Decommissioning : Winds of Change in Offshore Oil & Gas

1. Decommissioning: Winds of Change in Offshore Oil & Gas NAMEPA & NOIA Winds of Change in Offshore Oil and Gas February 2014

2. Oil & Gas Decommissioning – Winds of Change What has changed? Idle-Iron NTL became effective: October 2010 • Structures removed from the OCS: • 2002 – 2010: Averaged 164 • 2011 – 2013: Averaged 262 • 60% Increase post Idle-Iron

3. Single-Well Caissons Stone Decommissioning – January 2011 Work Scope ~ 100 Structures & 130 Wells Tri-Pods Braced Caissons Multi-Well Caissons 4-Pile Structures Estimated Cost: $235 million over 3 years 36-Pile Structure 6-Pile Structures

4. Oil & Gas Decommissioning – Winds of Change What needed to change? The Decommissioning Process Traditional Mini-Van Method

5. Oil & Gas Decommissioning – Process Evolution Mini-Van Method • Multiple Mobilizations – Sequential Steps: • Prepare the structure • Plug the wells • Sever & remove the well conductors (casings) • Flush, pig and remove the pipelines • Hydrocarbon-free the production equipment • Mobilize derrick barge to remove the structure • Perform Site Clearance

6. Mini-Van Method – Explosives to remove the Well After well is plugged with required number of cement barriers Explosives used to sever all well conductors > 15’ BML

7. Mini-Van Method: Structure Removal via Derrick Barge

8. Mini-Van Method: Explosives to remove the Jacket Explosives to Sever Jacket Piles > 15’ BML

9. Oil & Gas Decommissioning – Winds of Change What has changed? The Decommissioning Process New Stone Energy Method Old School Mini-Van Method

10. Oil & Gas Decommissioning – Process Evolution New Stone Energy Method • Single Mobilization – Concurrent Steps: • Perform all work in one or two mobilization(s) • Utilize the newest technologies • Utilize fewer resources – Decommissioning Department of 7 • (1 - Manager; 2 - Project Managers; 2 - Engineers; 1 - Regulatory Specialist; 1 - Administrative Assistant) • Complete the work scope in ½ the time • Spend ⅓ less money • Safer, Leaner, Greener and Less Expensive

11. \ New Technology: 335’ Liftboat Robert Operating water depths of 18’ to 280’ Accommodations for 152 Workers 15,200 ft² Clear Deck Space 500 Ton Heavy Lift Crane

12. New Stone Method Step 1: Mobilize all equipment Stone Method • Platform make-safe • Plug wells • Flush & pig pipelines • Remove pipeline tube-turns • Hydrocarbon free vessels • Remove production equip. • Abrasively sever conductors

13. New Stone Method Step 2: Perform Work in Parallel Stone Method • Abrasively sever jacket • Diver debris sweep • Acoustic bottom scan

14. New Stone Method Step 3: Take Structure Away Stone Method • Secure to Material Barge • Move to next location

15. Stone Decommissioning Method: Greener No Harm to Marine Environment =

16. Stone Decommissioning Method: Less Expensive 6 Spreads; 1 Mobilization 22 Days of Work over a 22 Day Period . . . 6 Spreads; 6 Mobilizations 42 Days of Work over a 10 Month Period . . . Spend: $2,401,000 Spend: $3,557,000 Mini-Van Method Stone Method

17. New Technology: Internal Abrasive Cutting Abrasive Jet Nozzle

18. New Technology: Internal Abrasive Cutting 13⅜” x 20” x 30” x 48”

19. Old Technology: Horizontal Diamond Wire Saw 60’ 60’ 60’ 60’ 3:1 Slope for Diver Safety 18’ Diamond Wire Saw Mounting

20. New Technology: Articulating Diamond Wire Saw Running Position 10’ 10’ 10’ 3’ 16’ Post-Cut Position 7’

21. New Technology – Articulating Diamond Wire Saw Mud Line Diamond Wire

22. New Technology: Excavation Stone Method Mini-Van Method New Auger Dredge Diver Jet Wand and Air Lift

23. New Stone Method Stone Energy Decommissioning Method

24. New Stone Method: Fast - 94 Locations in 590 Days

25. New Stone Method: Regulatory Excellence 86 Structure Removal Permits w/ Site Clearance Plan 86 Structure Removal Final Reports 59 Pipeline Abandonment Permits 59 Pipeline Abandonment Final Reports 46 Well TA Application for Permit to Modify (APM) 44 Well Revised Permit to Modify (RPM) 157 Well PA Application for Permit to Modify (APM) 310 Weekly Activity Reports (WAR) 203 End-of-Operations Reports (EOR) 284 Rig-Move Notifications (RMN) 86 Site Clearance Verification Reports 86 NavAid Discontinuation Reports 1506 Regulatory Filings (3.6 Every Business Day)

26. New Stone Method: Accomplishments Results – 20Months • 86 - Structures Removed • 157 - Wells PA’d • 59 - Pipelines Abandoned • 1,115 - Air/Mixed Gas Dives • 330 - Internal Abrasive Cuts • 40 - External Abrasive Cuts • > 420,000 Man-Hrs Worked Zero Recordable Incidents

27. Stone Method: Safer, Greener, Less Expensive 2013 Safer, Leaner, Greener and Less Expensive

28. Stone Method: Accomplishments Traditional vs. Stone Decommissioning Methods Actual Cost: $155 million Estimated Cost: $235 million

29. Stone Method: Safer, Greener, Less Expensive 2013 Questions? Safer, Leaner, Greener and Less Expensive