AFE: location preparation

Preparing the location to accept the rig is an important cost factor and perhaps the most difficult to quantify. The authority for expenditures (AFE) developed for each well must include a reasonable estimate of these costs, despite the uncertainties.

Overview

This process involve:

• Legal costs.
• Surveying the location site.
• Physical location preparation.
• Post-drilling cleanup.

These costs created due to land preparation are affected by:

• Rig type
• Rig size
• Well location

Land preparation process and factors

Location costs include only those variables actually involved with a rig move-in. These costs do not include lease fees or bidding cost. Individual companies must determine appropriate methods for handling these costs in the well cost estimate.

Permits

Permits, or “permitting” the well, are required in virtually every drilling area in the world. Some permit procedures are as simple as preparing a few fill-in-the-blank documents, while others may require extensive, time-consuming efforts such as environmental and economic impact statements. Some well permits must be granted from federal or national authorities, while others may be obtained quickly from local agencies. Permitting a well is primarily a legal matter that often requires significant consultation with legal groups.

Spotting

“Spotting” the well involves surveying the wellsite and determining its exact location. Land sites can be spotted by professional surveyors with the use of local, known markers. Offshore sites are spotted from offset platforms in the area. Satellite surveys can be used when spotting a well in an area, particularly in offshore environments where marker sites such as existing platforms are not available.

Right of way

Right-of-way from a public access road to the actual drilling site for land wells must be considered. If the off-road distance is small, or through single owner land, the permit may be obtained quite easily. Difficulties may arise for distant locations, multiple landowners, or public access areas. As in the case of obtaining permits, right-of-ways are often a matter for the legal departments.

Location and environment

Preparing the location to accept the rig depends on the rig type and size, as well as the location. Land rigs may require the construction of a board road and location, if the soil is too soft to support transport vehicles and the rig. Sometimes pilings are required under the substructure. The size of the turnaround and the number of board plys will increase with larger rigs. Mountainous locations may need a road built to the site. In addition, factors such as the size of the mud reserve pit and the chemicals storage area depend on drilling times, mud types, and mud weights.

Marsh areas usually require that a canal or channel be dredged to the site. The depth and width of the canal must be coordinated with the size of the rig. The rigsite at the end of the canal is a larger area that must be dredged. Shell pads for a rig foundation may be required in marshy areas if:

• The water depth is sufficiently deep to prevent the direct use of a barge rig.
• The seabed is very soft.
• The seabed erodes because of subsea currents.

Offshore sites often require the least amount of location preparation. If surveys of the seafloor show that no obstructions are present, the rig can be moved to the site with no additional efforts. Floating rigs are seldom troubled with soft subsurface formations that may hamper settling of the legs for jackup rigs.

Location cleanup

Location cleanup after drilling has been completed is currently undergoing close scrutiny by regulatory bodies. Most sites must be restored to a predrilling condition that may involve:

• Site leveling.
• Trucking.
• Replanting wildlife vegetation.

Offshore sites usually are required to ensure that no remaining obstructions will hamper commercial fishing operations.

See also

Authority for expenditures (AFE)

AFE:_projected_drilling_time

AFE:_drilling_rig_and_tools

AFE:_drilling_fluids

AFE:_rental_equipment

AFE:_cementing

AFE:_support_services

AFE:_transportation

AFE:_supervision_and_administration

AFE:_tubulars

AFE:_wellhead_equipment

AFE:_completion_equipment

PEH:Introduction_to_Well_Planning