Faculty of Science and Technology

MASTER’S THESIS

Study program/ Specialization:

Spring semester, 2012
Master of Science in Petroleum Technology
Drilling &Well Technology
Open

Writer:
Lars-Jørgen Sandvik Solvi …………………………………………
(Writer’s signature)
Faculty supervisor:
Kjell Kåre Fjelde
External supervisor(s):
Inge Bye - Halliburton

Titel of thesis:

The Value Of Drilling Optimization

Credits (ECTS):
30
Key words:
Pages: 120
Drilling optimization, Drilling challenges,
Trouble time, Drilling efficiency, A average + enclosure: 0
well reference, contract incentives, batch
effect, operational effects. NCS status,
Stavanger, ………………..
Date/year
Acknowledgements
I would like this opportunity to thank several people that have helped me in the work with this
thesis. I would first like to express my appreciation to the Business Development in Sperry
Drilling in Halliburton Norway for allowing me to take on this assignment as well as the material
and intellectual support that they have contributed in this process.

My deepest gratitude goes to my Halliburton Mentor Inge Bye whom have supported, educated
and facilitated me and my work far more than one could ever expect. Despite his young age his
level of knowledge of the industry both in terms of the operational as well as the organizational /
management aspects is far more than impressive. His engagement in discussions and tutoring
skills has been a most valuable asset in this process.

I would also like to thank the present Manager of M/LWD operation in Sperry Drilling –
Halliburton Lars Øy for taking the time and preparation to provide the information and
understanding of the operational and planning measures that was taken in the process of drilling
the wells used in this study. I would further like to thank Lead well Planner – Jan Egil Tengesdal
and Operations Leader of the Drilling Optimization Service Atulkumar Mehta who have taken
the time to educate me in the field of well planning and drilling optimization and provide
valuable information.

Finally I would like to thanks my advisor at The University Of Stavanger Kjell Kåre Fjelde.
Kjell Kåre has provided very good academic guidance and advisory through the process. His
engagement in discussion and knowledge within the Drilling Technology discipline has been a
major motivation and help in staying on the right track while working with this thesis.

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Abstract
The well construction time and cost on the Norwegian Continental Shelf has increased drastically
since 2001. The production is declining and there is a strong need to bring more wells on production
while at the same time there is an increasing amount of development drilling scheduled for the
upcoming years. The industry is in a time squeeze and it is crucial for future value generation on the
Shelf to reduce the well construction time and cost.

It is claimed that Drilling Optimization services increase drilling efficiency, reduce NPT and failures.
However, it is very difficult to measure the exact effect Drilling Optimization has on the drilling
operations. This thesis aims to identify and in best case quantify “The Value of Drilling
Optimization” in 8 carefully selected North Sea wells.

The work revealed that there was a clear improvement in drilling efficiency, but it was not possible
to quantify the effect of drilling optimization. This was because the reported information did not
allow the source of the improvements to be identified. An estimate of the value of the total
improvements was generated based upon the difference in performance between the two batches the
wells belonged to. The estimated value suggested that the improved drilling efficiency for a well
designed as an average of the sample wells would reduce the drilling time with 2.54 days. The study
also revealed valuable elements both with respect to the development of total drilling efficiency
through the two batches and key elements related to the process of studying drilling performance.
Some of the key findings were:

- The optimization often gets camouflaged by other events affecting the performance targets
and the absence of an identifiable effect of drilling optimization measures on/in the
performance targets, does not necessarily imply that they have not been present.
- Contract Incentives affects performance - Increased performance does not come for free
and needs to be encouraged through contract incentives that impact all parties involved.
- Real value is generated when all parties involved are working together while using their best
of knowledge and ability to reach the required targets. Communication, feedback,
consistency and cooperation are vital ingredients in such an approach.

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Contents
Table of Figures ............................................................................................................................. VIII
Table of Graphs................................................................................................................................ IX
List of Tables .................................................................................................................................... XI
Table of Equations ........................................................................................................................... XI
Abbreviations ................................................................................................................................. XII
1. Introduction ...............................................................................................................................1
2. Background ................................................................................................................................3
2.1. Status on the NCS – Norwegian Continental Shelf ....................................................................... 3
2.2. Technical Limit .............................................................................................................................. 7
2.3. Drilling challenges - Direct and Indirect contributors ................................................................... 9
2.3.1. Vibration................................................................................................................................ 9
[Link]. Vibration Mechanisms .......................................................................................................... 9
Stick-Slip – Torsional vibrations ....................................................................................................... 9
Bit Bounce – axial vibrations .......................................................................................................... 10
Bit Whirl – lateral vibrations .......................................................................................................... 10
Backward & Forward BHA Whirl .................................................................................................... 11
Torsional Resonance ...................................................................................................................... 11
Parametric Resonance ................................................................................................................... 12
Bit Chatter ...................................................................................................................................... 12
Modal Coupling .............................................................................................................................. 12
[Link]. Vibration consequences ...................................................................................................... 13
[Link]. Mitigating Downhole Vibrations ......................................................................................... 14
2.3.2. Borehole instability ............................................................................................................. 15
2.3.3. Insufficient hole-cleaning .................................................................................................... 17
2.3.4. Lost Circulation ................................................................................................................... 18
2.3.5. Kick ...................................................................................................................................... 19
[Link]. Kick Sources ........................................................................................................................ 19

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 [Link]. Kick Potential ...................................................................................................................... 20
[Link]. Kick Handling ....................................................................................................................... 20
[Link]. Example: Kick Handling - Time & Cost ................................................................................ 21
2.3.6. Stratigraphic and Lithological challenges............................................................................ 23
[Link]. Key Seating .......................................................................................................................... 23
[Link]. Abrasive Formations ........................................................................................................... 23
[Link]. Stringers - Natural Whipstocks ........................................................................................... 24
2.3.7. Stuck Pipe ............................................................................................................................ 24
[Link]. Differential sticking ............................................................................................................. 25
2.3.8. Handling Drilling Challenges ............................................................................................... 26
2.4. Drilling optimization.................................................................................................................... 27
2.4.1. What is drilling optimization? ............................................................................................. 27
2.4.2. Conventional Drilling Optimization ..................................................................................... 28
2.4.3. Real-Time Modeling ............................................................................................................ 29
2.4.4. Integrated Real-Time Modeling and Data........................................................................... 29
2.4.5. Real-Time –Operation-Center: RTOC .................................................................................. 29
2.4.6. The Drilling optimization Elements ..................................................................................... 30
[Link]. Drillstring integrity .............................................................................................................. 30
[Link]. Hydraulics management ..................................................................................................... 31
[Link]. Wellbore integrity ............................................................................................................... 31
[Link]. Data sources and systems ................................................................................................... 32
3. The Well study.......................................................................................................................... 33
3.1. Well selection Criteria’s .............................................................................................................. 33
3.1.1. Technical aspects ................................................................................................................ 34
Drilling Facilities ............................................................................................................................. 34
Well trajectory ............................................................................................................................... 34
Hole section ................................................................................................................................... 34
3.1.2. Geo-Technical aspects ........................................................................................................ 34

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 3.1.3. Drilling Optimization services ............................................................................................. 35
3.2. Source of Information ................................................................................................................. 35
3.3. Operational planning & measures .............................................................................................. 35
3.3.1. Planning............................................................................................................................... 36
3.3.2. Real-Time Monitoring ......................................................................................................... 37
3.3.3. Optimization........................................................................................................................ 37
3.4. Well description .......................................................................................................................... 39
3.4.1. Well trajectory ............................................................................................................................ 39
3.4.2. General Well Schematics ............................................................................................................ 40
3.5. Operational Overview ................................................................................................................. 40
3.5.1. Well # 1 ............................................................................................................................... 41
3.5.2. Well #2 ................................................................................................................................ 42
3.5.3. Well #3 ................................................................................................................................ 43
3.5.4. Well #4 ................................................................................................................................ 44
3.5.5. Well #5 ................................................................................................................................ 45
3.5.6. Well #6 ................................................................................................................................ 46
3.5.7. Well #7 ................................................................................................................................ 48
3.5.8. Well #8 ................................................................................................................................ 49
3.6. Performance Targets................................................................................................................... 51
3.6.1. Parameters .......................................................................................................................... 51
3.6.2. Targets................................................................................................................................. 52
3.6.3. How to Interpret the Target Definitions ............................................................................. 56
Increasing and decreasing value .................................................................................................... 57
Increasing value and decreasing displacement ............................................................................. 58
Increasing Value and increasing displacement .............................................................................. 59
Decreasing value and increasing displacement ............................................................................. 60
Decreasing value and decreasing displacement ............................................................................ 61

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4. Results ..................................................................................................................................... 62
4.1. 36 “Hole section .......................................................................................................................... 62
4.2. 26 “Hole section .......................................................................................................................... 66
4.3. 17 ½” Hole section ...................................................................................................................... 69
4.4. 12 ¼” Hole section ...................................................................................................................... 72
4.5. 8 ½” Hole section ........................................................................................................................ 76
4.6. The value of the Total Improvement in an Average well ............................................................ 80
4.6.1. Hole section Averages & Improvement Calculations.................................................................. 81
4.6.2. Total Time Savings & Estimated Value........................................................................................ 86
5. Discussion ................................................................................................................................ 89
5.1. The effect of Batch drilling .......................................................................................................... 89
5.2. Hole Section Performance .......................................................................................................... 91
5.2.1. 36” Hole section .................................................................................................................. 91
5.2.2. 26” Hole section .................................................................................................................. 93
5.2.3. 17 ½“ Hole section .............................................................................................................. 94
5.2.4. 12¼“ Hole section ............................................................................................................... 96
5.2.5. 8 ½” Hole section ................................................................................................................ 98
5.3. Reporting structure and challenges ............................................................................................ 99
5.3.1. Level of detail ...................................................................................................................... 99
5.3.2. Consistent measurements ................................................................................................ 100
5.3.3. Further work ..................................................................................................................... 100
5.4. Performance Study Reflections................................................................................................. 102
5.5. The Average well ....................................................................................................................... 103
5.6. The Contract Set-ups effect on Drilling Performance ............................................................... 105
5.6.1. Standard Contracts Setup ................................................................................................. 105
5.6.2. The Flat Rate Rental .......................................................................................................... 105
5.6.3. Standby Rate & Operational Rate ..................................................................................... 106
5.6.4. Standby Rate & Meter Rate .............................................................................................. 106

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 5.6.5. Pure Meter Rate - $$$/Meter ........................................................................................... 106
5.6.6. Contracts Risk Distribution................................................................................................ 106
5.6.7. Incentive effects on Batch 1 and Batch 2 Performance .................................................... 109
6. Summary ................................................................................................................................ 110
7. Conclusion.............................................................................................................................. 114
References..................................................................................................................................... 116

Table of Figures

Figure 1 - Historical production on NCS from 1970 to 2010 ......................................................................... 3

Figure 2 - Production forecast and source until 2030 .................................................................................. 4
Figure 3 - Reported resources in plans and methods for reserve growth in producing fields .................... 4
Figure 4 - Historical and estimated development of well costs from 2003 – 2015 for 8 fields on the NCS. 5
Figure 5 - The historical development of the planned versus the actual wells drilled from fixed
installations on some of the larger field on the NCS. ................................................................................... 5
Figure 6 - Historical and future number of wells drilled excluding sidetracks on the NCS from 1990 to
2016 sorted by well type............................................................................................................................... 6
Figure 7 - Schematic showing the relationship between: Technical Limit, Invisible Lost Time,
Conventional Lost or Down Time, Actual well duration and the industry normal well time . ..................... 7
Figure 8 - Hole Instability scenarios ............................................................................................................ 16
Figure 9 - Fracture network and karst formation ...................................................................................... 18
Figure 10 - Key seating ............................................................................................................................... 23
Figure 11 - Borehole instability due to interchanging formations ............................................................. 24
Figure 12 - Differential stuck pipe ............................................................................................................... 26
Figure 13 - The traditional Drilling optimization cycle ............................................................................... 28
Figure 14 - The New Drilling optimization circle ......................................................................................... 28
Figure 15 - A integrated circle of drilling optimization workflow .............................................................. 30

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Figure 16 - Distribution of time consumption related to the different phases of the well construction
process ........................................................................................................................................................ 33
Figure 17 - 3D plot of the 8 wells final well trajectory ................................................................................ 39
Figure 18 - General wells schematics excluded well #7 .............................................................................. 40
Figure 19 - well schematic of well #7 .......................................................................................................... 40
Figure 20 - Increasing absolute value ......................................................................................................... 57
Figure 21 - Decreasing absolute value ....................................................................................................... 57
Figure 22 - Increasing value and decreasing displacement ........................................................................ 58
Figure 23 - Increasing value and decreasing displacement ........................................................................ 59
Figure 24 - Decreasing value and increasing displacement. ....................................................................... 60
Figure 25 - Decreasing value and decreasing displacement ....................................................................... 61
Figure 26 - Example of cost Generation for a drilling service contactor .................................................. 107
Figure 27 - Example of the main revenue generating phases for a drilling service contactor ................. 107

Table of Graphs

Graph 1 - Average ROP through the 36” hole section for the 8 sample well’s chronologically arranged
after section start date ............................................................................................................................... 62
Graph 2 - Operational, Circulation & Drilling hours per ft for the 36" hole section. .................................. 63
Graph 3 - Ratio between Circulation hours and BRT hours for the 36” hole section ................................ 64
Graph 4 - Ratio between drilling hours and Circulation hours for the 36” hole section ............................ 65
Graph 5 - Average ROP through the 26” hole section for the 8 sample well’s chronologically arranged
after section start date ............................................................................................................................... 66
Graph 6 - Operational, Circulation & Drilling hours per ft for the 26" hole section. .................................. 67
Graph 7 - Graph showing the ratio between Circulation hours and BRT hours for the 26” hole section . 68
Graph 8 - Graph showing the ratio between drilling hours and Circulation hours for the 26” hole section
.................................................................................................................................................................... 68
Graph 9 - Average ROP through the 17 ½” hole section for the 8 sample well’s chronologically arranged
after section start date. .............................................................................................................................. 69
Graph 10 - Operational, Circulation & Drilling hours per ft for the 17 ½ " hole section. ........................... 69

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Graph 11 - Circulation to BRT hours ratio and NPT for the 17 ½ hole section ........................................... 70
Graph 12 - Graph showing the ratio between drilling hours and Circulation hours for the 17 ½ hole
section ......................................................................................................................................................... 71
Graph 13 - Average ROP through the 12 ¼” hole section for the 8 sample well’s chronologically arranged
after section start date. .............................................................................................................................. 72
Graph 14 - Operational, Circulation & Drilling hours per ft for the 12 ¼” hole section ........................... 73
Graph 15 - Circulation to BRT hours ratio in the 12 ¼” hole section .......................................................... 74
Graph 16 - Graph showing the ratio between drilling hours and Circulation hours for the 12 ¼” hole
section ......................................................................................................................................................... 75
Graph 17 - Average ROP through the 8 ½” hole section for the 8 sample well’s chronologically arranged
after section start date. .............................................................................................................................. 76
Graph 18 - Operational, circulation & Drilling hours per ft for the 8 ½” hole section. ............................... 77
Graph 19 - Graph showing the ratio between Circulation hours and BRT hours for the 8 ½ “ hole section
.................................................................................................................................................................... 78
Graph 20 - Graph showing the ratio between drilling hours and Circulation hours for the 8 ½” hole
section ......................................................................................................................................................... 78
Graph 21 - The development of BRT hrs/ft chronological arranged in time for the 36” hole section ....... 81
Graph 22 - The development of BRT hrs/ft chronological arranged in time for the 26” hole section. ...... 82
Graph 23 - The development of BRT hrs/ft chronological arranged in time for the 17 ½ “hole section. .. 83
Graph 24 - The development of BRT hrs/ft chronological arranged in time for the 12 ¼”hole section .... 84
Graph 25 - The development of BRT hrs/ft chronological arranged in time for the 8 ½” hole section. .... 85

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List of Tables

Table 1 - Frequency domain and Real-Time surface indicators for the different vibration mechanisms
[21] .............................................................................................................................................................. 13
Table 2- Calculated time to displace the whole annulus with new mud ................................................... 22
Table 3 - The calculated BRT hrs/ft averages and percentage improvement for the 36” hole section. .... 81
Table 4 - The calculated BRT hrs/ft averages and percentage improvement for the 26” hole section. .... 82
Table 5 - The calculated BRT hrs/ft averages and percentage improvement for the 17½” hole section. .. 83
Table 6 - calculated BRT hrs/ft averages and percentage improvement for the 12 ¼” hole section. ........ 84
Table 7 - The calculated BRT hrs/ft averages and percentage improvement for the 8 ½” hole section. ... 85
Table 8 - The calculated total BRT hours for each hole section and the total average well BRT hours
based on the 4 different averages. ............................................................................................................. 86
Table 9 - The hours and day’s saved for different combinations of the 4 different averages of BRT/ft
calculated for each hole section and its related cost saving for the average well ..................................... 88

Table of Equations

Equation 1 - Average ROP ........................................................................................................................... 52

Equation 2 - Drilling hours per ft................................................................................................................. 53
Equation 3 - Circulation hours per ft........................................................................................................... 53
Equation 4 - Operational hours per ft ......................................................................................................... 54
Equation 5 - Drilling to circulation hours ratio............................................................................................ 54
Equation 6 - Circulation to Below Rotary Table hours ratio ....................................................................... 55

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Abbreviations

WOB – Weight On Bit TD – Target depth

BHA – Bottom Hole Assembly TVD – True vertical depth

DO – Drilling Optimization PWD – Pressure While Drilling

RPM – Revolutions Per Minute FTWD – Formation-Pressure While Drilling

ROP – Rate Of Penetration MWD – Measurements While Drilling

POOH – Pull Out Of Hole LWD – Logging While Drilling

DP – Drillpipe SWD – Seismic While Drilling

DS – Drillstring GR – Gamma Ray Sensor

BHP – Bore Hole Pressure RES – Resistivity Sensor

PP – Pore Pressure DIR – Directional measurement sensor –

Provide Surveys: Measures the magnetic and
FP – Fracture Pressure
gravity field in X, Y and Z directions and
supply a total value.
MODU – Mobile Drilling Unit

DEN – Density sensor

OBM – Oil Based Mud

NP – Neutron Porosity
WBM – Water Based Mud

DDS – Drillstring Dynamics Sensor –

BOP – Blow Out Preventer
vibration sensor
MD – Measured Depth
MW – Mud Weight

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PDC – Polycrystalline Diamond Compact RKB – Rotary Kelly Bushing

3D RSS – Rotary Steerable System HPHT – High Pressure High Temperature

(>690bar, >150 deg Celsius or deeper than
NBG – Near Bit Gamma sensor
4000 m)

WOW – Wait On Weather

B/U – Bottoms Up (Refers to when one
annular volume I circulated)
TT – Trip Tank

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 1. Introduction
Drilling optimization have developed from being related to conceptual optimization as the rotary
drilling principle and the use of drilling mud in the 1920’s, full automation of rig and mud
handling in 1967 to the application of the first scientific techniques [3]. The same techniques that
make up the fundamental base for what Drilling Optimization is today. In 2004 David C-K Chen
defines drilling optimization as:

“Drilling optimization is a process that employs downhole and surface sensors, computer
software, Measurements While Drilling (MWD) and experienced expert personnel – all
dedicated to reduce drilling trouble time and increase drilling efficiency” [4].

As the cost of lifting oil is growing, it is important to increase the drilling efficiency and reduce
well construction time. A study of drilling in shallow water shelf in the Gulf of Mexico shows
that troubled time accounts for 25% of rig time. In dollar terms, it is about 1.5 million USD per
well [2]. Hence, a small reduction in trouble time and increased drilling efficiency can result in
tremendous time and cost savings. On the Norwegian Continental shelf there is in addition to the
continuous battle to reduce trouble time a time squeeze developing. The number of wells needed
on existing fields is accumulating while at the same time operators have set high goals within
development drilling [10]. For further successful value creation on the NCS, It is vital to increase
the drilling efficiency and reduce well construction time.

It is claimed that Drilling Optimization services increase ROP, reduce NPT and failures.
However, it is very difficult to measure the exact effect Drilling Optimization has on the drilling
operations. This thesis aims to study the effect Drilling Optimization has on the drilling
efficiency and time usage, and at best quantify the value of this effect. This is done by comparing
the performance in 8 carefully selected North Sea wells with same fundamental technical,
geotechnical and Drilling optimization service base.

Information on the measures and services that were supplied to the operator in the planning,
Real-Time and post phase of the drilling operations are described.

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The wells are analyzed in terms of the Below Rotary Table, operational, circulation and drilling
hours that were spent in each hole section. In addition the Rate of Penetration and Non
Productive time is evaluated. The drilling efficiency in each hole section is studied in
chronologically order from when the wells were drilled, and the result evaluated and discussed in
terms of the information provided by the End Of Well Reports.

An average well is designed as an average design of the wells used in the study. The average
well provides the fundament for an estimation of the value of the total improvement in terms of
time and money. Further, the contract set-up that governs the drilling service providers’ revenue
generation is discussed in relation to performance. Finally a summary of the findings from the
discussion and results are given in relation to the general situation the operators on the
Norwegian Continental Shelf are facing before a conclusion is presented.

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 2. Background

2.1. Status on the NCS – Norwegian Continental Shelf

Over 40 years ago the first Norwegian

oilfield started up production. Since then,
the Ekofisk field has seen over 40 Years
of production and have started
restructuring for another 40 years. Several
large Norwegian oilfields have been
brought online, since then; Statfjord,
Gullfaks, Draugen, Troll, Ormen lange
and Snøhvit to name a few. The NCS also
still delivers in exploration, with the
newly discovered elephant Aldous Major
– Avaldsnes, now known as Johan
Figure 1 - Historical production on NCS from 1970 to 2010 [5]
Sverdrup, as the latest example [5]

Norway is still a large exporter of oil and gas and was in 2011 the 7th largest oil exporter and
second largest gas exporter in the world [6]. Figure 1 shows that the oil production peaked in
2001 and an increasing fraction of our production is now coming from gas. The gas production
is still increasing but not sufficient to keep the total production level. Figure 2 shows the
estimated future production on the NCS. The majority of the future production is to come from
reserves in existing fields but the resources in new fields and discoveries are also expected to
bring a significant portion. Figure 3 is based on data provided by the licensees on the NCS. It
shows the amount of resources in producing fields and what technologies and methods they are
expecting to realize these resources [11].

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Figure 2 - Production forecast and source until 2030 [7] Figure 3 - Reported resources in plans and methods for
reserve growth in producing fields [8]

The highest single impact factor for future production on existing fields is expected to be drilling
of new well’s. However, the number of wells being drilled from fixed installations (Figure 5) is
actually less than planned. The residual wells from each year are postponed to next year along
with their production. This causes an accumulation of the number of planned wells to be drilled,
while at the same time the number of wells needed per year increases (Figure 6).

The average well construction cost has more than doubled from year 2003 to 2009 (figure 4). In
the MODU market there is limited rig availability and contracts for MODU for drilling in
2013/14 started signing already in March 2012 [9]. One of the reasons for the increased demand
for rigs the latest years is that MODUs are being used in the continuously increasing amount of
intervention and workover operations that need to be performed [1]. The large number of future
Permanent Plug & Abandonment (PP&A) campaigns is also expected to increase the pressure in
the rig market.

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The number of platform wells
required per year is increasing and
the MODU rig rates have increased
significantly. This has made the
operational time usage the most
critical optimization factor in the
well construction process. The
operator companies are also fully
aware of this and it takes us into
the subject Technical limits and
Figure 4 - Historical and estimated development of well costs from 2003 – 2015
Key Performance Indicators KPI’s. for 8 fields on the NCS. The green curve for MODU and blue for fixed installations
[1]

Figure 5 - The historical development of the planned versus the actual wells drilled from fixed installations on some of the
larger field on the NCS. Blue bars showing planned and red bar showing the actual wells drilled per year

[1]

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 Figure 6 - Historical and future number of wells drilled excluding sidetracks on the NCS from 1990 to 2016 sorted by well type

[10]

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 2.2. Technical Limit

Technical limit is defined as the best possible well construction performance for a given set of
design parameters. The Technical limit approach is based upon the time used to construct a
theoretical well where all operations are carried out without any flaws and without any
improvement potential. This is done by;

Selecting a set of appropriate reference wells

Dividing the well construction process into sequences
Quantify the time used in each sequence or section

The “best in class” time usage in each section / operation of the reference wells is added up to
generate the total time used to drill the Theoretical well. As an analog, The Technical limit/
theoretical well is kind of aiming to set the world record or at least regional record in all ten
aspects of a decathlon. Removable time is defined as the difference between the actual well
duration and the technical limit time. Removable time is then divided into conventional lost or
down time and invisible lost time. Invisible time being the classification of the activities that one
would include in a normal well, like; wiper trips, mid-section bit change or BHA trips, reaming
etc.

Figure 7 - Schematic showing the relationship between: Technical Limit, Invisible Lost Time,
Conventional Lost or Down Time, Actual well duration and the industry normal well time [12].

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The philosophy is to identify the technical shortcomings and thereby develop improvements in
terms of actions or changes rather than accepting the shortcomings as factors that always is going
to be present, even if this is the case. One will most likely never reach the technical limit but
through your actions you will need to implement measures that will take you closer than you
have been [12].

Different operators apply different visions of the technical limit methodology but their main
objectives is still the same: To make the hours and cost needed to drill a well as low as possible.

Regardless of if one is using the concept of the technical limit or some variant of this
methodology there are some indisputable elements that will have a critical influence on the total
well construction time. These are related to:

1. The efficiency of the rig and drill crew – How fast the rig and drilling crew are able to do
standard operations related to the drilling operation. Normal Key Performance indicators
related to this are: Casing/liner running speed, Connection time, tripping speed. They are
vital operations that are repeated continuously through the well construction process and a
large contribution to the total time usage [14].

2. Equipment reliability – Non Productive Time (NPT) caused by equipment failure. This may
be vital surface equipment like mudpumps, topdrive, pipe handling equipment or downhole
tools such as M/LWD tools in the BHA. They all have in common that their failure will either
halt the drilling operation or cause an unintended trip out – trip in operation. Depending on
the depth and the length of the well section it is not unusual that it takes 24 hrs before one
can start drilling again. For M/LWD equipment this reliability is typically measured through
the KPI: Mean Time Between Failure (MTBF). MTBF is the number of BHA component
failures in a run, a section or a well divided on the operational, circulation, drilling or Below
Rotary Table hours of the run/section/well [13].

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3. Formation Related add-on factors – Additional operations or failures caused by the
downhole environment that directly or indirectly slows down or increases the time needed
to construct the well, collectively known as Drilling Challenges.

2.3. Drilling challenges - Direct and Indirect contributors

2.3.1. Vibration

Vibrations are the result of interactions between the bit and the formation under certain
frequency’s and conditions [16]. During the rotation of the drillstring (DS), mechanisms such as
mass imbalance, misalignment, bent pipe or drillstring walkabout may cause excitations at the
same or multiples of the same frequency as the rotational frequency [15]. These mechanisms
may create forces and stresses that oscillate at the same frequency as the excitation mechanism.
If these oscillations match the BHA or drillstrings own natural frequency, known as the critical
speed, a resonance condition with growing stress in the BHA / DS is generated [17].

[Link]. Vibration Mechanisms

The main content of this section on vibration mechanisms is taken from: Halliburton – Sperry
Drilling, ADT Drilling Optimization Brochure, 2010: Drillstring Integrity Service -Vibration
Sensors and Vibration Mitigation Guidelines. Other sources are listed with normal
referencing.

Stick-Slip – Torsional vibrations

Periodic acceleration and deceleration of the bit and Drillstring is triggered by frictional torque
on bit and BHA and is the main cause of torsional vibrations. Low torsional stiffness of the
drillstring, fluctuating downhole RPM, along with friction along string and at bit, causes a Non-
uniform drillstring rotation in which the bits stops momentarily at regular intervals. This causes

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the string to periodically torque up and spin free with RPM’s that may be as large as 3 to 15
times surface average RPM [22]. Stick-slip is typically encountered in high angle and deep wells,
when encountering hard formations or salt or when using aggressive PDC bits in combination
with large WOB. Observable stick-slip effects are:

 More than 15% fluctuation in the average surface torque readings

 Damaged PDC Bit’s
 Reduced ROP
 Connection over-torque
 Back-off and Drillstring spin-off’s
 Mud Pulse telemetry detection problems
 Wear on stabilizers and Bit gauge

Bit Bounce – axial vibrations

In this mode large WOB fluctuation introduces an axial vibration that causes the bit to repeatedly
lift of bottom, drop and impact the formation [19]. Bit Bounce it is often observed when drilling
with tricone bit’s that have unstable cutting patterns, in under gauge holes, through ledges and
stringers, and generally in hard formations. The axial motion damages the bit cutting structure,
seals and bearings. Topdrive and hoisting equipment may start to shake axially and if severe
enough, lateral BHA vibrations may be introduced.

Bit Whirl – lateral vibrations

Lateral vibrations or walk of the bit is the eccentric rotation of the bit about a point that is not its
geometric center. It is caused by PDC bit – wellbore gearing from having excessive side-cutting
force. As a result the bit cut’s itself a hole larger than its own diameter and is thereby allowed to
walk around the hole, opposed to be rotating around its natural center. This vibration mode can’t
be seen on surface since the lateral vibrations are dampened throughout the string before it
reaches the top [18]. Bit whirl can be seen when excessive side-cutting bits have been used or

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when encountering soft and unconsolidated formations. The primary consequence of bit whirl is
the damage it causes to the bit cutting structure. During the whirling motion the bit cutters are
moving faster and are subjected to high impact loads. The high loads cause the cutters to chip
thereby making the wear from abrasion and heat more prominent. The over gauge hole created
by the bit whirling facilitate a downhole conditions that easily may cause the onset of BHA
whirl.

Backward & Forward BHA Whirl

Similar to the bit Whirl, BHA whirl is the eccentric rotation of the BHA about a point other than
its geometric centre. The motion of the BHA is the same as described for bit whirl with both
forward and backward whirling motions occurring. BHA whirl is a complex motion of the BHA
generating lateral displacements, shocks and increased friction against the well bore wall. BHA
whirl is onset as a consequence of bit whirl, rotation of a drillstring in imbalance or by the lateral
movement induced from bit bounce. The consequences may be:

MWD / directional equipment failure

Localized tool joint and stabilizer wear
Washouts
Twist-off’s due to fatigue crack’s of connection(s)
Increased average torque

Torsional Resonance

More specifically this is drill collar torsional resonance, as this mode is related to the natural
torsional frequency of the drill collars and is the consequence of the drill collars being excited.
This very specific type of vibration is encountered when drilling in very hard rock’s with PDC
bits. This vibration mode is most damaging at higher rotational speeds. This is because at higher
rotational speeds, higher amplitude resonance at the harmonics of the drill collar’s natural
frequency may occur. In some cases this high amplitude fluctuations may cause backward
turning of the bit, damaged cutters as well as severe damage to downhole electronics.

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Parametric Resonance

Parametric resonance is severe lateral vibrations caused by the dynamic component of axial load.
The dynamic component is primarily caused by bit – formation interactions and results in WOB
fluctuations [23]. These fluctuations generate a mechanical instability that is evident through
rapidly growing lateral vibrations at a specific frequency. As an analog the mechanism behaves
the same way as you would see if you induce a snakelike motion in the end of a hanging rope by
moving the end up and down at a specific frequency. This may generate severe lateral vibrations
than may accelerate drillstring failure or create the opportunity of hole enlargement which in turn
may cause poor directional control and onset of whirl. When Parametric Resonance is
encountered it typically is in relation with interbedded formations and undergauge holes.

Bit Chatter

Bit chatter is caused by the individual teeth of the bit impacting the rock. It is usually a low-level
vibration with high frequency, 50 – 350 Hz, depending on the rotational speed and the number of
bit teeth. Typical environment for this vibration mode is when using PDC bits in high
comprehensive strength formations when the bit teeth have lost its shearing cutting action and
the individual cutters are impacted on the formation. This results in cutter damage and high
frequency vibrations as well as a bit dysfunction that may cause bit whirl.

Modal Coupling

Modal coupling is when all the modes: axial, torsional and lateral are coupled together and
there are vibrations in all three directions simultaneously [19].

This is the most severe mode of vibration. It generates axial and torsional oscillations along the
BHA and large lateral shocks. It is usually onset due to the failure of controlling one of the
vibration modes thereby allowing it to initiate one or more other mechanisms simultaneously.
Environments where stick-slip, whirl or bounce can be initiated are typical modal coupling
environments and consequences are typically: Measurements While Drilling (MWD) component

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failures such as motor/3D RSS, M/LWD tool, localized tool joint and/or stabilizer wear, washout
or twist-offs due to connection fatigue cracks and increased average torque.

Vibration Mechanisem Mode of vibration Frequency Real-Time Indications

- Shaking of surface equipment at shallow depths
- Large WOB fluctuations
Bit Bounce
Axial 1 - 10 Hz - Possible SPP Fluctuations
- Loss of tool face, poor directional control
- Reduced or erratic ROP

- Cyclic torque and RPM Rotary drive stalling

Stick-Slip - Loss of tool face, poor directional control
Torsional 0.1 - 5 Hz - Reduced or erratic ROP
- Interference with mud pulse, telemetry — signal loss

Bit Whirl 10 - 50 Hz - Increase in mean torque

BHA Forwards Whirl Lateral / Torsional 5 - 20 Hz - Loss of tool face, poor directional control
BHA Backwards Whirl 5 - 20 Hz - Reduced or erratic ROP
- Possible increase in mean torque
Lateral Shocks Irregular
Lateral - Possible associated torsional vibration
Impact — cyclic RPM and TRQ
Torsional Resonance
Torsional 20 - 350 Hz
- Possible increase in mean torque
Parametric Resonance
Axial / Lateral 0.1 - 10 Hz
- Possible increase in mean torque
Bit Chatter
Lateral / Torsional 20 - 250 Hz
- No surface indications
- Increase in mean torque
Modula Coupling Lateral / Torsional and - Loss of tool face, poor directional control
0.1 - 20 Hz - Reduced or erratic ROP
Axial
- Interference with mud pulse, telemetry — signal loss

Table 1 - Frequency domain and Real-Time surface indicators for the different vibration mechanisms [21]

[Link]. Vibration consequences

Vibrations will always be present but when severe enough they introduce a variety of direct and
indirect negative effects. Some of the most severe are:

o BHA Washouts
o Twistoff’s
o Premature bit and drillstring failure
o Accelerated Failure of downhole equipment

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 o Excessive wear on tool joints
o Damage to topdrive and hoisting equipment
o Reduced ROP
o Hole Enlargement
These events will further cause reduced equipment efficiency, increased repair and maintenance
costs, additional trip’s to change equipment, fishing operations or unstable hole conditions [18,
19]. They are all adding a significant time and cost of the total well construction for the operator
company, the drilling service provider as well as the drilling contractor.

[Link]. Mitigating Downhole Vibrations

Mitigation of vibrations starts already in the planning phase where one attempt to design out
vibrations as best possible. This is done by doing BHA simulations on critical rotary speeds and
based on this optimizing the BHA design. Force, load and critical rotary speed analysis are
carried out. Real-Time (RT)-modeling of RPM, WOB and vibrations allows for the avoidance of
critical rotary speeds [24].

The mitigation strategy while drilling is: detect vibration – determine the mode / vibration
mechanism – apply corrective action to operational parameters; RPM and / or WOB. To do this
effectively one needs to monitor downhole vibrations. This is done by using e.g. a Drillstring
Dynamics Sensor – DDS in the BHA that gives you average, peak and burst (instantaneous)
vibration readings along all three axis’s [21].

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 2.3.2. Borehole instability

Different formations have different properties and when we are drilling we are interfering with
both the geochemical and the geomechanical equilibrium in the rock. In practices this means that
the wellbore wall and downhole conditions will respond and change due to the disturbance.
Dependent on the formation properties this will be reflected in a diversity of undesirable
scenarios:

- Naturally fractured formations, fractured formations close to a large fault, rocks with
strong in-situ stress field or simply a mechanical failure of the borehole wall causes
chips, chunks or boulders to fall into the well.
- Temperature changes may cause instability in the rock which further causes it to
fracture and collapse into the wellbore.
- Some formations, like salt may behave plastically and slowly creep into the wellbore
eventually close around the string.
- Sands may be unconsolidated and collapse into the wellbore
- Shale’s may be geo-pressured and to a certain degree exhibit the same behavior as salt
- Shale’s may also be reactive and form sticky mud balls known as gumbo clay that stick
to its surrounding
- Breakage or softening of rocks due to interactions with the drilling fluid.

These events cause additional operations; reduced drilling efficiency and cause well control
issues. Fractured and collapsed material may pack around the drilling assembly resulting in
twistoff, increased torque and drag, packoff, stuck pipe, lost drilling assemblies and sidetracks.
More material in the annulus may cause increased ECD and Packoff’s, causing lost circulation
events to further induce a kick. The wellbore wall may become severely overgauged, making
LWD measurements inaccurate, cementing operations challenging, challenge directional control
as well facilitate the onset of certain vibration modes. Undergauge hole makes the clearance to
the wall smaller, reduces the surge free tripping speed when running casing, in worst case

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making it impossible to get the casing string down at all. The picture in Figure 8 shows some of
the scenarios described [20, 25, 30, 33, 49].

Figure 8 - Hole Instability scenarios

From left: [Link] formation collapses and fall’s into wellbore and jams DS. 2. Fractured formation collapses after
drilled, falls into wellbore and jams DS. [Link] formation with plastic behavior packs around DS. [Link] clay with some
gumbo mud-balls [25][49].

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 2.3.3. Insufficient hole-cleaning

Hole cleaning ability is how good we can remove drilled formation from the wellbore. Hole
cleaning depends on flowrate, ROP, drillpipe rotation, hole size and hole angle to name a few
[32]. As we go deeper the annular area is reduced and the flow rate needed to properly clean
the hole is reduced. Though there are limitations due to ECD and equipment requirements,
insufficient hole-cleaning is usually not a big problem in vertical sections. However in deviated
and horizontal wells, insufficient hole-cleaning becomes a concern and higher annular velocities
are required to clean the well. Are the hydraulics inadequate, cuttings start to accumulate. In
the horizontal sections cuttings bed will keep growing with an accompanied increase in ECD
until a pack-off occurs. This restricts the wellbore and can be seen as a spike in pressure. In the
deviated sections especially between 45-60 degree inclinations, the bed will accumulate until
the gravitational forces causes the bed to release and slide down the slope of the borehole wall
and at some point pack-off the string. In either case, if the pack-off is severe enough the pipe
may become stuck. To avoid avalanches, it is important to maintain circulation and mud
properties [31, 28].

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 2.3.4. Lost Circulation

Lost circulation is the reduction or absence of fluid flow up the annulus when drilling fluid is
circulated into the well through the drillstring. In this situation the entry volume rate does not
equal the volume leaving the well. In some situations one may have small losses to the
formation, typically 20 bbls/hr. The definition may vary among different companies, but seepage
of an acceptable volume into the formation does not necessary mean a well control situation [27].

A Lost circulation situation during drilling is critical because the drilling fluid column acts as the
primary barrier. Lost circulation then weakens your primary barrier or removes it completely. If
the reduction in mud column height in the annulus is severe enough the BHP may drop below the
pore pressure (PP) and induce a kick [25]. Lost circulation may be due to:

- Cuttings accumulation downhole may

increase the hydrostatic head of the annulus
mud column and create a too high average
mud weight or ECD. This may fracture the
formation and one start losing mud into the
fractures.
- Karsts – big voids /caves in the underground
that cause the loss of the complete mud
column if drilled into.
- Naturally fractured formations - Carbonates Figure 9 - Fracture network and karst formation
[34]
often have natural fractures which may cause
lost circulation.
- A surge pressure caused by tripping in the
drill pipe to fast may be sufficient to fracture the formation and induce losses.
- Faults – Large faults may be active or be reactivated and provide large flow channels
that direct the drilling fluid away from the bore hole causing the fluid level to drop
and induce lost circulation

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 - Fracture growth due to in-situ stress field may cause significant loss of drilling fluids

[20, 25]

2.3.5. Kick

A kick is defined as “a well control problem in which the pore pressure found within the drilled
rock is larger than the mud hydrostatic pressure acting on the rock” [39]. When this occurs the
formation pressure has a tendency to force formation fluids into the wellbore, this fluid flow is
known as a kick. A kick that is not brought under control may easily develop into a blowout.
This is the most severe incident that can happen in a drilling operation.

[Link]. Kick Sources

A kick is initiated when the borehole pressure (BHP) drops below the PP. During a drilling
operation this may happened due to:

Insufficient Mudweight – Using too low density mud may at some point make the BHP
lower than the PP.

Swab & heave effect – A negative swab-pressure may be created if a certain volume of
mass/steel is removed from the hole too fast. This may be due to tripping out too fast or
caused by the effect of heave when the drillstring is in slips on a floating drilling unit.
The reduced pressure created may be sufficient to allow fluids to enter the wellbore.

Improper fill-up – As drillpipe (DP) is Pulled Out Of Hole (POOH) and the hole is not
refilled the annulus mud-level will drop. At some level the hydrostatic head from the
annulus fluid column will be insufficient to maintain the BHP above PP and a kick is
introduced.

Gas/Water Cut Mud – During drilling the mud may get contaminated by saltwater or
gas from the drilled formation. This lowers the average density of the mud-column and
this reduction may be sufficient to drop the mud hydrostatic pressure below PP [40].

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 Gas diffusion - When using Oil Based Mud (OBM) in deep wells (high pressures and
temperatures), gas may diffuse and completely dissolve in the base oil of the mud even if
the well is in overbalance. The gas stays dissolved until it is circulated upwards and
reaches the pressure and/or temperature conditions that allows it to boil out. This happens
very fast and is a large concern particularly in HPHT wells [40].

Lost Circulation – As mentioned, lost circulation may occur due to a diversity of

reasons. The concern is that the annulus mud-level decrease accompanied with a lost
circulation event, may reduce the mud-column sufficiently to drop the mud hydrostatic
pressure below PP and thereby introducing a kick [26, 42].

[Link]. Kick Potential

The severity of a kick will depend on several factors: The pressure differential between the
formation pore pressure and the mud hydrostatic pressure, along with the permeability &
porosity of the formation, are the main factors related to evaluation of the formations kick
potential. To illustrate; in the same pressure regime, the kick potential of a sandstone may be
high due to high permeability, whereas a shale may have the same porosity but almost zero
permeability: This would give the shale almost the same pore volume as the sandstone, but the
pores are not connected. The shale therefore have a low flow potential, hence the shale would
have a low kick potential because a kick is an inflow [26].

[Link]. Kick Handling

When a kick is taken it needs to be circulated out of the well before safe drilling can continue.
Depending on the kick size and the company kick handling procedures one can choose to gain
well control / “kill the well” in three ways:

Driller’s method – Uses 2 circulations to kill the well. First the well is shut in ( BOP is
closed). The Shut In DrillPipe Pressure (SIDPP) and Shut In Casing Pressure (SICP) is
noted after pressure stabilizes. The kick is circulate out through the choke & chokeline

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 while maintaining a constant bottom hole pressure. Then sufficient mud weight is
calculated and weighed up and pumped according to a calculated kill or pump sheet. This
is done while maintain a constant bottom hole pressure. Usually at least one additional
bottoms-up is circulated after well control is reestablished

Wait & Weight Method – Uses 1 circulation to kill the well. The well is shut in,
pressures are read and sufficient mud weight is calculated and weighed up, pumped
according to a calculated kill-sheet, while maintaining constant bottom hole pressure.
Usually one additional bottoms-up is circulated after well control is reestablished. This is
considered a more “advanced” method as it involves more calculations on the fly and is
often referred to as the “The Engineer’s Method”.

Bull heading – This is often considered “the last way out” as in this situation the kick is
not circulated to surface but pumped back into the formation. Significant bottom hole
pressure increase is usually seen with the result of hydraulic fracturing of the formation.
A bull heading operation in a reservoir section will in most cases destroy the flow
potential of the near borehole area. In such a case one may need to plug back the drilled
reservoir section and drill a sidetrack to get a productive reservoir section [35, 26, 42].

[Link]. Example: Kick Handling - Time & Cost

A kick situation is not only a critical situation when it comes to well control and safety, but also
to time consumption. This can be illustrated by the following example;

A vertical well takes a kick at 13 000 ft TVD depth. The last casing shoe was set at 8200 ft. The
drill collar section is 1000 ft long. The Well is killed using drillers method. Kill rate is 144 GPM;
4.6 gallons per stroke and 30 SPM (Strokes Per Minute).

Drillpipe inner capacity 0.74 gallon/ft

Drillcollar (DC) inner capacity 0.32 gallon/ft

Annular capacity

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 DP – Csg: 1.95 gallon/ft

DP – OH: 1.9 gallon/ft

DC – OH: 1.22 gallon/ft

Volume Time
Volumes Calculation
(Gallon) (min)
Drillpipe section (13000-1000)x0.74 8880
DC 1000 x 0.322 322
Drillpipe + BHA 9202/4.6= 2000 Strokes
9202
2000/30= 67 Min

DC - OH 1000 x 1.22 1220

DP - OH (4800-1000) x 1.9 7220
DP - Csg 8200 x 1.95 15990
Annulus 24430/4.6= 5310 strokes
24430
5310/30=177 Min
Total 33632 243.7 min

Table 2- Calculated time to displace the whole annulus with new mud

Using Driller’s method; assuming this is a perfect operation where no time is wasted between
pumping the 2 different displacements and one additional bottoms-up after the kill. This gives us
a total of 3 annulus volumes and 1 drillstring volume to circulate before drilling can commence.
The time usage one this kick will be (3 x 243.7) + (1 * 67) ≈ 798minutes or 13.3 hours. With an
operational rig-rate of 0.9 MM $ this kick cost’s at the bare minimum ≈ 0.5 MM $ or
approximately 3 MM NOK.

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 2.3.6. Stratigraphic and Lithological challenges

[Link]. Key Seating

Boulders, stringer, rapid formation changes or soft

formations may cause the bit to deflect from the
planned trajectory and the recovery back into the
planned trajectory may cause doglegs of different
severity. If the dogleg is severe enough this will
cause the drillstring to make contact with the side of
the wall. As drilling proceed, gradually a smaller
diameter groove in the borehole wall will then wear
away. A cross section view of the borehole at this
point will show that the borehole have been shaped
much like a “keyseat”. This does not introduce
problems while drilling ahead, but may get the
larger drill collar’s stuck on the way out [29].

Figure 10 - Key seating [41]

[Link]. Abrasive Formations

Some formation types are very abrasive. They are very hard and rough and which make them a
challenge to drill through. Certain types of specialized drill-bits are able to drill through them but
still it requires a lot of time to do so. Chert, hard sandstones and basalts are examples of abrasive
formations. When they are encountered in small layers at the time they are referred to as
stringers. They cause reduced ROP, bit wear, additional bit trips due to worn out bits and tight
hole [25, 43].

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 [Link]. Stringers - Natural Whipstocks

As mentioned, stringers are thin hard layers of rocks. In some cases the stratigraphy changes
rapidly between hard and soft formations. When drilling hard formations one usually needs more
WOB than in soft formations. If drilling through such formation layers a so called natural
whipstock may be formed, and the bit will deflect from the planned wellpath [44]. Soft formation
may in addition be unconsolidated or fractured. This may result in cavings, washouts and
collapses. This produces a very unfavorable hole, which it can be hard to return back to the
original wellpath from, create stuck pipe, issues with cementing the casing and in worst case not
be able to get the casing down at all. Figure 11 shows an example [25].

Figure 11 - Borehole instability due to interchanging formations [49]

2.3.7. Stuck Pipe

Stuck pipe is a critical situation. It adds on time usage and reduces flexibility. Stuck pipe may
introduce large fishing operations and in worst case it may be required to shoot the string off.
Then the well also needs to be plugged back and a sidetrack needs to be drilled. This will result
in a major additional cost add-on.

There are large numbers of reasons why pipe may get stuck. Some of them are man-made, like
when we get stuck in hardware or equipment placed in the well, but the far largest portion of
reasons are due to the downhole environment and formation properties. A lot of the root causes
of stuck pipe incidents have already been mentioned in sections above [25, 30].

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 - Insufficient hole-cleaning / Cuttings accumulation  Packoff

- Abrasive formation  Under gauge hole

- Wellbore geometry Key seating

- Unconsolidated formations / Boulders / Fractured, formations /  Packoff & jamming

of string

- Mobile, Reactive and Geo-Pressured formations  tight hole

In general, anything that can pack around the drillstring or drilling assembly may cause a stuck
pipe incident. But there is also another way to get the drillstring stuck and that is due to a
phenomenon called differential sticking.

[Link]. Differential sticking

When mud is circulated through an overbalanced well, the permeable formations will act as a
filter for particles in the mud. Depending on the amount of clay particles in the mud and the
differential pressure between the BHP and the formation PP, a mudcake of a certain thickness
will build up. This mudcake will grow until the cake more or less seals off the formation. The
differential pressure across the mudcake creates a normal force that can hold the drillstring to the
wall and make it stick. This force depends on the area of the drillstring that the force is acting on,
and the size of the differential pressure. Differential sticking usually occur when the reservoir
(permeable formation) pressure is low, the BHP is high, or both. The longer time a differential
stuck string stays stationary / stuck, the more likely it will remain stuck. This is because when
the string is stationary the contact area increases and thereby the stuck force increases. This
makes differential sticking a very time critical event in terms of response as well as terms of
potential time loss, as the consequence will be to shoot off the string and sidetrack the well [36,
45, 49].

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 Figure 12 - Differential stuck pipe

The dark brown is the mudcake. From left to right you see how the contact area has increased [36]

2.3.8. Handling Drilling Challenges

To maintain an efficient drilling operation, it is inevitable to take action and plan to avoid,
mitigate and handle the challenges the subsurface facilitate. The challenge is that one can never
know what exact challenges the subsurface will reveal. What is “known” before the well is
drilled is always very uncertain. Substantial work in the planning phase helps to prepare for,
mitigate and avoid many of the challenges [46]. Still one need to consider the information
received during the drilling operation, the Real-Time information. This is the real data from the
subsurface and enables us to make good decisions, act preventive, mitigate risks and optimize the
drilling process. These data are very valuable, but they need to be taken advantage of and used in
the right way [4].

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 2.4. Drilling optimization

Drilling Optimization has been a subject that has been based on a lot of different concepts the
last 4-5 decades. The first official application was in 1967 and James L. Lummus states in 1970
that:

“Optimized drilling techniques have significantly reduced drilling costs….Results indicate that
better data, more experience and confidence will result in greatly savings in the future” [3].

Since then the technology, data availability and quality have developed drastically and in 2004
D. C-K Chen from Sperry Drilling in Halliburton defined traditional drilling optimization as:

“Drilling optimization is a process that employs down hole and surface sensors, computer
software, measurements while drilling (MWD), and experienced expert personnel – all dedicated
to reduce trouble time and increase drilling efficiency” [4].

The well construction cost profile has also developed and all though the drilling optimization has
become significantly improved, still 15 - 35 % of the well cost is due to NPT associated with
wellbore integrity, drillstring integrity and downhole failure [37]. A study showed that failure
due to vibrations alone was in the range of $300 million per year [47]. In other words, there is
still work to be done, and as the economical margins on each well keep shrinking the
significance of drilling optimization rises.

2.4.1. What is drilling optimization?

The term is today used in almost every aspect of the drilling industry. Measures as tools,
software, procedures etc that either reduces the time used, the risk for encountering a problem or
in some way improves anything in any part of the drilling process is seemingly termed drilling
optimization. So, to clarify the further discussion of drilling optimization we will be referring to
Halliburton and Chen’s definition [4].

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 2.4.2. Conventional Drilling Optimization

As Chen defined traditional drilling optimization, it is a

process that uses down hole sensors, surface sensors,
computer software, measurements while drilling (MWD)
and experienced expert personnel to

reduce trouble time and increase drilling efficiency. Figure

13 shows the conventional optimization process as a closed
circle where you find the drilling optimization specialist in
the center.

This cycle have been and is used by drilling optimizers and

Figure 13 - The traditional Drilling
drilling engineers. It is a methodology that is universal and optimization cycle [4]
can be applied in some variant to most optimization
processes.

Through the last decade new technologies within data

transfer, storage capacity and IT software have allowed us to
get more data with higher quality faster. In drilling
optimization this is reflected through the development of new
technologies related to information management and real-time
decision making. The drilling optimization circle has changed
from being related to the pre, real-time and post face of the
operation to be a real-time circle consisting of Real-Time
Figure 14 - The New Drilling optimization
modeling, Integrated Real-Time Modeling and Data and Real- circle [4]
Time –Operation-Center (RTOC). Figure 14 shows the new
circle [4, 50].

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 2.4.3. Real-Time Modeling

Conventionally modeling is done in the planning of the well to provide predicted data. When the
drilling starts, this model needs to be continuously updated with the real data values and this is
an impractical and time consuming way of working. Real-Time modeling is continuously
running and automatically updating the model. The parameters being optimized and the
categorization used are still the same, however, Real-Time Modeling allows for a more
continuous and effective monitoring and thereby increases the ability to prevent drilling
accidents or optimize drilling parameters [4].

2.4.4. Integrated Real-Time Modeling and Data

It is a fact that the Real-Time modeling procedures produces more reliable results than the
conventional ones, but to assure that the information that is delivered from this process is useful
and for the diagnosis of the downhole environment to be identified it is almost inevitable to
integrate the modeling results with downhole data. Typically modeling and data integrations of
benefit are [4]:

 BHA Dynamics models & downhole vibration data

 Pore pressure model & Pressure (PWD) and Formation test While drilling
(FTWD) data
 Hydraulics model & PWD data
 Hole cleaning model & PWD data and mud solids
 Wellbore stability model & LWD imaging data

2.4.5. Real-Time –Operation-Center: RTOC

For the optimization process to be successful, a rig-to-office integration needs to be established.

This allows the process to be monitored 24/7 by an asset team and allows an increased
multidisciplinary level on critical decisions. The drilling optimization specialists in the RTOC

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are usually experienced field staff and they serve as the communicator towards the drilling
supervisor if precautions or interventions prior to an operation should be taken [4, 48].

The new cycle does however not suggest

that the old one should be removed. The
Drilling optimization process still starts in
the planning phase with pre-run modeling
etc. The integration of the two would
incorporate the benefits from both cycles
and allow for an even further optimization
of the operations [51]. Figure 15 - A integrated circle of drilling optimization workflow

2.4.6. The Drilling optimization Elements

The drilling optimization process has 3 main focus points: Drillstring integrity, Wellbore
Integrity and Hydraulics Management.

[Link]. Drillstring integrity

Drill string integrity focuses on the prevention or reduction of mechanical overload, protection
from fatigue and minimizing excessive shock and vibrations. The most important issues are
downhole vibrations like BHA and bit whirl, stick-slip and bit-bounce but also BHA buckling
and torque & drag. Specialized computer software provides dynamics and static BHA modeling
for critical Rotary speeds and torque and drag modeling.

Downhole and surface vibration detection sensors allow the ADT service specialist to measure
harmful vibration modes and identify active vibration mechanisms. Correlation with M/LWD
data and surface drilling parameters enables corrective actions to be taken to reduce damaging

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vibration and improve performance. Root cause analysis and effective documentation ensure
continued improvement in bit and BHA design, and makes it possible to further design out
vibration problems and deliver continued performance improvement [4, 50].

[Link]. Hydraulics management

Hydraulics management focuses on keeping the hydrostatic and dynamic pressures between
critical upper and lower operating limits, optimizing circulating pressures, hole cleaning and
clean-up cycles, optimizing ROP and tripping speed without exceeding the pressure limits.

This is done by the ADT and/or AFT (Applied Fluid Technology) specialist by using static and
RT-models for hydraulics, hole-cleaning and Torque&Drag to predict the expected drilling
environment.

Hydraulics models can predict the effect of temperature, pressure and compressibility on
downhole mud properties and the resulting hole cleaning efficiency and system pressures [4, 50].

[Link]. Wellbore integrity

In Wellbore integrity the drilling optimization process concerns about determining the upper and
lower wellbore pressure limits through simulation, modeling and prediction of PP, FP and Bore
Hole Collapse Pressure (BHCP).

Pore Pressure Prediction and Geomechanical Analysis Software are used in the pre-well analysis
and wellsite surveillance services to determine the mechanisms of pore pressure generation
within a prospect. Advanced pore pressure, geo-mechanical and basin models can also be
developed and updated in real time. Real-time formation evaluation data makes the Applied
Drilling Technology (ADT) specialist able to update as well as refine the expected wellbore
conditions. Based on this the ADT specialist makes recommendations to ensure wellbore
integrity and stability, maximize ROP, extend target depth criteria and optimize or eliminate
casing points. His prognosis is also used to reduce the uncertainty in mud weight decisions, and

The Value of Drilling Optimization Page 31

can be integrated with the Hydraulics Management service to maximize performance conditions
through selection of proper mudweight thereby indirectly assisting in maintaining a safe drilling
operation [4, 50].

[Link]. Data sources and systems

- LWD measurements - sonic, density, resistivity, Formation-Pressure While Drilling

FPWD, LWD imaging tools and seismic while drilling - SWD, significantly improve the
quality of the optimization services [4]
- MWD measurements
o Downhole Annular pressure, Bore Pressure and temperature measurements -
supplied by the PWD tool. Used in all analysis in all three elements of the DO
o Borehole dimensions – supplied by acoustic caliper tools, provide a detailed
image of the borehole wall, increases accuracy of wellbore volume calculations
o Downhole vibrations – Supplied by vibration sensors like DDS, gives Average,
Peak and Burst (instantaneous) vibration readings along all three axes provides
information on loads of equipment and vibration mechanism.
Surface Data-logging Parameters – SPP (Stand Pipe Pressure), TT (Trip Tank) and pit
volumes, Flow in/out, gas levels, block height, RPM, depth, WOB, Hookload, Surface
torque and Mud temperature [4, 50].

The Value of Drilling Optimization Page 32

 3. The Well study

3.1. Well selection Criteria’s

The objective with this assignment was to see identify and quantify the value of doing drilling
optimization and the processes it facilitates.

The first stage was to get a clear

understanding of what drilling optimization
is and what is considered drilling
optimization. Drilling Optimization, as the
services described in the theory chapter, are
related to the drilling phase of the well
construction. Figure 16 shows example of
how a time schedule for the different phases
of the well construction may look like. This
is just to illustrate what time element of the
well construction that drilling optimization
primarily effects. There are additional
secondary effects of drilling optimization
that impact the other phases, as completion, Figure 16 - Distribution of time consumption related to the different
but these will not be evaluated here. The phases of the well construction process

ratio between the phases is also not a

governing average; it will be very dependent
on how technical advanced the well is in terms of both drilling, completion and environment.

Second, one needs to find data, in this case wells, which are comparable in the light of these
objectives. This involves establishing selection criteria that need to be fulfilled for the well’s to
be considered comparable. The selection of wells was done based on the following criteria:

The Value of Drilling Optimization Page 33

 3.1.1. Technical aspects

Drilling Facilities

It was decided that the wells had to be drilled from the same drilling facility. This will remove
the factor with different capabilities and specifications related to each drilling facilities. It would
also remove to some extent the human skill factor, as this would keep the same people rotating
the rig and thereby the well’s would be drilled with people from the same skill pool. The
differences between each crew would still be present, but it was considered as an impossible task
to remove this element.

Well trajectory

The well trajectory is a major factor when it comes to the technical level of the drilling operation.
Inclination, turns and dogleg’s do to a large extent have an impact on the difficulty of hydraulics
and hole-cleaning, directional control and torque & drag mitigation. It was therefore considered
important to consider wells with more or less the same level of difficulty when it comes to well
trajectory.

Hole section

There will be different challenges in different hole sections. In the 36” hole section one need to
take special concern about the level of consolidation of the formation, however this does not
usually introduce the same level of concern in the 12 ¼ Section. The performance study in each
well will therefore to a large extent be section like.

3.1.2. Geo-Technical aspects

There are a lot of different challenges related to drilling into the subsurface. Different formations
may or may not have facilitated special conditions or properties which make them easier or
harder to drill. This is a highly analyzed and debated theme and it was therefore made an effort

The Value of Drilling Optimization Page 34

to select wells that was drilled in the same field and not too far from each other. In addition to
the well trajectory criteria, this suggests that the general lithology the wells are encountering will
to some extent possess the same properties and thereby introduce the risk for the same
challenges.

3.1.3. Drilling Optimization services

The idea behind the study is to try to quantify the value of drilling optimization. It was therefore
imperative that the wells that were studied had been subject and exposed to the same level of
drilling optimization services.

3.2. Source of Information

The well study covered 15 North Sea Fields and involved 31 different drilling facilities,
permanent as well as mobile. The End Of Well Reports made by the Directional Drilling,
Measurements while drilling, Surface data logging and Advanced Drilling Technology service
lines and the operator company’s drilling program were used as the source of information in the
study. Eight well’s were selected and considered appropriate for comparison. These wells will
be referred to as well #1 - #8 in further discussion.

The data presented in each section is based on the total runs needed to complete that particular
holesection. This means that if it took 3 runs to drill a section the hours used in the analysis is the
cumulative hours in these 3 runs. As an example, the Below Rotary Table (BRT) Hours will be
the sum of the BRT hours from run 1, 2 and 3 in this particular hole section.

3.3. Operational planning & measures

The wells considered were drilled from the same rig. The 8 wells were drilled in 2 batches. Batch
1 contained well #1 - #4 and batch 2 contained well #5 - #8. In both batches the 36” and 26”
holes was drilled and cased off before the 17 ½ “, 12 ¼” and 8 ½” hole sections were drilled. All
wells were subject to the same drilling optimization services. The drilling services for the first 4

The Value of Drilling Optimization Page 35

wells were contracted and governed by a contract without performance incentives. The second
batch, well #5 - #8, was governed by the same contract contact but with performance incentives.
The rig spread rate is assumed to be 900 000 USD / Day, the spread rate includes all the services
and is the operational dayrate the operator company face.

3.3.1. Planning

The formations in the upper part of the well were drilled through a low pressure gradient area. In
the formation that was expected to be encountered in the lower part of the well, it was believed
that high stress level in these formations would have the necessary strength to avoid drilling
problems. However, considerable design and planning were undertaken to optimize the
penetration through the lower stress zones and assure a stabile and robust well design.

Expected fracture pressure, pore pressures and temperatures were simulated and estimated based
on offset well data and LOT’s.

Correction software for both local and external magnetic disturbance was used to calculate the
expected magnetic field strength through the well trajectory to assure that survey accuracy could
be verified when drilling and that anti-collision procedure would be valid.

Torque & Drag simulations was carried out with regards to: Helical buckling – rotating, Helical
buckling – Non Rotating, Sinusoidal Buckling – all operations, Slide Drilling, Rotation on
bottom and tripping out.

Critical rotary speed analysis was performed based on the planned BHA design.

Hydraulics simulations on circulation pressure, shear rate and shear stress was done based on
BHA and drillstring design.

Optimal centralizer placement and spacing simulations was done for the planned well trajectory
to assure optimum primary cementation.

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 3.3.2. Real-Time Monitoring

The following real-time monitoring was done by drilling optimization specialists:

Real-time Hole cleaning; observed and theoretical volume changes

Real-Time Torque & Drag; rotating weight, up weight, down weight and off bottom
torque
Real-Time SPP, flowrate and ECD
Real-Time MSE – Mechanical Specific Energy: A pure drilling efficiency indicator based
on the ratio of effort put into the drilling action (RPM, WOB, and Torque) and the effect
of that effort (ROP). Higher MSE indicates lower drilling efficiency.

3.3.3. Optimization

The same optimization services were applied to all wells. However, after drilling the first 4 wells
some lessons were learned. This information was used to further improve the performance on the
2nd Batch, well #5-#8:

Lessons learned regarding rig logistics and limitations was taken into account when
preparing for the second batch
Directional control was optimized through WOB, RPM, flowrate and ROP, from study
and experience gained from batch 1
Analysis and RT measurements confirmed that several stabilizers in the BHA could be
removed, BHA design was optimized.
Identified operational effects on MWD measurements – made aware of this so no halts
would occur due to a “false alarm” of an event occurring downhole.
Mud properties and displacement procedures was optimized based on hole cleaning
and hydraulics analysis
Data from the first batch indicated that it was possible to safely operate with a higher
flowrate

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In addition to implementing the experiences a large focus was put on improving the performance
on a wider operational scale. The M/LWD coordinator described that the focus on performance
and clear communication was increased. All three parties (service provider, operator and rig
contactor) involved in the operation engaged in a very good teamwork. The targets were clearly
communicated and the positive experiences from the first batch were highlighted and adopted.
There was a continuous loop of feedback during the operation and a focus on standardizing the
operations. Rig crew helped MWD crew, MWD crew helped rig crew and so on. All together
this created motivation and unity among all three parties and resulted in everyone “pulling in the
same direction”.

The Value of Drilling Optimization Page 38

 3.4. Well description

3.4.1. Well trajectory

Figure 17 - 3D plot of the 8 wells final well trajectory

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 3.4.2. General Well Schematics

Figure 18 - General wells schematics excluded well #7 Figure 19 - well schematic of well #7

3.5. Operational Overview

All the 36” and 26” hole sections were drilled to TD with returns to seabed. They were cased and
cemented without any problems. The operational overview for the lower sections is given in the
following sections:

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 3.5.1. Well # 1

17 ½” Hole section

The 17 ½” section was drilled with a Roller cone bit with a 3D Rotary Steerable System (RSS)
assembly. The BHA was also supplied with Gyro, Gamma Ray (GR), Directional (DIR),
Drillstring Dynamics (DDS) and Pressure (PWD) MWD sensors. The Well was displaced to
OBM before the cement was drilled out. One Formation Integrity Test (FIT) was performed and
the section was drilled to target depth (TD) while gradually increasing mud weight. No incidents
were encountered during drilling. Problems with hole packoff and stuck pipe was encountered
when POOH. The 13 ⅝” casing was run and set without incidents.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a long gauge 12 ¼” Polycrystalline Diamond Compact
(PDC) bit with a 3D RSS with Near Bit Gamma sensor (NBG). The BHA was also supplied with
DIR, DSS, GR, Resistivity (RES) and Pressure MWD. The well was displaced to heavier OBM
before starting drilling cement. Float, cement, shoetrack, shoe and new formation were drilled
and an unsuccessful (FIT) was made. Pulled out of hole (POOH) and Ran In Hole (RIH) with a
cement string to carry out a squeeze cement job. A new FIT performed and was accepted.
Drilling commenced until a MWD-tool failed and the need to pull out of hole. At surface it was
established that the bit was severely worn. A new long gauge PDC bit was installed and was
RIH. The new bit drilled to section TD. The 9 ⅞” liner was set with only minor mud losses.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” PDC bit with a 6 ¾” mud motor and DIR, GR,
RES, DSS, Density (DEN) and Neutron Porosity (NP) MWD and a Formation-Pressure and
PWD tool. The cement and shoe track was drilled out while the well was displaced to a lighter
OBM. Mud weight was gradually increased towards TD and pressure points were taken during
the run. Frequent flow-checks were performed. Some significant losses was observed through the

The Value of Drilling Optimization Page 41

section but handled with LCM pills. After reaching TD the well was circulated and flow checked
at two different locations before POOH. The 6 ⅝” liner was run to setting depth, landed and set
without any problems.

3.5.2. Well #2

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” Roller cone bit with a 3D RSS assembly. The
BHA was also supplied with Gyro, GR, DIR, DDS and PWD MWD. The well was displaced to
OBM while drilling out the cement. One unsuccessful FIT was made but the section was drilled
to TD without any incidents. Hole instability problems and packoff was observed when POOH.
A cleanout trip was performed before the 13 ⅝” casing was run in hole and cemented. No
incidents occurred during the setting and cementing of the casing.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC and a 3D RSS with NBG. The
BHA was also supplied with DIR, GR, RES, DDS and Pressure MWD. The cement and
shoetrack was drilled out before displacing the well with a heavier OBM. One successful FIT
was made and drilling commenced until it was required to POOH due to directional sensor
problems. A new identical assembly was run in hole. Drilling continued until losses were
encountered. The section was drilled to planned TD while managing losses. The 9 ⅞” liner was
then run and cemented without problems.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” roller cone bit with a 6 ¾” mud motor and DIR,
GR, RES, DEN, DDS, NP MWD with a Formation-Pressure and PWD tool. Cement and shoe
track was drilled out while displacing the well to a lighter OBM. The section was finished 212 ft

The Value of Drilling Optimization Page 42

shorter than planned due to problems with low ROP. Significant losses were seen through the
section but they were handled with Lost Circulation Material (LCM) pills.

3.5.3. Well #3

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” tricone bit and a 3D RSS assembly. A Gyro
MWD tool was used for surveys. The well was displaced to OBM whilst drilling out the cement
and the MudWeight (MW) was increased gradually towards TD. One successful FIT was made.
The section was drilled to TD without any major incidents. The hole was washed and ream out
while pooling the string out of hole. The 13 ⅝” casing was run and set without any incidents.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC bit with 3D RSS assembly
with NBG. The BHA was also supplied with DIR, GR, RES, DDS and Pressure MWD. Cement
and shoe track was drilled out while displacing the well to heavier OBM. One successful FIT
was made. The section was drilled to planned TD without other problems than low ROP through
hard stringers. The Mud weight was increased after reaching TD and the string POOH. On the
way out one well volume was circulated after reaching the depth of a “flowing” formation layer.
Mud weight was additionally increased at the same point and the string was pumped out of hole
and to surface. The 10” liner was run in hole and cemented. During running the liner into the
well, 175 bbl was lost and an additional 90 bbl was lost while circulating prior to the cement job.
A total of 1200 bbl was lost during the cement job.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” long gauge PDC bit with a 3D RSS assembly and
NBG. The BHA was also supplied with RES, GR, DEN, NP and DDS MWD plus a Formation-

The Value of Drilling Optimization Page 43

Pressure and PWD tool. The well was displaced to a lighter mud and washed down to the shoe.
The shoe track was drilled out and an inflow was test performed. During drilling a higher
formation pressure was indicated by pressure points that were taken. This resulted in the section
being finished 311 ft shorter than planned. One unexpected gain was experienced but handled
through procedures and an increase in MW. A cut and slip of the drilling line on drillfloor was
performed during this time a total of a 1.8 bbl static loss was observed. The string was run back
in hole to TD and the well was circulated bottoms up twice before a flow checked was
performed. The string was then pulled to surface and the 6 ⅝” liner was run and set without any
problems or losses.

3.5.4. Well #4

17 ½” Hole section

The 17 ½” hole section was drilled with a Roller cone bit and a mud motor. The BHA was also
supplied with Pressure, GR, DDS and DIR MWD. The formation was proved to be too soft to
follow planned build rate but the target was still reached. A clean out run to TD was performed
and confirmed good hole conditions. A (small) static loss of 2 bbl’s/hr was observed. The 13 ⅝’’
casing was run to setting depth and cemented without problems.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a PDC bit with a 3D RSS. The BHA was also supplied
with DIR, GR, RES, DDS and Pressure MWD. Then the float, cement, shoe, shoetrack and new
formation were drilled, before a successful FIT was performed. Drilling was continued until a
stringer was encountered and it was not possible to drill ahead. The 12 ¼” section was drilled to
TD after POOH 2 times due to stringers. The Well was flow checked prior to POOH. The 9 ⅞”
liner was RIH and set with 51 bbl’s loss during the cement job.

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8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” Roller Cone Insert bit and mud motor. The BHA
was also supplied with RES, GR, DEN, NP and DDS MWD plus a Formation-Pressure and
PWD tool. The well was displaced to lighter mud and the float, cement, shoe, shoe-track and
new formation was drilled before an inflow test was performed. Hard formations was
encountered through large parts of the section and restricted the ROP through these. Six pressure
points were taken while drilling. The section was drilled to TD and four pressure points were
taken when POOH. The 6 ⅝” liner was set with slight mud losses observed prior to the cement
job. The cement job was performed with full returns.

3.5.5. Well #5

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” PDC bit with a 3D RSS assembly. BHA was
also supplied with Gyro, GR, DDS and Pressure MWD. The well was displaced to OBM before
drilling out the float, shoe track and cement. MW was gradually increased towards TD of the
section. One successful FIT was performed and the section was drilled to TD without any
incidents. The 13 ⅝” casing was also run and set without incidents.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC bit with a 3D RSS with NBG.

The BHA was also supplied with DIR, GR, RES, DDS and Pressure MWD. The well was
displaced to heavier OBM while drilling out the float, cement, shoe, shoetrack and new
formation before a successful FIT was performed. The 12 ¼” section was then drilled to TD
without any problems. At TD the well was circulated bottoms up. After one bottoms up
circulation two stands were reamed back and the bit run back to bottom where a flow check was
performed. The Flow check showed 1.5 bbl/hr static loss rate. The 10” liner was then RIH; 589

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bbl’s was lost while tripping the liner in, 180 bbl’s was lost while pumping LCM and spacer and
1073 bbl’s was lost while cementing the liner in place.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½" PDC bit with a 6 ¾ “mud motor. The BHA was
also supplied with RES, GR, DDS, DEN and NP MWD, plus a Formation-Pressure and PWD
tool. The cement was drilled and the well closed in due to gain of mud caused by nitrogen gas
expansion. The nitrogen was circulated out before drilling continued. The well was then
displaced to lighter MW prior to drilling out shoe, shoetrack and new formation. One inflow test
was performed and pressure points was taken before entering the target formation. The MW was
raised before drilling into the target formation. The section was then drilled to TD without any
incidents. At section TD, the hole was circulated clean with 3 x bottoms up. The 6 ⅝” liner was
run and set without incidents and the cement job was conducted with full returns.

3.5.6. Well #6

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” long gauge PDC bit with a 3D RSS. BHA was
also supplied with Gyro, GR, DDS and Pressure MWD. The well was displaced to OBM before
drilling out the float, shoe track and cement. New formation was drilled and a successful FIT was
performed. High erratic torque readings were experienced and were traced back to the top drive.
The string /BHA were reamed back into the 20” shoe before the top drive was repaired. After the
top drive was repaired drilling commenced and TD was reached without drilling problems. The
13 ⅝” casing was run and set without incidents.

The Value of Drilling Optimization Page 46

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC bit with 3D RSS with NBG.

The BHA was also supplied with DIR, GR, RES, DDS and Pressure MWD. The well was
displaced to heavier OBM while drilling out the float, cement, shoe, shoetrack and new
formation. 1 x bottoms-up was then circulated and a successful FIT was performed. The 12 ¼”
section was then drilled to TD with some packoff’s and several stringer intervals. During
drilling, problems with the Pipe Racking system caused a halt in the operation. In addition the
weather conditions worsened and caused 1 day of WOW. At TD a flow check showed a static
loss rate of 2.4 bbl’s/hr. The losses were with treated LCM pills before pulling out of hole. The
10” liner was run in hole. Some gain was observed when picking up the hanger. The well was
then circulated bottoms-up (B/U) and flow checked. The situation was stable and running in liner
continued. In total an effectively loss of 15 bbl’s were recorded while running in and cementing
the liner.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” long gauge PDC bit and a 6 ¾” mud motor. The
BHA was supplied with RES, GR, DEN, DDS and NP MWD plus a Formation-Pressure and
PWD tool. No data was recovered from the Formation-Pressure and PWD tool during the first
run. The cement was drilled and nitrogen was circulated out before drilling proceeded. The well
was displaced to lighter OBM prior to drilling out the shoe, shoe track and new formation. A
inflow test was performed. Drilling commenced and the MW was increased 3 times before
reaching TD. At TD the well was again flow checked. The Flow check showed underbalanced
conditions and 2 more MW increase’s was carried out before acceptable loss conditions were
achieved. A total of 14 bbl were lost when tripping out of hole. A new bit, a rock bit, was then
run with the same 6 ¾“ MWD suite as used in the previous run. The bit did not drill any new
formation as the purpose was to take the six pressure points that were not accomplished during
the last run. The pressure points were taken and the 6 ⅝” liner was run and set without any
problems

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 3.5.7. Well #7

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” long gauge PDC bit and a 3D RSS. The BHA
was also supplied with Gyro, GR, RES, DDS and Pressure MWD. The well was displaced to
OBM while drilling out the float, shoe track and cement. New formation was drilled and a
successful FIT was performed. Drilling commenced with relatively high ROP until cuttings
handling on surface required a halt for sorting out jammed cuttings. The MW was increased
gradually towards TD. Except for the jammed cuttings event, the bit drilled to TD without any
problems or incidents. After reaching TD 1 x B/U was circulated before starting to POOH. The
string was pumped out of hole until the depth of the 20” shoe was reached. A total loss of 18
bbl’s was observed while POOH. The 13 ⅝” casing was run and set without incidents.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC bit and a 3D RSS. The BHA
was supplied with GR, RES, DDS and Pressure MWD. The well was displaced to heavier OBM
while drilling out the float, cement, shoe, shoetrack and new formation. Pack-off and heavy
losses were seen after a short period of drilling lead to POOH in order to perform a cement
squeeze job. The cement squeeze job was performed and the same BHA was run back in hole. A
successful FIT was performed and drilling continued until pack-off and wellbore breathing was
observed. Gas was circulated out and drilling continued until MWD tool failed and POOH.
Heavy losses and high connection gas readings was observed during the whole trip out of hole. It
was decided to plug back the section and to do a side track. The section was cemented back and
the new 12 ¼” section was kicked off. Problems with hole packing off were observed in the top
of the new section. After reaching TD the hole was circulated clean with 5 x B/U before POOH.
Only minor mud losses were observed when POOH but some tight spots were seen. The 10”
liner was run and set with high mud losses recorded during the cement job.

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8 ½” Hole section

The 8 ½” hole section was drilled with a 8 ½” long gauge PDC bit and a 3D RSS assembly with
NBG. The BHA was supplied with RES, GR, DEN, DDS and NP MWD plus a Formation-
Pressure and PWD tool. The well was displaced to lighter OBM and the cement and shoe was
drilled out. The rathole was cleaned out and an inflow test which proved static conditions was
performed. Drilling commenced while pressure point while drilling was taken. The section was
finished 387 ft before planned TD due to losses. The well was circulated clean and the string was
pulled out while taking pressure points. The 6 ⅝” liner was run and set without any problems and
no losses were recorded during the tripping or cementing of the liner.

3.5.8. Well #8

17 ½” Hole section

The 17 ½” hole section was drilled with a 17 ½” long gauge PDC bit with a 3D RSS. The BHA
was supplied with Gyro, GR, DDS and Pressure MWD. The well was displaced to OBM while
drilling out the float, shoe track and cement. Drilled into new formation were a successful FIT
was performed. The MW was increased gradually towards TD. The section was drilled to TD
with average drilling rate 210 - 230 ft/hr and there were no incidents encountered. The hole was
washed and reamed on the way out of hole. No problems were encountered while
reaming/tripping out of hole. The 13 ⅝” casing was run and set without incidents and losses.

12 ¼” Hole section

The 12 ¼” hole section was drilled with a 12 ¼” long gauge PDC bit and a 3D RSS assembly
with NBG. The BHA was supplied with GR, DIR, RES, DDS and Pressure MWD. The well was
displaced to heavier OBM while drilling out float, cement, shoe, shoetrack. A successful FIT was
performed after drilling xx ft new formation. Occasional stringers were encountered with signs
of hole packoff when drilling through these. At some point a rapid increase in torque and
pressure was seen. The string was pulled off bottom but it was not possible to get back on

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bottom. Rotation and loss-free-circulation were re-established. A total loss of 110 bbl’s of mud
was recorded during the event. Indicators of insufficient hole cleaning led to the decision to limit
the ROP which had a good effect. Directional problems were encountered and attempts to
control the wellpath were unsuccessful. The hole was circulated clean with 2.5 x B/U before
POOH to replace the 3D RSS and the bit. The remainder of the section was drilled with restricted
ROP to be able to evaluate a good setting point for the 10” liner. Cuttings caused the string to
hang up but one was able to work the string free. The MW was held constant through the whole
section but flowrate adjustments were made frequently. After reaching TD and POOH the hole
proved to be in a good condition. The 10” liner was run and set without incidents.

8 ½” Hole section

The 8 ½” hole section was drilled with an 8 ½” PDC bit and a mud motor. The BHA was
supplied with RES, GR, DEN, DDS and NP MWD plus a Formation-Pressure and PWD tool.
The float was tagged, drilled out and the well closed to circulate out nitrogen. The well was
displaced to lighter OBM while drilling cement. The shoe and new formation was drilled before
a flowcheck was performed. Drilling continued and pressure points while drilling was taken. The
MW was increased in steps up to the planned MW prior to drilling into the target formation. A
flowcheck was performed in the top of the target formation. The section was drilled to TD
without problems. Before POOH 3 x B/U was circulated and a flow checked performed. The
flowcheck showed slight underbalanced conditions and the MW was increased prior to tripping
out of hole. Four additional pressure points were taken on the way out. The bit was pulled bit to
surface without problems. A total loss of 6.24 bbl’s was seen when pulling out. The 6 ⅝” liner
was run and set without any problems.

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 3.6. Performance Targets

As mentioned, the real value is added to the well construction process when the total time used to
drill a well is reduced. This is because the biggest and primary cost driver is related to keeping
the rig in operation. The total cost of the rig including all additional services is the rig spread-
rate. To see the real value of the drilling optimization one need to look at how much time is
saved by the increased focus and measures that the drilling optimization process emphasis. The
following section describes the parameters and target that have been used in the performance
development study.

3.6.1. Parameters

NPT – Non Productive Time is measured in hours and is the number of hours that the operation
is in halt and not adding any value in terms of operational progress due to a failure.

Avg. ROP – Average Rate Of Penetration is the average rate one get when dividing the total
footage drilled and divide it by the number hours drilling. This may be calculated for each run
and for each section. The numbers used in this study is hole section averages.

Drilling hours - is the number of hours where the bit is on bottom and rotating / drilling.

Circulation hours – This is the number of hours where there has been circulation. The drilling
hours will be included in circulation hours since one always circulate while drilling.

Operational hours – Operational is the time the tools in the BHA are operational. It is counted
from the time the tools are initialized until they are out of hole and the memory data has been
downloaded from the tool. The download may occur while the toolstring is in rotary table or
after the toolstring and BHA has been layed down. This depends on what operations are planned
and if the BHA is to be re-run. The operational hours include the circulation and drilling hours. It
will also include static time when not circulating or drilling.

BRT – Below Rotary Table is the time the BHA is below the rotary table. This value is usually
very close to the operational hours and will include the same time phases as the operational hrs.

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Footage – The number of ft or meters formation that have been drilled in measured depth (MD).

3.6.2. Targets

To study the performance the following targets was used:

Avg. ROP

Avg. ROP has been used because it is one of the classic KPI for drilling efficiency. It has been
debated how ROP may be an unjust KPI, but in this case the wells have the same trajectories in
terms of inclination, turns, and horizontals. They are drilled through the same formations, from
the same rig and by people with the same competence (to a certain degree). This suggests that the
ROP in each section will reflect the drilling efficiency in a just way.

Equation 1 - Average ROP

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Drilling hours per foot

Equation 2 shows drilling hours normalized on the footage drilled. The amount of hours needed
to drill a section is directly related to the length of the section. By normalizing the drilling hours
on the footage of the section it removes the influence of section length and the resulting
parameter: drilling hours per ft can be compared between wells. As this number increases we are
spending more time drilling each ft and vice versa. It is the inverse of the ROP but is included as
it adds value when compared in relation to the same target for circulation and operational hrs.

Equation 2 - Drilling hours per ft

Circulation hours per foot

Equation 3 shows circulation hours normalized on the footage drilled. Also here are the section
length and the hrs used directly related. By normalizing the circulation hours on the footage, the
resulting parameter can be compared. As this number increases we are spending more time
circulating per ft of formation penetrated and vice versa.

Equation 3 - Circulation hours per ft

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Operational hours per foot

Equation 4 shows operational hours normalized on the footage drilled. Again, by normalizing the
Operational hours on the footage the resulting parameter is comparable. As this number increases
we are spending more operational time per ft of formation penetrated and vice versa.

Equation 4 - Operational hours per ft

Drilling to circulation hours ratio

Equation 5 shows how the drilling to circulation hours ratio is calculated. It’s a dimensionless
parameter that shows what fraction of the total circulation hours that was used in the drilling
phase. The closer the number is to 1, the smaller amount of hours is spent on circulating while
not drilling.

Equation 5 - Drilling to circulation hours ratio

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Circulation to Below Rotary Table hours ratio

Equation 6 shows how the circulation to BRT hours ratio is calculated. This is also a
dimensionless parameters showing what fraction of the total time below rotary table were used
for circulation. The closer the number is to 1 the fewer hours have been spent in static
conditions.

Equation 6 - Circulation to Below Rotary Table hours ratio

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 3.6.3. How to Interpret the Target Definitions

To clarify the following sections some expressions and use of words should be clarified.

Displacement – Is referring to the vertical distance between two curves for the same horizontal
axis value (for the same “x” value in the coordinate system). The displacement can be constant,
increasing or decreasing. The displacement is referring to how the relationships between two
curves are developing.
The value – This is the numeric value that the graph is displaying for each horizontal axis value.
This may be constant, increasing or decreasing. The value is referring to one graph and its
development.
The only difference between the drilling hours and circulation hours is the non-drilling
circulation hours. The displacement between these two curves therefore reflects the need or use
of non drilling circulation. This should ideally be as low as possible.
The only difference between the operational hours and the circulation hours is the static hours.
The displacement between these two curves therefore reflects the use of static time. This is
mainly related to tripping out of the hole and connection time, but FIT, LOT and flow tests
would also be included in this element.
As explained in chapter 3.6.1 and 2, the different targets are dependent on different time
elements. The following examples are made to illustrate the meaning and relation between the
targets. However, this is meant as supplement to understand the general relation between the
targets. This is not an absolute truth and the curves development need to be seen in relation to the
operational overview as well as possibility for discrepancies.

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Increasing and decreasing value

Figure 20 show an increasing value for all three curves. The displacement is assumed to be
constant. The interpretation of this situation is that the total time to drill the section is increasing.
Since the displacement is constant there is no events occurring that contribute to additional non
drilling circulation time or static time. This curve development would typically be the result from
gradually decreasing the ROR, where same add-on in time is experienced in all three targets.

Figure 20 - Increasing absolute value Figure 21 - Decreasing absolute value

Green curve represent the operational hours used per ft. Red curve circulation hours per ft and blue curve drilling hours per ft.
Horizontal axis represent time section was drilled oldest to newest.

Figure 21 show the opposite development with a decreasing trend. The same explanation would
be valid here, except here the ROP is gradually increasing. The ROP increase does not introduce
any problems.

The operational hours and BRT hours are usually very similar in terms of hours. This is because
the start and end times that they are measured between usually is very similar. In both the above
cases the circulation hours to BRT hours ratio would be constant as long as the measurement of
BRT hours are consistent. Both parameters would then increase by the same factor and the ratio
remains the same.

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Increasing value and decreasing displacement

Figure 22 show that the values of all three

curves are increasing and more time is spent
in each section. In addition the displacement
between all three curves is decreasing. The
increasing drilling hours per ft – blue curve,
can be explained by a decrease in ROP. But
the circulation and operational hours per ft
Figure 22 - Increasing value and decreasing displacement
(red and green curve) does not increase by
Green curve represent the operational hours used per ft. Red
the same amount, they are increasing less. curve circulation hours per ft and blue curve drilling hours per ft.
The only difference between the circulation Horizontal axis represent time section was drilled oldest to
newest.
and drilling hours is the non drilling
circulation hours. The only difference between the circulation and operational hours is the static
time element. This leaves us with an improvement within the time used in the static and non
drilling circulation time elements. This implies that earlier they were spending more time with
non-drilling circulation as well as more static time. As long as no events occurred the
explanation for this curve development could be: the ROP is reduced, hole cleaning is less of a
concern so the non drilling circulation hours is reduced and they are tripping faster hence less
static time is used.

For this situation we could expect to see the ratio between the circulation and BRT hours to
decrease. As mentioned the operational hours and BRT hours are usually very similar in terms of
hours.

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Increasing Value and increasing displacement
Figure 23 show that the values of all three curves are increasing and the displacement between
the curves is increasing. The increasing
drilling hours per ft – blue curve, can be
explained by a decrease in ROP. The
circulation and operational hours per ft (red
and green curve) does not increase by the same
amount, they are increasing more. This causes
an increase in displacement. This leaves us
with a negative development within the time
Figure 23 - Increasing value and decreasing displacement
used in the static and non drilling circulation Green curve represent the operational hours used per ft. Red
time elements. This development implies that curve circulation hours per ft and blue curve drilling hours per ft.
Horizontal axis represent time section was drilled oldest to
earlier they were spending less time with non-
newest.
drilling circulation as well as more static time.
The explanation for this curve development, as long as no events occurred may be: that the ROP
is decreasing, hole cleaning has become a concern so the non drilling circulation hours is
increased to assure better cleaning and they are tripping slower hence more static time is used.
For this situation we could expect to see the ratio between the circulation and BRT hours to
increase.

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Decreasing value and increasing displacement
Figure 24 show that the values of all three curves are decreasing and the displacement between
the curves is increasing. The decreasing drilling hours per ft – blue curve, can be explained by an
increase in ROP. The circulation and operational hours per ft (red and green curve) are
decreasing less. This causes an increase in displacement. Overall the development is positive
because the value of all three curves is decreasing. However, the increase in displacement also
indicates that the drilling efficiency is decreasing. More static and non-drilling circulation time is
required to finish the section as the ROP increases. This is not how one ideally wants the
development to be, we would like to have both positive trends, like in Figure 25. However, in a
real life situation where one is optimizing the drilling performance, the development in Figure 24
may actually reflect a very healthy approach. The ROP is increasing; this means that more
cuttings need to be removed from the well in the
same period of time. Sufficient hole cleaning is an
important factor in maintaining trouble free drilling
and possesses a large risk in terms of additional
time usage. Figure 24 show that the circulation
hours are not decreasing with the same amount as
the drilling hours and are maintained on a higher
level. This means that the non-drilling circulation Figure 24 - Decreasing value and increasing displacement.

hours are actually being increased. This may be a Green curve represent the operational hours used per ft.
Red curve circulation hours per ft and blue curve drilling
strategy to confirm that the hole is being cleaned
hours per ft. Horizontal axis represent time section was
properly before starting to gradually reduce the drilled oldest to newest.

non-drilling circulation time. It’s a safe play which makes it possible retreat if one sees that the
increase in ROP is too high and the hole cleaning strategy is not working. The operational hours
show the same trend as the circulation hours curve, but it is not reduced by an amount of hours
equal to the circulation hours. All the circulation hours are included in the operational time usage
so if the reduction is not equal, the static element is stalling the reduction by an increase. The
increase in static time in this case would be due to a slower tripping speed. In a hole cleaning
point of view, cutting beds may have formed in parts of the well, and one may not have been

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able to remove these. As the bit is being pooled trough one of these beds, it will act as a dart
being pushed through a pipe and potential cuttings will accumulate around the BHA and in front
of the bit. If the amount of accumulated cuttings is large enough they may plug around the BHA
and bit, and jam the string. By reducing the tripping speed one will more easily be able to see if
the hookload starts to increase more than expected when pooling out of the hole. In such case,
circulation and reciprocation can then be engaged to clean out the cuttings and avoid potential
stuck pipe scenarios. The two explanations provided here is an example of what drilling
optimization is all about. A tradeoff where an optimal situation in one aspect of the operation are
sacrificed to produce an overall higher performance.

Decreasing value and decreasing displacement

Figure 25 show that the values of all three curves are decreasing and the displacement between
the curves is decreasing. The decreasing drilling
hours per ft – blue curve, can be explained by an
increase in ROP. The circulation and operational
hours per ft (red and green curve) does not
decrease by the same amount, they are decreasing
more. This causes a decrease in displacement.
This leaves us with a positive development within
all aspects of the operation. The ROP is increasing Figure 25 - Decreasing value and decreasing displacement
Green curve represent the operational hours used per ft.
so one is drilling faster. The non-drilling
Red curve circulation hours per ft and blue curve drilling
circulation used is reduced and one is spending hours per ft. Horizontal axis represent time section was
less static time. As long as the static time element drilled oldest to newest

is reduced more than the non-drilling circulation hours, we would see an increasing circulation to
BRT hours ratio.

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 4. Results
The following section presents the results from the performance study from the selected wells.
The results are briefly described and will be further evaluated and debated in the discussion
chapter of the thesis. The analysis has been carried out on each hole section size. The
performance targets used are as described in the previous chapter. Each well represents each
performance target with one value for each hole section. E.g. for well #1 only one ROP value
will be used to represent the ROP in the 36” hole section and only one for the 26” section and so
on. Based on the date which drilling of the relevant section started the targets for each hole
section are presented chronologically from the first (oldest) to the last (youngest) section start
date. Next to each performance target value, the well that the value comes from is displayed.

4.1. 36 “Hole section

No NPT have been recorded in the 36” section.

Graph 1 - Average ROP through the 36” hole section for the 8 sample well’s chronologically
arranged after section start date

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Graph 1 shows a stable ROP for the first 4 wells with an average ROP of 23 ft/hr. Then the ROP
decreases by 15.7 % to 19.9 ft/hr followed by an increase of 57% from the baseline ROP of 23
ft/hr to a new baseline average of ≈ 36 ft/hr.

Graph 2 - Operational, Circulation & Drilling hours per ft for the 36" hole section.

Arranged from oldest to youngest section start date the green graph shows the operational hours, the blue curve
the drilling hours and the red curve shows the circulation hours, all normalized on the footage drilled in the 36”
hole section.

The graphs show how much drilling, operational and circulation time we are using per foot we
drill. Considering the red and blue curve – circulation hrs and drilling hrs – we see that the
spread is reducing as we move from left to right. From left to right, the first 4 wells show a
reduction in displacement. For the last 4 wells small increase in displacement can be seen on
well #5 but well #8, #6 & #7 are almost overlapping. In the same time we see that the operational
hours (green) displacement from the circulation hrs (red) is almost zero for the first 3 wells but
then peaks on well # 8 and stabilizes on a new higher baseline. The displacement between the
operational and circulation hrs curves is increasing with time after the peak.

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 Graph 3 - Ratio between Circulation hours and BRT hours for the 36” hole section

Graph 3 shows the ratio of hours circulating to the total hours the BHA is below rotary table.
Well #2 and #8 have far lower ratios than the other wells. There seems to be a reducing trend and
if we don’t account for well #2 and #8 we can establish two averages. Well #3, #1 & #4 have an
average of 0.61 (61%) and the last 3 wells 0.53 (53%) circulation time to BRT time. This is a ≈
15 % reduction.

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 Graph 4 - Ratio between drilling hours and Circulation hours for the 36” hole section

Graph 4 shows an increasing trend. The 4 first well from left have a 0.7-0.8 ratio this is
equivalent to ≈70 - 80 % drilling time out of the total circulation time. The last 4 wells have a
ratio of 0.9 where only well #5 has a ratio on 0.7. Excluding well #5, the drilling time out of the
total circulation time is roughly 90%.

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 4.2. 26 “Hole section

No NPT have been recorded in the 26” section.

Graph 5 - Average ROP through the 26” hole section for the 8 sample well’s chronologically
arranged after section start date

The ROP show a decreasing trend. With the exception of well #1 (>160 ft/hr) the first wells
(from left to right) show a ROP of approximately 140 ft/hr. Then the ROP decreases fast until it
starts to stabilize on a ROP of ≈ 90 ft/hr for the last 3 wells.

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 Graph 6 - Operational, Circulation & Drilling hours per ft for the 26" hole section.

Arranged from oldest to youngest section start date the green graph shows the operational hours, the blue curve
the drilling hours and the red curve shows the circulation hours, all normalized on the footage drilled in the 26”
hole section.

The graphs show how much drilling, operational and circulation time we are using per foot we
drill. Considering the red and blue curve – circulation hrs and drilling hrs – the displacement
between the curves are increasing with time. The average displacement considering the 2 first
wells is 0.005 and for the last 2 average is 0.007, an increase in displacement. The Operational
hours per/ft is not changing much if one doesn’t consider well #2 and #7. The average of the first
4 (eksl#2) is 0.023 hours/ft and for the last 4 (ex. #7) 0.025 hrs/ft. This is equivalent to ≈ 8.5 %
more operational hrs per ft for the 26” hole section on the last wells than the first wells. The
operational hrs displacement in regard to the circulation and drilling hrs is decreasing with time.

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 Graph 7 - Graph showing the ratio between Circulation hours and BRT hours for the 26”
hole section

Graph 7 shows that the number of hrs that circulation is occurring among the total hours the
BHA is below rotary table is increasing with time. The first 3 wells have ratio of approximately
0.45 (≈ 45%) and the last 2 wells ratio is ≈0.75 (≈ 75 %). Roughly this is a ≈ 65% increase.

Graph 8 - Graph showing the ratio between drilling hours and Circulation hours for the 26”
hole section

The number of drilling hours to circulation hours is fluctuating through the first 4 wells before it
stabilizes on approximately ratio of 0.6 ≈ 60%.

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 4.3. 17 ½” Hole section

Graph 9 - Average ROP through the 17 ½” hole section for the 8 sample well’s chronologically
arranged after section start date.

The ROP show a general increasing trend with time. The increase is in plateaus, the first plateau
is on ≈150 ft/hr for well #1 and #3. The second plateau is within the last 4 wells, which is in the
range 221 - 235 ft/hr if not considering the fall back on well #6. The second plateau is close to
50% higher than the first plateau.

Graph 10 - Operational, Circulation & Drilling hours per ft for the 17 ½ " hole section.

Arranged from oldest to youngest section start date the green graph shows the operational hours, the blue curve
the drilling hours and the red curve shows the circulation hours, all normalized on the footage drilled in the 17 ½
hole section.

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The graphs show how much drilling, operational and circulation time we are using per foot we
drill. Considering the red and blue curve – circulation hrs and drilling hrs – the displacement
between the curves seem to be constant with time except well #3 which have slightly higher
circulation hours than one would expect if considering the curve trend. The absolute values of
the curves still show a slight decrease with time. The Operational hours per ft is increasing to a
maximum at well #5 and then drops consistently until it reaches a minimum on well #7. The
displacement from the circulation hrs curve seems to be more or less constant on the first 4 wells
before it decreases with time after a peak on well #5.

Graph 11 - Circulation to BRT hours ratio and NPT for the 17 ½ hole section

Blue curve shows ratio of circulation hours spent to BRT hours spent. Red curve NPT hours. Both

curves chronologically arranged by time for the 17 ½ hole-section’s start date.

The circulation hrs/BRT hrs ratio is fluctuating in a range of 0.65 – 0.8 (65 – 80 %) through the
first 4 well’s. Well #3 has the highest ratio of 0.8 (80%). After the 4 first wells, in well #5, the
ratio drops dramatically to just above 0.3 (30%). At the same time the NPT curve spikes. After
the drop on well #5 the ratio increases significant with time, until it again reaches a ratio of 0.8
(80%) on well #7. NPT is also present on well #7 and #8 but it does not seem to have an impact
on either the BRT or the circulation hrs, potentially they are equally affected.

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 Graph 12 - Graph showing the ratio between drilling hours and Circulation hours for the 17 ½
hole section

The drilling hours to Circulation hours ratio are showing a decreasing trend. In the first well the
ratio is 0.56 (56%) and for the last 2 wells it is 0.43 (43 %). The best fit linear relationship for the
curve suggests a decrease in the ratio of 0.012 for each new well.

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 4.4. 12 ¼” Hole section

Graph 13 - Average ROP through the 12 ¼” hole section for the 8 sample well’s chronologically
arranged after section start date.

The ROP in this section is in a range from 90 to 180 ft/hr. For the first 4 wells the ROP is
approximately 120 ft/hr with the exception of well #2 which generates a spike of ≈ 160 ft/hr. For
the last 4 wells the variation is larger, but here we find a trend with decreasing ROP in time.

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 Graph 14 - Operational, Circulation & Drilling hours per ft for the 12 ¼” hole section

Arranged from oldest to youngest section start date the green graph shows the operational hours, the blue curve
the drilling hours and the red curve shows the circulation hours, all normalized on the footage drilled in the 12
¼” hole section.

All three curves are following more or less the same trend. The displacement between the green
and red curve (operational and circ. hrs) shows a general decrease with time. The average
displacement for the 3 first curves is 0.008 hr/ft and the average from the last 5 wells is 0.0043
hr/ft.

The red-blue curves (circulation and drilling hours) have a fluctuating displacement with time.
No apparent trend in displacement, decrease or increase can be established.

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 Graph 15 - Circulation to BRT hours ratio in the 12 ¼” hole section

Blue curve shows the ratio of circulation hours spent to BRT hours spent. Red curve show NPT
hours. Both curves chronologically arranged by time for the 12 ¼” hole section s start date.

The number of circulation hours to BRT hours has an increasing trend in the 4 first well’s and a
clear decreasing trend through the last 4 wells. If comparing the average ratio for the 4 first
wells: 0.68 (68%) with the last 4 wells: 0.73 (73%), we see that there is a slight increase between
the batches. There is recorded NPT on well #1, #8 and #7, this does however not seem to affect
either there BRT or circulation hrs. Potentially they are equally affected.

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 Graph 16 - Graph showing the ratio between drilling hours and Circulation hours for the 12 ¼”
hole section

The drilling hours to circulation hours ratio shows a positive trend. With the exception of well #6
there is a clear increase. Less time is spent on circulation when not drilling. The first well has
just below 0.5 (50%) drilling time and the last well more than 0.6 (60%) drilling time. The ratio
decreased to 0.42 (42 %) on well # 6, with this exception the increase in almost linear in time.

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 4.5. 8 ½” Hole section

No NPT have been recorded in the 8 ½” section.

Graph 17 - Average ROP through the 8 ½” hole section for the 8 sample well’s
chronologically arranged after section start date.

The first 4 wells, batch 1, are showing an increasing trend with time. This is also the case for the
last 4 wells, batch 2. The ROP in the first well in batch 1 - #4 is 38 ft/hr. The last well in batch 1,
well #7, have a ROP of 86 ft/hr, this corresponds to a 126 % increase. If considering the second
batch, the first well (#5) is drilled with 46 ft/hr and the last well is drilled with a ROP of 91 ft/hr,
which corresponds to a 98% increase in ROP. Considering all wells together and applying the
best linear-relationship, the ROP increases by 7.3 ft/hr for each new well drilled. The general
trend in the plot is an increasing ROP.

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 Graph 18 - Operational, circulation & Drilling hours per ft for the 8 ½” hole section.

Arranged from oldest to youngest section start date the green graph shows the operational hours, the blue curve
the drilling hours and the red curve shows the circulation hours, all normalized on the footage drilled in the 8 ½”
hole section.

There are some variations but the general trend is that the absolute value of the curves is
decreasing with time. The displacement for the first 4 wells, between the operational hours and
circulation hour curves, is increasing. This can be seen when looking at the displacement on well
#4 which is 0.015 hr/ft and compare it to the displacement on well #3; 0.037 hr/ft. On the last 4
wells the displacement is decreasing from 0.023 hr/ft on well #5 to 0.011 hr/ft on well #7. The
displacement between the circulation and drilling hour curves does not show the same pattern.
Except for the large increase in displacement on well #3 and partly #5 the displacement
fluctuates between 0.016 - 0.020 hrs/ft with no consistent trend.

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 Graph 19 - Graph showing the ratio between Circulation hours and BRT hours for
the 8 ½ “ hole section

The circulation hours to BRT hour’s ratio does show some variations but in general does not
change much. Slightly lower values can be observed on well # 1 and #8. A linear relationship
suggests a decrease in the ratio of 0.0025 for each well with time. This is a very small value that
only makes up ≈ 0.4 % of the first well (#4) Circulation / BRT time ratio.

Graph 20 - Graph showing the ratio between drilling hours and Circulation hours for the
8 ½” hole section

Graph 20 shows a decreasing trend. When considering all the wells, the application of a linear
relationship suggests a decrease in the ratio of 0.029 for each new well. When considering the
first 4 wells separately the same linear relationship suggest a decrease in the ratio of 0.11 for
each new well. When separately considering the last 4 wells a linear relationship suggest a

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decrease in ratio of 0.05 for each new well. The drilling / circulation time ratio is in the range
0.55 – 0.6 (55-60%) for the first 2 wells (#4 and #2) and 0.3-0.38 (30-38%) for the last 2 wells.
These results show that there is more non drilling circulation hours recorded in the newest wells
compared to the old ones.

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 4.6. The value of the Total Improvement in an Average well

In an attempt to generalize the study an average well has been designed. The well has the same
trajectory – Build & Hold, as the majority of the sample wells. The section lengths are averages
of 7 of the 8 sample wells. Well #7 was left out because it has a different trajectory. The 8.5”
horizontal section is much longer than it is in the rest of the wells. Figure 18 & 19 confirms the
difference in well trajectory. The well is assumed to be drilled in the same formations and with
the same rig.

The aim of this study is to try to measure the effect of drilling optimization. The study therefore
focuses on the phase of well construction where drilling occurs. Based on this it was decided to
use the BRT hours/ft parameter to reflect total drilling operation time and not include other
operations like casing running etc. BRT hours has generally less fluctuations than the operational
hours. It show the hours from when the equipment goes below rotary table, finish drilling the
section and is back above the rotary table. It is a good measure of the total drilling time.

One could argue that the operational hours is more suitable for reflecting total time, since it
includes the time used on drill floor to initialize (pre) and read the tool memory data (post). The
justification of the selected approach is that there exists an inconsistency related to when this
time is measured; both start and end. This will be elaborated further in the discussion. Although
there are some uncertainties related to all the times used, they were considered smaller for the
BRT hours, thereby favoring the BRT / ft measurements.

For each hole section 4 averages are calculated:

Average BRT/ft for the 4 first wells (batch 1)

Average BRT/ft for the 4 last wells (batch 2)
Average BRT/ft for the 3 closest measurements from the 4 first wells (batch 1)
Average BRT/ft for the 3 closest measurements from the 4 last wells (batch 2)

The last 2 is used to remove the extremities. This is believed to produce a more representative
estimate of the time usage in the average well. The calculated BRT/ft averages from each hole
section was used to calculate the BRT hours used to drill each section of the average well.

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Finally the time consumption for each section was added up to generate the total BRT hours used
to drill the average well. Based on the number of days (hours) that was saved and an assumed rig
spreadrate of 900 000 USD / day a theoretical value of the improvement was calculated. The
following section shows the results.

4.6.1. Hole section Averages & Improvement Calculations

Graph 21 - The development of BRT hrs/ft chronological arranged in time for the 36” hole section

Average Batch 1 0.119 Closest 3 Average Batch 1 0.090

Average Batch 2 0.091 Closest 3 Average Batch 2 0.066
Improvement 0.237 Improvement 0.266
Percentage improvement 23.7 Percentage improvement 26.6

Table 3 - The calculated BRT hrs/ft averages and percentage improvement for the 36” hole section.

Graph 21 shows that the Below Rotary Table Hours / ft decrease with time. The hours used to
finish the 36” hole section starts on ≈0.21 hrs/ft for the first well and decreases to a value of
0.065 hrs/ft for last well. Table 3 shows that there is a 23.7 % improvement in the average BRT
hrs/ft from batch 1 to batch 2 when the average is calculated based on the results from all the
wells in each batch. It also shows that if the average is calculated based on the 3 closest BRT
hrs/ft values the improvement from batch 1 to batch 2 increases to 26.6 %. The most reasonable
claim is to say that the time to drill the 36” hole section in the average well is reduced by 26.6 %.

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 Graph 22 - The development of BRT hrs/ft chronological arranged in time for the 26” hole section.

Average Batch 1 0.031 Closest 3 Average Batch 1 0.028

Average Batch 2 0.027 Closest 3 Average Batch 2 0.026
Improvement 0.137 Improvement 0.079
Percentage improvement 13.7 Percentage improvement 7.9

Table 4 - The calculated BRT hrs/ft averages and percentage improvement for the 26” hole section.

Graph 22 shows that the Below Rotary Table Hours / ft decrease with time. The hours used to
finish the 26” hole section starts on ≈0.04 hrs/ft for the first well and decreases to a value of
0.022hrs/ft for last well. Table 4 shows that there is a 13.7 % improvement in the average BRT
hrs/ft from batch 1 to batch 2 when the average is calculated based on the results from all the
wells in each batch. It also shows that if the average is calculated based on the 3 closest BRT
hrs/ft values the improvement from batch 1 to batch 2 increases to 7.9 %. The most reasonable
claim is to say that the time to drill the 26” hole section in the average well is reduced by 7.9 %.

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 Graph 23 - The development of BRT hrs/ft chronological arranged in time for the 17 ½ “hole section.

Average Batch 1 0.021 Closest 3 Average Batch 1 0.020

Average Batch 2 0.021 Closest 3 Average Batch 2 0.018
Improvement 0.011 Improvement 0.103
Percentage improvement 1.1 Percentage improvement 10.3

Table 5 - The calculated BRT hrs/ft averages and percentage improvement for the 17½” hole section.

Graph 23 shows that the general trend in Below Rotary Table Hours / ft in a decrease with time.
However the decrease is not as consistent as in the two previous sections. The hours used to
finish the 17 ½” hole section starts on ≈0.022 hrs/ft for the first well and decreases to a value of
0.013 hrs/ft for last well. Table 5 shows that there is a 1.1 % improvement in the average BRT
hrs/ft from batch 1 to batch 2 when the average is calculated based on the results from all the
wells in each batch. It also shows that if the average is calculated based on the 3 closest BRT
hrs/ft values the improvement from batch 1 to batch 2 increases to 10.3 %. The most reasonable
claim is to say that the time to drill the 17 ½” hole section in the average well is reduced by 10.3
%.

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 Graph 24 - The development of BRT hrs/ft chronological arranged in time for the 12 ¼”hole section

Average Batch 1 0.023 Closest 3 Average Batch 1 0.0219

Average Batch 2 0.021 Closest 3 Average Batch 2 0.0207
Improvement 0.091 Improvement 0.0571
Percentage improvement 9.1 Percentage improvement 5.7

Table 6 - calculated BRT hrs/ft averages and percentage improvement for the 12 ¼” hole section.

Graph 24 does not show a clear decreasing or increasing trend. The graph indicate that the Below
Rotary Table Hours / ft is decreasing with time in the first Batch (first 4 values from left) and
increases with time for the second batch. The hours used to finish the 12 ¼” hole section starts
on ≈0.025 hrs/ft for the first well and decreases to a value of 0.013 hrs/ft for the fifth well (from
left) before it increases to 0.032 hrs/ft on the last well. Table 6 shows that there is a 9.1 %
improvement in the average BRT hrs/ft from batch 1 to batch 2 when the average is calculated
based on the results from all the wells in each batch. It also shows that if the average is
calculated based on the 3 closest BRT hrs/ft values the improvement from batch 1 to batch 2 is
5.7%. The most reasonable claim is to say that the time to drill the 12 ¼” hole section in the
average well is reduced by 5.7 %.

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 Graph 25 - The development of BRT hrs/ft chronological arranged in time for the 8 ½” hole section.

Average Batch 1 0.068 Closest 3 Average Batch 1 0.0712

Average Batch 2 0.053 Closest 3 Average Batch 2 0.0471
Improvement 0.223 Improvement 0.3380
Percentage improvement 22.3 Percentage improvement 33.8

Table 7 - The calculated BRT hrs/ft averages and percentage improvement for the 8 ½” hole section.

Graph 25 shows that the Below Rotary Table Hours / ft decrease with time. The hours used to
finish the 8 ½” hole section starts on ≈0.065 hrs/ft for the first well and decreases to a value of
0.038 hrs/ft for last well. Table 7 shows that there is a 22.3 % improvement in the average BRT
hrs/ft from batch 1 to batch 2 when the average is calculated based on the results from all the
wells in each batch. It also shows that if the average is calculated based on the 3 closest BRT
hrs/ft values the improvement from batch 1 to batch 2 increases to 33.8 %. The most reasonable
claim is to say that the time to drill the 8 ½” hole section in the average well is reduced by 33.8
%.

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 4.6.2. Total Time Savings & Estimated Value

BRT/ft - Average - Batch 1

Section BRT_HRS Start End Footage Max - Inc BRT/ft
36 26.8733407 423 658 225 0 0.119
26 29.0626477 648 1592 944 0 0.031
17.5 144.043761 1592 8432 6840 40 0.021
12.25 135.434822 5432 11348 5916 45 0.023
8.5 89.505056 11348 12672 1324 45 0.068
Sum 424.9196
BRT/ft - Average - Batch 2
Section BRT_HRS Start End Footage Max - Inc BRT/ft
36 20.4999999 423 658 225 0 0.091
26 25.0865916 648 1592 944 0 0.027
17.5 142.441558 1592 8432 6840 40 0.021
12.25 123.130627 5432 11348 5916 45 0.021
8.5 69.5611341 11348 12672 1324 45 0.053
Sum 380.7199

BRT/ft - Closest 3 Average - Batch 1

Section BRT_HRS Start End Footage Max - Inc BRT/ft

36 20.3311209 423 658 225 0 0.090

26 26.2339781 648 1592 944 0 0.028
17.5 137.378651 1592 8432 6840 40 0.020
12.25 129.57953 5432 11348 5916 45 0.022
8.5 94.2352437 11348 12672 1324 45 0.071
Sum 407.7585
BRT/ft - Closes 3 Average - Batch 2
Section BRT_HRS Start End Footage Max - Inc BRT/ft
36 14.9166665 423 658 225 0 0.066
26 24.1622142 648 1592 944 0 0.026
17.5 123.264796 1592 8432 6840 40 0.018
12.25 122.174067 5432 11348 5916 45 0.021
8.5 62.3838139 11348 12672 1324 45 0.047
Sum 346.9016

Table 8 - The calculated total BRT hours for each hole section and the total average well BRT hours based on the 4
different averages.

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Table 8 shows the calculations that were made to generate the theoretical BRT hours to drill the
average well. The table show 4 blocks with the same calculations. As indicated in each block
heading, the block contains the calculations made based on 1 of the 4 average calculations. The
governing average BRT hrs/ft calculation method in each block produces a BRT hrs/ft value for
each hole section. This value is multiplied with the length of this section in the average well.
This generates the theoretical BRT hours needed to construct each section. The BRT hours are
summed to generate the total BRT time used to drill the average well. This number is highlighted
in red in each table block. The total BRT hours from the 4 average calculations is then combined
in 4 different ways to generate the theoretical time savings between batch 1 and batch 2.

Table 9 show how many hours and days are saved on drilling the average well for different
combinations of the average BRT hrs/ft values that was calculated. The rig spread rate is
assumed to be 900 000 USD/ day and 1 USD = 6 NOK. The most reasonable comparison is, as
suggested in the introduction of this chapter, when removing the extreme values and averaging
based on the 3 closest values in each batch. In this case, the time saved when drilling the average
well with batch 2 drilling efficiency / performance, a theoretical time saving of 2.54 days is
generated.

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 Difference Difference Cost Savings Cost Savings
Comparison
(hr's) (Day's) (USD) (NOK)

Average :
44.20 1.84 $ 1 657 489 kr 9 944 936
Batch 1 v.s Batch 2
Average :
Closest 3 - Batch 1
60.86 2.54 $ 2 282 136 kr 13 692 817
v.s
Closest 3 - Batch 2
Average :
Batch 1
78.02 3.25 $ 2 925 678 kr 17 554 066
v.s
Closest 3 - Batch 2
Average:
Closest 3 - Batch 1
27.04 1.13 $ 1 013 948 kr 6 083 688
v.s
Batch 2

Table 9 - The hours and day’s saved for different combinations of the 4 different averages of BRT/ft calculated for
each hole section and its related cost saving for the average well

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 5. Discussion

5.1. The effect of Batch drilling

The effect of batch drilling suggests that due to the gained experience one get by performing the
same operation / drilling the same section repeatedly, one will naturally improve the efficiency
and performance of the operation. In this case, the same operations are performed and the well
design is more or less the same. The batch effect should then be seen as a continuous
improvement for each new well drilled.

With respect to ROP this improvement should give a higher ROP. The drilling, circulation and
operational hours used per length unit should decrease, as long as no other events influence the
parameters.

The displacement between the circulation hours and operational hours ratios should ideally
decrease. The same behaviors would be preferred for the displacement between the drilling hours
and circulation hours ratio. However, this also need to be seen I relation to if the hours used per
ft in each of these time categories is increasing or decreasing. Another thing worth mentioning is
that when considering the displacement between these ratios one need to remember that they do
not necessarily increase by the same factor for a given length of new formation drilled. Both the
circulation hours and the operational hours may be improved but the improvement may not be
apparent in regards to curve displacement. If one of the two is improved more than the other it
may result in the displacement increasing between the curves, indicating that the efficiency is
reducing when the overall time consumption is decreasing.

The drilling hours / circulation hours ratio reflects how much time is spent drilling of the total
time spent circulating. In a perfect world this ratio is 1, and then there had been no circulation
needed when not drilling. In the real world one need to clean the well and maintain hole stability
etc so a value as close as possible to 1 is preferred. With respect to the batch effect the
improvement one would expect to see is a continuous increase of the ratio as new wells are
drilled.

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The circulation hours / BRT hours ratio reflect how much time is spent circulating compared to
the total time the BHA/Bit is Below Rotary Table. This ratio can never become 1 as we need to
trip out the string after finish drilling. However, a continuous increase in the ratio for each new
well drilled in combination with a reduction in the hours spent per ft could potentially be a batch
effect.

The question arises to whether the batch improvement is a continuously improvement or if it first
is seen when the wells in the second batch was started? In theory the batch effect is a continuous
improvement for each repeated section / well. If the operation is just carried out as planned and
no measures are taken before the next batch is started, then the effect of batch drilling would
only be seen as a continuous increase in performance trough batch 1 and batch 2. The problem is
that this will contribute to camouflages the identity of potential other performance contributors.
The only way to separate drilling optimization is if there is seen a jump in performance from
batch 1 to batch 2. In theory this does not coincide with principle of becoming better each time
you perform a task and therefore is likely to be due to drilling optimization measures. However it
may be argued that since the information and experience gathered trough the first batch is what
enables drilling optimization, this could be considered an indirect batch effect. In further
discussion, the batch effect is considered to be a source of improvement related to a continuous
improvement for each new section / well drilled. Potential jumps in performance between the
batches will be assumed be due to drilling optimization.

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 5.2. Hole Section Performance

5.2.1. 36” Hole section

For the first 5 wells the ROP is stable and then it increases by more than 50% after well # 8.
There is clearly an improvement here; looking at the first 5 wells the ROP is more or less stable,
suggesting that the reason for the increased ROP is due to an adjustment done after the first batch
was drilled and the second batch started. The lessons learned notes from batch 1 described in
chapter 3.3.3 confirms that data from batch 1 showed that it was possible to use higher flowrate
than planned. A higher flowrate would allow a higher ROP while maintaining sufficient hole
cleaning. Based on this information it seems natural to first start gradually increasing the
flowrate and confirms stable conditions before also increasing the ROP. One scenario could be
that well #8 was used to verify a higher flowrate rate, and when the flowrate was confirmed safe
to use the ROP was increased in the next wells: #5, #6 and #7. The results do not oppose this
theory and the procedure fits well with the definition of what drilling optimization concerns
about. However, as mentioned, this is an example where one can argue that this an indirect batch.
Regards of the classification, the improvement is clearly noticeable and the development
improvement in ROP when averaging the 2 ROP plateaus on the curve was more than 61 %

Considering also the other measures, we see that the displacement between the drilling and
circulation hours curves in graph 2 is decreasing. The decrease is apparent already from the first
wells. The hours used per ft also show a decreasing trend with time, for the circulation hours
curve, but starts first in batch 2 for the drilling hours curve. The continuous improvement could
be a batch effect. The reduced drilling hours is due to the increase in ROP and as mentioned not
to consider a batch effect. The time spent circulating when not drilling is being reduced.
Circulation without drilling is typically initiated when there is a need to clean the well due to
cuttings accumulation, reduce amounts of cuttings in the return flow because it causes high ECD
or if one are concerned about hole conditions. The decrease then may be a indication that hole
cleaning is evaluated to less of a concern than expected and that less cleanup circulation is
needed. It may also be that the hole conditions proved more stable than initially expected and
allowed for higher flowrate. Higher flowrate would contribute to better and faster hole cleaning.

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These kinds of evaluations are usually not made by the driller and it then seem reasonable to
suggest that the continuous improvement is rather an optimization effect than a batch effect.

The efficiency so far seems to be improving, but the operational hours per ft curve does not show
the same positive trend. There is a good trend for the first 3 wells before it increases dramatically
on well #4 and #8. After this it stabilizes on a higher level and on the last wells where one are
spending more operational hours per ft than initially. The difference between operational hours
and circulation hours is the static time element. This result confirms that this element has
increased. Consider the BRT hours per ft curve in graph 21 in chapter 4.6.1. The interesting thing
here is to see that except for the first well this curve has more or less the same trend as the
operational hours per ft curve, but after the peak in operational hours on well #8 it stabilizes on a
lower level than its initial level. The operational hours per ft stabilizes on a higher level. As
mentioned earlier there exists an inconsistency in when the operational hours is measured. The
stop time is considered to be when the tool memory data is downloaded. This may be done on
drillfloor, in such case the operational hours and the BRT hours will be very similar, or after the
tools are layed down on deck. Depending on the ongoing rig operations the tool data memory
may not be downloaded before several hours after the tool was taken out of operation.
Considering the BRT hours per ft curve and the other performance targets it seem highly likely
that this is the cause of the unexpected increase in operational hours used per ft. The Significant
higher BRT hours on the first well may be due to some problems encountered after the tool
memory data was downloaded on drillfloor. A problem encountered after the tool was
downloaded while in the rotary table would result in an addition in BRT hours equal to the time
it would take to fix the problem and pull the rest of the string out of the hole. However no such
events have been reported. Another possibility is that it is a human error where the wrong above
rotary time have been noted.

The drilling hours to circulation hours ratio are increasing with time which is as expected as the
ROP is increasing and the hole cleaning seems to be improving. The circulation hours to BRT
hours ratio have a general decreasing trend which in addition to the fact that the total BRT hours/
ft is decreasing indicate more efficient drilling and hole cleaning.

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The reports states that all the 36” hole sections was drilled trouble free. Taking this and the
discussion so far into account it then seem likely that the improvement comes from the
optimization of hole-cleaning and the hydraulics. Optimizing the hole-cleaning and hydraulics
would remove the need for additional cleanup circulation time, allow higher ROP and explain
the observed trend of the different time element curves. The increased use of operational hours
does not fit with increased ROP and the BRT hrs/ft curve suggests that the discrepancy is a cause
of a change in tool memory download procedure has occurred.

In total, the 36” hole section show a more efficient drilling operation. It is still not possible to
confirm what improvements is due to drilling optimization or what is a batch effects. The only
clear statements that can with certainty be made is that there is a clear improvement in drilling
efficiency; reflected by a ≈ 70% reduction in Below Rotary Table Hours used when comparing
the first to the last well drilled (graph 21).

5.2.2. 26” Hole section

The ROP in the 26” hole section does with the exception of well #1 show a stable high ROP for
the first 4 wells and then decreases in the last 4 wells. Looking at the drilling, circulation and
operational hours per feet there is an increasing trend of drilling and circulation hrs per ft, and a
decreasing trend of operational hours per ft. This is clear when looking at the last 4 wells while
the first 4 wells are not as obvious. The circulation hours to BRT hours ratio clearly show an
increasing trend. The drilling to circulation hours ration varies for the first 4 wells but stabilizes
in the second batch; the last 4 wells.

The ROP is decreasing, this cause the drilling hours to increase because it takes more time to
drill the same footage. The increase in drilling hours per ft also increases the circulation hours
per ft, this is because we need to circulate while drilling. When considering the shape of these
two curves the circulation hours per ft are increasing slightly more than the drilling hours per ft.
This may indicate that there is also gained more non drilling circulation hours, not just the added
drilling hours. However, the drilling hours to circulation hours ratio is at the same time
stabilizing, opposing this suggestion.

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The operational hours needed per ft is very high for the first well but decreases and show a slight
increase until the first batch is finished (#4 is last well in batch 1). The first well in the second
batch show a higher operational hours per ft value than well #4, but after this a steady decrease
can be observed. The operational hours per ft curve is again a source of confusion. When looking
at graph 22 one can observe that the BRT hours per ft curve is decreasing with time. As
discussed in the 36” holesection performance chapter, also here does it seem to be an
inconsistency related to when the tool memory were downloaded.

Considering the BRT hours per ft curve instead of the operational hours per ft curve one can
conclude that there has been an improvement in efficiency. The Below rotary Hours used per ft
on the first well in batch 1 is 0.04 hrs/ft and it reduces to 0.023 hrs/ft on the last well in batch 2.
This is more than a 40% reduction.

It is not easy to identify the source of this improvement. The reduction in BRT hours used is
apparent from the first well in batch 1. This fits well with the improvement being a batch effect.
At the same time the results fit an optimization scenario where a tradeoff between ROP and
drilling hours per ft is made. In addition to slightly increasing the non drilling circulation hours,
good and stable hole conditions could be assured. This could allow faster tripping speed out of
the hole and thereby explain the reduction in Below Rotary Table hours spent to drill the section.
However the improvement in efficiency is apparent when looking on the total improvement in
the use of BRT hours.

5.2.3. 17 ½“ Hole section

The ROP shows a stepwise increase. It stabilizes in both batches but the ROP stabilizes on a
value ≈ 50% higher in the second batch, although well #6 shows a setback to 130 ft/hr the other 3
wells in batch 2 is fairly stable.

There is an increasing trend and displacement between the drilling, circulation and operational
hrs per ft for the first 4 wells. With the exception of the displacement between the drilling and

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circulation hours per ft, which only show small variations, a clear decreasing trend and
displacement can be seen for the last 4 wells.

Well #5 shows a very clear spike in operational hrs per ft that may be explained by a NPT event
adding on extra operational time. The NPT event is also reflected on the circulation to BRT
hours ratio, but here as a drop. The spike in operational hours per ft and the drop in circulation to
BRT hours ratio indicate that the NPT resulted in added static time. If the nature of the failure
had also created additional circulation hours, the spike and drop severity would have been less.
In addition, the drilling to circulation hours ratio is unaffected by the NPT and decreases with
time. This also supports that NPT only caused additional static time.

The operational overview from well #1 reports that there was problems with packoff and stuck
pipe when POOH, this may explain the increase in operational time that can be seen on well # 1
compared to well #2 and #4. Well # 3 was drilled after well #1, and displays an increase in both
operational hours and circulation hours. There are no reported problems in this section, but the
hole was washed and reamed while pooling out of hole. This is a normal preventive action if one
suspect there is a potential for getting stuck, and explains why the both circulation time and total
operational time is higher for well #3.

Well # 6 also show higher operational and circulation hours per ft than expected considering that
there is no drilling problems reported. The operational overview reports the event of a failing
topdrive which resulted in the string being reamed back to the shoe and the well left static until
the topdrive was repaired. While reaming back there was circulation and while waiting the well
was static. This explains why the operational and circulation hours are high in well #6. It should
also be noted that no NPT is recorded for well #6 and that the ROP is significantly lower on this
well than the other batch 2 wells. The failing topdrive seem to be a reasonable explanation for
why the ROP is not maintained on a 220-230 ft/hr level in well #6.

In total the operational hours per ft reduces by almost 50 % from the first to the last well. Graph
23 also confirms that the BRT hours per ft are decreasing.

Finally, an overall comparison between batches 1 and 2 reveals an increased ROP, reduced
drilling, circulation and operational time usage and a reduction in the amount of circulation hours

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used outside drilling mode. There are some variations but considering the results from 2 first and
last wells one can see that the 2 last wells are drilled more efficient than the first 2. Again, an
identification of the source of improvement cannot confidently be made.

5.2.4. 12¼“ Hole section

With the exception of well #2 the ROP for the first 4 wells are stable around 120 ft/hr. For the
first 2 wells in batch 2 (#5 and #6) the ROP starts out on 180 ft/hr before it starts gradually
decreasing to a minimum of 90 ft/hr for the last well.

The drilling, circulation and operational hours per ft follow more or less the same curve
trajectory. The BRT hours per ft curve (graph 24) and the operational hours per ft also follow the
same trend, suggesting that there is consistency in when (where) the tool memory data was
downloaded. The displacement between the curves does not change much. The increases and
decreases of the curves follow the opposite response of the ROP. This is natural as long as no
events that create additional time in usage occur. Graph 14 show that there is larger time usage
on all 3 time curves for well # 1, especially the operational and circulation hours are large.

The circulation to BRT hours ratio decreases and then increases when moving from left to right
through the first 4 wells. For the last 4 wells it shows a steady decreasing value.

The drilling to circulation hours ratio has with the exception of well # 6, a stable increase. The
decrease in time usage on well #6 can be traced back to problems with the Pipe Racking system
and that one additional day of WOW that was encountered (see operational overview 12 ¼”
section well #6). In the 12 ¼” section there is generally a higher risk of a well control situation if
the circulation is stopped, as this reduces the BHP. By the increase seen in both operational and
circulation hours it is reason to believe that circulation was maintained as long as possible before
the weather conditions required the well to be left static. This would explain the significantly
lower drilling to circulation ratio on well #6 as no drilling hours would be recorded during these
events.

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The most obvious positive trend that may be observed in this section is the increase in drilling to
circulation hours ratio, which shows almost consistent increase. It is spent less hours of non
drilling circulation with time. This improves the drilling efficiency as long as it doesn’t induce
extra drilling problems such as consequences of bad hole cleaning. This also indicates that the
circulation to BRT hours is a positive indicator since the drilling hours are implemented in the
circulation hours. The other curves do actually indicate a worsening situation with time, with
increased time per ft drilled and lower ROP.

However, if we see the section performance in relation to what kind of challenges they had to
battle during the 12 ¼” section the results can be justified. Stringers, Packoff’s, minor to severe
losses were encountered and this way a concern in all the wells. 5 of 8 wells had to POOH due to
drilling problems or failures. Well #1 and #4 had to POOH unexpectedly twice. In well # 6
surface equipment failed and the operation halted to WOW. In well #7 they battled so heavy
losses that the well had to be sidetracked after performing a cement squeeze job. Taking this into
consideration, the higher time usage and lower ROP makes more sense. Restricting the ROP
would help to properly clean the hole and reduce the chances for getting into new packoff events,
stabilizes ECD and the borehole stability. To indentify challenging downhole environment one
need to evaluate the drilling parameters and look for indications of onset of unfavorable
conditions, onset of packoff etc. Slowing down don’t just allow better hole cleaning but also
lowers the response time in terms of formation drilled and enhances the drilling optimization
specialist’s ability to respond.

The increase in the drilling to circulation hours ratio means that less time is spent with only
circulation. In addition it was only recorded slight loss of circulation and only onset of packoff in
the last well. Despite all the problems and challenges that were battled, these two elements are at
least positive ones. Without being to conclusive, these 12 ¼” sections at least serve as a reminder
that we can never 100% “know” what kind of challenges the subsurface will facilitate before we
actually have drilled it.

The Value of Drilling Optimization Page 97

 5.2.5. 8 ½” Hole section

The ROP curve development show an increasing trend for both batches, the second batch having
the largest ROP’s. Well# 4, #2 and #5 have considerably lower ROP than the other wells. In well
# 4 and #2 it was encountered hard formations. In well# 2 the progress was so low that the
section was finished 212 ft shorter than planned. This explains the lower ROP in these two wells.
Well #5 was also drilled with restricted ROP but the reason is not stated.

The circulation and operational hours per ft curves in graph 18 have increasing displacement
through the first 4 wells and a decreasing displacement on the last 4 wells. This indicate that in
the first batch the efficiency is not improving, rather the opposite. On the last 4 wells the
displacement is decreasing with time while the absolute value is also decreasing. This reflects an
increased efficiency as less hours of circulation is needed per ft.

All three curves in graph 18 show a decrease in time usage per ft in the second batch. The first
batch has a more irregular pattern and well # 3 show significantly higher values for all three
curves, compared to the first three wells. In well # 3 it was performed a Cut & Slip of drilling
line in the middle of the section. This causes additional operational and circulation hours and
explains why these two curves have a large increase compared to the drilling hours used per ft in
well #3.

The circulation to BRT hours ratio does not change much, it has a couple of drops but it is more
or less stable around 70 %. Seen in relation to the circulation and operational hours per ft, this
suggests that the time reduction is more or less equally affecting both circulation and operation
hours used.

The drilling to Circulation hours has a decreasing trend. Since the ROP is increasing and the
circulation hrs to BRT hours does not change much, this indicate that we are spending the same
number of hours circulating but less time is spent drilling due to the increasing ROP.

It seems that even if they are able to drill faster they do not risk reducing the additional
circulation hours. This is likely because this is the reservoir / target section and it will be very
critical both in regards of production and completion to maintain a clean and stable hole.

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Sometimes there is also a requirement to take cuttings samples every 3 -10 ft in the reservoir, this
also limits the ROP.

In total the results show a positive development when considering the time spent. If considering
an average, all time usage curves are lower for the last 3 wells than the first 3 wells. The ROP is
also showing an increasing trend and the circulation hours to BRT hours ratio is stable while we
are spending less hrs drilling the well. The drilling efficiency has clearly been improved.

5.3. Reporting structure and challenges

5.3.1. Level of detail

As the discussion on each hole section performance shows it is almost impossible to identify the
effect of Chen’s drilling optimization as defined in the introduction of this thesis. To do so one
needs very detailed information on what measures and actions that was taken. The level of detail
observed in the reports studied in this thesis was in general not high or consistent enough to
make a quantification of the effect. This creates an uncertainty element related to identifying or
explaining measures or performance target development. If there is a large level of detail in a
report this allow for identification of the root cause of discrepancies. One can confirm if the
discrepancy is due to a lower performance or a direct measure taken to mitigate a problem. If the
detail level is too low one will not be able to identify reasons for potential discrepancies and may
assume that no measures were taken. This may easily cause unfavorable or an incorrect picture
of the drilling optimization service or where the improvement potential for the operation actually
is situated. This has been the case in this study and as a result, the discussion has become more
general and moves towards evaluating trends and averages.

One point worth mentioning is that this may not be a bad approach, because it reflects the total or
real drilling efficiency seen from an economical point of view. For the oil company the
optimization doesn’t add real value before it actually reduced the time used to drill the well
thereby reducing their costs or losses.

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 5.3.2. Consistent measurements

Another challenge is the uncertainty related to the operational hours reported. As mentioned and
shown in the discussion, it may occur that the end time noted is reported after the tools have been
layed down on pipedeck instead of when they come out of the rotary table. This may create a
difference of up to several hours that produces an incorrect picture of the operation efficiency.

A similar issue is related to measuring the BRT – Below Rotary Table hours. Some starts
counting from when the bit is below/above rotary. Others start when the BHA is below/above.
Looking on one well this doesn’t have a large impact, but when comparing wells it may create
inconsistencies and again an incorrect impression of the situation. This creates an inconsistency
that can be seen as a different value recorded for operational and BRT hours. In some cases it
shows that the operational hours are larger than the BRT hours like when comparing the first 4
wells in graph 24 and 14. In other cases the operational hours are less than the BRT hours as
when comparing the first 4 wells in graph 25 and 18. It is hard to say which one is more correct
but in general the fluctuations are less for BRT hours than for operational hours and is why, as
also elaborated in chapter 4.6, BRT hours have been used to reflect total time usage.

A solution for both these problems would be to incorporate a note in the handling procedures
and specify that BRT is to be counted from bit or BHA is below rotary table. In addition a note
should be added in a comment if the tools are layed down on deck before the tool memory data is
downloaded.

5.3.3. Further work

The value of drilling optimization is not easy to study. This is because one never drill the same
well twice. Even if wells are very similar, like the wells in this study, the reference will be
debatable. Nevertheless, it would be very interesting to be able to say more confidently
something about the value of Drilling Optimization as per Chen’s definition [4]. In relation to
this it seems natural to involve statistics and probability.

The Value of Drilling Optimization Page 100

If one could assure consistent reporting of the correct information, one would after a certain
period of time have the possibility to use the information to generate a relation between the jobs
performed by the drilling optimization specialist, time spent drilling the section and the number
of drilling challenges and unfavorable events. The probability distribution of different
unfavorable events could be established based on the number of occurrences of the event in a
certain period of time or number of wells. These occurrences could further be separated into
categories based upon what drilling optimization services that were used. Simulations could then
be made on the probability of the event occurring. The value of the drilling optimization could
then be displayed in terms of the difference in the probability of occurrence for different time
consuming events, with and without drilling optimization specialist. Further, the probability for
an event to occur depending on what formation it was drilled through, what hole size etc. could
be made to broaden the analysis.

The reporting structure would need to be set up with an easy-to-use interface and allow for easy
exportation of the data into spreadsheets and simulation software. The “extra” work for the
personnel required to perform the reporting should be minimized to avoid the phenomenon
“reluctance to change”.

The Value of Drilling Optimization Page 101

 5.4. Performance Study Reflections

As the discussion on hole section performance reflects; it is very hard even to identify who or
what contributes to improved performance based on the information available for this study. So
far the study has shown that there have been improvements in the efficiency, but this is seen
mainly as total improvement, especially when considering the development between the batch 1
and batch 2. To further quantify the improvement related to specific services or actions then
becomes an impossible task, and the value of drilling optimization as: “a process that employs
downhole and surface sensors, computer software, Measurements While Drilling (MWD) and
experienced expert personnel – all dedicated to reduce drilling trouble time and increase drilling
efficiency” [4], is not possible to measure in this study. However, the total improvement in
drilling efficiency can be measured. This will at least give an estimate of the total value the
measures and actions in these wells have. The following discussion on The Value of the Average
well elaborates on this value estimation.

The Value of Drilling Optimization Page 102

 5.5. The Average well

The absolute value for the operator company’s point of view is generated first when they spend
less time finishing the complete drilling operation with the same or better quality than they
normally would do. The average well gathers the result from this study into one complete picture
and show the difference in performance between batch 1 and batch 2. Based on the different
average calculation methods (described in the introduction to the “the average well” result
section) two different average values for the BRT hours per ft was calculated for each
holesection, in each batch. Based on the lengths of each section of the average well and these
averages, the total Below Rotary Table hours used to drill the average well was calculated. Four
total BRT hours values was then generated, two from batch 1 and two from batch 2.

Table 10 shows that even with the least favorable combination 1.13 day’s was saved in BRT
hours on batch 2 compared to batch 1. The most reasonable combination gives 2.54 days saved
and the most favorable one gives 3.25 day’s saved. This is only on the drilling process, running
casing, cementing and completions is not included. With the assumed rig spread rate of 900 000
USD / day, this equals a minimum savings of ≈1 MM USD, most reasonable: ≈2.3 MM USD and
most favorable; ≈2.9 MM USD.

The least favorable value is calculated based on the average performance in each hole section
among all the wells in each batch. This is called “least favorable” because it includes all extreme
values. Some of these wells had large time additions due to WOW and surface equipment failing,
this caused the BRT hours in certain sections to be significantly larger in some of the wells.
These kind of events where present in both batches. They are not considered as something that
can be affected by optimization and does create an unrighteous picture in the discussion on
increased performance. Still even with these time elements included, batch 2 performance would
finish drilling the average well 1.13 day’s faster.

The most reasonable combination was considered to be when the extreme values were excluded.
When analyzing samples of data it is accepted praxis to remove extremities, so to be consistent
the 3 closest values was used in the calculations. As the results in table 9 shows, there 2.54 day’s
less time used using batch 2 performance.

The Value of Drilling Optimization Page 103

The most favorable combination was obtained when the averages calculated from batch 1 was
based on all 4 wells and batch 2 averages was calculated on the closest 3 values. This gave 3.25
day’s less time used using batch 2 performance. This cannot be considered as a valid comparison
as it include extremities in the first batch performance and not in the second batch facilitate a
larger difference between the batches that favor batch 2 performance.

Based on these results from the average well, we see that there is generally a better drilling
performance on the wells in the second batch and the most reasonable time saving is 2.54 days.
By multiplying this number with the rig spreadrate of 900 000 USD, savings of 2.3 MM USD is
generated.

The value of the total improvements that has taken place during drilling of these 2 batches can’t
directly be reflected by this number. This number is for the average well and will also serve as an
average estimate. However, as an example, let’s look back at Figure 6. The number of planned
wells in 2012 is approximately 110. After 2012 it is assumed to follow a ≈ 17% increase in the
number of wells needed to be drilled per year. A 17% increase results in an additional 18.7 wells.
Assuming the time distribution for the well construction process shown in Figure 16, drilling will
make up 25% of the total time usage. Table 8 shows that the time to drill the average well with
batch 2 performance is 346.9 hours. If all 110 wells were drilled with batch 2 performances -
2.54 days faster (table 9), this would equal a time saving of 6694.6 hours (110 wells x 2.54 days
x 24 hours). This is equivalent to the drilling time in 19.3 average (6694.6/346.9) wells. In terms
of well total construction time, where drilling time make up ≈ 25% of the total, the time savings
would be equivalent to 4.8 complete well constructions. So the time saved in only the drilling
phase of the well would allow almost 5 extra wells to be drilled in the same period of time. This
is of course only an estimate of what the time and cost improvement that can be achieved, but it
clearly reflects that optimization does add value both in terms of drilling and cost efficiency.

The Value of Drilling Optimization Page 104

 5.6. The Contract Set-ups effect on Drilling Performance

5.6.1. Standard Contracts Setup

So far this study has shown that there is an improved drilling efficiency between the two batches.
Tracing the improvement to a specific measure or action can’t be done. The total improvement
seen when using drilling optimization specialists, batch drilling and a performance focused
organization, is reflected as a 2.54 day savings in drilling the average well. The last thing that not
yet has been discussed is the contact set-up that these two batches was governed by, and if it
could be related to the increased performance.

As in all business, prior to any services is performed, the terms and conditions of the agreement
is settled in a contract. When the operator company has developed the scope of the work, the
drilling service providers receive an Invitation To Tender – ITT. The drilling service contractors
then receive the contract set-up and the job description. Each individual contactor then submits a
response to this ITT and the operator decides who is awarded the contact. This is a time
consuming process and I will not go into far details of how a “winner” is chosen, but such factors
as price, HSE record, technology, competency, track-record/experience, organization etc, all
come into play. However the general contract structure is of some interest when it comes to our
discussion of the value of total improvement and optimization.

There are 4 main revenue generation structures that the drilling service contracts are based upon:

5.6.2. The Flat Rate Rental

This is the “old” contact structure that descends from the early days of the oil industry. At this
time the majority of the competency’s was located in the operator companies and the contactors
only supplied the equipment, much like a rental-car company provides you with all you need but
you have to operate the car yourself. This contract provides a flat rate in the whole period the
drilling package is mobilized, independently of how long the tools is below rotary, drilling etc,
the total number of days the tools are occupied on the job ( the 16 days line in figure 27) is what
generates revenue.

The Value of Drilling Optimization Page 105

 5.6.3. Standby Rate & Operational Rate

The revenue is generated by a standby rate and an operational rate with some contacts also
offering a bonus if the job is performed faster than planned. Based on days or hours there will be
an agreed rate for standby and operation. This contacts are usually used for exploration well’s
where the scope of the job are more uncertain; meters to be drilled, length of section, etc is a lot
harder to predefine than for production wells.

5.6.4. Standby Rate & Meter Rate

Revenue is generated based on a standby rate and the amount of meters drilled, or in some cases
circulating hours. A bonus may be included as an additional $$$/ Meters drilled and based on the
drilling performance time vise. This kind of contacts is normally used when the scope is very
well predefined.

5.6.5. Pure Meter Rate - $$$/Meter

Here all the value for the drilling contractor is generated when drilling. These contacts are high
risk - high impact contracts and is not very common.

5.6.6. Contracts Risk Distribution

The contact setup described can be considered as the standard lay-out. Additional risk’s and
circumstances are always present and may be treated as own sections in the contract, usually
related to the job scope level of detail. However, the fight is always how much risk the service
providers is to hold, or are willing to take in regards to the success of the operation and thus
revenue generation.

When the drilling service provider bids on a contact he need to have a clear understanding on
what costs he is facing. Figure 26 illustrates a typical job and the related cost generation for a
drilling service provider. A large part of the fixed cost is equipment depreciation but also such as

The Value of Drilling Optimization Page 106

facilities, organization etc. The Variable cost only relates to cost that comes as a consequence of
the tools being operational, repair and maintenance, consumption of parts etc.

Figure 26 - Example of cost Generation for a drilling service contactor

Depending on the contract setup the revenue generation will be based on the activity or a
combination of activities related to the operation. This is usually set up such that different
amounts of revenue are generated in the different phases. As mentioned earlier the cost
generation and work starts long before the drilling operation, and during the operation there is
never 100% drilling time. So, the cost generation structure and the revenue generation structure
are not the same and this is where the risk element becomes an important factor. Who is to hold
the risk of operational success?

Figure 27 shows an example of the time consumption in the different phases of a drilling
operation.

Figure 27 - Example of the main revenue generating phases for a drilling service contactor

The Value of Drilling Optimization Page 107

If we go back to the different contact set-ups we can point out some interesting facts. On the flat
rental rate the service provider is making his revenue based on how long the drilling package is
in use. The level of success of the operation in the operators view does not influence the revenue;
actually the longer and more inefficient the drilling operation becomes the more revenue is
generated for the drilling service provider. This does not encourage increased performance, more
the opposite, and the operator is bearing all the risk related to operational success.

On the far other side we have the meter / ft rate set-up. If we look at the examples of the different
phases we see that the revenue now needs to be made on 5 day’s instead of 16 days, less than a
third of the time. If the price on this job was 30 000 USD the income would change from a daily
amount of 1875 USD, to5 days where the charge would be 6000 USD. In addition the service
provider also holds the risk related to unexpected events like WOW, rig equipment failure,
connection time etc. At the same time the fixed cost of the operation for the service provider is
still related to the time from mobilization to demobilization. This possesses an additional risk
because there is uncertainty to how large both the fixed and the variable cost of the job will be.
This uncertainty is usually managed by an addition in price to account for some unexpected
costs. But the competition in the market does not allow this amount to be nearly as large as it
naturally would be, so the risk related to revenue remains high. The upside here is that if the
section / well is drilled faster than the planned, the revenue is still the same. If this results in the
drilling package being demobilized earlier this serves as a bonus because the drilling package
now also can generate value on the saved days. In total this set-up requires the drilling service
provider to take a far higher risk, because they now need to make his money on only 5 days and
face the uncertainty related to how long the operation will take. If the topdrive fails and it takes
24 hrs to fix it, the extra fixed cost and variable costs is lost revenue. However, it also facilitates
the opportunity to increase revenue. This kind of incentives put a high value on performance and
encourages the service provider to perform at the absolutely top of their ability.

The Value of Drilling Optimization Page 108

 5.6.7. Incentive effects on Batch 1 and Batch 2 Performance

The 2 batches that have been drilled were on the same contract setup, but batch 1 was drilled
without any performance incentives. On Batch 2 on the other hand, it was incorporated
performance incentives affecting both the drilling service provider and the rig contractor.

It is interesting to see the difference in performance on the 2 batches in relation to this. Because
the most reasonable comparison shows that the second batch performance numbers results in
2.54 days less drilling time on the average well. This is excluded the time it takes to run and
cement the casing in place. Moving back to our discussion on the value of drilling optimization,
the results may actually imply that the performance will to a large extent be governed by the
contract structure. Except for the experiences gained from the first batch and the optimization
that was made based on this information, the same service was supplied in all the wells. The
difference between the two batches was the performance incentives and a higher performance is
recorded for the wells affected by these incentives. This suggests that there is a strong relation
between the contract set-up the service providers have to relate to and the performance they
deliver. One could argue that the improved drilling efficiency had to be a batch effect since all
the other services provided was the same, and that the optimization did not add any value. This
would however suggest that performance incentives are useless and do not take into account the
measures that were described by the coordinators in the chapter 3.3 - “Operational Planning and
Measures”: Focus on performance, all three parties (service provider, operator and rig contactor)
engaging in strong teamwork, clear communication and adoption of targets and experiences,
focus on standardizing the operations and at last: all three parties was “pulling” in the same
direction. In addition it would suggest that the improvements the drilling optimization specialist
did, as the majority of the points in chapter 3.3.3 mentions , was pointless and had no effect on
drilling efficiency. The discussion on hole section performance does however oppose this, and
we see repeatedly a significant improvement in batch 2 wells compared to batch 1. With all this
in mind, it does not seem very conclusive to suggest that also performance incentives do play a
large part when it comes to drilling performance.

The Value of Drilling Optimization Page 109

 6. Summary
It is clear that when seeking to identify the root causes of increased performance, we can’t
dismiss one effect or the other. Batch effect, performance incentives or drilling optimization, the
most reasonable is that the result is a combination. The experience gained from the first batch,
the improvements and advisory support from the drilling optimization specialist as well as the
incentives that made the organization “wake up”, all together added up to the improved
performance we see here.

This thesis has not achieved its objective to find The Value of drilling Optimization as defined
by Chen [4]. However, an estimated “average” value of the total optimization has been found. As
mentioned earlier this may not necessarily be a bad approach?

Drilling in terms of drilling for oil is when we drill a hole into the earth subsurface to extract
hydrocarbons. If you check the online dictionaries available you will find a diversity of
definition for “optimization”. To mention a few it may be defined as:

“To make as perfect or effective as possible”

“To take the full advantage of”

“To find the best compromise among several often conflicting requirements” [52]

The last one is taken from the field of engineering design so let’s go with that one. If we think
about what drilling optimization then actually should mean it should be; “the process of finding
the best way of drilling a well when considering the conflicting requirements”. The best way is
then further defined by the operator company’s who buy the services needed for the construction
process. Briefly this can be summarized as “As fast and cheap as possible in a safe way”. In
regards to this approach, can it be that defining drilling optimization as the processes that CHEN
describes is a too specific?

When you think about it, the rig crew and the drilling crew are just as important “to take the full
advantage of”. It doesn’t help if you can drill completely trouble free if you spend the saved time
on rig logistic problems or extra tripping time.

The Value of Drilling Optimization Page 110

It doesn’t matter if the drilling optimization specialist manages to increase the ROP with 100% if
it results in an additional 3 bottoms-up circulation before it’s safe to pull out of hole.

And it doesn’t matter how fast you drilled the 12 ¼” hole, if the casing collapses due to
insufficient well design, then you still need to drill an another one.

To optimize the drilling of a well everyone need to be working together, trust each other,
communicate and be consistently focused on performing at their best ability. Thus, the real value
of drilling optimization is seemingly not the root cause of a selected service or a few expert
personnel. The real value is related to the total approach, the total measures and the will to
perform.

According to the coordinators and personnel involved in drilling these wells the key factors
weren’t their superior services or software. They claim that very high focus on performance,
consistency, team effort and constant feedback was the key. It became a team effort between all
three parties to deliver the best possible performance and this created motivation and will to
perform and improve.

The results from this study confirm that this worked, but it was not until there was a reward in
place. The extra will and effort did not come for free. This is maybe the most relevant issue that
this study reveals.

The potential is there, but “The juice needs to be worth the squeeze” for all parties involved.
When it comes to the drilling service providers they are in a very tough market and in a constant
squeeze on price. This makes performance based bonuses very appealing to them. The rig
contractor isn’t in the same squeeze at the time, but more money on less time spent is good
business for any company. When it comes to the operator company, lower cost seems to be their
major incentive, but should this be their main focus?

If we take a glance back to the status on the NCS we find the following:

The production is declining

≈ 43% of our future production is to come from additional wells
The number of wells we are actually drilling is declining

The Value of Drilling Optimization Page 111

 The time we use from spud to well is online is increasing
The estimated increase in wells needed drilled per year is ≈17%

The inconsistency seems to be unavoidable to take notice of: The additional recovery is to come
from new wells, but we are drilling less than we should because rig rates are making them so
expensive. The majority of the future production is to come from the big existing fields that were
constructed and build with a life expectancy of 25-30 years. These fields have installations that
now need large investments and upgrades to keep going. These investments contribute to further
increase the installations breakeven point, meaning the minimum production it needs to cover its
expenses. If the production is not maintained the investments move the break-even point of the
installation up to an earlier date. This will cause the installation to become unprofitable earlier
which will cause a loss in the field’s tail production. This is loss of future revenue that is
accounted for in the market value of the operator companies today. An earlier break-even point
also affects the existing undeveloped marginal resources that depend on an installation to already
be in place to be profitable. These resources now become unprofitable, hence even more future
revenue is lost. This money is already accounted for and considered as “money in the bank” in an
economic point of view. Loosing these reserves cause degradation of the company’s market
value followed by a drop in the company’s stock price. The most important measure to battle this
development is to drill more wells and with today’s limited rig availability the only way to do
this, is to drill them faster.

So right now, the overall concern for an operator company on the NCS shouldn’t be that the
wells are getting more expensive, it should be the time squeeze they are in. The primary concern
should be to decrease well construction time, because if not the wells required are drilled fast
enough the economic loss will be unavoidable.

This is where the total approach to drilling optimization should come in. This approach includes
the optimization done by all parties involved, not just the drilling optimization specialist. This
approach, as shown by this study, is able to reduce the time consumption.

As the example in chapter 5.5 shows; the time savings earned by using a total improvement
approach to optimization, allows the operator / oil company to drill more wells in the same time.

The Value of Drilling Optimization Page 112

If the operator company is able to create this “total performance is what matters” mentality in the
service industry, the cost reduction will follow. Because as such processes become adopted and
its acceptance grows, the bar for “target performance” is set higher. In the beginning the service
providers collect bonuses for their increased performance, but they are also creating high
performance reference wells. With time, these wells make up the fundament that governs the
target performance. As the efficiency grows the target performance grows and so is also the case
for what is considered “above target performance”. As this development continues the well
construction time reduces and more and more drilling will occur in the same amount of time. The
reduced day’s on each well contributes to reduce both time and cost. The breakeven point is
pushed back into the future and the resources that generate future revenue for the company stays
in the bank.

As long as the operator recognize that “The juice needs to be worth the squeeze” and understand
the time squeeze they are in they can start a mentality change. Focus on reducing the total time,
then the cost reductions will follow.

The Value of Drilling Optimization Page 113

 7. Conclusion
The Value of Drilling optimization has been studied by using end-of-well-reports from 8 well’s
from the North Sea with the same fundamental technical, geotechnical and drilling optimization
service base. The wells was drilled in two batches, with batch 1 contacts (well #1-#4) not
containing performance incentives and batch 2 contracts (well # 5- #8) containing performance
incentives. The incentives affected both the drilling service provider and the rig contractor. The
value of Drilling Optimization has been studied, but it was not possible to quantify the effect of
drilling optimization as per Chen’s definition although a clear total improvement was seen in the
second batch. The source of the improvements could not be clearly identified but the study still
visualized valuable elements both regarding the development in total drilling efficiency and
displays key elements related to the process of optimizing the drilling efficiency:

- The optimization often gets camouflaged by other events affecting the performance
targets.
- The absence of an identifiable effect of drilling optimization in the performance targets
does not necessarily imply that they have not been present. An apparent negative
development in one target may have caused a positive in another.
- The well reports need to have a high(er) level of consistency and detail regarding the
performed actions and improvements to reduce the uncertainty and allow identification
of the different improvement measures.
- The wells in batch 2 had a higher total drilling efficiency compared to batch 1
- The most reasonable average, when considering drilling time, excluded running and
cementing of casing, showed that the time to drill the average well was 2.54 days faster
using average batch 2 performances.
- Contract Incentives affects performance - Increased performance does not come for free
and needs to be encouraged through contract incentives that impact all parties involved.

The Value of Drilling Optimization Page 114

 - The study further suggests that the real Value of Drilling Optimization is when all parties
involved are working together while using their best of knowledge and ability to reach
the required targets.
- To assure future production and success on the NCS, operator companies and oil
companies need to reduce well construction time, and a Total approach to Drilling
Optimization, as the processes and measures described in this thesis, may facilitate the
required measures for future success.

The Value of Drilling Optimization Page 115

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