Planning for Today's Drilling Costs,
Risks, and Timelines

Here is the situation: Your team is given a project to drill a well in deep water. Formation depths and structures as well as projections of pore pressures and fracture gradients are all highly uncertain, with few historic analogs for reference.Your goal: to safely drill and evaluate a relatively unknown formation in a hostile environment while trying to reduce rig days and manage multiple risks.

With today’s drilling and completion costs accounting for nearly two-thirds of the capital expenditures of some projects, you know that errors in cost and timing estimates can have a significant impact on project economics. Having few analogous wells and limited data, the perception biases of your drilling team, whether pessimistic or optimistic,might distort the ranges of uncertainties used.

Drilling has Moved into New Territory

Drilling professionals have a wealth of experience in themore traditional region of depth and reach that provides an intuitive framework and rich data set for probability assessments of what they may encounter. As technology has enabled much deeper drilling with extended reach (seechart next page) the experience level and available data is quite sparse. At the same time, the costs, time frame and risks have increased dramatically for such drilling projects

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