Why it Pays to Closely Track the Reasons for Well Downtime

05/19/2020
Why it Pays to Closely Track the Reasons for Well Downtime

A look at how 20 operators monitor downtime + ways to minimize unplanned downtime

Detailed tracking of the reasons why a well is down for any period of time provides valuable, time-sensitive insight into the necessary remediation measures an operator should take to get the well back onto production. Over time, it can also provide operations personnel awareness around trends that may be occurring for a specific well or groups of similar wells or similar pieces of equipment.

An Important Distinction: Planned vs. Unplanned Downtime

It’s important to make the distinction between planned and unplanned downtime. The former can be necessary for many reasons, which we’ll touch on in this article. The latter can be minimized by paying close attention to well and equipment behavior, and specifically, considering these types of questions:

  • Are there routinely issues with compressor failures? If so, are they related to high discharge, low suction, the engine integrated control system, or something else?
  • Are the issues related to downhole problems (paraffin corrosion-scale, tubing holes, rod parts, water loading) or surface problems (automation, equipment, mechanical)?

As mentioned, there are many reasons why a well may be down for planned reasons:

  • In the current environment of low oil prices, we are seeing more instances of wells being curtailed or shut in because they are uneconomical to produce and there is little to no market
  • In more favorable times, wells may be down for planned maintenance, shut in for buildup or chemical treatment, and so on                                                                     

Understanding why your wells are down is critical. If unplanned, downtime leads to lower output and lower revenue, compounded by a lack of understanding around the triggers that cause a well to stop producing. Conversely, planned downtime can lead to higher performing wells that do better over time. In either scenario, it’s certainly a best practice for oil and gas producers to track their downtime reasons and associated hours as closely as possible.

Well Downtime Analysis                         

P2 recently conducted a study of 20 companies, looking at the most recent three months of production across their wells, to identify the main causes of downtime and associated production deferment. The details of the study, as well as our findings and conclusions, follow.

  • Companies in our study ranged from operating 150 wells to 2,000 wells
  • A majority (12) operate between 500 and 1,000 wells
  • Seven of the companies operate in Eagle Ford, three in the Permian, two in Uinta, three in Haynesville/Cotton Valley, another primarily in the Appalachian Basin, one in the Anadarko Basin, and one in Piceance

Regarding categories of downtime codes being used by the field, here’s what we found:

  • 17 of the companies in the study had between one and three available downtime codes to choose from with these associated categories:
    • Other: See Comment
    • Miscellaneous
    • No Code Entered
    • Producer Shut In: Other
  • The total number of downtime categories to choose from ranged from just two (“Producer Shut-In: Other” and “Abandoned: Temporarily Abandoned”) for one company to 46 for another company
  • Most had between 10 and 20 downtime codes for field operators to select
  • Only six of the companies had detailed categories to select from that included master categories with multiple sub-options such as:
    • Compressor
    • Downhole
    • Producer driven
    • Purchaser driven
    • Repair
  • Only one company categorized their codes first by scheduled and unscheduled and then by additional subcategories

A Look at the Results

The percentage of hours attributable to the "miscellaneous downtime codes" yielded some surprising results. Of the companies in the study:

  • Eight had more than 25% of their total downtime hours attributable to these miscellaneous codes
  • Two of them had well over 50% in the miscellaneous categories
  • Another five had between 10 and 25% of their total downtime attributable to these codes

As a further measure of the impact on production associated with uncategorized downtime, we calculated the average daily oil and gas production for the affected wells over the prior three months (when they were not down) to come up with an estimated BOE of deferred production. For one company operating 800 wells primarily in the Anadarko Basin, 86% of downtime was uncategorized and the associated deferred production was over 75,000 barrels of oil and 523,000 Mcf of gas for that three-month period. That’s large volumes of oil and gas with no ability to analyze and provide insight into the causes for the deferment beyond looking at hand-entered comments one by one.

We did some additional analysis across these companies to see if we could identify how much of their total downtime in the three-month period was attributable to planned vs. unplanned downtime. Six companies had over 75% of their total downtime attributable to unplanned downtime categories and an additional eight had between 50 and 75% of their total downtime attributable to unplanned downtime reasons.

How to Minimize Unplanned Downtime

Unplanned downtime can be minimized with increased rigor around the categorization of downtime codes to allow for analysis of the reasons. The downtime codes presented to the field need to be specific so you can define the problem quickly and easily and eliminate wasted time and effort. They should be split by planned and unplanned and include master categories with associated subcategories.

For example, the planned attribute for the Master Category of Compressors may include: Compressor: Preventative Maintenance. The unplanned attribute for the Master Category of Compressor may include: Compressor: High Discharge PSI, Compressor: Low Discharge PSI, Compressor: Low Interstage PSI, etc. 

Due diligence is critical when it comes to the health of your assets and your business. Take the time to understand why unplanned downtime is occurring. Set up your codes appropriately to delineate problem(s) so that you can work with your field team to swiftly get wells back online.

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