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Title: A simple tool to assess the cost-effectiveness of new bit technology

Abstract

Cost or performance targets for new bit technologies can be established with the aid of a drilling cost model. In this paper the authors make simplifying assumptions in a detailed drilling cost model that reduce the comparison of two technologies to a linear function of relative cost and performance parameters. This simple model, or analysis tool, is not intended to provide absolute well cost but is intended to compare the relative costs of different methods or technologies to accomplish the same drilling task. Comparing the simplified model to the detailed well cost model shows that the simple linear cost model provides a very efficient tool for screening certain new drilling methods, techniques, and technologies based on economic value. This tool can be used to divide the space defined by the set of parameters: bit cost, bit life, rate of penetration, and operational cost into two areas with a linear boundary. The set of all the operating points in one area will result in an economic advantage in drilling the well with the new technology, while any set of operating points in the other area indicates that any economic advantage is either questionable or does not exist. In addition, examining themore » model results can develop insights into the economics associated with bit performance, life, and cost. This paper includes development of the model, examples of employing the model to develop should cost or should perform goals for new bit technologies, a discussion of the economic insights in terms of bit cost and performance, and an illustration of the consequences when the basic assumptions are violated.« less

Authors:
;  [1];  [2]
  1. Sandia National Labs., Albuquerque, NM (United States)
  2. Livesay Consultants, Encinitas, CA (United States)
Publication Date:
Research Org.:
Sandia National Labs., Albuquerque, NM (United States)
Sponsoring Org.:
USDOE, Washington, DC (United States)
OSTI Identifier:
656530
Report Number(s):
SAND-98-1537C; CONF-980917-
ON: DE98002965; BR: EB4001000; TRN: AHC29817%%85
DOE Contract Number:  
AC04-94AL85000
Resource Type:
Conference
Resource Relation:
Conference: Geothermal Resources Council annual meeting, San Diego, CA (United States), 20-23 Sep 1998; Other Information: PBD: [1998]
Country of Publication:
United States
Language:
English
Subject:
15 GEOTHERMAL ENERGY; 42 ENGINEERING NOT INCLUDED IN OTHER CATEGORIES; DRILLING EQUIPMENT; WELL DRILLING; PERFORMANCE; COST BENEFIT ANALYSIS; MATHEMATICAL MODELS; DRILL BITS; GEOTHERMAL WELLS; Geothermal Legacy

Citation Formats

Bomber, T M, Pierce, K G, and Livesay, B J. A simple tool to assess the cost-effectiveness of new bit technology. United States: N. p., 1998. Web.
Bomber, T M, Pierce, K G, & Livesay, B J. A simple tool to assess the cost-effectiveness of new bit technology. United States.
Bomber, T M, Pierce, K G, and Livesay, B J. Wed . "A simple tool to assess the cost-effectiveness of new bit technology". United States. https://www.osti.gov/servlets/purl/656530.
@article{osti_656530,
title = {A simple tool to assess the cost-effectiveness of new bit technology},
author = {Bomber, T M and Pierce, K G and Livesay, B J},
abstractNote = {Cost or performance targets for new bit technologies can be established with the aid of a drilling cost model. In this paper the authors make simplifying assumptions in a detailed drilling cost model that reduce the comparison of two technologies to a linear function of relative cost and performance parameters. This simple model, or analysis tool, is not intended to provide absolute well cost but is intended to compare the relative costs of different methods or technologies to accomplish the same drilling task. Comparing the simplified model to the detailed well cost model shows that the simple linear cost model provides a very efficient tool for screening certain new drilling methods, techniques, and technologies based on economic value. This tool can be used to divide the space defined by the set of parameters: bit cost, bit life, rate of penetration, and operational cost into two areas with a linear boundary. The set of all the operating points in one area will result in an economic advantage in drilling the well with the new technology, while any set of operating points in the other area indicates that any economic advantage is either questionable or does not exist. In addition, examining the model results can develop insights into the economics associated with bit performance, life, and cost. This paper includes development of the model, examples of employing the model to develop should cost or should perform goals for new bit technologies, a discussion of the economic insights in terms of bit cost and performance, and an illustration of the consequences when the basic assumptions are violated.},
doi = {},
journal = {},
number = ,
volume = ,
place = {United States},
year = {1998},
month = {7}
}

Conference:
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