IADC/SPE-178850-MS

True Lies: Measuring Drilling and Completion Efficiency

John P de Wardt, De Wardt And Company; Peter H Rushmore, Retired; Phillip W Scott, Technical Limit
Engineering

Copyright 2016, IADC/SPE Drilling Conference and Exhibition

This paper was prepared for presentation at the IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, 1–3 March 2016.

This paper was selected for presentation by an IADC/SPE program committee following review of information contained in an abstract submitted by the author(s).
Contents of the paper have not been reviewed by the International Association of Drilling Contractors or the Society of Petroleum Engineers and are subject to
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Abstract
Drilling efficiency is an often used term for various measures that purport to represent the relative
difference between current performance and some reference performance. Non Productive Time (NPT) is
globally used as an analogue for efficiency. Many reported efficiency measurements are in the 90% range
and NPT in the 20% range when the overall drilling and completion times are some 50% or more slower
than Best In Class (BIC) as determined by external benchmarking. Current measures of drilling efficiency
and NPT are both misleading and poorly defined.
This paper evaluates these misleading measurements and introduces the application of a meaningful
measure of drilling efficiency. The term drilling efficiency is used for a short description; the same process
applies to all well operations including drilling, testing, completion, well intervention, workover and plug
and abandonment operations; the well life cycle.
Means to estimate overall performance potential including Technical Limit (TL), Maximum Theoret-
ical Performance (MTP) and benchmarking are explained in their historical context and current applica-
tions. These provide the future state target for gap analysis to current state performance. This gap allows
the quantification of Invisible Lost Time (ILT) whose reduction is the means to true performance
improvement over deficiency correction as measured by NPT. ILT commonly gets included in Productive
Time (PT) as logged in daily report data-base systems and will remain invisible without such a gap
analysis. It is a more important measure of performance efficiency than both NPT and the often used
‘uptime’ of a drilling rig.
Measurements of industrial process (construction, manufacturing) efficiency are presented and,
through analogy, applied to drilling. The result is a robust methodology for the industry to measure
drilling efficiency.
This paper also includes a review of and suggestions for a normalization index for the relative
complexity of various drilling operations (Appendix I). A simple and comprehensive well complexity
index methodology that can be applied to adjust the calculated MTP for any well to develop a calculation
based Technical Limit will benefit the industry. An industry approach to establish a defined well
complexity index for universal application to drilling is suggested.
A drilling efficiency model with reference to a calculation method is available for the industry to
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measure the real gap to 100% efficiency. This will in general produce vastly lower efficiency numbers for
current performance than some of the inappropriate efficiency calculations currently used. It provides
organizations with a more accurate view of the improvement potential they could aspire to reach, and
become an enabler for the global oil and gas industry to improve performance and reduce cost of wells.
The recommended methodologies and efficiency measure provides the first realistic number for drilling
efficiency. It will be a wake-up call to the industry and initially show much lower efficiency numbers than
many organizations currently calculate and report. It will be an eye opener to managers who want to truly
assess the performance of their drilling operations and provide them the information to set new
performance goals. The challenge will be how willing the managers are to show how badly we perform
as an industry today, and how persistent they are in the needed step change and follow through with
improvement steps.

Introduction
A reference point is required to define a drilling and completions efficiency measure. The challenge for
the industry is to choose a reference point that can become a standard; so far the industry has been divided.
There are two considerations in choosing a reference point: how useful is it to serving the purpose of
spotlighting how much and where things can be improved and how true is it relative to what is ultimately
possible.
As improvements are made and performance is tracked (on successive wells) some reference points
change because more is learnt about the well construction processes. To measure true efficiency, a firm
calculated reference point is required. In this paper, we posture that Maximum Theoretical Performance
(MTP) is the true reference for drilling (and completion) efficiency and other references are relevant
markers to support performance improvement.
The determination of efficiency can also be made at various levels of the performance measurement
hierarchy providing measurements that are more relevant to personnel at those various levels in the
hierarchy. These include:
● Whole project – the complete work involved in accessing and bringing into production the
hydrocarbons. This is the true measure against delivered value.
● Drilling (or completion) only – the work involved in key segments of the whole work which is the
focus of different disciplines and can have different attributes to the functionality / quality of the
product.
● Section or phase – the work involving sub-segments of the business where specific sub deliver-
ables can be measured.
● Activity – the sequence of work involved in delivering an output (deliverable). These are usually
reported daily and saved in the operators databases.
● Task – are sub levels of activities that can be measured, recorded and evaluated. Operators’
databases are the source for this information, if available.
A hierarchy of performance reference points or targets that are clearly related and developed from a
best practice method will provide the industry with the greatest opportunity to understand the performance
in drilling and completing wells. There are multiple ways to develop the performance targets including
benchmarking, analysis of databases, team developed targets against visible gap analysis, calculated
theoretical maximum performance and other related methods that are described below.
Drilling performance has been characterized in recent papers as non-productive time (NPT) and
invisible lost time (ILT). The industry and its management have focused heavily on measuring, reporting
and evaluating of NPT which leads to a false sense of performance improvement as explained in this
paper. ILT is a more robust method to improve performance when combined with reducing NPT to
reasonable levels. The whole concept of performance improvement drivers, performance improvement
IADC/SPE-178850-MS 3

targets and the gap to achieve what is possible is inadequately developed and not well understood across
the drilling and completions industry.
This paper describes the issues and defines the measures that can be used in a hierarchical manner to
enable drilling and completion teams to focus on the performance gap and achieve the best results. It also
enables managers to truly view the performance of their drilling operations and avoid subjective analysis
which often leads to unrealized results.
There are four ways performance is typically measured in businesses:
● compare present to past – this includes such measures of Return On Income, past profit, sales. This
shows how the business is progressing relative to its historical performance.
● compare customer perception to expectations – surveys, comments, complaints. This is a quali-
tative means to understand feedback from clients in order to improve business delivery.
● compare own performance to best competitor – benchmarking. This provides the opportunity for
a business to compare itself to the best in their field of endeavor and so identify gaps that create
performance improvement opportunities.
● compare recent performance to ultimate possible performance – performance gap. Focusing on
what is ultimately possible enables companies to reach for the maximum possible performance.
These companies usually become the benchmark.
Businesses that want to excel cannot simply compare their current performance to past performance nor
can they rely on qualitative feedback. They can ascertain their relative performance through benchmarking
but ultimately any business that wants to excel must define the ultimate possible performance. The use of
ultimate possible performance as a target has never been so compelling in the drilling and completion
business given today’s very challenging financial environment. A drilling manager whose drilling team
moved from 250 feet per day to 1650 feet per day over 4 years observed that had his team realized initially
how large the opportunity was they would have used a far more aggressive target to accelerate this
improvement in performance.

Industry Efficiency Analogies

The Organization for Economic Co-operation and Development (OECD) definition of efficiency states:
Efficiency refers to the degree to which a production process reflects ‘best practice’, either in an
engineering sense (‘technical efficiency’) or in an economic sense (‘allocative efficiency’). Full technical
efficiency characterizes a production process where the maximum possible output has been achieved,
given a fixed set of inputs and given a certain technology. Full allocative efficiency prevails when the
input-output combination is cost- minimizing and/or profit maximizing. (OECD 2001)
Webster’s defines efficiency as the ability to do something or produce something without wasting
materials, time, or energy. In effect, this definition is one in which there is zero waste in undertaking the
operation to produce a product (a well).
Manufacturing operations define productivity as the ratio of output level to the input level and
efficiency is the ratio of the current productivity level to the best practice productivity level. Best practice
is defined as the largest productivity achievable. The challenge is to take the emotion out of defining the
⬙largest productivity available⬙ and be honest about the true (in)efficiency.
Lean manufacturing identifies the percentage of planned production time that is truly productive (all
waste has been eliminated) and uses this as the reference against which to measure manufacturing
efficiency. A score of 100% represents perfect production which means manufacturing only good parts,
as fast as possible, with no down time. An efficiency score of 85% is considered world class for discrete
manufacturers, 60% score is fairly typical for discrete manufacturers and indicates there is substantial
room for improvement while a 40% score is not at all uncommon for manufacturing companies that are
just starting to track and improve their manufacturing performance
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Calculated efficiency from across industry spectrum is simply the best time to perform a defined set
of activities divided by the actual time to perform those same activities expressed as a percentage. This
same calculation is appropriate for adoption by the drilling industry to define drilling (and completion)
efficiency.
The construction industry (Bröchner et al 2012) has developed a generic model that broadens the
definition of productivity through the incorporation of measures of efficiency. The model leads to an
input/output ratio based on quantitative and qualitative measurements. Ten basic requirements for
efficiency measures have been defined (Bröchner 2010):
1. Usability—in relation to strategic goals;
2. Low cost of data collection and coordination;
3. Reliability—regardless of who is collecting the data and when data are collected, and accurately
defined data collection methods with appropriate sampling techniques;
4. Validity - measuring the dimension of what we really want to understand;
5. Compatibility - with other quantitative metrics within the same system with other systems-in other
industries, other countries—not least official statistics on the industry level;
6. Opportunities to develop and analyze time series, including the choice of periodicity;
7. Short time between data collection and data usage;
8. Existence of strong incentives to deliver data;
9. Weak (or no) side-effects on behavior of the data is used for controlling selection or monitoring
of individuals and businesses;
10. Little (or no) risk of leakage of competitive business-critical information.
Each of these basic requirements from the construction industry concur with our proposed efficiency
measure; some more strongly than others.
Measures Currently In Use for Drilling
The drilling and completing business has struggled to define measures that provide a coherent value
proposition to define the gap in performance to a theoretical maximum. Many drilling performance
measures have been defined in an industry benchmarking system (Rushmore 2011) for use in comparing
across the industry on regional and global basis.
Companies and managers also put a lot of faith in ⬙planned⬙ vs. ⬙actual⬙ performance figures. This has
the benefit of being a very easy metric to understand, generate and use. Where actual is better than
planned, the performance is judged to be good and vice versa. A limitation of using planned vs. actual as
a performance measure is that, over time, the planned figures become determined by the actual
performance. Unless operators know where their planned targets sit in relation to an absolute measure
such as Maximum Technical Performance (MTP) and their competitors; planned vs. actual performance
has no demonstrable relationship to ⬙real-life⬙ achievement.
An alternative is to use ⬙feet per day⬙ or ⬙cost per foot⬙ figures to determine whether drilling
performance is getting better or worse. Unfortunately, as wells vary, it is not possible to simply say that
because Well #5 was drilled faster than Well #1 it represents better performance or efficiency. It may
simply be a much easier well. It is even more difficult with ⬙cost per foot⬙ as the company’s contracting
strategies, normally outside the control of the drilling group, may result in a spread rate higher than the
competitors before the well is even designed.
Given the need for the organization to judge its drilling performance in some way, there is an attraction
in using NPT to do this, at least in part. NPT is a single, easy to measure metric that unlike feet per day,
cost per foot, or planned vs. actual needs no normalization or further complication. Superficially, it also
appears that low NPT means drilling efficiently, and high NPT means drilling inefficiently. Although this
is demonstrably not true, it is, nevertheless, a commonly held view within our industry. Some companies
IADC/SPE-178850-MS 5

implement a variety of Key Performance Indicators (KPIs), and measure details (seconds and centimeters)
and lose track of the overall performance through the waterbed effect whereby a focus on one area of
measurement causes a change in another unmonitored area often with detrimental effects.
The challenge in drilling and completion has been to identify measures that can take into account the
varying well designs, geological uncertainty and product quality. The primary cost driver has been
duration for drilling and completing a well due to the significant impact of time dependent costs and the
value of earlier hydrocarbon production. Consequently, time over major measurable operation intervals
has become a key parameter, usually spud to TD, with other references as release to release, release to
spud. In some cases the neglect of functionality and quality measures has led to loss of value in assessing
reservoirs and additional costs in the operating expenditure (opex) part of the cycle of a well. Therefore
it is extremely important to balance the focus on time reduction with delivery of required levels of
functionality and quality. Best in Class operators are able to deliver top quartile time performance without
compromising well objectives including safety because they use a holistic performance improvement
methodology (Scott 1998, de Wardt et al 2000, de Wardt 2004).
The Fallacy of Non Productive Time as a Performance Measure
Almost all operators use percentage Non-Productive Time (NPT) as a measure of efficiency, considering
that a well drilled with a low % NPT represents a ⬙better⬙ performance than a well with a high % NPT.
This, however, is not necessarily true. Two identical wells were drilled with 10 days NPT where the first
well took 100 days in total resulting in 10% NPT and the second was drilled more aggressively in just 50
days, resulting in 20% NPT. The 20% NPT well represents the better drilling performance despite the
higher % NPT figure proving that % NPT is meaningless as a measure of performance or efficiency
because both the numerator and denominator in the calculation can change independently of each other.
A guaranteed way to reduce % NPT is simply to drill very slowly thus increasing well cost and delaying
hydrocarbon production.
The problem of the numerator and denominator both changing can be solved by reporting NPT in terms
of ‘per foot / meter’ in the same way that drilling speed is often reported as ‘Days per foot / meter’. As
the length of a foot / meter does not change a low ‘NPT days per foot / meter’ will always represent a
better performance than a higher ‘NPT days per foot / meter’.
This, however, only provides a useful measure if NPT is, in fact, capturing all the inefficiency in the
drilling process. If it is only capturing some part of the total inefficiency, then the NPT metric is of little
use in measuring performance.
Another aspect of using NPT as an analogue for efficiency is that it can encourage or incentivize false
reporting; it can drive undesirable behaviors during the planning phase and at the wellsite, and can result
in operators wasting resources by taking an ineffective approach to performance improvement. Bench-
marking data provides numerous examples of relatively inefficient wells displaying low NPT values,
suggesting creativity in moving stopped operations off the critical path and in reporting.
The authors have observed, over many years, instances of wellsite staff looking to avoid reporting NPT
fully, where this has been possible (sometimes it is unavoidable) to present a picture of a smooth operation
and circumvent the additional discussions and workload, and sometimes blaming, that would otherwise
take place. Also, planning well activities can introduce inefficiency to avoid increasing NPT. A clear
example is programming a low probability additional bit run to avoid it being classified as an unplanned
operation and therefore as NPT.
Benchmarking data shows that there has been no significant change in the levels of % NPT for offshore
wells over the last 15 years despite the fact that, on average, wells are not any more difficult to drill. While
some wells drilled in 2015 would not have been possible to drill in 2000, the average well is no more
difficult today than it was a decade ago. Despite this, NPT remains chronic and stable with reported NPT
for offshore wells averaging over 20%.
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It is not NPT that differentiates top from bottom quartile operators, it is overall performance. For
example, an operator (the best-in-class) drills a normalized or standard well in 30 days, with eight days
NPT (27%), while another operator takes 60 days to drill the same well, with 14 days NPT (23%).
Typically a BIC operator in a given area will drill a well in around half the time of an operator at the other
end of the performance spectrum. This range of differentiation driven by productive time (PT) far
outweighs the delta between these operators in terms of NPT. If an operator at the lowest end of this
performance spectrum managed to reduce their NPT to zero, this operator would still be a Q3/Q4
performer.
Best-in-Class (BIC), or top quartile (Q1), operators differentiate themselves from bottom quartile (Q4)
operators in terms of drilling time efficiency in that their Productive Time is a lot better. They do not have
some secret formula or process for making sure that their rig contractors never have equipment
breakdowns or their service companies never have tool failures, they live with the same level of contractor
and industry inefficiency as everyone else. There is very little any individual operator can do to ⬙fix⬙ all
the drilling contractors, all the service companies, and all of their other suppliers. There is, however, a
huge amount an operator can do to improve Productive Time which is around 80% of the total well time.
An operator’s Productive Time is driven by many factors including its culture, policies, and practices.
Productive Time is driven by the operator’s attitude to performance, the approach to target setting, the
relationship with contractors, and the treatment of staff. It is influenced by the operator’s approach to
business risk and new technology implementation. An operator has much less control over the level of its
NPT and much more control over the level of its Productive Time. Consequently, it make more sense, in
the long term, for the operator to put most of its performance improvement resources into improving
Productive Time by 10%, thereby improving overall well times by 8% rather than reducing NPT by 10%,
thereby improving well times by just 2% – a performance factor gain of four times.
Clearly, where an operator has an excessive level of NPT, or a specific NPT problem, this needs to be
addressed. Once completed, however, logic dictates that there is more value to be had by the operator
applying 80% attention and improvement resources to Productive Time improvement rather than NPT
reduction.
Drilling contractors, service companies, and their suppliers cause most of the NPT by virtue of their
role executing the drilling process. NPT is universally reported and is easily assigned an enormously high
dollar value and so becomes the obvious target for attention, especially when wells cost too much or
overrun their AFE’s. It is simply bad business to focus on NPT reduction rather than Productive Time
improvement to maximize performance and minimize cost.
True Value: Focus on Reducing Invisible Lost Time
Despite the huge efforts made on NPT reduction, it remains persistently high. Meanwhile the BIC
operators are focused on reducing their ILT. Invisible lost time (ILT) is lost time that is not reported as
lost time, it is included in the reported gross time because it is activity time associated with activities and
activity durations that are required to drill the well. ILT is a key parameter of performance improvement
because it is time that could be reduced through improving operations, it is called ⬙Invisible⬙ because it
is not evident in daily drilling reports that it was lost time.
ILT was originally defined in the work that introduced the Technical Limit approach to planning wells.
(Bond, et al. 1996) ILT was defined as the time discrepancy that resulted when historical drilling time data
was compared with identical ⬙theoretical⬙ well times. It was observed that after allowances were made for
reported lost time and down time, the historical drilling durations were significantly greater than the
technical limit developed by the drilling team. This discrepancy created the evidence of where drilling and
completions processes were weak in delivering performance and significant heretofore unrealized im-
provements could be achieved. Observations showed that well durations could be reduced by half or more,
a potential that was far greater than correcting deficiencies identified as NPT.
IADC/SPE-178850-MS 7

ILT was identified to be caused from a variety of sources including:

● Off-critical path activities that were not completed in time and ended up on the critical path.
● Tools not functioning to specification slowing the operation.
● Tools specifications not matched with the duty required.
● Personnel not practiced in the operation underway.
● Personnel rotation policies, losing local area expertise.
● Environmental conditions more extreme than anticipated in planning.
● Drilling fluid not matched to the downhole conditions slowing drilling progress.
● Information not available when needed.
● Planning done on the job and not before.
● Planning based on an expected outcome that includes inefficiencies.
Measuring ILT is a challenge the industry must address as it is a real source of performance
improvement that is typically unrealized. The method to measure ILT is to compare the time it takes to
complete an operation with a reference time based on flawless execution. The gap is ILT and immediately
challenges the operations team to isolate and address it.
The complete integration of NPT and ILT requires a holistic view of durations for drilling and
completing wells. This holistic view comprises the actual well duration sub divided into the reported NPT,
the theoretical well duration leaving the gap as the ILT. This assessment reveals the opportunity to
improve beyond correcting NPT through also accessing the improvements available from ILT.

Figure 1—Representation of ILT and Technical Limit (from Bond et al. 1996)

This assessment relies on the precision with which the theoretical well time can be derived as well as
the integrity of the operations team to truly evaluate the performance that is possible with all barriers
removed. Defining the reference duration is critical to understanding the gap available for improvement
as well as the effort and cost, worthy of investment, to gain this improvement.
Defining the value of ILT has significant benefits for performance improvement:
● ILT carries a very high cost in terms of duration driven well costs. Post analysis of drilling and
completion data has shown ILT to be of similar magnitude as reported lost time or NPT, and often
much higher when drilling teams have succeeded in addressing NPT rectification.
● ILT provides insight into the search for operations improvements. If ILT is measured at activity
level, or even task level, it brings focus immediately to problem areas saving a lot of investigation
effort that is often lost in engineering reviews.
8 IADC/SPE-178850-MS

A difficulty with this approach is the lack of precision with which the reference time is determined. A
number of ways to best determine reference times is described in the following section. The precision will
vary depending on the quality and quantity of relevant data available. In the worst case of little or no data,
a reasonable starting point can be estimated using a set of assumptions based on a flawless operation
derived by a group of suitably experienced personnel.
Reducing ILT is an extremely valuable endeavor to a drilling and completions operations team. Once
ILT is made ⬙visible⬙, it can be used as valuable input to any regular review of operations, whether it is
for planning performance improvement (Scott et al 1998, de Wardt et al 2000, de Wardt 2004), After
Action Reviews (AAR) or daily performance reviews. This review is the start of a corrective process for
identified inefficiencies or an adoption process for better than reference time operations. Developing a
drilling and completions team owned methodology for reducing both NPT and ILT leads to maximum
performance. Involving the rig site operations personnel is critical as this is where many of the activity
and task level improvements are made.
Managing the aspirations of external stakeholders, managers and operations personnel in the use of ILT
is a major challenge. While ILT is an opportunity to achieve the highest benchmark performance, it is too
easily used as a criticism of the current performance and leads to both demotivation and the systematical
diminution of ILT replacing it with easily achieved goals.
Technical Limit and Maximum Theoretical Performance
As described in the previous sections, there is a better measure of drilling efficiency than NPT. A realistic
measure of drilling performance or efficiency is to measure and report both NPT and ILT using a single
number that sums both quantities. We are not aware of any operator directly measuring and reporting ILT
at present. As discussed previously, to do this a reference is required.
The main theoretical reference used is the Technical Limit (TL) while benchmarked references can be
provided either by a ‘best of the best’ calculation or using a global benchmarking review to establish
current ‘best in class’ performance among the group providing data.
Some operators set a benchmark for themselves by using the fastest times they have ever achieved for
each well section and adding these to provide a target that is their Best-of-the-Best (BOB) well. They then
measure the gap between their actual performance and their BOB well. Its weakness is that this technique
measures against internal results without external reference or consideration of potential levels of
performance. Results can be achieved that are very close to the BOB composite while falling some way
behind the Best-in-Class BIC operator leading to the drawback of potential complacency.
Using benchmarked BIC as a target satisfies the performance measure needs of being challenging as
well as real; it has been achieved by others. Unfortunately it does not necessarily reflect the complete
potential performance because it is measuring against an achieved performance. However, it does provide
a real measure of relative drilling performance or efficiency. BIC can be taken from a specific offset well
or a figure derived from the average of, say, the top 5% of best-in-class wells.
Technical Limit (TL) is the time is the time it will take to drill a theoretical well assuming a flawless
operation on the basis of current knowledge and design technology for all involved systems (Bond et al
1996, Scott et al 1998). TL is derived by analysis of historic well data and taking into account BOB data,
BIC data and the opportunities team members perceive exist based on their experience.
Maximum Theoretical Performance (MTP) is a calculation of the minimum time a well could possibly
be drilled and is calculated from clearly defined physical factors that constrain the drilling time; rock
strength, operational limits, set rates for standard operations, number of casing strings, hole sizes, etc.
(Behm et al 2004; Brett 2006). MTP is the ultimate means to ascertain the real gap between current
performance, or planned performance, and what is theoretically possible. This gap realistically defines
operational efficiency in drilling and completion. The challenge is to reasonably and transparently
calculate the MTP value for any given well or series of wells.
IADC/SPE-178850-MS 9

Assumptions incorporated into MTP include:

● no midsection trips required to change bit or bottom hole assembly (BHA)
● no reaming (stable hole)
● no waiting on equipment
● no wiper trips
● no significant circulating time
● . . .. . .. . ..
MTP is based on the Perfect Well Calculation (Behm et al 2004, Brett 2006, Brett et al 2006); this
calculation focusses solely on the physics of drilling a well and ignores rig, technology and personnel
limitations. The perfect well time estimate is a drilling limit that may not be currently economically or
technically achievable. The objective and advantage of calculating the MTP from the physics for drilling
a well is that the result avoids human judgment, thus providing a very transparent value against which to
measure drilling performance and against which drilling efficiency can be calculated.
A Perfect Well Ratio (PWR) is applied to adjust for the uncertainty, technical challenges and learning
curve effect of various well types - wildcat, difficult exploration or routine development. The PWR is a
technical difficulty ratio that was developed from on observations of the best observed performance over
500 wells globally, in the early 2000’s, (Brett 2006) to convert the calculated time (MTP) into a usable
target time equivalent to a technical limit. This target time is then a fiscally responsible and technically
achievable drilling time that can be used by a team developing a technical limit target.
Figure 2 shows multiple wells along the X-axis grouped by similar type against PWR figures for best
observed performance, average performance and worst performance of those wells. The best observed
performance was used in this process to generate the ratio to apply to the MTP value to calculate a TL
equivalent. This plot provides the first estimation of the PWR for converting MTP to a calculated TL. The
published PWR (Brett, 2006) although somewhat dated, provides a good starting point for operators and
the opportunity exists to update it using larger and more recent data bases. Furthermore, an industry
managed review and updating process would enable industry wide usage of recommended PWR’s that are
both up to date and consistent in application to derive calculation based TLs.

Figure 2—World Wide Perfect Well ratios – reproduced with permission (Behm et al 2004, OGJ)
10 IADC/SPE-178850-MS

In summary, there are a number of methods of determining time performance reference points from
BOB through to MTP, each has its own benefits and uses, discussed further in the later section Drilling
Efficiency Model. Figure 3 below shows how they generally relate on a time bar.

Figure 3—Alternative time references in use or proposed for identification of Invisible Lost Time and Drilling Efficiency

Drilling Efficiency Model

A Drilling Efficiency Model (DEM) must take into account a multiplicity of factors including:
– The purpose of the model
– The users of the model
– The uncertainty inherent in drilling operations that varies from high to low
– The variation on well designs
– The variation in well construction processes
This multiplicity requires a DEM that accommodates these factors. Consequently, we propose a
multifaceted approach that combines the various performance targets described above, into a compre-
hensive and useful set of targets. These are represented in the table below.
IADC/SPE-178850-MS 11

Table 1—Tabulation of Performance Targets by Application and Description

Performance
Reference Application Description

Best of the Best(BOB) Internal measure of an Operator’s performance against the
- Internal best achieved on past wells
Can be applied to wells, phases, sections and activities
Best in Class (BIC) - Comparing performance with other operators on similar
Benchmarking: wells for overall, sections and phases
Technical Limit (TL) Performance against theoretical times that are set for
sections and activities based on assumptions of
perfection
Developed by analysis of historic data or estimation by
a team based on offsets and experience
Maximum Theoretical Calculated performance based on the physics of drilling
Performance (MTP) rock from its properties and perfect operations using
ideal tools and equipment
Will show if continuous learning is being achieved and the
remaining potential of current D&C set-up
Quite challenging reference if sufficient good quality
data is available but consistency in activity/time
reporting is often lacking
Internal focus can be limiting
Good to judge effectiveness of well planning and efficiency
of execution
Shows potential (the ⬙Gap⬙) for improvement against
current best performance
Good for identifying other operators that may be
approached for alternative practices, investigating
differences in technology applications
Applied to create a team owned gap from current
operations to potential operations performance to
stimulate performance initiatives
When applied to sections and activities it can show
where improvements can be made
TL Reference time reduces with operations learning
making this a relatively short term performance
measure
Represents the true target to calculate drilling efficiency
Provides a calculated base-line that can be used to
derive a calculated TL

BOB and BIC are very useful comparison methods to identify actual practices and technology
applications that can accelerate the performance improvement toward TL and ultimately MTP. TL is a
known powerful tool for focusing drilling teams on performance improvement, however over a period of
time, especially on repeated well types, the TL will advance further making it less suitable for calculating
efficiency over a longer period of time. The more precise calculation of MTP and its stability over a long
time frame make it the most appropriate reference for calculating the current drilling efficiency.
Inherently, higher uncertainty and more challenging well types will have much lower drilling efficiencies
than routine well types. This is logical and it must be recognized, understood and accepted so that that true
drilling efficiency can become a universal standard in the industry and not subrogated by management’s
desires for high efficiency numbers across all well types. Instead low efficiency numbers can be
rationalized in current operations by some measure of well complexity as a factor. (See Appendix 1).
An analysis of performance against TL provides a means to address an individual well operation
against the best achieved with current practices and technologies. However, the MTP efficiency must still
remain as it provides a measure of the gap new technologies and advanced understanding could realize.
We propose that the industry standard Absolute Drilling Efficiency (ADE) model is defined as:
– Planned drilling efficiency ⫽ MTP / planned time as a percentage
– Actual drilling efficiency ⫽ MTP / actual time as a percentage
TL, BIC, BOB are all relative targets for use in developing performance improvements with the goal
to improve absolute drilling efficiency.
This new model will deliver value to industry users through a calculated method:
– to define drilling efficiency against a common standard,
– that shows the true opportunity to invest in performance improvement through team processes,
drilling methods and technology upgrades,
– which is consistent over time and not a moving target enabling enable tracking of performance
improvement
12 IADC/SPE-178850-MS

Case Studies of MTP Applications

The depth versus time plots shown in Figure 4 were developed for land drilling development wells in the
Middle East where the reservoir formation is uniquely hard. The plot shows the calculated MTP curve
based on the Perfect Well methodology (Brett 2006) with a PWR applied to show the calculated TL for
a routine (PWR 2.8) and difficult development (PWR 5) well. The 7.8 days to TD as an MTP may appear
very aggressive compared to the current performance however it is equivalent to 449 m / day or 1,473 ft.
/ day which is less than global best performances at world class operations albeit with less hard reservoir
sections. The operations team on this project determined the 30 to 35 day range for the calculated TL as
the most appropriate effective TL since they assessed their wells were closer to difficult than routine.
Further in the performance enhancement process, the planning and operations team chose 32 days spud
to TD for their TL target. Their hesitancy to set a TL closer to a routine development value was due to
the technical challenges of the well (major losses in higher zone / hard reservoir with fractures and losses)
combined with the difficulties of the operating area which had many travel restrictions due to terrorist
activity. Unfortunately, the drilling program was terminated when the country risk level was suddenly
raised and personnel were evacuated from the drilling operations.

Figure 4 —Mid East Land Drilling – Dayrate, High Complexity

This example shows that while the MTP is far lower than the best performance, the calculated difficult
development well time was very close to the best well they had drilled in a development that contained
many technical / regional challenges. This shows that, in this case, the team had delivered good
performance and their further opportunity was a challenge. It also shows that the MTP calculated drilling
efficiency for the best well is low (20%) however it is a technically challenging and logistics challenged
location where a high efficiency cannot be reasonably expected. Achieving TL would raise the efficiency
to 24%.
IADC/SPE-178850-MS 13

The depth versus time plots shown in Figure 5 were developed for offshore drilling appraisal wells in
the Far East where the major challenges were pore pressure uncertainty at the lower portion of the
reservoir. As above, the plots are similar. The planning and execution team determined 30 days as the
highest probability for the TL based on the data in figure 5; after debate and review of past performance
they selected 30 days as the TL for the project to work to achieve. The calculated plots showed that the
best performance achieved was equivalent to a difficult deepwater exploration well when in fact the well
was actually an appraisal well; however the performance was negatively impacted by the use of an old
drillship that had very inefficient pipe handling methods making this correlation reasonable. The team
agreed that the calculated deepwater appraisal time could be achieved as a TL knowing that the PWR
applied was based on historic best deepwater appraisal performance. The team developed a list of
performance improvement opportunities, selected a modern deepwater drillship and included a deck
mounted bucking machine to offset the lack of a dual derrick. Estimates of potential time savings gave
the team the confidence that the TL target at an equivalent of best deepwater appraisal was achievable.
The recent efficiency was 14% with the TL efficiency level at 28% showing that current performance falls
well short of potential full performance.

Figure 5—Deep Offshore Far East Drilling - Appraisal

Figure 6 depicts a Middle East development drilling campaign run on an outsourced basis to a Project
Management company with wells drilled to TD on lump sum. After improving from some initial
challenges the team achieved the 27 days to TD for the particular well type depicted in this plot. The
calculated MTP is factored to an effective TL for both a routine development well and a difficult
development well. Both ends of this PWR are depicted because the wells had certain challenges with hard
surface drilling, major shallow losses and hard formation streaks. The planning / operations team
14 IADC/SPE-178850-MS

(involving all service providers and the drilling contractor including site personnel) developed a perfor-
mance improvement program using the MTP / PWR TL values as a focus and their own detailed activity
list of best possible operations to deliver a TL of 8.5 days. This required reducing drilling times through
some challenging intervals especially with drilling fluid losses however the team felt that the correct
economic application of some new technologies with improved operations activity processes could
achieve this. Immediately following this performance development process, the drilling times on the four
rigs in the program dropped by 26% demonstrating that a stretch goal TL can assist in creating a mind set
and support step change performance improvement. The drilling efficiency of the past best well was 24%;
the early performance improvement increased this to 32% with the team stimulated to improve further to
75%.

Figure 6 —Mid East Land Drilling – Lump Sum Project Managed

These case studies also show that many drilling operations operate as a relatively low drilling
efficiency. In some cases this is a result of the technical challenges that industry has not yet overcome as
well as regional challenges that can be mitigated but not removed; consequently drilling efficiency levels
for these operations can be expected to be low. While most managers prefer to report high efficiency
numbers it is unrealistic to expect higher efficiencies until the technical and operational challenges have
been met. Regardless, the efficiency percentages calculated in this manner reveal potential that the drilling
industry cannot ignore. Many will challenge this method of calculating drilling efficiency as being grossly
unrealistic however it is interesting to observe that drilling efficiency numbers of world class performance
drillers show that MTP can be approached:
IADC/SPE-178850-MS 15

– USA tight gas – MTP of 6.4 with actual of 8.2 ⫽ 78%

– Offshore Thailand – MTP (estimated) 4 days with actual at 4 days or lower ⫽ 100%
– USA Colorado - MTP (estimated) 3 days with actual at 3 days or lower ⫽ 100%
It is apparent that extremely high drilling efficiency percentages, including 100%, are possible for a
small group of world class operators. Arguments about whether MTP referenced efficiency values are
realistic or not cannot be allowed to take attention (and effort) away from the potential and challenge they
reveal.

Recommendations
Global variations in drilling performance on a spud to TD basis are very large; they are far greater than
the physics and technology challenges faced by the various drilling operations.
It is well known that an operator offshore Thailand has achieved extremely high performance on
drilling days to TD but it is less well known that similar statistics of performance have been achieved in
land based drilling operations in the USA with a variety of operators and drilling contractors using a
variety of contract types – day rate through turnkey. This observation shows that drilling teams who are
on opposite sides of the globe can achieve similar results simply because they have a reason to focus on
the best possible performance.
In the case of offshore Thailand, the prime operator was destined to become bankrupt from an
unfortunate failure to penetrate the gas reserves required to meet a government contract. The solution this
operator adopted was to drill their way out of this situation through the highest performance drilling
possible. They succeeded.
In the USA land drilling business, the collapse of natural gas prices by 70% forced operators to drill
faster wells at lower costs; shorter durations drove the lowered well costs as well as accelerated the
production profile from the field. In one specific example of an independent who drilled similar 15,000
ft. wells (S shaped) over a period increased their spud to TD performance from 250 ft. per day up to 1650
ft. per day and continues to focus on further improvements. When asked what they would do differently
with hind sight the Drilling manager stated he ⬙would have used a more aggressive target in the beginning
to capture the gains earlier⬙ (Watford 2015).
MTP is the most definitive and non-emotional reference for defining drilling efficiency. To use it
companies must accept that they may be only 40% (or less) efficient when they commence applying this
method. This is similar to the percentages described in Lean manufacturing efficiency and provides a real
basis to track, compare and report performance gains.
The use of aggressive targets provides the means to expose many deficiencies that are otherwise not
obvious through clearly identifying the full scale of ILT. This provides the team with an identified
opportunity well beyond the traditional deficiency rectification through NPT reduction. The methodolo-
gies that enable drilling teams to improve performance through focusing on an aggressive target and
collectively developing / implementing solutions to cross the gap from current performance to that target
have been publicized (Bond et al 1996,Scott et al 1998, de Wardt et al 2000, de Wardt 2004, de Wardt
2014). They include a rigorous process, extensive engineering of solutions, establishment of a strong
team, an ⬙enabling⬙ team environment, supportive contract management and courage to trust the approach.
It is important that technical short comings are the focus for action, change and debottlenecking rather
than being the source for reprimands. The improvement process included breaking each section down into
enough detail to enable estimation of actual durations (detailed schedule) so building a team based bottom
up detailed schedule with reduced durations.
16 IADC/SPE-178850-MS

Conclusions
While greater value has been steadily designed and built into well assets over the years the time based
costs still incur significant amounts of waste through inefficient operations as evidenced by performance
data, which shows wide variation between operators with similar portfolios and similar levels of reported
NPT. Operators who achieve levels of BIC, especially those whose levels of BIC are close to MTP, have
simply focused their drilling teams toward maximum performance and delivered the commitment to
continuously pursue this goal. The distinction between average and excellent BIC performances does not
correlate to drilling challenges and difficulty although these aspects do impact the final MTP opportunity.
A number of existing approaches to identifying the amount of this waste have been described here
although the industry does not use them consistently. A universal efficiency measure is needed that can
be applied to all well construction operations to create a standard industry wide approach and stimulate
performance improvement efforts of all operators to a similar degree.
Maximum Theoretical Performance (MTP), while impractical for work scope planning, provides a
stable and consistent time based reference point against which efficiency of any planned or actual
execution times can be calculated.

Acknowledgement
The authors acknowledge Ford Brett for sharing his experiences applying the Perfect Well Calculation.
The authors acknowledge the input of Hogne Kile into the Appendix describing the potential development
of a complexity index.

Nomenclature
Maximum Theoretical Performance (MTP)– the fastest a particular well could possibly be drilled
based on the physical limits of people, tools and equipment and subsurface characteristics.
Technical Limit (TL)– an estimate of the fastest duration a particular well with a particular drilling
spread could be drilled if all operations progress flawlessly; made by a team of experts with
experience drilling similar wells the same way and with reference to historic performance data.
Best in Class (BIC)– the best time achieved by any operator in a series of comparable wells.
Best of the Best (BOB)– a fictitious well duration generated by combining the best time for each
section (or activity) using historical data from a series of similar wells.
Productive Time (PT)– the reported time taken to execute activities that are planned or necessary to
drill a well.
Non Productive Time (NPT)– the reported time spent on activities that were unplanned and unnec-
essary in drilling the same well; includes lost time from problems and down time from equipment
failure
Invisible Lost Time (ILT)– time lost due to inefficiency while drilling a well that is typically reported
as PT and therefore remains ⬙invisible⬙ in the record.
Drilling Efficiency– a measure of how close to a chosen reference time an operation is executed on
a scale from 0% to 100%.
Absolute Drilling Efficiency (ADE)– a measure of how close to MTP an operation is executed on a
scale from 0% to 100%.
Complexity Index– a numerical representation of wells’ relative complexity that is expected to affect
the time it takes to execute; can be used to adjust the MTP or interpret relative performance. Also
called Drilling Difficulty Index, Mechanical Risk Index.
MRI is a trademark of IHS/ Dodson Data Systems.
IADC/SPE-178850-MS 17

References
Behm, E; Brett, J F; (2004). Perfect Well 1 / Perfect Well 2; Oil and Gas Journal, March 1 2004
Bond, D. F.; Scott, P. W.; Windham, T. M.; (1996). Applying Technical Limit Methodology for Step Change in
Understanding and Performance, SPE35077. IADC/SPE Drilling Conference, New Orleans, Louisiana, 12–15 March.
Republished as SPE 51181in SPE Drilling & Completion, September 1998
Brett, J F; (2006). The perfect well ratio: defining and using the theoretically minimum well duration to improve drilling
performance, AADE-06-DF-HO-13, AADE Drilling Fluids technical Conference, Houston Tx April 2006
Brett J F, ; Behm E J Jr.,, (2006). Drilling Performance Assessment Process United States Patent No.: US 7,031,840 Bl.
Date of Patent: Apr. 18, 2006
Bröchner, J. (2010) Effektivitetsmått för byggsektorn—mätfrågor (Efficiency Measurements for the Construction Indus-
try-Measurement Issues). Samhällsbyggaren, 3, 42–44
Bröchner, J. and Olofsson, T. (2012) Construction Productivity Measures for Innovation Projects: Case Study. Journal of
Construction Engineering and Management, 138, 670 –677. http://dx.doi.org/10.1061/(ASCE)CO.1943-
7862.0000481
De Wardt, J. P.; Cook, A.; Smook, R. W.; (2000). Step Change Improvement in Drilling Performance, Repeatable
Worldclass Performance is Possible, SPE 59203. SPE / IADC Drilling Confernce, New Orleans, February 2000
De Wardt, J. P.; (2004). Deepwater Success Through Predictable and Distinctive Drilling and Completion Performance
SPE 87117. IADC/SPE Drilling Conference Dallas, March 2004
De Wardt, J. P. (2014). The Drilling Business Model: Driver or Inhibitor of Performance and Innovation SPE 167933.
IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA,, March 2014
Kaiser, M. K.; (2007). Estimating Drilling Costs-1: Joint association survey, mechanical risk index methods common in
GOM, Oil and Gas Journal, August 6, 2007
Nzeda, B. G.; Schamp J H.; Schmitt T,; (2014). Development of Well Complexity Index to Improve Risk and Cost
Assessments of Oil and Gas Wells, SPE 167932 IADC/SPE Drilling Conference and Exhibition, 4 – 6 March, Fort
Worth, Texas, USA 2014
OECD (2001); Productivity Manual: A Guide to the Measurement of Industry-Level and Aggregate Productivity Growth,
OECD, Paris, March 2001, Annex 1 – Glossary.
Rushmore, P.; (2011). Anatomy Of The ⬙Best In Class Well⬙; How Operators Have Organised The Benchmarking Of Their
Well Construction And Abandonment Performance. SPE-140172. SPE/IADC Drilling Conference and Exhibition,
1–3 March2011, Amsterdam, The Netherlands.
Scott, P. W.; Bond, D. F.; (1998) Setting and Achieving Technical Limit Goals in Well Construction by Enabling the
Talents, Energies and Attributes of People. OTC 8637.Offshore Technology Conference, Houston, Texas, 4 –7 May
1998.
Watford M. D.; (2015). Ultra Petroleum Corp presentation to Scotia Howard Weil Energy Conference, March 23, 2015
18 IADC/SPE-178850-MS

Appendix I
Complexity Indices for Well Comparisons

Well complexity is usually a subjective description used to communicate the scale of challenge faced in
a given drilling operation and the negative impact this complexity has on real performance. An
all-encompassing objective definition of well complexity is required to communicate clearly the specific
impact it has on reduced performance and poor results. A carefully developed and globally accepted Well
Complexity Index (WCI) would need to be able to relate closely to the relative level of complexity of any
specific well to the total portfolio of all well types in the world and remove the ambiguity created by
subjective descriptions. Pursuing the development of such an index will bring value to the industry. A
mathematically derived complexity index for any well type would provide the best possible tool to
benchmark performance across various complexity levels and could be used to calibrate the PWR for any
well.
It is useful to look at the indices that are already in existence. A review of drilling indices has been
made (Kaiser 2007, Nzeda et al. 2014):
– Mechanical Risk Index (MRI*) developed and adopted in the Gulf of Mexico in the 1980’s. Six primary variables are
derived from analysis and other, subjective, factors were combined to calculate the MRI. Designed primarily for well cost
estimating.
– Drilling Difficulty Index (Rushmore 2011) derived from 4700 global wells (on and offshore) using regression analysis
to establish the relationship between rate of drilling and a number of factors resulting in a formula describing the effect
of these factors on drilling progress. Designed primarily for performance normalization, the Drilling Difficulty Index is
the only index based solely on empirical data.
– Drilling Complexity Index (Nzeda et al. 2014) utilizes more factors to compute the complexity of a well. Designed
primarily for exploration / asset evaluation, resourcing (staffing) projects and defining time and cost overruns for well
cost estimating.

Table 2—Tabulation of composition of various complexity indices (Nzeda et al. 2014)

Drilling Difficulty Index Mechanical Risk Index Drilling Complexity Index

Country Water depth New / reclaimed well

Measured depth Measured depth Field experience
Number of casing strings Total vertical depth Logistics
Spud depth Horizontal displacement Total vertical depth (TVD)
Water depth (offshore model) Mud weight at total depth Vertical section versus TVD
Maximum mud weight Number of casing strings Dogleg
Age of deepest reservoir Horizontal section Minimum target width
Batch or campaign drilled J-curve directional Maximum mud weight
Final bit size S-curve directional Mud overbalance
Maximum angle Subsea well installed Drilling margin
Length of horizontal section H2S / CO2 environment Temperature
High pressure Hydrate environment Hole stability
High temperature Depleted sand section Number of casing strings
Salt section Rig type
Slim hole (⬍6.5 inches) Rig capability
Mud line suspension system installed Months working since stacked
Coring H2S
Shallow water flow potential HSE impact
Riserless mud to drill shallow water flows Location and discharges
Loop current Weather
Multi-lateral well
Special considerations in cementing operations
Special considerations in drilling operations
Exploration well testing operations
Formation evaluation
Use of new technology
IADC/SPE-178850-MS 19

Operators who have implemented their own proprietary complexity index may not recognize the value
of a globally accepted index however it will provide the ability for operator partners to discuss well
complexity and its impact on planned drilling times and costs, for operators to compare to benchmarks
outside their own company on a known scale and for the adoption of MTP / derived TL across the industry
as a common definition for relative performance assessment.
Complexity indices have provided users of these indices valuable assistance in improving many of the
elements of their planning and execution processes including;
● Fair benchmarking – internal and external comparison of operations with similar complexity,
comparing like with like.
● Quality assurance levels – tailoring of the planning and execution processes based on complexity
of operation and not just equal treatment of simple / repetitive activities with prototype / first-time
activities
● Resourcing and staffing – scientific basis for adjusting resources up or down dependent upon what
level of man-hour resources and duration required to prepare for an activity. The final execution
result depends on the management’s ability to use the index to optimize and balance the
competence, engineering, risk management and planning assigned to the well.
● Risk management focus – support the risk assessment process with tailored efforts of risk analyses
to be applied dependent upon where the complexity identifies new and risky operations are
planned
● Portfolio schedule optimization – avoid doing all the high complexity planning and operations in
parallel and thereby straining manpower, expertise and management. Avoid overloading one
year’s distribution with greater complexity versus a normal year distribution.
● Management focus and awareness – give relative focus and quality surveillance to the highest
complexity wells and operations in a drilling portfolio
● Time and cost estimation – make sure the complex operations receive the correct risk escalation
and budget increase
The following is a functional specification that could be used as a starting point for developing a series
of WCIs applicable to various operations involved in the life cycle of wells. A universal complexity index
must have a broad scope (rig systems, directional focus, fluids operations, multilaterals, smart completion
levels, etc.) and it must include all elements and phases of a well. In order to establish a globally useful
scale, the start and end points need to be defined, i.e. the easiest and most complex technologies and
operations in use worldwide.
A well complexity calculator must be an intuitive and simple system to make it possible to calculate
any well’s complexity level quickly. A smart system can do this even with a significant number of
characteristics to be assessed.
WCIs are required to cover the drilling, testing, completion, well intervention, workover and plug and
abandonment phases of a well; accommodating various rigs and rig-less operations offshore and onshore.
The indices will adapt to a full range of wells in relation to exploration, appraisal and development, and
the various well objectives; oil production, gas production, gas injection, water producer or injector,
observation well or whatever other intentions the well is designed to achieve. A well with drilling, testing
and completion will have 3 different WCIs, one for the drilling phase, one for the well testing phase and
one for the completion phase as these have distinctly different characteristics. WCI categories across the
spectrum of drilling and completion operations on wells will be valuable; these include drilling, testing
and completion, well intervention (including offshore light well intervention by vessels), workover
(involving pulling a completion and installing a new one), and (temporary and permanent) plug and
abandonment.