State-of-the-Art Summary

Coiled Tubing Reaches for Areas of Growth
by Karl Lang, Hart/IRI Fuels Information Services

Coiled tubing (CT) services is one of the fastest growing oilfield technologies, with the global fleet of CT units having more than doubled over the last 10 years to just under 1000. As of November 2001, there were an estimated 244 units in the U.S. and 199 in Canada, with the Canadian count expected to grow to over 200 by early this year. Over the past decade, the US land drilling rig fleet has shrunk by 10% while demand for CT units has grown at 8% per year. In Canada, the CT market has boasted an annual growth rate of 25% since 1997 (OGJ, 2002).

Coiled tubing is gaining in popularity in situations where it enables operators to reduce the cost or improve the effectiveness of completion, workover and drilling operations. The capabilities of the equipment, the tubing, the units themselves, and the tools they employ, have improved tremendously over the past decade.

Initially, CT was employed primarily as a technique for well cleanout. During 2001, these conventional applications, as well as acid stimulation, accounted for more than three quarters of coiled tubing revenues. However, drilling and fracturing applications, practically unknown a decade ago, now make up nearly 15 percent of CT revenues. As early as 1997 there were between 900 and 1000 wells drilled in Canada and the U.S. using CT, including about 120 directional re-entries and 800 new shallow vertical wells (many of these in Canada). Only a relatively small portion of the global CT rig fleet is capable of handling the larger tubing sizes (> 2 ˝- inches) typically needed for drilling.

According to Raymond James and Associates, the annual global market for CT services is now about a $1 billion, while the market for CT units and pipe is $300 million and $90 million respectively. Schlumberger Ltd. commands 29% of the market, BJ Services Co. 21%, and Halliburton Co., 11%. A fourth firm, Superior Energy Services Inc., of Harvey, La., the largest CT service provider in the Gulf of Mexico, had 7% of 2001 revenues (OGJ, 2002). However, there are about 27 CT companies operating in the U.S. and about 38 operating in Canada. Several of these companies have well-developed equipment systems for maximizing the benefits that coiled tubing can offer, at prices that make sense for independent producers.

Important Features of Coiled Tubing

Coiled tubing is a continuous string of small diameter pipe (from ľ-inch to 4 ˝-inches), usually steel, that is flexible enough to be coiled onto a large reel (perhaps 13 or 14 feet in diameter). The length of pipe on the reel varies depending on diameter. For example, a reel of 1 ˝-inch coiled tubing may contain 15,000 feet, while a reel of 2 7/8-inch tubing may hold only 4000 feet.

The coiled tubing unit is an assembly of the equipment components needed to perform a continuous-length tubing service. These components include (at a minimum) an injector, service reel, control console, power supply, and well control stack assembly.

Because it is non-jointed, coiled tubing is capable of being run at much faster speeds into or out of a well than jointed tubing. In addition, fluid can be circulated through the tubing while it is being inserted into or withdrawn from a well. That capability allows for work on a pressurized well without the need to kill the well and risk damage to the reservoir. These two features: running speed and the ability to maintain an underbalanced condition, are at the heart of most of the significant advantages attributable to CT over conventional approaches to well intervention or drilling (Table 1).

According to the U.S. Department of Energy (DOE, 2001), several factors have contributed to the rise in activity for CT services, and for CT drilling in particular:
The CT industry has achieved a level of maturity and is capable of providing the necessary equipment and basic capabilities with a certain degree of reliability.
Technical advantages exist for CT that enable it to compete in and sometimes dominate niche markets.
Technical advances in directional drilling technology and underbalanced drilling technology have made CT drilling an option for more applications.
Industry has gained a greater understanding of the technical capabilities and limitations of CT drilling, enabling better candidate selection and ultimately a higher success rate.

In addition, advancements in coiled tubing design have improved its capabilities and made it a more attractive option:

Higher tensile strength, greater buckling resistance, and stronger corrosion resistance due to improvements in metallurgy.
Higher tubing quality at lower prices resulting from improved manufacturing methods and quality control.
More size and length options.

Table 1—Advantages of Coiled Tubing Relative to Conventional Pipe

1. Faster rig mobilization and demobilization

2. Faster trip time

3. Faster drilling in many situations

4. Safer and more effective operations in underbalanced conditions

5. Minimal well shut-in time

6. Smaller environmental footprint

7. More effective at positioning tools in horizontal wells

Applications of Coiled Tubing Technology

Drilling - Coiled-tubing drilling can be done safely and effectively in vertical, deviated, and horizontal wells. Tubing with installed electric lines is used for steering downhole drilling. Conventional overbalanced drilling of shallow gas wells with CT has become a growing market in Canada and in the U.S. In certain applications drilling shallow gas wells with CT is more efficient and economical then conventional rigs. Hybrid rigs (that can drill with both conventional rotary and CT) have the ability to drill a 4000 foot well and complete it with 5 ˝-inch casing, and deeper wells can be drilled and completed with 4 ˝-inch or smaller casing.

During the past five years, CT directional underbalanced drilling has become an alternative for slimhole wells. While the technology has proven effective, the economics have not always justified its use. However, more small CT service companies are now able to offer both underbalanced and directional drilling services at more economical day rates. With slim holes, operators can reduce well costs 40 to 70%, along with a reduction in environmental costs and concern, without restricting production. But slimhole applications still face problems. Concerns include drillstring torsional strength, fishing and milling in a restricted space, and bit design and reliability, among others.
Another growing market segment for CT drilling is the drilling of underbalanced extensions of vertical wellbores and underbalanced laterals from older vertical wells. Where coiled tubing can offer significant benefits is in cases where the original well was damaged by mud during the original overbalanced drilling. In this case, the well may never have had an opportunity to produce up to its potential. A CT unit can drill a horizontal lateral into the reservoir from an existing well, underbalanced, improving productivity by increasing the effective productive thickness and dramatically reducing the skin damage. Hybrid CT units can rig up and drill these extensions very quickly and cost effectively.

Workovers - Coiled tubing has been used for well cleaning and stimulation since it was first developed and well cleanouts are generally referred to as the "bread & butter" of the industry. CT completions, stimulations, and workovers also have distinct advantages over conventional methods. Stimulation with coiled tubing can be performed underbalanced (e.g., removing scale mechanically followed by solvent cleanup) or under highly overbalanced conditions for perforating existing skin damage. Other advantages include the ability to easily and accurately place well treatments, set hydraulic packers, and perform straddle-packer treatments. A large number of CT "velocity strings" are set each year as a means of improving productivity of wells with fluid problems.

Coiled tubing has several distinct advantages for well fishing operations. It offers additional tensile strength above that of braided line and the ability to use heavier tools and to circulate fluid can also be helpful in some situations. Downhole motors attached to the end of coiled tubing can be used to drill through cement, debris, etc. This is generally a quicker and cheaper alternative to workover rigs. For coiled tubing drilling, two major types of bits exist: diamond PDC and tungsten carbide (TC: splatter-welded). Tri-cone roller bits are generally not suitable for coiled tubing drilling because of the high rotational speed of the motors.

Logging and Perforating - Underbalanced CT production logging and perforating has become more popular as the capabilities of CT units have improved and costs have come down. Small-and intermediate-diameter coiled tubing in multifunction strings with electric lines have applications in well logging, well testing, and other tool conveyance, especially in horizontal wells. Current units do not require mobilization of an additional wireline truck to perform the work and rig up time has been reduced substantially. The ability to quickly and safely perforate horizontal wells underbalanced and lubricate long (30+ feet) perforating guns into and out of the wellbore has made this approach attractive.

Stimulation - Fracturing with CT has become a very effective way of stimulating multiple zone wells economically. The CT is used to set an isolation packer across a perforated interval, fracture a zone, move to a new zone, reset the packer and repeat the process. Not only can this be accomplished in a fraction of the time required by a conventional rig, but compared to other multiple-interval stimulation alternatives there is a higher likelihood that every zone will be stimulated appropriately. As a result, overall production is enhanced.

Future Trends in CT Services

According to Andy Rike, President of Technicoil USA Corp., a CT service company with operations in Canada and the US, "We see market growth for coiled tubing services to independent producers in three areas: fracturing, particularly multiple interval completions; re-entry drilling of horizontal laterals or vertical extensions in older wells; and "grassroots" drilling of shallower wells, including many coalbed methane wells."

Rike adds that one of the most important reasons for growth of coiled tubing drilling services has been the development of more integrated units. "In past years, coiled tubing units were not able to provide the sort of integrated set of equipment capabilities needed for drilling and completion operations. This led to an amalgamation of service company systems cobbled together on site and a situation where the safety, speed and size advantages of CT were being lost." Now, Technicoil as well as a few other companies have designed and built integrated CT units that incorporate everything needed to drill a well into four trailer loads. When rigged up these units fill a 20,000 sq ft footprint, less than 1/3 the size of a conventional rig. These newer units can also drill with conventional pipe, so they can drill a surface hole and set surface pipe with conventional equipment and then drill with coiled tubing.

In addition to the small footprint, the primary drivers for wider use of these units are very tight control of well discharges and speed. "We've drilled 400 feet per hour in some situations," says Rike. The combination of a smaller hole, lack of connections, faster trip time, and the higher drilling rates inherent to downhole motors leads to very rapid drilling rates. Last year, in the San Juan Basin of New Mexico, Technicoil drilled 26 wells to around 3000 feet for Burlington Resources over a four month period with one standard CT system (Figure 1).

Another area of growth is in fracturing, particularly multiple interval fracturing (Figure 2). One recent example is a five well project in Virginia's Buchanan County where as many as nineteen intervals were fractured using coiled tubing and a bottom-hole packer assembly (Rodvelt, 2001). These wells, part of a CONSOL Energy Inc. coalbed methane project, were part of a pilot to determine if individually fracturing each of the zones would result in better recovery. Prior efforts had evolved from single-stage, limited entry treatments to multiple-stage treatments with composite frac plugs and frac baffles.

Core tests on offset acreage had revealed that 3 of 10 coal seams had not been stimulated by these treatments and, on average, ten feet of coal was not being effectively stimulated. If the CT fracturing approach is successful in improving this situation, CONSOL calculated that an additional net present value of $1 million could be added per 160-acre lease, based on a gas price of $2.50. The CT fracturing procedure was a technical success, and hopefully, when the wells are dewatered and fully evaluated, it will be shown to be an economic success as well. Other CBM areas have seen similar success. For example, Barrett Resources experienced a 1.5 fold increase in gas production from 14 CBM wells in the Raton Basin following stimulation with coiled tubing versus conventional treatments. "Fracturing is probably the area with the greatest growth potential," says Rike, "and coalbed methane is about a third of that market."

Coiled tubing is not a panacea, but in particular situations it can provide real cost savings for operators of all sizes. Whether an operator needs to limit the time spent fracturing multiple intervals or drilling shallow wells, limit the degree of environmental impact, or limit the formation damage caused by drilling or completing a well, coiled tubing is an option to consider.

Figure 1—CT Drilling Rig and Trailers in New Mexico

Figure 2—Coiled Tubing Unit Fracturing

References

OGJ, 2002. "Global fleet of coiled tubing units more than doubled in last 10 years," Oil and Gas Journal, April 22.

DOE, 2001. "Sound Coiled-Tubing Drilling Practices," Final Report DOE/NETL-2022/1170, September 2001.

Rodvelt, G., et al., 2001. "Multiseam Coal Stimulation Using Coiled-Tubing Fracturing and a Unique Bottomhole Packer Assembly," Paper 72380 presented at the SPE Eastern Regional Meeting held in Canton, Ohio, 17-19 October.