The shift to drilling horizontal laterals, especially in shale oil and gas plays in the US, has led companies often to use coiled tubing units for well completion and intervention work, concludes a recent Simmons & Co. International research report.
The report notes that in the US about 30 companies owned and operated about 500 coiled tubing units at yearend 2010 and that 106 more units are on order.
The transition to drilling longer laterals in shale plays also has led to using more 2-in. and 23⁄8-in. tubing that requires larger sized units. Older units typically were built to handle 11⁄4-in. and 13⁄4-in. coil.
The report notes that because of a short supply of premium units, the average day rate for a unit has increased to $29,000 from $18,000 in the prior year.
Coiled tubing units
The report said the equipment currently in most demand are trailer-mounted units because these are designed for transport and operation of larger 2-in. and 23⁄8-in. tubing.
Major unit components include the injector head, steel tubing and reel, power pack, and control cabin. The report estimates that the cost of the entire unit, trailer, and components ranges from $1.2 million to $2.5 million.
In addition, a coiled tubing job includes other equipment such as double pumper, double-pumper tractor, nitrogen unit, crane, tools, hoses, pump iron, and two wet-kit tractors.
Assuming a $1.5 million coil tubing unit, the entire cost is $4.5-5 million for a 2-in. tubing spread and $6.5-7 million for a 23⁄8-in. tubing spread, the report said.
The report also broke down the cost of individual components. The injector heads cost about $200,000 for the 80,000 lb model used with 2-in. coil and about $252,000 for the 100,000 lb model used with 23⁄8-in. coil.
Coiled tubing cost ranges from $150,000 for small diameter to as much as $300,000 for larger diameter tubing, the report said. The report notes that one manufacturer said costs for 20,000 ft of 2-in. coil are $230,000-250,000.
The reel itself costs $220,000 and can be reused if respooled with new tubing.
Coiled tubing does wear out. Depending on usage, the report said companies will replace larger tubing about ever 60 jobs and replace smaller tubing after 125 jobs.
The report explains that useful coil life also depends on the feet run, which can range from 1 million ft in the Midcontinent to 500,000 ft in the Haynesville.
As an illustration, a 20,000-ft coil with a 600,000-ft run life would be good for 30 jobs. Because work in a well might require several runs, the coil might last for only 5-10 wells.
Another major component is the power pack that provides hydraulic power for running the tubing. The power pack is a 400-600 hp engine coupled with an assembly of components and controls for primary and secondary pressure-control systems such as strippers and blowout preventers.
If the power pack is mounted on the trailer, it is referred to as a wet kit, the report noted.
Depending on the equipment within, a control cabin might cost $50,000-150,000, according to the report.
Coiled tubing units are not the only equipment that companies use to complete and workover wells. In many cases, workover rigs and snubbing units are competitive in price although possibly not in speed.
For instance the report indicates that in the Eagle Ford shale play, a workover rig costs about $7,200 for a 12-hr day while a coiled tubing unit costs closer to $40,000/day. But the coiled tubing unit can do the work faster because it does not require the connection of pipe joints.
Snubbing units also compete with coiled tubing units in areas with high-pressure, high-temperature wells as well as in very deep wells because highway weight restrictions limit coiled tubing transportation. But as with workover units, use of jointed pipe slows the job.