Schramm Rig to 'Walk and Talk' Down Under

 

Schramm Inc.’s T500XD rig – which features step changes not only in rig technology but data acquisition capabilities that allow the rig to walk and talk – will head Down Under later this year.  

Energy Drilling Australia is buying the second T500XD rig manufactured by Schramm, which will drill for Senex Energy Ltd. in Australia’s Cooper Basin and for Statoil ASA in the Northern Territory. The rig is expected to begin drilling activity in Australia at mid-year.

The T500XD, which was launched last year, is a direct answer to the oilfield industry’s need for a land drilling rig that is safer, faster, has a smaller environmental footprint and can save producers time and money, say officials with Schramm. The oil field industry in the United States and internationally is moving towards using rigs that have a smaller footprint and enable safer pipe handling, said Fred Slack, vice president of marketing and sales administration at Schramm. The industry also is moving to pad or factory drilling.

“The T500 directly answers this product need, with its walking feature from hole to hole and it ability to drill both the tophole portion of a well and horizontal drilling,” said David Hartzell, vice president of engineering at Schramm and the project manager for the initial T500XD launch.

The rig has been undergoing testing and validation at Schramm’s 27-acre, 250,000 square foot, century-old manufacturing facility and headquarters, located in the hills of West Chester, Pennsylvania near Philadelphia. “Clever logistics” will allow the rig to be shipped from the Baltimore, Maryland to Brisbane, Australia, company officials say. While the company has moved product around the world before, the shipment of the T500XD marks the first time the company moved equipment of this size.

Schramm will verify the rig’s 500,000-pound hoist capacity prior to shipment. Schramm spent a lot of money to create and test fixture and validate the rig’s tophead technology, but still found it had to adjust parameters during operations. The company anticipates it will make more adjustments in Australia to account for the local formations and operating temperatures. With temperatures as high as 130 degrees Fahrenheit, rigs drilling in Australia require higher viscosity oil, which will require changes to the machine’s characteristics, Schramm President Ed Breiner told reporters during a recent media tour.

Schramm Rig to 'Walk and Talk' Down Under

The company has used its 60-year history in Australia working with regulatory authorities to incorporate needed changes into a rig. 

“You can’t overdesign for safety,” said Breiner, noting that the company uses the best practices available.

Schramm has made changes in the rig to meet specific requirements for Australia, including adjustments to the rig’s stair cases and handrails, trailer axle loading and configuration. Other changes include protective sleeves installed over high pressure hydraulic hoses to reduce the chance of injuries in case of a leak.

Breiner attributed the need for the T500XD to the move by the oil and gas industry since late 2009 towards more horizontal and directional well drilling and away from vertical drilling, better accuracy in pinpoint resources, which has resulted in fewer dry wells.

“There are fewer rigs running in the United States today than in 2007, yet there’s far more product coming out,” Breiner said.

Because shale wells are going deeper vertically and horizontally – some over 10,000 feet – Schramm wanted a rig that could drill the full hole.

Started at the turn of the 20th century in Philadelphia as an engine repair shop, Schramm began manufacturing compressors that were dominant in the construction market. Schramm later used this experience in pneumatics when it began building drilling rigs in the 1950s.

Schramm has had a global presence since the early 20th century – manufacturing winches used to raise dirigibles above World War I battlefields – and despite being located in West Chester, travel is in the company’s DNA, said Breiner. Today, its biggest markets include Australia – its number one destination – China and South America. The oil and gas industry is currently Schramm’s largest market; the company also builds rigs for use in the mining, water well and geothermal markets, 

The company’s T685 model rig played a part in the rescue of 33 workers trapped in a Chilean mine in 2010.

Schramm will debut at the May Offshore Technology Conference in Houston its T250XD rig. Schramm’s newest trailer-mounted drilling rig, which has 250,000 pounds of hook load capacity using Schramm’s Telemast technology, is designed with shale wells in mind and is essentially a smaller version of the T500XD. The rig builds upon the success of the field-proven TXD and offers additional capacity for deeper drilling applications. The T250XD features increased top drive travel at 56 feet for added casing handling clearance, blowout preventer clearance and an operator’s control room.

The company also recently expanded into Houston with the appointment of Kelly Shideler as its Houston-based oil and gas business development manager.

Simplicity is the Ultimate Sophistication

Quoting Leonardo da Vinci, Breiner said the T500XD’s compactness, automation in operations and data transmission capabilities create a simplicity in its operations that is the mark of ultimate sophistication. 

Originally targeted for the coalbed methane market in Pennsylvania, the Telemast rig line was launched in 2002.  Over time, the rig came into use in additional markets, including large diameter water wells, mine dewatering and mine rescue. As the depth of wells increased, the hook load of the original T130XD of 130,000 pounds was replaced with 200,000 pounds, and the integral LoadSafe pipe handling system displaced T130XDs in most energy sector applications.

The Telemast technology was engineered with mobilization in mind, to allow for large structures to be moved down roads in hilly western Pennsylvania.

“People complained about the long overhang when trying to case 43-foot plus length sections of wells underneath the tophead,” said Breiner.

The Telemast design allows the mast to be transported by highway in one trailer without disassembly, no small feat for rigs in the 250,000 to 500,000 pound Range III class, said Slack; the top drive travel ranges 52 to 56 feet with mast fully extended.

The rig is self-erecting – and can be set up in one 12-hour shift – meaning operators don’t have to spend money on a crane.  The rig’s compactness – with a footprint equivalent to one football field at 250 by 250 feet versus 350 by 350 feet – and fact that it can be hauled between drilling sites in 10 truckloads versus 30 or more, reduces the rig’s environmental footprint and disruption in the local community with less truck traffic.

The rig’s automated features mean that fewer workers are required and workers on the rig are out of harm’s way in the making and breaking of pipe.

“Instead of the derrickman being 70 feet off the ground on a platform to stand up pipe, the derrickman’s now in an air-conditioned cabin operating the rig with a joystick,” said Breiner.

The cabin and its human machine interface technology allows for greater visibility in drilling, with plug and play, joysticks and touch screens that are more user-friendly. These tools also allow for infinite control of the drilling apparatus and instantaneous feedback on its performance, with greater visibility drilling into the ground.

“The drill operator in the control room is at eye level with the action, on same level as iron roughneck aka power breakout during the pipe joint make or break process, as is the tilting top drive as it mates up to the LoadSafe XD jaw system,” said Breiner. “Old style draw works on rigs give you obscured views and stiff necks as you track derrick man activity on the monkey board 75 feet in the air.”  

Schramm does not offer downhole cameras or tools in its line, but cameras can be used to permit the operators to view various aspects of the rig as needed.

The T500XD also can “walk” up to 30 feet an hour, allowing it to move around a drilling pad, thanks to the rig’s 360 degree walking pad design for fast moves from hole to hole. This feature accommodates the trend towards pad drilling or factory drilling.

Its remote transmission capabilities mean that a rig can be monitored and adjusted remotely on a 24/7 basis. From its West Chester headquarters, the company has been able to monitor a rig operating in Ohio. Schramm also will be able to monitor and configure the rig operating in Australia via satellite.

Breiner likened the company’s ability to remotely monitor a rig to fine tuning a musical instrument, adding that, “the ability to remotely and infinitely monitor a rig over distance with the use of electronics represents a stepchange in technology.” 

“With the derrickman in the control room and no guys on deck during the make or break of pipe, the rig’s operations are safer and more efficient,” said Breiner.

Fewer people are required to be on site to run the rig, and the people on site are not in harm’s way.

With quicker completions and the ability to drill more wells, operators can do more work with less equipment, realizing savings in time and money. Breiner cited a public statement made last year by an official with Carrizo Oil & Gas – a Schramm customer – as having saved $15 million over an 8-month period using top hole drilling of Marcellus shale wells. Carrizo achieved this savings by using several TXDs for top hole work at a lower day rate and faster mobilization versus using traditional technology big rigs. Northeast Energy owned and operated the rigs under contract to Carrizo.

Alpha Hunter owns the prototype of the T500XD, which is drilling in West Virginia and has been used to drill Utica and Marcellus shale wells. While Schramm designed and built the entire rig inclusive of the control room software, which is a fully optimized single source package.

“Alpha Hunter provided valuable input from an end-user perspective, and was an important strategic partner, in addition to longstanding customer with multiple Schramm TXDs across their operating fleet,” said Breiner.

Because of greater efficiency of operations, fewer rigs are needed. For this reason, Schramm is marketing its T500XD package at around $8 million. This price is considerably higher than its other products such as the T200, which sells in the $2.6 million range, but Breiner said the company sees the T500XD as a value proposition to the market.

“While it’s higher priced, it’s far more capable,” said Breiner.

He wouldn’t comment on the company’s margins, but touted the advantages of the company’s 100-plus years of manufacturing experience and design and control of all critical components of the rig, versus other companies that are integrating components.

“Our strategy all along to develop innovative products for the industry,” said Breiner. “By developing the T500, we’re trying to stay a step ahead in terms of technology.” 

Over the past eight to 10 years, 30 to 35 percent of the company’s revenues have been generated from new product. The T500 is part of that strategy, said Breiner.

The TXD is built to order with seven months lead time, including one month of validation on factory tests prior to the rig’s shipment to the buyer. The T250XD has a 90 to 120-day delivery, including the factory validation process prior to shipment. Schramm also has TXDs in stock for four week delivery, and will likely have T250XDs available for fast turnaround as early as 2015.

Energy rigs operate on a 24/7 basis, typically up to 7,500 hours a year. With proper maintenance, a 10-year life cycle is achievable for a rig, and major aftermarket factory rebuilds can update the rig and extend its life even further, said Slack.

While the percent of revenues from each commodity-driven market has ebbed and flowed, oil and gas has become a major revenue source for oil and gas. In 2013, oil and gas accounted for 65 percent of Schramm’s market share; Breiner said the company is aiming to increase that percentage in 2014.  

The company employs 170 people at its Westchester, Pennsylvania headquarters and 60 at its operations in Australia. The company continues to hire people to meet the demand of the new technology play to support equipment, but the company’s workforce is down from its peak of around 250 employees in 2007 and 2008. The 2008 financial contagion caused the company’s workforce to shrink due to its impact on the commodities market, but the company was buoyed by a pickup in the mining sector in late 2009.

The company currently has over 45 rigs in China, 100 rigs in Australia, 60 rigs in Chile and over 20 in Peru.

Schramm already meets the American Petroleum Institute requirement of traceability of its rigs. The company also recently launched RigID, a password-protected online library where rig owners and distributors can search technical documentation used to support operations and maintenance support worldwide at any time.

Documentation on Schramm rigs built before August 2013 will be available through the site. RigID will allow a rig buyer operating anywhere in the world to check the original source of material, including when it was made, its chemistry, who welded it, the welding wire, the whole gambit,” said Breiner.

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