IADC/SPE 128716

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Well Delivery Process: A Proven Method to Improve Value and
Performance While Reducing Costs
John P. de Wardt / DE WARDT AND COMPANY INC

Copyright 2010, IADC/SPE Drilling Conference and Exhibition

This paper was prepared for presentation at the 2010 IADC/SPE Drilling Conference and Exhibition held in New Orleans, Louisiana, USA, 2–4 February 2010.

This paper was selected for presentation by an IADC/SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not
been reviewed by the International Association of Drilling Contractors or the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily
reflect any position of the International Association of Drilling Contractors or the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any
part of this paper without the written consent of the International Association of Drilling Contractors or the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is
restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of IADC/SPE copyright.

Abstract
Description
A Well Delivery Process defines a set of activities along a time line to plan, execute and close out a well. The most advanced
versions of this process include tools and techniques that create robust plans including risk and uncertainty management,
technical limit focus and stretch goals, probabilistic time and cost estimating, detailed scheduling, Drill / Complete the Well
on Paper and similar group exercises. Stage gates are included that provide review points which are usually matched to a
corporate Capital Value or Opportunity Realization Process. The most advanced form of the process incorporates best
practices from Lean Manufacturing. The paper describes best practices in the development of a Well Delivery Process.

Application
The Well Delivery Process applies to all wells in a scalable format whereby a longer term, more detailed process is used for
Exploration Wells and a simpler, shorter duration process for repeatable development wells. It covers work processes
between departments, especially subsurface and drilling, and between the suppliers and the oil company, as well as between
suppliers. An actively maintained Well Delivery Process provides the means to capture lessons learned and to retain
knowledge within a company.

Results, Observations, Conclusions

In a West African offshore operation in a marginal field development with complex wells, the application of a Well Delivery
Process resulted in best in class performance in an industry benchmark survey (Rushmore Review). This included a 77%
reduction in non productive time. Added value was achieved through increasing the typical well productivity by more than
33%.
In the N Sea, a horizontal well drilled from a semi sub achieved an overall drill rate of 171 m / day versus a historic average
of 80 m / day. Well cost was reduced by 30%.
A N Sea operator improved from 3rd quartile to 1st quartile performance while another improved overall drilling
performance by more than 30%.
Reviews of drilling performance in two different regions demonstrated the correlation with poorer performance when there
was insufficient lead time for proper planning according to the Well Delivery Process due to late and frequent drilling
sequence changes.
Lessons learned are described including the correlation of performance with robust risk assessment
Recommendations on the key characteristics for a successful Well Delivery Process are described.

Significance of Subject Matter

A best practice and robust Well Delivery Process is essential for high cost drilling operations and challenging drilling
environments whether exploration wells or infill drilling in depleted reservoirs to small hydrocarbon accumulations. This
paper will provide an essential guide to Drilling Managers wishing to develop a Well Delivery Process.
The paper also introduces Business Process distinctions for different types of wells from project based exploration through
Factory Drilling which impact the application of a Well Delivery Process.
2 IADC/SPE 128716

Introduction
Businesses that perform well have defined how they deliver value to their customers – internal or external. The common term
for this is a Value Delivery System (VDS). Drilling and completion operations that perform well have invariably, either
formally or informally, defined their Value Delivery System. A Value Delivery System is defined as the end-to-end system
that functions to deliver value to customers; both internal customers and external customers.
The Value Delivery System in Drilling and Completion has commonly been termed the Well Delivery Process (WDP). This
process defines the best practices through the full life cycle from concept to delivery of the product for operation to produce

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hydrocarbons or data gathering in the case of an exploration or appraisal well that is not converted to a producing well.
This paper treats the WDP as a system not a process in spite of the industry accepted nomenclature. The distinction that is
drawn here is that a system is more encompassing than a process in as much as it defines the structure of the interrelated
functions within the system, the type of behavior in the system and the interconnectivity of the various parts.
Most systems share common characteristics, including:
- Systems have structure, defined by parts and their composition;
- Systems have behavior, which involves inputs, processing and outputs of material, energy or information;
- Systems have interconnectivity: the various parts of a system have functional as well as structural relationships
between each other.
A process, in contrast, is a series of actions directed to some end in this case the completion of a well for data acquisition or
hydrocarbon production.

Purpose of a Well Delivery Process (WDP)

The purpose of the Well Delivery Process (WDP) is to ensure sufficient work has been undertaken in the planning phase to
match the level of uncertainty and risk that can be managed in the operating (execution) phase. This level of work varies with
the type of well, the experience with operating in the area and the strength of the organization. The extremes of planning
work load are; undertaking a lot more than is required for the type, location and organization strength thus committing excess
funds and time in the planning phase or undertaking too little that the operation is fraught with unforeseen problems and over
shoots the budget for cost and time as well as incurring failures in the well functionality through its operating life cycle.

Goal Alignment
The WDP and all Value Delivery Systems are intended to deliver value to the end customer. This must be a fundamental
attribute of the design of any WDP so that all the work performed in the WDP delivers toward this goal. This means that:
- the customer values must be articulated and communicated so that they are understood by all involved,
- decisions in the process must take into account the final customer values which will typically include schedule, cost
and functionality regardless of the time that these decisions are made,
- everyone who has data, information and knowledge pertinent to the planning and decision making must be involved,
- the process must include suppliers as well as in house parties.

Impact of Procedures & Practices

Well established, large companies have well defined and controlled procedures and practices in their organizations. These
define the way that the business is run and therefore supplant some of the WDP with the notable exception when agreed
deviations are required for a particular circumstance.
In the current business environment, there are many small, recently formed companies that do not have their own developed
procedures and practices. The WDP for such companies must define the development of detailed operational processes within
the individual drilling and completion programs until they are extracted and established as stand alone procedures and
practices for reference by the individual drilling programs.

Multi Disciplinary Input

The WDP is a means to define and ensure that input is obtained from the most knowledgeable sources. These include internal
departments that may be dissociated from the Drilling and Completion (Wells) Department through organizational design,
suppliers and technical / operational consultants.
The process defines tools to integrate across organizational boundaries such as RACI and Peer Assist – described later in the
paper.

Capital Value / Opportunity Realization

Oil companies have adopted Value Delivery Systems (Processes) that define the realization of value from the opportunities
that they can access. Terms used for this system are Capital Value Process and Opportunity Realization Process. These
processes incorporate sub processes for wells and facilities. The WDP is an integral component of these other processes and
must be designed to fit into them as part of the work flow.
The WDP can stand alone in an environment where wells are the primary activity of an organization. In such circumstances,
the WDP may need to take on some economic evaluation processes normally embedded in the Capital Value / Opportunity
Realization Process.
IADC/SPE 128716 3

Stage Gate Processes

The Stage Gate methodology breaks the Well Delivery Process into discrete and identifiable stages, each stage is designed to
move planning forward to the next gate (decision point) then through execution into close out. Stage Gates are distinct hold
points have that been defined for management approval to proceed to the next stage. This methodology provides the means
for organizations to develop plans and supervise operations themselves within a framework of management approval.
Each stage defines the work in detail and the level of certainty such that early decisions can be taken to proceed or abort
without undertaking more work than is necessary for the decision. The stage gates define specific deliverables and their

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accepted ranges of uncertainty. They also serve to confirm that the correct skill sets (departments) have been brought into the
process to avoid failure due to lack of communication with the knowledge holders.
The stage gates are very specific in both their requirements for approval, the type of approval and the assignment of authority
to give approval.
The rigidity of the stage gates can be partially and formally circumvented when good reason exists to proceed to the next
stage without full approval. In such an event, the exception must be clearly defined together with the requirement for delayed
approval. Conversely the selection and purchase of long term commitments (e.g. long lead items) can be brought forward
where schedule reduction is critical to the business.

Balancing the Stages in the Process

Front end loading brings significant value to any planning process however it also can load the resources and cost before
validation of the economic value leading to a wasted investment. Conversely, insufficient front end loading does not enable
sufficient work to be undertaken to properly evaluate the economics and can lead to poor decision making on which wells to
execute. A well balanced WDP causes the right amount of work to be completed for the approval process at each stage.
Furthermore, the planning work proceeds from stage to stage in an orderly development of detail. Parallel activities within a
stage are designed to gather and process vital information to drive down technical and business uncertainties. Financial
commitments to deliver the well(s) increases as the uncertainty decreases through the stages. Fig 1.

Defining the Stage Gates

The definition of Stage Gates is critical to a successful WDP. In a robust system poor business opportunities are spotted early
and killed; projects in trouble are detected early and sent back for re-work or re-direction. Gates are the quality control check
points that ensure only the right wells move forward as good business opportunities that are being properly planned. Gates
typically involve:
- a prescribed list of deliverables required for review with clearly defined expectations, robust data and solid work,
- a forward plan if the gate is approved,
- objective, pre-defined decision criteria with a score card to make go forward / kill and prioritization decisions,
- resource commitment decisions for wells approved to pass through the gate.

Project or Ongoing Operations Distinction

There is a distinction in business between projects and ongoing business that is very important for well delivery. These two
modes of business are managed in different ways; using the inappropriate management method results in poor performance.
In oil and gas well drilling, the operations often shift from the project mode to the ongoing business mode. Understanding the
boundaries of these two modes, the transition between them and the variations within them is critical to success. Systems and
processes are often set up with one or other mode of business in mind without distinction to make changes for the other
mode.

Project
A project is defined as a non repetitive set of activities directed toward a unique goal within a limited time frame. The range
of a project can be from small and simple to very large and complicated. Most well operations start out as a project, often
with an exploratory well. This is a situation where specific goals are set for the well results which will determine if further
drilling activity continues on the prospect. These projects are characterized by a high degree of uncertainty and risk due to the
nature of exploratory drilling.

Ongoing Business (Operations)

Ongoing business can be described as four basic types of processing to repeatedly deliver products and services:
- Job shop process when a low volume of a high variety of products or services is needed. An example is a sequence
of wells in a well known area that involve different locations with different characteristics.
- Batch process when moderate volumes of moderate variety of products or services are needed. An example is a
small group of similar wells drilled in series in a single field; sometimes this also includes repetition of sections of
wells in a sequence.
- Repetitive processing is used when higher volumes of more standardized goods or services are needed. This requires
a large number of similar wells that can be drilled and completed in a production or assembly line process. The only
4 IADC/SPE 128716

flexibility that exists is some predetermined options. This process has been termed “Factory Drilling”.
- Continuous processing is when a very high volume of non discrete, highly standardized products or services is
needed. This type of processing is typically a process plant such as refining or a steel mill. Currently, an analogy
does not exist in drilling and completing wells.

Managing the Type of Business Distinction

It is easily recognizable that most oilfield drilling operations start as a project. These operations transition to ongoing

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business as activity shifts to multiple wells in a field. The ongoing business stage goes through a life cycle that begins with
the job shop and transitions to batch processing as the wells becomes better defined and more standardized. Furthermore, the
applicable type of process may revert to job shop from a batch process if a non standard well is interjected into the sequence
for any reason (changed sub surface geology or a new well design).
It is important to adjust the planning and execution activities to match the type of process that is relevant for the operation. In
the extreme, applying a project type process to repetitive operations is a waste of time, effort and money in the planning
phase. Conversely, applying repetitive planning and execution activities to a project type operation will result in a major
failure in execution.

Features of the Different types of Operations (Table 1)

Project Ongoing Business
Projects Job Shop Batch Repetitive Continuous
Description One off Customized Semi standardized Standardized Highly
standardized
Advantages Maximize value of Able to handle Flexibility Low unit cost, Very efficient,
unique opportunity wide variety high volume very high volume
efficiency
Cost estimation Complex Difficult Somewhat routine Routine Routine
Scheduling Complex, subject Complex Moderately Routine Routine
to change complex
Wells analogy Exploration and Infill wells Groups of infill Large number of None
Appraisal wells. requiring unique wells with similar identical wells
Radically solutions. characteristics with some
redesigned wells or New designs of defined options
a radical change in wells in a well (Factory Drilling)
drilling / know region
completion
technology

The goal of many drilling and completion operations is to reduce cost and deliver predictable results – results that meet the
planned cost, schedule and functionality. In order to do this, they must transition toward repetitive and continuous operations.
This requires a change from flexibility to standardization which is only fully possible when consistent geology and reservoir
conditions enable development wells to become repeatable. The ultimate goal is to develop highly standardized “Factory
Wells”.
The well delivery process must either be designed for a specific type of operation or be scalable so that it is intentionally
adjusted to match a variety of types of operation.

Overview of Well Delivery Process

At the high level, the Well Delivery Process runs from the concept stage through to operations (and abandonment).
The WDP will have to link to local government approval processes. These often include an Application to Drill that has
specific requirements for submission. It is important to map this requirement into the location specific WDP to ensure that the
requisite information is delivered on schedule to complete this approval process in a timely manner. Likewise the approval
process for partners.
The WDP is intended to develop from multiple options that have uncertain ranges to a specifically selected design / program
that is detailed fully for expedient execution. The most powerful methodology is where options for key design decisions are
held open through the process, worked in parallel and then frozen once the decision is taken. This methodology requires more
effort and management but yields greater rewards than the single line process where later regrets often occur for early
decisions taken without full consideration of the options or the impact of early decisions on later decisions.
IADC/SPE 128716 5

Defining the Stages of Well Delivery Process (WDP)

The full cycle of a WDP commences with a conceptual design that is used to assess and rank opportunities for investment. It
ends with a close out that captures all the data and learnings combined with a hand over to operations when applicable. The
generic stages are defined as:
1. Identification and assessment – will we undertake it?
2. Evaluation and selection – what we will undertake.
3. Planning and procurement – how we will undertake it.

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4. Execution – undertake it.
5. Hand Over / Close Out – how did we undertake it.

These stages are followed in full and in depth for new opportunities which then become a project based program. The stages
compress to a focus on the plan / execute / operate cycle for repetitive type wells that are standardized where stage 1 and
stage 2 (Identification and assessment / Evaluation and selection) are undertaken for groups of development wells. This may
be in the form of a Field Development Plan (FDP). The WDP is scaled in its application between these two extremes; project
based planning requiring the full WDP cycle with a significantly longer planning duration than repetitive type wells requiring
the short WDP cycle.
There are two drivers of the application of the WDP cycle:
- the transition from exploratory to development type drilling is a transition from full cycle project based toward short
cycle repetitive based process,
- the technology developments applied to sub surface mapping that increase the certainty of the sub surface model.
The higher the certainty and the homogeneity of the sub surface model the greater the chance to apply a repetitive
type process using standardized designs.

Identification and Assessment

The first stage in the WDP is the one where the opportunity is identified and assessed. The well is defined in terms of range
of cost, uncertainty and risk such that it can be evaluated and ranked against other opportunities. The design is sufficient to
link to a field concept or design for decision making. Ranges of uncertainty on cost are high, typically +50% to – 30% and
obviously asymmetric since overruns typically exceed under runs.

Evaluation and Selection

The second stage is where the detail design is commenced with the project critical components being undertaken. These
include narrowed options for the hole / casing diameters, well trajectory and completion components which are all critical
early decisions upon which later decisions depend. Long lead items are identified and procured such that their delivery time
will not adversely affect the well execution schedule. Ranges of uncertainty on cost are reduced to a typical +25% to - 15%.

Planning and Procurement

The third stage is where the well planning becomes fully detailed. The design has been fixed and the program developed to
reduce uncertainty to a manageable level. Procurement activities secure all the necessary services, equipment and
consumables. Target ranges for uncertainty on cost are can be as low as +15% to – 10% for budgets and +10% to – 5% for
AFE’s (Approval For Expenditure) for development wells however the actual range is best defined through probability cost
estimating (see below). Exploration wells usually have a higher cost range due to inherent uncertainties in this type of well.

Execution
The well program is executed to deliver the approved design. While some operations are straight forward others require
feedback loops and decision making to manage the uncertainties and risks that remain unresolved. High performing teams
recognize this and are ready to stop and replan when the situation deviates outside the ranges envisaged in the program. This
process essentially resolves the process back through the planning and procurement stage but in very short order.

Hand Over / Close Out

Wells are usually completed for hand over to an organization that operates them as a means to produce hydrocarbons under a
controlled manner. The hand over process needs to be well defined so that the operator knows the exact status and capability
for operations and for any future remedial work. There are, unfortunately, many older wells where undue surprises occur
when undertaking remedial (re-entry) work because some critical details were not clearly recorded.
An essential component to production performance is a commissioning process for the well. This process defines the start up
of initial production such that the well is cleaned up properly without causing damage at the reservoir interface. The close out
process applies to the process for wells that are handed over (proper and complete documentation, lessons learned, etc) and to
the well itself in case it is abandoned.
6 IADC/SPE 128716

Correct Application of Full and Scaled Back WDP

Exploration wells are, by their very nature, project based processes. This clearly defines that the full cycle WDP is applicable.
Appraisal wells in a new area would most probably be project based process whereas appraisal wells of a field in a well
known region could be classified as a Job Shop process – a customized version of a well design and operation that has been
carried out in the region.
Development wells run the range of job shop through repetitive process; it is currently only in extreme circumstances that
development wells could be classified as a repetitive process, meaning that they are highly standardized. These wells are only

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likely to be found in multi well campaigns, in homogeneous conditions. During the course of developing a field, the primary
operational process could transition from job shop to repetitive as knowledge is gained and uncertainty is reduced. However,
a major learning event such as the introduction of new technology or a new well design will revert the operation back to the
job shop process.
It is very important that operations management has in place a guide to define the type of operational process and
consequently the applicable cycle of the WDP.

Description of WDP Tools

There are many tools that are being applied to improve the delivery of wells. These tools are usually applicable to most
operations, the variance is their scalability. Often, users determine to use or not use the tools rather than apply scalability.
This leads to missed opportunity.

RACI Charts (Responsible, Accountable, Consulted, Informed)

RACI charts are a Responsibility Assignment Matrix. The matrix defines roles of various team members in completing tasks
or deliverables for a project or business process. The typical chart lists tasks or deliverables on the left column (vertical axis)
and roles (or more specifically names) across the top row (horizontal axis). For each task or deliverable, the letters RACI are
inserted into the matrix to identify who has which responsibility.
Responsible – the (one) person who leads the work to achieve the task. For decisions, this is the person who develops and
makes the recommendation.
Accountable – the one who approves the task or deliverable. For decisions, this is the person who is authorized to approve the
decision.
Consulted – everyone whose opinion will be sought before completing the task.
Informed – everyone who is informed about the outcome of the task.
The Responsible and Accountable roles may reside with one individual.
The real value of RACI charts is in their development with the team so that each participant can understand who is doing
what. Through participation in its development there is greater understanding for the assignment of responsibilities and
greater ownership to implement according to the agreed RACI chart. This is particularly important when new teams are
formed or the WDP is rolled out for implementation. Very large RACI charts, ones that are extremely detailed, that are
imposed on people are often ignored.

Basis of Design (BOD)

The Basis of Design (BOD) is a written statement of facts that are sufficiently complete to demonstrate that the concept of
the well(s) is fully understood and provides the information basis for subsequent well design and well programs. The BOD
covers all the disciplines related to the planning and execution of the well. It includes relevant details of the sub surface
model and the uncertainties in that model together with identification of any risks in the overburden and reservoir sections.

The BOD catalogues major decisions made in developing the design basis for the well; such decisions can include tubing
sizes, casing sizes, specific completion requirements, etc.
The BOD requires a Well Proposal document that contains the geology model and evaluation requirements as support to the
design.
A suggested outline for the contents of the BOD document is:
1. Contents
2. Signature Page
3. Well Overview
3.1. General Well Description
3.2. Offset Data Wells
3.3. Geological And Drilling Hazards
4. Geophysical Data
4.1. Pore Pressure & Fracture Gradient
4.2. Temperature Gradient
5. Evaluation Requirements
5.1. Mud-Logging Requirements
5.2. Logging While Drilling Requirements
IADC/SPE 128716 7

5.3. Electrical Wire-Line Requirements

5.4. Coring Requirements
5.5. Well Test Requirements
6. Well Trajectory And Surveying Requirements
6.1. Well Trajectory Listing
6.2. Well Plot
6.3. TD Requirement

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6.4. Survey Requirements
6.5. Comments / Remarks
7. Casing Design
7.1. Casing Setting Depths
7.2. Casing & Wellhead Summary
7.3. Casing Pressure Test Requirements
7.4. Casing Design Summary
7.5. Comments / Remarks
8. Drilling Fluids
8.1. Mud Properties
8.2. Drill Cuttings Handling
8.3. Comments / Remarks
9. Cementing Fluids
9.1. Cement Properties
9.2. Comments / Remarks
10. Well Schematics (Drilling)
10.1. Well Status Diagram At TD
11. Well Test Design (Exploration & Appraisal Wells Only)
11.1. Well Test Outline And Objectives
11.2. Surface Test Spread Layout
11.3. Well Test Schematic
12. Completion Design
12.1. Well Completion Outline And Objectives
12.2. Surface Well Clean-Up Spread Layout
12.3. Well Completion Schematic

Risk and Uncertainty Management

Risk and uncertainty are similar characteristics that can be discovered and managed in similar ways. A distinction between
risk and uncertainty is that risk is a loss that results from a hazard and uncertainty is an unpredictability that can result in
different outcome than planned. Risks can be classified as hazards that occur with planned activities and uncertainties are
unknowns that impact activities. The distinction is worthy to note since many risks can be managed whereas many
uncertainties require contingency plans.
Risk and Uncertainty Management is applied in two ways – qualitative and quantitative (Ref 1). The most advanced
techniques combine both methods such that the effort expended in qualitative analysis provides input for the quantitative
analysis and keeps both techniques in synergy. Qualitative analysis is a method to assign grading to probability of occurrence
and impact of the event in order to rank for clarity of importance to focus mitigation action on the most significant risks.
Quantitative analysis is divided into deterministic methods such as decisions trees and stochastic methods such as Monte
Carlo simulation; it provides the methodology to model the probability and impact on the outcome of the operation in terms
of schedule, cost and functionality variances. This modeling provides insight for management decision making in two areas;
the range of project economics thus the value to undertake the project and the net effect of investing to reduce the range of
outcomes to provide a more certain result.

Detailed Scheduling
Typical scheduling for drilling and completion operations have been based on a small number of activities (often 40 or so)
that are sequential (essentially through the rotary table operations only) and depicted in a depth time graphic. More detailed
scheduling has been adopted by some companies through the application of a look ahead – a six or seven day listing of
activities and associated equipment and personnel requirements. Traditional Project Management practices include the use of
detailed schedules that are developed around a Work Breakdown Structure (WBS). These schedules include and link all
activities required to plan and deliver the project including planning activities and preparation activities such as maintaining,
calibrating and shipping critical equipment. Detailed plans can include around a thousand activities for a drilling and
completion operation. These plans are completed prior to execution and automatically provide a current look ahead through
regular status updating.
8 IADC/SPE 128716

Technical Limit Process

The technical Limit Process is a methodology of working with planning teams to identify performance improvements through
design, technology and operations by focusing on a goal that is far ahead of current performance. The original application in
the drilling industry is attributed to Bond et al in their 1996 paper which was revised and republished in 1998 (Ref 2). The
authors developed a methodology to ask planning teams (including operations personnel) “what would be possible if
everything went perfectly on every operation making up the well time”. This is not the usual trouble free time but a well time
built up of individual components, with each component representing its theoretical best performance. The authors also

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introduced the concept of “Invisible Lost Time” (ILT) which is the unrealized gains through improvement. This is where
invention occurs. In contrast, conventional lost time is the time lost due to breakdowns and failures which is often reported as
Non Productive Time (NPT). This is where correction of deficiencies occurs.

The technical limit process aims to create plans that will reduce the NPT and the ILT simultaneously for the largest possible
gains. The work of Bond et al has been developed by many practitioners with varying degrees of success. Fundamentally, the
methodology is sound and will lead to significant improvement in results. Missed opportunities to realize the full benefits of
this methodology are usually a result of:
- lack of management commitment,
- lack of investment in the time to undertake the process,
- lack of internal team ownership as a result of external practitioners undertaking the process rather than facilitating it,
- lack of leadership challenge to reach beyond correcting NPT into the ILT range,
- failure to identify and manage the risks associated with implementing significant change.

An alternative methodology that the author has employed is to develop a performance stretch goal early in the planning
process. A stretch goal is defined as a goal that is considered possible to achieve but the means to achieve it is not yet known.
When this is undertaken with the full participation of the planning team and key members of the execution team, it causes a
creative tension within the team that helps to keep them focused on a high performance outcome. This alternative form of
Technical Limit has resulted in significant step change improvements in a very short time period because it was initiated
early enough in the planning process for the team to develop major changes in practices and technology application.

A misnomer is that the Technical Limit Process is only applicable to Drilling and Completion time. In fact, the best results
are achieved when the three major elements of a well’s business success are simultaneously focused on:
- schedule (duration or time to complete),
- functionality & quality (data acquired and the hydrocarbon production),
- cost (expenditure to achieve the first two above).

Probabilistic Cost Estimating

Cost estimating for drilling and completing wells has historically been made as a deterministic result based on the intended
drilling and completion program. Often, an arbitrary 10% has been added as a contingency. In reality:
- the execution of the well contains uncertainties and risks that can be assessed in developing the cost estimate,
- an arbitrary percentage added across all cost elements contains no logic whatsoever.
Probabilistic cost estimating is a much improved method because it provides a means to take into account and present the
financial impact of the uncertainties. The methodology has been developed by several practitioners and can be adopted by
everyone.
The simplest approach is to take the current cost estimating method and identify ranges of risk / uncertainty from the Risk &
Uncertainty Log that impact key elements of the work. These should be limited to no more than 40 cost elements since
significantly more will cause Monte Carlo simulation errors due to Central Limit Theory. Simply put, too many elements in
the simulation create an outcome that looks more certain (a much lower range) than actually exists and will mislead
management. The simplest method to achieve this correct assignment is to divide the drilling and completion operations into
discrete packages of activities and then apply the modeling (typically by hole section).
The output from this modeling is an “S” curve plot showing cost versus probability. The significant parts of the S curve are:
- P10 value – only 10% probability the cost is less than this, used as the minimum expected cost.
- P90 value – only a 10% probability the cost is more than this, used as the maximum expected cost.
These two points define the range of expected cost.
Another output from the modeling is the Tornado diagram. This ranks the largest contributions to the cost range thus enabling
a focus on their reduction or management of their uncertainty.

Master Equipment List (MEL)

The Master Equipment List (MEL) is a list of all consumable and moveable items that are required to drill and complete a
well (a Bill of Materials). The purpose of this list is to:
- ensure that all items have been accounted for,
- identify the sources of all items,
IADC/SPE 128716 9

- identify the sizes and weights of critical lift items so that transportation and site handling can be safely planned,
- track location of critical items if another tracking system is not in use,
- develop load out lists for offshore sailings either for routine sailings or dedicated boats,
- ensure return of rental items to conclude the rental payments,
- manage the availability and location of contingency items.
Typically these lists have been set up in spreadsheet formats. This makes them user friendly and easy to share across the
team. Simple version control and web based access with defined rights (read only or make changes) provides a very adequate

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system for managing equipment and consumables.

On Paper Exercises (DWOP / CWOP)

On paper (or table top) exercises are workshop environment processes where the detailed plans are reviewed by a full cross
section of the team. The purpose of these exercises is to:
- review and challenge the integrity of the plans making sure that critical details are not omitted,
- discover ways to reduce the critical path timing throughout the operation sequence,
- detail any critical and unusual procedures to avoid errors,
- understand the roles of the various companies in the operation process especially non routine operations,
- review and understand the causes and mitigation of risks and mitigate any additional risks that are identified.
The primary method to reduce critical path time is to perform activities in parallel or off line. The greatest opportunity
usually lies in preparation activities whose benefit can be maximized through use of pre-made BHA’s, pre-made completion
sections that are gas tested and have lengths adjusted to match the rig equipment. Obviously Dual Derrick drilling systems
are a tool that are especially suited to parallel path activities and pre-making connections prior to critical path running.
Traditionally these exercises have been undertaken for Drilling the Well on Paper (DWOP) and Completing the Well on
Paper (CWOP). However, the methodology applies equally to any activities that require planning and will benefit from a
team review.
Successful on paper exercises are ones where the method is all inclusionary, open participation. Some practitioners have lost
all value of the process by reverting to a presentation mode with little or no discussion. The workshop for these exercises can
be for a few hours for a short cycle WDP on batch or repetitive wells to a few days for project or job shop wells.

Pre-Spuds
Pre-spuds are sessions held with the rig and service company crew to share the drilling or completion program and the
planning behind it. The objective is to hand over the program to the execution team in such a manner that they feel the
ownership necessary to execute it successfully. Pre-spuds are scalable; for new, remote high risk project type wells a full
offsite pre-spud that includes a broad cross section of the crew is a good investment in a successful outcome and will derive
benefits that exceed the cost. For batch or repetitive process wells small onsite pre-spuds that focus on the lessons learned
and changes from previous wells are the most suited.

Peer Reviews (Peer Assists)

A Peer Review is a method to subject the planning work of a wells team to the scrutiny of others who are experts in the field.
Peer reviews are usually conducted as a series of meetings or a workshop with the objective to assure management that the
plans and programs are robust. These are critical for new high risk projects and are often a requirement for stage gate
passage. They are usually not required for batch or repetitive wells however they can be introduced into the planning process
when results deviate from plan as a means to gain insight on bringing the operation back to within expected performance.
A Peer Assist is a meeting or workshop where outside experts are invited to share their experience, insights and knowledge
with a well(s) team that is seeking assistance. The Peer Assist is usually initiated where a team is facing a challenge. It
centers on the specific challenge and it is designed to gain insight and find possible approaches that can be evaluated as a
suitable solution.

Check Lists and Guidelines

Check lists are both a blessing and a curse. They can be made to accurately depict the work that should be undertaken and
used to confirm that it was undertaken. However, any lack of rigor usually leads to a “tick the box” mentality whereby the
actions on the check list are ticked off without confirming the completion or quality of the action. This mentality destroys the
value of both the check list and the WDP which the list is supposed to be verifying. Unfortunately, the “tick the box
mentality” is more prevalent than many managers would like to admit. A very visible example of the rigor required for using
the same check list repeatedly can be found in the airline industry where pilots are required to verify the check list before take
off. A combination of pilot discipline and sanctions for failure to properly process the check list ensure the check list is used
correctly in most cases. In the event that an anomaly is found while undertaking the checks, the pilots must have it rectified
or signed off as accepted by another party (usually the certified mechanic). The pilots are not permitted to waiver the checks
themselves.
10 IADC/SPE 128716

There is a distinction between guidelines and procedures; the former provide information on how to proceed while the latter
provide instructions on how to proceed. Procedures work where the instruction is always applicable and very repeatable.
Guidelines work where the user must take into account the situation and may require making some adaptations in order to
successful execute the operation.

Learning Lessons
An essential part of the WDP Close Out is to learn from the experience and apply that learning into future planning and

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operations. This cycle of learning is a very important tool for driving continuous improvement. The best defined process for
this purpose is the After Action Review (AAR) as developed and applied by the US Army (Ref 3). AAR’s can be carried out
at any time during the drilling and completion of a well. In fact, it is best to conduct them after clearly identifiable sections of
the well are completed so that lessons are captured while they are fresh. The purpose of the AAR is to identify deviations
from plan that are both positive and negative, analyze why these occurred and capture the learning for inclusion in future
plans (either to retain the positive outcome or overcome the negative outcome). A lessons learned log (register) which details
the lessons and their follow up is a good means to capture this knowledge; one which can be sorted is easiest for reference
and future use. The AAR process must be led and facilitated by some one who is familiar with it and include all people who
were involved in the operation. An open, non blame atmosphere is required to generate input and ascertain facts that can be
used for learning.

Lessons Learned from WDP Application

Missed opportunities are numerous. Experience has shown that application of a robust WDP will lead to exceptional results
in terms of industry benchmarked performance, not only in overall results such as days per 10K ft but also in key subsets of
performance such as Non Productive Time (NPT). The key lessons for success are:
- develop a fit for purpose WDP that matches a company’s business profile,
- exert strong leadership over the application of the WDP to ensure no unapproved deviations,
- maintain the application of the WDP in a scalable format; do not permit unapproved short cuts and by passing of the
defined process and tools.

Inadequate and Inappropriate Process Tools

There are a myriad of tools being applied throughout the industry that require a challenge as to their true integrity. All too
often tools are either inadequate or poorly applied leaving the mask that rigor exists whereas in reality it does not. Some of
these tools have been developed as computer “black boxes”; they look very good on the outside but the methodology within
them is obscured from the customer. Risk Logs (or Registers) have been developed in data base format that has two
drawbacks; the program forces the user to cycle through one risk at a time which prevents open brainstorming and looses the
quality of group risk identification, the program often requires a specialist to operate it which takes ownership away from the
team. Most WDP tools can be developed in an open and easy to use architecture through building them on a common
spreadsheet such as Excel. The functionality that exists within such spreadsheets is sufficient to undertake the processing
required; calculation, sorting, ranking, color coding, etc. Monte Carlo simulations can readily be performed on these
spreadsheets using well known, recognized and commonly available add on products.

Insufficient Use of Process Tools

Companies who develop their WDP and implement it fully at the onset often regress as familiarity sets in. In this regression
they drop some of the tools believing that they added value initially but no longer do. Furthermore they believe this saves
time and effort in the planning phase. Unfortunately, the consequences manifest themselves with poor results in the execution
phase. The appropriate response is to scale the tool application to the situation; reduce but not eliminate where it becomes
repetitive being always cognizant that it must be scaled up if the wells shift back to job shop or project mode. In one
example, a company in West Africa was able to directly correlate a significant difference in drilling performance between
two similar wells with the use of Risk Management on one and not on the other.

Poor Application of Process Tools

It is all too often and all too easy for people to say they are applying the appropriate tools without undertaking the application
to any degree of efficacy. The use of buzz words tends to obscure the quality and degree of application of a tool.
In one example, a client advised that they are running a Risk Management program. They described that it included listing
risks and ranking according to level of impact. Their description sounded good but a quick investigation discovered that the
system had stagnated 6 months previous with actions remaining in limbo. Furthermore, the ranking system had been copied
from a previous source and had very poor logic to it. The result was that the risks manifested themselves during the execution
simply because they had not been properly ranked nor had they been managed or mitigated.
IADC/SPE 128716 11

Failure to Listen
The oil industry has transitioned from a situation where the knowledge and planning ability was primarily resident in the oil
company with discrete support from the service companies and drilling contractors. The growth of technology application
and the shift from oil companies undertaking most of the R&D to service companies undertaking a significant amount in
areas of their products and services has resulted in a situation where service companies and their personnel have the most in
depth knowledge about products and services for drilling and completing wells. The consequence of this shift is that the
service company input is required early and in detail for proper planning.

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Some oil companies are very good at including the service company personnel in the planning process, unfortunately there
are others who reject this approach and ignore the knowledge base available to them. The consequence is that the latter
planners miss the real opportunities for improvement and do their management and shareholders a disservice in not realizing
the full access to knowledge and experience.

Time Compression
Oilfield development is continuously seeking to reduce the cycle time from discovery through production to improve the Net
Present Value (NPV) of developments. This can be accomplished through adopting parallel engineering in the WDP; this
requires additional effort but shortens the cycle time. Unfortunately, some companies simply reduce the time allowed for
planning believing that this reduces the overall cycle time while ignoring the consequences of poorer execution with
commensurate delays, extra cost and poorer functionality.
Some companies have added drilling rigs to increase their capacity to deliver wells without adding capacity to the sub surface
teams. The consequence is that drilling consumes the portfolio of available prospects and planning time collapses to
minimalistic levels. This always leads to a loss of performance in terms of time and cost as well as a loss of productivity
through inadequate completions. The whole system must be balanced such that the subsurface information can be delivered
into the WDP early enough to allow the correct planning time. A good drilling sequence will show the correct planning time
for each well which will vary with well type as well as the anticipated well execution duration. Such a system enables better
resource allocation across the parallel planning and execution activities on wells with multiple drilling strings.

Failure to Maintain Integrity of the WDP

There is a well known integrity curve that is usually applied to the technical soundness of design and projects. The first part
is the hard work invested in the climb up the curve to a very high level of integrity (the perfect condition). This can be
sustained for a period of time as a result of the momentum of the hard work invested. After some time, the tools and
techniques become routine and short cuts are brought in to create the illusion of efficiency. A robust integrity system usually
employs sequenced audits to find the points of relaxation of the tools and techniques and recommends corrections. The
implementation of these corrections is the means to raise the level of integrity back to the targeted level.
In the well planning process, a similar sequence of events occurs when a WDP is implemented. Unfortunately, many
organizations fail to implement an audit and correction process with the consequence that the level of integrity developed by
the application of the WDP regresses and failure to achieve desired results occur. It is imperative that the management of an
organization understand what it takes to ensure that the correct application of the WDP is maintained and has a check and
balance system in place to observe this. The lack of such a support system will result in additional well cost, worsening
outcomes in terms of achieving the schedule and functionality of delivering the well.
The recommendation is to develop an audit process along with the WDP and implement it with full management support.

Lack of Management Commitment

Management commitment is required to make a WDP effective simply because it requires investment in the planning phase
of a well. Lack of management commitment causes numerous problems, the most important of which are:
- a WDP cannot be implemented because there is no commitment to front end loading the planning process.
Performance is below potential and is only observed as such through industry benchmarking (if it is undertaken).
- a WDP is implemented but management pressure reduces the effort on the front end without considering the
consequences to business performance.

Summary of Characteristics of Successful WDP’s

Key characteristics that differentiate successful WDP’s from unsuccessful WDP’s include:
- The WDP is well defined and relevant to the user company. It is neither a “me to”, short cut, nor copied and pasted
version from another company that has limited meaning or match to the user company methodologies. Nor is it too
elaborate for managers and busy professionals to consider using. Well defined means it has been designed to fit the
application and is wholly owned by the users.
- Leadership drives the WDP implementation. The WDP and its stage gates require management involvement. Their
drive and discipline to use the system and its defined gates together with a willingness to adapt it to lessons learned
and changing circumstances is critical.
- Process tools are included and applied in the WDP. These tools are correctly selected, designed as fit for purpose
and are owned by the team.
12 IADC/SPE 128716

- The WDP is designed and understood to be scalable. Enormity of effort and extent of rigor are applied to drilling
projects that have significant risk and uncertainty while the quality of the process is maintained for batch and
repetitive types of wells such that the value the process brings is not lost.
- Agreed implementation is rigorously followed without the need for management intervention or audits. The whole
integrated team understands and values the WDP and consequently implements it without reservation.
- Lessons learned are applied back into the WDP so it is current and relevant. No process is ever perfect; it can only
maintain its usability and applicability through continuous and relevant update.

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- Key Performance Indicators (KPI’s) are measured and monitored so that changes can be detected and corrective
action made to the WDP or its application. Without measurement there is no ability to understand what works and
what does not work.
- Drilling and Completion performance is measured against internal goals and industry benchmarking. It is only
through measurements that the results from the WDP application can be monitored with corrective action being
taken where necessary.

Acknowledgements
I would like to acknowledge all the teams and managers I have worked with on Well Delivery Processes around the world
from many regions including the North Sea, Gulf of Mexico, East Coast of Canada, Asia and the West Coast of Africa
especially Nigeria. I would also like to acknowledge those Drilling Managers, Rig Managers, Rig Superintendents, Drilling /
Completion Engineers and Sub Surface Engineers (of various disciplines) who have stood up to implement the best practices
we have discussed. It gives me special pleasure to acknowledge the Service Company and Drilling Contractor personnel who
spoke out at difficult times in our WDP execution and who took on additional responsibilities to deliver to the agreed goal
regardless of the contract they were operating under. You all contributed to improved results and set benchmarks in
performance that are envied.

References
1. Risk and Uncertainty Management – Best Practices and Misapplication for Cost and Schedule Estimates – SPE 97269 –
S.K. Peterson, J Murtha and Assocs; J P de Wardt, DE WARDT AND COMPANY; J.A. Murtha, J Murtha and Assocs.
2. Applying Technical Limit Methodology for Step Change in Understanding and Performance – SPE 35077 - D.F. Bond,
SPE, P.W. Scott, SPE, P.E. Page, SPE, and T.M. Windham, Woodside Offshore Petroleum Pty. Ltd.
3. A Leader's Guide To After-Action Reviews - TC 25-20 Training Circular 25-20, Headquarters Department of the Army,
Washington, DC, 30 September 1993
IADC/SPE 128716 13

Figure 1

High

Risk and

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Uncertainty
Range

Cost influence

Cost Expenditure

Low

Identification Evaluation and Planning and Execution Hand over and

and Selection Procurement Close Out
Assessment
WDP Stage