Using ‘high-efficiency’ rigs, Colorado gas industry is drilling deep
RULISON, Colo. – The gas drilling rig is right off Interstate 70 to the west of the Rulison exit, near enough to the highway for the workers to hear the hum of passing cars and trucks if the noise from the drilling equipment itself were ever to stop.But it doesn’t – at least, not at what are known as “high-efficiency” rigs, the most technologically advanced set-up in use in this area.According to the company that operates this particular rig, Williams, the machinery and the men running it are hard at work 24 hours a day, seven days a week, and will be until its job is done and the rig is moved to another site.And the job, typically, is drilling somewhere between 16 and 22 wells per “well pad,” which is a concrete platform designed and built for the very specific needs of the drilling and production activity.Williams, which recently reported drilling its 3,000th well in the Piceance Basin, currently produces approximately 800 million cubic feet of gas per day out of the basin, according to Donna Gray of the company’s communications department.According to the Colorado Oil and Gas Conservation Commission’s online database, that equals between a quarter and a fifth of the total production of the Piceance Basin.As it is for the Colorado gas industry in general, this is a relatively quiet time for Williams, which currently is operating only seven rigs here, down from 26 last year, because of the national recession and a slump in the prices of natural gas.Gray said Williams is thinking of adding three rigs to its operations in 2010, but “it all depends on the price of gas.”One of the rigs in operation currently, high on the Roan Plateau, is what Gray called a “conventional” rig, lacking the computerized controls and labor-saving operations that characterize the newer six rigs.The remaining six, she said, all are working what she termed the Grand Valley Field, which hugs the Colorado River valley floor from West Rifle to a little ways west of Parachute.”So most of the rigs you see along the highway, in the valley area, would be Williams rigs,” Gray said.
A conventional rig involves a drilling operator standing outside on the rig platform, working a clutch lever to control the rotation of the drilling rod, while specialists fit new lengths of pipe as the bit digs deeper into the earth. It is a much more labor intensive operation, and considerably more hazardous to the crew, than the new style of rigs, according to Williams personnel.Known in the industry as “skidable rigs,” six of Williams rigs now in operation are made by the Helmerich & Payne manufacturing company, and are operated by a crew of five, including the “driller” who sits in a chair surrounded by computer consoles with touch-screens, and a kind of joy-stick to manipulate the drill itself.Gray said the H&P skidable rigs were developed through a joint design partnership with Williams, and that Williams was the first company in the Piceance Basin to begin using the equipment.Other companies working the Piceance Basin in Garfield County, such as Canada-based Encana USA, use similar technology in their drilling operations, though perhaps not as intensively.Doug Hock of EnCana said his company uses Nabors rigs, rather than the H&P brand, but that it is “the same kind of technology.” He said EnCana has only three or four such rigs in operation, and only on the North Parachute Ranch property near Parachute.Perched atop a specially built well pad, the entire rig can move on rails along, say, an east-west axis, while the upper superstructure, from the platform where the driller sits and above, can move along a north-south axis using rails perched 25 feet above the well pad.It is in that ability to move around on the pad, Gray explained during a recent tour, that the concept of “high-efficiency” comes into play.When a conventional rig would finish drilling a well, it would then have to be moved to a completely different location while other equipment was brought in for the “completion” of the well – setting up the concrete sheath required by the state and “frac’ing” the well prior to putting it into the production, or pumping mode.Meanwhile, the drilling rig would be off at another well pad, drilling a different well, and would be returned to the original site to drill another well only after the completion equipment had been moved off.”So, if you were drilling between four and six wells on a pad, which is pretty much the average for conventional rigs, you were talking about anywhere up to five years to drill all six of those wells.”But the skidable rigs, she said, make it possible for “simultaneous operation” of the drilling rig and the completion equipment. The 250-ton rig, moved by massive hydraulic gear, can reposition itself elsewhere on the pad and commence drilling another well, while the completion equipment is going to work on the well bore just vacated by the rig.That means it is a matter of a year to 18 months to finish drilling up to 22 wells from a single pad, rather than several years to drill six wells, Gray concluded.Another “efficiency” aspect of the skidable rigs, Gray said, is their taller derrick.A conventional derrick is roughly 80 feet tall, capable of drilling 30 feet at a time before a new 30-foot length of drilling pipe must be added to the “drill string,” Gray said. That process, which used to be performed by roughnecks skilled at “throwing chain” to work with the drilling pipes, is now done by one man operating a machine known as an “iron roughneck.”The high-efficiency rigs, she said, have derricks that reach as high as 135 feet into the air, enabling the rig crews to sink the drill at 90-foot increments – three lengths of the 30-foot drilling pipes – at a time. That means fewer stops to attach new lengths, which also is done using an iron roughneck. The resulting time saved speeds up the whole process, Gray said.In addition, Gray continued, the high-efficiency rigs use a “closed-loop system” for retaining the drilling mud, which lubricates the drill bit.The mud is separated from the pulverized sandstone that comes up from deep underground, which is termed “cuttings,” and then the cuttings are dumped into a nearby trench that is buried and reclaimed once the drilling is over.
Leasing the newer rigs, and the two, five-man crews that work them on rotation 12-hour shifts, costs “between $20,000 and $30,000 per day,” Gray said. Leasing the conventional rigs, with crew, costs “a few thousand dollars a day less” than the high-efficiency rigs, she said.Gray reported that it costs the company roughly $1.2 million to dig a single well, meaning that a 22-well, single pad represents more than $26 million from drilling through the completion process.The company employs about 250 people out of its corporate office complex on Parachute Creek, including such positions as drilling engineers, compression workers, field technicians doing maintenance on wells, and other specialized workers.Last year, Gray said, Williams was employing roughly 3,000 contractors, which included rig crews, truck drivers, environmental officials, and unskilled “roustabouts.”But this year, she said, that number has been pared down to “maybe about 1,500,” again due to the recession and the price slump.The company believes the economy will recover and drilling activity will pick up again, Gray and other officials have indicated.For example, Gray said this week, Williams expects to drill up to 300 new wells in 2010, and to continue drilling in this area for “at least another 10 years” before the gas fields will be tapped out.From the thousands of wells, she said, Williams expects to be pumping natural gas for perhaps half a century. She noted that the first well Williams ever pumped in the Piceance Basin was completed in 1986 and is still producing after putting more than a billion cubic feet of gas into the pipeline.And gas is not the only profitable substance coming out of the ground, she said. Typically, the company gets about a barrel of “sweet, light crude oil” from every well, plus varying amounts of butane, propane, ethane and something called “natural gasoline,” all of which is sold to other companies for processing and sale to email@example.com
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