IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
True Drilling Efficiency: Lead, Follow or Get Out of the Way
John de Wardt, DE WARDT AND COMPANY Ford Brett, Petroskills
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Heading into low rig count high oil production Shale drillers took
over marginal
production from
Saudi Arabia
Drilling efficiency is
a key to staying in
business
Red line – the gas story Created lots of gas with low rig count
Green line – new oil story
Expecting lots of oil with low rig count
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
US land drillers reacted to low gas price
A story of a tight
gas driller 15,000 ft
‘S’ shaped wells
Nat Gas price fall
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
> 2000 ft (600 m) per day opposite sides of the world – land and tender platform
4
DJ Basin Colorado
Offshore Thailand
Gas price crash
Bankruptcy
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Europe struggles to perform Now in declining
trend
Averages from data:
• Land Europe 300 ft / day
• Land USA 800 ft / day
280 ft / dy
5
40%
OG 21 Sources: NPD, Statoil, Petoro
1994 - 2013
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Doubling performance in Europe proven by Lean DrillingTM
560 ft. / day overall vs. 262 ft. / day historic best (plateau)
Halved completion time
Cut well cost 35%
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Lean DrillingTM repeated step change improvement Lessons from application • Organization Architecture = alignment to objectives thro aligned
delivery systems across breadth & depth of organization
• Culture change / team building = vision, values, equal players, common objective
• Performance gap recognition = team owned stretch goal (MTP beyond TL, BIC, BOB)
• Project services systems = professional detailed scheduling, cost est / control, risk management
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Breakthrough drilling performance ingredients Ford Brett: Study identified step change above benchmarks &
analyzed causes: GRI 1997 through today
latest step change made $35 bbl economic
• Commitment = “We are going to do this no matter what” • Detailed process focus = “The devil is in the details” • Involvement = “Everyone (all competencies) participates • Financial return = “Need to see return to make investment”
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
How NOT to have a Breakthrough • Keep doing things the same old way
• a breakthrough requires change, and change requires commitment.
• Don’t sweat the details • Rarely (never?) is a breakthrough one “magic bullet.”
• Only involve the experts • A breakthrough touches everyone’s job
• Don’t invest time & effort to change • A breakthrough requires 5 - 10 X the normal planning, engineering, and
coordination
Mr. Can’t
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Target a true drilling efficiency ratio: Face the facts and stop the hype
Slide 10
Act
ual
Nor
mal
BO
B
BIC
TL
MTP
Focus on NPT alone has
negative performance impact
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Case studies: MTP application
Mid East Land
Drilling – Dayrate,
High Complexity,
high risk area
(terrorist activity)
0
500
1000
1500
2000
2500
3000
3500
0 5 10 15 20 25 30 35 40
MD
[m]
Time [d]
Maximum Theoretical Performance Depth vs. Time - 3,500m Development Well
Maximum Theoretical
Performance Routine
Development
Difficult Development
Best well drilled
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
0
1000
2000
3000
4000
5000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70
MD
[m]
Time [d]
Maximum Theoretical Performance 5,100 m well - seabed zero
MTP
Deepwater Appraisal
Difficult Deepwater Exploration
Best well drilled
Case studies: MTP application
Deep Offshore Far
East Drilling -
Appraisal
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
0 5 10 15 20 25 30
MD
[Ft]
Time [d]
Maximum Theoretical Performance 9,700 ft single lateral well
Routine Development
Difficult Development
Best well drilled
Case studies: MTP application
Mid East Land
Drilling – Lump Sum
Project Managed
Step change wells
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
0
2000
4000
6000
8000
10000
12000
14000
0 5 10 15 20 25 30
MD
[Ft]
Time [d]
Maximum Theoretical Performance 15,000 ft ‘S’ shaped well
Routine Development
Difficult Development
Wells drilled
Case studies: MTP application
USA Land – “Super”
Performance Drillers
IADC World Drilling 2016 Conference & Exhibition 15-16 June, Estoril Congress Center, Estoril, Portugal
Drilling performance is now competitive advantage
Rig activity will be performance driven as never before
• Region to region: Europe is far behind / Mid East often wins on well production rates
• Operator to operator: drives well cost and production timing = profitability • Project to project: drives NPV so drives well opportunities • Contractor to contractor: winners and losers
Slide Number 1Heading into low rig count high oil productionUS land drillers reacted to low gas price> 2000 ft (600 m) per day opposite sides of the world – land and tender platformEurope struggles to performDoubling performance in Europe proven by Lean DrillingTMLean DrillingTM repeated step change improvementBreakthrough drilling performance ingredientsHow NOT to have a BreakthroughSlide Number 10Case studies: MTP applicationSlide Number 12Slide Number 13Slide Number 14Drilling performance is now competitive advantage
