Enhanced Well Cost Management Through Innovative Methodology in Drilling and Completions Cost Estimation and Tracking: A Case Study in Malaysia
Authors: Krasova D. , Andersen O. J. , Achen C. 
Published: February 2025

The development of marginal fields with limited budgets necessitates effective well cost management, beginning with cost estimation for investment decision-making, continuing through cost estimation for corporate budgeting, evaluation of cost-saving potentials through well plan optimization, and well cost monitoring during operation. This paper describes the implementation of advanced methodologies utilizing digital tools to modernize the well construction cost management workflow, adopted by an operator in Malaysia. The application's flexible architecture facilitates a scalable workflow to meet the company's cost estimation standards, in which each front-end stage requires a different level of input granularity depending primarily on the quality of information available to assemble the estimate. This approach effectively indicates the variance in the expected well cost at every stage throughout the data maturation. The probabilistic cost estimation incorporates the assessment of operational risks and performance through offset well information extracted from the daily operation database. During the operation phase, the final well cost estimate model serves as the baseline for well cost tracking, where executed activity is benchmarked against the plan. This allows monitoring of time and cost variations, as well as the generation of a comprehensive lookahead for measuring the campaign performance. The operator's transition to the digital well cost platform in 2021 marked a departure from conventional spreadsheets and standalone applications. This cloud-based solution improves data management and facilitates collaboration among finance analysts, cost controllers, drilling and completion engineers, and managers. Cloud computing efficiency transformed hours-long Monte Carlo probabilistic computations to seconds, enabling more effective cost planning through what-if scenarios and sensitivity analyses, thus streamlining decision-making, especially when well plans or batch operation sequences change. The offset wells data analytics model provides precise predictions of performance and common risks captured in historical non-productive time (NPT) events. This transformation allowed for detailed operational time and cost tracking, closely monitoring deviations from the plan due to operational factors like performance, plan changes, or the execution of improvement plans during operation, aiding in the generation of accurate lookahead projections, identifying lessons learned and cost-saving opportunities. Through effective cost management, the company successfully generated accurate estimates of expected costs, achieving up to 95% accuracy when no major scope changes occur. The operational excellence was recognized with industry awards, highlighting achievements in the lowest cost per foot in drilling and completions in the years 2022 and 2023. This paper presents a case study on a two-year implementation of improved well cost management by an operator. Through cloud-native collaborative software, the operator achieved higher confidence in cost estimates, improved cost control, and enhanced assurance that operation cost tracking is based on valid measures.