Data integration new norm in oil patch
Aug 31, 2023

Pumping units at work outside Midland in this 2022 file photo. Oil and gas companies are increasingly integrating their production and finance data into one data stream to help make activity decisions and manage their assets.

Joe Raedle/Photographer: Joe Raedle/Getty I


In the infancy of the oil and gas industry, oilmen used gut instinct and intuition to drill wells. Technology today is developing data that serves as that gut instinct, that tuition.


“Today we’re able to have data-driven decision making. It’s not so much a gut feeling of ‘I have a good feeling about this play but I’m looking at the data and it’s telling me this is a good place to drill, this is not a good place to drill.’ It backs up that intuition that’s been key to the industry, I feel, going back to the early days,” said Harrison Bedford, solutions engineering manager at W Energy Software.


Participating in a webinar presented by Hart Energy, Bedford and Michael Tanner, director of FP&A at King Operating, discussed the growing trend of merging production and financial data to offer a more comprehensive picture of an operator’s assets, what is generating revenue and where funds are being sent.


“Collaboration and communication are important because you’re able to increase the efficiency in which different departments can talk to each other, look at the data sets with all their contributing elements and you’re able to have good conversations about the operation of the business. It enables a more holistic and informed approach to spending capital, addressing reservoir management and allocating resources.”


Tanner said integrating production and financial data initially saved his company 10 to 15 hours a week that were spent generating reports and cut down the costs of cleaning and aggregating the data as well as making sure it was accurate. 


In integrating production and financial data – what Tanner called the meat of what managers look at in making decisions on the next well to drill, acquisition strategies and the company’s future direction – be strategic in how the company wants the data pipeline to work, he advised. He said his company made sure the data ran parallel rather than in a series and that information was updated across the board. Also, make sure the software matches with the company’s standard operating procedure. And make sure the company’s staff knows they all have the same goal and work toward a single set of requirements.


“Define the roadblocks specific to your company. Second, define a plan on how you’re going to integrate that data and, finally, get buy in from stakeholders across the organization. You really need everyone working together because ultimately the common goal is making the company more profitable and improving operations,” Bedford said.


The oil and gas industry is undergoing a digital transformation that is probably in the earlier stages than believed, Bedford said. He predicted data-driven decisions will become the new norm, helping companies reduce risks and opening new opportunities.


Tanner urged companies to embrace open source data and said, "the little guy has the advantage." Data integration is now standard and he predicted the "death of the dashboard."


Written by Mella McEwen

View on the Midland Reporter-Telegram website

Oil eases on higher US crude output, hopes of Israel-Hamas ceasefire

By Emalee Springfield • 02 May, 2024
HOUSTON, April 30 (Reuters) - Oil prices fell 1% on Tuesday, extending losses from Monday, on the back of rising U.S. crude production, as well as hopes of an Israel-Hamas ceasefire. Brent crude futures for June, which expired on Tuesday, settled down 54 cents, or 0.6%, at $87.86 a barrel. The more active July contract fell 87 cents to $86.33. U.S. West Texas Intermediate crude futures were down 70 cents, or 0.9%, at $81.93. The front-month contract for both benchmarks lost more than 1% on Monday. U.S. crude production rose to 13.15 million barrels per day (bpd) in February from 12.58 million bpd in January in its biggest monthly increase since October 2021, the Energy Information Administration said. Meanwhile, exports climbed to 4.66 million bpd from 4.05 million bpd in the same period. U.S. crude oil inventories rose by 4.91 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures on Tuesday. Stocks were expected to have fallen by about 1.1 million barrels last week, an extended Reuters poll showed on Tuesday. Official data from the EIA is due on Wednesday morning. Gasoline inventories fell by 1.483 million barrels, and distillates fell by 2.187 million barrels. Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown in recent days following a renewed push led by Egypt to revive stalled negotiations between the two. However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah. "Traders believe some of the geopolitical risk is being taken out of the market," said Dennis Kissler, senior vice president of trading at BOK Financial. "We're not seeing any global supply being taken off the market." Continued attacks by Yemen's Houthis on maritime traffic south of the Suez Canal - an important trading route - have provided a floor for oil prices and could prompt higher risk premiums if the market expects crude supply disruptions. Investors also eyed a two-day monetary policy meeting by the Federal Reserve Open Market Committee (FOMC), which gathers on Tuesday. According to the CME's FedWatch Tool, it is a virtual certainty that the FOMC will leave rates unchanged at the conclusion of the meeting on Wednesday. "The upcoming Fed meeting also drives some near-term reservations," said Yeap Jun Rong, market strategist at IG, adding that a longer period of elevated interest rates could trigger a further rise in the dollar while also threatening the oil demand outlook. Some investors are cautiously pricing in a higher probability that the Fed could raise interest rates by a quarter of a percentage point this year and next as inflation and the labor market remain resilient. U.S. product supplies of crude oil and petroleum products, EIA's measure of consumption, rose 1.9% to 19.95 million bpd in Feb. However, concerns over demand have crept up as diesel prices weakened . Balancing the market, output from the Organization of the Petroleum Exporting Countries has fallen in April, a Reuters survey found, reflecting lower exports from Iran, Iraq, and Nigeria against a backdrop of ongoing voluntary supply cuts by some members agreed with the wider OPEC+ alliance. A Reuters poll found that oil prices could hold above $80 a barrel this year, with analysts revising forecasts higher on expectations that supply will lag demand in the face of Middle East conflict and output cuts by the OPEC+ producer group. View on the Reuters Website

Oil and gas industry’s “strong” free cash flow to support increasing production targets

By Emalee Springfield • 01 May, 2024
Last year, the demand for loans from oil and gas companies fell 6% year-on-year, and that followed a decline of 1% in 2022. Oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said. “The oil and gas industry has experienced a number of booms and busts over the past few decades, but for now, it appears to be flush with cash,” he said. The healthy balance sheets reflect the boost that companies have received from rising oil prices, buoyed by robust demand and OPEC+ production cuts. The sector’s free cash flow is so strong that the group’s leverage ratio, which measures a company’s net debt relative to earnings before interest, taxes, depreciation and amortization, fell to 0.8 in 2023 from 2.4 in 2020, Stevenson said. The ratio will likely slide below zero by the end of the decade, he said.
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