DRILLING AND COMPLETION REPORT

Published: 2017-11-23 08:31:37
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Drilling and Completion Report Abstract

The objective of this report is to project the processes done in drilling a well, positioned to various properties and factors which are accorded as the major determinants of the type of work, time, and a clean process of drilling. This will include aspects of mud weight or density, hydrostatic pressure (in psi) and the drilling depth (in feet). These factors, and others, explain the daily events from the first to the last day of the drilling process explaining the decisions and activities that engineers practice. The cost of drilling is one other factor that is taken into consideration and adopts mutual interest between the client and the service provider. 

Projections of cost and real figures determined by the various aspects of cost will be positioned on the tools, service and amount of labor that is required by the engineer. This will be layered on the type of service, tools, wells that are being drilled and the mud type. Projections by the engineer, will also give a foundation of the construction requirements regarding the well, which also includes safety measures that are supposed to be put in place. 

The duration for this specific project to be successful, in our report, came out to be 25 days. Not only the duration, but also the position of the project construction and every other aspect are quite important when it comes to reading the DDR (Daily Drilling Report) so our report can be completed effectively and have all procedures on record.

Drilling and Completion Report Introduction

This study seeks to present a drilling report for the horizontal oil producer. The information presented was acquired from the records of the daily drilling report (DDR), the time breakdown chart and relevant literature sources. Moreover, the study seeks to give details regarding the horizontal wells project, the completion design of the wells, the time spent on both productive and non-productive activities and the estimated cost that suits the project. The records reveal that out of the 571 hours that were allocated for the project, 96 percent was utilized on productive activities with drilling as the main activity. Only 3 per cent of time was spent on activities that did not contribute to the progress of the project. Time wasted was attributed to the delayed delivery of items and equipment. The project was completed in a span of 25 days, just as anticipated. Records also suggest that 2,040,350 dollars were spent on drilling exercise. The daily mud cost was 21, 400.25 dollars and the cumulative mud cost was 57,642.20 dollars

Contingency cost estimation should be applicable for the project as it addresses the unforeseen risks, plans for future activities, helps the team leader to evaluate the team member and to allocate the available resources effectively. This type of cost estimation includes the unknown risks in the budget estimates; hence it can prevent or provide the capacity to deal with unpredictable hazards. The management can also hire the right personnel to evaluate the situation and establish realistic risks to avoid the challenge of stretching resources to unreasonable levels. Moreover, this type of cost enables better risks management techniques to provide changes in drilling rates. Not only that but also the need to extend the project and fix any errors as the team gets prepared financially and pursue help when needed from human resource.

Daily Drilling Report (DDR)

The daily drilling report is a tool that has been used over the years by many companies in the oil and gas industry, in which it was evolved from simple reporting applications into more complex system to meet the demands of worldwide industry. Many oil companies have different structures of reporting the daily drilling report, in terms of their applications, format and codes to report data. In order to create a consistent and effective system to evaluate performance, a time breakdown work has to be applied from the beginning to the end of any well activities to ensure that it meets all reporting requirements within any company and provide sufficient information for performance analysis and ease of extraction [x]. According to the daily drilling report that was assigned for this project, below are data that was taken from the report.

•Well name: MN-008

•Location: T-49.04/52.85

•Drilling time: 13 Days (183.5hr) 

•Project time: 25 day

•Objective of the well: re-entry well (horizontal oil producer)

•Target: drill the well from 2699 up to 7916 ft

•Well recap

•Depth

•Number of Days 

•Type of Mud (WBM, OBM, synthetic based mud)

•Cost of drilling the well

•Mud recap

•Fundamental mud properties (Density of the mud, viscosity of mud, type of mud, rheology and other parameters such as PH) 

•Cost of mud every day

•Bit recap

•Size of the bit 

•Type of Bit

•Deviation survey

•Production and non-production time

Information not included in the DDR:

•Daily rig rate (onshore: 30,000 to 40,000 USD/day)

Note: the information about daily rig rate was taken from outside source, which is ADCO OPCO’s in UAE.

Authorization of Expenditure 

AFE is the final step in well planning. It is a planning process used during for a well about to be drilled. It includes an estimation of costs to be experienced plus contingency plan costs. The objective of adding contingency plan costs is to avoid any delay or cancellation of the proposed drilling project or subsequent operation.

The team suggest contingency as the preferred type of cost estimate. This cost could be appropriate for the horizontal well oil project as it addresses the unforeseen risks. This kind of cost plans for future activities helps the team leader to evaluate the team member and to allocate the available resources to the right use. This approach, therefore, includes the uncertain risks in the budget estimates. Hence it can prevent risks that are likely to prevent task fulfillment. The management can also hire the right personnel to evaluate the situation and establish realistic risks to avoid the challenge of stretching resources to impractical hazards. Moreover, this type of cost enables better risks management techniques to cater for changes in drilling rates. If the company is financially stable, this type budget is more likely to suit it, as it will not have to strain its resources on obligatory expenses in readiness for the unforeseen future. The project has a time breakdown structure and hence the need to extend the project duration might not be necessary, hence dismissing the need for a time dependent budget. Most of the time has also be put into productive use, which implies that the challenge of time wasting is prevented. 

The horizontal wells include multiple holes, which makes the process expensive than vertical or conventional wells. Horizontal wells require various types of cost estimates, this because the future is unpredictable and unforeseen events may cause a rise in the expected expenditure. The company must account for overrun cost and the amount involved. The cost estimates include Base cost, which is estimated cost with no risk involved. Moreover, (the next is) budget cost, which involves the base cost and the contingency costs. Furthermore, maximum cost that is the upper limit of the cost estimates. Finally, supplementary cost, which includes additional cost estimates. Cost estimates are categorized into five types as following:

•Fixed cost

•Time dependent cost 

•Depth dependent cost 

•Overhead cost 

•Contingency cost 

 The first is fixed cost, this cost do not change along with duration or depth, for instance, the survey of the rig location as well as mobilization of the rig to the well site. The second is time dependent cost, this cost is prone to changes depending on the good duration, for instance, if the drilling project last for a longer duration the expenditure on salaries and consultations will increase, the drilling rates might change, and the cost of transport might change as well. Moreover, depth dependent costs. These are values that change following the decision to increase the depth of the well. Examples of these costs include drilling fluid cost, drilling bits, accessories and casting cost. The fourth type of cost estimate is overhead cost, these costs are not incurred in the website, they can be shared among several options, and each value is allocated to each well this toe of cost tends to depend on time. An example of this type cost is logistic bases, stationary, secretaries, and supply depots so forth. The last type is contingency cost this cost is set to cater for any projected risk or problem. The contingency cost can be obtained by multiplying the probability of risk occurrence and the cost of the problem (Samuel O. Osisanya, 2016). 

sheldon

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