training specialists to the upstream oil and gas industry
 
 

Well Costing - Intermediate

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Course overview

Among all the activities undertaken by oil and gas companies, well drilling could rank as one of the most expensive and riskiest decisions.  The cost of drilling a well is constantly being reviewed and contested in the industry today as it moves towards exploring for hydrocarbons in more difficult locations, ever deeper water and unconventional plays. Combined with the high costs in the exploration process, fluctuating price of oil and increased demand for technology, well costs continue to climb.

With such high cost considerations at play during the well planning and drilling phases, drilling engineers and accountants must generate accurate and efficient cost estimates for their operations throughout the life of a well.

This targeted training course will explore in detail the various issues and challenges in developing clear and concise planning and budget reports for well development and drilling

An emphasis on the nomenclature and terminology will be clearly defined to demystify the industry and enable more effective communication between colleagues from technical and financial backgrounds when discussing issues and requests for information for well costing purposes.

The course delivery will be through formal presentation, discussion and delegate participation. There will be case studies, worked examples and workshops providing delegates with a “hands on” experience that is highly interactive.

The course is designed for

  • This course has been developed for accounting and finance staff within the industry who need to broaden their understanding of the fundamentals of upstream oil and gas accounting
  • It is also relevant to those within the industry who have responsibility within their area of activity to provide information to be used for financial purposes and to use information provided by finance and accounts for analysis in decision making
  • Suggested attendees include joint venture / management accountants, joint venture / internal auditors, financial analysts, economists and senior / chief accountants, asset managers.

Course objectives

  • Understand the key stages in the well drilling process from surface to reservoir
  • Learn and improve the preparation of well AFE’s (Authority for Expenditure) to provide more accurate cost control
  • Learn how drilling commitments are controlled and reported
  • Understand and produce accurate well cost reports for operators and project partners
  • To use ERP (Enterprise Resource Planning) solutions to develop meaningful well cost control reports
  • How to manage and control well drilling costs through various reporting and reconciliation methods
  • Examine the purpose and role in risk management when increasing operation efficiency and safety together
  • Examine audit rights under a typical JOA and learn how to prepare for JV audits

Course outline

Controlling actual well drilling and completion costs 

Controlling and reporting financial commitments
Developing cost information relating to key day rate costs for equipment, services & personnel
Developing cost information relating to materials & supplies
Tracking drilling costs on a daily basis
Role of cost tracker in relation to well operations, drilling and the company man
Comparing invoiced costs to tracked costs and reporting variances
How to identify cost over-runs and prepare information for an AFE supplement

Well cost reporting and post drilling reconciliations 

Reporting daily, weekly and monthly estimated drilling costs
Using Enterprise Resource Planning (ERP) solutions to develop meaningful well  cost control and variance reporting
Understanding the array of well cost reporting and how to analyse them
Methodology for detailed well cost reconciliations to required industry standard
How to perform monthly materials usage stock reconciliations  
Discussion of audit trails, reporting and liaison with accounting (VOWD / accrual info)
Audit rights under JOA and preparation for JV audits
Final well cost review and materials and usage reconciliations

Wind up and course review

Overview of Well Drilling & Completion

Exploring for oil and gas, a process of reducing uncertainty
Well drilling process from surface to reservoir
Formation evaluation and well completion
Well design and preparation of the drilling plan
Roles of operator, contractor and company man
Technical reporting whilst drilling

Role of the AFE (Authorisation for Expenditure)

Preparing a well AFE, setting up an AFE tracking system
Using project management techniques to plan, organise & control resources
Rig contract and support services for drilling
Materials and supplies using in well drilling
Typical well cost breakdown – onshore well
Typical well cost breakdown – offshore well
Designing & building a robust well cost estimating model

Risk management of drilling operations

Managing risk to raise the bar for operations and well management safety
Mitigation of risk is directly related to on-target performance and operational excellence
The role of well costing in Operational Excellence Management Systems (OEMS)


 

Location Start Date End Date Cost Trainer Book
Kuala Lumpur 22 May 2017 24 May 2017  £1,390  Geoffrey Killick
Bahrain 26 Jun 2017 28 Jun 2017  £1,390  Simon Law

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