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1 NOTICE CONCERNING COPYRIGHT RESTRICTIONS This document may contain copyrighted materials. These materials have been made available for use in research, teaching, and private study, but may not be used for any commercial purpose. Users may not otherwise copy, reproduce, retransmit, distribute, publish, commercially exploit or otherwise transfer any material. The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specific conditions is that the photocopy or reproduction is not to be "used for any purpose other than private study, scholarship, or research." If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of "fair use," that user may be liable for copyright infringement. This institution reserves the right to refuse to accept a copying order if, in its judgment, fulfillment of the order would involve violation of copyright law.

2 GRC Transactions, Vol. 30, 2006 Case Study: Underbalanced or Mud Drilling Fluids at Tres Virgenes Geothermal Field J. Guillermo Jaimes-Maldonado and Sergio Cornejo-Castro Comisión Federal de Electricidad, Morelia, Mich., México Keywords Tres Virgenes, underbalanced, mud, air/water, drilling fluids, water based, directional well, costs ABSTRACT Several direction wells have been drilled at the Tres Virgenes geothermal field using mud and underbalanced fluids (aerated water) in the feed zones both for production and injection wells. Large mud volumes during drilling have produced damage in the formation decreasing its permeability. On the other hand, aerated water fluids produced wear in the production casings in some wells. CFE conducted several analyses to select the drilling fluid for future wells. The results indicate that the penetration rate using underbalanced fluid was 56 % higher or at least similar than drlling with mud. The estimated cost should have be reduced at least 20 to 34 % as compared with mud. This document presents the technical and economical analysis using both fluids. Introduction Tres Virgenes field is located in the Baja California Peninsula 1400 km NW of Mexico city. The geothermal resource is between Sta Rosalia and San Ignacio villages (Figure 1). Until recently, the installed geothermal power generation capacity in the field was 10 MWe, consisting of two condensing turbines. The steam for the units is delivered by LV-3, LV-4, LV-11 and LV-13 wells, which cover the steam demand to keep the plants operating. Steam production from LV-4 and LV-13 wells has decreased and it is necessary to replace one of them and to repair the other one. The new well will be drilled in the same pad than LV-3. The separated brine goes to LV-5 and LV-7 injection wells located at the north field zone (Figure 2, overleaf). Several wells have been drilled in the Tres Virgenes geothermal field. Most of these were drilled with underbalanced fluids (air/water) except LV-11 and LV-13 which were drilled using mud. All of them were directional wells completed in 8 ½ hole. The analyses reported in this document make technical and economical comparison between mud and underbalanced drilling of those wells and report experiences gained in this field. In the near future Comisión Federal de Electricidad (CFE), the electricity company in Mexico, will drill a new well, named LV-4A. To obtain a useful comparison we will examine wells that were drilled with similar completions. Those are LV-4, LV-8 Figure 1. Location of the Tres Virgenes geothermal field. 265

3 Fluids Used Three techniques have been used in Mexico to improve drilling techniques in the production zones that involve large fluid circulation losses during drilling. These techniques use water based mud, water with mud slugs and mixtures of water and air. Figure 2. Location of wells in Tres Virgenes. and LV-11. All of them are directional wells; the two fist ones were drilled with underbalanced fluids and the last one with mud. The study was limited only to the 8 ½ hole. Background Balanced drilling started in the 1980 s at the Los Azufres field using air. At that time three wells were drilled with several problems when trying to control air flow. Later in the 90 s decade, the LV-2 well was drilled with air/water fluid. A device was introduced to separate the different phases and 721 m. were successfully drilled. After this experience 7 wells were drilled using air just in feed zones. Three of these wells showed casing wear that was atributed to inadequate air/water rate and by the carbide tungsten banding used in the drill pipe tool joints. At the Tres Virgenes, Los Azufres and Los Humeros geothermal fields, the density reduction method has been used with an air/water mixture. At the surface a determined amount of air/water is mixed, depending on the formation pressure and of the annular friction losses. This is a recommended technique for depleted reservoirs and fields with water supply problems. Liquid and air are injected at the surface at the same pressure. The amount depends on the pressure loss in the system. When mud has been used in production zones in Los Azufres and Tres Virgenes, those wells have had formation damage and, as a result, low steam production. Therefore, it was been necessary to inject hydrochloric (HCL) and hydrofloric (HFL) acids to remove the mud clays. With this experience as basis, it is important, in mud drilling projects, to inject acid immediately after drilleding, before moving the rig. Water Based Mud It is a common practice in Mexico to use as the drilling fluid water based muds which must be chemically and mechanically separated in order to fulfill their basic functions, such as carrying the cuttings from bottom hole to surface, cooling the bit, lubricating the drill string, etc. Some of the materials added to water are bentonite, caustic soda, sodium bicarbonate, filtration agents and thinners that give to mud carrying properties and density increase. One of the main problems in our fields is loss circulation that increases costs. Remedies include the use of high viscous mud slugs. If lost circulation persists, it is necessary to add loss circulation materials to the mud system, though these materials cause, in some cases, sealing in the production zones besides differential sticking. Drilling With Water After production casing is set, drilling normally continues using mud as the fluid until loss circulation occurs. It is then necessary to change from mud to water presuming a production zone can be found. To ensure hole cleaning with low viscosity fluids, the flow rate has to be increased to l/s greatly increasing the annular velocity.. Longer times are needed for washing the hole before making a drill pipe connection, and it is usually necessary to pump a mud slug to prevent cuttings settling around the drill string. This approach has been successfully in fields where abundant water for drilling is available as in Los Azufres and Cerro Prieto. Underbalanced Fluids A circulation loss occurs when the pressure of the column of fluid in the wellbore is higher than the formation pressure. That allows fluid loss into the formation. These losses increase the material costs, the risk of pipe sticking, water consumption, loss of drilling time and possibility of prodution zone sealing. There are two ways to avoid loss circulation: one is to seal formation and the other one to reduce the well bore pressure. The second approach is possible through underbalanced columns using aerated water or mud, low density fluids, parasite tubes, jet sub, etc. Underbalanced drilling reduces or eliminates formation damage, materials costs, water consumption, differential sticking, formation cooling caused by fluid loss and increases drilling rate, as consequence of avoiding fluid losses into the production zone. Though as all technologies, underbalanced drilling also has disadvantages; it causes corrosion and drilling pipe erosion, it requires specialized engineering, specialized equipment and can cause erosion of unconsolidated rocks. 266

4 Field Experience At Tres Virgenes formations consist of sedimentary and volcanic sequences between surface and 900 meters depth and deeper there is intrusive graniodioritic rock. In the upper zone there are circulation losses from 400 meters to the production zone base. The reservoir is located in graniodioritic rock from 1300 m depth. The reservoir pressure is 130 bars and the maximum measured temperature is 275 C, that means the thermodynamic condition is subcooled liquid; water level is at 700 meters depth. At this depth drilling has been drilled with underbalanced fluids using low density fluids to avoid high circulation losses. For the objective of this paper, drilling penetration rate must be analyzed when using mud or balanced fluid. The concepts selected for comparison were drilling time and costs including pipe sticking and fishing operations when it was necessary. The excluded concepts were completion tests, fishing, and casing set time. LV-4. Drilling started on December 7 th, 1995 and was finished on June 13 th, A Side track with mud and aerated fluid at measured depth (MD) 900 m to total depth (TD) of 2500 m. was performed. It is located in the same pad as LV-3 at the south west of the field (Figure 2). LV-4 was planned to cross cut the El Viejon fault were high temperature and good permeability were found in LV-3. The well was drilled with mud and partially with balanced fluid in the 12 ¼ hole section and just with balanced fluid in the 8 ½ production zone (1546 m MD to 2500 m TD). 44 effective days were spent to drill from 1546 meters to 2500 m (954 m long). The rate of penetration (ROP) was 21.7 m/day as shown in table 1. As drilling continued through several depleted zones, the underbalanced fluid was adjusted in attempt to balance water flows especially in the producer zone. It was concluded that good permeability existed as indicated by different geological and petrology indicators. However when the well was connected to steam production system partial obstruction at 1200 m MD was detected and later during a routine workover using coil tubing, casing damage at 1060 m MD was detected. Table 2. 8 ½ hole drilling data at LV-8 well. Starting date Ending Length (m) Time (days) ROP (m/day) LV-8 12/03/ /04/ Seven years later the well was worked over to eliminate silica scale and obstruction at 868 m MD reaming. LV-11. Located in the southern part of field, LV-11 is the second main production well. It is a deviated well;. Its construction started on April 7 th and finished on September 1 st, 2000; it reached a 2081 m TD. It was sidetracked at 600 m MD. The feed zone goes from 1256 m MD to 2081 m TD (825 m interval) and was drilled during 38 days using mud as drilling fluid (Table 3). During drilling several lost circulation zones were encountered, mainly in the production zone, which accepted 277 t of mud solids (mostly bentonite) and 6928 m 3 of water. Steam production was low reaching only 12 t/h because of the large mud losses in the production zone. Later, after an acidizing job, steam production reached 36 t/h. Table 3. Data of 8 ½ drilling hole at LV-11 well. Started Ended Length (m) Time (days) ROP (m/day) LV-11 13/07/ /09/ Figure 3 shows the drilling days and drilling fluid used for LV-4, LV-8 and LV-11 in the production zones. Table 1. Drilling data of 8 ½ hole in LV-4 well. Started Ended Length (m) Time (days) ROP (m/day) LV-4 09/04/ /06/ Figure 3. Drilling time in days, for the 8 ½ hole in the wells LV-4, LV-8 and LV-11. During the first production period on may 1997, the well produced 34 t/h of steam and in the second period, December 2004, after an acidizing job, produced 48 t/h of steam. LV-8. LV-8 was drilled to cut the Cimarron and El Azufre faults. It was drilled between December 21 st and April 2 nd, The well objective was to inject brine that comes from the southern production area. It was sidetracked with aerated fluids at 700 mmd and passed through several permeable zones especially at around 1100 mmd. At 1005 m MD a 7 slotted liner was hung that goes to the bottom hole at 1715 m TD. The total injection capacity measured was 300 t/h. Table 4, overleaf, shows that the LV-4 and LV-11 wells, drilled either with underbalanced fluids or mud, have similar ROPs, around 21.7/day, while LV-8 drilled with underbalanced had a higher ROP, 33.8 m/day. These ROP indicated that drilling with underbalanced fluids was 56% higher or at least similar than drilling with mud. ROP in the worst scenario of balanced fluid was 21.7/day and in the best scenario reached 33.8 m/day. CFE internal reports describe that the damaged detected in LV-4 could have been for two main reasons: mechanical wear from the rotating drill string or erosion due to higher air/water 267

5 Table 4. Rateof penetration comparison using different fluids in the production zone. LV-4 LV-8 Starting Underbalanced rate during drilling or both of them. The casing was exposed to long drilling times and high cuttings velocities. LV-8 well obstruction detected at 868 meters depth after seven years of operation was attributed to a split of the casing collar that has occurred in the well after completion. It could have been the result of several well tests when cold water was injected for pressure tests. Also, it could have been related to drilling, as an inappropriate of air/water rate occurred during drilling well LV-4. Costs This section shows drilling costs of LV-4, LV-8 and LV-11 wells and estimated costs for future LV-4A well, that CFE is planning to drill. The costs are for the production zone in the 8 ½ hole. The estimation was done using the total cost divided by length interval (see Table 5) Table 5. Unitary cost in the 8 ½ hole. Ended Length (m) Time (days) Underbalanced LV-11 Mud Length (m) (USD/m) LV LV ,275 LV ,342 From results showed in Table 5 and figure 4 it is concluded that the difference in cost per meter of the two wells (LV-4 and LV-8) drilled with balanced fluids is quite large. This can be attributed to rig demand variations that occurred for short periods in the drilling industry at that time. The cost of LV-11 drilled with mud was 1,342 USD/m slightly higher than the highest unitary cost of the underbalanced fluid drilling. Actual Underbalanced Cost Per Meter To have an actual idea of underbalanced drilling costs, CFE required an expert air drilling company to prepare a budget for a similar job as that of LV-4 and LV-8 wells. The budget given to CFE included only the rent of compressors and auxiliary equipment. To integrate the total actual cost information from Cerro Prieto drilling contracts were used. Calculations were made for two different scenarios. One of them was a pessimistic, in which a ROP like that of LV-4 and LV-11 wells of 21.7 m/day was considered and the other one was optimistic, using an average ROP of 33.8 m/day, as the one obtained in LV-8 well. The costs summary for both scenarios is shown in table 6. For the first case 43 drilling days are required to drill the hole and for the second case only 26.2 days. Cost for the pessimistic scenery is 1,742 dollars per meter and for optimistic is 1,435 dollars per meter. Table 6. Estimated cost of drilling the 8 ½ hole using underbalanced fluid. ROP (m/day) Length (m) (USD/m) LV-4A ,742 LV-4A ,435 Further, the hypothetical cost of the proposed well LV-4A was compared considering in one case mud as drilling fluid and in the other case underbalanced drilling. In the first case we use the LV-11 cost per meter of 1,342 USD paid on the year 2000 (see Table No 5) and to calculate the other case we use the cost shown in Table 6. LV-4A should have an interval of 900 m in length. If we assume that it will be drilled with mud and unitary cost of 1,342 USD/m, the total cost will be 1,207,800 USD. Moreover the experience indicates that when mud has been used, the well was damaged and after an acidizing job production improved. Assuming this scenario the additional cost for acidizing job is Table 7. Estimated drilling costs using underbalanced fluid or mud LV-4A Estimated data Mud Underbalanced Fluid ROP (m/day) Cost (USD/m) 1,342 1,742 1,435 Interval Total Cost (USD) 1,207,800 1,567,800 1,291,500 Drilling Interval Time (days) Acid Job Cost (USD) 759,000 0,0 0,0 Interval Total Cost (USD/m) 2,185 1,742 1,435 Figure 4. Unitary cost per drilled meter in the 8 ½ hole. Interval Total Cost, USD (Drilling plus Acid Job) 1,966,800 1,567,800 1,291,

6 759,000 USD. This was the last cost of acidification of LV-4 well in Thus the sum of the drilling cost and acidizing job results in 1,966,800 USD, dividing by the total length results in 2,185 USD/m (Table 7). The result shows (Table 7) that cost saving is as much as 20 to 34 % when drilling with underbalanced fluid than drilling with mud followed by an acidizing job, depending on the used scenario, optimistic or pessimistic. While the drilling time with underbalanced is the same as with mud (around 41.5 days) in the worst case, it is only 26.6 days in the best scenario. Conclusions 1. The rate of penetration (ROP) in LV-4 and LV-8 (21.7 and 33.8 m/day), wells drilled with aerated fluids, was larger or at least the same as well LV-11 drilled with mud (21.7 m/day). 2. Wear was present in the wells drilled with underbalanced fluids due to inadequate air to water rates. 3. The underbalanced drilling costs were less in wells LV-4 and LV-8 than the cost in well LV-11. Those costs were 705 USD/m in LV-4, 1,275 USD/m in LV-8 and 1,342 USD/m in LV Present day costs for LV-4A including equipment, accessories, rig and materials applying the ROPs obtained in LV-4 and LV-8 should be 1,435 USD/m and 1,742 USD/m. 5. On the other hand, if the 8 ½ bore hole in LV-4 were drilled with mud and assuming an acidizing job after drilling to remove the mud clays, the costs would be 2,185 USD/m. 6. Therefore drilling with underbalanced fluid in LV-4A would have saved around 20 to 34 % of the cost compared to the use of mud with an acidizing job. This means a savings of 399,000 to 675,300 USD. Acknowledgements The authors wish to express their thanks to CFE for supporting this work, and for permission to publish the results of the study. References Comision Federal de Electricidad, (1996, 1998 & 2000) Drilling Reports of s LV-4, LV-8, LV-11. México, Internal Reports. Flores-Armenta, M., and Jaimes-Maldonado, G. (2001) Tres Virgenes, México, Geothermal Reservoir. Transactions of the Geothermal Resources Council, Vol. 25, pp Gutiérrez-Negrín, L.C.A. and Quijano-León, J.L.: (2003) Geothermal Development in Mexico in 2002, Geothermal Resources Council Transactions, vol. 27, p Jaimes-Maldonado, G., and Sánchez-Velasco, R. (2003) Acid Stimulation of Production s in Tres Virgenes Geothermal Field, B.C.S., Mexico. Transactions of the Geothermal Resources Council, Vol. 27, pp

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