Many small oil and gas companies (fewer than 500 wells) struggle along with little or no strategy to the manage the multiple points of data that come with operating oil and gas assets. Spreadsheets abound, and individual points of information come through scattered approaches. While this approach will give day-to-day snapshots of information through word documents, spreadsheets, etc., it inherently begins to create significant bottlenecks when it comes to both research and reliability in any analytical attempts to understand their assets and maximize their potential. Consider the following scenarios.
- In managing production via spreadsheet or other disparate sources of information, tracking the effects of downtime, failures, mechanical issues, treatments, or enhanced recovery efforts become very difficult, if not unachievable.
- Understanding wellbore mechanics such as casing and tubing, rods, pumps, and their setting depths in a well becomes difficult to collect and utilize for ongoing maintenance.
- Inventory tracking and material transfers create costs because of the difficulty to transfer inventory to a yard, and yet keep it tied to the well of origin until it is put in use again. The small company credits the inventory back to the yard, where it sits idle on the books until it is later transferred to a new location. The small operator carries the inventory through a very manual-intensive process, often being delayed by the voluminous paper trail required to keep up with inventory.
- Profit and Loss statements are often difficult to tie to technical activities on the wells because there is not a relational tie between the field activity and the accounting processes. This leaves the small company vulnerable for loss in many facets, including misplaced costs that slip through because there is no relational tie.
- Increased load on a small staff because of the necessity to handle information multiple times and in multiple formats, which leads to ineffectiveness while detracting from good analytical views of the operation.
- When the small company is then set to grow, they find themselves in even greater difficulty because the problem only grows exponentially as more wells and more people are added to the mix.
These are but a few of the more prevalent problems that occur. The lack of visibility and searchability of information around the assets creates increased costs, lost revenues, and greater overhead.
Well Lifecycle Strategies Are Not Just for Large Operators
So what are the justifications for implementing an operational well life cycle technology for a small oil and gas company? I have outlined the most compelling arguments below.
- The process of managing oil and gas wells will be streamlined, and simplified. You will get more timely information and be more nimble in making relevant decisions on your assets (and based on a single source of information).
- When considering that the average monthly cost of very powerful integrated software can be at a similar fixed cost of an experienced engineering technician, your small company will be able to get well-tested information flow in place. It will allow you to work smarter, rather than harder.
- Technology is more affordable than ever before in the industry, and the labor pool of technically sound people is growing rapidly.
- Hosting services and SaaS (Software as a Service) opportunities allow a small company to minimize the IT infrastructure required to have industry-class solutions available to their companies at a fraction of the cost of having internal resources and assets.
- It will position your company for growth as the property counts grow through acquisition and drilling.
- Most importantly, your company will have greater accountability and visibility to key metrics and information that will lead to insights for greater revenues, and reduced costs. Many of our other case studies highlight some of these benefits.
In conclusion, technology is achievable and more user friendly than ever before in the the oil and gas industry. And if you’re a small independent producer, the tools to make your operation successful are not as cost-prohibitive as they’ve been in the past. An investment in data management will give you fast, effective analytics that allow you to make profitable decisions and save costs is multiple areas. Landing on a good fit for your company is more possible than ever before.