 5 5 5 5 5 5 5 5

Glossary of Terms

Gas Drilling - the overall process of drilling using only gas as the drilling medium. No intentional fluid added. Mist Drilling - drilling with liquid entrained in a continuous gaseous phase. Typical mist systems have <2.5% liquid content. Foam Drilling - drilling with a two-phase fluid with a continuous liquid phase generated from the addition of liquid, surfactant, and gas. Typical foams range from 55% to 97.5% gas. Gasified Liquid Drilling - drilling with a gas entrained in a liquid phase. Liquid Drilling - drilling with a single liquid phase. Low head – or near-balanced drilling is a condition where the hydrostatic head of the well bore fluid column is reduced to either be in balance or be slightly greater than the formation pressure, thus not planning to induce hydrocarbons or formation fluids into the wellbore. Underbalanced Drilling - A 'planned' condition where the bottom hole pressure ex-erted by the hydrostatic head of the fluid column is less than the formation pressure be-ing drilled. Example of Classification System Use – a horizontal section of a well is drilled in a known geologic area using a drilling fluid lightened with nitrogen gas to achieve an un-derbalanced condition through the reservoir section. The maximum predicted bottom-hole pressure is 3,000 psi with a potential surface shut-in pressure of 2500 psi. This well would be classified as a 4-B-4 indicating Classification Level 4 risk, and UBD drill-ing with a gasified liquid.