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SchlumbergerDowell

SOLIDS CONTROL HANDBOOK

Economics

Section 200

January 1998

of 12

CONFIDENTIAL

Economics

1 Introduction................................................................................................................. ........1

2 Economic Justification....................................................................................................... 2

2.1 Penetration Rate............................................................................................................2

2.2 Dilution Rate ..................................................................................................................3

2.2.1 Economic Analysis Calculations...........................................................................4

3 Solids Control Economics and Performance Program (SECOP) ....................................8

4 Monitoring System Performance .......................................................................................9

4.1 API Procedure for Evaluating Total Efficiency of Solids Control Systems (Water-Based Muds) ..................................................................................................10

5 Summary...................................................................................................................... ......12

FIGURES

Fig. 1. Effects of solids content on drilling performance. ........................................................3

TABLES

Table 1 Solids Control Economic Analysis Parameters...........................................................4

1 Introduction

The impact of good solids control can be very significant and can lead tosubstantial cost savings, but often there is reluctance to invest in solidscontrol for the following reasons:

1. Many of the benefits are indirect and the savings are hard to quantify.

2. Methods to economically justify solids control equipment were notavailable.

3. Techniques to measure performance are limited.

4. Disappointing results from ill-chosen or incorrectly-operatedequipment.

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Although the benefits from good solids control are numerous, the costsavings are not apparent in normal drilling cost accounting. For example, thesavings due to reduced trouble costs and improved penetration rate,although substantial benefits, cannot be accurately calculated. Usually thedrilling fluid gets most of the credit (or blame) since mud materialconsumption is easily tracked and the mud properties are the only directindication of solids control system performance. In a realistic sense, the mudand the solids control equipment are integral parts of one system. Onecannot plan the mud without considering the solids control system and viceversa. This does not mean that the benefits of good solids control practicescannot be measured.

2 Economic Justification

2.1 Penetration Rate

The impact of solids control on penetration rate is best depicted by Fig. 1.This has become somewhat of a classic illustration of the benefits of a lowsolids content mud. For example, a reduction in average solids content from4.8% (9.0 ppg) to 2.6% (8.7 ppg) results in a 15% reduction in total rig days.Given a 10,000 ft well costing $700,000 excluding mud cost, the estimatedsavings could reach $100,000. If even half of these savings were realized, itwould more than pay for the best solids removal system available.

In soft rock country such as the Gulf Coast, efficient solids removal canreduce the need to control-drill by limiting required dilution rates tomanageable levels and reducing operational problems due to overloadedsolids removal equipment. The benefits from efficient solids removal, e.g.,“low-silt” muds, have been documented for Gulf Coast drilling since the mid-60s when hydrocyclone use was first advocated.

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Economics

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Fig. 1. Effects of solids content on drilling performance.

Note: The benefits of low solids contents are most apparent at less than 5% solids.

2.2 Dilution Rate

Solids removal efficiency directly impacts dilution costs. When dilution wateris added to the system, three costs are incurred simultaneously:

1. Dilution water cost.

2. Cost of additives to maintain stable mud properties.

3. Disposal cost.

The savings due to improved penetration rates and reduced trouble time,while real, cannot be reliably predicted as justification for improved solidscontrol equipment. In many cases however, the economic advantages due toreduced dilution and disposal costs are more than enough to justifyexpenditures for additional equipment. The economic benefits in terms ofmud consumption and disposal can be determined through a simple massbalance analysis: Removing a given percentage of drilled solids will result ina certain dilution volume to maintain the desired maximum concentration ofdrilled solids in the mud. The relevant parameters and their symbols used inthe calculations are listed below.

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Table 1 Solids Control Economic Analysis Parameters

Vc = Volume of drilled solids generated, bblsVi = Initial volume in tanks, previous hole/casing, bblsVf = Final volume in tanks, previous hole/casing, bblsVd = Volume of addition/dilution fluid required, bblsVlw = Volume of liquid waste to be disposed, bblsVsw = Volume of wet solids to be disposed, bblsVt = Total volume of solids and liquids to be disposed, bbls

ki = Initial concentration of drilled solids, vol. fractionks = Maximum volume fraction of drilled solids, vol. fractionX = Drilled solids removed by equipment, vol. fractionY = Liquid associated with the cuttings, bbl/bbl

D = Hole diameter, in.L = Section length, ftW = Washout, vol. fraction

rd = Density of dilution fluid, ppg

rc = Density of drilled cuttings, ppgr

i = Mud weight at the start of the section, ppgr

e = Desired mud weight, end of section, ppg

2.2.1 Economic Analysis Calculations

First, the volume of cuttings generated in a given interval must be calculated:

Vc = 0.000971 x D x L x W2

For a given percent of drilled solids removed, X, the required dilution volumeis computed by:

( ) ( )V V Vkk

Vd c ii

si =

1- k

k 1- Xs

s- +

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Economics

Section 200

January 1998

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CONFIDENTIAL

The following equations may be used to calculate the solids removalefficiency, Xc, and the associated dilution volume required to discharge onlywet solids:

( )( )

Xk V V k V

V k Ycs f c i i

c s =

Vc - + +

+1

( ) ( )V V X V Yd i c c = Vf − + +1

The required mud weight (density) of the dilution volume, Vd, is based on thespecified starting and ending densities and is calculated by:

( )ρ ρ ρ ρ ρ ρd e e ic

dc e

V

VX =

V

Vi

d

+ − − − −( )( )1

The total volume of solids and liquid generated in an interval is given by:

V V Vt c d = Vi + +

The wet solids volume, Vsw, and liquid volume, Vlw, discharged while drillingthe interval is computed by:

( )V Ysw = XVc 1+

( )V V V Vlw f c sw = Vt − + +

The remaining circulating volume includes the volume of solids not removedby the solids removal equipment. Since the solids are assumed to be too fineto be removed by the solids control equipment, their volume is counted asliquid volume for disposal purposes.

When the entire circulating system is to be discharged at the end of theinterval, the total liquid for disposal is calculated by:

V Vlw sw = Vt −

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Once the waste volumes are calculated, the total dilution and disposal costfor the interval may be determined by estimating the equipment rental costand the cost/bbl for addition/dilution and liquid/solids disposal:

1. Solids Control Equipment Cost

- Estimate rental, transport, service, and maintenance (e.g., screens)cost for the interval.

2. Addition/Dilution Cost

- Estimate the cost/bbl by including purchase cost for dilution liquid,trucking, and additive cost.

3. Liquid/Solids Disposal Cost

- Estimate the cost/bbl by including hauling, disposal, treatment,reserve pit construction and reclamation.

Example Calculations

Interval Data:

Vc = Volume of drilled solids generated, bblsVi = 360 bblsVf = 360 bblsVd = Volume of addition/dilution fluid required, bblsVlw = Volume of liquid waste to be disposed, bblsVsw = Volume of wet solids to be disposed, bblsVt = Total volume of solids and liquids to be disposed, bbls

ki = 0 (fresh mud, no drilled solids)ks = 0.06 (6% maximum drilled solids)X = 0, 0.1, 0.5 (3 cases)Y = 1.0 (1:1 solids to liquid ratio in wet solids discharge)

D = 12.25 in.L = 1600 ftW = 1.10 (10% washout)

rd = Density of dilution/addition fluid, ppgrc = 2.6 x 8.34 = 21.68 ppgri = 8.6 ppg initial mud weightre = 9.4 ppg final mud weight

Dilution Cost: $5.00/bblLiquid Waste Cost: $3.00/bblSolid Waste Cost: $5.60/bbl

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Calculations:

1. Cuttings volume:

Vc = 0.000971 x D x L x W2

( ) ( ) ( )Vc = 0.000971 x 12.25 x 1600 x 1.1 = 256 bbls2

2. Dilution volumes for each solids removal efficiency:

( ) ( )V V Vkk

Vd c ii

si =

1- k

k 1- Xs

s- +

For X = 0.0

( ) ( )Vd = 1- 0.06

= 3650 bbls0 06

1 0 256 3600

0 06360

.( )

.− − +

For X = 0.1

( ) ( )Vd = 1- 0.06

= 3250 bbls0 06

1 01 256 3600

0 06360

.( . )

.− − +

For X = 0.5

( ) ( )Vd = 1- 0.06

= 1645 bbls0 06

1 0 5 256 3600

0 06360

.( . )

.− − +

3. Dilution density:

In this example, the required density will not change with eachcase. The parameters for X=1 are chosen for illustration purposes.

( )ρ ρ ρ ρ ρ ρd e e ic

dc e

V

VX =

V

Vi

d

+ − − − −( )( )1

( )ρd = .4 360

360 = 8.6 ppg9 9 4 8 6

256

32501 01 217 9 4+ − − − −. . ( . )( . . )

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4. Solids removal efficiency and dilution volume to achieve zero whole-mud discharge while drilling:

( )( )

Xk V V k V

V k Ycs f c i i

c s =

Vc - + +

+1

( ) ( )( )Xc =

256

x 1.0 = 0.81

− + ++

0 06 360 256 0 360

256 1 0 06

.

.

( ) ( )V V X V Yd i c c = Vf − + +1

( ) ( )( )Vd = 360 = 415 bbls− + +360 0 81 256 1 1.

5. Summary of waste disposal volumes:

Total Volumebbls

Wet Solidsbbls

Liquid While Drillingbbls

Total Liquidbbls

X = 0.00 4266 0 3650 4266X = 0.10 3866 51 3199 3815X = 0.50 2261 256 1389 2005X = 0.81 1030 414 0 616

6. Cost estimate for each case, discarding total liquid volume (lastcolumn in Step 5):

Drilled SolidsRemoved

EquipmentCosts

Addition/DilutionCosts

Disposal CostsSolids Liquids

TotalCosts

0% $0 $18,250 $0 $12,678 $30,92810% $100 $16,250 $286 $11,445 $28,08150% $500 $8225 $1434 $6015 $16,17481% $5000 $2075 $2318 $1848 $11,241

The example illustrates how an increase in equipment costs to improvesolids removal efficiency is justified by the savings in addition/dilution anddisposal costs, even without considering savings attributable to higherpenetration rates or reduced trouble costs.

3 Solids Control Economics and Performance Program (SECOP)

A natural question arising from the economic analysis exercise is “Whatequipment will I need to achieve the optimum solids removal efficiency?” It isalso apparent that the determination of an economically-optimum solidscontrol system can be a time-consuming, iterative process. The equipmentcosts to achieve the minimum required dilution volume (commonly called a“closed-loop” mud system) may not be economic in all cases. It may noteven be physically possible with available mechanical solids removal

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technology. The Solids Control Economic and Performance AnalysisProgram (SECOP) was developed at APR to assist drilling personnel in theoptimum selection of solids control equipment. It is available as anIntegrated Drilling Assistance Program for use on the PC.

1. The economics of solids control in terms of potential savings in muddilution and disposal costs versus the percent drill solids removed.

2. The performance of solids control equipment. It predicts the drill solidsremoved by each piece of equipment selected.

3. The loss of weighting material and mud from each piece of equipmentfor weighted muds and the predicted recovery from barite-recoverycentrifuging.

4. The performance for different equipment options to determine themost effective solids control system for drilling a well.

SECOP predicts only the savings in mud and disposal costs. As discussedpreviously, no model exists to predict additional savings from higherpenetration rates and lower trouble costs that result from effective solidscontrol. The program uses models developed as a result of extensiveequipment testing at APR to predict individual equipment and total systemperformance. The overall economics calculations are based on the sameequations described above. A complete description of the program isprovided in the IDAP reference manual.

The recommended application of SECOP is to match the performancehistory of the solids control system for an offset well. This can be done byselecting the proper lithology and resulting particle size distribution whichmatches the mud volumes and costs for the offset well. Once a lithologymatch has been made, different equipment options may be tried to find themost economically-effective solids control equipment for the proposed well.

A successful economic analysis for future wells will depend on determining arepresentative particle size distribution from the offset well which, in turn, isdependent upon having accurate records of dilution volumes and equipmentoperation. This emphasizes the importance of accurately metering wateradditions and equipment performance while drilling. SECOP may then beused to monitor equipment performance and establish representative particlesize distributions for future economic analysis and equipment selection.

4 Monitoring System Performance

The API Recommended Practice 13C contains a field method for evaluatingthe total efficiency of the drilling fluid processing system in water-basedfluids. As with any performance analysis, this procedure depends uponaccurate dilution volume information. The API procedure uses the dilutionvolume over a given interval to compute a dilution factor, DF, which is thevolume ratio of actual mud built to mud dilution required to maintain adesired solids concentration with no solids removal equipment. The dilutionfactor is used to determine the total solids removal efficiency of the system.

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This total efficiency can then be used in SECOP to establish arepresentative particle-size distribution for further analysis and equipmentperformance predictions.

4.1 API Procedure for Evaluating Total Efficiency of Solids Control Systems (Water-Based Muds)

1. Over a desired interval length, obtain accurate water additions andretort data.

2. From the retort data, calculate:

- The average drilled solids concentration in the mud, ks.

- The average water fraction in the mud, kw.

3. Calculate the volume of mud built, Vm:

VV

km w

w=

4. Calculate the volume of drilled solids, Vc:

Vc =0.000971 x D2 x L x W

5. Calculate the dilution volume required if no solids were removed, Vd:

VV

kd c

s=

6. Calculate the dilution factor, DF:

DF V

Vm

d

=

7. Calculate the total solids removal performance, Et:

Et = (1 - DF) Multiply by 100 to calculate as a percentage.

The accuracy of the API procedure depends on a relatively constant solidsconcentration in the mud, constant surface circulating volume, andconsistent averaging techniques over the interval of interest. Regardless, thetotal solids removal performance should be reported at frequent intervals tofacilitate solids control analysis and planning for future wells.

SchlumbergerDowell


Economics

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January 1998

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CONFIDENTIAL

Example Calculation

Interval Data:

Water Added, Vw 1481 bbl

Average Water Fraction, kw 0.9

Interval Length, L 1600 ftBit Diameter, D 12.25 in.Washout, W 10%

Average Drilled Solids Concentration, ks 0.06

Calculations:

1. Calculate the volume of mud built, Vm:

VV

km w

w= =

1481

0.9 = 1645 bbls

2. Calculate the volume of drilled solids, Vc:

Vc = 0.000971 x D2 x L x W

= 0.000971 (12.25)2(1600)(1.1)

= 256 bbls

3. Calculate the dilution volume required if no solids were removed, Vd:

Vd = V

k =

256

0.06 = 4267 bblsc

s

4. Calculate the dilution factor, DF:

DF V

Vm

d

= = 1645

4267 = 0.386

5. Calculate the total solids removal performance, Et:

( )Et = 1- DF = 1- 0.386 = 0.614

Expressed as a percentage:

Et = 61.4%

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5 Summary

· The economic advantages of good solids control practices, while real,are usually difficult to predict in terms of improved penetration rates andreduced trouble time. However, savings in dilution and disposal costscan be predicted and are often ample justification to invest in improvedsolids control equipment.

· Solids removal efficiency directly impacts the cost of dilution, materialconsumption and waste disposal. A simple mass balance approachmay be used to predict total dilution and waste volumes as a function ofsolids removal efficiency. Example calculations show how aninvestment in solids control equipment may be easily justified by thesavings realized from reduced addition/dilution and disposal costs.

· The solids control economics and performance program “SECOP” maybe used to select the most effective solids control system. This programpredicts:

- The savings in mud dilution and disposal costs vs. the percent solidsremoved.

- The drilled solids removed by each piece of equipment.

- Loss of weighting material and mud from each piece of equipment.

- Recovery from barite-recovery centrifuging.

· The program is available as an Integrated Drilling Assistance Program.

· The API Recommended Practice 13C contains a field method formonitoring system performance in the field. This method depends uponaccurate dilution volume monitoring to determine total solids removalefficiency. The API procedure and example calculations are presentedin this section.

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