Using Linear Data for Ad-Hoc Decision Making
In E&P information about an asset is usually set up to flow directionally as that asset moves from being an identified prospect through to drilling and production. But while the development process is linear, information needs are not. For example, information gathered while drilling a well (mud logs, for instance) could be useful for Geology when either identifying another prospect or creating a drilling plan at a later point in time. Another example of needing data from across the asset’s lifespan might be putting actual production numbers into perspective with the geology data that originally made that prospect look economically feasible. Unfortunately, in many cases all of that great information that’s been gathered over the lifetime of a well is usually locked into siloes and can be difficult or even impossible to use to quickly make decisions.
At Entrance we’ve documented the digital lifecycle of a typical asset in upstream Oil and Gas in detail, with particular attention to naming conventions and documents along an asset’s critical path. By standardizing these conventions and documentation, we are able to create an information framework that supports ad-hoc reporting across departments, systems, and even spans of time. Our understanding of where information lives in a company can unlock that valuable insight and put it in the hands of the people who need it.
Below is a sneak-peek overview of our in depth asset lifecycle documentation. If you are interested in seeing the full deliverable, please get in touch! Let us help you evaluate your information portfolio.
Defining the Information Workflow
The lifecycle of a typical upstream asset can be shown six phases, along with ongoing accounting and forecasting functions that involve all phases of an asset’s life:
- A prospect, or potential asset, is usually identified by the Exploration department, using geological data.
- The Land department will then typically attempt to acquire a leasehold on the prospect. This is most often done before it is clear whether the prospect is economically viable.
- Once the leasehold is acquired, a prospect may begin the formal process of becoming a producing asset. The Exploration and Land departments frequently work together to analyze the economics of a potential asset.
- If the prospect is deemed feasible, the explorationists customarily draft an Authorization for Expenditure (AFE) document, which in most cases must be approved by management and by all partners on the project.
- After approval, the AFE will generally move to the Operations and Drilling department who arrange to drill the well. Explorationists and operations personnel remain in close contact during drilling to ensure that the well stays on course, and to make last-minute changes based on up-to-the-minute seismographic data.
- Once drilling is complete, and if hydrocarbons were found, the well enters production. The well remains in production until it becomes economically infeasible to continue production. At that time, the well may be plugged-and-abandoned, or the explorationists may identify another potential asset that can be reached from the same platform or even same hole.
- Throughout this process, the Accounting department commonly tracks expenses and manages accounts payable and receivable.
- Finally, forecasting is done regularly, for instance some companies forecast on a quarterly basis. The process involves classifying reserves (exploitation manager) and forecasting production (production manager). The forecasting process can be performed either by internal staff, or by an external vendor.
It is important to note that throughout this process, an asset is referred to by many names and information is stored in many different systems (both digital and hard-copy). The most common and reliable names are the AFE number, which is assigned internally, and the well identification, which is assigned by the local regulatory agency. In the United States this agency is the Minerals Management Service, but in Africa, Canada, China or other locations a different agency would assign a tracking number. Associating documents and records with the wells they are from can create a much better understanding of what that information really means.
While we know that every E&P firm operates differently, our understanding of the phases of the exploration and production lifecycle make us uniquely able to turn complex and isolated silos of information into real-time collaboration and actionable intelligence.