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2003 Press Releases
FOR IMMEDIATE RELEASE: May 6, 2003

BAROID'S HYDRO-GUARD™ FLUID TESTS POSITIVE ON GULF OF MEXICO SHELF AND DEEPWATER OPERATIONS

Designed for maximum shale inhibition in highly reactive formations, this water-based fluid system provides wellbore stability, high rates of penetration, and acceptable rheological properties over a wide range of temperatures.

Houston, Texas - Based on the independent tests of three major operators, Baroid's HYDRO-GUARD™ inhibitive water-based fluid system, shows a superior inhibition as compared to similar systems, resulting in the awarding of a contract for a deepwater well offshore Brazil in 3,400 feet water depth. Baroid is a product service line of Halliburton Energy Services (HES), which is a business unit of Halliburton (NYSE: HAL).

"To date, the HYDRO-GUARD system has been used on eight deepwater wells and four shelf wells in the Gulf of Mexico with excellent results," said Gary West, Baroid Product Development Manager. "The rates of penetration achieved with the HYDRO-GUARD system have equaled or exceeded the performance observed on offset wells where synthetic-based fluids (SBF) or other highly inhibitive water-based fluids were used."

On one shelf well in the South Marsh Island area of Louisiana, a 13 ppg HYDRO-GUARD system drilled twice as fast as SBFs and seven times faster than water-based fluids used on offset wells. In addition, the HYDRO-GUARD system was used to drill an S-type shelf well (maximum deviation 48 degrees) to a total depth of 15,000 feet measured depth. Based on hook load comparisons used to measure drag, the HYDRO-GUARD fluid performance closely tracked that achieved with SBF, confirming the extremely lubricious nature of the HYDRO-GUARD system.

Field performance has now verified laboratory results indicating that the HYDRO-GUARD system is as effective as an SBF in minimizing accretion on the drillstring. Additionally, good production rates observed on HYDRO-GUARD wells support the high return permeability results obtained in the testing phase of the HYDRO-GUARD system development.

A major operator used the HYDRO-GUARD system to drill four deepwater wells in Green Canyon (GOM). According to this operator's estimates, the system saved an estimated half million dollars per well when compared to an offset drilled with an SBF. These savings were attributed, in part, to fast penetration rates, lubricious and workable wellbores, no whole mud losses, and trouble-free casing runs with good cement jobs, thus eliminating the need for squeeze operations.

The operator also cited additional cost benefits related to the absence of discharge and solids handling issues associated with SBFs. The rig was released after drilling four initial wells. When the rig became available again, the operator elected to drill two more wells with the HYDRO-GUARD system.

The HYDRO-GUARD system uses two unique proprietary polymeric additives that minimize shale hydration almost instantaneously. The two polymers work synergistically to create a "water blocking" barrier between the fluid phase and the reactive clays drilled. With this new polymer chemistry, the HYDRO-GUARD system reaches inhibitive qualities similar to that of an invert fluid. Troublesome shales are readily drilled and reactive drilled solids are effectively and efficiently removed from the circulating system.

Halliburton Energy Services provides products, services, and integrated solutions for oil and gas exploration, development, and production. Capabilities range from initial evaluation of producing formations to drilling, completion, stimulation, and well maintenance - for a single well or an entire field. With more than 300 service centers in more than 100 countries, Halliburton possesses the global perspective that is increasingly important for energy exploration and production.

Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and Engineering and Construction Group business segments. The company's World Wide Web site can be accessed at www.halliburton.com.


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