hem - organizational learning and continuous improvement
TRANSCRIPT
Organizational Learning and Continuous ImprovementPresented by Harold E. McGowen III, PE
President & CEO Navidad Energy Partners, LLC
UPTECH Upstream Oil & Gas SummitNovember 8-10th, 2015
Hyatt Regency Lost Pines Resort, Austin
Overview
Navidad ResourcesOil and Gas Exploration
and Production
Navidad’s play was located in the prolific U.S. Gulf-Coast fractured carbonate belt.
Source: McGowen, H. E. (2015, March 17). Case Study: Using Managed Pressure Drilling and Oil Based Mud to Efficiently Drill an Extremely Thick and Highly Fractured Carbonate Sequence Under an Extremely Thick and Highly Sensitive Laminated Shale. Society of Petroleum Engineers. doi:10.2118/173021-MS
MASTERS CREEKAUSTIN CHALKPEARSALL
AUSTIN CHALKBUDAGEORGETOWN
KURTENAUSTIN CHALKBUDAGEORGETOWN
GIDDINGSAUSTIN CHALKBUDAGEORGETOWN
PEACH CREEKAUSTIN CHALKBUDAGEORGETOWN
PLEASANTONAUSTIN CHALKBUDAGEORGETOWN
ICIGEORGETOWN
BROOKELANDAUSTIN CHALK
Target Pay:BUDAGEORGETOWNEDWARDSKIAMICHI SHALEGLEN ROSEJAMES LIME
Navidad fracked and commingled 1,400’ of stacked fractured limestone (carbonate) pay.
Source: McGowen, H. E. (2015, March 17). Case Study: Using Managed Pressure Drilling and Oil Based Mud to Efficiently Drill an Extremely Thick and Highly Fractured Carbonate Sequence Under an Extremely Thick and Highly Sensitive Laminated Shale. Society of Petroleum Engineers. doi:10.2118/173021-MS
Formation Type Characteristics
Austin Chalk Lime Non-Productive
Eagleford Shale
Woodbine Sand Wet/High Perm
Woodbine Dexter
Shale/Sand
Maness Shale
Buda Lime Fractured
Del Rio Shale
Georgetown Lime Fractured
Kiamichi Shale
Edwards Lime Fractured
Paluxy Shale
Glen Rose Lime Fractured
WEAK
SENSITIVE
Managed Pressure Drilling
Managed Pressure Drilling
Managed Pressure Drilling
Managed Pressure Drilling
Managed Pressure Drilling
Oil Based Mud
Navidad had to quickly learn how to drill, complete, and produce economically.
While there are many sources of learning...
QUALITY CONTROLDATA
LESSONS LEARNED
DATA ANALYSIS
CAPTURED ON THE FLY
LITERATURE REVIEW
EXPERT ADVICE
OFFSET WELL REVIEW
Learning
SEMINARS
This is about learning from our mistakes.
Source: CartoonStock
IMPACT ON BOTTOM LINEOrganizational Learning and Continuous Improvement
Organizational Learning has a direct impact on the bottom line.
For example, in drilling, Organizational Learning can:• Reduce Non-Productive Time (NPT)
– and associated trouble cost, i.e. the negative impact of unexpected events on well delivery time and cost.
• Reduce Invisible Loss Time (ILT)– i.e. the negative impact of excessive flat times and general
inefficiencies that lengthen well delivery times.• Increase Rate of Penetration (ROP) & on-bottom drilling time.
SPE/IADC 140333, How to Accelerate Drilling Learning Curves, Eric van Oort, SPE, James Griffith, SPE, and Barry Schneider, SPE, Shell Upstream Americas
Everyone has heard the term “Learning Curve.”
C1 = Excess Drilling Time available for
reduction
C3 = Optimum or
“Factory Well” Drilling
Time
C2 = Learning Coefficient (impacts rate of learning)
Source: SPE 15362
Fast learning decreases time to reach the best case factory well.
C1 Excess Drilling TimeC2 Learning Curve CoefficientC3 Minimum Drilling Time
Maximum (C1+C3)
Minimum Possible
(C3)
LearningCoefficient
(C2)
Ratio =Our
=1.78
Source: SPE 15362
Example: Fast learning decreases time to reach the best case horizontal well.
1 2 3 4 5 6 7 8 9 10 11 12 $-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Projected Learning Curve
Total Cost $MM
Learning typically accounts for 55% of cost of first 6 wells in a Program.
Brett, J.F. and Millheim, K.K.: "The Drilling Performance Curve: A Yardstick for Judging Drilling Performance", SPE 15362, presented at 1985 SPE Annual Technical Conference, New Orleans, Louisiana.
Gains are harder to
achieve here…
New technology can cause a step change in performance.
• C3 represents the limits of the current technology and organizational ability, not necessarily the fastest possible time to drill wells in the area.
C3 with Old Technology
C3 with NewMore Efficient Technology
Source: SPE 15362
If prices turn-around the challenge will be: Organizational Forgetting!
• FORGETTING: Organization overcame serious stuck pipe on the first and second wells, forgot about the stuck pipe problem during the seven year hiatus
• LOSS OF KEY PERSONNEL: Key members of the drilling organization left. New team re-learned the hard way.
Forgetting Loss of Personnel Source:SPE 15362
METHODS OF IMPLEMENTATION
Organizational Learning and Continuous Improvement
RapidOrganizational
Learning requires a managed process…
Source: CartoonStock
Learning requires time, resources, and management support.
• Coach on location to capture and teach lessons– E.G. “What lessons learned apply to this section of the hole and
what did we learn in the past 24 hours?”• Review existing records and generate risk factor/lessons
learned database.• Capture lessons learned during meetings at every tour.• Generate a standard operating procedure.• Review procedure/lessons learned in spud meeting, tour
changes, hand-off meeting between well-site supervisors, etc.
Learning is an iterative process.
The process has distinct phases.
Phase 1 – Analyze
Data
Phase 2 – Plan, Do, Measure,
Learn
Phase 3 – Discuss,
Document, Challenge
Phase 1 – Analyze
• FACTS not just OPINIONS• Identify areas of most variance and poor
performance through historical analysis.• Compile an overall consensus on which
questions need to be answered to produce the most efficient result in performance improvement.
• Implement Plan-Do-Measure-Learn continuous learning cycle using performance coaching in field.
• Perform Planning and After Action Review sessions.• Review Daily Task List with rig crews.• Make Performance Visible displaying daily graphics.• Capture Learnings and share throughout all
operations.
Phase 2 – Plan, Do, Measure, Learn
• Transfer daily capture of lessons learned to organizational leaders and shift focus of coaches towards creating Operational Best Practices (“OBP”).
• Discuss all operational phases with rig leadership and office team.
• Document each operational phase imbedding learnings and operating procedures.
• Challenge the OBP to achieve final copy status.• Begin using OBP for Pre-tour reviews, Planning & After
Action Sessions, and capturing Learning’s.• Maintain OBP as “Living Document” continuously reviewed
and updated with current “Best Practice”.
Phase 3 – Capture:Discuss, Document, Challenge
IMPORTANCE OF TRIBAL KNOWLEDGE
Organizational Learning and Continuous Improvement
Great ideas often come from unexpected places…
The Industry is good with Viral Knowledge but often loses critical Tribal Knowledge.
LEVERAGING I.T.Organizational Learning and Continuous Improvement
Learning can be accelerated through information technology.
• Web-conferencing– Application Sharing– Video
• Web-based project management tools
• Cloud-based document storage
• Lessons Learned Database Tools
• Mobile Applications
Source: CartoonStock
REAL WORLD RESULTSOrganizational Learning and Continuous Improvement
Navidad had great results with Organizational Learning/Continuous Improvement.
• 13 Month Program• Direct savings of $9.2MM+• ROI of 10:1 on learning intiative• 2 String Design (completed well) improved
by $42.79/ft.• 3 String Design (drilling only) improved $36.63/ft.• Play covered 100,000 acres, so individual well
cost savings had ~200 Fold impact.
Questions?
Source: CartoonStock