Drilling Efficiency

1. Drilling Efficiency • Veritas Associates, Inc • For Conoco Indonesia • By Paul Baumgardner

2. About This Program • This program was developed by the drilling personnel of Global Marine UK Drilling Co. as a consequence of GM UK being awarded a five well turnkey job for Fina Oil and a four well incentive alliance drilling program, both in the UK North Sea. • The program was developed with the idea that working efficiently would reduce the time and costs of drilling the wells without compromising safety or causing damage to the drilling equipment.

3. Drilling Efficiency Overview • The Concept Consists of the Following: • Morning Meetings • Meetings are not more that 20 minutes • Should involve drilling contractor supervisors, all Operator representatives and third party personnel that will be involved in the drilling program for that day • Meetings should be a daily program

4. Drilling Efficiency Overview Continued • Tool Box Meetings • Crew level meetings, i.e. driller and drill crew, crane operator and roustabout crew, mechanic/chief engineer and maintenance crew. • Checklists • Needs to cover the activities of that day. • Needs to cover all aspects of the job. • Needs to assign a person responsible. • Allows the responsible person to sign off that the job has been done.

5. Drilling Efficiency Overview Continued • Written Instructions • Write instructions for all critical procedures. • Must be short and cover routine as well as non-routine jobs. • Involves the input of the operator, drilling contractor supervisors and third party personnel as appropriate.

6. Sample – Written Instructions Now that the 26” hole has been drilled, it is time to run the 20” casing. All tools, etc. required for this operation have been prepared in accordance with the checklist for “Running 20” Casing”. The casing has been measured ahead of time and a running list will be made out. The casing running list, usually made out by the operator’s drilling supervisor or engineer, is basically a list defining the correct order in which the casing is to be ran. The first joint to be picked up is the shoe joint. The bottom 10’ –15’ is painted white to aid visibility when entering the 30” housing. A rotating ring is attached to this joint, about 10-12 feet from the bottom, for guide ropes. When the shoe joint is picked up, water is pumped into it to test the integrity of the shoe. The shoe is basically a non return valve. When the shoe joint is confirmed to be in good working order and is lowered through the rotary, the guide ropes can be secured from the rotating ring to the guide lines. These guide ropes act as a guide for entering the 30” housing. Now all of the remaining intermediate joints can be ran. After these joints have been ran, it is time to pick up the 18 3/4 “ wellhead housing. Depending on the operator, the housing may already be made up and standing in the derrick, or the running tool will have been installed on deck. Before picking up the wellhead housing it is good practice to count the joints of casing remaining on deck to confirm the total joints ran reflects the the running list. With the wellhead resting on the rotary table, a third party engineer will check operation of the running tool. With the running tool checked and reinstalled, the complete casing string is ran on drill pipe (landing string). Prior to stabbing the 30” housing, the compensator should be unlocked and put in mid stroke. The ROV should be present on the seabed to aid in stabbing. The last stand of the landing string will have a crossover from the pipe connection to a 2A” weco union fitted on top. The landing string will have been “spaced” out so that the wellhead when landed in the 30” will have approximately 10-20 feet of pipe sticking up above the rotary. Once the wellhead is landed, a 20,000 lbs. over pull will be taken to ensure engagement of the latch ring that connects the wellhead to the 30” housing. Satisfied that the latch has connected, a circulating line from the mud pumps/cement line can be rigged up. All of the equipment required for the cement job will have been checked according to the checklist “Cement 20” casing” Once the circulating line has been hooked up, it is customary to to pump at least the volume of the casing using either the rig mud pump or the cement pump. When pumping is complete, the cement unit will be lined up to the circulating line, etc., etc., etc.

7. Drilling Efficiency Overview Continued • Critical Path Planning • Needs to be done for all rig activities. • Best to use Gantt charts or pert charts. • Best to use Microsoft Project Manager. • Identification of tools and equipment to facilitate the drilling program, i.e. rotating mousehole, step on slips, automatic driller, iron roughneck, E-Z torque, etc.

8. Overview Continued • Identifying Constraints in the drilling process • Identification of the limitations of the drilling process, i.e. tools, equipment, personnel, training, shorebase management, third party equipment and services, etc. • Problem identification and problem solving

9. Some Grade School Management Concepts • Develop Clear Objectives. • Clearly Communicate the Importance of Achieving the Objectives. • Make a plan to achieve the objectives. • Successfully implement the plan. • “A goal without a plan is but a dream”

10. Some Common Goals of the Operator and Contractor • Safety • Downtime Control • Good Food • Clean Rig

11. Some not so Common Goals • Operator - Drill the well on or under budget. • Contractor - Operate the rig under budget. • Operator - Drill the well as fast as possible. • Contractor - Keep the rig on contract as long as possible. • Operator - Find a suitable rig for the lowest dayrate possible. • Contractor - Find a job for the rig with the highest dayrate possible.

12. Drilling Efficiency • Unfortunately, contract drilling is one of the few industries in which the service provider does not consistently identify with the client’s objectives. Contractors usually do not develop a plan to meet the client’s objectives. • Contractors need to: • Identify the client’s objectives. • Establish a goal to meet the client’s objectives. • Formulate a plan to meet the client’s objectives. • Execute the plan to achieve the client’s objectives.

13. Good Plans / Bad Plans • If the goal is to meet or beat the drilling time curve, a bad plan to achieve this goal would be: • Run the mud pumps to 130 SPM • Run the mud pumps to 4800 PSI • Run the maximum weight on the bit by running the drill pipe in compression. • Run the blocks up and down as fast as possible while tripping or making a connection. • Move the rig with a full load of liquid mud, casing, drill pipe in the derrick, etc. • Compromise safety by getting in a hurry. • Cause damage to the rig equipment by exceeding the equipment limitations.

14. Good Plans / Bad Plans • A Bad Plan Will: • Compromise safety for speed. • Will also eventually cause damage to the rig equipment resulting in expensive mechanical downtime. • This is not what we want to accomplish.

15. Do We Really Need a Learning Curve? • NO – We can do it: “The First Time - On Time - Every Time”.

16. Critical Path Planning • Identify the critical path. • Do good task analysis. • The drilling program should be a planned project. • It is not a daily episode, waiting on a crisis. • Managing the past or planning the future. • What is a poorly planned round trip? • What is a well planned round trip?

17. Task Analysis • Start / Start • Task 1 • Task 2 • Task 3 • Finish / Finish • Task 1 • Task 2 • Task 3

18. Task Analysis • Finish / Start • Task 1 • Task 2 • Task 3 • Lead Time • Task 1 • Task 2 • Task 3

19. Task Analysis • Lag Time • Task 1 • Task 2 • Task 3

20. Task Relations Using Microsoft Project Manager

21. Critical Path Planning • Drilling a Well is a Project • We Recommend Using Microsoft Project Manager. • And, Using a Gantt Chart for Following the Critical Path. • What is a Critical Path? • A critical path is the linking of tasks that must be done on a Finish/Start or a Lead Time Relation.

22. Sample Gantt Chart Page Using Microsoft Project Manager

23. Sample Gantt Chart Page for Semisubmersible

24. Critical Path Planning • If a task has a Finish/Finish or a Start/Start Relation, then it should be on a checklist.

25. Planning Meeting • A planning meeting should be held daily. • It should be only 15 - 20 minutes long. • Who Should Attend? • Contractor Supervisors • Operator Supervisors • Third Party Personnel as Appropriate • What Should Be Discussed? • Critical path planning • Checklists • Narratives (Written Plans) • Review Potential Problems and Discuss Safety

26. Bad Trip - No Planning • Drilling • Mix Slug • Pump Slug • Pull Out of Hole • Call Drilling Supt for Bit Info • Bring Bit to Floor • Bring Pliers & Jets to Floor • Install Jets • Call Drilling Sup for BHA Info • Drilling Supt Calls Shorebase • Shorebase Calls Directional Co. • Shorebase Calls Rig • Bring Subs to Floor • Rig Down Old BHA • Pick up New BHA • Double Handle BHA • RIH • Total = 22.75 Hours

27. Good Trip - Well Planned • Drilling • Mix Slug • Pump Slug • Pull Out of Hole • Call Drilling Supt for Bit Info • Bring Bit to Floor • Bring Pliers & Jets to Floor • Install Jets • Call Drilling Supt for BHA Info • Drilling Supt Calls Shorebase • Shorebase Calls Directional Co. • Shorebase Calls Rig • Bring Subs to Floor • Rig Down Old BHA • Pick up New BHA • RIH • Total = 13 Hours

28. Bad Trip Using Microsoft Project Manager

29. Good Trip Planning Using Microsoft Project Manager

30. Good Trip / Bad Trip Costs • No. of Hours - Good Planning Bad Planning • Mix Slug 00.0 1.00 • Pump Slug 00.5 0.50 • Pull Out of Hole 4.00 4.00 • Call Drilling Supt for Bit Info00.0 0.25 • Bring Bit to Floor 0.00 0.50 • Bring Pliers & Jets to Floor 0.00 0.50 • Install Jets 0.00 0.50 • Call Drilling Supt for BHA Info 0.00 0.50 • Drilling Supt Calls Shorebase 0.00 1.00 • Shorebase Calls Directional Co. 0.00 1.00 • Shorebase Calls Rig 0.00 0.50 • Bring Subs to Floor 0.00 1.00 • Rig Down Old BHA 2.00 2.00 • Pick up New BHA 0.50 0.50 • Double Handle BHA 0.00 3.00 • RIH 4.00 4.00 • Total = 13.0 Hrs 22.75 Hrs • At 100,000/Day Spread Cost = $54,166 $94,791 • The bad trip cost was $40,625

31. Good Task / Bad Task Relationship • Just as we have a good trip/bad trip situation, we also have a good cementing operation/bad cementing operation, good nipple up/bad nipple up, etc. • We can reduce the time for any project by changing the task relationships or by not doing the task at all.

32. Checklists • What is a checklist task and what is a critical path task? • A critical path task is a task that must be done in sequence. It must be done as a lead time relation or a finish/start relation. • A checklist item is a task that must be done but can be taken off the critical path and made into a finish/finish or a start/start relation.

33. Checklists • Checklists • Should be job specific • Should be rig specific • Are basic outlines • Should address potential problems • Should be a live system, i.e. readily changeable

34. Checklist Sample Portion

35. Checklists • Pre-operations start-up • Prepare to spud • Drive Pipe • Drill conductor hole • Run conductor casing • Cement conductor casing • Grout conductor casing (Top Job) • Grout conductor (With BOP Installed)

36. Checklists • Install Diverter System • Drill surface hole (17 1/2) • Under-ream surface hole • Run surface casing • Cement surface casing • Install wellhead • Nipple up BOP’s • Test BOP’s • Drill intermediate hole (12 1/4)

37. Checklists • Establish shut in procedure • Establish kill procedure • Logging operations • Run intermediate casing (9 5/8) • Cement intermediate casing • Install casing spool • Install and nipple up BOP’s

38. Checklists • Drill production hole (8 1/2) • Run production casing • Run production liner • Cement casing • Cement liner • Set P&A plugs • Cut and retrieve casings

39. Review of Drilling Efficiency • Drilling Efficiency is: • Controlling costs by working efficiently (Reducing the time it takes to drill a well). • Critical path planning. • Using Checklists. • Holding a daily planning meeting. • Holding toolbox meetings. • Using narrative (written) instructions. • Identifying tools and equipment to facilitate the drilling program, i.e. rotating mousehole, auto driller etc. • Identify Constraints, i.e. solids control equipment, rig power, pumps, etc. rig crews, shorebase management, training, etc. • Utilizing constructive criticism, i.e. “Report Card” with feedback.