1. INSTRUCTOR © 2017, John R. Fanchi
All rights reserved. No part of this manual may be reproduced in any form without the express written permission of the author.
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

2. To the Instructor
The set of files here are designed to help you prepare lectures for your own course using the text Introduction to Petroleum Engineering, J.R. Fanchi and R.L. Christiansen (Wiley, 2017)
File format is kept simple so that you can customize the files with relative ease using your own style. You will need to supplement the files to complete the presentation topics.

3. DRILLING PRIMER © 2017, John R. Fanchi
All rights reserved. No part of this manual may be reproduced in any form without the express written permission of the author.
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

4. Outline
History of Drilling
Rights and Contracts
Homework: IPE Ch. 8

5. HISTORY OF DRILLING

6. Evolution of Drilling Rigs
Cable Tool
1859
1900 – 1930
Today
Rotary Drilling

7. Cable Tool Rig
Bit
Derrick
Bull Wheel
Engine
Walking Beam

8. Rotary Drilling Rig

9. Basic Drilling Functions
Prime Movers
Engines
Hoisting System
Raise and lower pipe (e.g. drillstring, casing, tubing)
Derrick, drawworks, blocks and hook
Rotating System
Rotate drillstring and bit
Swivel, kelly, rotary table
Circulating System
Circulate drilling fluid
Pumps, standpipe, return line, solids control equipment
Controlling System
Control pressure
Blowout preventers, choke system

10. Wellbore

11. RIGHTS AND CONTRACTS
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

12. Mineral Rights and Real Estate Transactions
Example contract language:
Seller’s Negotiating Position
“Seller retains mineral rights.”
Buyer’s Negotiating Position
“Mineral rights to convey to buyer. Copy of any current leases associated with the property to be provided to buyer prior to closing.”

13. Lease Mineral Rights Owner (lessor) Bonus - $25 to $250/acre
Royalty – 1/8th to 3/16th
Oil Company (lessee)
Right to explore and drill
Own the oil and gas
Right to produce

14. Primary and Secondary Terms of Lease
Primary Term
Exploration period
Typically 1 to 5 years
Secondary Term
Production period

15. Landman in U.S.
Identifies Mineral Rights Owner at County or Parish Courthouse
Negotiates Lease

16. Companies Multinational or International company
operates in many countries
National or host company
owned by central government

17. International Agreements
Central (Federal) government owns mineral rights
Exploration and Production contract(s) required
Service Contract: fee for specific services
Production Contract: contractor takes over existing or underdeveloped field and improves production
Concessions (Royalties and Taxes)
Production Sharing Agreements (PSA)
Joint Operating Agreements

18. QUESTIONS?
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

19. SUPPLEMENT
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.