American experience enlightens Polish exploration company during unique tour

November 21st, 2012 | Posted by in gray-four | Oil and gas | RD20

An oil and gas company’s challenges are rarely so unique that they have not been experienced by another. Businesses who partner with a global manufacturer like Atlas Copco often discover they have not only found a supportive partner in that manufacturer but have also joined a global resource network.

 

Poland’s Oil and Gas Exploration Company Krakow, or Nafta Krakow for short has been exploring the country’s vast shale gas resources for about five years now. Recoverable reserves there were estimated by Poland’s Geological Institute in a March 2012 report to be as high as 1.9 trillion cubic meters, which is about the same as reserves in the United States.

Built upon the former State Enterprise Oil Exploration company established in Krakow in 1946, Nafta is a governmental organization. Though it has been operating throughout Europe, Asia and Africa, Nafta has not drilled previously for gas in Poland.

To date Poland has been entirely dependent upon Russia for natural gas, the world’s largest natural gas exporter. Tapping its own reserves would move Poland toward energy self-sufficiency and, by providing other European countries with a reliable supply of the relatively clean fossil fuel at competitive prices, it would create considerable revenue for itself.

In spite of the excitement and national pride generated by such a promising forecast, Nafta Krakow is moving cautiously to make sure it is creating the safest, most efficient production program. So Atlas Copco Poland’s customer center in Raszyn looked for a way to put Nafta in touch with another company that could serve as a sort of model for modern shale gas drilling. Since Atlas Copco is a global manufacturer with a presence in more than 200 countries, it was simply a matter of selecting which company.

They called on Josh Marcus, who works out of the marketing office of Atlas Copco USA’s Roanoke, Virginia, research and development facility for DTH tools. Marcus hoped Southwestern Energy Company, who specializes in exploration and production of unconventional oil and natural gas, would be interested in hosting a visit for a Polish delegation. Southwestern Energy has had remarkable success in Arkansas’s Fayettville Shale gas play.

In April, Nafta drilling engineers Marek Siola and Andrzej Gaska, accompanied by four Atlas Copco Poland representatives, traveled to Southwestern Energy’s offices in Conway, Arkansas. Southwestern gave the envoy a generous briefing of its operations, fielded their questions, and treated them to genuine southern cuisine for lunch with a welcome side of Arkansas hospitality.

Southwestern Energy and the Fayettvile play

Jim Tully, the division drilling manager at Southwestern, related how the company was established as a gas utility company initially and started drilling wells of its own in the early 1940s to supplement its supply for its customers. Under what Tully called “the right leadership” in the late 1990s, its exploration and production divisions, SEECO and SEPCO, began making a name in the industry. It was in the early 2000s, while trying to identify the source of inexplicably larger volumes of gas than should volumetrically be recoverable from another formation, that the company first recognized the potential economic viability of a shale that stretches across a large part of north central Arkansas.

Siola asked Tully one of the main questions on his mind. Was drilling for gas with air safe?

Tully answered, “Conditions are good here for air drilling in that the gas in the Arkoma Basin is a dry gas without the heavier hydrocarbon components.”

When Siola inquired further about down hole fires, which can occur when air drilling, Tully said he wasn’t familiar with the geology or makeup of the hydrocarbons in Poland, but air drilling may be feasible in Poland. He said he had some experience with down-hole fires in the western part of the Arkoma Basin and in west Texas.

“It is not so much a safety issue as it is a cost issue if it occurs on a frequent basis due to replacement costs of your drilling bottom-hole assembly and potentially side-tracking of the well. In some areas, you can use a nitrogen membrane or even drill with nitrogen and potentially prevent down hole fires or you could possibly plan your casing program to allow you to drill certain intervals on air,” Tully suggested

Marcus, who had firsthand knowledge of the drilling there, helped with details for a comparison, “They’ve drilled a couple 22-inch holes on air there through fractured limestone using a hydrocyclone with polymer as we do in Texas. The two holes were very successful.”

Andrezj Majczyna, the business line manager for Atlas Copco rock drilling tools in Poland, asked again to make certain, “You are not afraid to drill for gas with air?” Air drilling is a completely new approach to oil and gas drilling in Poland, and Nafta is the first company to use it. Mikal Goral, also of Atlas Copco Poland customer center, told Tully, “This is why this visit is important for us, to learn.”

Tully offered that even in some parts of the Barnett Shale of Texas, they drill a portion of the hole with air.

Techniques to cut costs

Eventually the discussion turned to the cost of drilling a hole. Siola estimated that drilling one of their 12,000-foot (3,660 m) wells ran them about $10 million USD. Eyebrows went up and cheeks puffed out in unison from the Americans at the table. Tully addressed this with techniques U.S. companies like Southwestern Energy use to lower costs.

Tully said the highest costs in constructing a Fayetteville Shale well is in hydraulic fracturing, not in drilling.  A well with a 5,000 foot lateral length might have as many as 13 to 15 fracturing stages or 13 to 15 individual jobs.

Southwestern has lowered hydraulic fracturing costs by acquiring a plant to supply sand. Southwestern is also in the process of purchasing pumping equipment and training its own hydraulic fracturing crews, who will operate under the subsidiary, DeSoto Field Services. He said almost all of the fluid they use is recycled from the site and from other jobs, collected in man-made fluid ponds. They also gather rain water. “It takes a lot of water and a lot of sand.”

Southwestern is still applying science to its Fayetteville Shale wells and sometimes incurs significant costs in running open hole electrical logging tools and cutting cores to evaluate the formations in a well.

“Science wells cost a lot, but we gain a lot of valuable knowledge from them,” Tully said. He also offered up measures Southwestern takes to keep those costs down, such as for coring: “Wireline retrievable coring is a whole lot faster than conventional coring and is what we utilize. One of our guys came up with the idea to use casing and a casing running tool for coring, which has been a big savings and has sparked a lot of interest from other operators.”

As for drilling itself, Tully said Southwestern could show them what they call their “spudder rig concept.” This involves utilizing a smaller rig,  very proficient at air drilling, to air drill the upper, vertical  portion of the hole, typically to a depth near kick-off point where the directional portion of the well begins. The wellbore is then loaded with drilling fluid, or mud, and then a larger, conventional drilling rig is moved in. The conventional drilling rig drills the curve and lateral portion of the horizontal well.

Tully said the Fayetteville Shale play lies in a “good air drilling basin with hard, competent rock and not an excessive amount of water. The rate of penetration while drilling on air is much better than while drilling on mud.”

Though he knew of companies that had been utilizing directional hammers to do some steering in the vertical portion of their wells, he said Southwestern was not, but might in the future.

After a tour of the engineering room where every rig’s real-time data was portrayed on a two-wall array of monitors, the group suited up for site visits to four drilling pads. Two were Atlas Copco RD20 drilling rigs that were drilling the surface hole, setting surface casing and drilling vertical “spudder” holes down to near the wells’ kick-off point. The other two were conventional drilling rigs that were drilling the curve (turning the wellbore to near 90 degrees), then drilling the lateral and running production casing in the well.

Deck Travis, the area drilling superintendent for Southwestern who helped lead the site visits, commented that his company is impressed with Pense Bros. Drilling Company’s efficiency and quality of work drilling the top portions of the wells. Pense uses the Atlas Copco RD20 for the work, which is the rig of choice for its power and speed, as well as its unique feed system that puts the load on the cylinder, not the tower, which can be a lightweight lattice structure. Drilling operations are firmly planted on four points of contact. Rigs that rely on a cantilevered design do not provide as much support. Southwestern owns two of the RD20 units itself.

The RD20 is valued for its mobility, as well. Travis said Pense has been able to move an RD20 “from hole to hole in four hours and pad to pad in just six,” though if pads were a long distance from each other, additional time would be spent on the road.

After seeing the RD20 drill rigs preparing the wells for the conventional rigs, the group visited pads where the second stage of drilling was underway by one of Southwestern’s conventional single rigs, one of which was unique for having a triple’s mast.

As group members took turns saying their goodbyes once back at Southwestern Energy’s office at the end of the day, Majczyna politely waited for a break in conversation. Then speaking on behalf of his countrymen in his characteristically mild but deliberate voice, he said simply, “Thank you. This is exactly what we came for.”

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