Still scheduling drilling projects the old way? You’re missing out.
Scheduling drilling operations is a complex and critical process that has substantial economic impact. When done well, it focuses all well delivery operations on meeting the organization’s targets. It also maximizes the efficient use of expensive resources, provides warnings about operational risks (such as offset well violations or continuous drilling problems), and improves responsiveness to operational or business changes. However, when done poorly the consequences can be severe: cycle time delays, deferred production, increased last-minute shuffling of work, and cost overruns are inevitable.
These days, operators are starting to look closely at the way they schedule, and are seeking better tools and ways to improve the scheduling process. This is because there is a realization across the industry that a drilling schedule is not just a simple sequence of activities with their associated resources, arranged by time. Instead, a schedule that incorporates all well delivery activity and related data in an integrated manner has the potential to be a model of drilling operations and how effective they are. By using a single, “next generation” scheduling software tool that associates a schedule with key data, such as lease expirations and obligations, pre-spud milestones, well coordinates, costs and expected production output. It’s possible to gain insights into the effectiveness of drilling operations, manage more easily to targets and ensure that resources are being used most efficiently, Fig. 1. It also warns operators of schedule conflicts, pending well interference and continuous development obligation issues before they become major headaches. This simply cannot be done with older software.
Efficiency losses resulting from inadequate drilling scheduling. In many operators the challenges that result from scheduling drilling operations with spreadsheets or 1990s general purpose project management software are either invisible or ignored. These organizations may be producing hydrocarbons, but unfortunately they are leaving money on the table because they aren’t operating as efficiently and effectively as they could be. As mentioned above, there are significant improvements to be gained from migrating to more advanced scheduling software tools. And there are numerous examples of ways in which dramatic performance improvements have been achieved by operators around the world, as a result of focusing attention on improving scheduling.
Why aren’t spreadsheets and 1990s general purpose project management tools effective for use in scheduling drilling programs? There are many reasons; below are some of the major ones:
- They don’t include any advanced scheduling logic, or any capabilities to map the well delivery lifecycle. All decisions about how to assemble and manage the drilling schedule on an ongoing basis are left to the person who is responsible for scheduling. This yields a time-consuming and error-prone process that isn’t effective because the frequent changes in the operational environment—which may happen as a result of planned or unplanned events—make it hard to keep up.
- These tools aren’t made for the oil and gas industry: they don’t provide any way of incorporating any data specifically about wells and production data, for example, and so they don’t provide any objective measures of schedule quality that are meaningful in an upstream context (Key Performance Indicators (KPIs) like average cycle time, expected costs, forecast production, and resource utilization are missing).
- With no KPIs there is no visibility into the impact of schedule changes, little ability to rapidly answer questions that crop up in team meetings, and questions or requests from management have to be dealt with offline through manual calculations and analysis.
- Creating and analyzing schedule scenarios to evaluate options for changes in the drilling program is hard to do rapidly. The process isn’t reliable and requires a considerable amount of manual effort.
- Collaboration among team members relies on a simplistic process of emailed or stored reports. The risk of an individual working with outdated information is high. This also reinforces territorial behavior and collections of data that are either used only within one discipline, or, more seriously, only by one or two individuals.
Using advanced software for scheduling. Today’s advanced drilling scheduling software is targeted at oil and gas upstream needs, and provides capabilities that are critical to the development of a truly effective drilling schedule that provides rapid answers to important questions. Instead of a simplistic schedule model, limited to activities, resources, dates, and a few constraints, modern scheduling software provides schedule optimization functions, and enables management of a more complex operations model that captures all aspects of drilling operations in an integrated manner, and that is tailored to the needs of the scheduler.
Imagine that you’re in charge of scheduling your company’s drilling program. You not only have to consider your resources, the activities they will perform, and when, but you must also take into account the program’s budget, operation costs (CAPEX and OPEX), resource costs, production forecasts, and equipment utilization. Many constraints besides simple timing requirements affect the schedule, such as SIMOPS, lease obligations, resource work locations, and well interference. Pre-spud workflows and milestones need to be visible in the schedule so that key events are tracked and approaching deadlines are evident (and missed deadlines are flagged for immediate action). As well, you will need the ability to respond rapidly and reliably to questions, and to ensure that all your colleagues have ready access to the schedule data when they need it, so that your team collaborates effectively, and everyone is always dealing with up-to-date information. Lastly, a fast and reliable way of creating multiple schedule scenarios, and analyzing them, is critical.
Today’s advanced scheduling and optimization software must incorporate two key principles. The first is that all important aspects of drilling operations need to be addressed by the software. The second is that the software should focus on enabling the scheduler to do their job in the most productive way possible, without getting in the way. So, capabilities that enable modelling of all upstream drilling operations, together with associated data, must be available. And that will provide 360° visibility into the schedule, so that it may be viewed and analyzed from multiple perspectives, including resources, wells, pads and platforms, business, production, and political areas and leases, Fig. 2.
Data on costs, production curves associated with wells, pads, or areas, and resource utilization must all be present, and must be updated instantaneously as the schedule is changed. User-defined KPIs may be added at any time, to monitor issues such as the ongoing inventory of drilled but uncompleted wells.
The software should work with the user and for the user, and its built-in scheduling logic will replace a huge amount of manual work with automated support for common activities like updates, creation of new wells and resources, alerting, and data analysis. An integrated AI-powered optimization engine will enable the scheduler to align the sequence of activities with important business targets—such as budget ceilings or production targets—and is also instrumental in rapidly creating and analyzing operational scenarios. Collaboration should be easy, with a powerful web-based scheduling viewing and reporting interface that provides authorized users with access to the data they need, from any device, at any time. There is no more need to print PDF files and email them to colleagues at the end of every day: now all team members will be able to access relevant schedule data on demand.
Significant returns on investment. 21st century upstream scheduling software is designed to be up and running rapidly, and to yield significant benefits within the first three months of use. Some real-world case studies illustrate the advantages of moving away from older, general-purpose software, and adopting a more advanced tool.
The first case study resulted in 13 extra 2021 wells. This number arose in a U.S. independent operator that had been using Primavera for many years to schedule their drilling program. This tool provides visual insight into the schedule with a resource-based Gantt chart. But that’s the only way to look at the schedule, and this makes it difficult to determine much about the lifecycle of each well: that is, the ordering and timing of all the activities that are conducted on the well to produce hydrocarbons. Although the well itself is the real item of interest, rather than rigs and frac spreads, there is limited data available about cycle time, for example, so the gap between spudding a well and the time when it’s placed on production is not obvious. Efficiency losses are masked and resource utilization may be sub-optimal.
The operator evaluated Actenum DSO/Upstream scheduling software, loading their drilling schedule and working with it on a daily basis, in parallel with Primavera. Within two months, DSO’s 360° view of the schedule enabled the operator to analyze cycle times for all their wells, easily determine how to move rigs within their asset to maximize efficiency, and they uncovered the opportunity to drill 13 additional wells by the end of 2021. The operator subsequently adopted the Actenum software and is continuing to obtain benefits such as saving scheduler time and managing to budget more effectively and easily.
The second case study concerns a major U.S. operator that generated $100 million in free cash flow in one year. As operational complexity increased in the last few years their spreadsheet-based approach was hindering rather than supporting their efforts. It required a large amount of manual effort to keep up to date, didn’t provide visibility into KPIs, and made it exceedingly difficult to determine cycle times since it only provided a tabular view of wells and their associated operations. Drilling activities were sometimes scheduled out of order instead of in the correct sequence, resulting in lost time, additional costs and inefficient use of assets. It also negatively impacted personnel productivity and year-end results.
In addition to needing the ability to closely monitor KPIs as schedule changes occurred, gain better visibility into operations, and improve the scheduling process and agility, the hyper-competitive oil and gas environment was pushing the operator to be leaner and more efficient than ever. Before and during the pandemic, they needed to understand the impact of resource reductions. By switching from spreadsheets to Actenum DSO the operator was able to automatically generate drilling program Integrated Activity Plans, optimized against business objectives and priorities, such as free cash flow and production targets. The software simplified the process of making schedule changes and also ensured that all operational constraints were satisfied. The AI-powered software gave the schedulers the ability to create and evaluate multiple “What if?” schedule scenarios on demand, with each separate optimization run saved as a new scenario and compared to other scenarios. This enabled the team to select the best one at any point, and present realistic operational options to management. The resulting decisions led to the $100 million savings. And since the operator is able to view the impact of schedule updates on important KPIs in real time, they saved an additional $10 million in 2020 by examining multiple well sequence scenarios and choosing the best.
The third case study centers on 1,000 hours of time saved in scheduler time in one year. That’s roughly equivalent to 25 weeks, or almost half a year. How is it possible to save so much time? This operator was using spreadsheets to manage their drilling schedules. But not just a single spreadsheet: they used multiple spreadsheets, owned by multiple disciplines, to represent the various aspects of their operations: pre-spud milestones, drilling, completions, costs, production forecasts, leases, and so on. Given the size of their program, the task of communicating and keeping the various spreadsheets synchronized was becoming a nightmare. Every day there were multiple schedule changes, resulting from drilling delays, equipment breakdowns or redeployment, and last-minute avoidance of lease expirations and well interference penalties, and all the spreadsheets then had to be updated and synchronized. On top of this, questions raised by team members in meetings, and by senior management, required extensive calculations and more spreadsheet work.
Adopting modern, advanced scheduling software enabled the operator to manage an integrated drilling schedule with all required data in a single application, managed by one scheduler. By linking Actenum DSO/Upstream with their key external applications, data was automatically imported into the schedule overnight and presented to their scheduler each morning. Communication overhead was dramatically reduced, schedule conflicts eliminated, and the schedule update process greatly simplified. And since the schedule is linked to KPIs that are recalculated automatically, the need for calculations done in other spreadsheets and back-and-forth emailing has become a thing of the past. Now it’s much easier to respond to questions from the team and present reliable information to management about the best course of action.
From rapid implementation to impressive insights. A reasonable question to ask is “How complex is the process of adopting a sophisticated, modern schedule tool?” Moving from simplistic spreadsheets to a much more complex product, with many associated data items and extensive reporting, must be difficult, right?
The answer to this question is that it’s actually a reasonably simple process, as long as it’s done the right way. The process of moving from an existing scheduling tool to a modern solution is rapid and reliable, and once the users see the power of the tool they embrace it enthusiastically. Implementation is designed to be methodical, and is usually split into three phases that ensure the successful adoption of the product. Each phase builds on the results of the prior phase, and it all starts with a workshop—using the existing schedule data loaded and transformed into an integrated model schedule—to educate users and stakeholders. The next phase configures the software to address specific requirements, and sees the solution installed in the operator’s IT environment. Installation may be on site, or may be hosted in the operator’s private cloud environment. Following installation, the software is ready to use, so user training and follow-on mentoring sessions are conducted. Within about 2 months the software is in production and users will be starting to see the benefits of the integrated solution.
It’s important to note that not all data has to be available in the software at once. Actenum’s experience, for example, is that full implementation is really a journey with multiple additions of data over time. For example, an organization might begin with their simple schedule consisting of activities, resources, and dates. Once they have been running in production for a month or two, they may add cost data into the schedule, and follow that with more information about their wells, including coordinates and production curve data, so that they’re able to gain additional insights into the effectiveness of their drilling program, Fig. 3. And the process continues over time, adding various data items, until the operator is satisfied that they have all the information they need.
More information. Modern scheduling and optimization software like Actenum DSO is designed specifically to address today’s needs for upstream scheduling, no matter how complex the operational environment, or how many activities need to be scheduled. With a sophisticated user interface created to help the scheduler perform their job at a high level of efficiency, the benefits are there for any operator. For more information and a live demonstration, contact firstname.lastname@example.org
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