Shaking hands with the devil: the deepest hole ever drilled

[zachary]

On the subject of pressure, as someone stated the mud holds back the formation pressure. The deeper you go the higher mud weight.

There is a HUGE differance in pressures at the same depths across the same basins.

I can show you in South Louisiana where at 11500 feet we encountered 5000#(10.2# mudweight, 2.7mm$ drilled and completed)) bottom hole pressures. Then show you once you cross a huge down fault be at 11,500 and have pressures of 9000#(15.8 mud weight, 4.2mm drilled and completed) bottom hole pressure. It is not universal like most people think. Formations and faulting has a huge impact on pressure. We drill all the time what we consider "normal" pressure wells in Mississippi with no intermediate pipe down to 13-14000' with just surface casing. Then we have drilled some in south Louisiana where we had to have intermediate casing to drill a 9000' well because pressures were too great.


Some offshore deals we have looked at have the hundreds of millions per well dollar tag on them with every intent to drill it and plug it just for evaluation purposes, one being drilled right now just offshore La. Davy Jones
When playing with the big boys and bigger numbers several millions barrels is a possibility.


ALso oil business is one of the only ones where you do not get full % of what you spend.

Say you pay to drill 100% of the well, after 12.5% severance tax, then 25% royalty to land owners. the best you could possibly get back out of your 100% is 62.5% of what the well makes.

[zachary]

McMoRan Gives Update On Davy Jones, The $1 Billion Ultradeep Well
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Davy Jones (Pirates of the Caribbean)

We got an interesting update this week from McMoRan Exploration, America’s ballsiest oil and gas explorer, on the status of the ultradeep wells it has drilled in the shallow waters of the Gulf of Mexico. Led by legendary geologist Jim Bob Moffett, McMoRan said in its new quarterly report that it has sunk a total of $1.2 billion to drill six behemoth wells, including Davy Jones, Blackbeard and Lafitte.

Moffett, as we’ve written before, is going after deeper reservoirs of natural gas than anyone has before — more than 30,000 feet below sea level. McMoRan’s exploration wells have indeed found bountiful quantities of hydrocarbons. But the trouble now is figuring out how to complete and produce these wells.

Davy Jones is perhaps the most watched well in the entire U.S. oil and gas industry right now. McMoRan has drilled two wells into the Davy Jones structure, discovering high-quality sandstone reservoirs of more than 300 feet thick and filled with natural gas. The reservoirs have been proven to stretch more than 2 miles across between the two Davy Jones wells.

But McMoRan has run into trouble completing the first Davy Jones well. In short, the bottom of the wellbore, which at 30,000 feet deep is no bigger than your fist, got all gummed up with heavy drilling mud that McMoRan had to pump down to control the well’s massive pressures. The gunk solidified and has stymied McMoRan’s efforts to complete the well and test its flow.

Impatient investors in McMoRan were so discouraged last year that the started bailing out on McMoRan. Facing the real risk that he’d run out of cash before completing his ultradeep wells, Moffett in December forged a deal whereby sister company Freeport McMoRan Copper & Gold agreed to buy McMoRan for $3.4 billion. Moffett now faces a bevy of lawsuits from shareholders alleging that he breached his fiduciary duty to Freeport (where he’s long been chairman of the board) by saddling that company with McMoRan’s high-risk ultradeep wells. The merger is expected to close in June.

Investors will have to wait a little longer than that to see if Moffett can figure out how to unclog Davy Jones and get it flowing. In order to break through the solidified drilling mud, McMoRan is engineering a large-scale hydraulic fracking treatment. The big offshore service companies like Halliburton HAL +1.06% and Schlumberger SLB +0.07% don’t just have gear sitting around ready for this kind of job. No one has ever before tried to frack into a 30,000-foot deep reservoir through such a tiny wellbore while knowing full well that the natural pressures contained in the reservoir are on the order of 20,000 psi. Building the heavy duty blowout preventers and fracking gear for Davy Jones and the other wells takes months. McMoRan says it expects to resume work on Davy Jones before August.

The first Davy Jones well has to be most expensive well ever drilled. McMoRan says its “investment in drilling, completion and other costs specifically attributable to Davy Jones No. 1 approximated $339.4 million as of March 31, 2013″ and that its total investment in the Davy Jones complex, “which includes $474.8 million in allocated property acquisition costs, totaled approximately $1.0 billion at March 31, 2013.”

McMoRan holds a 63.4% working interest and a 50.2% net revenue interest in the Davy Jones complex. Other investors include Energy XXI (Nasdaq: EXXI) and Fort Worth billionaire Tex Moncrief.

Perhaps the most interesting aspect of the pending acquisition of McMoRan by Freeport is that in addition to $14.75 in cash per MMR share, investors will receive 1.15 units in the Gulf Coast Ultra Deep Royalty Trust, which will hold a 5% overriding royalty interest in McMoRan’s share of future production from all of its ultradeep prospects — that means 5% of revenues, off the top, with no deductions for well costs.

This is from the registration statement for the Trust:

The “subject interests” consist of 20 ultra-deep (target depths generally greater than 18,000 total vertical depth) prospects. The offshore “subject interests” consist of the following: (1) Barataria; (2) Barbosa; (3) Blackbeard East; (4) Blackbeard West; (5) Blackbeard West #3; (6) Bonnet; (7) Calico Jack; (8) Captain Blood; (9) Davy Jones; (10) Davy Jones West; (11) Drake; (12) England; (13) Hook; (14) Hurricane; (15) Lafitte; (16) Morgan; and (17) Queen Anne’s Revenge. The onshore “subject interests” consist of the following: (1) Highlander; (2) Lineham Creek; and (3) Tortuga. All of the subject interests are located in relatively shallow waters offshore of the state of Louisiana, or onshore in Louisiana. MMR does not own 100% of the working interest of any of the subject interests. The 5% gross overriding royalty interest in hydrocarbons saved and produced from the subject interests will burden MMR’s current leasehold interests associated with such prospects, as well as any leasehold interests associated with such prospects which MMR was in the process of acquiring as of the date of the merger agreement and which are acquired by MMR on or before December 5, 2017. The 5% gross overriding royalty interest will be proportionately reduced to the extent MMR does not own 100% of the working interest.

So far the only one of these prospects with any reserves booked to it is Lineham Creek, which MMR is drilling in partnership with Chevron CVX +0.17%.

What’s that worth then? In its merger agreement Freeport figured that the units were worth about $1.50, and has more recently figured about $2.30 per unit in SEC filings. Any real value won’t be realized at least until Moffett has proven that he can complete and produce these wells — and complete the merger with Freeport. In a filing this morning McMoRan clarified that the trust units will initially only be tradable over the counter because their value wouldn’t be high enough the meet listing requirements on the NYSE or Nasdaq.

Based on McMoRan’s current share price of $16.60, investors are figuring that the 1.15 Trust units they’ll receive per MMR share are worth $1.85, equivalent to $1.61 per unit, or roughly a $370 million implied value for the entire Trust.

Sure it’s a crapshoot. But it’s clear that once these Trust units start trading they will be the lottery ticket to hold if you want to wager on the size of the bounty buried Davy Jones’ locker.

[Strychnine]

It costs millions to drill a well. I don't know what the actual number is, but I heard rumors that our day rate was 25k per day charged to the lease holder.

No rumor. That's about right. Day rates for land rigs are in the $25k/day range. Go offshore and you can add another zero to the end of that number.

Yes, but that drill pipe is pretty strong stuff, you've got to have something go pretty bad to twist one off. I wonder if the Russians even tried to fish it out. Hook weight on a 12k vertical was north of 250k plus anywhere between 20-40k of weight on the bit while drilling.

I have no idea what the max is, but I know there are offshore rigs with 2,000,000 lb static hook capacity.

At some point you are going to be limited by the tensile strength of the material used to make the drill string aren't you? When you pull the string up are you lifting the full weight of the entire drill string?

The Kola hole was 40,230 ft "straight" down, but there are production wells being drilled today that are hanging that much string from the derrick also. Actually, there is a well longer (not deeper) than Kola.

Maersk have a well in Qatar with 40,320 ft MDRT (measured depth from rotary table) of hole. It has 35,000+ ft of lateral. Derricks and downhole materials can handle the weight.

The drawworks motors probably hated life coming off bottom though.



FWIW, they got a full 35,000 ft of horizontal bore in the reservoir target zone which is just 20 ft thick on that well.

[racrguy]

I have no idea what the max is, but I know there are offshore rigs with 2,000,000 lb static hook capacity.

FUCK AROUND! The biggest one I've been on had a capacity of 500k. I bet it's got 10-15 pulleys in the blocks. Even with a capacity of 2,000,000 Big Dog could still find a way to collapse the derrick. lol

The drawworks motors probably hated life coming off bottom though.

I bet the cooked the brakes a few times.

[Strychnine]

Even with a capacity of 2,000,000 Big Dog could still find a way to collapse the derrick. lol

LMFAO. Going to dig up that pic that was texted to me of the last one they pulled down. BRB.

I bet the cooked the brakes a few times.

A lot of AC rigs (VFD) will use dynamic braking (with big resistor banks to dissipate energy/heat) so it's not all hung on some brake pads.




edit: found it

[Ratt]

Are you guys who are discussing pressure taking into account depth in feet (what you seem to be talking about) versus depth in meters (what the OP story was talking about)?

[Cooter]

all of our VFD rigs, the disk brake on the draw works was emergency and park only. The rest of the braking was resistance

[racrguy]

LMFAO. Going to dig up that pic that was texted to me of the last one they pulled down. BRB.

You know you're fucked when people refer to you as "last one they pulled down." That concept should be foreign to your brand name. I'll never work for 'em.

You fuckin' fired, PLAYA!

[Strychnine]

Are you guys who are discussing pressure taking into account depth in feet (what you seem to be talking about) versus depth in meters (what the OP story was talking about)?

Yes, they are talking feet. Those depths (eg. 12,000 ft) are about average for work around here... it just happens to also be right around the number of meters mentioned in the article for the other well.

[Ratt]

Yes, they are talking feet. Those depths (eg. 12,000 ft) are about average for work around here... it just happens to also be right around the number of meters mentioned in the article for the other well.

Just making sure they weren't talking pressure at * feet deep when the article was talking about drilling * meters deep.

[Ruffdaddy]

BHPs can get way higher than 12ksi. deep water stuff is hitting the 20ksi and up range. There isn't an exact pressure and depth correlation between wells in different regions. A lot more factors come into play than simple depth.

And as has been mentioned, true vertical and measured depth are much different things.