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Newer, faster, stronger: drilling efficiencies in deepwater GoM are good news for operators


Newer, faster, stronger: drilling efficiencies in deepwater GoM are good news for operators

Report summary

In deepwater Gulf of Mexico (GoM), drilling efficiency (DE) has improved by 37% since 2014 as operators high-grade and decrease activity in emerging plays. Gains in DE have supported the key theme of capital reduction in the region during the low oil price environment. Well type plays an important role in DE; development wells are drilled 5% and 11% more efficiently than exploration and appraisal wells, respectively. Operators become more efficient drillers during a field's life, seeing an improvement of 20% to 40%. New generation rigs are set to make a mark as they become more predominant in deepwater GoM. We estimate over 93% of deepwater GoM rigs to be gens 6 and 7 in 2016. DE is expected to improve as older rigs retire and newer rigs increase activity in legacy plays. We expect 25 rigs to be active in deepwater GoM in 2017, of these 96% will be a newer gen rigs. A 20% increase in DE is material enough to reduce breakevens by 7% to 9% across all plays in deepwater GoM.

What's included?

This report includes 2 file(s)

  • Drilling Efficiencies GoM.pdf PDF - 1.79 MB
  • Drilling Efficiencies GoM.xls XLS - 356.00 KB

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This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • Drilling efficiency (DE): a key element in optimizing project economics
    • High grading driving big DE gains
    • Experience and well type matters
    • New generation rigs set to make a mark
    • Offshore drillers matching onshore rates
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