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Oilfield Tech & Innovation Conference A New Drilling Business Model
February 23, 2018
Presented by:
Joey Husband
Vice President
2
Commoditized industry takes energy price risk
(-) Low cost debt funded “fast barrels” during
period of low energy demand
(+) 2017 capex moderation/decline rate
(-) US DUC and international projects coming
(+) Demand > Supply 3 out of 4 last quarters
Upstream forecasting environment
Source: EIA, Baker Hughes, Nabors
95.0
95.8
96.6
97.4
98.2
99.0
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
MB
OP
D
World Oil Supply and Demand
supply demand Linear (supply) Linear (demand)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
0
20
40
60
80
100
120
140
160
180
200
2010 2011 2012 2013 2014 2015 2016 2017
Na
tura
l Ga
s $
/MM
BTU
Cru
de
$/B
BL
an
d A
ctiv
e R
igs
rig count/10 Cushing WTI Henry Hub Natural Gas
3
Nabors journey focused on technology, people and performance
Operations
Organization
transformation
Creation of a new
R&D Group
Creation of
Nabors Drilling
Solutions
2015
APR
2015
Centralized
Engineering
People
Strategy
Operations
Excellence
2014
The Driller of
Choice
Integrated
Offering
Performance
focus
Best people
Competitive
Price
Customer
partnerships
2016
Oct
2011
Tony Petrello
CEO
Focus on
Technology
and
Performance
2017
2018
DD Ready™ Rig
Fully Automated
RP 800 Rig
completed
PACE M-800
build series
commences
AccuSteer™
commercialized
MPD Ready™ Rig
Saudi JV goes
Live
Tesco, RDS
Acquisitions
Closed
Orient Express
Rotary Steerable
D series Testing
CRT Ready™ Rig
Performance
Driller™ rollout
RigWatch ™
Navigator
commercialization
Rockit-Pilot
commercialization
Orient Express E
series
commercialization
4
• $100 million SG&A reduction
• Performance and efficiency improvements
• Nabors Drilling Solutions (NDS) accelerated growth
• Low volatility international upside – SANAD
• Automation of rig and downhole
5 levers to Performance Driller of Choice
5
Nabors Drilling Solutions – four unique product lines
Supported by Nabors IP Portfolio
Performance Drilling Tools
ROCKit® REVit®
DrillsmartTMRigWatch®
AccuSteer ®, BlueForce
Motors
Orient Express RSS
Wellbore Placement
MPD-Ready™
Non Stop Driller
BOP Testing, VBR, Chokes
Casing Drive System
Managed Pressure Tubular Services
6
The legacy model for well construction is a “dumb” rig
to pump fluids, torque and hoist pipe, while drilling and
evaluation technology is applied by third party service
companies and suppliers
• The rig and crew however execute most tasks
• Comprehensive well KPI’s lack transparency, not
actionable
• Traditional workflows embed cost and performance
variability
• Barriers exist for new workflows among separate
suppliers
Well construction norm
7
Rig mobility and configuration
• Solids control, pressure control
• Pipe handling and automation
Smart programming and automation
• Health check, high fidelity data
• Performance drilling, tripping apps
• Managed pressure, casing apps
• RigCloud hosting
Right people
• New automated workflows, roles,
responsibilities
• Well construct vs traditional crew
• Remote support, transparent KPI’s
Changing the game on performance
1
3
4
5 6
7
8
9
Performance Drilling Training
Increase P rate, BHA life
Downhole motor reliability
1
Voice/Chat/Video
Communication
Direct to driller, improve connection
time
RigWatch Navigator™
Automated instructions, decision
log, customer specific drilling rules
Performance Driller™
Reliable logging, decoder, reduced
rig up
2
Top Drive ROCKit®-Pilot,
REVit®, ECM enabled
Improve drilling performance
Reduce NPT
3
2
Integrated rig sensors
Reliable MWD telemetry
Calibrated EDR, data quality
4
Mud Pit best practices
Reliable MWD telemetry
Higher P rate
5
AC Mud Pump automation
Reliable MWD telemetry
Reduced shock and vibration
6
Automated Catwalk
Safe BHA handling, supervision,
specifications
7
Rig Grounding Practice
Improve MWD signal reliability8
RigWatch™ Daily DD KPI’s
Benchmark and improve directional
performance9
8
Automated Measurement of Rig Performance
ReportDescriptionReport Type
End of Well
Report
Custom
Performance
Reports
Daily
Performance
Report
ILT/IST
• Summary of SQKPIs, Torque and Drag, ILT, Days vs
Depth, Depth per Day, Fuel Usage, and SQKPI incidents
• KPI’s are owned by crew
• Rigs with ECM have fuel consumption data
• Rig performance previous 24 hours including SQKPI’s,
torque and drag, plan days vs actual, and drilling
parameters
• SQKPI’s split by day and night shift
• Differential actual time by activity versus target
• Consolidated rig technical limit
• ILT for tripping, casing, and connections available by
crew
• Detailed Well Time Analysis reports identify where
biggest improvement areas of activity
• KPI trends and rig comparisons over time quantify
continuous improvement
9
myWells® Analytics Dashboard
10
The product of directional drilling is a safely and
efficiently drilled deviated wellbore reliably placed in
the target production interval
One drilled to specifications that adjusts
automatically as new information is obtained in real
time and used to adjust the plan
Directional drilling is not directional drillers, MWD
tools, motors, rotary steerable tools
A Smart drilling rig is the most effective way
to deliver a deviated wellbore
Directional drilling example
11
Directional drilling - automation
RigWatch® NavigatorTask- Create plan for next stand and deliver detail to driller
• Detailed drill down instructions
• 3D visualization of wellbore for drillingand geology
RigWatch® / myWells KPIsTask- Record survey and other data to understand performance
• Review position and adherence to plan
• Analyze effectiveness of slide
• Analyze drilling KPIs
• Document performance and decisions
ROCKit® Pilot Task- consistently execute slide
• Automation of directional control
• Steer on Target
• Repeatable consistent performance
RigWatch® NavigatorTask- Obtain positional data
•Take Survey
•Validate/Accept Survey
•Advanced survey management,as required
Determine position
Record and analyze result
Create plan for next stand
Execute plan
1 2
3
4
12
Automated Directional Drilling decision making and guidance system that provides:
Directional drilling - RigWatchTM Navigator
• Automated drilldown
instructions
• 3D Visualization and
Reporting
• Documented adjustment of
instruction to adhere to rules
set forth by the Operator
• Collaborative communication
and workflow platform
13
Directional drilling - Rockit™-Pilot automated execution
Trapped Torque
• Limit toolface movement once tagging bottom
Oscillation• Oscillate to improve WOB transfer and ROP
Tag Bottom
• Adjust drilling parameters start the slide
Align Toolface
• Bring toolface to desired target
Maintain Position
• Steering corrections to maintain target toolface
Evaluate Slide
• Evaluate slide and adjust drilling speed
Off
Bottom
Steps
On
Bottom
Steps
14
Pre Slide Time
• Time to work out trapped torque, adjust
drilling parameters and target toolface
Toolface Setting Time
• Quill adjustments to adjust toolface
position
Burn Footage
• Initial footage drilled in the wrong
direction
Slide Score
• Metric to evaluate toolface control
Effective ROP
• Total time to execute slide versus on
bottom ROP
Directional drilling - new KPI’s
15
Directional drilling - automated service
20162 x DD, 2 x MWD, 5 x rig
crew = 9 personnel plus rig
up surface acquisition
2017 DD Ready™1 day,1 night supervisor, 5
man crew = 7 personnel, rig
integrated acquisition
Expert DD in Rigline™ 24/7
supporting 6 rigs
Centralized well planning,
engineering support,
geosteering
16
MPD Ready® Rig
1
3
4
5
6
7
8
MPD Training
Increase P rate, reduce cost
Choke Automation
Kick detection, reduce personnel
1
Voice/Chat/Video Communication
Direct to driller, improve ROP
Rig Integrated MPD Choke Manifold
Reduce engineering, rig up time
Lower 3rd party cost
2
Piping Package
Reduce engineering cost, footprint
Reduce rig up/fit up time
Walks with rig
3
2
Rig Integrated RCD
Lower personnel
Lower 3rd party cost
Engineered to BOP
handling
4
Rig integrated mud gas separator,
ultrasonic gas metering
Reduce rig up, footprint
Lower 3rd party cost
Walks with rig
5
AC Mud Pump automation
Early Kick detection
Reduce operator errors
Divert flow on connections
6
Rig integrated Coreolis Meter
Reduce 3rd party cost
Early Kick Detection
Walks with rig
7
RigWatch™ Daily MPD KPI’s
Benchmark / improve performance
8
3
17
MPD-Ready® performance case
10 wells in highly fractured Lower Lance andMesa Verde formations characterized by influxand fluid losses in the production section byholding back pressure while drilling, duringconnections, running and cementing pipe
Results
• No kicks in reservoir section, incident-freeoperations
• Drilled to TD without losses (Mud / Cement)
• Drilled with hydrostatic underbalanced mud ~ 1.0ppg
• No ballooning/breathing by maintaining constantEMW at the bit during connections
• All return gas controlled and diverted to MGS
• Alignment of rig/mpd crew on well control andMPD operating procedures
• Managed pressure casing running and cementingoperations for wellbore stability and reliableisolation
WY
18
CRT Ready™ Rig
1
2
CRT Training
Increase running speed, reduce
personnel, reduce cost
Torque Automation
Reduce damaged pipe
1 2 Top Drive integration
Reduce engineering cost
Reduce footprint, rig up/fit up
time, reduce service loop
3
4
Integrated Cementing
Reduce rig up
Lower 3rd party cost
Cement integrity
RigWatch™ Daily CRT KPI’s
Benchmark and improve
performance
4
3
Torque Turn
Control makeup speed, spec
5
5
Powered Walking
Catwalk
Reduce rig up
Lower 3rd party cost
Reduce NPT
6
6
19
The rig of the future is now
$0
$1,000
$2,000
$3,000
0%
30%
60%
90%
2017 NDS Penetration US NBR Fleet
% Penetration Margin/Day/Rig
20
• Trips per well decrease
• Man-hours/well decrease
• Days per well decrease, wells/rig increase
Repeatable performance impact on wells 2Q to 3Q 2017
Source: EIA, Baker Hughes, Drilling PerformanceUSA-L48: Benchmarking Report
BASIN# OF WELLS
DRILLED
CHANGE VS
PRIOR
QUARTER
# OF
ACTIVE
RIGS
CHANGE
VS PRIOR
QUARTER
WELLS
PER RIG
CHANGE
VS PRIOR
QUARTER
Permian 1384 291 355 58 3.9 0.02
Eagle Ford 540 99 82 21 6.6 -0.7
Niobrara 422 66 34 3 12.3 0.9
Bakken 266 76 46 8 5.8 0.7
Haynesville 134 27 39 6 3.4 0.2
~ Sequential 25% increase in wells drilled in 5-major L48 basins
21
• Safer floor, better well control
− Lower turnover, opex, downtime, flat time
• Less rig demand for same wells
− Engineered service integration enables new
capex model
• Day rate models discount performance
− Predictable performance enables new
commercial models
Impact on the business model