Cost Estimation & Control for Drilling and Completion Projects
At Benorch Energy Services LTD (BESL), we understand that effective cost management is critical to your project's success. Our rigorous approach to cost estimation and control ensures financial predictability and maximizes your return on investment.
Today, we'll demonstrate how we:
- Develop accurate cost estimates – Using proven methodologies
- Implement real-time cost control – Preventing budget overruns
- Deliver value engineering – Optimizing every dollar spent
1. Accurate Cost Estimation
A. Breakdown of Cost Components
| Cost Category |
Key Elements |
| Pre-Spud Costs |
Permits, site preparation, mobilization |
| Drilling Operations |
Rig day rate, fuel, drilling fluids, bits |
| Completion |
Casing, cementing, stimulation, equipment |
| Workover/Intervention |
Well access, remediation tools, services |
| Contingency |
Risk-adjusted reserve (typically 10-15%) |
B. Estimation Methodology
- Historical Data: Leverage costs from similar offset wells
- Vendor Quotes: Secure competitive pricing for materials/services
- Engineering Models: Use softwares for scenario analysis
Deliverable: Detailed AFE (Authorization for Expenditure) with line-item transparency
2. Proactive Cost Control
A. Real-Time Tracking System
- Daily Cost Monitoring: Compare actual vs. budgeted expenditures
- Variance Analysis: Investigate deviations >5% immediately
- Digital Dashboards: Live financial reporting for stakeholders
B. Cost-Saving Strategies
| Opportunity Area |
Savings Approach |
| Rig Optimization |
Reduce standby time, optimize crew rotations |
| Supply Chain |
Bulk purchasing, local sourcing |
| Operations |
Preventive maintenance to avoid NPT |
C. Change Management Protocol
- Request Review: Assess technical/financial impacts
- Client Approval: Before implementing changes
- Documentation: Update forecasts and track variances
Tool: Earned Value Analysis (EVA) to measure cost/schedule performance
3. Value Engineering
A. Cost vs. Performance Optimization
- Alternative Technologies: Evaluate ROI of advanced tools/methods
- Design Simplification: Reduce complexity without compromising safety
- Lifecycle Costing: Consider long-term OPEX in decisions
Case Example: Saved 18% on completion costs by switching to expandable liner hangers
Why Our Approach Wins
- Proven Accuracy: Historical estimates within ±7% of actuals
- Transparency: Open-book costing with audit trails
- Results Focus: 92% of projects delivered under AFE
Next Steps
- Develop Project-Specific Cost Model – Using your well parameters
- Establish Control Protocols – Tailored to your approval processes
- Implement Tracking System – With weekly financial reviews
Let’s discuss how we can optimize your project economics.
Key Takeaways
- Granular cost estimates prevent budget surprises
- Active cost control protects your financial interests
- Value engineering maximizes returns at every stage