Production Operations Database:
A Case Study in Custom Exploration and Production Software

This client is one of the world’s largest publicly traded oil companies, with total global daily production of 2.3 million barrels of oil equivalent a day. Their American Division, headquartered in Houston, Texas, has a portfolio of exploration prospects in the Gulf of Mexico.

The Problem

The company planned to go-live with their first operated property in the first quarter of 2007, and needed a platform to monitor and manage their production on a daily, weekly, and monthly basis. Like most companies operating in the Gulf of Mexico, they share their production revenue with multiple partners, often with a different level of financial interest for each “completion” of a drilled well. With oil and gas production potentially in the millions of dollars per day, our client needed a way to ensure that the production being allocated to them was accurate.

The Custom Software Solution

Entrance Software partnered with a leading production accounting firm, to create a Production Operations Database to track gross and net production volumes in the Gulf of Mexico. Production Operations Database understands the geographical, pipeline, and legal reporting hierarchies in the Gulf and can report on production data at any level desired.

All calculations are performed per completion regardless of where each component of the calculation comes from (e.g. marketed interest is determined at the lease level). For raw production data, Production Operations Database can accept the field allocation performed by the client or their partners or perform a pro-rata allocation based on well-test results.

Centralized data storage

Production Operations Database has the ability to track theoretical production, reported OGOR production, and sales volumes for every property that the company has an interest in (operated or not). Production Operations Database can produce a variety of reports in Excel format, aggregating data at the Area, Block, Lease, Well, or Completion level. It can also export directly to third-party tools or expose calculated and raw data via ODBC.

Reporting hierarchy

Production Operations Database calculates all gross and net volumes at the well completion level, and allows users to run reports at any level in the reporting hierarchy (A/B/L/W/C, Platform, Reservoir, etc).

Auditing

A key requirement during development of Production Operations Database was that the client be able to audit the results of field allocations over which they have no control. After consultation with the accounting firm, Entrance Software developed a variance report that compares field allocation results to well test volumes (adjusting for downtime, etc). This report can be used to identify when the volume of production allocated to rises or falls relative to the expected production. Based on this information, the client can decide whether to perform a formal audit or request that additional well tests be performed to validate the allocation.