Many forms of "beat-the-curve" incentive contracts are in use in the drilling industry to reduce cost and improve project performance. A successful variation involved drilling conventional deviated wells from pads in less than two-thirds of the budgeted time for a lump-sum fee. Modulators, included in the contract to account for nonproductive times (NPT), were subsequently used to adjust the lump-sum fee, depending on the party responsible for the NPT.

Historically, the deviated hole sections were drilled with turbines and local tricone bits requiring multiple trips for bit changes, turbine bent-housing setting changes, and directional surveys. The new plan included the use of a telemetry system, positive displacement motors, and polycrystalline diamond compact (PDC) drill bits. One run per section was targeted, and results were achieved after a few wells by experimenting with several bottomhole assembly (BHA) configurations and PDC design combinations. The wells were drilled in 22 to 26 days instead of the originally planned 40 days.

These results are attributable to a concerted effort by the operator, drilling contractor, and the service companies to identify and eliminate "invisible" NPT by applying fit-for-purpose technology and better planning. Several time-saving practices were also adopted. A main contributor to the success was that the local drilling contractor adopted the mind-set change for all the contractor rigs, including those not associated with the project. Cooperation developed the means to overcome the limitations of the drilling equipment belonging to the drilling contractor: first, an external audit identified critical areas needing immediate improvement, and then these areas were subsequently remedied jointly without creating a heavy financial burden on the drilling contractor.

You can access this article if you purchase or spend a download.