A benchmark study compares best drilling and completion practices in South Texas, and a US government program encourages technological developments for deep, hot gas wells.

Ziff Energy Group has completed a major new benchmarking study that evaluates drilling costs and practices for gas wells in South Texas, one of the most active gas exploration and production onshore areas in the Lower 48. Ziff's study analyzes drilling and completion cost data for 2001, when there was considerable gas drilling activity.

The study analyzed roughly 400 wells drilled by 12 operators (majors and independents) active in Texas Railroad Commission districts 1, 2, 3 and 4. Total construction costs for the study wells were US $685 million for drilling and $360 million for completions.

"Study participants received a detailed diagnostic report on each well, comparing it on a 'like kind' basis with peer wells and identifying potential savings in each cost category," said Mark Gregoli, Ziff Energy's drilling project manager for the South Texas Reducing Drilling Costs/Best Practices study. Key metrics include $/ft, ft/day and $/Mcfe/d. Peer groups were based upon factors related to type and difficulty of drilling (pressure conditions, directional vs. vertical, depth, etc.).

Average drilling cost for the seven asset peer groups varied widely, from a low of $71/ft to more than $200/ft. For shallow (less than 10,000 ft or less than 3,500 m), normal-pressure wells, average drilling cost was $95/ft, and the "Best in Class" well cost $53/ft. Rig and tubular costs accounted for almost half of the costs for these shallow, normal-pressure wells. Completion costs for these wells also varied significantly, with an average cost of $365/Mcfe/d. In addition to the peer group comparisons, Ziff Energy also provided comparisons of peer groups based on hole or casing size, target formation and size of the drilling program.

Leading drilling practices were identified via a questionnaire completed by each study participant's drilling operations staff. Ziff Energy then correlated specific practices to strong performance. "As part of the process, our experienced engineers personally visited with drilling managers, supervisors and engineers to review specific practices with field personnel that may drive lower drilling costs," said Gregoli. Based on the input received, the study reported on three practice areas:

* drilling procedures to avoid difficulties;
* directional drilling planning and execution; and
* practices to maximize rate of penetration.

A full-day best practices workshop was held in late November to conclude the study. At the workshop, drilling staff from participating companies presented innovative practices and those that were linked to lower drilling costs.

Operators who did not participate in this study may do so on a "late" basis by contacting Richard Tucker at rtucker@ziffenergy.com.

Deep Trek targets gas at 20,000 ft

Deeper and smarter are the two themes of the US Department of Energy's (DOE's) Deep Trek project to help operators tap the estimated 125 Tcf of gas thought to be trapped at depths below 15,000 ft (4,575 m). The goal is to develop an intelligent drilling system tough enough to withstand the extreme temperatures and pressures of deep reservoirs, yet economical enough to make the gas affordable to produce. Production from depths greater than 10,000 ft (3,500 m) is expected to increase from 35% in 2000 to 41% in the United States by 2010. DOE's National Energy Technology Laboratory (NELT) is funding the initiative at $10.4 million, and the target date for developing the advanced drilling system is 2010.
Solicitation of proposals occurred in February 2002, followed by a roadmap workshop in March. Preapplications were due April 11, 2002, and successful first-round candidates were asked to submit a comprehensive proposal by May 30. The second round of preapplications was due Nov. 30, and comprehensive applications from the second round candidates are due Jan. 13.

Today's sensors, drill bits and materials are ineffective when exposed to harsh, extreme conditions found in deep formations. Technologies pursued in the Deep Trek project include low-friction, wear-resistant materials and coatings, advanced sensors and monitoring systems, advanced drilling and completion systems, and new bit technology that can operate in temperatures greater than 350°F (176°C) and pressures greater than 10,000 psi. Deep Trek partnerships were encouraged with nontraditional drilling organizations that have promising results in these areas. Proposals were also accepted for improved economics in deep well completions, including fluid optimization for high-pressure, high-temperature conditions and downhole separation techniques.

Proposals to improve diagnostic capabilities during drilling operations include measurement while drilling, logging while drilling and seismic while drilling with corrosion-resistant electronics and data transmission; sensors for fluid detection and downhole vibration detection; and an operator decision-support system to monitor all wells. Development of a high-data-rate telemetry system, open architecture information standards and logic algorithms for drilling applications that integrate real-time downhole and surface data were encouraged.

"The advantage of a 'smart' system is its ability to report key measurements - temperature, pressure, water, geology, etc. - as a well is drilled, pinpointing potential trouble spots on a real-time basis. This allows operators to make adjustments as drilling continues, avoiding costly work stoppages," said NELT's Brad Tomer.

E-Spectrum Technologies of San Antonio, Texas, partnered with the University of Texas Center for Space Research to submit a Deep Trek proposal. In August 2002, E-Spectrum announced that its proposal was selected for negotiations leading to the award of funds under this program. E-Spectrum plans to develop a wireless system based on low-frequency electromagnetic (EM) waves to provide wireless downhole communication capabilities for deep gas drilling projects. Such a high-temperature EM system will increase the overall effectiveness of deep well drilling activities. Funding for the first phase of the project is expected to cover the period from October 2002 to September 2003. The company plans to submit a proposal to continue work under the second phase of the project to commence in October 2003.