Increased speed of drilling
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Hydraulic Workover Rigs
250K Combination Drilling, Workover and Snubbing Rig
Stand Alone Snubbing System™
Snub Fracing™
Rig Assist Snubbing
Nitrogen Pumping Services
Rotating Flow Diverter (RD3K)
Underbalanced Drilling
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General
High Arctic's principal focus is on providing underbalanced drilling, workover and completion services. High Arctic's underbalanced drilling and snubbing services are primarily provided through the use of 250K CDWS Rigs, Hydraulic Workover Rigs, Stand Alone Snubbing Systems™, Snub Fracing™ equipment, Rotating Flow Diverters, Rig Assist Snubbing Units, Nitrogen Pumping equipment and Surface Recovery equipment.
Some of the first oil wells drilled during the early 1900s were drilled underbalanced; these wells were referred to as gushers instead of underbalanced drilled wells, as they are commonly known today. Underbalanced drilling refers to the practice of intentionally drilling a well with borehole pressure less than the formation pore pressure, thus allowing formation fluid to more freely flow into the wellbore. Unlike in the early 1900's, specialized well control equipment is now used by the energy services sector to induce and control the formation fluid influx at the surface during drilling or workover operations. A snubbing unit in conjunction with a Rotating Flow Diverter are the essential pieces of equipment making this process possible.
Underbalanced drilling has become an important technology in the Canadian oil and gas sector, especially in low pressure formations and shallow gas wells. By not introducing drilling fluids which typically invade the formation, underbalanced drilling reduces, if not eliminates, mechanical damage and chemical damage to the producing formation, both of which restrict oil or gas to flow into the wellbore. The dramatic reduction of formation damage, especially in low pressure reservoirs like CBM and shallow gas is the key advantage of underbalanced drilling. In addition, underbalanced drilling provides the ability to produce smaller reservoirs that were not economical to drill in a traditional overbalanced manner due to production losses and formation damage associated with this manner of drilling. Formation damage refers to a restriction which reduces the ability of the reservoir oil or gas fluids to flow into the wellbore. When formation damage occurs while drilling overbalanced, there are a number of stimulation techniques that are available for overcoming flow impairment into the wellbore. These stimulation techniques work well with vertical wells regardless of depth or shallow damage in horizontal wells, however, deeper matrix damage is often difficult to remove in long horizontal sections and stimulation techniques are prohibitively expensive.
Underbalanced well operations, drilling and/or workovers cannot successfully be conducted without the use of snubbing equipment. Snubbing is the process of moving tubing and drill pipe into and out of a wellbore under pressure. When the surface pressure and tubing/drill string are such that, if unrestrained, the pipe would be ejected from the well, moving the pipe is referred to as "snubbing". The ability for the producing formation to flow in a continuous pressure-controlled environment is a significant advantage in successfully addressing common production problems in fluid sensitive formations, low pressure reservoirs, naturally fractured reservoirs and low permeability sandstone reservoirs. In such formations and reservoirs, snubbing offers the proven ability to enhance operational and economic performance of low-pressure gas wells which may not be able to produce gas as a result of kill fluid over-pressurization or, deep gas well workovers where sandstone formation clays are susceptible to swelling.
Snubbing operations also offer the ability to maintain production during part or all of well service work, increase well production rates, reduce completion costs and eliminate fluid purchase, well remediation and disposal costs.
The use of a Rotating Flow Diverter during drilling operations in conjunction with a snubbing unit allows for the pulling of pipe safely while the well is flowing, permitting the replacement of a downhole motor or tool assemblies. Without the RFD/snubbing rig combination, the well would have to be killed with fluids to offset the formation pressure, which would risk contaminating the formation with mechanical and/or chemical damage.
Some of the benefits afforded to Canadian oil and gas producers as a result of underbalanced services include:
Increased speed of drilling;
Reduction in fluid invasion into the producing formation, minimizing damage;
Rapid indication of hydrocarbons during drilling;
Optimizing production in existing wellbores;
Reduction or elimination of stimulation costs (i.e. fracing, acid stimulation);
Reduced completion costs;
Reduction of overall project costs; and
Maximization of ultimate hydrocarbon recovery.
Today, underbalanced drilling is recognized worldwide as a viable technique in addressing difficult reservoir problems and in improving overall production rates.
Domestic Services
Within the Domestic division, High Arctic has the following product lines which it provides to its customers in the operating areas of Alberta, Northern British Columbia, the Northwest Territories and Yukon Territory as outlined below:
250K Combination Drilling, Workover and Snubbing Rigs
Hydraulic Workover Rigs
Rig Assist Snubbing
Stand Alone Snubbing Systems™
Snub Fracing™
Nitrogen Pumping Services
Underbalanced Tool Rentals
Surface Recovery
Rotating Flow Diverters
Heating Packages
Well Management
In 2004, representatives of High Arctic visited over 4,000 wellsites and recognized that numerous different product lines were provided to wellsites from many different service companies. Based on management's view of market conditions and customer feedback, High Arctic recognized an opportunity to consolidate these services within one service provider and has developed a number of new product lines that allow its Canadian customers to utilize High Arctic as a single source for underbalanced drilling, workover and completion services. Consolidating underbalanced services within a single service provider results in reduced overall well costs and greater consistency of performance. Currently, customer demand for underbalanced drilling, workover and completion services during peak activity levels exceeds High Arctic's fleet of equipment. When required to meet customer demand, High Arctic contracts for equipment from third party suppliers. However, High Arctic's expansion plans include the acquisition of additional equipment in order to position High Arctic to directly meet customer demand in the future.
The illustration below describes the product lines that High Arctic can provide on an underbalanced well as a single source for underbalanced drilling, workovers and well completions. A service company that operates in the same market segment would typically provide only one to three of these services. Management believes that this particular type of bundling of services in a single service provider is not being offered by any other service provider worldwide.
International Services
Within the International division, High Arctic has the following product lines which it provides to its customers in the operating areas of Turkmenistan, Pakistan, Yemen, Iran, Saudi Arabia, Tanzania, United Arab Emirates, Thailand and Argentina as outlined below:
Hydraulic Workover Rigs
Rig Assist Snubbing Units
Underbalanced Tool Rentals
International Safety Services
Well Management
High Arctic has begun to replicate its domestic bundling of services in its operations in the Middle East. The illustration below describes the product lines that High Arctic currently provides in the Middle East on an underbalanced well as a single source for underbalanced drilling, workovers and well completions. The International market is an emerging market and the International division is a relatively new division for High Arctic, which accounts for the limited services being provided in the Middle East at this time. In the future, management anticipates providing additional product lines to its International operations.
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