Justification and Calculation of the Economic Efficiency of Directional Well Drilling
Abstract Generated abstract
This paper addresses the need for a more adequate method of evaluating the economic efficiency of directional drilling in geological exploration wells, especially where existing formulas for multilateral drilling give only approximate results. It reviews earlier approaches and argues that they neglect important geological, technical, organizational, and cost factors, including site preparation, transport, access roads, utilities, equipment depreciation, directional tools, sidetracking operations, and interval-specific drilling costs. The paper proposes a comparative cost framework for ordinary and directional drilling, deriving an efficiency coefficient and economic effect from the ratio and difference of total expenditures under alternative drilling schemes. It also emphasizes that maximum benefit depends on rational well profiles, use of natural deviation, favorable collar placement, and suitable geological conditions.
Full Text
Justification and Calculation of the Economic Efficiency of Directional Well Drilling
S. S. Sulakshin
(Presented by the scientific seminar of the Department of Exploration Engineering)
The justification and calculation of the economic efficiency of directional drilling of geological-exploration wells is of very great importance for the development and introduction into working practice of this progressive method.
The indicator of the economic efficiency of new equipment, technology, or work methods, as is known, is ultimately the savings obtained as a result of reducing production costs through a decrease in expenditures of living and embodied labor. At the same time, there must be an increase in labor productivity and a reduction in the cost of the work. There are a number of methods for determining the economic efficiency from the introduction of new equipment, mechanization, and automation of processes in industry producing a definite product, but they are of little use for determining the economic efficiency obtained in directional well drilling. This is connected with the specific character of geological-exploration work and the great variety of conditions under which it is carried out. Therefore, evidently, up to now there has been no definite and sufficiently acceptable methodology for solving this problem, which is important for introducing the progressive method of drilling geological-exploration wells.
In work practice, the economic effect from directional drilling of wells is often determined by the cost of the drilled well up to the point from which directional-drilling means began to be applied, on the assumption that otherwise the well would not have solved the assigned tasks and would have been written off as defective. Such “savings” are conditional in nature, but in a number of cases they may indeed be taken into account.
The economic efficiency from the use of multibore wells is usually determined by the cost of the footage saved by drilling additional boreholes. Such a method makes it possible to estimate the advantages of multibottom wells only very roughly, since in this case very many factors are not taken into account.
A. E. Kolesnikov, for example, in order to evaluate economic efficiency proposes using a certain coefficient
\[ k_{\mathrm{ef}}=\frac{C_{0}}{C_{\mathrm{m}}}, \tag{1} \]
where \(C_0\) is the cost of exploratory drilling carried out by the conventional method;
\(C_{\mathrm{m}}\) is the cost of work in drilling multilateral wells.
The use of multilateral wells is rational only when
\(k_{\mathrm{ef}} > 1\).
Obviously, because all expenditures associated with drilling multilateral wells can be determined only after they have been drilled, A. E. Kolesnikov recommends determining the efficiency coefficient from the ratio
\[ k_{\mathrm{ef}}=\frac{L}{L_{\mathrm{eq}}}, \tag{2} \]
where \(L\) is the meterage of wells drilled by the conventional method;
\(L_{\mathrm{eq}}\) is the equivalent meterage, determined by the expression
\[ L_{\mathrm{eq}}=L_0+k_{\mathrm{t}}\sum l, \tag{3} \]
where \(L_0\) is the length of the main bore;
\(k_{\mathrm{t}}=1.3\text{–}2.5\) is the “drilling difficulty” coefficient, taking into account the additional costs of drilling supplementary bores;
\(\sum l\) is the total meterage of the supplementary bores.
Obviously, the proposed formulas can be used only with a sufficiently accurate determination of \(C_0\) and \(C_{\mathrm{m}}\) in expression (1) and \(k_{\mathrm{ef}}\) in expression (2), which the author does not show.
In the instructions for determining the economic effect from the introduction of new equipment and technology, compiled by KazIMS, it is recommended that the economic effect from multilateral drilling be determined by the formula
\[ E=(\sum C_{\mathrm{s}}+E\sum k_{\mathrm{s}})-(\sum C_{\mathrm{n}}+E\sum k_{\mathrm{n}}), \tag{4} \]
where \(C_{\mathrm{s}}\) is the cost of drilling wells from the earth’s surface and the cost of assembly and dismantling work;
\(k_{\mathrm{s}}\) is the cost of drilling rigs and derricks necessary for drilling wells from the surface, taking into account transportation and other expenses;
\(E\) is the normative sectoral coefficient of economic efficiency (0.20);
\(C_{\mathrm{n}}\) is the cost of drilling supplementary bores, assembly and dismantling work, and setting whipstocks;
\(k_{\mathrm{n}}\) is the cost of rigs, derricks, wedges, and the clinometer in multilateral drilling, taking into account transportation and other expenses (accounted for by a coefficient equal to 1.1).
In this case, the cost of drilling 1 linear meter of the bores of the main and supplementary wells is assumed to be the same, as is the category of rocks, which is infrequent in actual practice. In addition, in this case it is hardly possible to use the full cost of rigs and equipment (capital expenditures), considering that their depreciation period is much longer than the time required to drill individual wells.
Thus, none of the methods considered makes it possible to assess the economic efficiency of directional drilling of geological-exploration wells sufficiently fully and accurately.
Method for calculating the economic efficiency of directional well drilling
Determination of the economic efficiency of directional drilling should be based on a sufficiently complete analysis of technical-and-economic
technical indicators evaluated for different variants under specific geological and technical conditions.
Naturally, when comparing the selected variants it is necessary to take into account the entire set of factors that promote either an increase or a decrease in efficiency under one variant or another.
In considering and analyzing all the factors that determine the feasibility and rationality of directional drilling, it is necessary to take into account not only quantitative but also qualitative indicators. The principal factors determining the economic efficiency and rationality of using directional drilling for exploratory wells include:
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The possibility of drilling wells along a specified, most rational profile.
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The possibility of drilling vertical-inclined wells (deflected in the required direction at a specified depth).
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The possibility of drilling multilateral wells for solving a whole series of geological and technical problems.
The realization of the noted positive features characterizing directional well drilling makes it possible, under specific conditions, ultimately to obtain a significant economic effect, improve the quality of work, shorten the time required for exploration of mineral deposits, and, finally, choose the most favorable conditions for conducting drilling exploration. In fact, the implementation of directional drilling of single- and multilateral wells makes it possible:
A. In the general case
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To increase labor productivity through the use of forced drilling regimes in slightly deviated directional wells.
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To eliminate defective work, since in directional drilling all wells fulfill the assigned tasks.
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To improve the quality of work, since wells are brought to specified points, the parameters of the exploration grid are maintained, more accurate data are obtained on the thickness and depth of occurrence of mineral deposits, and the quality and quantity of core obtained in less deviated wells are also improved.
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To reduce the number of accidents and improve the conditions for eliminating them in slightly deviated wells.
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To choose the most convenient and advantageous locations for placing wellheads.
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To reduce the expenditure of funds per 1 ton of explored mineral reserves.
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To raise the category of explored reserves by improving the quality of the work performed.
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To carry out exploration in a shorter time.
B. In directional drilling of vertical-inclined wells
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To simplify the well design, reduce the consumption of casing pipes when drilling in loose, unstable rocks, and increase their service life.
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To simplify the design of drilling shelters and facilitate the installation of drilling equipment.
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To increase labor productivity in carrying out tripping operations in vertically deviated wells by means of
mechanization of this process, the use of semi-automatic elevators, and improvement of working conditions.
- Reduce the size of the drilling crew through the use of semi-automatic elevators when working in headframes for vertical drilling.
B. In directional drilling of multilateral wells
- Reduce the number of wells assigned from the surface.
- Reduce the drilling footage of exploratory wells per 1 ton of explored reserves.
- Reduce the number of moves of drilling rigs and equipment.
- Reduce the scope of assembly-and-dismantling work and the construction of communications (access roads, power lines, water pipelines, etc.).
- Reduce the costs of tying in wellheads on the ground.
- Reduce the costs of crop damage, forest clearing, etc.
- Reduce operating expenses for maintaining access roads in serviceable condition for transport (especially in winter), repairing power lines and water pipelines, and delivering replacement equipment, materials, drilling fluid, etc.
- Reduce depreciation costs.
- Ultimately, to a significant extent, reduce expenditures per 1 ton of explored reserves of mineral resources.
In a comparative analysis of methods of drilling wells, naturally, one must also take into account the expenses associated with the use of special means of directional drilling, and the costs of the additional time required to perform particular operations: orienting and installing deflectors, drilling a new direction, etc. The final balance of expenditures of material resources and time costs for exploration of a deposit determines the question of the expediency of applying one or another method of drilling wells.
When choosing one or another scheme for exploration by boreholes, an important question is the time required to carry out the exploratory work. Obviously, under certain conditions, when using multilateral wells, it is possible not to obtain an economic effect; however, the resulting reduction in the duration of the work may justify the increased expenditure of funds.
Thus, the calculation of the economic efficiency of directional drilling is reduced to determining the monetary costs in ordinary and directional drilling of wells. Let us denote:
$S_1$ — the costs of tying in the wellheads of newly planned wells;
$S_2$ — the costs of preparing the site for the drilling installation (surface grading or excavation of soil, forest clearing, payment for damage to agricultural lands, cutting areas, etc.) or of preparing the chamber when drilling from underground workings;
$S_3$ — the costs of assembling and dismantling the main and auxiliary equipment (construction of headframes, foundations, installation and fastening of mechanisms, lighting, heating, etc.);
$S_4$ — the costs of transporting all equipment from point to point;
$S_5$ — the costs associated with spudding wells from the surfac-
…ties (construction of cellars, installation and cementing of the conductor pipe, etc.);
\(S_6\) — expenditures for preparing 1 km of access roads to newly laid-out wells (clearing, grading, road surfacing, construction of bridges, compensation for crop damage, clearing of forest strips, etc.);
\(S_7\) — operating expenses associated with maintaining 1 km of access roads to the drilling site in transportable condition (repairs, snow clearance in winter);
\(S_8\) — expenditures for laying 1 km of power lines for supplying electricity to the drilling rig;
\(S_9\) — operating expenses associated with maintaining power lines in working condition;
\(S_{10}\) — expenditures for preparatory works associated with water supply (construction of a water intake, water-supply wells, water pipelines and their insulation), and operating expenses attributable to one site;
\(S_{11}\) — depreciation cost of the main equipment;
\(S_{12}\) — cost of directional-drilling means expended per one borehole;
\(S_{13}\) — expenditures associated with deflection (sidetracking) of boreholes (orientation and installation of the deflecting device, additional measurements of well curvature, etc.);
\(S_{14}\) — cost of drilling a well by depth intervals and rock categories under ordinary conditions;
\(S_{15}\) — the same for directional drilling.
Obviously, the expenditures for preparatory, rig-up and rig-down operations and transportation will be determined as
\[ (S_1+S_2+S_3+S_4+S_5)q_1=\sum_{i=1}^{i=5} S_i q_1=S_{\mathrm{m}}, \tag{4} \]
where \(q_1\) is the number of wells laid out from the surface.
The expenditures for preparing and operating access roads and power lines will be determined, respectively, as
\[ (S_6+S_7)q_2=\sum_{i=6}^{i=7} S_i q_2=S_{\mathrm{p.p}}, \tag{5} \]
\[ (S_8+S_9)q_3=\sum_{i=\ [[unclear: lower limit]]}^{i=9} S_i q_3=S_{\mathrm{e.l}}, \tag{6} \]
where \(q_2\) is the length of the access roads constructed to the designed wells, km;
\(q_3\) is the length of power lines to the designed wells, km.
Expenditures for preparatory water-supply works:
\[ S_{10}\cdot q_1=S_{\mathrm{v}}, \]
where \(q_1\) is the number of designed wells of ordinary drilling.
The depreciation cost of the main equipment can be determined from calculation of the planned depreciation period of the equipment used: the drilling unit \(S_a\), the derrick \(S_{\mathrm{k}}\), etc., i.e.,
\[ S_{11}=S_a+S_{\mathrm{н}}=\frac{t_a}{T_a}Q_a+\frac{t_{\mathrm{k}}}{T_{\mathrm{k}}}Q_{\mathrm{k}}, \tag{8} \]
where \(t_{a0}, t_{k0}\) are the operating time of the drilling rig and the casing head at the well under ordinary drilling \((t_{a\mathrm{nb}}, t_{k\mathrm{nb}}\) under directional drilling);
\(T_a, T_k\) are the depreciation periods of the drilling rig and the casing head;
\(Q_a, Q_k\) are the full cost of the drilling rig and the casing head.
The cost of the directional-drilling tools consumed per borehole is determined by the expression
\[ S_{12}=\frac{Q_{\mathrm{nb}}}{q_4}, \tag{9} \]
where \(Q_{\mathrm{nb}}\) is the full cost of the tools used in directional drilling;
\(q_4\) is the number of applications.
The expenditures of funds associated with deviation (sidetracking) of boreholes are determined on the basis of the cost of a rig-shift \(Q_{c-c}\) and the operating time with directional-drilling tools \(t_{\mathrm{nb}}\),
\[ S_{13}=(Q_{c-c}\cdot t_{\mathrm{nb}})\,q_4. \tag{10} \]
If, when directional-drilling tools are used, the well is also deepened, then the expenditures associated with the use of deflectors will be equal to zero. The decrease or increase in productivity in this case will be taken into account by the cost of 1 linear m of the drilled portion of the borehole.
The cost of drilling wells is determined by depth intervals and rock categories
\[ S_{14}=(S_{\mathrm{ob}_1}L_{\mathrm{ob}_1}+S_{\mathrm{ob}_2}L_{\mathrm{ob}_2}+\ldots+S_{\mathrm{ob}_n}L_{\mathrm{ob}_n})\,k_{\mathrm{ob}} = k_{\mathrm{ob}}\sum_{i=1}^{i=n} S_{\mathrm{ob}_i}L_{\mathrm{ob}_i}, \tag{11} \]
where \(S_{\mathrm{ob}_1}, S_{\mathrm{ob}_2}, S_{\mathrm{ob}_3}\ldots S_{\mathrm{ob}_n}\) is the cost of drilling 1 linear m of wells at different depths and for different categories of rocks;
\(L_{\mathrm{ob}_1}, L_{\mathrm{ob}_2}, L_{\mathrm{ob}_3}\ldots L_{\mathrm{ob}_n}\) is the length of the drilling intervals;
\(k_{\mathrm{ob}}\) is a coefficient taking into account an increase or decrease in the costs of drilling 1 linear m of wells due to nonstandardized conditions (casing the well with pipes, drilling under reduced or forced regimes, accidents, their elimination, etc.).
\[ S_{15}=(S_{\mathrm{nb}_1}L_{\mathrm{nb}_1}+S_{\mathrm{nb}_2}L_{\mathrm{nb}_2}+\ldots+S_{\mathrm{nb}_n}L_{\mathrm{nb}_n})\,k_{\mathrm{nb}} = k_{\mathrm{nb}}\sum_{i=1}^{i=n} S_{\mathrm{nb}_i}L_{\mathrm{nb}_i}, \tag{12} \]
where \(S_{\mathrm{nb}}\) is the cost of directional drilling of 1 linear m of wells at different horizons and in rocks of different categories;
\(L_{\mathrm{nb}}\) is the length of the drilling intervals;
\(k_{\mathrm{nb}}\) is a coefficient taking into account an increase or decrease in the costs of drilling 1 linear m of wells due to nonstandardized conditions.
Then, in a comparative evaluation of alternatives—for example, in multilateral drilling (Fig. 1)—the cost of all wells (Nos. 1, 2, and 3) drilled from the surface will be
\[ S_{\mathrm{ob}}=S_{\mathrm{m}}+S_{\mathrm{pl}}+S_{\mathrm{el}}+S_{\mathrm{v}}+S_{11}+S_{14} \tag{13} \]
or
\[ \Sigma S_{ob} = \sum_{i=1}^{i=5} S_i q_1 + \sum_{i=6}^{i=7} S_i q_2 + \sum_{i=8}^{i=9} S_i q_3 + S_{10} q_1 + \frac{t_{a0}}{T_a} Q_a + \frac{t_{k0}}{T_k} Q_k + k_{ob} \sum_{i=1}^{i=n} S_{ob i} L_{ob i}. \tag{14} \]
Fig. 1. Scheme of penetration of a deposit by single-bore and multibore wells: 1, 2, 3 are the numbers of single-bore wells; 1m, 2m, 3m are the numbers of the bores of a multibore well.
The cost of a multibore well under directional drilling (No. 1m; 2m and 3m) will be
\[ \Sigma S_{nb} = \frac{Q_{nb}}{q_4} + \left(Q_{s-s}\cdot t_{nb}\right) q_4 + \frac{t_{a nb}}{T_a} Q_a + \frac{t_{k nb}}{T_k} Q_k + k_{nb} \sum_{i=1}^{i=n} S_{nb i} L_{nb i} \tag{15} \]
or
\[ S_{\mathrm{nb}} = S_{11} + S_{12} + S_{13} + S_{15}. \tag{16} \]
Obviously, directional drilling of a multilateral well will be economically expedient in the case where the economy coefficient is equal to or greater than unity, i.e.,
\[ k_e = \frac{\Sigma S_{\mathrm{ob}}}{\Sigma S_{\mathrm{nb}}} \ge 1. \tag{17} \]
The economic effect in this case may be determined as the difference between \(\Sigma S_{\mathrm{ob}}\) and \(\Sigma S_{\mathrm{nb}}\):
\[ S_e = \Sigma S_{\mathrm{ob}} - \Sigma S_{\mathrm{nb}}. \tag{18} \]
This expression can also be used successfully in determining the economic expediency of drilling a well from underground workings.
In determining the economic efficiency of ordinary directional drilling of single-bore wells, all the positive aspects listed in items A and B should be taken into account.
Obviously, under certain conditions the economic efficiency of directional drilling may also be determined by the cost of drilled but strongly deviated wells that do not solve the assigned tasks under ordinary drilling.
It should be noted here that the economic effect in directional drilling depends to a considerable degree on the rationality of the selected well profiles, the direction of their drilling, the selected locations of the collars, and the drilling conditions. In order to obtain the maximum economic effect, it is necessary:
1) to make the fullest and most rational use possible of the conditions of natural deviation, guided by established regularities, with the aim of minimizing the use of means of artificial deviation when bringing wells onto the design profile;
2) to design well drilling in rocks with higher drillability, but sufficiently stable and homogeneous, especially in the exploration of steeply dipping deposits, when it is practically immaterial from which side the wells are started;
3) to use profiles of multilateral wells with preferential flattening of the boreholes in the direction opposite to the dip of the rocks;
4) to determine the locations for drilling additional boreholes under the most favorable conditions—in intervals of wells with slight working of the boreholes in stable, but sufficiently easily drilled rocks.