Boosting production amid a cost-conscious environment

20 January, 2021 by Add Energy

The impact of COVID-19 has resulted in many operators delaying investment into new projects and looking for opportunities to improve operating efficiencies and lowering costs for projects that are already in play.  

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Production optimization is a key component to survival and assuring production remains economically viable and safe.  

In this blog, our EVP of Well Engineering, Eduardo Robaina share insights on how this initiative can be achieved to assure return on investment (ROI), and offers advice for building a compelling business case that can be presented to decision makers, to help sanction the project amid a cost-conscious environment.  

What options are available, and proven to boost production amid a cost-conscious environment? 

“There are a number of variables involved which makes it difficult to offer a 1 size fits all solution, however, there are a numerous of viable options that can be relatively quick to identify from the insights that your well data, processes and people can offer.  

“Tapping into each of these resources is crucial to gain a fuller picture of the current situationThis will ensure that all possible restrictions and bottlenecks that could be impacting production are identified and therefore considered as part of the improvement plan.  

“In our experience, a 2 week study to determine these factors is imperative to the project success. During this study, experienced well engineers will use transient multiphase software to model and analyze the well data, review processes and anecdotal information from key stakeholders to determine bottlenecks or restrictions.  

Once the restricting factors have been identified, the solutions for eliminating these can then be assessed to determine impact and thus suitability and feasibility. To give you an idea of the options available, here are some solutions that we have seen implemented successfully: 

  • Isolation of water breakthrough by using modern technology for re-instating shale / zonal isolation if there is fluid movement behind production casing / poor zonal isolation 
  • Re-perforating existing production zones  
  • Gas lifting techniques  
  • Re-allocation of lift gas across multiple wells 
  • Installing velocity strings in tubulars 
  • Installing a smaller sized tubing in the production wells 

Additional considerations  

In my experience, the ability to optimize the reservoirs capability through production optimization initiatives has never been a challenge once you understand the options available and the feasibility of those options. However, it is important to note that there are additional initiatives that can impact the production capability and cost of extraction without touching the well. These include but are not limited to:  

  • Reviewing the well maintenance regime and historical data to identify opportunities to change the maintenance strategy to better mitigate against known failures – this will help to avoid the risk of downtime and optimize your maintenance expenditure, to assure you are only doing the right maintenance at the right time, with the right materials-  no more, no less  
  • Consolidated well planning and execution to minimize personnel mobilizing to the asset, this can include: 
    • Water Shut Off Plug installation 
      • Reviewing industry practices 
      • Reviewing new technology available  
      • Reviewing tension / wire modelling to ensure plug reaches required depth, where practicable review roller and standoff technology 
      • Where practicable use Surface Read Out (SRO) technology to assist in accurate depth placement 
      • Where practicable use reservoir saturation and production logging tooling to better understand formation, including: 
        • Cross flow 
        • Water saturation 
        • Skin damage 
      • Conduct flow trial post setting, be prepared for backup plug setting  
      • Review technology available for re-instating shale / zonal isolation if there is fluid movement behind production casing / poor zonal isolation 
    • Perforating 
      • Complete well history and status from previous interventions 
      • Conduct extensive auditing of vendors explosive handling procedures (i.e. API67) 
      • Conduct Saturation Logging to confirm zones / review tight shales that may be accessible 
      • Conduct Shock Pro modelling to understand perforation performance into desired reservoir (area of flow), estimating ROI  
      • Conduct wireline tension modelling to best select tool string perforating gun length 
      • Use SRO tooling to ensure correct depth placement of perforating equipment 
      • If possible, monitor reservoir pressure at depth and surface prior to shooting for understanding of zone performance 
      • Ensure data is reviewed real-time by use of cloud sharing technology platform 
  • Investment in learning and development to ensure the workforce has the correct skills, knowledge, and competency to mitigate risk, assure productivity, make the right decisions, and optimize well operating costs. With thousands of experienced people being made redundant as a result of COVID-19 and the subsequent plunge in commodity price, a significant skills and knowledge gap has emerged, meaning this investment is more crucial than ever right now.   

Building a powerful business case for releasing the budget you need 

During a time where it feels like every penny being spent is questioned or scrutinized, it is important to build a compelling business case that you can present to decision makers that is impossible to reject.  

“Whether you are looking to obtain budget to outsource a production optimization feasibility study, or you want to form a team internally to dedicate time to this initiative, it is important to create a sense of urgency by communicating just the right level of information that is continually aligned to your goal, which is to get the authorization you need to enhance production capability and the bottom line!  

Throughout my career, I have spent a lot of time and effort developing cases for change both internally and on behalf of my clients, here is my go-to, results driven structure that I would apply during this “pitch”: 

Set the scene 

Explain why change is needed now and not tomorrow, and detail what impact this change will have, and what will happen if no change is made 

Discuss the change 

Discuss what could potentially change (a summary of proven tactics for production optimization and the results it has had), what will remain the same (i.e. the team, culture, etc) and who this change will impact directly.  

Detail the how 

Discuss in detail how you plan on achieving the goal to optimize production, detail who you believe should be involved, how long it will take and how much it will cost. It is important to consider options to de-risk the “how” (this could be through risk and reward initiatives, or bringing in an external expert and having team members shadow their way of working for future initiatives, etc).  

Focus on the gains 

Communicate the projected ROI and any fringe benefits when you are discussing the costs and time associated to de-risk the initiative and gain the buy in you need from key decision makers. Showcase case studies of where this initiative has been successfully implemented previously and the value it unlocked.  

Expose the consequences 

Discuss what the impact will be if the initiative is not implemented, give examples and be sure to include associated costs to emphasise your point.  

Set the expectations  

Inform the key stakeholders about what the expectation is from them, i.e. what do role do they play in the project success (authorizing funds, attending workshops, etc) so they are aware of the commitment before embarking on the project. This is one of the key success factors, you need the buy in and support from leadership for initiative to be successfully implemented and sustained.  

Without a doubt, this process can be quite daunting, especially if this is something that is new to you. Ultimately your name will be associated with initiative, so naturally you want to ensure you have explored all possible scenarios and risks prior to presenting this, and even more so if it is sanctioned. Ensure sufficient time is allocated to preparing properly for this discussion and get the opinion of other stakeholders across different functions to test your approach. 

How Add Energy can help boost production 

Add Energy’s team of well engineering experts works with companies who are looking for opportunities to enhance production. We do this through analysis and modelling of well data and information to identify production optimization opportunities and implement techniques to unlock the flow capacity.  

Learn more here. 

Topics: General Drilling and Wells

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