Filename:1 BP-Amoco: 1 How to make a Break thru Breakthrough Drilling & Completion Performance –...

filename:1BP-Amoco: 1

How to make a Break thru

Breakthrough Drilling & Completion Performance – Case Studies

J. Ford BrettOGCI

DrillingTechand10Oil.ppt

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1955 1965 1975 1985 1995

Predicting Rig Utilization

2000

.3$10 /BBL

Statistics

Scaled Utilization SD = .22

Scaled Oil Price SD = .23

Correlation = .09(Oil price, Utilization)

.98$ 55 / BBL

Utilization

Change in Real Oil Price


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1955 1965 1975 1985 1995

Predicting Utilization

2000

.3

.98

58ºF

57ºF

Statistics

Scaled Utilization SD = .22

Scaled World Avg Temp. SD = .25

Correlation = .32(Temp., Utilization)Utilization

World Temp


Predicting Rig Count and Oil Price is Like Predicting the Weather

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1955 1965 1975 1985 1995 2000

.3 10.15/BBL

.98 55.5/BBL

58ºF

56.8ºF

We Know:

It will change.

We can’t control it.

We can’t predict it (very well).

We need to live with it.


DroughtSeason long changes in the

environment.


Drought

Change your environment to prosper no matter what.

Season long changes in the environment.


Drought Season long changes in the environment.

Change your environment to prosper no matter what.

6.2

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Oilfields dry up Change the technology to prosper

(e.g. multilateral)

New

wel

l av

erag

e u

ltim

ate

reco

very

, b

cf/w

ell

(Tex

as g

as w

ells

)

Projected Ultimate Recovery

“That’s it, sir. We’ve eaten the last of the contractors!”

Everyone is in this together...

“That’s it, sir. We’ve eaten the last of the contractors!”

Everyone is in this together...

operators


DUAL ACTIVITYDUAL ACTIVITYDEFINEDDEFINED

1 Make up 26" BHA2 Run 26" BHA, drill 26" hole3 Retrieve 26" BHA4 Rig up 20" casing tools5 Run 20" casing, cement6 Retrieve 20" casing tools7 Rig up riser running tools8 Run riser, BOP, test9 Make up 17-1/2" BHA

10 Run 17-1/2"BHA,drill 17-1/2"hole11 Retrieve 17-1/2" BHA12 Rig up 13-3/8" casing tools13 Run 13-3/8" casing, cement14 Retrieve 13-3/8" casing tools

Time

SINGLE ACTIVITY WORK SEQUENCESINGLE ACTIVITY WORK SEQUENCE


DUAL ACTIVITYDUAL ACTIVITYDEFINEDDEFINED

1 Make up 26" BHA2 Run 26" BHA, drill 26" hole3 Retrieve 26" BHA4 Rig up 20" casing tools5 Run 20" casing, cement6 Retrieve 20" casing tools7 Rig up riser running tools8 Run riser, BOP, test9 Make up 17-1/2" BHA

10 Run 17-1/2"BHA,drill 17-1/2" hole11 Retrieve 17-1/2" BHA12 Rig up 13-3/8" casing tools13 Run 13-3/8" casing, cement14 Retrieve 13-3/8" casing tools

Yellow - Rig #1Red - Rig #2

Time

DUAL ACTIVITY WORK SEQUENCEDUAL ACTIVITY WORK SEQUENCE


95

42

Well Number

180

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40

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1995 Wells

1996 Wells

Learning behaviors / processes introduced

Drilling Learning: Deepwater Drilling Example BP GoM

Greater Green River Basin: South Moxa Arch 1990-1995

Successful Drilling Practice Study

Graph here

Regression with 1994 Statistics

R Square = .22

P-Value Intercept = .000

Slope = .000

Significance F = .000

y = 34.8x + 346

100

300

500

700

900

1100

1/90 1/91 1/92 1/93 1/94 1/95

Spud Date

ROP (Avg. Ft/Day)

15%/year

• Comparable Wells

• Every Operator

STEP CHANGE

Copyright © 1996 by OGCI Management, Inc.


Gravel Pack Completions - Learning

Implemented Dedicated Learning Effort in Operations

Well #

Co

mp

leti

on

Da

ys

02468

101214161820

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Greater Green River Basin: South Moxa Arch 1990-1995

Process Driven Alliance can Yield Step Change in Improvement

Graph here

Regression with 1994 Statistics

R Square = .22

P-Value Intercept = .000

Slope = .000

Significance F = .000

y = 34.8x + 346

100

300

500

700

900

1100

1/90 1/91 1/92 1/93 1/94 1/95

Spud Date

ROP (Avg. Ft/Day)

15%/year

• Comparable Wells

• Every Operator

“Alliance”



Days vs. DepthA-3 and A-4

4000

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Days

Me

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d D

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th

A-3 Actual

A-3 Trouble Free

A-4 Actual

A-4 Trouble Free

A-3 Actual

A-4 Actual

A-3 Trouble Free

A-4 Trouble Free

Alliance andPlanning

$/Frontier Well

Other DrillingTechnology

$/Frontier Well

Anti-Whirl Bit

$/ Frontier Well

Now running logs on Frontier Zone $5,000Use 4-1/2" production casing vs. 5-1/2" casing $30,000No well clean-up on single Frontier well $25,000

Cement Design $7,0008-5/8" surface casing vs 9-5/8" casing $2,715Drill less rathole on Frontier $15,000Change in wellhead design $4,000

Production equipment located closer to wellhead $460Reduced drilling days by Drlg. Co. $43,200Re-use of drilling mud on Frontier wells $5,000Rig Mobilization - Pre-Planning/Scheduling $3,000Less supervision/time on jobs/#of people $4,196Cooperation within Alliance $2,500

Dowell avg. CEMENTING location time reduced $420Purchase pit liners in lots of 10 $1,400

Negotiated with Denny's Water Co reduced price $6,000Hauling of surface casing $300

Use 400 bbl frac master for cement water vs 400 bbl up-Switched vendors for casing dope right tanks

$250$100

Single contractor to handle all trash dumping $425Estimated avg. hole size from previous data - savings onFlat rate for casing screws number of sacks of cement

$1,750$1,800

Flat rate with contractor for cleaning casing $1,150Set 2-3 conductors at a time $200

Utilized railhead in Rock Springs, WO for casing delivery $2,400Pump 10 bbls vs 40 of chemical pre-flush $350Re-use 1" cement pipe $110Zero or bare bone automation $4,000

Competitiveness between dirt contractors $6,000Purchase fencing material in bulk $400

Drilling Cost Reduction Totals: $68,211 $62,715 $43,200

Percentage of Total: 39% 36% 24%

Total Drilling Cost Reduction $173,226

Moxa Arch Single Operator’sProcess-Driven Improvement


Alliance MutualGoals

GoalsLinked to

Profitability

Well-DefinedProcess

Buy-in atAppropriate

Levels

QuantitativePerformance Msmt.Tools

PerformanceBased

Incentives

ProcessImprovement

Analysis

# of SuccessFactors

IncorporatedE 0K 0L 0P 0I X 1D X X 2N X X X 3O X X X 3B X X X X 4C X X X X 4F X X X X 4A X X X X X 5M X X X X X 5G X X X X X 5J X X X X X X 6Q X X X X X X 6H X X X X X X X 7

Successful Alliances

Critical Success Factors


Successful Alliances are Process-Driven

Quantified Success

All Report Success

Some Report Success

Some Report Failure

Quantified Failure

All Report Failure

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B

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Success

Failure

Number of Factors Incorporated

7

Page 20



NOT ECONOMIC TODAY

1/90

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2/951/91 1/92 1/93 2/94

Spud Date

ROP (Ft/Day)

Year Average Cost1990 $1,400,0001991 $1,240,0001992 $1,080,0001993 $ 920,000

What is the bottom line?

A Drilling Story


NOT ECONOMIC TODAY

1/1/90

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1100

12/31/941/1/91 1/1/92 12/31/92 12/31/93

Spud Date

ROP (Ft/Day)

Year Average Cost1990 $1,400,0001991 $1,240,0001992 $1,080,0001993 $ 920,0001994 $ 760,000

What is the bottom line?

Impact



Critical Success Factors

Compelling Reason to Change

Goals Linked to Profitability 100 %

Well-Defined Detailed Process 100 %

Quantitative Performance 100 %Measurement Tools

Performance-Based Incentives 60 %

Process Improvement Analysis 80 %

% of Alliances w/ Quantified Success using these factors% of Alliances w/ Quantified Success using these factors


The Bottomline for “My Company”Make your company more competitive = more valuable.• Have a Technology Direction

– Have a technology strategy for each asset - what are the bottle necks and how might we remove them?

• Routinely Measure Performance of Technology

– Treat every use of technology as an experiment - monitor & diagnose both successes and failures.

• Link Economic Results with Technology use

– Develop formal business cases for using technology - estimate & document cost and value.

• Have a way to Re-new your Technology

– Create culture and structure that supports learning, in addition to mechanisms.


The Bottomline for “Me”Learn = make yourself more valuable• Have a Technology Direction...

– Make a personal technology plan - ID gaps and create plan to close the gaps. Make yourself distinctive.

• Routinely Measure Performance of Technology

– Be able to PROVE how the impact of your know-how.• Link Economic Results with Technology use

– Treat use of technology like it was your money - if you own stock it IS your money.

• Have a way to Re-new your Technology

– Listen, seek out, learn something new EVERY day, EVERY week, EVERY month - eliminate “Not invented by me” mentality.


• Compelling reason to change - crisis or leadership. Recognize change is needed• Commit to a goal you don’t know how to achieve• Involvement• Reason by in choose to do it – need buy on the hook.• Don’t come from continuous improvement little bit at time.• Compelling reason – goal – recognize a change is required.• Distinctions – “on field or in stands”- type of conversation on the field• What are you doing day in day out.• 90% spent on items not meeting goal• Rotary time is precious.• Plans they know will work.• Bought into target• Loose weight example.• Clear accountability• Simple Goals• Focus on Bottom line.

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