Oil and Gas
Oil and Gas | Drilling and Well Engineering
Well Cost Control and Forecasting
Format and Duration:
5 days
Cost control and forecasting are fundamental to efficient well planning and execution. The ability to accurately estimate, track, and reconcile well costs is critical for drilling engineers, finance teams, and cost engineers to ensure projects remain within budget while maximizing operational efficiency.
This course provides a comprehensive exploration of well cost control, covering everything from the initial cost estimation and AFE creation to real-time cost tracking, financial reporting, and post-drilling reconciliations. By integrating both technical and financial perspectives, participants will develop a well-rounded understanding of how to effectively manage well costs, mitigate financial risks, and optimize the value of well expenditures.
The course begins with a review of fundamental cost principles, including the well cost improvement cycle and how various technical and operational factors influence well expenses. Participants will learn how to break down costs into Time-Related Costs (TRC), Depth-Related Costs (DRC), and One-Off Costs (OOC) to develop a structured, standardized approach to cost estimation. Another major aspect of the course is risk management in well cost control. Participants will learn how to recognize and mitigate potential cost overruns caused by operational challenges such as stuck pipe, lost circulation, non-productive time (NPT), and well control issues. Strategies for controlling actual well costs, managing financial commitments, and identifying cost overruns before they escalate will be discussed in detail.
By the end of the course, participants will have a clear understanding of the entire well cost control and forecasting process, from the initial budgeting phase to final reconciliation. They will be equipped with the skills needed to implement cost-effective drilling strategies, improve financial reporting accuracy, and add value to their organization by enhancing cost control practices.
This course can be tailored for various experience levels, from Awareness to Skilled level.
This course is delivered in partnership with Black Reiver Consulting Ltd.
Schedule
Duration and Training Method
This is a classroom course comprising a mixture of lectures, discussion, case studies, and practical exercises.
- Instructor led sessions using interactive exercises, case studies, and financial simulations.
- A step by step approach, where each topic builds on previous knowledge.
- Real world examples from drilling projects to highlight cost management best practices.
- Handson exercises, including AFE preparation and cost tracking models.
- Q&A discussions to clarify financial reporting and cost control concepts.
Course Overview
Learning Outcomes
Participants will learn how to:
- Understand the principles of Well Cost Control & Forecasting.
- Recognize the link between well design, drilling execution, and cost control.
- Apply practical cost control techniques in real world operations.
- Develop financial control documents such as AFEs, cost trackers, and reconciliations.
- Learn to calculate the Value of Work Done (VOWD) and apply it to financial reporting.
- Identify cost overruns, track expenditures, and manage financial risk.
- Effectively report and present well cost data, adding strategic value to an organization.
Course Content
1. Fundamentals of Well Cost Estimation & Control
- Understanding Time Related, Depth Related, and One Off Costs (TRC, DRC, OOC).
- Key elements of building a well cost estimate.
- Overview of AFE preparation and approval processes.
2. Well Cost Tracking & Reporting
- Setting up daily, weekly, and monthly cost reporting.
- Analysing cost variances and forecasting cost overruns.
- Time depth vs. cost depth analysis – plan vs. actual expenditure.
- Using graphs (Cost per Foot, Planned vs. Actual Costs) to visualize financial performance.
3. Role of Cost Control in Well Operations
- Integration of cost control with drilling operations and decision making.
- How financial tracking affects Realtime drilling adjustments.
- The relationship between AFE tracking, and financial reporting.
4. Managing Cost Risks in Well Drilling
- Common cost overruns: stuck pipe, lost circulation, formation issues.
- Impact of nonproductive time (NPT) on cost forecasts.
- Risk assessment techniques for cost optimization.
5. Post Drilling Reconciliation & Auditing
- Final well cost reconciliation and variance analysis.
- Materials usage reconciliation and stock audits.
6. Financial Accounting & Reporting in Well Cost Control
- Breakdown of costs for internal financial reporting and external partners.
- Work in progress (WIP) accounting during drilling operations.
- How financial teams analyse well cost data and use it for budget forecasting.
7. Strategic Cost Management in Well Design & Drilling
- How well cost control influences drilling decisions.
- Cost saving techniques in well design, rig selection, and operations.
- The role of procurement & contract management in cost reduction.
This course equips participants with the skills and confidence to manage well costs effectively, from planning and tracking to reconciliation and reporting. With a focus on real world applications, attendees will leave with practical strategies to improve financial performance and add value to their organization.
Who Should Attend and Prerequisites
This course is ideal for:
- Well Engineers & Drilling Engineers involved in well design and execution.
- Finance Teams & Cost Engineers looking to understand the financial aspects of well operations.
- Professionals with little or no experience in well cost control who need to learn cost tracking techniques for simple and complex wells.
- Anyone interested in understanding the financial impact of well construction and how cost control adds value to an Oil & Gas Operator’s organization.
Instructors
Kevin Gray
Kevin can offer the experience of over 5000 days of operational experience and operations support positions from an oilfield career of over 31 years as well as working as lead trainer for a multi award winning ERD engineering team based in Perth Scotland. Kevin has been consistently the highest rated drilling training instructor in a major multinational training company over the last four years and throughout his offshore career was repeatedly graded in top 5% within both offshore and onshore positions for the largest oilfield service company.
Kevin has designed and overseen the delivery of multi week training programs for offshore drilling, well intervention and fluid supervisors for a number of clients. This has included competency assessment and skills gap analysis throughout the programs. Kevin is also able to draw on his well documented teaching skills to deliver courses or programs in directional drilling and surveying, stuck pipe, extended reach drilling and various other drilling related subject areas. He wrote the first Operation support centre SOP for directional drilling which was later adopted globally. In addition, he has designed and delivered various 'Real Time Centre' training courses including human dynamics training. In his former role as directional drilling coordinator, based in Aberdeen he still holds a number of world records for drilling achievements with motor and RSS tools.
In his earlier career he led an offshore team that developed the first multi axis drill vibration measurement tool to report measurements in real time, and subsequently wrote the core documentation on vibration control for D&M. Later he was responsible for the introduction and field testing of Powerdrive RSS tools and had considerable input into their re-design as the X5 variant. Kevin has led many teams into both new fields and mature field redevelopment. Outside the industry he enjoys skiing and exploring, taking these two activities to the extreme in 2015 when he skied to the South Pole dragging a sledge behind him.
Courses Taught
- N687: Advanced Directional Drilling and Advance Surveying Techniques
- N688: Drillstring Design
- N689: Drilling Fluids
- N690: Stuck Pipe, Design and Operational Practices for Avoidance
- N691: Well Integrity Management & Barrier Verification
- N692: Well Cost Control & Forecasting
- N693: Casing Design & Well Integrity Engineering
- N694: Basic Drilling Technology
- N695: Introduction to Drilling, Completion, and Workover Operations
- N696: Drilling Rig Selection & Inspection for Performance Optimization
- N697: Extended Reach Drilling (ERD) Program
- N698: HPHT Well Engineering
Accreditation and Certification
CEU: 3.5 Continuing Education Units
PDH: 35 Professional Development Hours
Certificate: Certificate Issued Upon Completion
RPS is accredited by the International Association for Continuing Education and Training (IACET) and is authorized to issue the IACET CEU. We comply with the ANSI/IACET Standard, which is recognised internationally as a standard of excellence in instructional practices.
We issue a Certificate of Attendance which verifies the number of training hours attended. Our courses are generally accepted by most professional licensing boards/associations towards continuing education credits. Please check with your licensing board to determine if the courses and certificate of attendance meet their specific criteria.