Lost Production and Profit Analysis-Gas Well Example

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Create Business Value with Operational

Business Intelligence Tools

Sam Raju, Chief Architect, Customer Solution Adoption, SAP Labs, LLC

Ken Landgren, Director Oil & Gas IBU, SAP

Siddharth Taparia, Senior Director Business Analytics, SAP

Stéphane Lauzon, Director Oil & Gas IBU, SAP

Jagannath Das, Solution Manager, SAPA col laborat ion of:

Production Loss Analysis

and Workover Profitability Analysis

Ken Landgren, Jagannath Das, Steve GallingtonOctober, 2011

Story Summary

A field produces primarily gas, with some water production. The gas fieldmakes extensive use of compressors.

In 2006, production seems normal.

In 2007, the operator notices that monthly gas production is falling below plan.

Investigation also reveals that failure rates for compressors have increased.Deeper investigation reveals a root cause as fuel filter failures. A newmaintenance program is designed to replace the worst performing filters morefrequently.

In 2008, the results show reduced failures.

In 2009, the operator notices that some of the gas wells are underperforming due

to liquid loading. The operator does an analysis to understand the cost/benefit of initiating a workover program to swab the underperforming wells to unload theliquids. The expected payout for each well is under 15 days, so the swabbingprogram is undertaken.

Data Summary

3 Fields

1053 wells

10 years

Daily Data

3.85 Million Rows

Cost Data

Equipment Failure Data

Production Data

– Well Volumes Data

– Well Pressure Data

– Reservoir pressure Data

Scenario Architecture

Production Cost Maintenance Revenue

Analytics -- Answers

Excel Explorer Xcelsius Web Intelligence

•Integrated

•Flexible

•Fast

Agenda

Two Related Scenarios for a Producing Asset

• Production Loss Analysis

• Workover Profitability Analysis

Lost Production Analysis*

Situation

A field produces primarily gas, with some water production

The gas field makes extensive use of compressors

* Inspired by “Use SAP PM to Capture Quality Equipment Reliability Data,” by Dan MacPherson and Chad Wallace, Nexen, SAP-

Centric EAM 2010 Conference

Gas Production Report

In 2007, the operator observes the planned and actual monthly gas production

Gas Shortfall Report

In a deeper analysis the operator notices that monthly gas shortfalls have increased

Equipment Failure Report

Investigation also reveals that failure rates for compressors have increased

Lost Production Analysis

Compressor maintenance downtime analysis

Lots of maintenance events due to equipment failure

Desire is to reduce the equipment failures

What is the best way?

Answer

Root cause analysis based on equipment codes

Most frequent

Maintenance

Items: Fuel filter

Battery

Alternator

• Pareto Analysis on Failure causes

Equipment Failures by Model

What is the failure distributionamong different compressor models?

3400 series shows a higher failure rate as a percentage of population

– Smaller fuel filter

3500 series shows a lower failure rate

– Larger fuel filter

Recommendation: Increasemaintenance frequency on 3400series

• Analysis of fuel filter events

Where should newmaintenance program be

started? Wells with a combination of

high production and highdowntime

Populate HANA with wellproduction data

Prioritize wells by highproduction and highfailures

• Bad actor report – ranked by production

Higher priority, ranked onproduction and downtime

Lost Production Analysis Results

Fuel Filters

Reduction in fuel

filter events

January to April

Stable reducedrates May through

December

In 2008, the operator observes the planned and actual monthly gas productionseem better

Also in 2008, the gas shortfalls have decreased

Failure Coding for Lost Production Analysis

Important Points

Most traditional analysis requires data extraction from SAP.

– This is labor intensive, and can lead to errors

– HANA is directly connected to data sources, reducing effort and error The process works. This story is inspired by a published example.

Workover Profitability Analysis

The operator has succeeded in addressing the problem of lost production due to

compressor failures. The next problem is well underperformance.

As the wells produce gas, they also produce formation water. Often, the formationwater falls to the bottom of the well, and slowly builds up. As the liquid level in thewell rises to cover the perforations, it exerts hydrostatic pressure that diminishes theflow rate, and can eventually kill the well. This process is called liquid loading.

During the first 6 months of 2009, the planned and actual monthly gas productionlooks OK.

However, a closer analysis shows the gas shortfalls are increasing

The gas shortfall is concentrated in a few wells out of the 1000 in the asset

There are 10 gas wells that are underperforming

Gas Well Workover Example

A swabbing operation can be initiated. Swabbing will unload the liquids from the gaswells. During each swabbing operation the well is shut in for one day. After swabbing, production increases to the expected rate.

Single Well Projected Underperformance

The current performance is projected to the future and compared with the plan.

Single Well Swabbing Projected Results

The projected results of swabbing are added and compared with the plan.

Single Well Projected Revenue Underperformance

By bringing in gas price, the revenue performance can be projected and compared with theplan

Cost Analysis for Gas Well Workover

During each swabbing operation the well is shut in for one day, losing the revenue for that day,and incurring a cost for the swabbing job. After swabbing, production revenue is projected toincrease to the originally planned rate.

Start of Underperformance

Swabbing

The blue linerepresents theoriginal revenueplan. The greenline shows therevenue lost duringthe workover shutdown and theadditional cost of the swabbing job.

Single Well Swabbing Profitability

Revenue gainfrom Swabbing

How many days will it take for the revenue gain to pay off the total cost (lost production plus job cost) for the swabbing job?

Swabbing jobs cost $800.For a well that is underperforming due to liquid loading, how many days of increasedproduction will pay out the project?

Swabbing

Payout

Multi-Wells Swabbing Profitability

How will this work if we plan the operation for all 10 wells?

The results show that for an average well, the cost of the swabbing operation ispaid out in under 15 days.

The sooner the well underperformance due to liquid loading is discovered and addressed,the less will be the production loss due to underperformance.

Story Recap

Results

Identified most numerous failure causes

Implemented programs to reduce most costly failures first

Reduced failure rates

Workover Profitability Analysis

Results

Cost-benefit analysis shows that a workover will payout for each well in under 15days

The swabbing program is undertaken.

The rest of the story

A schedule is proposed to regularly swab the wells to unload the liquid that hasbeen accumulating.

The compressor maintenance intervals are synchronized with the swabbingintervals so the downtimes for swabbing and for compressor maintenance arematched, further reducing overall downtime.

Asset profitability is increased, and everyone gets a bonus.

Ken Landgrenken.landgren@sap.com

Jagannath das jdas@sap.com

Steve Gallingtonsteve.gallington@sap.com

Sam Raju, SAP Labs, LLC, Sam.raju@sap.com

Ken Landgren, SAP, ken.landgren@sap.com

Siddharth Taparia, SAP, siddharth.taparia@sap.com

Stéphane Lauzon, SAP, stephane.lauzon@sap.com

Jagannath Das, SAP, ja.das@sap.com

Lost Production and Profit Analysis-Gas Well Example

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