Heavy equipment machinery

May 2, 2007

Precision Drilling Trust: Offering Income & Growth

Filed under: Drilling Rigs

Precision Drilling Trust (PDS) is the leading provider of energy services to the Canadian oil and gas industry.

Income-oriented investors might want to take a look at Precision Drilling, because it is an open-ended investment trust that makes monthly cash distributions.  The estimated dividend yield for FY 2006 is about 12 percent. The Trust holds a 99.12% interest in Precision Drilling Limited Partnerships (which owns Precision Drilling Corp.).

Company Overview
Precision’s operations are reported in two segments. The Contract Drilling Services segment—which comprises the foundation of the Company’s oilfield services enterprise (about 77 percent of operating profits)—includes contract drilling rigs, camp and catering (LRG Catering), oilfield supply, and manufacturing divisions. The Completion and Production Services segment includes well servicing (for completions, workover, maintenance and abandonment work on any well), wastewater treatment units, rig-assist snubbing (for under-balanced drilling), and rental divisions.

Precision is Canada’s largest drilling contractor with a 30 percent market share and a modern fleet that consists of 234 rigs covering depth ranges from a few hundred meters to almost 6,700 meters.

Precision dominates in the Western Canada Sedimentary Basin [WCSB]. The WCSB has a complex mix of energy reserves—oil sands, heavy oil, conventional oil, coal bed methane, deep gas and shallow gas—as well as challenging geography and ever-changing weather conditions. As the basin matures, Precision is able to offer its customers greater efficiencies and “best-of” technology through the provision of a diversified inventory of oil-service equipment and a highly qualified and experienced technical staff.

Precision has a balanced drilling rig portfolio, with a particular strength in deep drilling. As customers turn to deeper wells to discover new reserves, Precision’s 40 percent market share in rigs with a depth capacity greater than 3,600 meters is noteworthy. Drilling opportunities for natural gas reserves is a market where the Company has an advantage, a market many expect to emerge in Canada.

Financial Overview
For the six months ended June 30, 2006, earnings from continuing operations were $312.5 million on revenue of $759.9 million, as compared to $97.6 million on revenue of $541.3 million in 2005. The 1H:06 benefited from a combination of higher equipment utilization (in part due to dry weather conditions) and continued strong pricing in both the Contract Drilling and the Completion and Production business segments.

Net earnings per unit share were $2.49 in the 1H:06 compared to $1.32 in 2005. A lower effective tax rate (as Precision converted to a Trust in November 2005) and substantively enacted tax rate reductions contributed to an increase of $0.81 per unit in the 1:06 over the same period last year. The effective income tax rate in the 1H:06 was about 8 percent compared to 37 percent last year.

In the 1H:06, the Company had a dividend payout ratio of 68.3 percent, declaring $1.70 in distributions per unit share.

Precision’s liquidity and financial health remains strong, as working capital exceeded long-term debt and other liabilities by $83.7 million at June 30, 2006. Long-term debt stood at $45.0 million, for a long-term debt to long-term debt (plus equity ratio) of 4.0 percent.

Growth Initiatives
Accretive growth is being delivered organically through the addition of new equipment lines across the organization and geographic expansion into other North American markets. Growth is anticipated, too, from value-added acquisitions.

Precision Drilling is moving forward on several growth initiatives:
PDS Logo

1. The geographic expansion of Precision’s Contract Drilling services segment to the United States is proceeding as planned. A drilling rig commenced work in Texas in late June 2006. Plans to construct an additional 10 drilling rigs for the U.S. market is proceeding on schedule. Precision expects to have a fleet of 11 drilling rigs operating in the U.S. by the end of the second quarter of 2008.

2. By the 4Q:07, Precision expects to have a fleet of 252 drilling rigs operating in Canada, up from the 2Q:06 end count of 234.

3. The Completion and Production Services segment has initiated several growth measures for its domestic market. The Service Rig unit secured a long-term customer commitment to construct two slant service rigs for the heavy oil market.

4. By the 1Q:07, the Company’s Production Services segment expects to be operating a fleet of 239 service rigs compared to a current fleet size of 237.

5. In addition, the snubbing unit division has initiated plans to construct four new stand-alone units, of which two will be a rack and pinion design. By the end of the 3Q:07, Precision expects to be operating a snubbing fleet of 30 units.

6. In August 2006, Precision acquired Terra Water Group Ltd., an Alberta based company that operates 40 wastewater treatment units for the traditional drilling rig camp market in western Canada

Valuation Analysis
The oil-service industry has been in a freefall since May, as investors fled the stocks in the belief that declining energy prices meant that the current cycle in drilling activity was peaking. The Philadelphia Oil Service Sector Index [OSX] has slipped 20.2 percent in the last five-months.
PDS Drilling
Our forward view remains that energy prices will stabilize, and possibly turn higher, because a supply imbalance (where field depletion rates outstrip new reserve additions) will put a floor on commodity prices and precipitate the continuing need for exploration and drilling activity.

Although oil and gas prices have slipped, they still remain high relative to historical benchmarks. West-Texas Intermediate [WTI] oil prices averaged US $56 per barrel during 2005, an increase of 37 percent over the 2004 average of US $41 per barrel.

North American natural gas prices are also being supported by strong fundamentals (as older, shallow wells are being depleted). North American Henry Hub natural gas prices surged 45 percent in 2005, averaging US $8.96 per mmbtu, an increase of US $2.78 per mmbtu over 2004. Demand for natural gas is increasing with economic activity while the supply from relatively mature basins is continuing to decline.

Industry fundamentals remain strong in Canada. Although the Canadian Association of Oilwell Drilling Contractors has decreased its 2006 industry well count forecast from 26,070 to 23,827 wells, it has increased its estimate of average drilling rig operating days per well assumption from 6.4 to 7.2 days. This results in a net increase of 3 percent in the forecast industry operating days for 2006 from 166,849 to 171,489 days.

On a valuation basis, Precision Drilling is selling at for a forward 12-month P/E multiple and trailing EV/EBITDA of 8.73 times and 5.90 times, respectively. The Common Stock is selling at a discount to its peers: Schlumberger Ltd. (SLB), 16.68x and 14.03x; Baker Hughes Inc. (BHI), 13.55x and 10.54 times; and, Nabors Industries Ltd. (NBR), 6.42x and 7.19 times, respectively.

Precision offers attractive growth prospects (and income) for value-oriented investors and a “bounce” trading opportunity for speculators (the stock has slipped about 23 percent in price since early May).

For traders, the catalysts for a positive shift in investor sentiment could be a colder-than expected winter in North America and a firming in energy prices.

Investment Risks and Considerations

Financial performance in the oilfield service industry in Canada is subject to seasonal trends. The first quarter is usually the most active and prosperous as winter ground conditions typically allow complete access to well locations [frozen lakes and compacted snow make for good roads]. In the second quarter, spring weather (rain) softens ground conditions and can slow oilfield service activity dramatically. Subject to dry weather, activity resumes and will sequentially gain momentum in the third and fourth quarters.

Volatility in oil and natural gas prices can impact Precision’s customers’ activity levels and spending for its products and services. While current energy prices are important contributors to positive cash flow for its customers, expectations about future prices and price volatility are generally more important for determining future capital spending levels. For example, almost three-quarters of the drilling activity in western Canada is targeting natural gas reservoirs, making this activity the primary driver of demand for Canadian oilfield services. A continued decline in natural gas prices could lead to capital spending cuts by the customers—with a resultant slowdown in demand for Precision’s products and services

Precision operates in a highly competitive environment, which may adversely affect the Company’s ability pricing power (e.g. rig rates).

Editor David J Phillips is long on shares of Precision Drilling Trust but has no financial interest in any other company mentioned in this posting. The 10Q Detective has a full disclosure policy.

PDS 1-yr chart:



http://energy.seekingalpha.com/article/18805

Drilling Rig Coating Surveys

Filed under: Drilling Rigs

One of the most demanding and critical assignments that can be given to a NACE Certified Coating Inspector is to be the coatings member of a team that is conducting a condition survey of an offshore drilling rig. These surveys are the foundation blocks that management depends upon to plan the timing and size of maintenance repairs and maintenance painting of their fleet of drilling rigs.

A rig only makes money for the owner when it is drilling, thus the ability of the coating systems to protect the structure for extended periods with minimal maintenance by the rig’s crew is extremely important. Unfortunately, rig crews are trained in all aspects of drilling, but hardly ever in proper maintenance painting.

On a regular basis, the rig must be surveyed in much the same way that a ship must be surveyed in order to maintain its classification for drilling purposes by such societies as the American Bureau of Shipping (ABS), Det Norske Veritas (DNV), Lloyds of London, etc. The survey team normally consists of a minimum of one experienced construction or fabrication person; one experienced coating inspector, and one or more Non-Destructive Testing (NDT) technicians.

The survey team must inspect and rate every critical piece of steel on the rig as to the remaining wall thickness of the metal and the condition of the coating systems protecting the metal. They must also verify the wall thickness of all critical piping systems.

Surveying a platform type production rig is relatively simple since those structures are fairly open and easily accessible. A drilling rig is exactly the opposite. It is a very complex structure full of all sizes and types of tanks, each of which is critical to the structural stability of the rig. A Jack-Up drilling rig usually has a minimum of twelve (12) preload tanks, two (2) drill water tanks, six (6) ballast tanks, eight (8) void tanks, four (4) mud pits, two (2) potable water tanks, and four (4) cofferdams. In addition it has sack storage rooms, engine rooms, equipment storage rooms, generator rooms, pipe storage decks, etc. Each of these takes a severe beating in the normal daily operation of the rig. Semi-submersible drilling rigs have even more compartments, including three to four large upright caissons and at least two horizontal pontoons with multiple chambers in each. Drill ships have even more tanks and compartments, depending on the size of the ship.

Naval architects who design these rigs are concerned with the maximum utilization of space, hence the size of the tanks can range from large tanks with depths of more than 25 feet to small tanks with depths of only 6 feet. However, for structural reasons all of these have many compartments within each tank. The only way to access these tanks is through a manhole in the deck and manways cut into the bulkheads of each compartment. Rarely are these manholes and manways cut to fit the average male. A huge amount of grunting and groaning and contortions are required to get into and out of these tanks.

In order to survey these properly, they have to be emptied and gas freed before the team goes in. All of the survey work has to be done while the rig is drilling, which means that tanks have to be emptied and filled in a sequence that allows the rig to continue to drill while the survey is going on. This is time consuming and difficult work, particularly in the harsh winter environment of the North Sea and the hot, humid environment of Africa and Southeast Asia.

Condition surveys run on a very tight schedule. The working day is generally from six in the morning to six at night with one mid-morning break, a lunch break, and one mid-afternoon break. During the work, the NDT technicians will take hundreds of metal thickness readings with ultrasonic gauges. The team leader is usually the structural person who determines the number of readings by visually inspecting the steel for evidence of corrosive attack and often by sounding the steel with a pick hammer to guide the technicians to areas that might have lost sufficient metal cross section that they have to be identified for replacement at the next available break between drilling contracts.

The NACE Certified Coatings Inspector has to use his experience and judgement right alongside the structural leader to determine which areas of the tanks have which type of coating breakdown, amount of coating thickness remaining, cause of coatings breakdown, type of surface preparation required during the next scheduled maintenance painting, and sometimes even prepare suggested coatings systems.

The gauge manual is also available on the web-site as a pdf file, so can be accessed from any internet terminal. Presumably any minor changes or improvement to the manual will be shown in the version on the web. I noticed that my manual says that software will become available, and looking at the web-site it has already become available, so there is one appropriate change.

The gauge will read within a fairly wide range of measurements, and its parameters are described as follows: Air temperature -20ºC to 75ºC, -4ºF to 167ºF Surface temperature -30ºC to 60ºC, -22ºF to 140ºF (accuracy +/- 0.5ºC, 1ºF) 60ºC to 300ºC, -140ºF to 572ºF (accuracy +/- 1.5ºC, 3ºF) Humidity 0% to 100% (accuracy +/- 3%)

This should easily be wide enough for most inspections, but don’t ask me to stand holding the contact probe on a surface for too long at 300ºC, please (or at -30ºC for that matter)

The gauge has a reassuring "chunky" feel about it. There is enough weight to make it feel reliable. Silly, subjective judgment, I know, but on such issues is confidence built.

Many adjustments can be made to the gauge in set-up menus. First and not least, it can be changed to read imperial ("American/English") units rather than metric. The time and date must be set, and LCD screen contrast can be changed-useful on site, in summer.

These electronic gauges are convenient, and digital display or print-out of measurements looks authoritative. My concerns about this kind of gauge are about accuracy, and reproducibility, and early RH gauges were not particularly good in this respect. Maybe the DEWcheck has this under control. I’ll report back next time with results of field experience.

http://www.heavymachineryinfo.com/admin/index.php?ToDo=createArticlePage

Drill rig makes favourable impact

Filed under: Drilling Rigs

The production target at Leviathan Resources’ Stawell gold mine in Victoria for 2006 is 130,000oz, a dramatic increase from 100,000oz in 2004.

Now, with the help of a new Simba M6C production drill and four Atlas Copco MT5010s, this task is firmly on track.

The mine bought four 50t Atlas Copco MT5010s last year, the last of which arrived on site in January. A more recent Atlas Copco addition to the equipment fleet is the Simba M6C delivered at the end of June.

Previously the site used two Simba 1354s for production drilling, but after completing a one week initiation on low-priority stope drilling for fine-tuning, the new Simba has taken over from one of the 1354s as the front line stope drill.

Stawell senior mining engineer of operations Andrew McDougall says the older Atlas Copco machines that the Simba is replacing have served the mine well.

“Together they have clocked up over 23,000 hours and drilled over 1.4M metres, which is exceptional,” McDougall says.

“One of the rigs has 13,500 hours and this will be retired from service. The remaining rig will be used more for cable and sludge drilling, enabling the new Simba to take over and optimise the majority of the stope drilling.”

The Simba M6C hydraulic top-hammer production drill rig has a hole diameter range of 51-89mm and can drill holes up to 31m deep. The rig has a rig control system with an interactive control panel that displays the computer-based drilling system in colour.

Sturdy and easily manoeuvrable in narrow drifts, Stawell’s articulated four-wheel-drive Simba has a COP 1838 HEX drifter with advanced double reflex dampening. It combines high-speed drilling with good drill steel economy.

McDougall says the M6C has a range of practical features for ease of operation, operator comfort and maximum production efficiencies.

The decision to buy a new production drill from Atlas Copco arose from these characteristics, as well as having other Atlas Copco equipment already working on site, which enables the sharing of parts, and the streamlining of maintenance and training procedures.

“We discussed our equipment options with a number of suppliers,” McDougall says.

“So it wasn’t only past experience and the current fleet that influenced the decision. Comparison of the equipment put forward showed that the Atlas Copco Simba had the best vision from the cabin, would provide excellent production efficiencies and was well backed by a strong technical support team.

“While the M6C has only been on site a short time, so far it has proven a wise investment,” he says.

“Operators report that it is manoeuvrable, extremely comfortable and, because of the sturdy positioning unit, makes accurate positioning and precise drilling easier than on other rigs they’ve worked with.”

The positive operator feedback is partly due to comfort considerations such as an enclosed, climate-controlled cabin not featured on the older rigs previously used.

As part of the purchase, Stawell took up a maintenance contract that involves Atlas Copco personnel training Stawell’s fitters to perform routine maintenance on the equipment. Surface training was conducted for fitters and a week of underground training for operators.

Atlas Copco trainers will attend site to provide refresher training at regular intervals.

“So far the Simba M6C has performed very well against our expectations,” McDougall says.

“From the initial demonstration onwards we have had excellent customer service from helpful, knowledgeable and professional Atlas Copco personnel. Based on my experience with this purchase I would buy this and other Atlas Copco equipment again in future,” he says.

http://www.ferret.com.au/articles/af/0c0329af.asp

Vibrations in drill rigs

Filed under: Drilling Rigs

The dynamical behaviour of an active drilling assembly used in the oil or gas industry is complex. This article provides an overview of the vibrational states experienced by such a system and explains an approach taken to control them.

Digging a hole in the ground is an infamously mundane task. If, however, you are using a drill with a bit at the end of a 5km long shaft, then the task is anything but dull. The scale of the operation aside, one of the most complex aspects of this type of task is dealing with unwanted vibration. These problems can become even more demanding when the hole is under the sea. Work carried out in the Department of Physics at the University of Lancaster has been exploring some of these problems and suggesting new solutions to eliminate them.

Drilling assembly

A major component of a drilling assembly consists essentially of a series of hollow cylindrical steel pipes connected to form a long flexible drill-string, to which is attached a short heavier segment containing a cutting device at the free end (the drill-bit). This segment may contain stabilising fins designed to minimise lateral motion during drilling and together with the drill-bit it constitutes the bottom hole assembly (BHA). Drill-strings are driven in a rotary fashion from the tcp end, often by means of an electric motor and gearbox - the top-drive - and these are constrained to pass at a controlled rate through a rotating mass (the rotary) near the surface. Such a drilling system is designed to construct a bore-hole linking the earth’s surface to a reservoir of oil or gas.

The bore-hole

The bore-hole is lined (usually with steel) and the excess in the diameter of this cavity over the diameter of the drill pipe is called the over-gauge. This annular gap (which in general varies along the bore-hole) is necessary for the conduction of fluids. These are a source of external interaction along the drill-string in addition to gravity and the occasional contact with the bore liner. During the process of drilling, pressurised fluid (’mud’) is continuously circulated down the centre of the drill string, out of holes in the drill-bit and back to the surface via the space between the rotating drill-string and the bore-liner.Fig 1. Dangerous vibrational modes of the BHA Its primary purpose is to cool and lubricate the drill-bit, as well as to remove the cuttings produced by the drill-bit. When operating the drill-string and BHA are prone to dynamic instabilities that are not fully understood. Field experiences, however, have provided ample testament to the destructive consequences of such instabilities. Although extensive literature has been devoted to the analysis of distinct aspects of the dynamics of the drill-string and BHA, it is only recently that the virtues of treating the drilling assembly as an integrated system have been considered. The physics involved is inherently non-linear and recourse to modelling is inevitable to compensate for a lack of detailed dynamical information in the vicinity of the bit.

Mathematical modelling of the drill-string

The steel strings under consideration have a ratio of average diameter to length of the order of I 0~ (which is less than that of the average human hair). Due to the earth’s gravity a drill-string’s horizontal length differs from its vertical length by between one and two metres. This suggests that it can be effectively modelled by elastic space-curves with structure. (That is to say the model treats the drill-string as an ‘elastic band’ that can stretch, twist, bend and shear). Supplemented with appropriate material constitutive relations and boundary conditions the model can fully accommodate the modes of vibration that are traditionally associated with the motion of drill strings in the engineering literature:
  • Axial motion or vibration along its length
  • Torsional or rotational motion about its long axis
  • Transverse or lateral motion
  • Whirling vibrations (motion in a plane about a vertical axis).
Although the model accommodates arbitrary displacements and deformations its use in describing small amplitude vibrations about various stationary configurations offers valuable guidance for the attainment of stable drilling processes. The fully nonlinear aspects of the motion are, however, needed to appreciate the significance of some of the most important non-perturbative vibrational phenomena observed in the field. These include:
  • Torsional relaxation oscillations induced by non-linear frictional torques between the drill bit at the rock surface (torsional ’slip-stick’)
  • Axial vibrations that induce the drill-bit to intermittently lose contact with the rock surface (’bit bounce’)
  • Whirling motion of the drill-string and the motion of the bit in the bore-hole (bit and BHA-whirl)
  • Collision of the rotating drill-string with the bore-liner.

Fig 2. Lancaster drill-string simulation test rigModels of course need to be tested, and part of the work carried out at the University of Lancaster has included the dynamical testing of a scale model of a drill-string. The segmented drill-string is represented by a fine chain, hung vertically (with its extremity in mollasses!) and driven by a motor. Figure 2 shows one of our test rigs.

Torsional slip-stick

Torsional ’slip-stick’ is often regarded as one of the most damaging modes of vibration when drilling with low rotary speeds. Fig 3. Torsional slip-stick controlFor a typical drill-string, with length of around 5000m, such a torsional disturbance consists of a travelling torsional pulse that bounces back and forth between the top rotary and the drill-bit every few seconds, periodically forcing the drill-bit to slip and stick for extended periods at the rock surface. The amplitude of this torsional excitation can be two to four times the target or average angular speed (typically between 30 and 150RPM) set by the top-drive. The torsional excitation can give rise to enormously destructive fluctuating torques in the drill-string that, once out of control, invariably cause damage to the bit or drill-string. Even small amplitude slip-stick vibrations are thought to be a major cause of bit wear. Fig 4. Marine riser dynamicsVarious control techniques have been devised to combat this instability, but field evidence suggests that they often exhibit undesirable volatility, thereby detracting from the overall efficiency. In addition to these violent excitations that can lead to rapid failure in the drilling operation there are more subtle vibrations that are thought to contribute to fatigue crack growth, ultimately leading to component failure. These include the transfer of energy between axial, lateral and torsional motion induced by the interactions of the drill-string and a BHA with their environment. Drilling strategies and initial conditions can dramatically influence the nature of such inter-mode couplings.

Feedback control

Unless controlled, the vibrations of a drill string can lead to dramatic and damaging motions. One attempt to prevent the build up of such effects involves placing mechanical sensors on the side of the string. These respond by generating small electric currents in proportion to strains in the material. The resultant electrical signals can be analysed, and then after suitable filtering and amplification, sent to the power source driving the rotary motion. (See Figure 3).

Mud telemetry

Some sensors detect the motion of the end of the drill-string using gyroscopes cradled within the BHA. Information near the cutting action is sent to the surface as sound pulses through the ‘mud’ that is used to lubricate and effect the removal of rock cuttings. (Such ‘mud telemetry’ is more reliable than other techniques in this mechanically hostile environment - radio communication simply does not work well enough.) By varying the rate of torque production a compensating torsional wave can be sent down the drill-string to prevent the build-up of slip-stick vibrations at the drill-bit.

Negative feedback

This is an example of active feedback control and it is widely used to control unwanted torsional vibrations. The mechanism is analogous to the way an experienced driver can control his brakes to escape from a skid. Instead of continuously applying a pressure to the brake pedal, the driver alternately applies pressure on and off the pedal rapidly. The result is that the effective frictional adhesion between the road and the car tyres is dynamically modified and traction restored. In this case the feedback sensor is the driver’s sensory apparatus. Active feedback is achieved via the driver’s brain and the steering and brakes. (In modern cars the ABS servo-control replaces this feedback loop.)

Vortices

The effects of moving air on solid bodies can be both subtle and dramatic. If one draws a solid rod through a tray of milk one can observe a swirling in the fluid in the wake of the motion. If the motion is rapid enough these swirls form vortices in which eddies of fluid appear to generate isolated tornadoes of fluid with their own overall translational motion. As the vortices escape from the rod they cause it to react slightly. The impulse reactions occur as each vortex is shed from the fluid in contact with the rod. If the solid rod were free to react to these forces as it moves through the fluid it would execute an oscillatory response. This is why, for example, a falling leaf in still air ‘dances’ as it falls to earth and why a flag flaps in the way it does in a stiff breeze. The origin of the famous Tacoma Narrows suspension bridge collapse was a wind-vortex induced torsional vibration of the bridge deck, in turn excited a lateral mode of the entire bridge. The ensuing resonance caused the bridge to collapse catastrophically. The effects of such vortex-induced vibrations are very important to take into account in the design of large span suspension bridges - and undersea drilling operations.

Offshore systems

In undersea oil and gas exploration the drill-string is connected to a floating rig and passes down a hollow ‘marine riser’ that is fixed both to the floating rig and the sea bed. The marine riser protects the rotating drill-string from the sea, keeps the drill cutting debris from escaping into the environment and offers a conduit for the collection of oil and gas. Unlike onshore drilling systems, one now has to reckon with the vibrational effects of both the drill string and the surrounding ‘marine riser’. The integrity of the marine riser under a variety of conditions is crucial to the entire operation. However, our current ability to predict stress levels and fatigue rates in marine risers is inadequate, resulting in design criteria that rely on anecdotal evidence and simplified models. This is especially true for sheared flows, where the local fluid velocity of the ocean current varies with depth. Pressure on development costs and increasingly hostile field environments, including water depths over l000m, are demanding increasingly refined design strategies. Although the marine riser is kept in a state of mechanical tension to minimise its lateral motion, the effects of vortex shedding along its length can be important. The reaction forces on the marine riser as the vortices are shed cause a perceptible vibration to occur, that in time produce fatigue in the steel riser and a requirement that it be replaced before it breaks. (Any attempt to make the riser out of a more flexible material is likely to risk the excitation of enhanced lateral vibrations induced by internal hydrodynamic forces, as well as the fluid forces due to sea currents.)

Lock-in

More striking is the phenomenon of lock-in’. The frequency of vortex shedding depends on the overall speed of the sea current and the diameter of the marine riser. As this frequency approaches the natural frequency of one of the natural modes of the riser the structure and the fluid suddenly behave in unison and lock each other into a grand vibration with a common frequency that persists. This behaviour is hazardous, since the energy of the sea currents exploit the enhanced route into the motion of the riser, which now sustains motion with damaging fatigue stresses.

Stable and unstable motion induced by forced vibrations

If one tries to stand a thin rod (for example a pencil) vertically on its end on a horizontal table without constraints it proves impossible - the slightest perturbation tips it over. However, it is not too difficult to keep it from toppling over if one is allowed to move its lower end about in space. In fact, with a small amplitude oscillatory motion the lower end can be kept vertically stable if the frequency of oscillation is right. The longer the rod, the lower the frequency must be for this trick to work. The ability of an external intermittent or oscillatory motion to either amplify or stabilise the motion of a system is apparent in a wide variety of phenomena.

Cylinders in fluids - the power cable problem

Around 1930 it was noticed that overhead electrical power lines began to execute large swaying motion in light winds (less than 5mph) with sleet. In some cases cables between pylons were displaced more than 20 feet. A controversy arose as to whether this was due to some strange electrical effect (such as coronal discharge into the air) or mechanical forcing by the air. This motion came to be called ‘galloping’. One (correct) suggestion was that the presence of sleet in the environment was the problem and that ice on the cable was forming to change its shape from a stranded cylinder. With a modified profile the aerodynamic forces of lift and drag on the iced cable due to even a light wind were sufficient to amplify its swaying motion and set the cable into a ‘galloping mode’. This insight led to the introduction of damping devices that are now common on all overhead power lines world-wide, which serve to eliminate this kind of motion. (Interestingly, from time to time wind and rain induced vibrations reappear and their effects continue to puzzle. Modern long span cable-stay bridges are particularly prone to such subtle effects.)

Parametric oscillation

There is a more subtle effect that affects marine risers analogous to the amplification of sleet and rain wind-induced vibrations in cables. In those cases we saw the amplification of persistent small forcing excitations into a large-scale motion of the structure. Since the surface of the sea is not smooth as the platform rises and falls it will cause an under-sea riser to stretch in harmony as it is fixed to the sea bed. This in turn sets up axial stresses that travel down the riser and reflect off the junction where the riser terminates on the sea bed, returning to the surface. Although these axial vibrations may be small in amplitude and irregular in time their repetition can trigger an amplification mechanism that offers a new channel in which external energy can be directed into the motion of the structure. If the nature of the surface fluctuations enter a critical domain this energy slips effortlessly into the riser and deforms its shape. This triggers a lateral motion that along with the vortex shedding effects contributes to accelerated fatigue rates in the riser. This is known as parametric excitation. This article has provided just a glimpse of some of the fascinating, but difficult problems associated with drilling in the oil and gas industry. While we have suggested solutions to some problems, new ones are always appearing as we drill deeper into the earth and under ever deeper oceans.

http://www.lancs.ac.uk/users/spc/vibrations/vidr.htm

Drilling rigs hit the mark

Filed under: Drilling Rigs

ALTHOUGH this column usually looks at recent introductions and developments from manufacturers in Europe, the big debate that started recently concerned Australian contractor, Multiplex, and the ongoing saga of the new Wembley Stadium under construction.

There are reports that Multiplex’s losses on the fixed price contract will exceed $50 million and the unknown penalties for failure to complete on time need to be taken into consideration. As the contractor involved is Australian, it is probably being well reported in detail, which leaves space in this column for more positive news.

There are several announcements in the rock-drilling sector. Atlas Copco has introduced additional hammers to the Secoroc range. The latest product, the TD80, for drill holes of 200 ~ 280 mm diameter, is the latest addition to the Total Depth range (this range follows the acquisition of Ingersoll Rand’s DTH division). The new hammer is matched for use with QL80 shank bits and targets general applications such as water-well, blast hole and explorations drilling.

Atlas Copco have also introduced the ROC F9CR, equipped with the 2nd generation of Coprod high production straight hole drilling system.

Not to be outdone, major competitors, Sandvik Tamrock have also announced a new series in drilling rigs. The Ranger Rock Pilot series features a drilling control system to guarantee straight-hole quality and good performance even in the most demanding ground conditions. The system resembles the earlier introduced Rock Pilot drilling control in the Tamrock Panteras but has been customised to better meet the needs of construction applications.

Boart Longyear continues to develop its range of surface drill rigs. The latest introduction is the percussive top hammer drill string. The EL 60 drill is designed for surface drilling and offers superior performance and optimal thread life due to its engineered thread profile and tapered coupling.

These features should enhance energy transmission and distribute stress more evenly throughout the entire drill string. Performance figures would indicate that the new drill offers faster penetration, longer rod life and straight-hole drilling.

As always, there was a lot to be seen at the annual three-day SED (Site Equipment Demonstration) Show in the UK which, unusually, had very warm weather, which attracted a record crowd of over 22,000.

Various companies took the opportunity to show equipment for the first time to UK contractors, although much of what was “new to the UK” had been unveiled at other events earlier in the year. However, there were new introductions to be found.

Among those was JCB with their new 801 mini range, a completely new range of smoother, quieter, easier to operate and more comfortable 1.5t mini excavators. JCB says that the new 801 models are designed with both the operator and service engineer in mind. Also shown was JZ140 - the first 14t zero tail swing excavator to feature a full size cab, combining performance and operator benefits to an excavator which can be put to work in the most confined spaces.

Access manufacturer JLG introduced seven models of the Liftlux range of rough terrain scissor lifts (now manufactured by JLG, following the buy-out of the brand from Grove Worldwide). The new range offers platform heights from 15.3m to 32m. The 153-22, equivalent height to the current JLG Model 500RTS scissor, was also unveiled at the show with the promise of larger models to follow over the coming months.

Versalift unveiled the latest truck-mounted access platform, the LT69NF mounted on a DAF 7.5t truck. The platform offers 23m working height, a maximum horizontal outreach of 11m for one person/8.5m for two, and 2t spare payload.

Mini-excavator specialists, Kubota, used SED to unveil more new machines, including the new U15-3, considered to be the only 1.5t zero tail swing machine currently available UK. The specifications show an exceptional lifting and breakout force. There are also several enhanced safety and comfort features. The U15-3 is suitable for many different applications and users, from construction to landscaping and for plant hire companies to owner operators.

We started this column with an Australian situation and we can finish with another local topic. The Australian designed and built Kanga Loaders 7 Series Fat Track was being demonstrated at SED, equipped with a concrete breaker attachment as a safe alternative to using dangerous hand held power equipment and risk of injury.

The Kanga Loaders are rapidly gaining market acceptance because of their versatility and adaptability for new building and demolition works. The models are available in the UK with over 40 multi purpose quick-change attachments.

Roger Lindley looks at recent developments in Europe that may impact on the Australian market.

http://www.infolink.com.au/articles/5D/0C03065D.aspx

Rig improves piling efficiency

Filed under: Drilling Rigs

STEELCOM have recently purchased a Mobilram multifunctional piling rig from German manufacturer ABI. The TM 12/15 Mobilram can be supplied with piling, extracting and augering attachments and has a usable pile length of 14m.

Mounted on its own carrier the Mobilram is a self-propelled unit delivered to site on a low loader. The unit is quick to set up and all attachments are connected and disconnected quickly and safely via a rapid changing device.

The Mobilram improves piling efficiency by enabling downward pressure to be applied to the vibro hammer (crowding the hammer). It also allows the operator to align sheet pile which provides for better driving.

A drill can also be attached to the unit to allow for pre drilling in harder soils. The Mobilram is claimed to be easy to operate and will reduce the operating crew down to two. It is being offered for hire and sale throughout Australia.

Steelcom has recently completed new storage and maintenance facilities in Newcastle and employed service manager Glen Pentecost to run the facility. Pentecost has worked with ABI in Germany and the US for over 12 years and will support clients in the use of the Mobilram. His experience ranges from rig operator to the assembly of piling machinery and his piling knowledge is extensive.

http://www.infolink.com.au/articles/8A/0C03568A.aspx

Types of Oil Drilling Rigs

Filed under: Drilling Rigs

Getting down to the basics, there are several types of offshore oil rigs designed to work in a variety of locations, on certain kinds of wells, and differing environments:

    * Jackups are moveable drilling structures with bottom supports. Jackups have open-truss or columnar legs in support of their main deck or hull area.
    * Platforms cannot be moved like Jackups. They are immobile. Platforms are typically made from steel or cement and are used to drill new development wells.
    * Semisubmersibles drilling units, or Floaters, stay afloat offshore on giant pontoons or hollow columns. When filled with water, the pontoons or columns will partially submerge the unit to a desired depth. Floaters are reliable in rough seas and most frequently used for drilling new wells (Wildcat Wells).

What exactly is a drilling rig? Most rigs rely on several primary systems to get the job done:

   1. A hoisting System, often referred to as the derrick or drawworks.
   2. A drive group comprised of motors, chains and compounds.
   3. A circulating system of pumps, a kelly, drill string, return lines, and pits.
   4. Well control equipment

Wells are drilled for a variety of purposes. When a new well is drilled in an effort to find new reservoirs it’s called an exploratory well. There are also development wells, which go into already proven oil fields and are designed to maximize oil production from that field.

The most common drilling technique is rotary drilling. It is a method whereby a rotating drill bit is forced downward into the earth to make a hole or wellbore. The drill bit is connected to and rotated by a drill stem, which also provides a passageway through which the drilling fluid (mud usually) is circulated.

A petroleum engineer or expert in the field of drilling could write volumes on the topic of drilling. We just want to give you the basics on JobMonkey.

We’ve talked about the types of rigs, wells, and told you that the most common type of drilling is done by rotary drills. Here’s some information about the way wells are drilled. It’s not always a case of ’straight down.’

When you hear that a well will be drilled conventionally, it means the well will be drilled straight down vertically to the oil.

Conventional drilling doesn’t always yield the best results. Oftentimes the driller will go down vertically and then make a sharp horizontal turn. Special drill bits are required for this to work. Sometimes the there will be two wellbores drilled, one over the other in fairly close proximity. Steam will be injected from above into the overhead hole which forces oil down into the lower hole facilitating easier extraction.

Slant or directional drilling is when the bit goes down at an angle. We hear about this technique more and more due to environmental concerns. Lets say the oil is in a sensitive area. You could build your rig on a less sensitive area and drill at an angle until you’re underneath that sensitive area. You get the oil without disturbing the environment so much. Multiple angled holes may be drilled from one rig to maximize production from the reservoir. With the type of equipment and technology available today, directional drilling is very precise.

http://www.jobmonkey.com/oilindustry/html/types_of_oil_drilling_rigs.html

IceCube Drilling Rig

Filed under: Drilling Rigs

A unique drilling rig, soon to be deployed to the South Pole to help an international consortium of scientists and engineers - including many from the Space Science and Engineering Center at the University of Wisconsin-Madison - to build a neutrino telescope known as IceCube is now being tested at the UW-Madison Physical Sciences Laboratory (PSL).                                     
To build IceCube, engineers and technicians will need to deploy strings of bowling ball-sized photomultiplier tubes (PMTs) deep beneath the ice at the South Pole. The PMTs will be frozen into kilometer-deep holes made with the help of the novel hot-water drilling rig now being tested at (PSL). The equipment that makes up the rig includes a drilling tower, a giant hose reel on runners, and a series of mobile drilling structures, including two 10,000-gallon water tanks. The specially constructed drilling rig must not only be able to withstand the harsh conditions of the polar environment, but also must be able to be broken down into pieces that can fit into the cargo bay of Air Force C-130 Tranport aircraft, the workhorse aircraft for the National Science Foundation’s research station at the South Pole.

The drilling rig will be available for viewing by news media on Friday, Sept. 19, from 10:30 a.m.-noon. Engineers and technicians will be on hand to describe the rig, and explain IceCube and the science behind neutrino astronomy.

http://wistechnology.com/article.php?id=226

Hydro Secures Drilling Capacity For Troll

Filed under: Drilling Rigs

Norsk Hydro ASA has on behalf of the partners in the Troll production license entered into two contracts with Awilco Offshore ASA for rental of the two newly-built semi-submersible drilling rigs WilInnovator and WilPromotor. "These two rig contracts provide a good technical and commercial solution for the long-term drilling requirements on Troll. Hydro is developing a long-term plan to increase the oil reserves in the Troll field through an extensive drilling program," says Senior Vice President Øystein Michelsen, who is head of Operations in Hydro.

The two rigs will start operations for Hydro on the Troll field medio 2009 and second quarter 2010 respectively. Each contract has a fixed five-year duration from its start-up date. Hydro has the option to extend the duration of one or both contracts to eight years, within 60 days of contract award.

Currently, Hydro is using three drilling rigs for production drilling on the Troll field. The two new rigs will replace two of the three rigs presently in operation on Troll. The contract period for these rigs ends in 2009.

As operator for Troll Oil, Hydro has been responsible for long-term development of the oil reserves located in the thin oil zones in the field. The commercial oil reserves in the field have increased from zero in 1986, to around 1.4 billion barrels. Hydro is developing a new long-term plan for increased oil recovery from Troll, where the aim is to increase the reserves by 30 percent, to over two billion barrels of oil.

So far, 113 wells have been drilled on Troll Oil, of which a large proportion are multilateral wells with between two and six branches. Altogether, there are around 300 producing well branches in the oil reservoir.

Both rigs will be built at Yantai Raffles Shipyard in China. The drilling package for the rigs will be built at National Oilwell Varco in Norway.

The estimated value of each contract is in the range of USD 650 million and USD 980 million, depending on the ultimate fixed duration of the contracts. The value is exclusive of mobilization and possible modification costs.

If the fixed operating period remains 5 years, the contracts have 5 x 1 year options. If the operating period for one or both contracts is extended to 8 years, the contracts have 8 x 1 year options.

Providence to Drill Hook Head Prospect

Providence announces details of its summer drilling program in the Celtic Sea, offshore Ireland.

Using the Petrolia semisub, which has been secured for a 50 day drilling slot, Providence and its partners have elected to drill an appraisal well on the crest of the Hook Head prospect.

The Hook Head structure is a large mid-basinal anticline where two previous wells have successfully encountered hydrocarbon bearing sands. The original IRL50/11-1 discovery well, which was drilled by

Marathon in 1971, logged c. 100 feet of hydrocarbons in five sandstone units of Lower cretaceous age. The well was not flow-tested due to severe operational issues at the time. The subsequent IRL50/11-2 appraisal well, which was drilled by Marathon in 1975 was drilled as a delineation well at the down-dip edge of the structure.

Post-drill mapping by Marathon indicates that the crest of the structure is located to the north-east of the IRL50/11-1 discovery well, which is further supported by the seismic data acquired by Providence in 2006. This crestal location is some 2 km northeast of the IRL50/11-1 well and is thought to be c. 70 meters structurally higher than the original well. The most recent in-house volumetric estimates suggest that the Hook Head discovery could contain prospective resources of up to c.70 MMBO or 250 BSCFG REC.

Commenting on today’s announcement, Tony O’Reilly Jnr., Chief Executive, said: ‘I am delighted to announce that Providence and its partners have agreed to drill Hook Head this summer. This well is not only important for proving up commercial quantities of hydrocarbons at Hook Head, but success here will also open up other fields in the Celtic Sea for future development. I look forward to updating you further over the next few months on this very exciting program’.

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