Baker Hughes 2007 Annual Report Download - page 86

2007 Form 10-K 3
being drilled. Many LWD measurements are the same as those
taken via wireline; however, taking them in real-time often
allows for greater accuracy, as measurements occur before
any damage has been sustained by the reservoir as a result
of the drilling process. Real-time measurements also enable
“geo-steering” where geological markers identified by LWD
tools are used to guide the bit and assure placement of the
wellbore in the optimal location.
In both MWD and LWD systems, surface communication
with the tool is achieved through mud-pulse telemetry, which
uses pulse signals (pressure changes in the drilling fluids travel-
ing through the drill string) to communicate the operating con-
ditions and location of the bottom-hole assembly to the surface.
The information transmitted is used to maximize the efficiency
of the drilling process, update and refine the reservoir model
and steer the well into the optimal location in the reservoir.
As part of INTEQ’s mud logging services, engineers monitor
the interaction between the drilling fluid and the formation
and perform laboratory analysis of drilling fluids and examina-
tions of the drill cuttings to detect the presence of hydrocarbons
and identify the different geological layers penetrated by the
drill bit.
The main drivers of customer purchasing decisions in these
areas are the value added by technology and the reliability and
durability of the tools used in these operations. Specific oppor-
tunities for competitive differentiation include:
•฀ the฀sophistication฀and฀accuracy฀of฀measurements,
•฀ the฀efficiency฀of฀the฀drilling฀process฀(measured฀in฀cost฀
per foot drilled), rate of penetration, and reduction of
non-productive time,
•฀ the฀reliability฀of฀equipment,
•฀ the฀optimal฀placement฀of฀the฀wellbore฀in฀the฀reservoir,฀and
•฀ the฀quality฀of฀the฀wellbore.
INTEQ’s primary competitors in drilling and evaluation
services include Halliburton, Schlumberger and Weatherford
International Ltd. (“Weatherford”).
Key business drivers for INTEQ include the number of
drilling rigs operating, the total footage drilled, the mix of
conventional and rotary steerable systems used, technological
sophistication of and type of wells being drilled (vertical, devi-
ated, horizontal or extended reach), as well as the current and
expected future price of both oil and natural gas.
Baker Atlas
Baker Atlas is a leading provider of formation evaluation
and wireline completion and production services for oil and
natural gas wells.
Formation Evaluation. Formation evaluation involves
measuring and analyzing specific physical properties of the
rock (petrophysical properties) in the immediate vicinity of
a wellbore to determine an oil or natural gas reservoir’s
boundaries, volume of hydrocarbons and ability to produce
fluids to the surface. Electronic sensor instrumentation is run
through the wellbore to measure porosity and density (how
much open space there is in the rock), permeability (how well
connected the spaces in the rock are) and resistivity (whether
there is oil, natural gas or water in the spaces). Imaging tools
are run through the wellbore to record a picture of the forma-
tion along the well’s length. Acoustic logs measure rock prop-
erties and help correlate wireline data with previous seismic
surveys. Magnetic resonance measurements characterize the
volume and type of fluids in the formation as well as providing
a direct measure of permeability. At the surface, measurements
are recorded digitally and can be displayed on a continuous
graph, or “well log,” which shows how each parameter varies
along the length of the wellbore. Formation evaluation tools
can also be used to record formation pressures and take sam-
ples of formation fluids to be further evaluated on the surface.
Formation evaluation instrumentation can be run in the
well in several ways and at different times over the life of the
well. The two most common methods of data collection are
wireline logging (performed by Baker Atlas) and LWD (per-
formed by INTEQ). Wireline logging is conducted by pulling
or pushing instruments through the wellbore after it is drilled,
while LWD instruments are attached to the drill string and take
measurements while the well is being drilled. Wireline logging
measurements can be made before the well’s protective steel
casing is set (open hole logging) or after casing has been set
(cased hole logging). Baker Atlas also offers geophysical data
interpretation services which help the operator interpret the
petrophysical properties measured by the logging instruments
and make inferences about the formation, presence and quan-
tity of hydrocarbons. This information is used to determine the
next steps in drilling and completing the well.
Wireline Completion and Production Services. Wireline
completion and production services include using wireline
instruments to evaluate well integrity, perform mechanical
intervention and perform cement evaluations. Wireline instru-
ments can also be run in producing wells to perform produc-
tion logging. Baker Atlas (and Baker Oil Tools) also provide
perforating services, which involve puncturing a well’s steel
casing and cement sheath with explosive charges. This creates
a fracture in the formation and provides a path for hydrocar-
bons in the formation to enter the wellbore and be produced.
Baker Atlas’ services allow oil and natural gas companies
to define, manage and reduce their exploration and production
risk. As such, the main driver of customer purchasing decisions
is the value added by formation evaluation and wireline com-
pletion and production services. Specific opportunities for com-
petitive differentiation include:
•฀ the฀efficiency฀of฀data฀acquisition,
•฀ the฀sophistication฀and฀accuracy฀of฀measurements,
•฀ the฀ability฀to฀interpret฀the฀information฀gathered฀to฀
quantify the hydrocarbons producible from the formation,
•฀ the฀efficiency฀of฀providing฀wireline฀completion฀and฀
production services at the wellsite, and
•฀ the฀ability฀to฀differentiate฀services฀that฀can฀run฀exclusively฀
or more efficiently on wireline from services that can run
on either wireline or drill pipe.
Baker Atlas’ primary formation evaluation and wireline
completion and perforating competitors include Schlumberger,
Halliburton and Weatherford.
Key business drivers for Baker Atlas include the number of
drilling and workover rigs operating, as well as the current and
expected future price of both oil and natural gas.