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Don Robinson, PE VP Drilling Canonsburg, PA 1

Don$Robinson,$PE$$ VPDrilling$ Canonsburg,$PA$ 1on$iron$roughneck,$kelly$ hose$and$top$drive.$ * 0.0 10.0 20.0 30.0 ... 1st$Iden]fy$the$Cri] ... vity$Improvementfrom$2010$to$2012$=$

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Page 1: Don$Robinson,$PE$$ VPDrilling$ Canonsburg,$PA$ 1on$iron$roughneck,$kelly$ hose$and$top$drive.$ * 0.0 10.0 20.0 30.0 ... 1st$Iden]fy$the$Cri] ... vity$Improvementfrom$2010$to$2012$=$

Don  Robinson,  PE    VP  Drilling  Canonsburg,  PA   1  

Page 2: Don$Robinson,$PE$$ VPDrilling$ Canonsburg,$PA$ 1on$iron$roughneck,$kelly$ hose$and$top$drive.$ * 0.0 10.0 20.0 30.0 ... 1st$Iden]fy$the$Cri] ... vity$Improvementfrom$2010$to$2012$=$

Take  Away  Points:  1.  Advantages  of  air  rigs  and/or  top  hole  rigs.  2.  You  don’t  need  the  Ferrari  Rig  3.  GeIng  beJer  requires  consistent  measuring  of  performance  4.  Modify  your  team  to  establish  the  proper  aItude  to  achieve  your  goals.  

2  

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TOTAL  HORIZONTAL  MARCELLUS  WELLS  DRILLED  FROM  FIRST  WELL  

IN  2005  THROUGH  2012    =  469  

From  2010-­‐  2012    =375  3  

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BACKGROUND  

4  

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5  

Air  Rig  Opera]ons  

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Horizontal  Rig  Opera]ons  

6  

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Revised  Horizontal  Rig  Opera]ons  

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SeIng  The  Conductor  

Fresh  Water  Zone  

Coal  Seam   Mine  –  Coal  Removed  

Marcellus  Shale  

Onondaga  

26”  @  40’  

Surface  

30”  Hole  

8  

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SeIng  The  Water  String  

Fresh  Water  Zone  

Coal  Seam   Mine  –  Coal  Removed  

Onondaga  

26”  @  40’  

Surface  

20”  @  250’  24”  Hole  

30”  Hole  

Marcellus  Shale  

9  

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SeIng  The  Mining  String  

Fresh  Water  Zone  

Coal  Seam  

Onondaga  

26”  @  40’  

Surface  

20”  @  250’  24”  Hole  

13-­‐3/8”  @  400’  17-­‐1/2”  Hole  

Marcellus  Shale  

10  

Page 11: Don$Robinson,$PE$$ VPDrilling$ Canonsburg,$PA$ 1on$iron$roughneck,$kelly$ hose$and$top$drive.$ * 0.0 10.0 20.0 30.0 ... 1st$Iden]fy$the$Cri] ... vity$Improvementfrom$2010$to$2012$=$

SeIng  The  Mining  String  

Fresh  Water  Zone  

Coal  Seam  

Onondaga  

26”  @  40’  

Surface  

20”  @  200’  24”  Hole  

17-­‐1/2”  Hole  13-­‐3/8”  @  400’  

2  Cement  Baskets  above  mine  

Balanced  Cement  Job  For  Shoe  

Marcellus  Shale  

11  

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SeIng  the  Intermediate  String  

Fresh  Water  Zone  

Coal  Seam  

Onondaga  

26”  @  40’  

Surface  

20”  @  200’  24”  Hole  

17-­‐1/2”  Hole  13-­‐3/8”  @  400’  

9-­‐5/8”  @  2000’  12-­‐1/4”  Hole  

Marcellus  Shale  

12  

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SeIng  Produc]on  String  

Fresh  Water  Zone  

Coal  Seam  

Onondaga  

26”  @  40’  

Surface  

20”  @  250’  24”  Hole  

17-­‐1/2”  Hole  13-­‐3/8”  @  400’  

9-­‐5/8”  @  2000’  12-­‐1/4”  Hole  

Marcellus  Shale  

13  

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SeIng  Produc]on  String  

Fresh  Water  Zone  

Coal  Seam  

Onondaga  

26”  @  40’  

Surface  

20”  @  250’  24”  Hole  

17-­‐1/2”  Hole  13-­‐3/8”  @  400’  

9-­‐5/8”  @  2000’  12-­‐1/4”  Hole  

Marcellus  Shale  

14  

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Why  Air  Rigs?  

15  

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1)  Daily  opera]ons      $avings  

 2)  Faster  Performance    3)    Reduced  Collision  Risk  

16  

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On  August  6,  2012  Range’s  

New  Marcellus  Record    for  Footage  Drilled  

In  24  Hour  period  (22.5  hrs  Drlg)  With  Falcon  Rig  #26  

 3619’  at  Avg  ROP  of  161  fph  

  17  

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Is  Your  Drilling  Rig  Ford  or  Ferrari?  

18  

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Ferrari  Walking  Triple  

Ford  Super  Single  

1000  HP  Draw  works   650  HP  Draw  works  

2-­‐  1600  HP  Pumps   2  –  1000  HP  Pumps  

250  Ton  Top  Drive   150   Ton  Top  Drive  45,  000  l  lbs   30,000  l-­‐lbs  

3  –  1625  KW  Generators   2  –  450  KW  Generators  

5”  Drill  Pipe   4-­‐1/2”  Drill  Pipe  

500,  000  lbs  mast   300,000  lbs  mast  

Lateral  Max  -­‐  9000’   Lateral  Max  –  6000’  

PA  Mobiliza]on  Cost  -­‐  $500  M   PA    Mobiliza]on  Cost  $150  M  

Expected  Faster  Tripping   Expected  Slower  Tripping  

Expensive  Day  Rate   30  %  Reduced  Day  Rate  

Walking  Ability   Skidding  Ability  

Emission  Opportunity   PermiJed  Loads  Reduc]on  

90  Loads  to  Move   50  Loads  to  Move   19  

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HISTORICAL  ANNUAL  

PERFORMANCE  20  

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0.0  

10.0  

20.0  

30.0  

40.0  

50.0  

60.0  

70.0  

80.0  

90.0  

100.0  Horizontal  Wells  Drilled  in  2006  

Big  Rig  Days  

100%  >  20  Days  Fastest  Well  =  35  Days  Combined  Avg.  =  49.3  Days  

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0.0  

10.0  

20.0  

30.0  

40.0  

50.0  

60.0  

70.0  

80.0  

90.0  

100.0   Horizontal  Wells  Drilled  in  2007  

Big  Rig  Days  

Avg.  Lateral  Length  =  2377'  89%  >  20  Days  *  Fastest  Well  =  18.1  Days  (2469'  LL)  Combined  Avg.  =  27.4  Days  

*  

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0  

10  

20  

30  

40  

50  

60  

70  

80  

90  

100   Horizontal  Wells  Drilled  in  2008  

Big  Rig  Days  

Air  Rig  Days  

Avg.  Lateral  Length  =  2545'  

96%  >  20  Days  *  Fastest  Well  =  19.0  Days  (2235'  LL)  Combined  Avg.  =  33.2  Days  

3  Sidetracks  due  to  fishing  and  ]ght  hole.  

*  

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0  

10  

20  

30  

40  

50  

60  

70  

80  

90  

100   Horizontal  Wells  Drilled  in  2009  

Big  Rig  Days  

Air  Rig  Days  

Avg.  Lateral  Length  =  2891'  

76%  >  20  Days  *  Fastest  Well  =  15.8  Days  (2559'  LL)  Combined  Avg.  =  26.9  Days  

2  Sidetracks  due  to  fishing  and  ]ght  hole.  

Big  Rig  drilled  from  1900'.    Rig  repair  on  iron  roughneck,  kelly  hose  and  top  drive.  

*  

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0.0  

10.0  

20.0  

30.0  

40.0  

50.0  

60.0  

70.0  

80.0  

90.0  

100.0   Horizontal  Wells  Drilled  in  2010  

Big  Rig  Days  

Air  Rig  Days  

Avg.  Lateral  Length  =  3183'  78%  >  20  Days  *  Fastest  Well  =  14.1  Days  (2334'  LL)  Combined  Avg.  =  24.9  Days  

Sidetrack  due  to  stuck  pipe.  

*  

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0  

10  

20  

30  

40  

50  

60  

70  

80  

90  

100   Horizontal  Wells  Drilled  in  2011  

Big  Rig  Days  

Air  Rig  Days  

Avg.  Lateral  Length  =  2718'  38%  >  20  Days  *  Fastest  Well  =  11.1  Days  (2702'  LL)  Combined  Avg.  =  19.5  Days  

Fishing  during  8  3/4"  hole.  2  Sidetracks  due  to  lost  motor  and  collapsed  hole.  

*  

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0.0  

10.0  

20.0  

30.0  

40.0  

50.0  

60.0  

70.0  

80.0  

90.0  

100.0  Horizontal  Wells  Drilled  in  2012    

Big  Rig  Days  

Air  Rig  Days  

Avg.  Lateral  Length  =  3123'   13%  >  20  Days  *  Fastest  Well  =  9.7  Days  (3296'  LL)  Combined  Avg.  =  16.3  Days  

Columbia  Storage  Field  well.    An]-­‐collision,  P&A.  

*  

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ANNUAL  PERFORMANCE  COMPARED  

28  

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8.9   10.5   10.4   10.9  8.4  

49.3  

27.4  

24.3  

16.4  14.5  

8.6  

7.9  

49.3  

27.4  

33.2  

26.9  24.9  

19.5  

16.3  

0.0  

10.0  

20.0  

30.0  

40.0  

50.0  

60.0  

2006  -­‐  3  Wells   2007  -­‐  9  Wells   2008  -­‐  26  Wells   2009  -­‐  54  Wells   2010  -­‐  99  Wells   2011  -­‐  149  Wells   2012  -­‐  127    Wells  

Horizontal  Wells  Drilled  2006  -­‐  2012    

Big  Rig  Days  

Air  Rig  Days  

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Summary  2010  Days   2011  Days   2010  to  2011  

%  ReducWon  2012  Days   2011  to  2012  

%  ReducWon  

Air  Rig   10.4   10.9   +5%   8.4   -­‐23%  

Horizontal   14.5   8.6   -­‐41%   7.9   -­‐8%  

OVERALL   24.9   19.5   -­‐22%   16.3   -­‐16%  

30  

From  2010  to  2012  Reduced  Drilling  Days  From  24.9  day  to  16.3  days    (35%  Reduc]on)  

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HOW  WE  DID  IT  

31  

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Keys  To  Success  

•  Con]nuous  Drilling  Program  •  Stability  of  Personnel  •  Focus  On  Key  Performance  Indicators  (KPI’s)  •  Incen]ves  •  Create  and  Maintain  Team  Atmosphere  •  Constant  Communica]on  •  Con]nuous  Improvement  Focus  

32  

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CONTINUOUS  DRILLING  PROGRAM  

•  3  Year  Contract  •  Dependable  Drilling  Rigs  •  Working  Closely  With  Drilling  Contractor  to  Improve  Opera]ons  

•  Con]nuity  with  Key  Service  Providers  

33  

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STABILITY  OF  PERSONNEL  

 – Drilling  Superintendents  – Drilling  Supervisors  – Drilling  Engineers  – Drillers  – Toolpushers  – Direc]onal  Drillers  

34  

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FOCUS  ON  KPI’s  

•  Days  per  Phase  (Air  &  Horizontal)  •  Cost  per  Phase  •  ROP  Slide  and  Rotate  and  %  •  Flat  Time  analysis  •  Rig  Mobiliza]on  Time  and  Cost  

35  

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Eliminate  The  Train  Wrecks  

•  Wellbore  Collisions  •  Stuck  Pipe  Leading  to  Side  Tracks  •  Comple]ons  Fracing  In  To  Drilling  Well  •  Stuck  Casing  •  Well  Control  Issues  •  Rubble  Zones  •  Geological/Targe]ng  Side  Tracks  

36  

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INCENTIVES:  1st  Iden]fy  the  Cri]cal  Performers  

•  Drilling  Superintendents  •  Drilling  Supervisors  •  Drilling  Engineers  •  Rig  Crews  – Toolpushers  – Drillers  

•  Direc]onal  Drillers  •  Mud  Engineers  

37  

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CREATE  TEAM  ATMOSPHERE  

•  Establish  Clear  Responsibili]es  •  Maintain  Accountability  •  Share  Success  •  Review  Failures  Without  Punishment  •  Encourage  Par]cipa]on  at  Every  Level  •  Provide  Individual  Recogni]on  When  Earned  •  Work  Closely  With  Service  Providers  in  Non  Adversarial  Respectul  Rela]onships  

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C0NSTANT  COMMUNICATION  •  Monthly  Mee]ng  With  Drilling  Contractor  •  Pad  Spud  Mee]ngs  •  Daily  Conference  Calls  With  Rigs  and  Office  •  Superintendents  visi]ng  rig  on  near  daily  basis  •  Open  Door  Policy  •  No  BIG  ME,  liJle  YOU  AItudes  •  Par]cipa]on  at  Every  Level  •  Useful  Drilling  Programs  •  Consistent  Approach  With  All  Rigs  •  NO  Micro-­‐Managing  From  Office  

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CONTINUOUS  IMPROVEMENT  FOCUS  

•  All  Brine/Polymer  Systems  •  Low  Solids  Mud  •  Conven]onal  Direc]onal  Assemblies  •  Casing  flota]on  •  Shorter  bit  to  bend  motors  •  Performance  Based  Bit  Selec]ons  

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Future  Savings  Opportuni]es  

•  Reducing  Rig  Mobiliza]on  Costs  •  Reducing  Loca]on  Costs  •  Reducing  Waste  Disposal  Costs  •  Reducing    Number  of  Casing  Strings    

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ANOTHER  WAY  TO  LOOK  AT  IT…  

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Southern  Marcellus  Shale  Division  Comparison  of  2010  vs.  2011  Wells  Drilled  Output  

2010  Well  Count:    122  top  holes  with  6.4  air  rigs/yr  avg  =      19.1  wells/rig/year    99  horizontal  holes  with  5.4  H  rigs/yr  avg  =    18.3  wells/rig/year      2011  Well  Count:    104  top  holes  with  3.8  air  rigs/yr  avg  =          27.4  wells/rig/year    149  horizontal  holes  with  4.9  H  rigs/yr  avg  =    30.4  wells/rig/year      Air  Rig  Improvement  =  44%      Big  Rig  Improvement  =  66%      

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Southern  Marcellus  Shale  Division  Comparison  of  2011  vs.  2012  Wells  Drilled  Output  

2011  Well  Count:    104  top  holes  with  3.8  air  rigs/yr  avg  =      27.4  wells/rig/year    149  horizontal  holes  with  4.9  H  rigs/yr  avg  =    30.4  wells/rig/year      2012  Well  Count:    126  top  holes  with  3.3  air  rigs/yr  avg  =      38.2  wells/rig/year    127  horizontal  holes  with  3.8  H  rigs/yr  avg  =    33.4  wells/rig/year      Air  Rig  Improvement  =  39%      Big  Rig  Improvement  =  10%      

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Summary  2010  Wells/Rig/Year  

2011  Wells/Rig/Year  

2010  to  2011  

%  Improve  

2012  Wells/Rig/Year  

2011  to  2012  

%  Improve  

Air  Rig   19.1   27.4   43%   38.2   39%  

Horizontal   18.3   30.4   66%   33.4   10%  

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Air  Rig  Produc]vity  Improvement  from  2010  to  2012  =    100%    Big  Rig  Produc]vity  Improvement  from  2010  to  2012  =  83%    

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Take  Away  Points:  1.  Advantages  of  air  rigs  and/or  top  hole  rigs.  2.  You  don’t  need  the  Ferrari  Rig  3.  GeIng  beJer  requires  consistent  measuring  of  performance  4.  Modify  your  team  to  establish  the  proper  aItude  to  achieve  your  goals.  

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