MERLIN ERD: Complex Wells Specialist Weaves Magic Globally

The term extended-reach drilling (ERD) was coined in the early 1980s by Mobil Oil Company and presents a unique challenge for directional drilling, requiring specialised planning to execute well construction. Since first used, the scope of ERD has broadened and the definition is now more flexible, encompassing deep wells with large diameter high angle hole sections, required to facilitate the necessary step out for larger reservoir penetrations.

The drilling industry’s ERD database classifies wells, with increasing degree of well construction complexity, into low-, medium-, extended- and ultra extended-reach wells. Construction complexity depends on many factors, including water depth for offshore wells, rig capability, geologic constraints, and overall true vertical depth (TVD). Essentially, ERD is a technology for drilling longer wells at a high inclination angle to reach underground oil and natural gas deposits further away from the surface drilling location, instead of drilling wells vertically.

Though renowned as being among the most challenging of all well projects for a litany of reasons, Merlin’s Technical Development Director Stewart McGregor describes this complex drilling as ‘bread and butter’ for this independent engineering consultancy.

PROBLEM SOLVERS

“Within the drilling industry, the term extended-reach drilling has a very specific technical definition,” he explains. “At Merlin we are world-class drilling engineering advisors, collaborators, and educators, positioned to offer independent advice, support, and ultimately delivery assurance for extended reach and challenging high angle wells. From upfront engineering, training, through to execution in the field, Merlin ensures project value is delivered and objectives are met.

“We bring expertise, experience and energy to our drilling projects, and we know exactly what works, because we do it day after day, all over the globe. Merlin has an enviable track record of delivering value to clients through bringing additional reserves on stream, without equipment upgrades, with wells previously perceived as impossible.”

What arguably sums up Merlin best is ‘problem solvers’. From deep-water exploration into tectonically unstable zones, to wells in complex geo-mechanical environments, Merlin has seen and helped solve problems believed to be intractable, and engineered wells previously thought un-drillable. “We are not exclusively focussed on extended-reach drilling,” McGregor stresses, “but where we really come into our own is in assisting people to accomplish something a little bit different from what they are used to doing – any departure from their own norms.

“We place all of this under the overarching ‘complex wells’ banner, which means different things to each operator depending upon the context, and our approach must be flexible and tailored each time. All of these considerations can add a further layer of complexity, and we are there to guide people through the planning and execution phase of something which is outside of their usual specialism and ensure the technical aspects are all in place to facilitate it.

“What we are selling is assurance, and where we can add value, is in helping people to deliver wells according to the time and budget estimates that have been quoted to their respective management. Clients leverage our knowledge and techniques to make challenging wells simple, marginal projects economical, and problematic operations trouble-free.

“The results speak for themselves with lower drilling costs, fewer problems, more production sooner, and an up-skilled workforce with ever-increasing confidence, desire, and ability to design and deliver ever more challenging wells, with greater retained economic value in NPV terms.”

GLOBALLY ENGAGED

On the back of a number of active, productive years, this is shaping up to be the busiest 12 months yet, according to McGregor. “We have work going on all over the place at the moment, some of the most interesting of which has been for a multinational service company in the USA,” he outlines. “This project has not been so much about the drilling process itself, rather the focus has been on software – it has been enlightening and value-adding for all concerned.

“We do a lot of work in New Zealand for an operator tackling some challenging wells, where drilling is taking place at this moment. For one of the world’s super majors we are supporting in the development of a raft of training materials geared towards improvements in well delivery in one of their flagship assets.

“In Asia, we have joined up with another multinational service provider drilling turnkey wells, whilst in Kurdistan a smaller independent operator approached us to support operations on their five rigs. We were drafted in following a period fraught with technical problems to train the workforce and fortify them operationally, a similar job to one we had done earlier in the year for a major operator off the coast of West Africa.

“In the same location we supported deep water drilling operations for a different player, and what makes these wells especially interesting is that there is really not a huge amount of relevant material or offset wells at this water depth, making it truly edge of the envelope stuff for that particular environment.”

ESSENTIAL COMPETENCES

The competence and experience that Merlin brings is needed now more than ever, McGregor elaborates. “Ever since 2015 there has been a perceptible exit from the industry of a vast amount of competence and experience, and as activity has ramped up it has left a general shortage of skills across both the service and operator spectrum. This all culminates in issues with drilling performance and well delivery assurance – operators being able to deliver what they promised in their stated timeframes. From experience, drillers need to deliver what they said they would, when they said they would.

“This aligns very well with Merlin’s business MO, which is to provide experienced and knowledgeable people who know how these areas work intimately and can apply their knowledge to all sorts of different wells. Typically, the guys we send out into the field have 20 or 25 years of experience behind them in extended reach and complex well drilling operations.”

Since moving to an employee ownership model five years ago, three of the ensuing years have delivered record returns for Merlin, with 2022 expected to surpass all previous years as demand for services rebounds strongly. “One major advantage of this structure is that we are able to take profits out of the business and into the hands of individual employees when the company does well,” says McGregor.

“It also helps to ensure that our ultimate objective the bottom line, which is servicing – enabling our clients to drill further, faster, more efficiently is the focus of attention for everyone in the business. There is a very clear connection between what we all do on a day-to-day basis, how that impacts on our clients, and how that contributes to everyone’s bottom line.”

With revenue currently expected to reach £6.7 million by the end of 2022, McGregor advises that there are various ways in which Merlin is striving to reach the £10 million per year mark. “Organic growth is very much our model – developing our core business, adding capability and expanding geographically. Merlin has already added a managed pressure drilling specialism which is a key enabling technology, and has also developed its own drilling engineering software which is helping it to grow the business in another direction.”

But it’s not just about oil and gas. “We believe Merlin has a real role to play from a renewable energy perspective, and our next big challenge is to figure out exactly where it is that Merlin’s capability and expertise can best add value.” McGregor finishes. “We are trying to cast the net as widely as possible, leaving no stone unturned in our assessment of this, while successfully maintaining, developing and improving our core service offering to the peerless standards expected of us.”