RedNews Issue No.2

Red Spider Bike Sponsorship

Past events

Red Spider is in the fast lane as it sponsors a member of staff who is taking part in motorbike racing throughout this year.

Coiled Tubing and Well Intervention Conference & Exhibition (SPE ICoTA)

Inside this issue

April 05 2011 - April 06 2011 Texas

Graham Pirie,

assembly and test leader, at Red Spider’s Westhill headquarters, has been interested in motor biking from an early age. He achieved good competition results before a racing accident several years back forced him to give up the sport while he recovered.

redspiders.com

Oil & Gas Asia Exhibition (OGA)

Oil & Gas UK Breakfast Briefing eRED Case Study − Ninian Field Red Spider Aims High with Shawn Peet

June 01 2011 - June 03 2011 Malaysia

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Forthcoming Events Deepwater World Asia 2011 October 10 2011 - October 13 2011 Singapore

Red Spider has taken its support of like-minded ambitious people to new heights. The UK-headquartered company recently expanded into the North American market, opening a base in Houston and has been keen to get involved in local initiatives within the community. A $1000 donation has been made by Red Spider to a Houston-based man who is climbing some of the highest mountains in the world to raise money for Texas Children’s Hospital.

Shawn Peet, who is originally from Calgary, Canada, moved to Houston in 2001, aged 23, to gain some life and career experience. While working in an office-based job at Rosen USA as Manager of Operations, he decided to take up mountaineering in his spare time and produced a timeline of climbs to both challenge himself and raise money along the way.

ATCE 2011 - Denver, Colorado October 30 2011 - November 02 2011 Denver, USA

Red Spider North America Sales Manager John O’Hara suggested the company should donate to Shawn’s fund-raising ambitious travels after they met at a local Crossfit training facility. John O’Hara said: “Shawn is a highly-ambitious individual who is constantly striving to push himself further and achieve more – both in his fund-raising targets for such a good cause, but also in his personal goals of climbing higher and more difficult mountains. These aspirations are a perfect fit with the values of Red Spider and are the reason I was keen for us to support Shawn’s fund-raising efforts.” Last year Shawn raised $3,250 for the Texas Children’s Hospital through his fund-raising climb in Denali, Alaska, in June. In August this year the 33 year old is planning to raise more funds when he climbs Cho Oyu, the sixth-highest mountain in the world, 26,906 ft (8201 metres) above sea level. It lies in the Himalayas, 20km west of Mount Everest at the border between China and Nepal. These climbs are all geared towards preparing Shawn for the ultimate mountaineering mission of climbing Everest, which he aims to do next year.

ITF Technology Showcase November 08 2011 Aberdeen

17th European Well Intervention Conference & Exhibition (SPE ICoTA) November 15 2011 - November 16 2011 Aberdeen

Remote Open Close Technology Takes Hold

Downright Clever, Downhole Simple

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Issue No 2

Steve Nicol, Red Spider chief executive officer, said, “We are delighted to support Graham’s comeback a decade on. He started the race season with the sensible ambition of effectively racing against himself as he feels his way back into the circuit and breaks in his new bike. But a few races in and his competitive nature meant Graham set his sights on top ten finishes by the end of the season. We wish him all the best and will continue to track his progress.”

Red Spider

RedNews

Steve’s Foreword Welcome to the latest installment of RedNews. It is exciting times for Red Spider with the first half of the year seeing a record level of confirmed orders and we look set to finish 2011 60% up on last year. Our move into the completion arena is proving very popular with clients resulting in a greater uptake than we could have hoped for. The value proposition of reducing cost, removing risk and a faster return to production is further enhanced by the fact that our tools are engineered to be a low risk deployment; in the unlikely event they did not work you would simply revert to conventional operations. This value proposition, as well as confidence in our ability to deliver quality products and associated services, is leading directly to orders. The internationalization strategy is working well with significant orders secured in the Americas and first eRED deployments planned in Brazil and Australia by year end. Agent agreements are helping us to access the market in Brazil, Malaysia, Indonesia and Brunei. Our technology is also being well received in Africa. In response to these growing prospects Red Spider is relocating Bruce MacLeod and Richard McKimmie to Kuala Lumpar and Perth respectively. Home markets have been a little more fluctuant. The recent taxation regime change in UK CS has lead to a few operators cancelling confirmed orders resulting in lost revenue. This dip is being somewhat made up by demand from new independent operator clients. Norway is emerging very strongly, helped by an order for four eRED-FB completion tools for delivery this year.

eRED

Red Spider donates £housands to their staff’s chosen charities

® Ninian Field operated by CNR International

Case Study

Background

News in Brief

Oil and Gas UK Breakfast Briefing ‘Steve Nicol, CEO of Red Spider was pleased to participate in the recent Oil & Gas UK Breakfast Briefing at the AECC on Thursday 30th June. The theme of the morning was ‘Opportunities and Challenges Facing the UK Supply Chain – at home and abroad’ and attracted an audience of 370 people. Steve presented a SME perspective alongside Robin Davies, Subsea 7’s vice president for integration and business improvement and Simon Seaton, Halliburton’s country vice president for the UK, who shared their insights and forecasts from larger companies’ viewpoint. Brian Kinkead, Supply Chain Director at Oil & Gas UK joined all three speakers on the panel for the Q&A session which was chaired by Malcolm Webb, Chief Executive of Oil & Gas UK.’

The Ninian field operated by CNR International, is located in the Northern North Sea around 140 miles north-east of Aberdeen in block 3/3. Produced Oil from the Ninian South Platform is processed onboard and exported to the Sullom Voe Terminal on the Shetland Islands via the Ninian Pipeline System. This case study is on injector well S86, side-tracked from well S43z which had been permanently abandoned.

The Operation In a standard platform completion deployment, wireline plugs and prongs are used as isolation devices below the production packer and tubing hanger. These require several interventions together with all the associated time and risk involved with the rig-up of surface pressure control equipment to install, test and retrieve the each isolation device. The conventional tubing hanger and production packer plugs were replaced with two eREDs in well S86. The motive behind this decision was due to several factors, but primarily: the removal of risk which improves the safety of the operation and a reduction in operational rig-time, helping reduce the overall cost of the well operation. Both eREDs were set to the closed position and installed into assemblies onshore prior to shipping. The first installation was the deep-set eRED which was made up to a 4-1/2” Bridge Plug then set and pressure tested from above and below in the tubing pup below the 7” Production Packer. The second eRED was made up to a 4.700” Lock and set in the tubing hanger nipple profile. The lock was then pressure tested as per the deep-set eRED. Upon completion of all testing each eRED was programmed to open. The assemblies were then shipped offshore with the eREDs switched onto running mode looking for their next trigger.

Six Well Velocity String Success Red Spider recently completed a well intervention campaign in a total of 62 days from start to finish for Petroleum Development Oman. The overall Six Well Velocity String campaign, including all other associated services, was completed without incident and under budget. This brings the company’s total velocity string deployments to 11 with 100% success.

In keeping with our core values and corporate social responsibility, we are supporting good causes in several regions. Find inspiration in the achievements of Shawn Peet and Graham Pirie featured in this newsletter.

Velocity string is a small-diameter tubing string run inside the production tubing of a well as a remedial treatment to resolve liquid-loading problems. Installing a velocity string reduces the flow area and increases the flow velocity to enable liquids to be carried from the wellbore. Velocity strings are commonly run using coiled tubing as a velocity string conduit. Rapid mobilisation allows coiled tubing velocity strings to provide a cost effective solution to liquid loading in gas wells.

We are pleased to have robust growth plans in place that are working well for us. Now we welcome the challenge of delivering product to our clients at an increased rate.

These strings typically comprise of 4,500m of jointed pipe deployed below the Red Spider velocity string retrievable packer, set, tested and lower dual barriers expelled as designed. Thanks to Geoff Lister, Assembly and Well Ops Technician and Martin Davidson, Lead Assembly and Test Technician for a safe and professional field execution and to all the backroom support staff for such a great job.

Offshore, with both eREDs pre-installed in the open position, the tubing could self-fill as the completion was run to depth. Production packer and tubing hanger were then made up as per the completion programme, removing several interventions during the completion installation. The deep-set eRED had been programmed with a pressure/time activation and was set to activate at approximately 7,500 ft (4,750 psi). Once this trigger initiated the eRED was programmed to close after 12 hours. This allowed the completion to be on-depth, the tubing hanger to be landed, the well to be circulated to inhibited seawater and the production packer to be tested to 4,900 psi. The shallow-set eRED had been programmed to close using a pressure activation of 2,250 psi (target window of 2,000 - 2,500 psi) applied pressure for 20 minutes. Since both the eREDs were now closed, the well had two fully tested barriers in place without the need for any intervention. The BOPs were removed and the christmas tree was installed and tested against the shallow-set barrier. After a successful christmas tree installation, the tubing hanger eRED was remotely opened using a positive pressure activation of 3,250 psi (target window of 3,000 - 3,500 psi) applied pressure for 15 minutes. A positive pressure drop was observed at surface as the tool opened. Once equalised, the eRED was recovered using wireline.

The deep-set eRED was remotely opened with its programmed activation of 1,250 psi (target window of 1,000 - 1,500 psi) for 20 minutes and a pressure drop was observed as the tool opened. Subsequent to the deep-set eRED opening, the well pressure was monitored for a period after which the tool was recovered using wireline. Once the completion was run, tested and the christmas tree installed, the 4.700" lock and 4½" bridge plug with eREDs were recovered and a 5½" Red Spider High Lift Injection Valve was set on a Tubing Hanger 5½" packer in the blast joint Standard Lock 4.700 in at 7,450 ft prior to handing the well back to production. Nipple Profile

Results Both the eREDs functioned exactly as per the designed set up. This allowed CNR International to remotely close and open, then perform various pressure tests against the eREDs without any form of intervention. The reduction in wireline rig-ups and runs for this operation reduced the overall cost and planned timing of the completion. Another positive point of this operation was the reduced exposure to potential waiting-on-weather to rig-up slickline and all the associated risks with wireline operations. • In total at least 18 hours rig time saved utilising eREDs • Both eREDs pre-installed onshore saved one wireline rig-up and rig-down and five wireline runs • Less exposure to potential waiting-on-weather time • Reduce the associated risk involved with rigging up PCE and running slickline Various pressure tests were completed and the well was circulated to completion fluid without the need for any additional intervention using eREDs.

eRED

Each year Red Spider gives their colleagues the opportunity to nominate two charities to benefit from company fundraising efforts. This year employees voted to support The Stroke Association and Down’s Syndrome Scotland as both of these charities had personal connections for staff members and both charities received a donation of £5,000. Red Spider UK Sales Manager Andy Skinner suggested Down’s Syndrome Scotland. Hannah, his thirteen year old daughter, has Down's Syndrome and so he wanted to thank the charity for all the support and information they have provided. Mr Skinner said, "We have received a huge amount of assistance over the years and this donation is a way of giving something back. It is important that this group of people and their families throughout the country are represented. The charity relies heavily on donations to continue their work in helping people with the condition, their families and professionals and to raise awareness.” Down’s Syndrome Scotland promotes the interests of people with Down's syndrome and their families in Scotland by influencing public policy and attitudes and by providing a range of services and activities to help those with the condition reach their full potential. Red Spider’s Chief Marketing Officer, Kelly Murray, suggested The Stroke Association. She wanted to support the charity as her father has been affected by stroke since 2001.

Tubing

Production Packer

Kelly said, “I hope the donation helps The Stroke Association with their invaluable work. Their services, in particular their research and awareness campaigns, are hugely important. My whole family and I are very grateful for all their hard work and really hope that it leads to fewer strokes and reducing their effect.” The Stroke Association is the only UK charity solely concerned with combating stroke in people of all ages. The charity funds research into prevention, treatment, better methods of rehabilitation and helps stroke patients and their families directly through its community services. It also campaigns, educates and informs to increase knowledge of stroke.

iPAD 2 Winner! Congratulations to Dave Phimister a Senior Tree and Completions Advisor who works for Gaz de France Suez. Dave was our lucky winner from last issue’s iPAD 2 competition and correctly answered that the greatest number of hours saved on a single subsea eRED job is 36 hours. Dave was presented with his prize by Sales Engineer, Euan Fraser at Red Spiders HQ in Westhill. Well done Dave from all at Red Spider!

RS Agents Customers international

within Red Spider’s operating regions are being provided with local sales support after the company completed agreements with agents in Brazil, Brunei, Indonesia and Malaysia. The agents will be promoting the suite of Remote Open Close Technology and will provide a permanent presence for customers in the four countries.

Bridge Plug 4½ in

The most recent agent to enter into agreement with Red Spider is Abumas, which will represent the company within Indonesia. David Philp, Red Spider’s agent in Indonesia, visited the Red Spider HQ in Aberdeen in June to meet the team and learn first hand about the products.

eRED

Agent agreements are already in place with Pascholain within Brazil, Scomi in Malaysia and AmrTur in Brunei.

Tubing

Pictured left to right: Red Spider’s Bruce McLeod and David Philp, MD, Abumas Group

Simone Palmieri, Red Spider Chief Commercial Officer, said: “By providing clients with a local agent it shows our commitment to these countries whilst helping us to achieve an effective sales effort for our Remote Open Close Technology. We work closely with our agents to provide all the necessary support and we frequently visit the agents in their country for direct sales work.”