Introduction
Cameron Croft:
All right, everybody. It’s 11:00 so we’re going to get this webinar started. I’m excited about this episode in our series, saving money in oil and gas operations. Now today’s focus our episode, we’re having our subject matter expert Chad Dorsett join us today, talking about Plunger Lift Optimization and LOE Savings. Now the series is created to focus on conceptual design, ongoing operations, and facilities, all the way to plug and abandon.
Cameron Croft:
Now the reason we created this series is we wanted to interview the subject matter experts to help share knowledge throughout the industry. We really wanted to get more control. There’s a lot of anxiety going on with election year that already destabilizes oil and gas, make people more cautious. But now when you’ve got protests, riots, COVID, oil and gas prices down, we really wanted to focus on the things that we can control. So that’s the reason why we bring on these subject matter experts onto the series. So let’s kick it off.
Cameron Croft:
So before we get started, we want to do a little bit of housekeeping. Now if you’re new to Zoom, there’s a Q&A box, question and answer box that you can be typing in your questions throughout the presentation. We will try to answer those questions through the presentation, but we will have a Q&A section at the end that we will touch base on. Now a lot of us are working from home, remotely, power might shut off, a kid might walk in, something might go wrong. Don’t worry on that. This will actually be uploaded to our blog with a transcript so that way you can do a control search function, or you can look at it on our YouTube channel.
Cameron Croft:
Now what I want to introduce, is the speaker. So my name is Cameron Croft, I’m the CEO of Croft Production Systems. I’ve received my bachelor’s and my master’s from the University of Houston in mechanical engineering and project management. Also receiving my Black Belt Six Sigma. So I’m really excited about data, continuous improvement, meeting with other people that have great ideas to share. But I’m really excited about who our subject matter expert is today. His name is Chad Dorsett. He is from Impact. He recently got promoted to Director of Operations for Impact in the last six months.
Cameron Croft:
The reason I like talking with him is he’s got a very wide range of experience. Being with ConocoPhillips, Premier Natural Resources and EnerVest as an operator and production foreman. He’s literally been in the trenches, he’s had to work with vendors, had to work with field techs, field engineers, how to optimize things. He’s just got a lot of good information. Here recently, he actually joined Impact. So this is a company that specializes in plunger lift and artificial intelligence.
Cameron Croft:
Now I asked him a series of questions coming on board, what would you want to focus on? So Chad put together a list of topic highlights that he would love to talk about, listing them out from plunger optimization, conventional versus fast fall and then his big focus always when he was an operator was lowering LOEs, especially in a down market. So these are the items and topics we’re going to be covering today.
Cameron Croft:
Now in our introduction, I’ve already spoken about our webinar, what is our goal of creating this webinar series to bring in these subject matter experts on. But Chad, I really want to ask you, why did you want to come on?
Chad Dorsett:
Well, the biggest reason that I wanted to come on it is, I’ve been through several of these, what we call downturns and plummets in oil and gas prices. And so the biggest thing that we focused on as production foreman superintendent is, how do we withstand the storm? How do we come out on top and not have to cut production so low that we’re laying people off and having to really make those tough decisions on who stays, who goes type of deal.
Chad Dorsett:
So any information that I’ve got, that I can share that will help anybody in production, ultimately is going to help all service companies, Croft, Impact, the water haulers, all those guys that need to stay working and be able to take care of their families. So anything that I can do and talk about that’s going to help someone else, lower their LOEs so that they don’t have to lay someone off or so that they don’t have to shut all their production in and ultimately end up losing their job, I’m more than happy and willing to share.
Cameron Croft:
Well done. I appreciate that. And we keep saying LOEs, if you’re not familiar with it, that means lease operating expenses. I guess you’re graded on that, as a production foreman, what are your expenses?
Chad Dorsett:
Oh, yeah. Yeah. And what we determined was, the most expensive thing in operations was compression and water disposal.
Cameron Croft:
And we’re talking about that later. I know you got some good stories that I definitely want to listen to later. Because on your first one, on your topic highlight was plunger optimization. So I know you’ve got a whole slide dedicated to that. So what do you mean by optimizing?
Plunger Lift Optimization
Cameron Croft:
And we’re talking about that later. I know you got some good stories that I definitely want to listen to later. Because on your first one, on your topic highlight was plunger optimization. So I know you’ve got a whole slide dedicated to that. So what do you mean by optimizing?
Chad Dorsett:
So if you’ve got… And a lot of companies that are new to… Plungers have been around for a long time, but a lot of companies that are new to plungers and getting them to run and trying to optimize them to where your well’s producing the most efficient way that it can, they don’t realize that some of the equipment that they’ve already got on location like your total flow, your ABB, boards actually have more features built into them to optimize plungers rather than setting what we call a standalone box at the wellhead that will only optimize your plunger based off of times. And that’s really not optimizing the well and your production if you’re doing everything based off of times, like shutting time, after flow, that type of thing.
Chad Dorsett:
So when you get into plunger optimization, there’s things that you can look at like critical flow, load factors, your differentials from your wellhead to your lines. There’s so many different ways to optimize a well and then you add GAPL, which is gas, lift, assist, to plunger lift, and if you don’t have everything set up, you’ll inject, and inject, and inject constantly for 24 hours. And ultimately, what you’re doing is you’re holding the well back because you’re just pressuring up your formation, which is pushing everything back into the reservoir. That’s not what you want. You want to bring everything to surface and you want to lower your Delta P from the formation to your cells in.
Chad Dorsett:
So if you can lower that DP and optimize your production, you’re going to get more production and you’re going to be more effective and cost efficient. You’re not going to tear up equipment, you’re not going to have your lease operators out there for hours and hours at a time trying to troubleshoot this and that, because they already know, “Hey, this is where my problem is.”
Cameron Croft:
Well, so plunger optimization, so in Six Sigma, it’s always identify your resources. And that’s what you’re saying is, do a equipment inventory of what you’ve got on location. And then what were the critical factors you were looking at… I guess what were the thing you would tell your technicians, “Go out there,” they would bring you in the reports. What were you trying to identify?
Chad Dorsett:
So the first thing you identify is currently, what do we have in the well? So what are we running? What depth are we running? Where do we set our springs? Is it set in a seat nipples? Is it set on a tubing stop, collar stop? Where is our spring assembly set? And how much water, how much condensate and how much gas production do we have on that well? And so that’ll determine what plunger, what style of plunger you’re going to start with, what you’re going to go with. Do you have scale build up? Do you have paraffin? I mean, is there any issues within the well? And the person that knows that better than anybody is going to be that lease operator. Because he is closest to that well every day. He’s the one that goes out there and checks and tries to troubleshoot and try and get more production out of these wells.
Chad Dorsett:
So that’s the person that you talk to. And so as a production foreman, I would hold… What is it? Brain dead right now. So I would have well reviews on their wells quarterly. So every quarter we would sit down and go through a well review. And we would look at their production, and even in Carte, which is a production data collection that we used at EnerVest and Conoco. And so when you get in there and you start looking through their production, and you can see a trend, well, production was good and on good uplift, and then all of a sudden now production fell off. So what happened in this area that caused that? And then there’s some wells that we drilled and we’re a year into production, and the trend has flattened out and it’s now starting to take a slight dip.
Chad Dorsett:
And so that’s the time, you’re looking at the production daily, but when you see that production flatten out and that curves stop right there, to me, that’s the time that I wanted to put my plungers in because then maybe I can stabilize it there and not see that dramatic decline on that curve. And it helped quite a bit when we would install early, as far as getting plungers in there.
Cameron Croft:
Was there a I guess a common mistake that you would see when a lot of operators are trying to I guess optimize a plunger was there something like a big key you would always tell your people or, now your clients but at the time you were your own client, that you would catch them doing?
Chad Dorsett:
The biggest thing was if a plunger, must run or something they’d go give a tremendous amount of shut in or they’d go add more injection. So everybody’s always got a toolbox. And that toolbox you got all these tools. But the first thing everyone wants to grab is the big hammer. Well, out on wells, if you’ve got compression, the big hammer’s compression. Hey, let’s just give it more injection, and that plunger will come back and it’ll start running again. That’s the wrong way to go. Because more injection means you’re pushing everything back in the formation, you’re literally holding the well back.
Chad Dorsett:
And so the biggest thing was teaching them to trust the computer system, and to use that automation that was on the wells rather than thinking that they had to do everything based off of times.
Automated vs. Stand Alone Boxes
Cameron Croft:
So on that, per well… And that’s a good segue on the next topic you have. So on this one is, identify the resources that you got.
Chad Dorsett:
Mm-hmm (affirmative).
Cameron Croft:
And then you got to hit those metrics. You got to understand the data.
Chad Dorsett:
Yes.
Cameron Croft:
So pull the correct data. And I like what you said about the quarterly reviews. Is that common place? Do you see that throughout the industry?
Chad Dorsett:
A lot of companies do quarterly. Most will do yearly reviews. But say if I saw a route because I was in charge of six routes, and in each route had anywhere from 50 to 65 wells on each route, and the probably 80% of my wells were plunger wells that were GAPL.
Cameron Croft:
Wow.
Chad Dorsett:
So my guys, if I would go through their production because I did a production report every morning. And it showed me what their top 10 problem wells were for the day based off of yesterday’s production. So the top 10 wells that were going to be down in production for that day, it would flag. And then I went further and built an Excel spreadsheet for my guys and I could tell you exactly which route was down the most throughout my field. So I could go in and I could pick and see, “Okay, well this route, maybe we need to step up and do our well review early and try to figure out what’s going on here.”
Cameron Croft:
So you would have almost like red flag indicators of, “Now we got to focus our attention. Something’s really off on this one.”?
Chad Dorsett:
Yes.
Cameron Croft:
That’s awesome. Well, I know, segueing into your next one, was automation versus standalone boxes. And that’s what you were talking about. So yeah, tell us what’s the difference between just a Timekeeper box and a box that actually Impact has.
Chad Dorsett:
So a Timekeeper box which is what we’ve got shown here on this. And every plunger company has their own style box and each one of them have different functions. So when I was a foreman, the biggest box that we used when I had a superintendent that didn’t believe in automation, didn’t like it. So we used IPS boxes, just because they had some features that were easier for the guys in the field to understand. This Timekeeper box here it’s really user friendly, and it’s, I don’t want to say dummy proof, but is dummy proof to where you really can’t mess something up so bad that you can’t get it back easily.
Cameron Croft:
Yeah.
Chad Dorsett:
And every bit of the instructions are in there, on the inside of the panel. But these boxes no matter how smart the company says they are, only can do so much based off of what… Because that computer in that box is, it’s nothing like what you’re going to get with a rock or a total flow, ABB or our ODEX system that we’ve created. So these boxes are built, honestly just to run your plunger based off of the times you enter. And a lot of these standalone boxes don’t have the capability of communicating with your signal.
Chad Dorsett:
So your guys can’t see what’s going on with that plunger until they come back the next day to go through and check and see, “Well, how many runs did it make? How many did it miss? What were the average run times?” And then they make an adjustment and that adjustment’s there for 24 hours. So if that was the right adjustment, and you did good, you don’t know for 24 hours, but if it’s wrong adjustment, and your production is going to fall off, and you’re going to lose your tail, you don’t know that for 24 hours. So the biggest thing is being blind because if the guys get out there and that plunger’s missed the last 10, 15 runs, and he has to spend two, three, four hours trying to get that plunger running again, versus he gets a alert on his phone or his computer saying, “Hey, plunger is missing runs. Plunger missed last run,” our guys would get text message alerts on their phone if a plunger missed a run. As soon as it missed one, the quicker you catch issues with the plunger, the less you’re going to spend getting that well back, because you’re not going to completely load that well up.
Chad Dorsett:
So the faster you can identify those problems and see those problems, the easier it is to optimize and the easier it is to get your well back, if something happens. Line pressure spike, the plunger missed some runs. The plunger is just absolutely worn out. Sometimes guys will leave these plungers in and they think, “Oh, it’s good. It hasn’t missed any runs.” Well, the day that it starts missing runs, you should have pulled the plunger two weeks ago and seen that one whole side of the plunger is completely gone. It’s just worn out.
Chad Dorsett:
And so the biggest thing that helps as far as automation versus standalone boxes is automation will help you identify problems, it’ll help you cut your lease operator’s time in the field. And that time is valuable because if they’re not sitting there messing with plungers and trying to get plungers to run and get them to run efficiently, they’ve got more time to fix broken parts, fix little things that normally they would just walk by and hit with a crescent wrench to shut it up while they’re on location and move on. Now they’ve got time to spend fixing these little things that is going to ultimately help you save money down the road because you’re not having to call someone else to come out and fix it. You’re a lease operator. Part of, at ConocoPhillips, we weren’t lease operators, we were what they called MSOs, multi skilled operators. So we changed our own Kimrays, we changed our own seat and stems in our Kimrays, we change dump valves, we changed the hammer unions.
Chad Dorsett:
We did everything on location. The only time we called out a roust about crew is that there was a major project to be done. Otherwise we called the person that ran our sister route, and they came over, we put pipe wrenches together and we knocked it out. And they were pretty strict on overtime and all that. So it wasn’t like we were getting a whole bunch of overtime because we were fixing all these parts and these in these issues. It was we had automation, we were taught to use the automation correctly. And we had the training to use the automation correctly. So we had that extra time to fix little things and little issues that popped up in the field.
Cameron Croft:
So that standalone box is, like you said every 24 hours, if that person is doing it every 24 hours, that’s a one time, they’re assessing, “Yeah, everything looks good,” and then they input one time. When automation, you can set it where it’s making changes every 10 seconds or [crosstalk 00:19:01].
Chad Dorsett:
So in, yeah, in automation, so the greatest thing about it is you can do everything if you’re automated from your computer. We have apps for your phone. You can get on and make adjustments from your cell phone. So if you’re at your kids baseball game, football game, choir, whatever you’re at, you can literally get on your phone and make adjustments to your plunger, you can make adjustments to your compressor. You can speed your compressor up, slow it down, you can add injection to wells, you can take injection away from wells, you can adjust chemical pumps. I mean, there’s so much you can do if you’re automated, that you can’t do if you’ve just got the standalone boxes.
Chad Dorsett:
And on the cost is more in the beginning for the automation. But what we found is you’ll pay that cost off in six months or less, just with the uptake in production in which you’re not spinning on overtime and having to have your guys out there away from their families and working more because they’re having to fix these little issues that come up. Batteries die in the plunger box, they don’t know it for 24 hours because they can’t see their plunger runs. The latch valve inside those things, they’ll get a little bit of salt or something go through the gas that’s supposed to be dry gas going through a drip pot. Well, they forgot to drain the drip pot now they’ve got salt or scale or something, some trash in that latch valve and so the latch valve went out. So the well’s not opening and closing. Whereas automation, you’re going to get a text email, you’re going to get something that says, “Hey, you’ve got an issue we need to get it looked at.”
Cameron Croft:
So some of these operators, companies out there, that are not, especially in this market, their capex is cut, they’re not going to spend a bunch of money on automation upgrades, they might, we have a few clients that are actually doing it and it’s really exciting for them. Because they see the benefit on it. But right now cash is king, trying to keep everything. So the standalone boxes, if they have that, what would you recommend to your operators of how to adjust for all the well run times. When they get out there, what are they looking for? Shut down at 15 minutes or needs to go every 30-
Chad Dorsett:
Whoa, honestly, so if they’ve got a standalone box and they’ve got a SCADA system on location that measures their gas, you can see the flow and you can see when the plunger is shutting because the flow stops and when it comes back on. So you can see all of that. So the biggest thing that I would suggest is look at that net flow. And you can see when the well’s in after flow, how it starts to tail off and starts. You can see it loading because your flow rate starts to drop, and drop.
Chad Dorsett:
And so if you see that flow rate drop, really dramatic drop, that right there is when you really want to shut in because that’s loading. So that’s when you’re pouring more fluid into your tubing column and it’s going to make it that much harder for that plunger to lift that load of fluid. So in timer boxes, you look at that, if they’ve got minute history, they can see how far into after flow that that big drop in flow rate started. So you can pinpoint, “Okay, so I was six minutes into, or 15 minute after flow when this happened. So let’s take that back to, give it eight minutes of after flow.” So that you don’t lose a lot of production but the… And by losing a lot of production, you’re not going to really lose it because, yeah, you’ve lowered your after flow, but you’re shutting times are the same.
Chad Dorsett:
So you’re still going to get the same amount of runs probably a couple more runs throughout the day, which is going to average out on how much flow time you’ve got. And then if you see that given that eight minutes of after flow, rather than 15 minutes by cutting that after flow back, well, maybe now you don’t need as much shutting time. So depending on what cell plunger you’re running, you might not need that shutting time. And then a lot of these boxes also have more capability than what you’re actually using.
Chad Dorsett:
So I know some of the plunger boxes. Because when I was a foreman, I worked with another plunger company that I knew quite well. I used a lot of their product. And with my automation guys and myself, we created a way to actually see the standalone box on my signet. So my guys could see the plunger runs and everything. And eventually we got it to where they could make some of those adjustments. And it was a simple upgrade that was like 750 bucks, I believe. And all they did was add a little cell modem to the box, they added a tab to my signet, the guys clicked on that tab, and they could see their plunger runs, and they could make small adjustments to the time.
Chad Dorsett:
Now, they couldn’t run the plunger off of critical flow or load factor, which is really what you want to do, if you have the capability or with our ODEX system, the computer will make all those adjustments without the operator having to do it. Which is a phenomenal tool.
Cameron Croft:
Well, that’s what… So your plunger time, I guess what would be the optimal plunger time, runtime that you would like to see from your operators?
Chad Dorsett:
So equipment and to not tear up your equipment and to have the best runtime as far as plunger life goes. I like to see between 12 and 15 minute runs. That’s optimal, in my opinion. Just because, number one, if you’re coming 6,000, 10,000 feet from bottom and you’re surfacing in less than 12 or 15 minutes, that’s a rocket. 12 and 15 minutes at that depth is still pretty fast. But when you’re carrying fluid, it acts as a cushion and the plunger is not slamming. But if you get less than eight minute runs, you’re tearing up equipment.
Cameron Croft:
That’s right.
Chad Dorsett:
You’re going to tear up springs in the lubricator, you’re going to tear up your plunger, you’re going to tear up bottom hole spring assembly. Bring in plungers on that quick and I’ve had plungers that were making eight minute runs and they ran great and had the best production at eight minutes. But you have to look at everything. Well, how often are you checking that bottom hole spring assembly? How often are you having to fish out broken plungers, fish out different things that broke because it was running that hard and that hot?
Chad Dorsett:
And all of that adds on to those LOEs. So if you’re changing a plunger out every 10 days because it’s making eight minute runs or less, are you really getting your money’s worth out of that 300, $400 plunging? Or could you put a conventional plunger that’s 100 bucks, 200 bucks in that well and make up 15, 20 minute run and have a little more shut in and maintain your production and cut your costs? So the biggest thing is, how can you save money and keep production where it needs to be to keep the wells open and flowing?
Cameron Croft:
That’s right.
Chad Dorsett:
And the biggest key for me at that point with having over 400 plungers in the field was taking wells that were using a bypass plunger and switching over to a conventional during these downturns.
Choosing the Right Plunger
Cameron Croft:
That actually, you’re getting really good at it. You just segued right into the next one, which is choosing the right plunger. So keep going with what you were saying. So how do you choose the right plunger?
Chad Dorsett:
So again, like I said, in these downturns when you’re looking at your wells and how can you save and how can you cut costs, if you’ve got a plunger in the well that you’re changing out 10 days, 20 days, 30 days, every 60 days even. And you can go to a plunger that will last eight, nine, 10 months a year. I’ve had plungers, conventional plungers that were in the hole for 18 months. And still probably could have ran longer. But we got our money’s worth out of it.
Chad Dorsett:
So you go through and you look at these wells and you make those decisions, “Hey, we’re changing this plunger out every three weeks, every month. We’re having to get a new plunger in this well and this plunger is 375, 425,” whatever the cost, “let’s try conventional.” What’s it going to hurt to try conventional for a week, two weeks? If you don’t lose a lot of production, five MCF, 10 MCF. And I know in some marginal wells, five MCF, 10 MCF that’s big. But you can also reduce that to where you maybe lose one MCF a day. But that loss is it going to cover the cost of changing that plunger 10 times compared to that one plunger? And nine times-
Cameron Croft:
So that was another variable point that you would do, is I guess when you’re a production foreman, you would look at, “We got high end plungers on this well.” You would actually say, “All right, the variable we can do is let’s change it out.” And you would see what the data was telling you afterwards, production data?
Chad Dorsett:
Yes.
Cameron Croft:
Okay.
Chad Dorsett:
So you change that plunger out and you look at it and you make the decision, “Well, hey, yeah, we lost a little bit in production. But does it justify us going back to the more expensive plunger that we’re changing out six times compared to the one that we just spent?” And nine times out of 10, it didn’t justify going back to that more expensive plunger. Now when the market starts coming back and gas production or gas prices come up, oil prices come up and everything’s looking good market wise, then you can go back and say, “Okay, let’s go back to a fast fall, a bypass, voluminously,” whatever the case may be and see if we get a little bit more of a production uplift and can maintain it.
Chad Dorsett:
But the good thing about like our ODEX system that Impact has, is that system literally looks at your well flow rate production, pressures and makes adjustments and takes all the guessing out of the lease operator’s hands. So literally all that lease operator has to do is inspect his equipment, his plunger, pull it, inspect it, make sure it’s still good. And anytime he gets an alarm on, it’ll flag whether it’s the separator or something at the wellhead that flagged then caused the plunger to start acting up. So it takes all the guessing away and will optimize that well 100% efficient. And I’m talking, we’ve had wells that the plunger runs well within four seconds of each, other 24 hours straight.
Cameron Croft:
Wow.
Chad Dorsett:
So you would do good if you had a 15 minute run, a 12 minute run, a 10 minute run, a 15 minute run. I mean, those huge couple of minute variables, whereas the system that we’ve created and that our engineers have created, what they did is they listened to myself. And so I have a lead that I brought with me from another company. And then we have another production foreman, that was up in the Utah area, he is one of the operating partners. And so they took all the information that we talked about, and we gave them and they created this system and so every day it gets smarter.
Chad Dorsett:
And by getting smarter, I mean, they’ll go in and make adjustments in the data that this system collects is infinite. I mean, we it’ll collect as much as we want it to. And it’s all cloud based. So we can keep adding on to memory and memory and memory. And so every day it gets smarter. And they’ve used, they’ve literally used, so, “Hey, Chad, what was your biggest headache as running plungers?” And I would tell them, and then they would go in, and they’d make those adjustments and you’d go out in the field and it’s really cool to see how smart it was, because things that we used to guess on, now I know for sure. This thing tells me when my plungers hit fluid, it tells me when it’s setting on bottom, how long it’s set on bottom, did I leave my well shut in for too long? And so this system will actually see that and correct it.
Conventional vs. Fast Fall
Cameron Croft:
Cool. And that’s what you were saying earlier, going into the conventional versus fast fall plungers. So well, why did you want to focus on that?
Chad Dorsett:
So a lot of people will see a conventional plunger and they’re like, “Oh, man, my well has to be shut in a minimum.” For some plungers about 15 minutes, but other plungers you go 30, 45 minutes depending on depth because they fall so much slower. If I put a fast fall in a bypass plunger, it can fall through flow, and so my well’s open more. And then in some cases, fast fall plungers are exactly where you want to be. But in most cases, especially when every penny counts on keeping a well from being shut in, a conventional plunger, number one, it’s cheaper. It’s literally a quarter of the cost of a fast fall in most cases. And number two, it’s going to last longer, because it’s not tripping 50, 60, 80 times in a day. So a conventional plunger typically, I would triple eight, maybe 10 times in a day.
Chad Dorsett:
And by tripping, that means shut in, to the surface. And then you after flow the well like you maximize your after flow. That’s what you’re focusing on at that point. Our ODEX system goes even further, it’ll see when the plunger is sitting on bottom and it stopped moving and will open that well back up and let the plunger come to surface and then after flow it out based off of that. And it’ll calculate the load for you, it does everything. But-
Cameron Croft:
For you, I guess your opinion on the people that are going to watch this is, when would you recommend them to change? I guess, especially in a down market
Cameron Croft:
Yeah.
Chad Dorsett:
… what they need to really look at is these wells that are right on the cusp of being inefficient to keep open by simply taking a more expensive plunger out of the well and dropping a conventional, or heck, there’s some wells that you can even take the plunger completely out and interment the well. You need to look at those things and take into consideration, “Well, hey, if I pull this fast fall plunger that cost me X amount, and I put this cheaper one in. Number one, it’s going to last longer, two, it’s going to be less of a headache for my operator. And three, it’s cheap.” I mean, you can’t put anything in your well, that cost less, other than intermitting the well or free flowing the well. And if you-
Cameron Croft:
So it’s, I guess you would look at, I guess one would be the variable, the gas to liquid ratio when you’re doing your well reviews?
Chad Dorsett:
So we look at gas to liquid ratio. We also look at all the costs that are going to that well. So when we’re going through well reviews, yeah, we’re looking at production, but we’re looking at what our accounting department is seeing, “Hey, this is being charged for compression. Are we injecting on the well? This is being charged for water hauling X amount of dollars, how much are we actually producing out of this well? Is that number correct?” So you’re looking at all these different numbers, different parts that have been changed on location, and so you’re making sure that everything’s being allocated to that well as correct. So that’s one big thing.
Chad Dorsett:
But then you’ve got to look at the expendables, your plungers, your seat and trims, different things that you’re changing out, that are affecting those LOE costs too. So if you’re charging six plungers to that well in a year, and you can charge one plunger to that well, and it keeps it from having to be shut in, it’s a no brainer to make that change. But again, that’s something that as a foreman, superintendent and even with your engineers, that you get in there and you look at together and you say, “Okay, so what can we do to this well, to make it more efficient to where we can keep producing? Otherwise, this one right here, it may be shut in next week.” And again, the more you end up having to shut in because of price and because of cost, at the end of the day, that’s someone’s job. Because if you shut in half your field, you have to condense.
Chad Dorsett:
And so the biggest goal is to not have to make those hard decisions. What can we do, to keep producing and be most cost effective in the field? And so those are the questions you ask. So can we change something as simple as a plunger? Can we change something as simple as settings and keep these wells producing without shutting them in?
Well Knowledge
Cameron Croft:
No, absolutely. And then that’s what… I liked your next topic you’ve gone into as well, knowledge and equipment. So when you’re talking about this, I mean, this is I guess general well knowledge surface.
Chad Dorsett:
Yes. So the biggest thing as far as your well knowledge is, number one, talk to the guy that’s out there every day. The person that is literally at the wellhead every day looking at it. And then two is what equipment do you have on location? What’s its capabilities? Do the research. So when I come in, I thought the rock, which is automation box that measures gas, it runs your plungers, it looks at your tanks. It does everything. And I thought that was the end all be all. I didn’t like total flows because I didn’t think ABB total flow had the capability.
Chad Dorsett:
Well, then when I get into a foreman’s position and over 75% of my wells have total flows, and I start doing the research, total flow, ABB has the exact same capability, there’s a few more steps that you have to go through and different things you have to do to get it to that point. But it does have all those capabilities. So when I’m doing the research and I’m looking and I’m figuring out, “Hey, I can do more with this total flow, than just measure my gas, I can actually run my plungers I can see my plunger runs I can do so much more with it than what I thought.” So knowing your equipment on location and what it’s capable of, that honestly, as is equally as important running a plunger or knowing how to start a compressor.
Cameron Croft:
I like what you said with ConocoPhillips. What did they call… Multi skilled operator?
Chad Dorsett:
MSO.
Cameron Croft:
MSO?
Chad Dorsett:
Yes. Yeah.
Cameron Croft:
That’s a nice way of saying you got to know everything. So I mean, some of these guys when they’re first starting out, they’re greenhorns, or they’re highly very trained specialized in one area. How did you… I guess, how did Conoco enter this? How did these guys start training in different areas? Because it is a domino effect.
Chad Dorsett:
Oh, yeah. So the biggest thing that I did when I started training guys to operate that were really green, is I would take them out to location and I would hand them a piece of paper and tell them to draw their equipment out, and then label what each part was, tell me which way this well is flowing. How does this piece of equipment work? And I would go through that, and I would make them take notes all day, throughout the process. And so then when something would break, I’d go out there and say, “Okay, so where do we start here?” And we would walk through every step on how to fix that part. So from shutting this valve and that valve, releasing pressure here, double checking to make sure the pressure on the opposite side of that check is also gone. Every single step, teaching them from point A to point B.
Chad Dorsett:
It’s honestly like when you’re teaching a kid how to ride a bike, or how to walk. There’s so many different things that you want them to know, to get to the point that it’s just second nature, jump on go. And so there would be guys that would come out and weeks later, they’re not calling you anymore asking you questions. And then there’s guys that come out that six, eight months, they’re still calling and second guessing things. So each individual is always going to pick it up quicker and different. But every person that I’ve ever worked with and trained, they’ve always said, “Just one day and it was like a light bulb just went off. And I instantly knew without picking up the phone to call you.”
Cameron Croft:
That’s awesome.
Chad Dorsett:
So that’s the biggest thing, is just making sure that they know what’s on location. Because simple things will get you hurt quick. And people don’t realize like on a Bettis Actuator, with an NVI choke. So those things when they’re closed, there’s still trapped pressure and it may be trapped 200 pounds in a two foot area. Well, that 200 pounds in a two foot area is more dangerous than 200 pounds in a 600 foot area. And we had a guy end up with, I think 15 stitches in his hand, because he didn’t realize it and he was pulling one of those top works apart-
Cameron Croft:
Oh, yeah.
Chad Dorsett:
… and that ceramic disc came out and that pressure released and it cut through. I think it severed his thumb. And out there on that day, there were several things because at EnerVest we did, it was a incident review. So everybody that was involved had to come into a room with superintendents and safety. And we would go through exactly what happened throughout the day. Well, one of the things that was missed that day was the company man that was in charge, that particular day, wasn’t standing over there with them, and monitoring what they were doing and making sure that they had knowledge of what they were working on. So not only will knowledge help you figure out how to make that well perform better and produce better, but it will also keep your people from getting hurt.
Cameron Croft:
Absolutey.
Chad Dorsett:
So the more knowledge you have on your equipment in your locations, the better off you are.
Takeaways in a Down Market
Cameron Croft:
Well, that leads into our next one, the more knowledge you have. A lot of people are joining us because they wanted to know your experience on cutting LOE, especially in a down market. So having that understanding, well knowledge, you can really start figuring out where your variables are and then you can start focusing and optimizing. So I guess, what are your big takeaways during this down market?
Chad Dorsett:
So the biggest thing is, as a foreman superintendent, the person that’s in the office every day that deals with vendors and the vendor relationship, the biggest thing is, don’t be afraid to ask for discounts. I asked every time of a vendor, someone walked through my door, “Hey, where are we cutting cost today?” And a lot of times it was, they walk in, “Hey, what are you doing for lunch today?” “Well, I brought my lunch today. So let’s cut the cost on this plunger that you’re fixing to sell me based off the fact that we’re not going to lunch.”
Chad Dorsett:
Those things, so when a vendor takes foremen superintendents, field hands to lunches to all this, it comes back in one way or another. So if rather than taking me to lunch or buying me a golf game or doing this or doing that, how about you give me the best price you can and you save that money on your company credit card and put it towards cutting my costs in my field?
Chad Dorsett:
And so I was never afraid to ask any vendors or negotiate my prices on my compression, “Hey, I’ve got this compressor over here that is rated to move 10 million. But I’ve got my wells running, and I’m only using three million. I don’t need the extra horsepower. So do you all want to pay to swap this unit out for me a smaller unit? Or do you want to cut the cost, and we’ll keep running that one, just at a lesser price a month? Let me pay for the horsepower I’m using.” And nine times out of 10, they’d be, “Well, yeah, because we really don’t want to have to pay to have a crane come out, pay to have my guys take this to the shop and completely rebuild it, rework it to send it to a new customer, let’s keep it out there because eventually you may need it.”
Chad Dorsett:
And we ended up, nine times out of 10, we would eventually need more horsepower, more compression, and we let them know, “Hey, you all cut us a break. Now we’re using more horsepower. We had your guy come out and put valves back in,” or whatever he did adjust the pockets in the unit, “and so now we’re using it more. So let’s go back up on the price.” And you have to show them that you’re going to be fair. I negotiated-
Cameron Croft:
So compression was one of the big LOE, for you?
Chad Dorsett:
It was the largest. That was the highest cost that I had in my field, was compression. My second highest was water hauling. So EnerVest as a company when I was with them, they negotiated and went into an alliance with a compression company. And so that helped us negotiate our prices quite a bit by using that one compression company, we were able to negotiate prices, but then it got to the point that we figured out that we weren’t really getting the best deal in that alliance as far as service and keeping our units running, the percentage runtime.
Chad Dorsett:
But then the second highest cost was water hauling for me. I didn’t have the option of being able to hauling our water to certain disposals and get the break of not having to haul it. So when it started out, we were thinking $1.50, $1.65 per barrel is what we were paying to have it hauled.
Cameron Croft:
Wow.
Chad Dorsett:
And we negotiated that down to 90 cents a barrel. So those costs there, they helped quite a bit. And then negotiating with your plunger companies because what I found was, and that was one thing with Impact, that they listened to with the foreman is, plunger companies, they’ll come in, they’ll say, “Okay, well, this company has 8,000 wells, this company has 20,000. So the guy with 8,000 wells, he’s going to pay more because he’s not buying as many than the guy with 20,000.”
Chad Dorsett:
And so I knew because oil and gas companies talk and I have friends that still worked at Conoco, I had friends that worked at VOG.L, I had friends that worked in all these different companies, and we talk. So we know that Joe down the street is paying less per plunger than what I’m paying. And that didn’t always sit well with me. And so that’s one reason that Impact, all of our prices are on the internet. We don’t hide anything. This is what everybody pays. We’re by hands down probably the most cost effective as far as price goes.
Cameron Croft:
Well, that’s what, like what you said earlier, it’s a small industry. If you get cuts deals over here now, if the vendor can come back and explain, “Look, they buy $20,000 a month worth of stuff, they’re getting economies of scale,” I can understand that. That’s where it comes from. But if you’re just doing it just to do it and get in the door, yeah, everyone talks, especially in the oil and gas industry.
Chad Dorsett:
Oh, yeah.
Cameron Croft:
It’s always someone’s brother in law or cousin or that cousin that no one talks to, but somehow he knows everything that’s going on. So your biggest LOE costs were compression, then went into water hauling, and I guess, third party maintenance? Third party services?
Chad Dorsett:
The next was the third party services, which the biggest cost in that was plunger lift and then your roust about your brake fixes and that type of thing. And a lot of those costs were cut by making it to where my guys had more time to go out and work together and fix things rather than, “Hey, call the roust about crew and let’s get them in,” and pay that 130, 140 dollars an hour for the three main crew and then there’s four hour minimum and it took them 30 minutes.
Conclusion/ Q&A
Cameron Croft:
Absolutely. Well I’m going to, let’s go on to the next one. All right, so these are the upcoming webinars. So everyone stay on because we will have a Q&A section in the end. So if you want to start typing in your questions, they will start showing up. But our next speaker is going to be Terry Nelson, Glycol Dehydration Expert. He worked with WPI, very knowledgeable, Hannover Extern experience. And then we got Jesus Olivares. He comes with his own company, Oil and Gas Equipment Manufacturer. He does a bunch of equipment pressure vessels skids and he’s going to be talking from his perspective of what to watch look for, how to optimize, repairing existing equipment. So they will be coming in the next few weeks.
Cameron Croft:
If you’re interested in being a webinar speaker or know of anyone, please give us a call, let us know what’s going on. Reach out to [email protected], we’d really like to have you come on board. So being continuous improvement, Six Sigma, we always like feedback. We’ve had great feedback on the last couple of webinars. So if you will get an email outside of this or there will be a pop up right after this is done, please give us your feedback. Let us know what’s going on. And then you’ll get a free hat or a shirt.
Cameron Croft:
Now back into the Q&A section, this is all of our information. I’m here for you, Chad is here for you. So if you have anything else specific for your clients, or for your business, engineers that want to learn a little bit more please do reach out to us so that way we can set that up for you. So if there’s any questions right now, please put them in. But there is a couple of questions that came pre loaded before this came in. So they’re one to explain GAPL, a little bit more. So Chad, can you explain what that is?
Chad Dorsett:
So GAPL is done in many different ways. So if you’ve got the automation capabilities, so you can literally add gas lift to help. Basically what it does is, you add a little gas lift to help the plunger surface and bring the load, unload the fluid that it’s carrying. So if you’ve got automation, you can set it up to where… Cameron can you go back to that first slide that we had that had the picture of a well? Okay. So in this picture here, so if you look down at the ground, there’s a Kimray at the bottom there, on the ground beside the check valve. So what that Kimray is, is that’s on the injection line. So yes, so that Kimray there, that’s on the injection line.
Chad Dorsett:
And so we’ve got it hooked up with a solenoid and it tells that valve when to open and when to close. So say your plunger opens and it should have surfaced at 15 minutes, 12 minutes, whatever the normal plunger cycle is, and that plunger hasn’t surfaced at that point. So that valve would open, give it a little injection, help get that fluid slug off and then as soon as the plunger surfaces it shuts it back off. So if you don’t have the automation capabilities to… Or the capabilities to run solenoids to open and close these valves, then you do what is continuous gas lift, which is it’ll help you unload the well and help you unload the plunger but if you give too much injection, then you’re just pressuring up your formation and holding your well back.
Chad Dorsett:
So you’re not going to produce it as efficiently as you can by constant injection. Whereas here, you can set it up in many different ways. If the plunger doesn’t surface at a certain time, that’ll open, to help the plunger surface. Say you only want to use gas lift during the ride cycle. So as soon as the well opens to let the plunger come back to surface, that valve would also open, give it injection and you can preset the injection how much you want, give it that little injection. As soon as it surfaces that valve shuts, you go into after flow, the well’s after flowing and you’re lowering your formation pressure. So there’s many, many different ways to run GAPL. And the best way is through automated valves.
Cameron Croft:
Awesome. Just want to go back. Oh, lost it.
Chad Dorsett:
Oh, oh.
Cameron Croft:
No, you’re fine. So we’re actually going to… Well, Chad, I appreciate you coming on board, talking with us, going through this. This is your day off also. So I appreciate you. I guess coming on board, sharing your information with us, and it was great. It was exciting to talk to you. We’re going to get your information. Again, if anyone out there is wanting more information, Plunger Lift Optimization, just webinars, something that goes on, please let us know. And then we can get this information to you and start setting up these meetings. But I appreciate everybody for joining us. And if you need anything, please let us know.
Chad Dorsett:
Yeah. Thanks for having me.
