Baroid Fluid Services Wellbore Stress Management™ Service There most likely is no segment of drilling non-productive HAL15549 HAL18406 time in which it is more difficult to make an economic decision than lost circulation. Estimations of economic impact in this area vary widely, but are on common ground in their very large magnitude. Slight improvements in technology that reduce drilling non-productive time can translate into millions of dollars of operating cost savings. Wellbore Stress Management™ service is Halliburton's engineered solutions which are designed to improve wellbore strength and help reduce drilling non-productive time due to lost circulation. This fully engineered approach requires both unique planning software and materials. Planning includes means to prevent lost circulation as well as stop losses. Prevention of lost circulation by improving the wellbore strength is accomplished by designing and applying WellSET™ treatments that increase the hoop stress around the wellbore. D50 Values of STEELSEAL and BARACARB Products HAL14916 The goal of WellSET treatments is to increase the "hoop stress" (and thus the wellbore pressure containment ability) in the near wellbore region. This is accomplished by placing a plugging material in an induced fracture that prevents further pressure and fluid transmission to the fracture tip, while at the same time widening and propping the fracture. Chemical lost circulation treatments that form a deformable, viscous and cohesive material (e.g., FlexPlug® sealant) also may have the ability to improve the wellbore pressure containment as long as they can increase compressive stress at the fracture face. The Halliburton DFG™ software with DrillAhead® hydraulics module can predict the equivalent circulating density (ECD) over an interval in one module, calculate the width of a fracture that may be initiated, and select and design a proper material and particle size distribution that can efficiently prop and plug that fracture in a second module. The matchless WellSET treatment materials are selected from sized resilient graphitic carbon (eg., STEELSEAL lost circulation material) and ground marble (eg. BARACARB 600 bridging agent). BDF 392 1330 BDF 391 1150 BDF 393 665 BARACARB 600 600 STEELSEAL 340 BARACARB 150 150 STEELSEAL Fine 80 BDF 398 55 BARACARB 50 50 BARACARB SF 35 BARACARB 25 35 BARACARB 5 5 A third module then predicts the change in rheology resulting from the addition of the specialized lost circulation materials, which then is cycled back to update the ECD calculations. The engineering model was able to adequately predict rheology for LCM additions in non-aqueous drilling fluids with sufficient accuracy to minimize error on ECD predictions. HALLIBURTON The model is demonstrated using three products: 20 lb/bbl BARACARB 25 bridging agent, 16 lb/bbl BDF-398 resilient graphitic carbon and 10 lb/bbl BAROFIBRE SF seepage loss additive. Very good agreement was observed between the measured and tested data as shown in the accompanying figure. This combination of unmatched planning and application tools can allow the operator to make decisions ahead of time during the "drilling the well on paper" phase as to which approach is the most economic - prevention (pay now) or remediation (pay later). Regardless of the choice, the resulting cost can be reduced by knowing and choosing the proper approach and materials ahead of time. The learning process can improve future decisions as experience is gained, resulting in a continued reduction in cost related to lost circulation. Productsversus Viscosity Prediction vs Measured Data MeasuredMixed Rheology Predicted - after LCM Addition 90 12 ppg ppg SBM; 12.0 Base SBM, base rheology 80 46lb/bbl lb/bbl LCM:16measured rheology 20 BAROCARB, BDF 398, 10 BAROFIBRE 70 Predicted 20 lb/bbl BAROCARB, 16 BDFRheology 398, 10 BAROFIBRE 46 lb/bbl LCM: Predicted 60 50 40 30 20 lb/bbl BARACARB 25 16 lb/bbl BDF 398 10 lb/bbl BAROFIBRE SF 20 10 0 0 100 200 300 400 500 RPM 600 HAL18409 Dial Reading 100 HAL18407 HAL18408 HAL18542 HAL18541 Contingency chemical sealant treatment applications are designed using the DrillAhead® platform software package that models long fractures. Capabilities include the ability to model lost circulation fracture length and width vs. ECD to plan chemical sealant treatments for lost circulation mitigation. Our unrivaled chemical sealant systems are designed to react with the drilling fluid itself to create highly viscous and cohesive sealants in the wellbore that are displaced into the lost circulation fractures. FUSE-IT™ lost circulation treatment reacts over a wide range of waterbased fluid mixing ratios while FlexPlug® OBM slurry reacts with oil-based fluids. FUSE-IT treatment also is capable of reacting within an oil-based fluid if a water pill is provided. These drilling-fluid-reactive systems are not dependent on temperature or pressure, thus removing a significant amount of placement uncertainty present with competitive systems. FUSE-IT treatment reacted with a water-based fluid HAL18543 FUSE-IT treatment reacted within a non-aqueous fluid www.halliburton.com SDS-053 09/06 © 2006 Halliburton All Rights Reserved Printed in U.S.A. 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