Chapter 2.

Economics

The impact of good solids control can be very significant and can lead to substan-
tial cost savings, but often there is reluctance to invest in solids control for the fol-
lowing reasons:

1. Many of the benefits are indirect and the savings are hard to quantify.

2. Methods to economically justify solids control equipment were not available.

3. Techniques to measure performance are limited.

4. Disappointing results from ill-chosen or incorrectly-operated equipment.

Although the benefits from good solids control are numerous, the cost savings are
not apparent in normal drilling cost accounting. For example, the savings due to
reduced trouble costs and improved penetration rate, although substantial bene-
fits, cannot be accurately calculated. Usually the drilling fluid gets most of the
credit (or blame) since mud material consumption is easily tracked and the mud
properties are the only direct indication of solids control system performance. In a
realistic sense, the mud and the solids control equipment are integral parts of one
system. One cannot plan the mud without considering the solids control system
and vice versa. This does not mean that the benefits of good solids control prac-
tices cannot be measured.

Economic Justification

Penetration Rate
The impact of solids control on penetration rate is best depicted by Figure 2.1.
This has become somewhat of a classic illustration of the benefits of a low solids
content mud. For example, a reduction in average solids content from 4.8%
(9.0 ppg) to 2.6% (8.7 ppg) results in a 15% reduction in total rig days. Given a
10,000 ft well costing $700,000 excluding mud cost, the estimated savings could
reach $100,000. If even half of these savings were realized, it would more than
pay for the best solids removal system available.

In soft rock country such as the Gulf Coast, efficient solids removal can reduce the
need to control-drill by limiting required dilution rates to manageable levels and
reducing operational problems due to overloaded solids removal equipment. The
benefits from efficient solids removal, e.g., “low-silt” muds, have been docu-

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Solids Control Manual

mented for Gulf Coast drilling since the mid-60s when hydrocyclone use was first
advocated.

Figure 2.1 Effect of Solids Content on Drilling Performance. The benefits of low solids con-
tents are most apparent at less than 5% solids.

Dilution Rate
Solids removal efficiency directly impacts dilution costs. When dilution water is
added to the system, three costs are incurred simultaneously:

1. Dilution water cost.

2. Cost of additives to maintain stable mud properties.

3. Disposal cost.

The savings due to improved penetration rates and reduced trouble time, while
real, cannot be reliably predicted as justification for improved solids control equip-
ment. In many cases however, the economic advantages due to reduced dilution
and disposal costs are more than enough to justify expenditures for additional
equipment. The economic benefits in terms of mud consumption and disposal can
be determined through a simple mass balance analysis: Removing a given per-
centage of drilled solids will result in a certain dilution volume to maintain the

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 Economics

desired maximum concentration of drilled solids in the mud. The relevant parame-
ters and their symbols used in the calculations are listed below.

Solids Control Economic Analysis Parameters

Vc = Volume of drilled solids generated, bbls
Vi = Initial volume in tanks, previous hole/casing, bbls
Vf = Final volume in tanks, previous hole/casing, bbls
Vd = Volume of addition/dilution fluid required, bbls
Vlw = Volume of liquid waste to be disposed, bbls
Vsw = Volume of wet solids to be disposed, bbls
Vt = Total volume of solids and liquids to be disposed, bbls

ki = Initial concentration of drilled solids, vol. fraction

ks = Maximum volume fraction of drilled solids, vol. fraction
X = Drilled solids removed by equipment, vol. fraction
Y = Liquid associated with the cuttings, bbl/bbl

D = Hole diameter, in.

L = Section length, ft
W = Washout, vol. fraction

ρd = Density of dilution fluid, ppg

ρc = Density of drilled cuttings, ppg
ρi = Mud weight at the start of the section, ppg
ρe = Desired mud weight, end of section, ppg

Economic Analysis Calculations

First, the volume of cuttings generated in a given interval must be calculated:
2
V c = 0.000971 × D × L × W

For a given percent of drilled solids removed, X, the required dilution volume is
computed by:

( 1 – ks ) ki
V d = ------------------- ( 1 – X )V c – V i + ----- V i
ks ks

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The following equations may be used to calculate the solids removal efficiency,
Xc, and the associated dilution volume required to discharge only wet solids:

Vc – ks ( Vf + Vc ) + k iV i
X c = ----------------------------------------------------------
V c ( 1 + ks Y )

Vd = ( Vf – Vi ) + Xc VC ( 1 + Y )

The required mud weight (density) of the dilution volume, Vd, is based on the
specified starting and ending densities and is calculated by:

Vi Vc
ρ d = ρ e + ------ ( ρ e – ρ i ) – ------ ( 1 – X ) ( ρ c – ρ e )
Vd Vd

The total volume of solids and liquid generated in an interval is given by:

Vt = V i + V c + Vd

The wet solids volume, Vsw, and liquid volume, Vlw, discharged while drilling the
interval is computed by:

V s w = XV c ( 1 + Y )
V lw = V t – ( V f + V c + V sw )

The remaining circulating volume includes the volume of solids not removed by
the solids removal equipment. Since the solids are assumed to be too fine to be
removed by the solids control equipment, their volume is counted as liquid volume
for disposal purposes.

When the entire circulating system is to be discharged at the end of the interval,
the total liquid for disposal is calculated by:

V lw = V t – V sw

Once the waste volumes are calculated, the total dilution and disposal cost for the
interval may be determined by estimating the equipment rental cost and the
cost/bbl for addition/dilution and liquid/solids disposal:

1. Solids Control Equipment Cost

- Estimate rental, transport, service, and maintenance (e.g., screens) cost

for the interval.

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 Economics

2. Addition/Dilution Cost

- Estimate the cost/bbl by including purchase cost for dilution liquid, truck-
ing, and additive cost.

3. Liquid/Solids Disposal Cost

- Estimate the cost/bbl by including hauling, disposal, treatment, reserve pit

construction and reclamation.

Example Calculations

Interval Data:

Vc = Volume of drilled solids generated, bbls

Vi = 360 bbls
Vf = 360 bbls
Vd = Volume of addition/dilution fluid required, bbls
Vlw = Volume of liquid waste to be disposed, bbls
Vsw = Volume of wet solids to be disposed, bbls
Vt = Total volume of solids and liquids to be disposed, bbls

ki = 0 (fresh mud, no drilled solids)

ks = 0.06 (6% maximum drilled solids)
X = 0, 0.1, 0.5 (3 cases)
Y = 1.0 (1:1 solids to liquid ratio in wet solids discharge)

D = 12.25 in.
L = 1600 ft
W = 1.10 (10% washout)

ρd = Density of dilution/addition fluid, ppg

ρc = 2.6 x 8.34 = 21.68 ppg
ρi = 8.6 ppg initial mud weight
ρe = 9.4 ppg final mud weight

Dilution Cost: $5.00/bbl

Liquid Waste Cost: $3.00/bbl
Solid Waste Cost: $5.60/bbl

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Calculations:

1. Cuttings volume:

2
V C = 0.000971 × D × L × W
2
V c = 0.000971 ( 12.25 ) ( 1600 ) ( 1.1 ) = 256 bbls

2. Dilution volumes for each solids removal efficiency:

( 1 – ks ) ki
V d = ------------------- ( 1 – X )V c – V i + ----- V i
ks ks

For X = 0.0

( 1 – 0.06 ) 0
V d = ------------------------ ( 1 – 0 ) 256 – 360 + ---------- ( 360 ) = 3650 bbls
0.06 0.06

For X = 0.1

( 1 – 0.06 ) 0
V d = ------------------------ ( 1 – 0.1 ) 256 – 360 + ---------- ( 360 ) = 3250 bbls
0.06 0.06

For X = 0.5

( 1 – 0.06 ) 0
V d = ------------------------ ( 1 – 0.5 ) 256 – 360 + ---------- ( 360 ) = 1645 bbls
0.06 0.06

3. Dilution density:

In this example, the required density will not change with each case. The param-
eters for X=1 are chosen for illustration purposes.

Vi Vc
ρ d = ρ e + ------ ( ρ e – ρ i ) – ------ ( 1 – X ) ( ρ c – ρ e )
V d V d

360 256
ρ d = 9.4 + --------- ( 9.4 – 8.6 ) – ------------ ( 1 – 0.1 ) ( 21.7 – 9.4 ) = 8.6 ppg
360 3250

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 Economics

4. Solids removal efficiency and dilution volume to achieve zero whole-mud dis-
charge while drilling:

V c – ks ( V f + V c ) + k i Vi
X c = ----------------------------------------------------------
Vc ( 1 + ks Y )

256 – 0.06 ( 360 + 256 ) + 0 ( 360 )

X c = ------------------------------------------------------------------------------ = 0.81
256 ( 1 + 0.06 × 1.0 )

V d = ( Vf – V i ) + X c Vc ( 1 + Y )

V d = ( 360 – 360 ) + 0.81 ( 256 ) ( 1 + 1 ) = 415 bbls

5. Summary of waste disposal volumes:

Total Vol-
Wet Solids Liquid While Drilling Total Liquid
ume
bbls bbls bbls
bbls
X = 0.00 4266 0 3650 4266
X = 0.10 3866 51 3199 3815
X = 0.50 2261 256 1389 2005
X = 0.81 1030 414 0 616

6. Cost estimate for each case, discarding total liquid volume (last column in
Step 5):

Equip- Disposal Costs

Drilled Solids Addition/Dilution Total
ment
Removed Costs Solids Liquids Costs
Costs
0% $0 $18,250 $0 $12,678 $30,928
10% $100 $16,250 $286 $11,445 $28,081
50% $500 $8225 $1434 $6015 $16,174
81% $5000 $2075 $2318 $1848 $11,241

The example illustrates how an increase in equipment costs to improve solids

removal efficiency is justified by the savings in addition/dilution and disposal
costs, even without considering savings attributable to higher penetration rates or
reduced trouble costs.

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Solids Control Economics and Performance Program

(SECOP)
A natural question arising from the economic analysis exercise is "What equip-
ment will I need to achieve the optimum solids removal efficiency?" It is also
apparent that the determination of an economically-optimum solids control system
can be a time consuming, iterative process. The equipment costs to achieve the
minimum required dilution volume (commonly called a "closed-loop" mud system)
may not be economic in all cases. It may not even be physically possible with
available mechanical solids removal technology. The Solids Control Economic
and Performance Analysis Program (SECOP) was developed at APR to assist
drilling personnel in the optimum selection of solids control equipment. It is avail-
able as an Integrated Drilling Assistance Program for use on the PC. The diskette
provided with this manual contains an earlier, interactive version of the program.
This program analyzes:

1. The economics of solids control in terms of potential savings in mud dilution

and disposal costs versus the percent drill solids removed.

2. The performance of solids control equipment. It predicts the drill solids

removed by each piece of equipment selected.

3. The loss of weighting material and mud from each piece of equipment for
weighted muds and the predicted recovery from barite-recovery centrifuging.

4. The performance for different equipment options to determine the most effec-
tive solids control system for drilling a well.

SECOP predicts only the savings in mud and disposal costs. As discussed previ-
ously, no model exists to predict additional savings from higher penetration rates
and lower trouble costs that result from effective solids control. The program uses
models developed as a result of extensive equipment testing at APR to predict
individual equipment and total system performance. The overall economics cal-
culations are based on the same equations described above. A complete descrip-
tion of the program is provided in the IDAP reference manual.

The recommended application of SECOP is to match the performance history of

the solids control system for an offset well. This can be done by selecting the
proper lithology and resulting particle size distribution which matches the mud vol-

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umes and costs for the offset well. Once a lithology match has been made, differ-
ent equipment options may be tried to find the most economically-effective solids
control equipment for the proposed well.

A successful economic analysis for future wells will depend on determining a rep-
resentative particle size distribution from the offset well which, in turn, is depen-
dent upon having accurate records of dilution volumes and equipment operation.
This emphasizes the importance of accurately metering water additions and
equipment performance while drilling. SECOP may then be used to monitor
equipment performance and establish representative particle size distributions for
future economic analysis and equipment selection.

Monitoring System Performance

The API Recommended Practice 13C contains a field method for evaluating the
total efficiency of the drilling fluid processing system in water-based fluids. As with
any performance analysis, this procedure depends upon accurate dilution volume
information. The API procedure uses the dilution volume over a given interval to
compute a dilution factor, DF, which is the volume ratio of actual mud built to mud
dilution required to maintain a desired solids concentration with no solids removal
equipment. The dilution factor is used to determine the total solids removal effi-
ciency of the system. This total efficiency can then be used in SECOP to establish
a representative particle-size distribution for further analysis and equipment per-
formance predictions.

API Procedure for Evaluating Total Efficiency of Solids

Control Systems (Water-Based Muds)
1. Over a desired interval length, obtain accurate water additions and retort data.

2. From the retort data, calculate:

- The average drilled solids concentration in the mud, ks.

- The average water fraction in the mud, kw.

3. Calculate the volume of mud built, Vm:

Vw
V m = -------
kw

4. Calculate the volume of drilled solids, Vc:

2
V c = 0.000971 × D × L × W

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5. Calculate the dilution volume required if no solids were removed, Vd:

Vc
V d = ------
ks

6. Calculate the dilution factor, DF:

Vm
DF = -------
-
Vd

7. Calculate the total solids removal performance, Et:

E t = ( 1 – DF ) Multiply by 100 to calculate as a percentage.

The accuracy of the API procedure depends on a relatively constant solids con-
centration in the mud, constant surface circulating volume, and consistent averag-
ing techniques over the interval of interest. Regardless, the total solids removal
performance should be reported at frequent intervals to facilitate solids control
analysis and planning for future wells.

Example Calculation

Interval Data:

Water Added, Vw 1481 bbl

Average Water Fraction, kw 0.9
Interval Length, L 1600 ft
Bit Diameter, D 12.25 in.
Washout, W 10%
Average Drilled Solids Concentration, ks 0.06

Calculations:

1. Calculate the volume of mud built, Vm:

Vw 1481
V m = ------- = ------------ = 1645 bbls
kw 0.9

2. Calculate the volume of drilled solids, Vc:

2
V c = 0.000971 × D × L × W
2
= 0.000971 ( 12.25 ) ( 1600 ) ( 1.1 )
= 256 bbls

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 Economics

3. Calculate the dilution volume required if no solids were removed, Vd:

Vc 256
V d = ------ = ---------- = 4267 bbls
ks 0.06

4. Calculate the dilution factor, DF:

Vm 1645
DF = -------- = ------------ = 0.386
Vd 4267

5. Calculate the total solids removal performance, Et:

E t = ( 1 – DF ) = 1 – 0.386 = 0.614

Expressed as a percentage:

Et = 61.4%

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Summary

• The economic advantages of good solids control practices, while real, are
usually difficult to predict in terms of improved penetration rates and reduced
trouble time. However, savings in dilution and disposal costs can be predicted
and are often ample justification to invest in improved solids control equip-
ment.
• Solids removal efficiency directly impacts the cost of dilution, material con-
sumption and waste disposal. A simple mass balance approach may be used
to predict total dilution and waste volumes as a function of solids removal effi-
ciency. Example calculations show how an investment in solids control equip-
ment may be easily justified by the savings realized from reduced
addition/dilution and disposal costs.
• The API Recommended Practice 13C contains a field method for monitoring
system performance in the field. This method depends upon accurate dilution
volume monitoring to determine total solids removal efficiency. The API pro-
cedure and example calculations are presented in this section.

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