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Technology Advances Increase Drilling Efficiency

Driven by the desire to increase profitability and enhance efficiency, advances in engineering, tools and technology continue to evolve the exploration and production (E&P) landscape. Limitations that once plagued E&P ventures have been alleviated by new software, equipment and automation systems. The benefits of these technologies can be seen in the form of increased savings, safety and speed. The invention of Rotary Steerable Systems (RSS) in the late 90s proved as a significant step forward in the advancement of directional drilling and provided the opportunity for increased Rate of Penetration (ROP), control and accuracy. Adding to this success, the industry continued to make strides with real-time technologies such as advanced Measurement While Drilling (MWD) and Logging While Drilling (LWD) Systems; visualization and reservoir characterization systems; and automation systems. According to Baker Hughes rotary rig count, in North America alone, oil and gas drilling has increased 214 percent over the last decade to reach a total rig count of approximately 1,859. These numbers have been influenced by directional drilling which has seen a 1,165 percent increase in horizontal wells. Additionally, US drilling onshore has shifted its attention to shale activity with focuses on the Bakken, Eagle Ford, Marcellus, Utica, Permian, Williston and Niobrara formations. Benefits from technology can be seen in the form of prolonged production from greenfields and brownfields, elevated return on investments, safety on the

jobsite and accuracy while drilling. Technologically advanced avenues for collecting data have positively affected where, how, when and what people drill.

Historical setbacks
The historical focus on improving drilling efficiency has been highly technical. Innovations in the 90s introduced the use of computers, enabling reservoir modeling and imagery in addition to increased control. The use of computers has created synergy between downhole machinery located thousands of feet below the earths surface and people at the wellsite, in the lab or even hundreds of miles away in a corporate office. Previously, costs in conjunction with the uncertainty and unreliability of directional drilling prevented its popularity. The lack of real-time data to determine appropriate depths, pressure, mud weight and fluid loss hindered the drilling engineers ability to control or mitigate risks to improve efficiency and productivity. Made manageable by todays technologies, NonProductive Time (NPT) events reduce drilling productivity while increasing costs. NPT events include downhole trips to replace drill bits, downhole tools, drive systems and bottomhole assemblies. These events may be either planned based on estimated rates of equipment wear or unplanned due to equipment failure for various reasons. The longest and most expensive NPT events are typically unplanned and are often associated with well safety. NPT events such as well blowouts can be extremely costly in terms of lost productivity, environmental damage

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and adverse publicity. Other NPT events such as stuck pipe can also be costly and can cause operators to abandon the well. Operator errors, equipment wear and failure to clean the wellbore in a timely fashion all can cause equipment to become stuck or lost in the well. Fishing is the process of removing this equipment. On an industry-wide basis, fishing may account for 25 percent of drilling costs. Fishing is often time-consuming, complex and risky. Dealing with stuck or lost equipment may be more complex in wells containing both vertical and horizontal well sections. At times, it may be more cost-effective to sidetrack or even abandon a well rather than engaging in fishing operations. Key Energy Services extensive arsenal of fishing tools include a wide range of equipment from whipstocks and mills to an exclusive line of Johnston Jars and proprietary drilling tensile shear subs. Each is available with ancillary equipment, depending on situation and site needs.

drilling these formations more productively thus improving drilling efficiency and production economics. Many of the wells in these fields, particularly shale plays, are shallow and can be drilled or redrilled using rigs that are lighter and physically smaller than rigs used in new field development. To optimize drilling rig design for old drilling areas and most shale formations, rig operators are using single- or double-mast rigs. Key Energy Services extensive fleet of service rigs includes a wide range of classes including 1000+ hp, Class V self-propelled carrier or trailer-mounted rigs. Each is available with ancillary equipment depending on class and site needs. While well life varies by formation, horizontal drilling has given life to wells that were once declared tapped out. For example, the Eagle Ford shale formation in Texas, once considered an old formation, is predicted to remain productive to approximately 2028. The formation covers 23 counties, and expenditures in 2011 reached approximately $14.6 billion. Horizontal drilling and hydraulic fracturing have made it possible to tap into shale to extract hydrocarbons. Unconventional petroleum deposits in Canada, dubbed oil sands, have also grown to become an attractive source of energy. While governmental regulations prohibit drilling in geographical regions with respect to the environment, modern technology affords drilling engineers with the knowledge and technology to drill almost anywhere in the world.

Geoscience advances
Today, much drilling involves reentering vertical wells in old fields, cutting windows and drilling horizontal wells penetrating old producing horizons. There is just as much of this type of drilling as drilling of completely new grassroot wells to penetrate old producing formations with horizontal wells. This is the case in areas such as in the Permian Basin, North Dakotas Bakken Shale and areas of Kansas and Appalachia (the Marcellus Shale). Forecasts are that extended reach horizontal drilling will become increasingly common in California. Previous drilling and production data and geological information are available for these old fields. Together, they provide information on how geology impacts the drilling process. This information guides operators in

Advances in technology
Advancements made in the drilling and recovery of oil and gas coupled with the exploration of new formations and the rediscovery of older, once less productive formations have broadened drilling opportunities. In

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the Williston Basin, multi-stage fracing sleeves and packers allow the wellbore to be fractured in many different segments which greatly increase the penetration and efficiency of the fracturing process. This process is also making its way to other hot oil and gas plays. In terms of transportation and distribution, pipelines and gas plants are being built to move the product to the market more efficiently. Rigs are constantly being built and upgraded with safer, more efficient tools and equipment; automation in equipment such as top drives, iron roughnecks and hydraulic catwalks have all greatly reduced the involvement of employees in dangerous situations while handling drill pipe during drilling operations, said Handeland. This multi-use equipment also eliminates the need for switching tools for certain jobs and eliminates costly time spent rigging up and down third party companies to run pipe. Todays tools have transformed planning and accuracy. Once drilling operations commence, several engineering parameters can contribute to or reduce drilling efficiency. Seismic graphing and geological studies have helped companies pinpoint the best locations for drilling wells; this gives the companies a very high success rate along with the geological sampling and MWD surveys throughout the drilling of well ensure that the hole stays in the pay zone.

Deviated wellbores permit penetrating production formations where vertical access is not possible due to topography or pre-existing human activities. Horizontal drilling allows more wells to be drilled from a single pad; in many cases, this limits environmental impact while allowing drilling and production activities to be managed from a central complex instead of many separate locations. The first significant use of horizontal well drilling technology occurred in the 1970s. During this time, the use of downhole drilling motors driven by the hydraulic power of circulating drilling mud became common. Most of the vertical pipe was held in a stationary position while a piece of bent drill pipe allowed the drill bit at the bottom of the wellbore to be rotated, changing the direction of drilling. MWD tools allow the change in the drilling direction to be determined and adjusted accordingly. Including MWD tools in the drill string allows this to be done on a near-real-time basis. By closely monitoring operations, other MWD tools allow operators to prevent premature equipment failure. LWD techniques and tools are employed to increase drilling precision. LWD tools assist the MWD system and allow engineers to make adjustments in mud weights, fluids and real-time steering. LWD tools generate 3-D images to provide the engineer with profit- and time-saving information. In conjunction with MWD tools, LWD tools provide the engineer with an accurate reading of the reservoir. The first commercial vertical well drilled in the United States occurred in 1859 in Venango County, Penn., and was completed under the instruction of Colonel Edwin L. Drake. Since then and up until the 1970s, this form of drilling served as the primary method. Vertical drilling requires less pad space, water, time and resources but is also less productive. The typical vertical well requires two to four acres of land compared to ten

Horizontal wells
Horizontal wells are drilled to better penetrate productive formations. The exposed length of wellbore penetrating the productive interval is far greater than that provided by a vertical well. Increasing the overall length of wellbore penetrating the production interval reduces the amount of bypassed oil and gas that is never produced; thereby, horizontal drilling increases both hydrocarbon production rate and the ultimate reservoir depletion.

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and up for a horizontal well. Additionally, the average cost for a vertical well rests at about $750,000 to $1.1 million while the average cost for a horizontal well costs anywhere from $6 million to $8 million. The completions phase includes the processes or tools required to prepare the wellbore for production. Edge Oilfield Services, a subsidiary of Key Energy Services, provides high pressure rental equipment and services which support well completion activities. Group operations emphasize the necessary completion activities and subsequent remediation work required. Equipment and services offered by Edge include frac stack spreads, well testing/hydraulic choke services, and reverse unit services. Additional completions equipment include, but are not limited to: packers, flow control mechanisms, liner systems, sand control devices and fluids. Fluid hauling plays a crucial role in effective reservoir management. Key Energy Services also offers a variety of drilling fluids and disposal solutions.

made it possible to drill in extreme, new environments all over the world. New equipment and advances in automation have made drilling and production possible in areas such as the Middle East where temperatures can reach up to 113 degrees Fahrenheit and in the Arctic where temperatures can dip as low as -50 degrees Fahrenheit. High Pressure/High Temperature (HP/HT) situations can involve a combination of high depth, temperature and pressure situations. Todays high performance technologies including fluids, casing materials and well completion systems are developed to withstand these instances. With the strong focus on the North American shale plays, Key Energy Services provides the services and equipment needed to perform in the cold of the Williston and Bakken regions and the heat of the Eagle Ford, said Handeland. Dependent on the environment and situation, Key has an extensive array of rental equip- ment and services, from hard items such as pipe, rods, or even Blow Out Preventers, to our proprietary services such as SmartTong Rod Connection Services, Hydra-Walk Pipe Handling System, and the Sand-X system.

Automation
Automated drilling rigs reduce safety hazards; subsequently, the industry has pushed to remove employees from the drilling process. Rig Automation replaces the highly strenuous conditions of the rig floor by the more pleasant environment of a climate-controlled room. People remain more alert under these more comfortable working conditions, thus contributing to safe rig operations. The same or fewer number of people can monitor several drilling rigs simultaneously which, in-turn, improves drilling economics. Supervisory Control and Data Acquisition (SCADA) control systems are computer-controlled systems that monitor and control industrial processes. These control systems are installed on rigs to control drilling equipment and used in conjunction with drilling automation systems. In addition to improving safety, technology has also

Safety
Safe operations mean fewer drilling process interruptions, thereby improving drilling productivity and economics. In recent years, Health, Safety and Environment policies have become more stringent as a result of the BP Deepwater Horizon Explosion. While this occurred offshore, it has also affected the industrys perception onshore. Enhanced safety precautions have been developed to better prevention, intervention and response procedures. Several American Petroleum Institute (API) Standards have been developed and amended as a result. Many of these procedures concern well design and blow out preventer regulations. Automation has helped to alleviate the concern for safety as fewer employees are required

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on the rig site. (Figure 1)

Future plans
Advances in technology have in-turn equated into advances in production and increased drilling efficiency. These strides have allowed drilling in areas once considered too harsh and extreme. As technology evolves, developments will continue to be seen internationally. Horizontal wells make it possible to raise production without drilling several vertical wells; however, the in- creased demand for energy and the emerging shale plays still have the rig count rising. Customers recognize Keys willingness to provide the best and most reliable equipment in the industry; preventive maintenance, training and first-class operational supervision ensure that equipment is always kept up to standards. Key Energy Services is the largest onshore, rig-based well servicing contractor based on the number of rigs owned. Key provides a complete range of well intervention services and has operations in all major onshore oil- and gas-producing regions of the continental United States and internationally in Mexico, Colombia, the Middle East and Russia.