Well pad construction dirt work, cost certainty & savings
The textbook definition of cut and fill is “a process of earth moving, whereby the ideal amount of material cut from an area roughly matches the amount of an area that needs to be filled”. Moving earth is usually one of the first activities to be performed on a drill site where a well pad is to be constructed and placed, for example.
Moving earth, or better referred to as “dirt work”, is a very costly process so it is always the goal of an Operator (company who serves as the overall manager of a drilling project) to limit the import on-site or export off-site of earth to the greatest extent possible. Importing either too little or too much dirt is costly, particularly if supplementation of material from off-site sources is required. Therefore, the practice of using cut material removed from an area of a site to then meet fill requirements of the site results in significant savings and is the basis of the cut and fill process. In Oil & Gas it is referred to as a balanced well pad. Balanced pads are becoming more challenging due to larger size well pads plus Operators have different requirements on what items can be on cut and what can be on fill portion of the well pad.
To achieve everyone’s goal of being cost efficient, it is of utmost importance to provide accurate, detailed data to those who will be submitting a bid to construct a well pad.
For bidding purposes, the data specified above and the Pad Layout and Typical Cross Sections based on site information containing all necessary dirt quantities must be included in the response to a Request For Bid or proposal.
This can be done most effectively by using cut and fill data software versus manual manipulations of numbers which are based on estimates. When everyone on the project uses the same set of documents containing the same data, risk is reduced for additional costs due to possible use of different estimates for dirt to be moved.
Cut and fill diagrams state the exact amount of dirt to move, for example. An Operator can be use cut and fill diagrams to double check a contractor’s bid to avoid using a dirt work estimate that is too high based on estimated rather than accurate measurements.
Some Operators use cut and fill diagrams and some don’t. Those that use computer generated data for cut and fill work will have the best chance to successfully complete the project on time and within budget.
Many consider that the cut and fill portion of a well pad construction, especially the dirt work to represent an impactful financial risk to the Operator. A few possible risks include, but are not limited to, inexperienced personnel working on the project, math errors, mixing cut and fill quantities, using the wrong formula for the volume, incorrect well pad location without consideration of slope grading requirements (i.e. location could be outside spacing requirements such as 190’ instead of 200’ of a railroad or 285’ instead of 300’ of a water source or 300’ instead of 330’ of a section hardline or other regulations issues, these are just examples), incorrect site maps and incorrect topographical data.
Let’s examine the possible cost savings of well pad construction from the use of cut and fill diagrams. Example: a well pad is X acres, total cubic yards of dirt work is to move a 100,000 yards. If the invoice comes in at 110,000 yards, that is a 10% increase in dirt work which might be about $30k (~$3 a cubic yard for dirt work) in additional costs for dirt work on the well pad. The cut and fill diagrams provided by a 3rd party like a Survey and Engineering firm can provide an Operator objective and reliably accurate data to use for dirt work bids and cross checking invoices. I do not know what other service providers charge for cut and fill diagrams, but an Operator is going to get over a 30 to 1 return on their spend for construction documents if such an example occurs. This is a good return on money spent or a very affordable insurance policy to contain costs. This is about being very prudent with planning for construction costs and execution. The well pads being constructed today in some markets will last 30+ years and contain 4 to 60 wells.
Cut and fill documents give all the pertinent information needed to prepare accurate bids, limit possible risks, build the well pad in the proper location and dimensions, contain costs and perform a project in the most efficient manner. Why guess and be about right, when you can be about exactly right.
By Parrish Salyers