20 Apr Drilling, Testing, and Completion
DTC – Never seen this acronym before? It means “Drilling, Testing, and Completion .”I always use them in tandem because it’s an entire process. Most newcomers don’t fully understand that most success in prospecting is not in the Drilling and Testing; it’s in the Completion.
Based on the technology and historical field data, it’s hard these days to completely whiff when drilling and find non-economical pay zones when testing. Once they are found, then the real work begins.
Completing any well depends on many variables like material type (shale, limestone, sand, etc.), porosity, permeability, initial hydrocarbon showings, water content, possible water intrusion, and well depth. These variables have to be understood before any plan is put into place. That’s where things get started. This could take me all day to write on this, but this is an excellent place to start if you want to go “submarine .” https://deepdata.com/well-completion/
What does Completion have to do with investment evaluation?
An AFE (authority for expenditure) can have Completion costs 1/3 to 2x compared to Drilling and Testing costs. Ideally, we like to find operators with a proven methodology to complete wells in a defined pay zone in a field (infield production). The next best thing is to find prospects where the completion methodologies are well known (almost industry standard) for those pay zones. If the completion methods are well defined, the chances of AFEs going beyond scope are significantly reduced, therefore keeping within the program budget and avoiding cash calls.