The slowing overall rig count growth corresponds with significant drilling and completion efficiencies that are increasingly being realized by E&P operators, especially within the unconventional resource plays that have become the primary growth engine for US natural gas production. This trend, which is reflected in the disproportionate growth in horizontal drilling activity, is likely to persist in 2008 with impressive production growth being achieved with lower drilling and capital intensity, particularly relative to ’05-’06 levels.”

This observation from a recent Simmons & Company International report should be music to industry ears. One might think drilling efficiency is on a steady and unstoppable march upward, abetted by seemingly daily introductions of new tools and techniques devised for this very purpose.

One would be wrong, at least in the opinion of Morten Mauritzen, who is responsible for partner-operated fields on the Norwegian Continental Shelf (NCS) for ExxonMobil. In a recent article in Norwegian Continental Shelf, a journal from the Norwegian Petroleum Directorate, he lays out his case. “We’re spending more time on drilling than planned,” he says, and in the article he notes that the gap between actual and planned time to drill wells on the NCS in which the company is a licensee has increased sharply. As an example he notes that the 17 wells ExxonMobil participated in during the first half of 2007 took more than 50% longer to drill than expected. He says 6.8 rig-years were used instead of the intended 4.4, which corresponds to the “loss” of eight to 10 wells or a production shortfall of close to 100,000 boe/d.

That’s serious. “We must recognize that drilling and completion have become more complicated than before,” Mauritzen says. “That means we have to get better at identifying risk, planning on that basis and executing a program which takes it into account.”

Drilling through depressurized zones in mature fields represents a challenge because reservoir conditions are less stable, he explains. “Where multibranch wells are concerned, I’d question whether we’re good enough at balancing their complexity against supplementary resources. Perhaps we should sometimes drill shorter and simpler wells so that we could free up rig time to focus on new drilling targets.”

Mauritzen believes understanding of technical risks has deteriorated at the same time as the technology is being pushed to its absolute limits. “Expertise has become a constraint on both contractor and operator. Overall experience available on a rig is often lower than before for each well drilled — more crew are both younger and less well trained. With hindsight, we’ve seen too many examples where inadequate understanding of technical risk causes major but avoidable operational problems. In the worst case, we’ve had to plug the well and drill a sidetrack.”

What’s the cure? Mauritzen offers up a number of sensible, if not game-changing processes for managing the problem. Among them is drawing on the company’s global experience. “We carefully categorize the risk of each well to be drilled in order to improve our understanding of its complexity. Our requirements for reviewing equipment and drilling procedures are particularly stringent for complex wells, and this work is cross disciplinary.”
“In addition, we must ensure an exchange of experience between organizations and specialist teams. Our central drilling group in Houston plays a key role in facilitating that. This means it’s a short distance from Malaysia to Norway, for instance.”

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From our friends at the Petroleum Technology Transfer Council comes an entertaining trivia question and answer that illustrates the role of one factor unaffected by technology — good fortune.

Question: Located about five miles north of Albany in Shackelford County, Texas, the Cook Oil field, for a period of time, was the largest shallow oil field in the world. The 1926 discovery well flowed 1,000 b/d from its 1,240 ft (378 m) depth. Within three years, the Cook field produced 10,000 b/d of oil. What is unique about the field is the circumstances that led to siting the discovery well. What were those circumstances?

Answer: Despite earlier dry holes on the Cook Ranch, the geologist with Roeser and Pendleton, Inc. believed that there was oil to be discovered. Drilling this well was the last roll of the dice for this company before going broke. As they were hauling their rig to the selected site, it broke down. The rig could go no further unless additional money was raised for repairs and that was impossible. So they drilled right there and brought in a gusher. A year later Roeser and Pendleton drilled a well at the location they had first intended. It was a dry hole!