Word to the Wise: Why data isn’t enough for the pre-licensing and drill planning process

November 9, 2021

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To complete the applications necessary for regulatory approval of new drills (such as Directive 056 and Directive 008), it is essential to have the correct data. Whether you gather that data manually or have it provided from a service, the pre-licensing application process demands that operators rely on several sources of historical records for their assessments, such as gas analyses, pressure tests, leak-off tests, historical casing depths, and field kick rates.

However, while data is a critical component to the pre-licensing and drilling planning process, just as critical is the validation and interpretation of that data. For compliance, regulators demand an accurate, credible review of a prospective drill; an assessment based on a regurgitation of public data won’t cut it. Applicants need to show that the necessary data has been vetted and validated against their application. They need to ensure the data they provide both fits the needs of regulators and meets the assumptions built into their application.

Those with experience in well licensing and regulatory compliance understand the equal balance between two core principles needed in licensing applications:

Access to trusted data (and considerable amounts of it).
Proper evaluation and/or supporting documentation of the data, without which you could be vulnerable to audit.

Examples where simply having the government regurgitated data is not enough for an application include:

Missing or sparse government tops data.
Tests assigned to zones that are now commingled or tops that span multiple formations.
Errors in public data records – such as decimal-shifts in reported pressures or recording depths.
Referenced tests not representative of the drilling operation – For example, using a post-stimulated flow rate to reflect a drilling H2S release rate.
Geology not properly reflected in referenced data.

Figure 1 – A good example of user-made comments that add context to the data samples used. XI’s software makes it easier to identify problems and add comments to help users validate their applications.

As these examples demonstrate, due diligence, validation, and interpretation are as necessary as data collection, in the pre-licensing and drill planning process. This added complexity and time is necessary to avoid having to re-file incomplete or rejected applications. And definitely less complicated and time-consuming than having to deal with an audit as a result of poorly validated applications.

XI Technologies offers tools that provide both the necessary data and validation for H2S release rate assessments and surface casing applications in our RegulatorySuite of products. These web-based tools eliminate the complexity and expense typically associated with pre-licensing research. We’re hosting a webinar on Tuesday, November 23^rd to demonstrate how we make it easier to achieve regulatory compliance, click here to register or contact us for more info.