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2005 PetroSkills LLC, All Rights Reserved

PLANNING
Proper planning is key to
optimizing operations and
minimizing expenditures
2005 PetroSkills LLC, All Rights Reserved 2
PLANNING
The drilling engineer's job is to
develop oil and gas reserves at
minimum cost
Oil companies are in the business to
make money
If we do not make money, we cannot
stay in business
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PLANNING
The drilling plan can be anything
from a single sheet of paper to
several books
It depends upon the complexity
of the well
Data acquisition
The first step in formulating any
drilling plan is to gather information
for drilling the well
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PLANNING
Some information is always available
Geologic prognosis
The geologic prognosis contains
information about the formation to be
drilled
It should define the objectives of the well
It should indicate the types of logs
required and whether cores and drill
stem tests will be required
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PLANNING
Example in book
Name and Location:
Dry Hole No. 1-"A", 700' FNL & 660'
FEL Section 82, Block B-1, H&GN
Survey, Northwest Mendota Field,
Roberts County, Texas.
Objective Horizon and Contract
Depth: Base of Upper Morrow Sand
plus 100' (30m); Approved depth
11,350' (3460m)
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PLANNING
Estimated Formation Tops
Estimated Elevation, KB 2,857' 871m
Top Wichita-Albany Anhydrite 2,950' 899m
Top Wolfcamp Dolomite 4,150' 1,265m
Top Possible Lost Circulation 4,300' 1,311m
Top Douglas Sands 7,100' 2,164m
Top Granite Wash 9,950' 3,033m
Top 13 Finger Lime 10,910' 3,325m
Top Morrow Formation 11,100' 3,383m
Top Morrow Sand 11,165' 3,408m

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PLANNING
Possible Producing Zones:
Douglas Sand 7,100-7,200' 2,164-2,194m
Stray Douglas Sand 7,400' 2,256m
Des Moines 9,050-9,900' 2,758-2,018m
Granite Wash 9,950-10,800' 3,033-3,292m
Upper Morrow Sand 11,165' 3,403m
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PLANNING
Samples:
Catch 10' (3m) samples from 6,800' (2070m) to
TD. Wash thoroughly, air dry, and tie in 100'
(30m) bundles. 10' (3m) drilling time from 3,350'
(1020m) to TD.
Coring:
One 50' (15m) oriented core of Upper Morrow
Sand 11,165 to 11,215, (3,403m to 3,418m)
approximately. (Need core for dipmeter study and
environmental analysis.)
Drill Stem Testing:
Possibly one test in Granite Wash
2005 PetroSkills LLC, All Rights Reserved 9
PLANNING
Surveys:
Dual Induction and Compensated Neutron
Formation Density logs
Remarks:
Set surface casing at 3,350' (1021m); set
intermediate casing at 10,950' (3,338m) (5
1/2 139.7mm). Possible string of 2 1/2"
(64mm) tubing to be set outside of 5 1/2"
(139.7mm) casing in order to test Granite
Wash.
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PLANNING
Geologic map
Provides
information on
offset wells that
can be used for a
reference
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PLANNING
Geologic maps
Geologic cross
section and
structure
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PLANNING
Control wells
Control wells should be geologically
similar to the well being planned
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PLANNING
Bit record
Information from offset bit records
can show
Casing points
Mud weights
Deviation
Time to drill
Number of bits
Types of bits
Hydraulics
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PLANNING
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PLANNING
Open hole logs
Information on formation types
Caliper log can indicate hole stability
Pore pressures from shale values
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PLANNING
Drilling mud recap and proposal
Recommended mud program
Information on offset wells
Time required to drill offsets
Hole problems
Mud properties
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PLANNING
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PLANNING
Scout ticket
Information on
productive
horizons and
production rates
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PLANNING
When available, daily drilling
reports are the most valuable
information
They give detailed drilling information
including an hourly breakdown
They may also give descriptions of
the drilling problems
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PLANNING
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PLANNING
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PLANNING
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PLANNING
Once all the information is
collected, it is the drilling
engineers responsibility to
develop a drilling plan
Improvements in drilling
practices are always possible
and expected in an area
2005 PetroSkills LLC, All Rights Reserved 24
PLANNING
Local problems and drilling
conditions must be analyzed
with respect to a broad, ever
changing expertise in order to
develop the best possible drilling
program
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PLANNING
Be a skeptic
It is our responsibility as drilling
engineers to question drilling
practices which are inconsistent with
sound judgment or other experiences
in similar areas
Can the well be drilled more
efficiently and at a lower cost
2005 PetroSkills LLC, All Rights Reserved 26
PLANNING
Develop expertise in every phase
of drilling
Learn all you can
Spend time on the rig to become
familiar with operations
Don't close your mind to new
technology or the experience of
others
2005 PetroSkills LLC, All Rights Reserved 27
PLANNING
Establish realistic objectives
Stick to facts, data, and statistics
Don't do anything simply
because it's the established
routine
Time is the most important factor
All efforts should be directed at
reducing time

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PLANNING
Attack general practices in view
of new technology
For real savings, attack the
hazards
Attack the abnormal pressure
problems, the deviation, the lost
circulation, or the pipe sticking
problems
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PLANNING
Support conclusions and
recommendations with data,
analysis, and calculations
Follow up and honestly evaluate
your efforts
Report success and failures alike
Don't place blame; find solutions
2005 PetroSkills LLC, All Rights Reserved 30
PLANNING
The Technical Limit (Drilling
the Limits) is defined as the
best possible well construction
performance for a given set of
design parameters
The technical limit is a well design
process by which drilling and
completion costs are reduced

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PLANNING
The assumption is made that
costs are time driven
Up to 70% of drilling costs are time
dependent
If the amount of time on location
can be reduced, the cost of the
well can be reduced
2005 PetroSkills LLC, All Rights Reserved 32
PLANNING
This reduction requires
extraordinary effort and
commitment challenging the
common mindset and philosophy
of the drilling personnel
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PLANNING
The technical limit approach consists of
answering three questions.
What is the current performance? Or what is
the historical or actual performance of wells
near the location?
What is a possible and achievable
performance? Alternately, what is the
theoretical limit of the performance in this
location?
What resources or investments are needed to
achieve the theoretical or technical limit?
2005 PetroSkills LLC, All Rights Reserved 34
PLANNING
Offset wells are evaluated in detail
for time required to drill and
complete
Based on the gathered
information, the well drilling plan
is broken down into many tasks
Complicated wells may have more
than 100 separate tasks
2005 PetroSkills LLC, All Rights Reserved 35
PLANNING
The time is broken up into
Theoretical well time,
Conventional lost or down time, and
Invisible lost time
Theoretical
Well Time
Conventional
Lost or Down
Time
Invisible Lost
Time
Industry Normal Well Time
Actual Well Duration
Technical Limit
2005 PetroSkills LLC, All Rights Reserved 36
PLANNING
Technical limit requires much
more in-depth well analysis and
planning
Each phase of the drilling operation
must be broken down into it's parts
On complicated wells, planning may
take as much as six month and
thousands of man hours
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PLANNING
Example
Time to drill 12 hole (311mm)
Pick up BHA
Trip in hole
Test casing
Drill out shoe track
Drill formation
Leak off test
2005 PetroSkills LLC, All Rights Reserved 38
PLANNING
Example
Time to drill 12 hole (311mm)
Drilling
Surveying
Tripping
Circulating
Formation evaluation
Etc.
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PLANNING
After the time breakdown, every
detail must be analyzed by a
team
The team includes drilling,
completion, production, reservoir,
service companies, drilling contractor,
permitting, purchasing and
management
2005 PetroSkills LLC, All Rights Reserved 40
PLANNING
Field personnel need to be included
as part of the planning and
implementation
During the actual well
construction, the time for each
operation must be tracked
Deviation from the technical limit
must be explained and solutions
offered
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PLANNING
A post well analysis is
conducted after the well
construction is completed
Summarize the lessons learned
Give possible solutions to eliminate
the lost time
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PLANNING
There cannot be an environment
where the parties are looking for
someone to blame
It must be:
What are the problems
What are the solutions
How can we improve
2005 PetroSkills LLC, All Rights Reserved 43
PLANNING
Jones and Poupet reported 20%
improvement from the best previous
offset well performance and 25%
cost reduction from the budgeted
amount
41
31
27.25
21.63
15
0 5 10 15 20 25 30 35 40 45
Days
Historical Estimate
Historical Estimate with
One Improved Task
Best Well in the field
Well Drilled after the
Alternate Planning
Technical Limit
2005 PetroSkills LLC, All Rights Reserved 44
PLANNING
The technical limit approach
provides an immediate benefit of
reduced costs to construct a well
It intensifies planning and
engineering effort
Challenges the established practices
and procedures
Creates an opportunity for better
performance and thereby, accelerates
well construction activities
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PLANNING
The technical limit approach
should not be designed to
surpass the regulatory, health
and safety issues related to well
development
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PLANNING
The approach improves well
construction time, and hence
would need careful resource
planning during the construction
phase as well as after the
construction activity is over
It does no good to drill faster if you
have to wait on equipment or
personnel because they are not there
on time
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PLANNING
As with any new activity, there
will be a learning curve for
implementing and reaping full
benefits from the new approach
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PLANNING
Extending The Alternate Approach
to Drilling Cost Management
Time dependent costs e.g. drilling rig
rate etc.
Time independent variable costs e.g.
mud, cement etc.
Fixed costs e.g. casing, well heads,
mobilization, demobilization etc.
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PLANNING
Extending The Alternate Approach
to Drilling Cost Management
A much larger improvement can be
achieved by also including time-
independent costs into the planning
procedure
The time-independent cost element
can be 30-60% of the well cost
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PLANNING
Extending The Alternate Approach
to Drilling Cost Management
A well with a high proportion of time-
dependent cost can justify increasing
time-independent cost to achieve
improved drilling performance
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PLANNING
Extending The Alternate Approach
to Drilling Cost Management
The planning should begin even before
the bids are floated for the well
development

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