Semester Assignment Drilling, Reservoir & Well Engineering Study

Drilling, Reservoir & Well Engineering

Study

Authors: Supervisor:

Nikolaos G. Felessakis (8653) Dr E. Dimou

Date: 24/12/2013

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Table of Contents

QUESTIONS 3

QUESTION 1: 3

WHAT TYPE OF DRILLING RIG YOU ARE GOING TO SELECT AND WHY? 3

WHAT IS THE PROCESS FOR DRILLING (BRIEF DESCRIPTION) FOR A DRY HOLE COMPLETION? 3

WHAT ARE THE MAIN WELL CONTROLS FOR PREVENTING ACCIDENTS FROM ABNORMAL WELL CONDITIONS AND

HOW THEY WORK? 5

YOU NEED TO SUBMIT A DRILLING PLAN. WHAT FACTORS YOU NEED TO CONSIDER IN ORDER TO PROVIDE A SAFE

DRILLING ACTIVITY TO THE RIGHT PLACE? 6

QUESTION 2: 9

A. THE COSTS SUBMITTED FROM THE DRILLING CONTRACTOR ARE SUFFICIENT TO ENABLE THE COMPANY TO APPLY

FOR THE THREE LICENSES 9

B. IN THE CASE THAT THE COST IS NEAR TO THE MARKET CAP VALUE OR EXCEED IT, PLEASE PROPOSE WAYS THAT

THE COST COULD BE REDUCED CONSIDERING DATA GIVEN IN KELLS ENVIRONMENTAL STATEMENT REPORT. 10

C. DEFINE THE MAIN PARAMETERS THAT MADE THE COST REDUCED AND EXPLAIN YOUR APPROACH. 11

D. BASED ON YOUR PROPOSED APPROACH, IS IT POSSIBLE FOR THE COMPANY TO APPLY FOR THE LICENSING

ROUND BASED ON THE NEW DATA?(THE DATA PROVIDED FOR YOUR CALCULATIONS ARE THE QUOTES FROM THE

DRILLING COMPANY SHOWN IN APPENDIX1.) 13

QUESTION 3 13

AT WHAT POINT IN TIME WOULD YOU HAVE SUGGESTED THAT THE BIT BE PULLED AND WHY? 13

QUESTION 4 16

4A. PLOT THE FOLLOWING PORE PRESSURE/DEPTH INFORMATION ON A PRESSURE - DEPTH DIAGRAM (PRESSURE X

AXIS, DEPTH AT Y AXIS) 16

4B. CALCULATE THE PORE PRESSURE GRADIENTS IN THE FORMATIONS FROM SURFACE TO: 16

4D. IF THE MUD WEIGHT USED TO DRILL DOWN TO 8000FT WERE USED TO DRILL INTO THE FORMATION PRESSURES

AT 8500FT WHAT WOULD BE THE OVER/UNDERBALANCE ON THE FORMATION PORE PRESSURE AT THIS DEPTH? 18

Drilling, Reservoir and Well Engineering

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Questions

Question 1:

You are assigned to describe the process for selecting a drilling unit for drilling a well

in a water depth of 100m.

What type of drilling rig you are going to select and why?

The only information for this drilling well is the water depth at 100m with this

parameter the economic options is the Jack-up rig that is able to operate until150m

depth and an average rent cost per day is close to 90.000$1

What is the process for drilling (brief description) for a dry hole

completion?

The last step of hydrocarbons exploration is to drill in the point that we expect

hydrocarbons existence. A Part of this procedure includes the drilling process and

the first steps staring with the specific part of the well casing. The casing is the main

part of the well construction, and is needed to2 :

• Maintain borehole stability,

• Prevent contamination of water sands,

• Isolate water from producing formations,

• Control well pressures during drilling, production, and work over operations,

• To provides space for the farther installations.

The casing has six basic levels :

• Conductor Casing

Is the first string set below the structural casing. Under the surface hole is

cemented in place along its full length to ground surface. A diverter or

blowout prevention (BOP) is installed in this point. The main purposes are to

prevent all the unconsolidated surface sediments and to isolate shallow

groundwater from the contents of the hole.

• Surface Casing

1 http://www.rigzone.com/data/dayrates/ 2 http://petrowiki.spe.org/Casing_and_tubing

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The main purpose of surface casing is for well control, and to provide blowout

protection, isolate water sands, and prevent lost circulation. It also provides

the support point to drill into high-pressure transition zones.

• Intermediate Casing

The purpose of intermediate casing is to isolate any abnormally-pressured

subsurface rock formations from causing instability. If the exploratory drilling at

this point has discovered profitable quantities of hydrocarbons, a wellhead3

valve assembly will be installed. If the well does not contain commercial

quantities of hydrocarbon the site is decommissioned to a safe and stable

condition and restored to its original state.

• Production Casing

The primary purpose of production casing is to isolate the zone containing

natural gas from other subsurface formations. It’s also used to pump hydraulic

fracturing fluids into the producing formation without contacting other

formations along the wellbore.

• Liner

Liners are used instead of full casing strings to:

o Reduce the cost

o Improve hydraulic performance when drilling deeper and

o Allow the use of larger tubing above the liner top

Liners can be either an intermediate or a production string.

In this case the well is considered as a “dry hole”. As a dry hole well probably does

not contain commercial quantities of Oil or Gas to move for production, or with the

existence technology to be unable the exploitation. The next step is to plugged and

abandoned the well.

The propose of plugged4 is to:

o Prevent the mixing of fluids from different geologic levels,

o Prevent the flow of fluids from pressurized zone to the surface, and

o Maintain pressure integrity in the individual subsurface intervals.

3 http://www.dmitre.sa.gov.au/invest_in_south_australia/major_developments_directory/case_studies/santos 4 http://www.dec.ny.gov/docs/materials_minerals_pdf/dgeisv1ch11.pdf


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All the above steps are following the Plugging regulations

What are the main well controls for preventing accidents from abnormal

well conditions and how they work?

Well control is about keeping formation fluids in the formation and drilling fluids out

of the formation any undesirable flow of formation fluids into the wellbore is called

the kick. The kick has to controlled properly otherwise it can grow rapidly and cause

a blowout. A blowout is an uncontrolled flow of formation fluids into the wellbore,

with catastrophic results.

To keep the well control there are:

o Primary control system,

o Secondary control system.

The primary control is related with the drilling mud and the pressure. The main

purpose is hydrostatic pressure to balance formation pressure. The mechanism to

keep the balanced drilling is the mud characteristics as the :

o Weight or Density,

o Viscosity,

o pH.

When the formation pressure is bigger than the hydrostatic pressure then the

reservoir fluids entering in the wellbore. This situation is been reverse by increasing

the weight of the mud, and that can be achieved by adding barite or calcium

carbonate. If the Hydrostatic pressure was bigger than formation pressure the drilling

fluids being lost to the formation. To restore the balance between FP and HP it can

be achieved by decreasing the weight of the mud. The prices of Viscosity can be

controlled by adding behtonite. The pH has to be alkaline close to 9pH if its less it

can be increased by adding caustic soda.

The secondary control is been provided from a valve system that stop the fluid flow

from the well and gives time to recover the stable well conditions. This system

include the:

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o Blowout Preventer Stack (BOP)and is installed on the top of the casing,

o Rig choke on the platform.

The blowout preventer also contains a series of annular preventers, and Ram’s

stacked on top of one another. For this reason the blowup preventer is sometimes

called a BOP stack the annual preventer’s and rams and the BOP stack all have

one thing in common, when closed they sealed off the space inside the BOP, in

order to isolate the well below, or to contain pressure inside the well. An Annular

preventer is a large rubber element shaped like a doughnut when activated the

annular preventer expense inward, if the space is empty the annular preventer seals

the open hold entirely, if there is drill pipe in the space the annular preventer seals

around the pipe. The blowout preventer also contains variable board rams also

called pipe rams. Pipe rams are made of metal and elastomer’s, when activated

the two sides of the pipe ram slide into place around the drill pipe, sealing off the

drill and the wellbore space (also known as annual space), pipe rams generally

have higher pressure ratings than annular preventers. The blind shear ram consist of

two middle blocks with blades on the inside edges, when activated the two have

slight together to seal off the space inside the BOP shutting in the well entirely. In an

emergency the relationship through drill pipe that is inside the BOP though they

cannot share through the thick tool joints were sections of drill pipe or screwed

together. All the elements of the BOP stacker designed to shut in well and contain

pressure inside the wellbore.

Choke system keeping the pressure on bottom whole constant. It’s a system with

several safety valves. By adjusting the openings of the choke making the opener

larger or smaller. The smaller the opening the less flow, the larger the opening the

more flow. The less flow creates more backpressure on the well and vice versa.

You need to submit a drilling plan. What factors you need to consider in

order to provide a safe drilling activity to the right place?

The drilling plan is formulated from many variables, for this reason its mandatory to

follow a basic's principals aspects as the safety, minimum cost, and operability. Its


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planning parameter giving as the important details to forward in the next one as

been described in the next Hierarchy table

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Drilling Depth

Location

The location ditermine the specific regulations tha has to follow

Well Casing

Total casing depth

Fracture pressure

Type of Drilling Rig

Cement Storage Unti BOP

Evry drilling has unique

specifications

Power Generatores Pumps

Formation Presures

The formation pressure it will deermine the type and the

cuantites of chemical tha are nesseserey to keep the balance bitween the Formation pressure

and the Mud pressure

Environmental Assesment

Drilling Procces

Production Facillity Rig Selection

Weather Conditions


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Question 2:

A company wants to become an operator in UKCS and they want to apply for

three licenses. The conditions for the licenses are that the operator – as a company-

has to have a market cap that it is sufficient to cover the expenses of the proposed

drilling program. The government sets up the following criteria for the financial

eligibility:

Market cap should be sufficient to cover:

a. 100% of the most expensive well,

b. 50% of the cost of the other wells.

Due to the fact that the company wants to apply for three licenses, which means to

drill 3 wells, they contacted a drilling contractor to estimate the cost for a dry hole

drilling. The drilling contractors submitted the figures shown to Appendix to the

company.

The company had to review the figures and make comments on them since the

Market Cap is 25 MM pounds.

Please determine if:

a. The costs submitted from the drilling contractor are sufficient to

enable the company to apply for the three licenses

The company Market Cap Wells

Market

cap per

Well to

cover

Total Dry hole Cost

The licenses

cost by

following the

government

criteria

£ 25,000,000

A 100% £27,450,000 £27,450,000

B 50% £10,000,000 £5,000,000

C 50% £11,100,000 £5,550,000

Total Dry Hole Cost for the three Licenses £38,000,000

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As we can see from the table, the company market cap is £13,000,000 £ less from

the costs submitted from the drilling contractor. With this cost the company is not

able to apply for the Licenses.

b. In the case that the cost is near to the market cap value or exceed it,

please propose ways that the cost could be reduced considering data

given in Kells environmental statement report.

The common characteristics of this case with Kells is that the wells are exist in the

same area. This area has a specific depth of 91.44m that give as the option to

change the Rig from Semi – Submersible to Jack up that has significant economical

day rate and to ask the driller to provide as an other offer with Jack up rig.

Also the budgetary cost estimates are calculated with estimations and not a

turnkey contract. So we can assume that the drilling days per drilling depth are also

estimations. Compering the drilling data of Contractor for each well, with the drilling

data of Kells that is a field close to our location. That give as the benefit of the similar

geological structure. As we can see from the next table at kells Well deeper drill

hole has been done in less days. So we can ask from the contractor a better

estimation.

Hole

section 36' 26' 17' 12' 8'

Wells

Data

D*

*

Depth

(ft)

D*

*

Depth

(ft)

D*

*

Depth

(ft)

D*

*

Depth

(ft)

D*

*

Depth

(ft)

Kells 2.5 784 9.5 3,317 9 7,992 10 13,917 3 15,055

A well 3 620 8.75 3,000 11.8 8,500 21.5 13,200 4.5 13,800

B well 3.25 620 7.25 2500 3 6080

C well 3.25 620 7.25 2500 5.5 8280

Table 1 Wells comparison Days and Depth

Specially we can see on the next diagram between Kells well and the A well from

contractor That in kells from 8000 ft to 13.900 ft it needs close to 4 days and our

contractor needs 16 days for less distance.


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Table 2 Comparison day rate per drilling depth between Kells Well with A well from Contractor

c. Define the main parameters that made the cost reduced and explain

your approach.

As I mention above the main parameters are :

o To change the Rig type, and

o The Contract type

The Semi Submersible day rate is 200.000 £ the average day rate cost for the

available5 Jack up’s is close to 59.455 £. The new total dry hole drilling cost per well is

calculated in the next Table 3

Rig Rate /day Wells Total Days Jack up Cost New

Budgetary Rate

£59,455 A 49.5 £2,943,023 £15,943,023

£59,455 B 13.6 £808,588 £4,438,588

£59,455 C 16.0 £951,280 £5,251,280

Table 3 Total Jack Up cost per Well

With the above Drilling cost the Licenses criteria are demonstrates according the

next Table 4.

5 http://www.rigzone.com/data/dayrates/

784

3,317

7,992

13,917

15,055

620

3,000

8,500

13,200 13,800

-‐

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0 2 4 6 8 10 12 14 16 18

"Kells Data"

"Contractor Data A well"

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Market Cap Wells

Market cap

per Well to

cover

Total Dry hole Cost

The licenses cost

by following the

government

criteria

£ 25,000,000

A 100% £15,943,023 £15,943,023

B 50% £4,438,588 £2,219,294

C 50% £5,251,280 £2,625,640

Total Dry Hole Cost for the three Licenses £20,787,957

Table 4 Total Dry Hole Cost for the three Licenses

With the Jack Up rig the TD Hole Cost for the three Licenses is £20,787,957 that is

£9,037,044 less than the previous TD Hole Cost with Semi Sub. With this new TD Hole

Cost The Company is able to cover the criteria for financial eligibility.

Additionally about the drilling depth and the days as we can see from the table 1

Well Depth (ft) Total Days

Kells 15055 33.5

A well 13800 49.5

B well 6080 13.5

C well 8280 16

We can ask to reduce the days based on kells data and an approach of this can

be :

o For the A Well to be reduced about 18 days,

o for the B Well 4.5 days and

o for the C well 3.5

That means a total reduce of 26 days

In order to convince the contractor to accept all the above cost reduce we can

propose an Incentive contract and gain from the historical data cost from the Kells

and The contractor will be entirely in charge of drilling for the well’s. By that we

avoid the bud behavior to make the hole quickly. Also from the cost savings that

has been achieved we can set bonus for better performance or in the worst

scenario to be split between company and contractor


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c. Based on your proposed approach, is it possible for the company

to apply for the licensing round based on the new data?

(The data provided for your calculations are the quotes from the drilling company shown in

Appendix1.)

With the above proposes the company is able to apply for the license round

because it covers the financial criteria.

Additionally can further reduce the cost close to £1,545,830 more by reducing the

total drilling days. An approximation of total saving can achieved to £10,582,874

Question 3

Whilst drilling a 12 1/4" hole section of the new well the following drilling data is being

recorded and provided to the company man.

At what point in time would you have suggested that the bit be pulled

and why?

Assume an average trip time of 8h, a rig rate of £400/h and the bit type

selected above had been run in hole. Decision based on the cost of the bit.

Data

Rig Rate ($) 400

Bit Cost ($) 1600

Trip Time (h) 8

The total cost of run function is :

o Bit cost + Rig Rate x (trip time +time on bottom)

The cost per foot function is :

o Total cost of run / footage drilled

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Drilling time (h) Footage Drilled (ft) Total Cost of Run Cost per foot ($/ft)

1 34 5200 153

2 62 5600 90

3 86 6000 70

4 110 6400 58

5 126 6800 54

6 154 7200 47

7 180 7600 42

8 210 8000 38

9 216 8400 39

10 226 8800 39

11 234 9200 39

12 240 9600 40

Consider all the available data, and specially the bit performance over the time I

will suggest the company man to pull the bit out at 8 hours. The decision taken

based on two parameters :

o The cost per foot

o The drilled time per foot

0 20 40 60 80

100 120 140 160 180

0 2 4 6 8 10 12 14

Bit run Cost


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As we can see in the table and also in the diagram after the 8h its no longer

economical to drill. That because the drilled time per foot decreases and the cost

per foot begin to increases, so it will be economical to pull the bit.

It should be noted that the bit had not entered in a new formation type, since this

may affect on the bit performance.

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Question 4

The following pore pressure information has been supplied for the well you are

about to drill.

4a. Plot the following pore pressure/depth information on a Pressure -

depth diagram (pressure x axis, depth at y axis)

Pore Pressure (psi) Depth Below Drill floor (ft)

0 0

465 1000

2325 5000

3720 8000

6800 8500

6850 9000

6900 9500

4b. Calculate the pore pressure gradients in the formations from surface

to:

· 8000ft · 8500ft · 9500ft

0 1000

5000

8000 8500

9000 9500

0 465 2325 3720 6800 6850 6900

Pressure / Depth diagram (psi/ft)


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The gradients pore pressure can be calculated from the function :

o Patm + γ = Phyd (z)

Then Patm à 14,7 atmospheric Pressure

γ à (dP/dz)*z

z à the specific depth (ft)

Phyd (z) à The hydrostatic Pressure at the specific depth

by plotting the data through the gradients pore pressure we get the next table :

Patm (psi) Phyd (z) (psi) Depth Below Drill floor (ft) γ (psi/ft)

14.70 3720 8000 0.46

14.70 6800 8500 0.80

14.70 6850 9500 0.72

4c. Determine the mud weight (in ppg) required to drill the hole section

down to the following depth assuming that a maximum of 200 psi

overbalance on the formation pore pressure is required · 8000ft · 8500ft

9500ft.

To calculate the mud weight we used the formula of Pressure

P = 0.052 * mud weight * total vertical depth

Pore Pressure

(psi)

Formation Pressure

(psi) + Safety

Depth Below

Drill floor (ft)

Gravitational

Mud

weight

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Pressure Required acceleration

(ppg)

3720 3920 8000

0.052

9.42

6800 7000 8500 15.84

6900 7100 9500 14.37

4d. If the mud weight used to drill down to 8000ft were used to drill into

the formation pressures at 8500ft what would be the over/underbalance

on the formation pore pressure at this depth?

Using the mud weight at 8000ft to 8500ft the Mud pressure is 4.165(psi)

The Deferens between Pore pressure and the specific mud pressure at 8500ft is

-2.635 (psi)

So its obvious that it will be Underbalance and it will create a Kick.

Documents

Semester Assignment Drilling, Reservoir & Well Engineering Study