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Executive Strategy Briefing
Data Driven Decisions in Oil and Gas
Session Objectives
Today’s session objectives will be to
✓ Provide an overview of technologies driving data intelligence in the oil and gas industry
✓ Provide an overview of Microsoft and our partner’s innovation and gain an understanding of their
impact in this industry
✓ Gain an understanding of how business scenarios have benefited from these technologies through
stories and examples
✓ Discuss innovation challenges and barriers to adoption
Welcome, Agenda and Presenters
9:30 am Welcome & Introductions Tammi Warfield, Customer Success General Manager, Microsoft
10:00 am
Leveraging Machine Learning and AI for Oil and Gas
Intelligence
Bill Barna, Cloud Solution Architect – AI, Microsoft
11:00 am Injecting AI into Seismic Data Management
Liam Cavanagh, Principal Program Manager, Microsoft Azure Search
Olivier Lhemann, President, INT
12:00 pm Lunch & Networking
12:30 pm Predictive Maintenance
Ramkumar Krishnan Senior Program Manager, Microsoft
Naveen Vig, Principle Solutions Architect, Microsoft
1:15 pm Integrating AI with Spatial Analytics Omar Maher, Director of AI, ESRI
2:00 pm Pipeline Flow Quality Assurance on the Blockchain
Scotty Perkins, SVP of Product Innovation, Quisitive
Bryan Blain, Principal Consultant, Quisitive
3:00 pm Closeout Discussion and Next Steps Tammi Warfield, Customer Success General Manager, Microsoft
Today’Facilitator: Dania Kodeih, Industry Solutions Architect
Upstream Oil & Gas Analytics
Increasing production and optimizing drilling
May 21, 2018
Bill Barna
Cloud Solution Architect – AI
Microsoft Irving
bibar@microsoft.com
Jeff Johnston
Principal Consultant
Artis Consulting
jjohnston@artisconsulting.com
Microsoft Azure Provides the Building Blocks
• Reference architectures
• Everything fits together
• Fewer skills needed
• Flexible and agile
• Scalable
• Zero exit costs
Partial Listing of Azure Services
Production Scenarios
Production Costs in the Permian Basin
Subsurface Maintenance
*http://www1.salary.com/Roustabout-Salary.html
Secondary Oil Recovery
• Electricity ($19,990)
• Waste Water Disposal ($9,000)
• Rig Workovers ($19,710)
• Remedial Services ($8,930)
• Pumper Labor ($7,620)
• Roustabout Labor ($3,540)Targets
Data Science
Well Cost Data
• Data from 2009 Department of Energy Survey
• West Texas
• 8,000 foot well
Texas Production Wells
• 13 to 20 barrels per day in 2015 (all well types)
• $189k to $292k annual rev/well@ $40/barrel
• 190,000 to 250,000 oil wells in Texas
• 33,000 to 150,000 stripper wells in Texas
• Average stripper well produces < 2 barrels/day
2015 Median Annual Salaries
• Field Supervisor: $86,001/year
• Roustabout: $45,952/year
• Pumper: $42,600/year
Market Condition Metrics Annual Operating Costs
$13,170
$53,020
$3,010
$14,330
$13,120
$33,940
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Primary Secondary
Subsurface Maintenance Surface Maintenance
Daily Expense $0
$10,000
$20,000
$30,000
$40,000
Supervision Pumper Labor Chemicals Power & Water Supplies
$0
$3,000
$6,000
$9,000
Roustabout Labor Supplies & Services Equipment Usage Other
$0
$5,000
$10,000
$15,000
$20,000
Rig Workover Remedial Services Equipment Repair Other
Primary Secondary
Surface Maintenance
Daily Expense
Intelligent Pad
Azure AI-based pad monitors assets, predicts outcomes, and takes action
Wellhead
Free Water Knockout
Heater Treater
Waste Water Tank
Oil Tank
Gas Compressor
Monitoring Sensors
Monitoring Sensors
Monitoring Sensors
Monitoring Sensors
Tank Level Sensor
Tank Level Sensor
BS&W Sensor
Monitoring & Alarms
• Wellhead
• Free water knockout
• Heater treater
• BS&W sensor
Predictive Maintenance
• Gas compressor
Forecasting
• Tank levels
Azure Technologies
Dynamics 365 Field Service
• Automated ticket generation
• Oil & water haulers assigned
• Technicians dispatched
Tightly Integrated with Azure
• IoT asset monitoring
• Predictive maintenance
• Tank level forecasting
San Antonio
Datacenter
Technician
WALLIS 23-33-71 A 2H
Oil
Water
WALLIS 23-33-71 A 2H
Predictive Maintenance
Equipment sensor data can be used to improve maintenance schedules
Activity Cost
ESP Replacement $100,000
Workover Rig (3-days) $30,000
Trucking/Dock Services $6,000
Rental Tools & Equipment $5,000
Contract/Service Labor $4,500
Test/Inspect Pipe $2,000
Insurance (2% of total) $2,950
Contingency Costs (10% of total) $14,750
Total $165,200
Downtime 3 days lost
Event Classification Model Training by Component
Sensor Variables
• Revolutions per minute
• Amperage
• Temperature
• Vibration
• Etc.
Failure Risk
Motor
Pump
Normal
Anomaly
Support Vector
Machine
Automatic Detection
• Spikes
• Dips
• Level changes
• Trends
• Extreme values
Time
Sensor Signals
Anomaly
Electric Submersible Pump (ESP)
http://www.hexionfracline.com/flowback-causes-serious-issues-for-esps
Anomaly Detection Model Component Failure Prediction
Classification Anomaly Detection
Strength Known events Unknown events
Approach Supervised learning Unsupervised learning
Output ESP events Rate change precursors
Prevent Failures: Downhole Dynamometer Card
Machine learning can be used to avoid costly failures of oil well rod pump systems
ADF consumes aggregates
returns ML results
DocumentDB
Consumed
Produced
Machine Learning
Predictions
Daily notifications
generated
Notifications sent to
dispatch system
Data to Card Shapes
+ Area per shape
Quantify shape, match
to problem shapes
Data
No
Data Visualization
Shape Library
Source: Sage Oil Tools
Source: Lufkin Automation
Analysis Process & Diagnosis
Tank Level Forecasting
Machine Learning can be used to forecast and schedule oil tank pickups
• Machine learning used to forecast tank levels using
onsite sensor reading and historical data
• Tank forecasts used to schedule tank pickups and
minimize downtime at site
• Parallel model development in Azure ML allows for
rapid solution testing and development
• Advanced machine learning algorithms (Neural
Network Regression, Poisson Regression, Decision
Forest Regression) enable accurate prediction
Tank Forecast DevelopmentMultiple Algorithm Evaluation
Parallel Feature Testing
5
15
25
35
45
55
65
1 6 11 16 21 26 31 36 41 46
TankLevel
Day
Linear Regression
Random Forest
Neural Network
Level
Forecast Accuracy Impact
1 hour High Truck Route
1 day High Schedule
1 week Medium Schedule
Forecast Horizons
Corrosion Prediction
Reducing workover costs with proactive treatments
“If a little works, more will work better!”
– Production Engineer in Midland
Predict and treat corrosion before it
occurs.
Data Mining Scenario
Finding Production: Identifying Underproducing Wells
Using data mining to identify under producing wells because of misconfigured beam pumps
Why review configurations?
• Beam pump misconfigured at installation
• Downhole conditions change over time
• Stimulation changes system dynamics
• Equipment efficiency changes over time
Business impact of misconfigured wells
• More equipment failures
• Higher electricity consumption
• Oil production at less than 100 percent
Challenges to reviewing beam pumps
• Manual process
• Large volume of wells
• Many wells configured correctly
• Lack of skilled personnel
• Opportunity cost (higher priority work)
Asset Database Production
History
Service History
Gateway
Storage blob
Data FactoryHDInsight Machine
Learning
Data Lake
Solution
• Automated process
• Scheduled or ad-hoc
• Data Factory managed
• Hadoop preprocessing
• Data mining with ML
• Data Lake Storage
• PowerBI visualization
• Recommender engine
Are there beam pumps underproducing and/or at risk of failure?
• Production history
• Service history
• Asset inventories
• Configuration data
• Dynamometer cards
• Service history
• Water cut history
• Gas to oil ratio history
• Stimulation history
• Service bulletins
Data Sources
Reducing Electricity Costs: Beam Pumps
Machine Learning and Linear Programming optimize beam pump configurations to reduce electricity costs
Beam Pump Configuration Performance Metrics and Costs
Pumping Unit
Pump Size
and SPM
Rod String PIP
Max-Min
Loads
Load
Range
Gearbox Torque
Polish Rod
Horsepower
Monthly
Power Bill
Production
C-456-256-120 120" 1.50" - 10.20 SPM 86 100 25,576 8,594 16,982 478,700 20.85 $1,944.00 200 BFPD
C-456-256-120 103" 1.75" - 10.20 SPM 86 100 26,729 9,649 17,080 341,800 18.71 $1,482.00 200 BFPD
M-320-256-144 144" 1.25" - 10.40 SPM 86 100 24,608 5,910 18,698 305,400 25.46 $1,971.00 200 BFPD
C-320-256-120 120" 1.50" - 8.70 SPM 86087 100 18,097 6,022 12,075 289,600 18.97 $1,383.00 200 BFPD
Source: Lufkin
Production Forecasting
• Internal data
• Competitor/partner data
• Dynamometer cards
• Downhole logs
• Texas Railway Commission
• Frac Focus
(Oil and Water)
Regenerative Power
• Capture downstroke power
• Meter only runs forward
• Multiple wells per circuit
• Synchronization
• System balance
(Well Clustering)
Optimized Configurations
• Production forecast
• Regenerative power
• Stroke length vs torque
• Stroke length vs speed
• Equipment limits
• Efficiency & Durability
• Strategy over time
Drilling Scenario
Drilling Costs in the Permian Basin
Reporting Companies: Energen, Concho, Laredo, EP Energy, and EOG Resources.
Drilling costs range from $88,000 to $109,000 per day
Trends in U.S. Oil and Natural Gas Upstream Costs, March 2016
Well Drilling Planning Process
Objectives
• Safe
• Minimum cost
• Usable
Drilling costs correlate directly to the effectiveness of the planning effort
Problem Type: Optimization
Source: Petro Wiki
Prospect Development
Data Collection
Pore Pressure Analysis
Fracture Prediction
Pipe Setting Depth Selection
Hole Geometry Selection
Completion Planning
Mud Plan
Cement Plan
Casing Design
Tubing Design
Rig Sizing and Selection
Drill Time Projections
Cost Estimate
Steps for developing a drilling plan
Constraints
• Geology
• Drilling equipment
• Temperature
• Casing limitations
• Hole sizing
• Budget
Drill Bits – Selecting and Grading Wear
“Historically, a driller would learn through experience how to examine a "dull" to determine what type of bit to run next, and how it should be run
(WOB, RPM, etc.). This was part of the art that separated the best drillers from the rest.” - SPE 23938 The IADC Roller Bit Dull Grading System
Drill Bits
- Many choices defined by IADC codes
- Most important variable in system*
- Decisions based on Driller’s experience
Drill Bit Wear
- Drillers use IADC grading system
- 2nd most important variable in system*
- Driller reads bits like tea leaves
Art becomes science
Driller empowered by AI
*In relation to lithology
Estimating Lithology for Model Inputs
No MWD available prior to planning a new drilling project
Permian Basin
• Layer cake formation
• Many lithologies
Seismic Data
• Can replace MWD (partially)
• Poor resolution and accuracy
Adjacent Well Data
• MWD logs from other projects
• Proxy data for current project
Drilling Optimization – An Evolutionary Process
SPE-133429-MS – Basic Drilling Cost Model and Optimization Theory (2010)
• SPE-169451-MS – Improves the bit wear model (2014)
• SPE-180518-MS – Improves the lithology variables (2016)
• SPE-178852-MS – Adds Bottom Hole Assembly variables (2016)
• SPE-181382-MS – Provides new AI models to evaluate drilling data to optimize ROP (2016)
• SPE-185909-MS – Improving ROP performance with steerable mud motors (2017)
• TBD - Delivering these solutions more easily, faster, and less expensively with Microsoft Azure
Oil & Gas Companies, Academia, and Microsoft all contributing to a solution
Solution Contributors
Optimizing Drilling Costs Per Foot
SPE-133429-MS: Cost-Per-Foot Reduction by Bit-Run Optimization: A Simulation Study (2010)
Rate of Penetration (ROP) Factors
• Bit type
• Bit tooth wear
• Formation characteristics (lithology)
• Drilling fluid properties
• Weight on Bit
• Rotary Speed
• Bit hydraulics
Lithology variables (feature inputs)
• Rock type (shale, lime, sand, chert)
• Fracture gradient
• Softness
• Abrasivity
• Gamma ray
• Resistivity
• Porosity
• Fluid type
• Pore fluid pressure gradient
Other variables (feature Inputs)
• Bit hydraulic horsepower
• Fluid type (water or oil)
• Mud weight (ppg)
• Mud flowrate (gpm)
Bit types and tooth wear by lithology
Original Costs
Optimized Costs
Costs down 17%
Minimize the Cost Per Foot Drilled in the Permian Basin
Storage blob
• Lithology
• Bit type
• Weight on Bit
• Rotary Speed
• Mud
• Hydraulics
Input Data
Machine
Learning
HDInsight
Power BI
IoT Hub
• Ingest
• Store
• Preprocess
• Model
• Visualize
Drilling Process Today
• Infinite configuration settings
• Limited pre-drilling data
• Experience dependent
• Driller overly conservative
• Hit & miss results
Future Drilling Process with AI
• Optimized configuration settings
• Improved data insights
• Experience augmented by math
• RoP balanced against TOOH risk
• Consistently better results
Microsoft Azure
Azure-based AI makes drillers smarter to increase Rate-of-Penetration (RoP) while reducing Tripping-out-of-Hole (TOOH)
Algorithm: Gradient Boosted Decision Tree
Tricone Bit PDC Bit
About Artis Consulting
Artis Consulting ROP Demo
Data
• University Lands Data
• 3 wells from Andrews County
• MWD logs (includes lithology)
• Mud Logs
• Daily Drilling Reports
• ~4500 to ~14000ft depth modeled
Modeling
• 2 R Scripts were used
• one for regression model training &
prediction
• one for creating the permutations
• predictive model optimized to
protect against over-fitting
• one prediction every 2 feet of depth
Power BI Visualization
• Load well logs
• Load permutations data
• Load predictive model
output
• Allow user to configure
ROP Factors
Data
Engineering
Perms
Predictive
Model
Model
Output
Create
Lithology &
Bit Perms
Log Files
Cortana Gallery (Pending)
Public Data Used to Train Models
Predict Rate-of-Penetration (RoP) for different drilling configurations
Choose Configurations to Compare (Power BI)
Map Lithology to RoP for Configurations (Power BI)
Evaluate RoP Model Goodness of Fit (Power BI)

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Mtc oil and gas use cases 05 16-2018

  • 1. Executive Strategy Briefing Data Driven Decisions in Oil and Gas
  • 2. Session Objectives Today’s session objectives will be to ✓ Provide an overview of technologies driving data intelligence in the oil and gas industry ✓ Provide an overview of Microsoft and our partner’s innovation and gain an understanding of their impact in this industry ✓ Gain an understanding of how business scenarios have benefited from these technologies through stories and examples ✓ Discuss innovation challenges and barriers to adoption
  • 3. Welcome, Agenda and Presenters 9:30 am Welcome & Introductions Tammi Warfield, Customer Success General Manager, Microsoft 10:00 am Leveraging Machine Learning and AI for Oil and Gas Intelligence Bill Barna, Cloud Solution Architect – AI, Microsoft 11:00 am Injecting AI into Seismic Data Management Liam Cavanagh, Principal Program Manager, Microsoft Azure Search Olivier Lhemann, President, INT 12:00 pm Lunch & Networking 12:30 pm Predictive Maintenance Ramkumar Krishnan Senior Program Manager, Microsoft Naveen Vig, Principle Solutions Architect, Microsoft 1:15 pm Integrating AI with Spatial Analytics Omar Maher, Director of AI, ESRI 2:00 pm Pipeline Flow Quality Assurance on the Blockchain Scotty Perkins, SVP of Product Innovation, Quisitive Bryan Blain, Principal Consultant, Quisitive 3:00 pm Closeout Discussion and Next Steps Tammi Warfield, Customer Success General Manager, Microsoft Today’Facilitator: Dania Kodeih, Industry Solutions Architect
  • 4. Upstream Oil & Gas Analytics Increasing production and optimizing drilling May 21, 2018 Bill Barna Cloud Solution Architect – AI Microsoft Irving bibar@microsoft.com Jeff Johnston Principal Consultant Artis Consulting jjohnston@artisconsulting.com
  • 5. Microsoft Azure Provides the Building Blocks • Reference architectures • Everything fits together • Fewer skills needed • Flexible and agile • Scalable • Zero exit costs Partial Listing of Azure Services
  • 7. Production Costs in the Permian Basin Subsurface Maintenance *http://www1.salary.com/Roustabout-Salary.html Secondary Oil Recovery • Electricity ($19,990) • Waste Water Disposal ($9,000) • Rig Workovers ($19,710) • Remedial Services ($8,930) • Pumper Labor ($7,620) • Roustabout Labor ($3,540)Targets Data Science Well Cost Data • Data from 2009 Department of Energy Survey • West Texas • 8,000 foot well Texas Production Wells • 13 to 20 barrels per day in 2015 (all well types) • $189k to $292k annual rev/well@ $40/barrel • 190,000 to 250,000 oil wells in Texas • 33,000 to 150,000 stripper wells in Texas • Average stripper well produces < 2 barrels/day 2015 Median Annual Salaries • Field Supervisor: $86,001/year • Roustabout: $45,952/year • Pumper: $42,600/year Market Condition Metrics Annual Operating Costs $13,170 $53,020 $3,010 $14,330 $13,120 $33,940 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Primary Secondary Subsurface Maintenance Surface Maintenance Daily Expense $0 $10,000 $20,000 $30,000 $40,000 Supervision Pumper Labor Chemicals Power & Water Supplies $0 $3,000 $6,000 $9,000 Roustabout Labor Supplies & Services Equipment Usage Other $0 $5,000 $10,000 $15,000 $20,000 Rig Workover Remedial Services Equipment Repair Other Primary Secondary Surface Maintenance Daily Expense
  • 8. Intelligent Pad Azure AI-based pad monitors assets, predicts outcomes, and takes action Wellhead Free Water Knockout Heater Treater Waste Water Tank Oil Tank Gas Compressor Monitoring Sensors Monitoring Sensors Monitoring Sensors Monitoring Sensors Tank Level Sensor Tank Level Sensor BS&W Sensor Monitoring & Alarms • Wellhead • Free water knockout • Heater treater • BS&W sensor Predictive Maintenance • Gas compressor Forecasting • Tank levels Azure Technologies Dynamics 365 Field Service • Automated ticket generation • Oil & water haulers assigned • Technicians dispatched Tightly Integrated with Azure • IoT asset monitoring • Predictive maintenance • Tank level forecasting San Antonio Datacenter Technician WALLIS 23-33-71 A 2H Oil Water WALLIS 23-33-71 A 2H
  • 9. Predictive Maintenance Equipment sensor data can be used to improve maintenance schedules Activity Cost ESP Replacement $100,000 Workover Rig (3-days) $30,000 Trucking/Dock Services $6,000 Rental Tools & Equipment $5,000 Contract/Service Labor $4,500 Test/Inspect Pipe $2,000 Insurance (2% of total) $2,950 Contingency Costs (10% of total) $14,750 Total $165,200 Downtime 3 days lost Event Classification Model Training by Component Sensor Variables • Revolutions per minute • Amperage • Temperature • Vibration • Etc. Failure Risk Motor Pump Normal Anomaly Support Vector Machine Automatic Detection • Spikes • Dips • Level changes • Trends • Extreme values Time Sensor Signals Anomaly Electric Submersible Pump (ESP) http://www.hexionfracline.com/flowback-causes-serious-issues-for-esps Anomaly Detection Model Component Failure Prediction Classification Anomaly Detection Strength Known events Unknown events Approach Supervised learning Unsupervised learning Output ESP events Rate change precursors
  • 10. Prevent Failures: Downhole Dynamometer Card Machine learning can be used to avoid costly failures of oil well rod pump systems ADF consumes aggregates returns ML results DocumentDB Consumed Produced Machine Learning Predictions Daily notifications generated Notifications sent to dispatch system Data to Card Shapes + Area per shape Quantify shape, match to problem shapes Data No Data Visualization Shape Library Source: Sage Oil Tools Source: Lufkin Automation Analysis Process & Diagnosis
  • 11. Tank Level Forecasting Machine Learning can be used to forecast and schedule oil tank pickups • Machine learning used to forecast tank levels using onsite sensor reading and historical data • Tank forecasts used to schedule tank pickups and minimize downtime at site • Parallel model development in Azure ML allows for rapid solution testing and development • Advanced machine learning algorithms (Neural Network Regression, Poisson Regression, Decision Forest Regression) enable accurate prediction Tank Forecast DevelopmentMultiple Algorithm Evaluation Parallel Feature Testing 5 15 25 35 45 55 65 1 6 11 16 21 26 31 36 41 46 TankLevel Day Linear Regression Random Forest Neural Network Level Forecast Accuracy Impact 1 hour High Truck Route 1 day High Schedule 1 week Medium Schedule Forecast Horizons
  • 12. Corrosion Prediction Reducing workover costs with proactive treatments “If a little works, more will work better!” – Production Engineer in Midland Predict and treat corrosion before it occurs.
  • 14. Finding Production: Identifying Underproducing Wells Using data mining to identify under producing wells because of misconfigured beam pumps Why review configurations? • Beam pump misconfigured at installation • Downhole conditions change over time • Stimulation changes system dynamics • Equipment efficiency changes over time Business impact of misconfigured wells • More equipment failures • Higher electricity consumption • Oil production at less than 100 percent Challenges to reviewing beam pumps • Manual process • Large volume of wells • Many wells configured correctly • Lack of skilled personnel • Opportunity cost (higher priority work) Asset Database Production History Service History Gateway Storage blob Data FactoryHDInsight Machine Learning Data Lake Solution • Automated process • Scheduled or ad-hoc • Data Factory managed • Hadoop preprocessing • Data mining with ML • Data Lake Storage • PowerBI visualization • Recommender engine Are there beam pumps underproducing and/or at risk of failure? • Production history • Service history • Asset inventories • Configuration data • Dynamometer cards • Service history • Water cut history • Gas to oil ratio history • Stimulation history • Service bulletins Data Sources
  • 15. Reducing Electricity Costs: Beam Pumps Machine Learning and Linear Programming optimize beam pump configurations to reduce electricity costs Beam Pump Configuration Performance Metrics and Costs Pumping Unit Pump Size and SPM Rod String PIP Max-Min Loads Load Range Gearbox Torque Polish Rod Horsepower Monthly Power Bill Production C-456-256-120 120" 1.50" - 10.20 SPM 86 100 25,576 8,594 16,982 478,700 20.85 $1,944.00 200 BFPD C-456-256-120 103" 1.75" - 10.20 SPM 86 100 26,729 9,649 17,080 341,800 18.71 $1,482.00 200 BFPD M-320-256-144 144" 1.25" - 10.40 SPM 86 100 24,608 5,910 18,698 305,400 25.46 $1,971.00 200 BFPD C-320-256-120 120" 1.50" - 8.70 SPM 86087 100 18,097 6,022 12,075 289,600 18.97 $1,383.00 200 BFPD Source: Lufkin Production Forecasting • Internal data • Competitor/partner data • Dynamometer cards • Downhole logs • Texas Railway Commission • Frac Focus (Oil and Water) Regenerative Power • Capture downstroke power • Meter only runs forward • Multiple wells per circuit • Synchronization • System balance (Well Clustering) Optimized Configurations • Production forecast • Regenerative power • Stroke length vs torque • Stroke length vs speed • Equipment limits • Efficiency & Durability • Strategy over time
  • 17. Drilling Costs in the Permian Basin Reporting Companies: Energen, Concho, Laredo, EP Energy, and EOG Resources. Drilling costs range from $88,000 to $109,000 per day Trends in U.S. Oil and Natural Gas Upstream Costs, March 2016
  • 18. Well Drilling Planning Process Objectives • Safe • Minimum cost • Usable Drilling costs correlate directly to the effectiveness of the planning effort Problem Type: Optimization Source: Petro Wiki Prospect Development Data Collection Pore Pressure Analysis Fracture Prediction Pipe Setting Depth Selection Hole Geometry Selection Completion Planning Mud Plan Cement Plan Casing Design Tubing Design Rig Sizing and Selection Drill Time Projections Cost Estimate Steps for developing a drilling plan Constraints • Geology • Drilling equipment • Temperature • Casing limitations • Hole sizing • Budget
  • 19. Drill Bits – Selecting and Grading Wear “Historically, a driller would learn through experience how to examine a "dull" to determine what type of bit to run next, and how it should be run (WOB, RPM, etc.). This was part of the art that separated the best drillers from the rest.” - SPE 23938 The IADC Roller Bit Dull Grading System Drill Bits - Many choices defined by IADC codes - Most important variable in system* - Decisions based on Driller’s experience Drill Bit Wear - Drillers use IADC grading system - 2nd most important variable in system* - Driller reads bits like tea leaves Art becomes science Driller empowered by AI *In relation to lithology
  • 20. Estimating Lithology for Model Inputs No MWD available prior to planning a new drilling project Permian Basin • Layer cake formation • Many lithologies Seismic Data • Can replace MWD (partially) • Poor resolution and accuracy Adjacent Well Data • MWD logs from other projects • Proxy data for current project
  • 21. Drilling Optimization – An Evolutionary Process SPE-133429-MS – Basic Drilling Cost Model and Optimization Theory (2010) • SPE-169451-MS – Improves the bit wear model (2014) • SPE-180518-MS – Improves the lithology variables (2016) • SPE-178852-MS – Adds Bottom Hole Assembly variables (2016) • SPE-181382-MS – Provides new AI models to evaluate drilling data to optimize ROP (2016) • SPE-185909-MS – Improving ROP performance with steerable mud motors (2017) • TBD - Delivering these solutions more easily, faster, and less expensively with Microsoft Azure Oil & Gas Companies, Academia, and Microsoft all contributing to a solution Solution Contributors
  • 22. Optimizing Drilling Costs Per Foot SPE-133429-MS: Cost-Per-Foot Reduction by Bit-Run Optimization: A Simulation Study (2010) Rate of Penetration (ROP) Factors • Bit type • Bit tooth wear • Formation characteristics (lithology) • Drilling fluid properties • Weight on Bit • Rotary Speed • Bit hydraulics Lithology variables (feature inputs) • Rock type (shale, lime, sand, chert) • Fracture gradient • Softness • Abrasivity • Gamma ray • Resistivity • Porosity • Fluid type • Pore fluid pressure gradient Other variables (feature Inputs) • Bit hydraulic horsepower • Fluid type (water or oil) • Mud weight (ppg) • Mud flowrate (gpm) Bit types and tooth wear by lithology Original Costs Optimized Costs Costs down 17%
  • 23. Minimize the Cost Per Foot Drilled in the Permian Basin Storage blob • Lithology • Bit type • Weight on Bit • Rotary Speed • Mud • Hydraulics Input Data Machine Learning HDInsight Power BI IoT Hub • Ingest • Store • Preprocess • Model • Visualize Drilling Process Today • Infinite configuration settings • Limited pre-drilling data • Experience dependent • Driller overly conservative • Hit & miss results Future Drilling Process with AI • Optimized configuration settings • Improved data insights • Experience augmented by math • RoP balanced against TOOH risk • Consistently better results Microsoft Azure Azure-based AI makes drillers smarter to increase Rate-of-Penetration (RoP) while reducing Tripping-out-of-Hole (TOOH) Algorithm: Gradient Boosted Decision Tree Tricone Bit PDC Bit
  • 25. Artis Consulting ROP Demo Data • University Lands Data • 3 wells from Andrews County • MWD logs (includes lithology) • Mud Logs • Daily Drilling Reports • ~4500 to ~14000ft depth modeled Modeling • 2 R Scripts were used • one for regression model training & prediction • one for creating the permutations • predictive model optimized to protect against over-fitting • one prediction every 2 feet of depth Power BI Visualization • Load well logs • Load permutations data • Load predictive model output • Allow user to configure ROP Factors Data Engineering Perms Predictive Model Model Output Create Lithology & Bit Perms Log Files Cortana Gallery (Pending)
  • 26. Public Data Used to Train Models Predict Rate-of-Penetration (RoP) for different drilling configurations
  • 27. Choose Configurations to Compare (Power BI)
  • 28. Map Lithology to RoP for Configurations (Power BI)
  • 29. Evaluate RoP Model Goodness of Fit (Power BI)