Situation

A large independent oil and gas company with a significant position in the Bakken of North Dakota was experiencing long cycle times for drilling pad and facilities construction, rig moves, completing wells and getting wells put on production.

Approach

Advisian was called in to conduct an analysis to determine root causes and corrective actions for lengthy cycle time from building the drilling pad and production facilities through to putting a well on production. During this analysis we:

  • Created detailed current-state process maps for all major processes and identified sources of waste and lost time.
  • Observed areas of poor coordination, communication, planning and work practices in the field pad and facilities construction, rig moves, completion activities and flow back to put on production work.
  • Completed studies to document leadership practices and communication between functions.
  • Documented the current-state management system illustrating the lack of key performance indicators, reports and effective meetings to manage the overall process.

From this we found:

  • Current-state processes contain waste and lost time, and personnel were not completely clear on their roles and responsibilities. Designing new processes with clarified roles will decrease cycle time for Spud to Rig Release and Rig Release to Put-on-Production.
  • Field activities were excessively long due to poor planning, coordination and communication. Improving planning and communication between groups will decrease cycle time.
  • Lack of key performance indicators with plans and targets did not permit effective management of the overall process. Implementing a robust Execution Control System (ECSSM) will allow management to direct activities to achieve planned results.
  • Due to rapid growth and infusion of new personnel with varied backgrounds, overall leadership coaching and team development skills needed to be improved and strengthened in order to support an efficient Build to Put-on-Production process.

Results

  • Reduction in cycle time to achieve a financial impact of $76 million to $95 million.
  • Streamlined processes managed with KPIs in effective, efficient meetings.
  • Financial impact for anticipated wells to be drilled in the project area represented a Spud to Put-on-Production reduction of 12 to 15 days per well valued at $76 million to $95 million.Redesigned the pad construction process to include building a slightly larger pad to allow facilities construction while drilling pad was being built, thus removing facilities construction time from the critical path. Cycle time for construction reduced two days per well.
  • Designed and implemented Rig-Move-On-Paper process to coordinate all vendors and to significantly improve communication. Distributed Rig Move Workbooks designed for each rig type including target times for key rig move process steps. Average rig moves reduced from 9.2 to 7.2 days. 
  • Designed and implemented Frack-Plan-On-Paper process to coordinate all vendors. Significantly improved communication between Frack manager and field personnel. Completion cycle time reduced 8 days per well.
  • Implemented a robust management system of Key Performance Indicators and reports with Plans and Targets. Improved effectiveness and efficiency of key performance review meetings. Developed a summary report for key executives to show Build-to-Put-on-Production process cycle times were meeting or exceeding targets for wells planned to be drilled and completed.
  • Delivered a series of Leadership Coaching and Team Development workshops to all client staff, as well as key vendor personnel, representing all phases of the Spud to Put-on-Production process, resulting in greatly improved communication between functional groups. Spud to Put-on-Production cycle time began dropping immediately after project start and had dropped 20 days per well within the first 90 days.
  • Spud to Put-on-Production time was reduced by 41.8 days per well below the pre-project base performance and 26.8 days per well below the project stretch target based on a 10-week rolling average. The value of the reduction below the pre-project base performance is estimated to be in excess of $191 million.