Continuing with the story we started in my last column, we’re looking briefly at U.S. drilling activity, to see how drilling performance has changed over the last 25 years and how we can advance even further. (Refer to my last column, if you are interested in the complete story: Column—Drilling Advances (Brett) (nxtbook.com))
Figure 1 shows one important relationship from the history of drilling in the U.S.: Active Rigs and Average Feet per Day. These two measures of drilling—activity and productivity—raise some interesting questions:
Let’s assemble a few more facts before we start (trying to) address these questions.
Fact: wells are deeper and more complex. Average well depth in the U.S. was only increasing slightly each year until 2008, when it started taking off, growing by some 265% (5.8% per year) from an average depth of 6,000 ft to 14,500 ft (1.8 km to 4.4 km), Fig. 2.
A short detour for international readers: an unconventional primer. U.S. drillers know this, but for some international readers this may be news: average well depth increased through the 2010s because of an increasingly larger percentage of unconventional horizontal wells, and those wells had increasingly longer laterals. Very roughly, U.S. unconventional zones of interest started at a true vertical depth of ~8,000 ft (2.4 km). Laterals started out at about 5,000 ft (1.5 km) and are now very routinely 10,000-ft (3 km) laterals, with many approaching 15,000 ft (4.5 km) as of writing. So, early unconventional wells were about 13,000 ft (4 km) and are now often over 20,000 ft (6 km) in total depth. (In the U.S. at least, it’s kind of funny to call these “unconventional” wells, because in the U.S. they are now very normal; vertical or merely directional wells are what is odd.)
Figure 1 and Fig. 2 show a couple of ways to assess drilling’s performance: the kind of wells delivered (e.g. how deep) and how efficiently those wells were produced (feet per day). Drilling did advance a lot by these measures. In future columns, we’ll get into what caused this and what it means about how to keep advancing. But everything isn’t peaches and cream.
One fly in the ointment: the way we respond to changes in activity. When we are standing back and squinting at it, drilling has advanced a lot. We deliver more complicated wells much more efficiently than we did 10 years ago. But we do have at least one opportunity to get better: how we respond to changes in activity. Figure 1 shows that every time activity goes up, performance goes down. A way to look at this more precisely is shown in Fig. 3.
Figure 3 shows a plot of how year-over-year performance (as measured by percentage change in average feet per day) changes with percent change in rig count. This is the mathematical relationship of the performance/activity jigs and jags in Fig. 1. Figure 3 shows that it’s a mathematical fact that drillers do worse when rig count goes up, and better when it goes down. The equation shows that average performance is up year over year by 5.4% (the + 0.054 in the equation)—that’s good. But we do not do a very good job (at all) of repeating what we already know how do to, as we expand activity. The plot also shows that the last 10 years behave pretty much like the prior 15 (the triangles look like the X’s), so while we are getting better, we don’t do well at handling changes in activity. This costs us a lot; future columns will show that eliminating this effect is not a trivial opportunity to advance drilling.
One last fact: safety varies with changes in activity, too. Figure 4 shows another way to measure drilling performance, and that doesn’t tell quite as good a story.
Making holes to specification and doing it efficiently are not the only measures of drilling performance; we need to do it responsibly. We can’t hurt people (or the world) when we do it. What we do makes the world a better place, by providing energy to make lives easier and better (more on how important this is in future articles). But if we hurt people in the process, we are not making things better. I remember when Mike Harris—then head of Apache’s drilling—told me, “Drillers can do everything they need to do safely; there is no reason drilling shouldn’t be as safe as sitting at home in your living room.” It is absolutely possible for everyone to go home from work better than when they came: wealthier through compensation for a job well done and without injury—or having messed up the world.
Figure 4 is like Fig. 3, except instead of having performance measured by average feet per day, we have the fatality rate for Oil and Gas Extraction Workers. (Note: these fatalities are for all oil and gas extraction activities, not just drilling). This figure is sad. When drilling activity goes up, the fatality rate goes up. More activity logically means more people in harm’s way and, unfortunately, more injuries. This plot doesn’t show that. It shows that the busier we are, the higher the fatality rate goes up; not only are there more workers, but they are also harmed more frequently.
There is one small glimmer of hope; we are, on average, getting better. The fatality rate does go down 1.4% per year on average (the “-.014” in the regression). But when activity goes up X%, the fatality rate goes up .65*X%. As we get busier, we are less safe. There might be another reason for hope here, as it seems that we are recently getting a bit better; in 2017, activity went up 70% and the fatality rate “only” increased 25%. However, that’s still where we want (and need) to be. Even still, when we get busier, we perform worse in efficiency and on safety.
What does this mean? We have a big opportunity to advance by transferring capability. In the last column, I presented three things I’m pretty sure are involved in drilling advancements:
Technology: Improved downhole tools and surface equipment move the technical limit forward.
People: Learning curve optimization and ramp up takes more time when you release rigs, with crews that need to “re-learn” when you bring them back.
Process: The evolution of how we work together and the do’s and don’ts that aim for operational excellence help us eliminate loss and waste.
When it comes to performance regressing as activity increases, one way to advance drilling is to find better and more reliable ways to ensure that we transfer the know-how and skills we already have to new workers and new teams. We don’t need to invent new things; we just need to do as well as we already know how and as we have proven we already can do. One way that people are trying to do this is with the principles of “Crew Resource Management” (more on that in the next column).
In the meantime, I hope to start a conversation with any of you on how we can all help Drilling Advance. Please email me at ford.brett@petroskills.com, and I promise I’ll respond. WO
Ford Brett, P.E., is CEO of PetroSkills. He has consulted in over 45 countries, been granted >35 patents, authored >40 technical publications, and has served as an SPE Distinguished Lecturer, as well as on the on the SPE Board as Drilling and Completions Technical Director. ford.brett@petroskills.com