Cost Control

Dr.Robello Samuel
Well Planning…

• Primary consideration in the planning of drilling well is

economics. So cost analysis is very much required for
the completion of a well. Economic feasibility is
established from cost estimation.

• AFE (Authorization for Expenditure) is an effective

method of accounting the expenditures involved in
drilling and completing the well. This gives the detailed
cost estimate for a well.

• Optimized drilling program to achieve cost control

Well Planning…

• Area Geology
• Formation pore pressure and fracture prediction
• Logging program
• Casing program
• Mud program
• Cementing program
• Casing running and handling
• Wellcontrol equipment and procedure
• Bottom-hole assemblies
• Hydraulics
• Drillbit program
• Drilling Rig
Cost Estimate
Drilling Time curve…

A drilling time curve should be included in the program

planning and compared daily with the actual progress.
When the differences occur between the predicted and
actual corrective measures should be taken.

actual
Depth in ft
planned

Days/$
Onshore Data - Example
Onshore Data - Example
Time-Depth Graph
Drill Cost Analysis…
Synthesis of cost
1. Drill bit cost
2. Rig cost
3. Cost of rotating time
4. Cost of connection time
5. Cost of trip time

Cost to drill through a formation interval may be

expressed as follows:
dollars exp ended
C 
depth drilled
Well Cost Estimation…
• Overall well cost excluding the production may be
expressed as follows:

C w do  C d  C o
is the cost of drilling a foot of hole that includes
Cd bit cost and rig rental cost
is related to all other cost to make the hole such as
Co casings, muds, drillstring, cementing, logging..etc
Drill Cost Analysis…
Cost per foot equation

Bit  Tools  Mud  Td  Tt  Tc C r  C s  C t 

Cd 
F  Td
Cd – cost per foot $/ft
Bit – cost of bit $
Tools – cost of tools or repairs of tools, $
Mud – cost of mud to drill, $
Td – drill time, hr
Tt – time to pull and run bit, hr
Tc – time chargeable to non-drilling task, hr
Cr – rig rate, $/hr
Cs – support rate, $/hr
Ct – tool rental rate, $/hr
F – rate of drilling, ft/hr
Real-Time Drill Cost Analysis (Discrete)…
Cbi  Cr Tdi  Tti  Tci 
Cdi 
Di

Cdi Drilling cost, $/ft for bit run, i

Cbi Bit not i, cost $
Tdi Drilling time, hrs for bit i
Tti Trip time, hrs for bit i
Cr Rig cost, $/hr

Tci Connection time, hrs for bit i

Di Distance drilled, ft
Well Cost Estimation…
• Trip time required to change a bit and resume drilling
operations in hours is expressed as follows:

 ts 
Tti  2  Di
 Ls 
ts Average time required to handle one stand of
drillstring, hrs

Ls Average length of one stand of drillstring, ft

Di Depth where trip was made, ft

Drill Cost Analysis…
Example Problem:
A recommended bit program is being prepared for a new well using bit
performance records from nearby wells. Drilling performance records for
three bits are shown for a thick limestone formation at 9,000 ft. Determine
which bit gives the lowest drilling cost if the operating cost of the rig is
$400/hr, the trip time is 7 hours, and connection time is 1 minute per
connection. Assume that each of the bit was operated at near the
minimum cost per foot attainable for that bit.
Mean
Bit Rotating Connection Penetration
Cost Time Time Rate
Bit ($) (hours) (hours) (ft/hr)

A 800 14.8 0.1 13.8

B 4,900 57.7 0.4 12.6
C 4,500 95.8 0.5 10.2
Drill Cost Analysis…
The cost per foot drilled for each bit type can be computed
using Eq. 1.16. For Bit A, the cost per foot is

8 0 0  4 0 0 (1 4 . 8  0 . 1  7 )
Cf   $ 4 6 . 8 1 /ft.
1 3 .8  1 4 .8
Similarly for bit B

4 ,9 0 0  4 0 0 ( 5 7 .7  0 .4  7 )
Cf   $ 4 2 . 5 6 /ft.
1 2 .6  5 7 .7
Finally, for bit C

4 ,5 0 0  4 0 0 ( 9 5 . 8  0 . 5  7 )
Cf   $ 4 6 . 8 9 /ft.
1 0 .2  9 5 .8
Lowest drilling cost was obtained using bit B
Drilling Cost Prediction…
Drilling rate versus depth relationship
dD
 KeD
dt
Drilling time td required to drill a well is given by integrating the
above equation
D
K  dt   e dD D
td

0
0

td  e  1
1 D
K
K , are constants and must be determined from
past field data
 Prediction of Drilling Time
When major unconformities are not present, the
penetration rate usually decreases exponentially with
depth. Under this conditions:
where
D = depth (ft) K = constant a2 = constant t = time (hrs)

• Integrating:
• Drilling cost depends primarily on well location and depth.
• Location: cost of preparing the well site, moving the rig and
the daily operating cost of the drilling operations.
• rig rental,
• crew boat rental, helicopter rental,
• well monitoring services,
• crew housing,drilling fluid treatment, rig supervision, etc.
• Depth: ROP, trip time and casing, cement, drilling fluid to
complete the well.
• From studies it was found that drilling cost tend to increase
exponentially with depth: where
C = Cost of well ($)
a = constant depending primarily on location ($)
b = constant depending primarily on location (ft-1)
D = depth of well (ft)
 Drilling Cost Prediction

646 dry wells drilled in South Louisiana

565 wells completed
 Example for Prediction
of Drilling Rate
• The bit records for a
well are shown in a
table.
• Make plots for depth
vs. penetration rate
and depth vs. rotating
time for this area using
semi-log paper.
 Example for Prediction
of Drilling Rate
Solution
: • The constants K and a2 can be
determined using the plot of depth vs.
penetration rate. The value of 2.303a2 is
2.303 divided by the change in depth per
log cycle:

• The value of K is equal to ROP

at zero depth (K = 280)

• Substituting these values lead to an

equation for the drilling time for
above example. Note, that the line
gives good agreement with the bit
record data from the table over the
entire depth range.
 Prediction of Tripping Time
• A second major component of the time required to drill a well is the tripping
time. It depends on the depth, the rig being used, and the drilling practices.
The tripping time to change a bit can be approximated:
With
tt = trip time
ts,aver = average time to handle one stand of string
ls,aver = average length of one stand of string
D = depth
• The time required per trip increases linearly with depth. In addition the
footage drilled with one bit tends to decrease with depth, causing more trips
as the well is deeper. The footage drilled between trips can be estimated by
knowing the approximate bit life. Integrating before discussed equation
between Di, the depth of the last trip, and D, the depth of the next trip gives
the following:
With
=> tb = bit rotating
time
• Above equations can be used to calculate the total trip time required to drill
to a given depth using estimated values for ts,aver , ls,aver , a2, and K
 Example Cumulative Trip Time vs. Depth
• Construct a depth versus trip time plot valid for the field discussed earlier. The rig
should be able to handle 90 ft stands of DP´s in an average time of 2.7 minutes.
The average bit life is 17 hours for the entire depth interval. The casings are
planned to be set at 500, 2000 and 7500 ft depth. The planned well depth is 9150
ft.
Solution:
• Time required per round trip at any depth:
• The depth of each trip can be obtained from the casing program and from
equation:

• Complet
e the
table:
 Drilling Time per 1000 ft
• The number of bits required per 1000 ft at a given depth can be expressed
as:

With
N´b = number of bits per 1000 ft
t´d = drilling time per 1000 ft (hrs)
t´b = average bit life for the interval (hrs)

• The drilling time required to drill from D to (D + 1000 ft) can be obtained
by:

• Or
simplified:
Example Drilling and Trip Time per 1000 ft
• Compute the drilling time and trip time requirements for “Cumulative
Trip Time vs. Depth” between 8000 and 9000 ft!

Solution:
• Calculate the average trip time
• Calculate the drilling time
• Calculate the number of bits required
• Multiply the number of bits with the average trip time
 Drilling Cost Prediction
• In addition to predict the time requirements for drilling and tripping operations,
time requirements for other planned operations must be estimated. This is:
– Wellsite preparation
– Rig movement and rig up
– Formation evaluation, testing, and borehole surveys
– Casing and cementing
– Well completion
– Drilling problems

Example time analysis for an

offshore Louisiana well drilled
to 10000 ft:
 Evaluation of Bit Performance
(Cumulative) Cost per Foot, CF, CCF
• To evaluate the drilling performance of a bit the well known cost per foot equation
needs to be adjusted to the drilling time only (non-rotating time has no influence):

With
Cf = drilling costs per unit length ($/ft)
Cb= cost of a bit ($)
Cr = fixed operating cost of rig per unit of time ($/hr)
D = depth drilled with bit (ft)
tb = rotating time (hrs)
tc = non-rotating time (hrs)
tt = trip time (hrs)
 Evaluation of Bit Performance
(Cumulative) Cost per Foot, CF, CCF
• The criterion for selection of bits on CF basis is to choose the bit that consistently
produces the lowest value of Cf in a given formation or hole section.
• The performance of a bit in the different parts of a hole section can be determined,
while the bit is drilling, by a cumulative cost per foot method (CCF). In this method
above equation is used to calculate the cost/ft for e.g. every 10 ft by assuming a
reasonable figure for round trip time. It is recommended to pull the current bit when
CCF starts to increase.
 Different Terms

Flat Time:
normally includes time for all operations essential to well construction,
such as tripping, running casing, and cementing (known as “flat time”),
as well as interrupt and weather time and time spent on sidetracking.
Time spent coring, logging, or other evaluation techniques are
excluded.
It is the time that the drill depth is not increased
 Different Terms
• Technical Limit
• Productive time
• Non –Productive time
• Invisible lost time
• Flat Time
• Drilling Time breakdown
– Productive time - 50%
– Non-productive time – 25%
– ILT – 25%
 Different Terms

Technical Limit (TL) –

an estimate of the fastest duration a particular well with a particular drilling
spread could be drilled if all operations progress flawlessly; made by a team of
experts with experience drilling similar wells the same way and with reference to
historic performance data.

Productive Time (PT) –

the reported time taken to execute activities that are planned or necessary to
drill a well.

Non Productive Time (NPT) –

the reported time spent on activities that were unplanned and unnecessary in
drilling the same well; includes lost time from problems and down time from
equipment failure

Invisible Lost Time (ILT) –

time lost due to inefficiency while drilling a well that is typically reported as PT
and therefore remains “invisible” in the record.
 Data Volume Increase–
Invisible Lost Time (ILT)
NONPT
What is invisible lost time?
Downtime NPT
• ILT = (Potential – Current) NPT
performance
– Progress made but not as ILT ILT
efficient as it should be Dat
• Non-productive time (NPT) = a
zero progress Uptime

Tech
Limit
Tech
Limit

Traditional Method
Run Cycle Speed

The performance of a bit can also be determined by using run-cycle speed

(RCS).

The RCS is defined as:

Where

D is the total footage determined by the particular bit.

Optimization on RCS…