Get more out of your drilling budget with drilling cost software for exploration teams
Drilling is the biggest expense in an explorer’s budget - but it’s also the most variable.
With the increasing cost of drilling and tighter budgets, it’s essential to ensure that dollars spent equal metres drilled, especially as new discoveries require us to go deeper than ever before.
But not only do dollars spent need to equal metres drilled, but they also need to equal the right metres drilled.
How most exploration teams manage and track their drilling costs
Every exploration company uses drillers’ cost contracts, rate schedules, and quote estimates to calculate the projected drilling costs against their project budget.
But most of them are still using spreadsheets to run this workflow.
Once drilling commences, daily drilling reports (plods) are entered into a cost-tracking spreadsheet (or mining ERP at the big end of town). Then, the actual cost per metre drilled is extracted and used to project future drilling costs across the remainder of the project.
Finally, drilling invoices are reconciled against the drillers’ plod data and cost contract and recorded against the relevant tenement, closing the cost reporting workflow.
The problem with using spreadsheets to track exploration drilling costs
This process sounds straightforward - in theory. However, as we’ve all experienced, mineral exploration can be an unpredictable beast.
Very rarely does a drill program go from planning to completion without some (often expensive) challenge, whether it’s unexpectedly tough ground, tools falling down the hole, inclement weather or even scheduling oversights. All of these can impact how much you’ll spend on drilling each day, week, month, and throughout the entire drilling program.
The problem with using spreadsheets to run this workflow is that it’s easy for problems to slip through your fingers unnoticed - taking your budget along with them. Hundreds or even thousands of data cells aren’t an easily accessible way to understand the story of what’s happening in the field.
With spreadsheets, it doesn’t take much to suddenly fall behind the rig and lose track of your drilling costs. Particularly if you’re running multiple shifts and rigs per day, using multiple contractors charging different rates - or you’re not getting your cost data back from your drillers on time.
This was a problem faced by exploration teams like Chalice Mining. Teams that quickly realised their spreadsheet workflow was becoming unsustainable as they sought to expand their operations.
So they turned to drilling cost tracking software to help them.
How exploration teams like Chalice Mining, Maronan Metals and Sandfire Resources manage and track their drilling costs
Drilling cost software is a fast, easy, accurate and cost-effective way to track and predict drilling costs throughout one or many exploration drilling programs.
It uses powerful automation to take the fiddly and time-consuming aspects that typically happen in spreadsheets out of the cost tracking and management process.
For example, automation is used to centralise and standardise drilling data in any format against the drillers’ cost contract for accurate cost tracking. It can also instantaneously calculate your actual cost per metre and projects your costs based on real data and planned depth targets.
This means that less time is spent by geos transferring data manually between spreadsheets, fewer mistakes are made, and the data is delivered faster and more accurately than before - at scale. Decision-makers are then empowered to make better, data-driven decisions about how the budget is used in the drill program based on actual performance and the context of what’s happening in the field.
The benefits for Managing Directors, Exploration Managers and their teams
As a Managing Director or Exploration Manager, you want to feel like you are in the driver’s seat of your drilling budget. You don’t want any nasty surprises at invoicing time. You also want the peace of mind from knowing that you are allocating resources to your best prospects, not burning cash in ways that won’t lead to your next big discovery.
Here are four ways that drilling cost tracking software can help you achieve these goals:
Dynamic tracking of conditional clauses
One of the complexities that stands in the way of accurate cost tracking is the conditional clauses in drilling contracts.
When your geos are processing and entering the drillers’ cost data, they need to identify when and where these conditional clauses, like minimum shift rate and slow pen rate, apply and to which contractor.
A task that’s understandably quite difficult when looking at hundreds of rows of excel cell data, not to mention needing to know the intricacies of each cost contract by heart.
Because drilling cost tracking software can apply conditional rules automatically based on the plod data, this complex process is handled for them. Not only is this a huge relief for your geos, but it also creates certainty at invoice reconciliation time - with fewer surprises in your retrospective invoices once it’s too late to do anything about them.
As a decision-maker, do you feel empowered to make decisions based on data - with the confidence of knowing that it doesn’t lie?
Drilling cost software can help you make better decisions based on the actual performance of your drilling programs.
It begins by incorporating governance into the data capture and approval process to reduce errors. For example, all drilling data is subject to a review and approval process at the input point. Any missing data is flagged before entry, and data like drill hole intervals cannot overlap, creating issues in your dataset down the track.
Next, by bringing together the contextual information that’s driving costs, like time activities, penetration rate, rig utilisation breakdowns, and consumable usage by rig and by shift, into visualisations, it becomes far easier and faster to identify anomalies in the dataset and either make corrections or pivot field strategies.
This gives managers an accessible way to deeply understand what’s driving costs without necessarily having a background in advanced data analysis.
Plus, it scales across your entire operations, bringing every drill program’s data together into one place. This way, you can understand how each program impacts the bottom line, where performance gains come from, and where money is wasted.
Faster data turnaround
It’s all well and good to have amazing drilling cost data. But not if it comes three weeks after the drilling has already occurred!
You need that data now, but there are two hands that data needs to pass through first: your drillers and your geos. And drilling cost software can speed up the process at both levels so that it’s ready for you in just a few minutes, not hours, days or weeks after the fact.
First, let’s consider your drillers.
One of the realities of working with drillers is that they use all kinds of systems and software. And it’s a lot to ask them to switch to yours for a single project. So how can you get around this barrier and start collaborating more effectively with ANY driller?
The answer is using automation like the one found in CorePlan’s universal plod importer as part of its cost software capabilities. This new intelligent software technology can process any plod from any contractor in any format (even paper) and automatically organise the data to fit your requirements. Not only does this mean that your drillers can keep working in the way that works best for them - but it also means that you have a broader set of drillers to choose from. Perhaps you can shop for the best deal - or go with that niche drilling contractor with capabilities like sonic that you’ve wanted to try for your next drill program.
But what about your geos?
Well, their lives become a whole lot easier thanks to the capabilities of technology like the universal plod importer. However, there’s another benefit - all of this data is synthesised into an easy-to-digest report for their review and approval. Unlike having to trawl through thousands of data cells, the information is right there when they need it. Minus the complexity of working with macros, building your own reports and all the other manual work that comes with Excel.
Because this can all be completed in a matter of minutes, it can be done at the end of every shift. This means your geos can finally stop spinning your wheels trying to keep up with the rig, and you have the data you need when you need it to make informed decisions.
Drilling the right metres
Drilling is all about the metres, but only if they are the right metres. You don’t want to be wasting cash on holes that aren’t going to advance you closer to your goal of making a hit.
But how can drilling cost software help you close this gap?
Removing data silos and bringing your cost and drilling data together promptly gives you much more context to draw upon when making decisions about the drilling program.
For example, suppose you’re finding halfway down a hole that you’re not getting the results you’d hoped for. In that case, you have easy access to the information you need to conduct a cost-benefit analysis on whether or not to prematurely end that hole (and redirect the cash to another one).
Or, if your drilling cost projections suggest you will blow out your budget by 40% to reach your meterage target, you can investigate what’s driving the increased costs and dive into your analytics today to do something about it. Was your budget or meterage target realistic? Or, maybe you’ve chosen the wrong drilling method and are getting stung by minimum shift rates as a consequence?
Drilling cost software for exploration teams
Nobody wants to burn through cash unnecessarily - or run out entirely - before making their big hit.
So, it’s no surprise that drilling cost software is fast becoming an essential tool for exploration managers wanting to improve the efficiency of their drilling program spending across their entire operations.
However, it’s not the only drilling software used by exploration teams.
Our complete guide to drilling software for exploration teams breaks down the latest in drilling software for mineral exploration, giving you the facts you need to know to make an informed decision about drilling software for your team.