Under Balance Drilling

PETE 689
Underbalanced Drilling (UBD)

Lesson 12
Selecting an Appropriate Technique
Read: UDM Chapter 4
pages 4.1-4.54
Harold Vance Department of Petroleum Engineering
Selecting an Appropriate
Technique
• Potential applications and

candidate technique.
• Technical feasibility.
• Economic analysis.

Required Data For UBO
Candidate Identification
• Pore pressure/gradient plots.
• Actual reservoir pore pressure.
• ROP records.
• Production rate or reservoir
characteristics to calculate/estimate
production rate.
• Core analysis.

• Formation fluid types.

• Formation integrity test data.
• Water/chemical sensitivity.
• Lost circulation information.
• Fracture pressure/gradient plot.

• Sour/Corrosive gas data.

• Location topography/actual
location.
• Well logs from area wells.
• Triaxial stress test data on
any formation samples.

Poor Candidates For UBD
• High permeability coupled with high

pore pressure.
• Unknown reservoir pressure.
• Discontinuous UBO likely (numerous
trips, connections, surveys).
• High production rates possible at low
drawdown.

• Weak rock formations prone to

wellbore collapse at high drawdown.
• Steeply dipping/fractured formation
in tectonically active areas.
• Thick, unstable coal beds.

• Young, geo-pressure shale.
• H2S bearing formations.
• Multiple reservoirs open with
different pressures.
• Isolated locations with poor
supplies.
• Formation with a high likelihood of
corrosion.

Good Candidates For UBD
• Pressure depleted formations.

• Areas prone to differential pressure
sticking.
• Hard rock (dense, low permeability,
low porosity).
• “Crooked-hole” country and steeply
dipping formations.

• Lost-returns zones.
• Re-entries and workovers (especially
pressure depleted zones).
• Zones prone to formation damage.
• Areas with limited availability of
water.

• Fractured formations.
• Vugular formations.
• High permeability formations.
• Highly variable formations.

• Once the optimum candidate has

been identified, the appropriate
technique must be selected, based
on much of the same data required
to pick the candidate.

Candidate Decision Tree-Sheet 1
Previous history of
underbalanced
Operations (UBO)?
No
Hydrocarbons
Yes Go to
anticipated Sheet 2
No
Drilling No
problems No UBO
anticipated
Yes
Lost
Yes
circulation
No
Stuck
Yes Cost/safety No
No UBO
pipe benefits
No
Yes
Hard Yes Candidate
drilling
(ROP/bit)
No
No UBO
Detailed engineering
(cost, safety, reservoir,
Mechanical main drivers)
Depleted
Yes Go to
reservoir Sheet 3
No
Drilling No
Problems No UBO
anticipated
Yes
Lost
Yes Reservoir damage
No
circulation Production impairment No UBO
No Yes
Stuck
Yes Cost /safety
No
pipe benefits No UBO
No
Yes
Candidate
Hard Yes
Drilling
(ROP/bit)
No
No UBO

Drilling Yes Lost

Yes
problems
circulation
anticipated
No No
No Reservoir damage
No UBO Production impairment Stuck Yes Cost /safety
Yes
pipe benefits Candidate
Yes
No No
Candidate
Hard Yes
Drilling No UBO
(ROP/bit)
No
No UBO
This decision tree can be found on the IADC website (www.iadc.org).

Click on Committees.
Click on Underbalanced Drilling committee.
Click on decision tree.

Potential Applications and
Candidate Technique

Low ROP Through Hard Rock
• Dry air.
• Mist, if there is a slight water inflow.
• Foam, if there is heavy water inflow,
if the borehole wall is prone to
erosion, or if there is a large hole
diameter.
• N2 or natural gas, if the well is
producing wet gas and it is a high
angle or horizontal hole.
Lost Circulation Through The
Overburden
• Aerated mud, if the ROP is high (rock

strength low or moderate) of if
water-sensitive shales are present.
• Foam is possible if wellbore
instability is not a problem.

Differential Sticking Through
The Overburden
• Nitrified mud, if gas production is
likely, especially if a closed system is
to be used.
• Aerated mud, if gas production is
unlikely and an open surface system
is to be used.
• Foam is possible if the pore pressure
is very low and if the formations are
very hard.
Formation Damage Through A
Soft/Medium-Depleted Reservoir
• Nitrified brine or crude.

► string injection, if the pore pressure is
very low.
► parasite injection, if the pore pressure is
high enough and a deviated/horizontal
hole needs conventional MWD and/or
mud motor.
► Temporary casing injection, if the pore
pressure is intermediate and a high gas
rate in needed.
Soft/Medium-Depleted Reservoir
• Nitrified brine or crude, con’t.

► String and temporary casing
injection, if the pore pressure is very
low and/or if very high gas rates.
• Foam, if the pore pressure is very
low and an open surface system is
acceptable.

Normally Pressured Reservoir
• Flowdrill (use a closed

surface system if sour gas is
possible).

Lost Circulation/Formation
Damage Through A Normally
Pressured, Fractured Reservoir
• Flowdrill (use an atmospheric

system if no sour gas is possible).

Formation Damage Through
An Overpressured Reservoir.
• Snub drill (use a closed surface

system is sour gas is possible).

Technical Feasibility
• In evaluating the feasibility of candidate
drilling techniques, a controlling factor is
the range of anticipated borehole
pressures which will be required for each
zone to be drilled.
• The upper limit for UB conditions is
formation pore pressure.
• Lower limit will generally be regulated by
the lowest pressure at which wellbore
stability is ensured.

• First step is to determine the

anticipated pressures.
• Step two is to determine which
methods are functional within the
anticipated pressure window.

• Other considerations are:
► Will there be sloughing shales?
► Are aqueous fluids inappropriate?
► Will water producing horizons be

penetrated?
► Will multiple, permeable zones,
with dramatically different pore

pressures, be encountered?

• Other considerations con’t:

► What is the potential for chemical
formation damage, due to fluid/fluid
or fluid/formation interaction and is
this an overwhelming problem,
regardless of what wellbore pressure
is used?
► Is there a potential for sour gas
production?

• Other considerations con’t:

► Are there features of the well
geometry which dictate specific
underbalanced protocols?
► What is the local availability of suitable
equipment and consumables (including

liquids and gases for the drilling
fluids)?

Borehole Pressure Limits
• Pore pressure
► The wellbore pressure must be
maintained below the formation
pressure in all open hole sections.
► If there is no formation fluid inflow,
borehole pressures with dry gas, mist,
foam or pure liquid will be lower when
not circulating.
► With fluid influx, borehole pressure can
increase or decrease when not
circulating.
• Pore pressure
 Best practice is to use the:
► Lower bounds for pore pressure

prediction when choosing a
technique.
► While surface equipment capacity
and drilling specifics should be
based on an upper bound.

• Wellbore stability provides the

lower limit to the allowable
borehole pressures.
• Will be discussed later.

• Hydrocarbon production rates can

sometimes set the lower bound,
depending upon the surface
equipment available.
• Formation damage may effect the
tolerable drawdown due to fines
mobilization in the producing
formation.

• Backpressure from a choke can

sometimes be used to protect the
surface equipment from excess
production rates or pressures.
• This also increases the BHP.
• The allowable backpressure is limited
by the pressure rating of the
equipment and formation upstream
of the choke.

• When using compressible fluids, it

is usually more cost effective to
switch to a higher density fluid
than to choke back the well.

• Applying back pressure will:

► Increase the gas injection
pressure.
► Increase the gas injection rate
required for acceptable hole
cleaning.
► These both will increase the cost
of the gas supply.

• With a gasified liquid, BHP can

usually be increased by reducing the
gas injection rate.
• When drilling with foam, back
pressure may be necessary to
maintain foam quality.
• Holding back pressure is most
beneficial when drilling with liquids.

• Once the maximum tolerable surface

pressure is reached, production rate
can only be further reduced by
increasing downhole pressure by
increasing the effective density of the
drilling fluid.

Implications of Drilling
Technique Selection
• Pore pressure gradients vary with
depth.
• Formation strength varies with depth.
• In-situ stresses vary with depth.
• The tolerable stresses, are affected
by by the inclination and orientation
of deviated, extended reach and
horizontal wells.
Technique Selection
• Production rates depend on the

length of the reservoir that is open
to the wellbore and on the
underbalanced pressure.

Technique Selection
• Once the borehole pressure limits,
corresponding to wellbore instability
and excessive production rate, have
been determined , a first pass
evaluation of the different drilling
techniques can be performed.

Example 1
4500
4000
•Shallow, normally 3500
pressured reservoir.
Borehole Pressure (psi)

3000
•No wellbore stability 2500
problems. 2000
•Surface equipment can 1500
handle the anticipated 1000
AOF.
500
•Minimal water inflow 0
is expected.
0 2000 4000 6000 8000 10000
True Vertical Depth (feet)
Stability regimes for the well described in Example 1.

Example 2
•Depleted sandstone from 4500
3,000 to 4,000 ft with a 4000
pore pressure gradient of 5 3500
ppg. Pore pressure above

3000
the sand is 8 ppg.
2500
•Lost circulation and 2000
differential sticking is a 1500

problem with mud.
1000
•No instability problems 500

anticipated if borehole
0
pressure is > 2 ppg. 0 2000 4000 6000 8000 10000

•Production rate is low.
Stability regimes for the well described in Example 2.

Example 3
•Pore pressure = 8 ppg 4500
•Shale from 6,000-8,000’ 4000
requires a minimum wellbore 3500
pressure of 7 ppg

3000
•Target zone is 9,000’ 2500
•Reservoir itself is competent 2000

unless borehole pressure
< 5 ppg 1500
•Expect high flow rates.

1000
500
•maximum drawdown
= 500 psi 0
4000 5000 6000 7000 8000 9000 10000
•Pore p. at 9,000’ = 3,744 psi True Vertical Depth (feet)
•min BHP = 3,244 psi or Stability regimes for the wells described in Examples 3 through 5
6.93 ppg
Example 4
4500
4000
3500
•Maximum drawdown

3000
= 100 psi.
2500
•Equivalent to 7.79 ppg. 2000
•Diesel or crude gives a 1500
pressure lower than 1000
this. Plain water is too 500

dense.
0
4000 5000 6000 7000 8000 9000 10000
Stability regimes for the wells described in Examples 3 through 5

Example 5
4500
4000
•Reservoir is depleted to
6.5 ppg. Maximum 3500

drawdown is 500 psi. The 3000
tolerable range for ECD 2500

through the reservoir
would be 5.4-6.5 ppg. 2000
A gasified liquid would be 1500
required. 1000
•This would not supply 500
sufficient support for the

0
shale above. 4000 5000 6000 7000 8000 9000 10000
Stability regimes for the wells described in Examples 3 through 5

Evaluating Highly Productive
Formations
• Require detailed numerical

analyses of circulating pressures.
• Formation fluid influx interacts
with drilling fluids which effect
borehole pressure - effecting
influx rate.

Formations
• When circulation stops, the

influx lifts mud from wellbore.
• This changes the borehole
pressure and the production
rate.

Formations
• Choking back the well returns further
complicates the calculation of borehole
pressures and production rate.
• If the fluid is incompressible,
backpressure changes BHP by the
amount of pressure applied.
• If the fluid is compressible,
backpressure changes density,
velocity, and BHP.
Formations
• Uncertainty of input parameters in

simulators leads to uncertainty in
output.
• In many cases these uncertainties
can make simulations in technique
selection unjustified.

Water Production
• Production of small quantities of

water makes dry gas drilling
difficult.
• If offset wells have a history of
water production, dry gas drilling
below the water zone is probably
impractical.

Water Production
• When misting, higher gas rates are

required to prevent slug flow.
• Slug flow can damage the borehole
and surface equipment.
• Higher injection rates and the
increased density in the annulus
may require boosters on the
compressors.

Water Production
• Large water influxes may require

foams.
• High disposal costs can sometimes
make mist drilling impractical.
• Higher density foams can decrease
water influx, however the increased
volume of make-up water may
make disposal still impractical.
Water Production
• If high water influx makes

gas and foams impractical,
aerated mud or low density
liquids may be required.

Multiple Permeable Zones
• If all zones are to be drilled
UB, the circulating pressure
must satisfy the borehole
pressure requirements for all
open permeable zones,
simultaneously.
• Several factors can prevent
this from happening.
Factors Preventing UB
In All Zones
• The ECD of compressible fluids
increases with increasing depth.
• In vertical wells, it is possible for
a permeable zone close to the bit
to be overbalanced when a
permeable zone higher up hole,
with the same pore pressure
gradient, is UB.

In All Zones
• This effect is more pronounced in

high angle and horizontal wells.
• AFP increases along the borehole
even if formation pore pressure
remains relatively constant along
the borehole.

In All Zones
• Changes in pore pressure

gradient along the wellbore may
be present.
• This can be due to abnormally
pressured formations, or partially
depleted formations.

Multiple Permeable Zones
• The major concern with multiple

permeable zones is the potential
for underground blowouts.
• Extreme care must be taken to
prevent this from happening
when pressure changes occur
such as tripping, or connections.

If Cross Flows Cannot Be Tolerated:
• Use a different drilling technique
that allows all permeable zones to
remain UB, if possible.
• Kill the well before suspending
circulation.
• Change the casing scheme so that
the upper formations are cased of
before penetrating the lower zone
in the hole.
Sour Gas
• There must be no possibility of
releasing hydrogen sulfide into
the atmosphere while the well is
being drilled or completed.
• If any is produced during drilling
it must be disposed of in a
suitable flare.

Sour Gas
• H2S can become entrained in
any liquid in the wellbore, and
must be completely removed
from the fluid and flared before
any of the liquids are returned
to any open surface pits.
• The separation process should
be completed in a closed vessel.

Sour Gas
• Sour gas can become entrained in
foams.
• The foam must be completely
broken prior to separation.
• Unless effective defoaming can be
guaranteed foams cannot be used
in closed systems, and should not
be used in the presence of
Hydrogen Sulfide.
Drilling/Reservoir Fluid
Incompatibility
• It can be difficult to prevent

temporary overbalance.
• Drilling fluids should be tested
for compatibility with formation
fluids.

Hole Geometry
• A compressible fluid will have a
greater ECD in deep wells than in
shallow wells.
• Annular gas injection only reduces
the density of the fluids above the
injection point. Drillpipe gas
injection may be necessary if long
vertical sections are to be drilled
with gasified liquid.
Hole Geometry
• Increasing ECD with depth may

make it impossible to maintain
the proper foam quality in deep
wells. Backpressure may be
required, increasing the gas
supply needed.
• Increasing hole size makes hole
cleaning more difficult.

Hole Geometry
• Large hole sizes may require

larger diameter surface
equipment. Larger surface
diverter equipment may not
have the pressure rating of
smaller resulting in lower back
pressure capabilities.

Naturally Fractured Formations
• In fractured formations, high

viscosity drilling fluids,
circulating at low rates may
prevent hole enlargement and
still maintain UB.
• Stiff foams may be the preferred
candidate.

Logistics
• Water supplies may be limited in

some areas, and a technique that
limits water use may be chosen.
• Availability and access to the
gaseous phase can influence the
choice of gas used.

Logistics
• Offshore locations generally do

not have the same space
available as land locations.
• Equipment used on surface
locations may not be suitable for
offshore locations.
• Modular closed systems must be
used offshore.

Logistics
• The high production rates

necessary for offshore wells
to be economically viable
may make them unlikely
candidates for UBD.

Economic Analysis
• Rules of thumb.
► UBO increases costs 1.25 - 2.0
times the cost per day over

conventional.
► but may be accomplished in
1/4 to 1/10 of the time.

Economic Analysis
• Rules of thumb.
► In permeable rock ROP may be
increased from 30% to 300%
as well goes from overbalanced
to balanced.
► Below balance ROP will increase
another 10-20%.
► In impermeable rock, ROP will
increase 100-200%.

Drilling Days
0 20 40 60 80 100 120
0
1000
2000
3000
Depth (feet) 4000
5000
6000
7000
8000
9000
10000
Gas and mud effect on drilling time (after Moore, 197456).

Rotating Time (hours)
0 10 20 30 40 50 60 70 80 90 100
0
500
1000
Depth (feet)
1500
2000
2500
3000
Air and water effect on drilling time (after Moore, 197456).

Steps for Economic Analysis
1.Determine the expected
penetration rate or drilling time
of each candidate hole-interval, if
the operation were to be carried
out conventionally.
2.Estimate the daily cost of
conventional drilling operations
for each prospective hole-interval
based on empirical data.

Steps for Economic Analysis
3.Multiply the conventional daily
cost by an underbalanced factor
(1.3-2.0, depending on difficulty
of the operation) to get the
expected daily cost of UBO.
4.Apply the expected
underbalanced operating cost by
the anticipated underbalanced
drilling ROP to get the total cost
for each interval.
Factors that Effect the
Economics of UBD
• Penetration rate.
• Bit selection.
• Bit weight and rotary speed.
• Mud weight.

Completions and Stimulation
• UBO does not save completion time.
• But, if you are going to drill UB to
prevent formation damage, you
better complete UB.
• Mitigation of formation damage in
wells that will need to be
hydraulically fractured (except
naturally fractured) may be a poor
and unnecessary economic decision.
Formation Evaluation
• Real time formation evaluation

possible.
• UB coring possible.

Environmental Savings
• Closed systems make

smaller reserve pits and
locations possible, but there
is additional costs of rental
of the systems.

Fluid Type
• The bottom line controlling

factor may be the specific
fluid system adopted. Each
fluid type has technical and
economic advantages and
limitations.

Drilling Method Problems and/or
Savings
or Fluid System Potential Expenditures
High penetration Possible problems if water
rates and reduction flow is encountered
in rig time.
Low bit cost Hole erosion, if poorly
consolidated.
Air Low water Possibility of downhole fire, if
requirement hydrocarbons are
encountered.
No mud removal Supplementary equipment
rental.
Low additives cost Is not suitable for H2S

Drilling Method Problems and/or Potential
Savings
or Fluid System Expenditures
High penetration rates Problems if water flow is
and reduction in rig encountered.
time. Cost of gas and/or rentals.
Low bit cost Hole erosion, if poorly consolidated.
Gas
(Nitrogen or Low water requirement Cost is high if a market for the gas
exist.
Natural Gas)
No mud removal Rig safety.
Low additives cost Supplementary equipment rental If

H2S is expected, consider a closed
system.

Savings
High penetration rates Problems if substantial water flow is
and reduction in rig encountered. Gas Cost if air not
time. used.
Low bit cost Hole erosion, if poorly consolidated.
Low water requirement Shale stability.

Mist
Disposal of waste water/gas and
supplementary rental cost.
No mud removal
Air-mist not suitable if H2S is
present.
Modest additives cost. Equipment rental.

Savings
High penetration rates and Considerable foamer cost.

reduction in rig time. Gas cost if air not used.
Low bit cost. Careful metering required.
Low water requirement. Specialized metering

equipment.
High solids carrying capacity. Defoaming.
Stable foam Good hole cleaning capability.

Compatible with oil, salt water, Considerable cost.
calcium carbonate and most
formation contaminants.
Can safely entrain a considerable Separation and disposal.
volume of gas into aqueous
foam, rendering in non-
flammable until sumped.
Can handle large flows of water. Water disposal

Savings
Considerable mud and
High penetration rates and chemical cost.
reduction in rig time.
Gas cost if air is not used.
Low bit cost. Fluid degradation possible if
oil, salt water or calcium
chloride are encountered.
Stiff Foam
Low water requirement. Specialized metering
equipment.
High solids carrying Defoaming.
capacity.
Good hole cleaning
capability.

Savings
Expense of running a parasite
string or a temporary casing
string.
Higher gas rates are required.
Slow pressure response if a
Higher bottomhole pressures. parasite string is used.
Low underbalance pressure may
cause transient departures from
underbalanced conditions and
Gasified Liquids advantages to impairment
reduction may be lost.
Improved directional drilling Tool problems with drilling
in comparison to dry gases or injection.
mist (refer to chapter 6).
Reduced drillstring wear. Supplementary surface
equipment.
Reduced potential for Corrosion potential (and
downhole fires in vertical requirement for inhibitors 62) is
holes with aqueous fluids. air is used.
Savings
Higher borehole Supplementary surface
pressures reduce the equipment and safety
possibility of instability. measures.
No gas supply system. Excessive production is
Flowdrilling
possible.
Conventional mud motors Safety issues associated with
and MWD units can be oil and gas on drill site.
used.
Can be used in situations Supplementary equipment and
Mudcap Drilling where surface pressure is safety considerations.
too high for flowdrilling.
Can be used at pressures Snubbing or CT unit.
too high for conventional
Snub Drilling or CT
units and underbalanced
drilling equipment.
Environmental savings Equipment rental and operating
cost
Closed Systems
Can handle H2S. Better Cannot be used with explosive
monitoring returns. mixtures.

Cost Comparisons - Case 1
Nitrogen vs. Pipeline Gas
General Assumptions
Flowrate…………………………………...3,000 cfm
Gas Price……………………………… $2.00/mcf
Trucking Distance……….... 50 miles (one way)
Drilling Hours/day……………....………… …… 20
Average Gas Drilling Days/well…………… ….12
Diesel Usage/hour/unit…………….10.7 gallons
Diesel Fuel Price…………………... $ 0.80/gallon
Standby Days (Equipment)/well…..……......... 4

Nitrogen Drilling System Cost Pipeline Gas Drilling Cost
Compressors (8) @ $ 12,960 Pipeline gas 43.2 mmcf @ $ 86,400
$135/unit/day $2.00/mcf
Boosters (2) @ $200/unit/day $ 4,800 Booster (2) $300/unit/day (gas $ 7,200
(air use) use)
Membrane Skids (2) @ $ 36,000 Drill Gas Unit (installed on $ 1,000
$1,500/unit/day location)
(1,800 cfm/skid)
Trucking/Transportation Fuel $ 9,200 Gas Line (2,000 feet) $ 1,800
(delivered)
25,680 gallons * $0.80/gallon $ 20,540 Trucking/Transportation Fuel $ 1,800
(delivered)
Mist Pump $ 1,500 5,138 gallons @ $0.80/gallon $ 4,110
Equipment Standby (4 days) $ 1,800 Mist Pump $ 1,500
Equipment Standby (4 days) $ 700
Total Nitrogen Drilling $ 88,600 Total pipeline Gas Drilling $ 104,510

Cost/well Cost/well

Portable N2 Generating
Item Liquid N2
System
Drilling Program 90 days 90 days
N2 1,500 scfm 1,500 scfm
Duration of N2
240 hrs (10 days) 240 hrs (10 days)
requirement
Minimum 95 % (by
N2 Purity Minimum 95 % (by volume)
volume)
N2 Pressure 5,000 psi 5,000 psi
1,500 scfm * 60 min/hr
*
1,500 scfm * 60 min/hr *
24 hr/day *10 days =
584,000 sm3 24 hr/day *10 days = 584,000
N2 requirement
sm3
= 834,000 liters liquid
N2
= 139 tanks
Trucked in liquid N2 On-site membrane
Method of N2 Supply
(equipment rental) (equipment purchase)

Portable N2 Generating
Item Liquid N2
System
139 liquid N2 tanks, 1 4 skid maximum, 14 tonnes
Logistics evaporator and 1 diesel each, 1 power unit, 14 tonnes (5
skid (141 containers) containers)
Electrical power: 1,400 kW * 10
Cost of Utilities days * 24 hrs @ $0.05/kWh
(liquid N2 , electricity, $ 1,284,000 = $ 16,800
diesel) (Power unit rental included in
capital cost)
10 % of interest and
Maintenance None depreciation
$ 32,000
Interest and depreciation
Capital Cost None
over 10 years $324,000
Approximately
TOTAL $ 1,300,000
Approximately $ 375,000

Economic Analysis
• On the basis of available
technology, select the potential
drilling systems to be evaluated.
• Tabulate the tangible and
intangible costs for each system.
• Rely on previous history and
recognize the inevitability of
statistical variation.

Economic Analysis
• Perform basic cost/ft drilling evaluations.
CT = [B+Cr(t+T)] / F (4.12)
Where:
CT……total cost/foot.
B…….bit cost.
Cr……hourly rig cost.
t……..rotating time.
T…….round trip time.
F…….footage per bit run.
Assess Drilling Costs
Item Air Drilling Mud Drilling
Interval From 4,000 to 7,000 ft From 4,000 to 7,000 ft
Interval Length (F) (ft) 3,000 3,000
Penetration Rate (ft/hr) 30 15
Rotating Time (t) (hr) 100 200
Bit Life (hr) 100 100
Bits Required 1 2
Unit Bit Cost $ 4,800/bit $ 4,800/bit
Bit Cost (B) $ 4,800 $ 4,800
Trip in to 4,000 ft
Trip in to 4,000 ft Trip out from 5,500 ft
Trip Schedule
Trip out from 7,000 ft Trip in to 5,500 ft
Trip out from 7,000 ft
Total Trip Footage 11,000 ft 22,000 ft
Unit Trip Time
1.5 1.5
(hr/1,000 ft)
Assess Drilling Costs
Item Air Drilling Mud Drilling
Trip Time (T) (hr) 16.5 33
Hourly Operating Cost
$ 375/hr $ 250/hr
(Cr)
Cost / ft [9,600+250(33+200)] / [3000]
[B+Cr(T+t)]/[F] $ 22.62 /ft
[4,800+Cr(16.5+100)] /
Competitive Cost for Air [3000]
Drilling = $ 22.62t
Cr = $ 541.29/hr
Barrels of Water That
($541.29 - $375)/ $1.00 =
Can be Disposed of at
166 * 24 = 3,984 BWPD
$ 1.00/bbl
($541.29 - $375)/ $5.00 =
33 * 24 = 798 BWPD
$ 5.00/bbl
($541.29 - $375)/ $10.00 =
16.6 * 24 = 400 BWPD
$ 10.00/bbl
25
24
23
22
Cost ($/ft)
21
20
19
18
17
16
15
0 500 1000 1500 2000 2500 3000
Barrels of Produced Water per Day
Economic water volume production (modified after Carden 19931).

Accelerated Production
• Earlier production can improve the NPV
NPV = 1 / (1+DR)t = (1+DR)-t
NPV = net present value (discounted

value of asset).
DR = discount rate.
t = discount time, years.
Improved
Production/Reserves
• The absolute and relative
increase in production should be
calculated, or estimated.
• Productivity Index, PI should be
calculated based on whether the
well is vertical, horizontal, oil,
gas, radial, transient flow, or
pseudo-steady state flow
(see page 4.48).
Improved
Production/Reserves
• Well Inflow Quality Indicator,

WIQI, is the ratio of the PI for
an impaired to that for an
undamaged well.

Improved
Production/Reserves
Considering the following example for
evaluating PI:
K 50 mD
H 25 feet
µ 2 cP
Bo 1 bbl/sbbl
re 1,980 ft
rw 0.411
S variable
Orientation vertical
depth 10,000 ft
reservoir pressure 4,300 psi
BHPP 3,000 psi (pseudo-steady state)
Improved
Production/Reserves
Skin Production Rate (BOPD) PI WIQI

0 761 0.572 1
1 674 0.507 0.89
2 604 0.455 0.79
5 462 0.348 0.61
10 331 0.249 0.44
100 55 0.041 0.07

Improved
Production/Reserves
800 1.12
700 0.98
Well Inflow Quality Indicator

Production Rate (BOPD)
600 0.84
Productivity Index
500 0.7
400 0.56
300 0.42
200 0.28
100 0.14
0 0
0 1 2 5 10 100
Skin
Economic water volume production (modified after Carden 19931).

Example
Oil well
Revenue Interest = R = 0.375
Working Interest = WI = 0.5
Gross Income (per net bbl)
Crude Price = $20.00/bbl
Less
Transportation = $1.00/bbl
Production taxes = $6.00/bbl
Leaves
Gross Income (per net bbl) = $13.00/bbl
Estimated Op. Expense = $5000/well month
Number of wells =5

Case 1
All five wells drilled

in the first year with
a conventional mud
system.

Case 1 (Base Case)
Year 1 2 3 4 5 6 7 Total
Estimated Future Operation Units
(1)
Gross Lease - bbl 201,204 170,280 122,952 96,720 77,960 55,388 18,024 742,528
Production
(2)
bbl
Net Production R * (1) 75,452 63,855 46,107 36,270 29,325 20,771 6,759 278,448
To Operator
(3)
Gross Income (2) * $13.00 $ 980,870 830,115 599,391 471,510 380,055 270,017 87,867 3,619,824
To Operator
(4)
Development $ 750,000 0 0 0 0 0 0 750,000
Cost
(5)
Number of
- - 60 60 48 48 36 36 24 312
Producing Well
Months
(6)
Operating (5) * $5,000 $ 300,000 300,000 240,000 240,000 180,000 180,000 120,000 1,560,000
Expense

Case 1 (Base Case)
Year 1 2 3 4 5 6 7 Total
(7)
Capital - $ 20,000 20,000 20,000 20,000 20,000 20,000 20,000 140,000
Expenditure
(8)
Share of WI *
$ 535,000 160,000 130,000 130,000 100,000 100,000 70,000 1,225,000
Operating and [(4)+(6)+(7)]
Capital Expenses
(9)
Cash Flow to (3) – (8) $ 445,870 670,115 469,391 341,510 280,055 170,017 17,867 2,394,824
Operator
(10)
5% Annual © - 0.9740 0.9276 0.8835 0.8414 0.8013 0.7632 0.7268 0.9010
Deferment Factor
(11)
Present Worth (10) * (9) $ 434,277 621,599 414,707 287,347 224,408 129,757 12,986 2,157,736
Of Cash Flow
© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]

DCR annual deferment factors, applicable to equal payments at the end of each month
during a specific interval of year between (t-1) an t years from now.
i effective annual compound safe interest rate as a decimal fraction.
t time in years
Case 2
Same as Case 1 with the

exception that there is
higher production to
reduced formation damage
from UBD.

Case 2
Year 1 2 3 4 5 6 7 Total
(1)
Gross Lease - bbl 221,324 187,308 135,247 106,392 85,756 60,927 19,826 816,781
Production
(2)
Net Production R * (1) bbl 82,997 70,241 50,718 39,897 32,159 22,848 7,435 306,293
To Operator
(3)
Gross Income (2) * $13.00 $ 1,078,956 913,127 659,330 518,661 418,061 297,018 96,654 3,981,806
To Operator
(4)
Development $ 750,000 0 0 0 0 0 0 750,000
Cost
(5)
Number of
- - 60 60 48 48 36 36 24 312
Producing Well
Months
(6)
Operating (5) * $5,000 $ 300,000 300,000 240,000 240,000 180,000 180,000 120,000 1,560,000
Expense

Case 2
Year 1 2 3 4 5 6 7 Total
(7)
Capital - $ 20,000 20,000 20,000 20,000 20,000 20,000 20,000 140,000
Expenditure
(8)
Share of WI *
$ 535,000 160,000 130,000 130,000 100,000 100,000 70,000 1,225,000
Capital Expenses
(9)
Cash Flow to (3) – (8) $ 543,956 753,127 529,330 388,661 318,061 197,018 26,654 2,756,806
Operator
(10)
5% Annual © - 0.9740 0.9276 0.8835 0.8414 0.8013 0.7632 0.7268 0.9010
Deferment Factor
(11)
Present Worth (9) * (8) $ 529,814 698,600 467,663 327,019 254,862 150,364 19,372 2,483,883
Of Cash Flow
© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]

t time in years
Case 3
Same as case 2 with the

exception that development
costs for the five wells are
$150,000 less, due to
improved drilling while
underbalanced.

Case 3
Year 1 2 3 4 5 6 7 Total
(1)
Gross Lease - bbl 221,324 187,308 135,247 106,392 85,756 60,927 19,826 816,781
Production
(2)
Net Production R * (1) bbl 82,997 70,241 50,718 39,897 32,159 22,848 7,435 306,293
To Operator
(3)
Gross Income (2) * $13.00 $ 1,078,956 913,127 659,330 518,661 418,061 297,018 96,654 3,981,806
To Operator
(4)
Development $ 600,000 0 0 0 0 0 0 600,000
Cost
(5)
Number of
- - 60 60 48 48 36 36 24 312
Producing Well
Months
(6)
Operating (5) * $5,000 $ 300,000 300,000 240,000 240,000 180,000 180,000 120,000 1,560,000
Expense

Case 3
Year 1 2 3 4 5 6 7 Total
(7)
Capital - $ 20,000 20,000 20,000 20,000 20,000 20,000 20,000 140,000
Expenditure
(8)
Share of WI *
$ 460,000 160,000 130,000 130,000 100,000 100,000 70,000 1,150,000
Capital Expenses
(9)
Cash Flow to (3) – (8) $ 618,956 753,127 529,330 388,661 318,061 197,018 26,654 2,831,806
Operator
(10)
5% Annual © - 0.9740 0.9276 0.8835 0.8414 0.8013 0.7632 0.7268 0.9010
Deferment Factor
(11)
Present Worth (9) * (8) $ 602,864 698,600 467,663 327,019 254,862 150,364 19,372 2,551,458
Of Cash Flow
© DCR= [(1+i)1-t – (1+i)-t] / 12[(1+i)1/12 -1]

t time in years
Summary of all Cases
(Present Worth of Cash)
Year
Case
1 2 3 4 5 6 7 Total
1 434,277 621,599 414,707 287,347 224,408 129,757 12,986 2,157,736
2 529,814 698,600 467,663 327,019 254,862 150,364 19,372 2,483,883
3 602,864 698,600 467,663 327,019 254,862 150,364 19,372 2,551,458

Summary of Examples
700,000
600,000
Present Worth of Cash Flow ($)
500,000
400,000
300,000
200,000
100,000
0
1 2 3 4 5 6 7
Year
Projections Over Seven Years

Under Balance Drilling

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Under Balance Drilling

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PETE 689

Underbalanced Drilling (UBD)

• Potential applications and

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

• Formation fluid types.

Harold Vance Department of Petroleum Engineering

• Sour/Corrosive gas data.

Harold Vance Department of Petroleum Engineering

• High permeability coupled with high

Harold Vance Department of Petroleum Engineering

• Weak rock formations prone to

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

• Pressure depleted formations.

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

• Once the optimum candidate has

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

Drilling Yes Lost

This decision tree can be found on the IADC website (www.iadc.org).

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

• Aerated mud, if the ROP is high (rock

Harold Vance Department of Petroleum Engineering

• Nitrified brine or crude.

• Nitrified brine or crude, con’t.

Harold Vance Department of Petroleum Engineering

• Flowdrill (use a closed

Harold Vance Department of Petroleum Engineering

• Flowdrill (use an atmospheric

Harold Vance Department of Petroleum Engineering

• Snub drill (use a closed surface

Harold Vance Department of Petroleum Engineering

Harold Vance Department of Petroleum Engineering

• First step is to determine the

Harold Vance Department of Petroleum Engineering

► Will water producing horizons be

with dramatically different pore

Harold Vance Department of Petroleum Engineering

• Other considerations con’t:

Harold Vance Department of Petroleum Engineering

• Other considerations con’t:

equipment and consumables (including

Harold Vance Department of Petroleum Engineering

► Lower bounds for pore pressure

Harold Vance Department of Petroleum Engineering

• Wellbore stability provides the

• Will be discussed later.

Harold Vance Department of Petroleum Engineering

• Hydrocarbon production rates can

Harold Vance Department of Petroleum Engineering

• Backpressure from a choke can

Harold Vance Department of Petroleum Engineering

• When using compressible fluids, it

Harold Vance Department of Petroleum Engineering

• Applying back pressure will:

of the gas supply.

Harold Vance Department of Petroleum Engineering

• With a gasified liquid, BHP can

Harold Vance Department of Petroleum Engineering