By improving the stakeholders’ ability to assess risk and reward, iQx™ P1™ enables commercial growth in geothermal drilling where projects can be more complicated than oil and gas exploration and production, and budgets harder to assess.
RED Drilling & Services GmbH (RED) is utilising iQx™ to achieve a more accurate picture of well time and costs involved in geothermal drilling.
LOCATION: The Molasse Basin stretching over France, Switzerland, Germany and Austria
Overcoming uncertainty around geothermal well costs
RED Drilling & Services GmbH (former RAG Energy Drilling) is an Austria-based company with over 80 years of expertise in drilling wells. It’s a business committed to deploying state of the art technology to achieve the safe, stable and cost efficient extraction of energy for the European market.
In its transition towards renewable energy sources, RED has been engaged in numerous geothermal energy projects in the Bavarian Molasse and other EU countries.
The iQx™ Solution
Probabilistic planning methods ensure fully informed investment decisions
RED’s switch from using a deterministic (Excel-based) approach to probabilistic basis for well planning, which offers a more complete and accurate view of time, cost and risk estimation yields for investor decision making, was game changing.
P1™ application has been proven in all types of oil and gas well operations planning including; drilling, completion, well intervention, slot recovery and abandonment. It provides answers that aren’t easily found in other planning tools, which struggle to map out all possible outcomes and risks that can arise during well operations or identify why a well may be more or less expensive than planned.
Capturing this information immediately is vital and matters even more in geothermal well drilling because of their complex characteristics.
All of this adds up to longer drilling days, more expensive equipment and higher costs. And because the value of heat is lower than hydrocarbon values, the sometimes unclear economic case makes it harder to justify the green light for similar projects.
But now, by applying the iQx™ probabilistic simulation methodology, RED can offer clients an assessment of cost range that will enable more accurate project budgets and avoid overruns. This approach is a compelling part of the proposition for investors.
With P1™, the output of the time and cost planning can be better used to estimate the probability of achieving the project goals within a certain time and budget. A 10% chance becomes P10, a 50% chance P50, or a 90% chance P90. Based on the degree of risk acceptable to stakeholders, well-founded investment decisions can be made and optimum project management controls put in place.
The benefits feed through to well engineering teams too. P1™’s intuitive user interface allows data to be imported from multiple sources to support operational planning. Results are easily transferred to iQx ™ time and cost tracking tool, CT™, when the project moves from planning to operations.
The Client Benefit
A solution that is opening up the geothermal drilling
With P1™, RED has enjoyed important gains – from increased project performance and client satisfaction to new business opportunities. There is also the wider environmental picture to consider – with a more accurate method of assessing true costs, greater trust in the investment community will result and more geothermal projects are likely to follow.
The client gains:
- Overall increased efficiency in well time and cost planning has been achieved.
- Time saved led to an increased number of projects, enabling commercial growth.
- More accurate well time and cost overviews are available.
- Greater transparency of time and cost planning for stakeholders is increasing interest and trust in investing into geothermal projects.
- Seamless workflow sharing and collaboration between project members.
Since 2020 up to 2021, RED has used P1™ for planning 15 Geothermal wells and 23 oil and gas wells (including workover operations).