Aligned Interest Business Concept Utilizes Innovative Technologies to Extend the Useful Life of a Cook Inlet Oilfield
Authors: Dewees Lee , Wahleithner Jeff , Thompson Derry , Johnson Jerry , Balest Lew , Miller Troy , Cashion Rick , Schwaintz Brian 
Published: December 2007

Lee Dewees, SPE, MI Drilling Fluids; Jeff Wahleithner, SPE, S.W.E.P.I.; Derry Thompson, SPE, Anadrill; Jerry Johnson, Inlet Drilling; Lew Balest, Halliburton; Troy Miller, SPE, Baker; Rick Cashion, SPE, Weatherford; and Brian Schwaintz, SPE, Schlumberger

In late 1993 an innovative business alliance was formed between a Cook Inlet operator and seven drilling service vendors. The operator's objective was to drill and complete unrealized reservoir opportunities that had previously been considered uneconomical based on past performance. The purpose of the business alliance was to align all team member's interests to the primary objective of reducing well costs, while maintaining each individual team member's profitability. This is a case history of how this business process was structured. This paper also documents new technologies that contributed to the completion of this redevelopment drilling program.

Introduction

The Middle Ground Shoals field (MGS) was discovered in 1962. This field is a north-south trending, deeply folded anticline. New platforms were placed in 1964 and 1967 to develop this field. They were platform A and platform C, as indicated on Fig. 1. Initial drilling of platform A and platform C was completed in the early 1970s.

During the late 1980s, additional reservoir opportunities were identified on the western flank of the Middle Ground Shoals anticline. A 19-well development program was undertaken off platform A and platform C to expose the west flank opportunities. In order to fully develop the reservoir opportunities and minimize historical problems with troublesome coals, a buttonhook well design was used to drill the majority of these wells. (Fig. 2).

Results of this program were disappointing. Actual drilling costs exceeded AFE costs by 50%. The AFE cost for this program was 40 million dollars. The actual drilling costs exceeded 90 million dollars. The majority of the drilling cost overruns was attributed to stuck pipe; this was caused by sloughing coals and differential sticking. An average of 1.1 bottom hole assemblies was lost during this drilling program. The program was suspended in February of 1991.

Even though the results of the 19-well drilling program were less than anticipated, there were still significant reservoir opportunities on platform A. In order to economically achieve this opportunity, the production drilling costs had to be significantly reduced.

The operator was in the process of reorganizing Alaskan operations. in order to help maintain the economic viability of the Middle Ground Shoals development, it was important to develop any existing reservoir opportunities. Drilling costs had to be reduced from those that were realized in the redevelopment program in the 1980s. The operator considered several different business concepts to approach this drilling opportunity. These included the conventional operator/contractor relationship, turnkey bidding, integrated packages, and aligned interest teams. In the process of the operator's reorganization, engineering and management for drilling were moved from Alaska to Houston. In order to maximize the engineering and management talent, an aligned interest team business plan was proposed. A formalized request for proposal for the scope of this work was presented to the vendor community. After completing the selection process, the operator formed a business alliance with seven vendor's to drill and develop opportunities off platform A.

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