Assignment 3 – Drill bits

Example 1: Calculation of Cost /ft

Determine the cost/ft for the following bit types which were used to drill the same type of
formation in three wells. Which bit would you select for the next well?
Assume bit cost = $10,000 and rig cost= 900 $/hr

In the given question, since the rig cost and trip time is same. The cost per
feet is only needed to be calculated for the bit cost and footage drilled by the
drill bit.

Example 2: Break-even analysis

A milled tooth bit drilled 2,461 ft of limestone in 150 rotating hours. Other relevant data for this
bit is:
Trip time (T) = 8 hrs
Bit cost (B) = $3,000
Rig cost = 900 $/hr
It is proposed to replace this bit with an insert-type bit costing 8,500.
Prepare a break-even graph.