Lessons that BHP Billiton has learned in the Eagle Ford Shale of South Texas can be applied to emerging shale development in Australia and elsewhere, according to David Banks, BHP’s general manager for the Eagle Ford asset.
Banks manages the company’s Blackhawk and Hawkville fields, two of the largest fields in the play. He shared some of those lessons at the Australian-American Chamber of Commerce’s 7th annual energy conference in Houston in February.
Productive wells are the product every company seeks; proper execution and coordination of all team members are the keys to unlocking value. “Looking back at our performance vs. the industry over the past three years, on average our wells are more productive than the competition, although the competition is catching up,” Banks said.
To improve drill time and costs as BHP has, you’ve got to set ambitious aspirations, Banks advised. Drilling and completing a shale well typically involves five to eight steps and each step is essentially a mini-project with its own associated costs and risks. BHP Billiton studies them all versus external industry benchmarks and compares them against its own internal “perfect day.”
“We have anywhere from 2,000 to 3,000 people working in the Eagle Ford in service of our business plan, and we have deep and broad engagement from all of them, from the senior leadership to the front lines to suppliers and vendors, with relentless process discipline. We have detailed tracking of who, what, when, where and how much,” he said.
The company has 60 different work groups in the Eagle Ford at any given time. “It’s almost like a living organism, but with integration, coordination and communication—otherwise it would be a mess, like an orchestra without a conductor.”
Banks said the steps involved include: measure, observe, think about, act and eliminate variation. Eliminate the outliers or lows and study bad performers to understand how that can be prevented the next time.
The results? Drilling times in the company’s Blackhawk Field have dropped to 20 days, sometimes less than 10 days, from a high average of 30 days in 2013. A 30% reduction in drilling costs has been achieved.
“It’s been a challenge for us in that all these activities must happen on the same ground [pad] at the same time—seismic, drilling, completions, appraisal drilling, installing production facilities. A year ago we were in the top quartile and now we are knocking on the door of being the leader.”
Contact the author, Leslie Haines, at lhaines@hartenergy.com.
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