drill bit economics
Post on 28-Mar-2015
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Drill Bit Economics
Drill bit economics consists of drilling curves, cost-per-interval and breakeven analysis; all of which
possess significant differences.
There are two types of drilling curves:
1. Depth vs. Time
2. Depth vs. Costs
Drilling costs are comprised of three different components:
Time
Rotating Time
Drilling / on bottom time
Non-drilling
Reaming / back reaming
Non-Rotating Time
Connections
Tripping
Circulating
Running Casing
Logging
Maintenance / Repair
Fishing
Bit Cost
Downhole Tool / BHA Costs
Standby Charges
In-Hole Costs
Up-Front Charges
Indirect Costs
Borehole Quality
Trajectory
Shape
Open-Hole Risk
Borehole Integrity
Formation Damage
Pressure Risk
Wireline and Cement Unit Rentals
Basic Cost-Per-Interval
CI = RR x (HR + TT) + (DT x HR) + BC
INT
CI = Cost-Per-Interval (Currency)
RR = Rig Rate (Hourly)
HR = Drilling Time (Hours)
TT = Trip Time (Hours)
BC = Bit Cost (Currency)
INT = Interval Drilled (feet or meters)
Historical Versus Projected Cost-Per-Interval
Historical
Uses information from an actual well or wells
Cost-Per-Interval is actual
Projected
Used for selection and comparison
Calculated based on planned or target well
Calculated based on projected hours and interval drilled
Breakeven Analysis
Breakeven analysis demonstrates rate of penetration or interval required to meet or exceed offset
cost-per-interval.
Assumed Footage
ROPBE = RR / CLO – [((R(TT)) + BC) / INT]
Assumed Penetration Rate
INTBE = [RR (TT) + BC] / [CLO – (RR / ROP)
ROPBE = Breakeven Penetration Rate
INTBE = Breakeven Interval
CLO = Offset Cost-Per-Interval (Currency)
RR = Rig Rate (Hours)
TT = Trip Time (Hours)
BC = Bit Cost (Currency)
ROP = Assumed Rate of Penetration
INT = Assumed Interval Drilled
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