American Oil and Gas Reporter - March 2018 - 70

SpecialReport: Advancing Shale Science

Wireless Technologies Optimize Pads
By Tom Bass
AUSTIN, TX.-Advances in wireless
automation technology are driving both
immediate and long-term cost reductions
and operational efficiency in pad well
production, helping oil and gas companies
achieve operational excellence in tight
oil and natural gas resource plays.
Operators cannot control prevailing
commodity prices, but they can create
value by changing the efficiency with
which wells are brought to production
and operated. Leveraging wireless automated solutions is allowing producing
companies to achieve significant productivity improvements on their multiwell pads. This shift in operational philosophy and risk tolerance demonstrates
the benefits of changing traditional operational strategies.
The willingness to adapt and change
has made a positive impact on how production facilities are designed and constructed in shale plays, ensuring more
efficient use of capital and reliable operations for the duration of a field development. In fact, based on a study of 34

North American operators, the companies
using standardized well pad designs and
the latest wireless automation technologies
have attained a capital savings of more
than $75,000 per four-well pad, while
also improving production performance
and reliability.
Operators realized significant cost savings during the downturn as a result of
reduced rates for labor, material and other
market-driven costs, in addition to applying
advanced production processes to drilling
and completion operations. Through these
efficiencies and cost deflation, the
breakeven prices for operators across all
basins decreased. However, only an estimated 30-35 percent of the cost reductions
made during the down cycle can be attributed to repeatable efficiencies. The
other 65-70 percent were based on temporary market conditions, and cannot be
sustained as commodity prices recover
and stabilize at higher levels.
An example of sustainable cost reductions for drilling would be upgraded
rigs that reduce cycle times and result in
more wells drilled per rig. Alternatively,
primary cost inputs such as day rates or

FIGURE 1
Wireless versus Wired Cost Savings
Wireless-Wired Cost Differential
Wellhead
Separation
Tanks
Controller, SCADA & Wireless Infrastructure
Total Cost Differential

(9,768)
(6,000)
(24,544)
5,500
$(34,812)

Wireless-Wired Installation, Material & Labor Cost Differential
Wellhead
Separation
Tanks
Controller
Total Installation & Labor Cost Differential
Total Installed & Commissioned Cost Reduction
Facilities CAPEX Reduction*
70 THE AMERICAN OIL & GAS REPORTER

25,273
16,182
57,040
10,000
$108,495
$73,683
6.4%

drill pipe and drilling mud are cyclical,
and are expected to increase significantly
as industry drilling activity rebounds.
Sustainable reductions in completed
well costs only can be achieved when
operators re-evaluate and modernize legacy
operating practices and engineering standards. Wireless sensors and remote telemetry units (RTU) provide an automation
architecture that enables a standardized
well pad design, streamlines construction
processes, reduces waste and increases
the speed of execution necessary to achieve
long-term sustainable results.
Demonstrable Impact
Wireless technologies can have a demonstrable impact on three of the top five
lease operating expense (LOE) line-item
costs: repairs and maintenance, production
chemicals, and labor. Together, these costs
account for 45 percent of total LOE on a
per-barrel-of-oil-equivalent basis.
Advanced wireless monitoring capabilities enable a lease operator or pumper
to focus on the highest-value tasks while
on a pad site or central production facility,
and reduce safety risks associated with
loss of containment. Seamless integration
enables operators to access actionable
diagnostic information through local or
secure wide-area communications without complicated integration work to expand operational visibility and add a
layer of protection from manual errors,
further reducing safety risk and enhancing productivity.
As part of an overall asset operational
excellence strategy, wireless technology
helps operators attain measurable performance improvements in facility construction costs and scheduling. The results
of the collaborative benchmarking cost
analysis of 34 operators showed an average
savings ranging from $30,000 per pad in
dry gas fields in the Appalachian Basin
to more than $200,000 per pad in Williston
Basin tight oil plays. Although differences
in savings varied based on the type of
field, geography and facility, all operators
saw sustainable savings by implementing
wireless technologies.
Figure 1 compares wireless and wired
sensors and associated controllers/RTUs
with equivalent functional specifications
for wellhead, separation and tank battery
facilities. It is based on operator data
from the Eagle Ford, Permian Basin,
American Oil and Gas Reporter - March 2018

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