Tag Archives: Oil & Gas production

Data and Processes are your two friends in fat or skinny margin times – Some tools and ideas to weather low oil-prices

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well;  2014 is ending with oil prices down and an upward trend on M&A activities. For those that are nearing retirement age, this is not all bad news. For those of us that are still building our careers and companies, well, we have uncertain times ahead of us. This got me asking: is it a double whammy to have most knowledgeable staff retiring when oil prices are low? I think it is.

At the very least, companies will no longer have the “fat margins” to forgive errors or to sweep costly mistakes under the rug! While costs must be watched closely, with the right experience some costs can be avoided all together. This experience is about to retire.

For those E&P companies that have already invested (or are investing) in putting in place, the right data and processes that captured knowledge into their analysis and opportunity prioritization, will be better equipped to weather low prices.  On the other hand, companies that have been making money “despite themselves” will be living on their savings hoping to weather the storm. If the storm stays too long or is too strong they will not survive.

Controlling cost the right way

Blanket cost cutting, across all projects is not good business. For example some wells do not withstand shutting down or differing repairs, you would risk losing the wells altogether. Selectively prioritizing capital and operational costs with higher margins and controllable risks, however, is good business. To support this good business practice is a robust foundation of systems, processes and data practices that empower a company to watch important matrices and act fast!

We also argue that without relevant experience some opportunities may not be recognized or fully realized.

Here are some good tools to weather these low prices:

Note that this is a quick list of things that you can do “NOW” for just few tens or few hundred thousand dollars (rather than the million dollar projects that may not be agile at these times)

  •  If you do not have this already, consider implementing a system that will give you a 360 degree view of your operations and capital projects. Systems like these need to have the capability to bring data from various data systems, including spreadsheets. We love the OVS solutions (http://ovsgroup.com/ ). It is lean, comes with good processes right out of the box and can be implanted to get you up and running within 90 days.
  • When integrating systems you may need some data cleaning. Don’t let that deter you; in less than few weeks you can get some data cleaned. Companies like us, Certisinc.com, will take thousands of records validate, de-duplicate, correct errors, complete what is missing and give you a pristine set. So consider outsourcing data cleaning efforts. By outsourcing you can have 20 maybe 40 data admins to go through thousands of records in a matter of a few days.
  • Weave the about-to-retire knowledge into your processes before it is too late. Basically understand their workflow and decision making process, take what is good, and implement it into systems, processes and automated workflows. It takes a bit of time to discover them and put them in place. But now is the time to do it. Examples are: ESP surveillance, Well failure diagnosis, identifying sweet frac’ing spots…etc. There are thousands upon thousands of workflows that can be implemented to forge almost error proof procedures for  “new-on-the job” staff
  • Many of your resources are retiring, consider hiring retirees, but if they would rather be on the beach than sitting around the office after 35+ years of work; then leverage systems like OGmentorsTM (http://youtu.be/9nlI6tU9asc ).

In short, the importance of timely and efficient access to right & complete data, and the right knowledge weaved into systems and processes are just as important, if not more important, during skinny margin times.

Good luck. I wish you all Happy Holidays and a Happy 2015.

Change Coming Our Way, Prepare Data Systems to Store Lateral’s Details.

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Effectively, during the past decade, oil and gas companies have aimed their spotlight on efficiency. But should this efficiency be at the expense of data collection? Many companies are now realizing that it shouldn’t.

Consider the increasingly important re-fracturing effort.  It turns out, in at least one area, that only 45% of re-fracs were considered successful if the candidates were selected using production data alone.  However, if additional information (such as detailed completion, production, well integrity and reservoir characterization data) were also used a success rate of 80% was observed. See the snip below from the Society of Petroleum Engineer’s paper “SPE 134330” by M.C Vincent 2010).

Capture

Prepare data systems to store details, otherwise left in files.

Measurements while drilling (MWD), mud log – cuttings analysis and granular frac data are some of the data that can be collected without changing drilling or completion operations workflow and the achieved efficiency.  This information when acquired at the field will make its way to petrophysicists and engineers. Most likely it ends up in reports, folders and project databases.  Many companies do not think of this data storage beyond that.

We argue, however, to take advantage of this opportunity archival databases should also be expanded to store this information in a structured manner. This information should also funnel its way to various analytical tools. This practice will allow technical experts to dive straight into analyzing the wells  data instead of diverting a large portion of their time in looking for and piecing data together. Selecting the best re-frac candidates in a field will require the above well data and then some. Many companies are starting to study those opportunities.

Good data practices to consider

To maximize economic success from re-stimulation (or from first stimulation for that matter) consider these steps that are often overlooked:

  1. Prepare archival databases to specifically capture and retain data from lateral portions of wells. This data may include cuttings analysis, Mud log analysis, rock mechanics analysis, rock properties, granular frac data, and well integrity data.
  2. Don’t stop at archiving the data, but expose it to engineers and readily accessible to statistical and Artificial Intelligence tools. One of those tools is Tibco Spotfire.
  3. Integrate, integrate, integrate. Engineers depend on ALL data sources; internal, partners, third party, latest researches and media, to find new correlations and possibilities. Analytic platforms that can bring together a variety of data sources and types should be made available. Consider Big Data Platforms.
  4. Clean, complete and accurate data will integrate well. If you are not there yet, get a company that will clean data for you.

Quality and granular well data is the cornerstone to increasing re-frac success in horizontal wells and in other processes as well.  Collecting data and managing it well, even if you do not need it immediately, is an exercise of discipline but it is also a strategic decision that must be made and committed to from top down. Whether you are drilling to “flip” or you are developing for a long term. Data is your asset.

 

Bring It On Sooner & Keep It Lifting Longer. Solutions To Consider For ESPs (Or Any Field Equipment)

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Settled on average 6,000 feet below the surface, electrical submersible pumps (a.k.a ESPs) provide artificial lift for liquid hydrocarbons for more than 130,000 wells worldwide.
Installing the correct ESP system for the well, installing it precisely, and careful monitoring of the system is paramount to reducing the risk of a premature end to an ESP life cycle. But the increasingly long laterals of horizontal wells, along with rapid drilling in remote areas, is creating challenges for efficient operations and the ESP’s life span. Implementing the correct processes and data strategies will, undoubtedly, be the cheapest and fastest way to overcome some of the challenges.

1- Implement A Process Flow That Works, Break The Barriers

When a decision is made to install an ESP in a well, a series of actions are triggered: preparing specifications, arranging for power, ordering equipment, scheduling operations, testing, and finally installing it in a well, to state a few. These actions and decisions involve individuals from multiple departments within an organization as well as external vendors and contractors. These series of actions form a process flow that is sometimes inefficient and is drawn out, causing delays in producing revenue. In addition, sometimes processes fall short causing premature pump failures that interrupt production and raise operational costs.
Research of many industry processes shows communication challenges are one of the root causes for delays, according to LMA Consulting Group Inc. Furthermore, communication challenges increase exponentially when actions change hands and departments. A good workflow will cut across departmental barriers to focus on the ultimate goal of making sure Engineering, Procurement, Logistics, accounting, vendors, contractors and field operations all are on the same page and have a simple and direct means to communicate effectively. But more importantly, the workflow will allow for the team to share the same level of urgency and keep stakeholders well informed with the correct information about their projects. If you are still relying on phones, papers and emails to communicate, look for workflow technology that will bring all parties on one page.

A well-thought through workflow coupled with fit-for-purpose technology and data is critical, not only to ensure consistent successful results each time but also to minimize delays in revenue.

2- ESP Rented Or Purchased, It Does Not Matter… QA/QC Should Be Part Of Your Process

Although ESPs are rented and the vendor will switch out non-performing ones, ensuring that the right ESP is being installed for a well should be an important step of the operator’s process and procedures. Skipping this step means operators will incur the cost of shut downs and tempering of reservoir conditions that may otherwise be stabilized – not to mention exposure to risks each time a well is penetrated.
More importantly a thoughtful workflow ensures a safe and optimal life span for ESPs regardless of the engineers or vendors involved, especially in this age of a mass retiring of knowledge.

At today’s oil prices, interrupted production for a well of 1,000 barrels per day will cost an operator at least $250,000 of delayed revenue for a 5 day operation. Predictive and prescriptive analytics in addition to efficient processes can keep the interruption to the minimum if not delay it altogether.

3- Know Why And How It Failed Then Improve Your Processes – You Need The Data And The Knowledge

One last point in this blog: Because ESPs consist of several components, a motor, a pump, a cable, elastomer, etc… ESP failure can, therefore, be electrical, mechanical, thermal or fluid/gas composition. Capturing and understanding the reasons for a failure in a system to allow for effective data analysis provides insight that can be carried forward to future wells and to monitoring systems. Integrating this knowledge into systems such as predictive analysis or even prescriptive analytic to guide new engineers will have an effect on operator’s bottom-line. A few vendors in the market offer these kind of technology, weaving the right technology, data and processes to work in synergy is where the future is.

On how to implement these solutions please contact our team at info@certisinc.com.

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More Shale Data Should Equal More Production, Unless Your Data is an Unusable Mess

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As the U.S. overtakes Russia in Oil & Gas production because of its unconventional fields, new operators flood the industry. Inevitably, competition increases. The need for predictable and optimized well performance is greater than ever. The fastest route to optimization is quality data that can be used to understand unconventional fields better and drive the flow of operations efficiently.

However, as more data pours in, the cracks in many E&P companies’ data management systems are exposed. Geoscientists and engineers are left to make their own integrations and correlations between disperse systems and left digging through folders trying to find documents for knowledge.

Some of the trouble lies in the new methods of analyzing vast array of data that were not considered as prominent in conventional fields. For example, geoscientists break shale down by geology, geochemistry, and geomechanics, and engineers now look into fracs using microseimic lenses. While this data was used in conversional fields before, the stress on and ways of analyzing them is different now; new parameters have emerged as key measures such as TOC and brittleness. When it comes to shale fields, the industry is still learning from acquired data.

Well organized (and quality) information that is easily found and efficiently flows through internal departments and supplying vendors, not only will allow for faster reaction to operation’s needs & opportunities, it will turn into better strategy to increase EUR per well through better understanding of the reservoirs.

How you take care of your data directly impacts your engineers and geoscientists efficiency and the speed they can find good production opportunities. Fast and efficient is the name of the game when it comes to unconventional and competitive world.

It is not enough to provide a place to store new unconventional information and flow it to analytical systems, while those are the first steps they must fit into a holistic approach that takes unconventional integrated operational processes to the next level of efficiency.