Information Builders Fuels Information Management for Upstream Professionals

Consultant Uses WebFOCUS and iWay to Help Customers Reduce Risk and Optimize Production Efficiency

Most oil operators have amassed valuable operational data about finances, drilling, production, reserves, and project planning, but they have trouble analyzing this data to make decisions. They derive operational metrics from multiple systems and often must manually combine the data to produce meaningful reports. Many of these operators export data into Excel spreadsheets to analyze information – a tedious process that is slow and fraught with errors.

Upstream Professionals Inc. (UPI) helps these companies streamline information management issues. The consulting company is well known for its Well Lifecycle Efficiency Framework and Methodology, a software application that helps oil and gas operators optimize their operations. Building on the success of this endeavor, UPI used the WebFOCUS business intelligence (BI) platform from Information Builders to develop a BI and performance management system called Oil & Gas Total Asset Manager (O & G TAM).

O & G TAM synthesizes the multiple streams of data collected from drilling, production, economics, land, accounting, and other sources into a single, trusted source of information. The configurable system includes a centralized data repository that populates WebFOCUS dashboards, scorecards, and other powerful data visualization tools. The solution also includes a master data management (MDM) platform that provides trustworthy information to all users, who can view operational metrics through dashboards and parameterized reports to minimize the risk of expensive well stimulation projects. The BI system helps oil and gas companies manage upstream activities such as drilling, production, finance, and asset management.

“Most oil and gas operators are experts at managing wells, not data points,” explains Jeff Dyk, chief executive officer at Upstream Professionals. “Before they can finalize a project plan they need hard data that reveals what it will take to get the wells to perform at optimal levels. Similarly, investors need to have confidence in their forecasts to be assured of a worthwhile return.” O & G TAM pulls data from dozens of sources and integrates the results into an enterprise reporting, BI, and performance management environment. “Our reports help them know precisely what action to take,” Dyk adds.

Addressing Upstream Process Inefficiencies

The oil industry is divided into three sectors: upstream, midstream, and downstream. Upstream activities are related to oil exploration and production. In addition to large companies like Shell and BP, this sector includes contractors that specialize in servicing oil rigs, manufacturing equipment, running seismic tests, handling drilling operations, and many other tasks. The midstream sector is primarily involved with moving oil from production facilities to refineries via pipelines and oil tankers, as well as with refining oil at midstream refineries. The downstream sector includes petroleum product wholesalers and retailers, including gas stations.

UPI focuses on the upstream sector by helping operators address process and data inconsistencies. One of UPI’s charter customers is Laredo Petroleum, Inc., an exploration and production company headquartered in Tulsa, Oklahoma. Laredo’s strategy is to make strategic acquisitions and participate in joint drilling ventures that have upside potential in the targeted area of the Mid-Continent and Permian Basin Regions of the U.S.

Laredo acquires and develops natural gas, oil reserves, and strategic gathering systems. The company actively seeks and evaluates acquisition opportunities to create value through operational improvements, gathering system expansion, development drilling, and exploration ventures. Laredo uses O & G TAM to automate these activities. The system pulls data from 72 applications into one source.

“TAM automated our well lifecycle strategy. It pulls data from multiple applications into one trusted source for easy access and utilization,” says Jerry Schuyler, president of Laredo Petroleum. “This gives us a platform for generating accurate data and reports about our assets. From the TAM system, we have created dashboards that help highlight problematic areas quickly and easily. Now, our technical professionals spend most of their time solving problems, not wasting their time sorting through cumbersome databases.”

TAM tracks key performance indicators (KPIs) that help Laredo improve asset visibility, minimize downtime, increase capacity, manage capital burn rate, and other critical business functions. Its KPIs and dashboards include AFE Management, Capital Budget Management, Drilling and Wellwork, Lease Expirations, Failure Analysis, and Production Performance. TAM also generates critical reports, helping Laredo monitor performance and improve asset visibility, minimize downtime, increase capacity, manage capital burn rate, and catch potential problems before they are out of control.

For example, the Daily Production Report, created with WebFOCUS, presents details about daily and forecasted production, with a seven-day rolling average for one or multiple wells. The Base Production Report shows the monthly value of forecasted base production and monthly actual production. The Lease Operating Expense Report reveals what Laredo budgeted for particular wells that month and where they stand now. The Lease Expiration Report tracks thousands of leases on many pieces of land to make sure those leases are renewed correctly and on time.

WebFOCUS ReportCaster delivers daily reports about the status of each well. These reports help Laredo optimize business processes to maximize their assets on a daily basis. For example, the Daily Operations Report is sent out by e-mail to the people overseeing the wells. It contains daily information about the work done on the wells, who did the work, job completion status, and well production compared to seven days prior. Key data points within the report are associated with thresholds, and TAM uses WebFOCUS alerting technology to notify people when thresholds are exceeded. This proactive function keeps managers abreast of progress towards scheduled goals, budgets, and completion dates.

Information for All Levels and Departments

For companies, such as Laredo, that have aggressive drilling or acquisition plans, TAM manages information among authorized users and bilaterally updates new well entries across all applications.

“Each type of user measures the success of a well differently, whether those users are operators, controllers, senior managers, or field workers,” explains Gilbert Hernandez, a WebFOCUS developer at Upstream Professionals. “They are all interested in different reports and KPIs. That’s why we designed TAM to provide different versions for different types of people.”

For example, well operators need an overview that tells them whether or not they are on target. Production managers might want to drill down to the well level to determine how each well is performing. Displaying information through a dashboard helps them assess these performance metrics quickly and cohesively in an understandable format.

“It used to take months of work to gather this information,” says Hernandez. “Now TAM automates this process and allows operators to more accurately measure the performance of the wells. Operators know the information is relevant because it is derived from the metrics they depend on. WebFOCUS reports help operators make multimillion-dollar decisions.”

To develop TAM, Upstream Professionals used WebFOCUS Enable for Adobe® Flex® to create a dynamic user interface that includes colorful dashboards, drillable graphs, and PDF output. At Laredo, the implementation was divided into two phases. During phase one, Upstream Professionals installed TAM, connected it to all the back-end data sources, and automated the process of updating key reports. Phase two of the project, which is currently underway, includes information about capital management, helping Laredo better manage its expenses.

During phase two, Hernandez plans to use integration technology from iWay Software, a division of Information Builders, to automate data access, alerting, and extract, transform, and load (ETL) procedures. “iWay Service Manager and the iWay ETL tools will help us create a service bus that monitors events in the back-end applications,” says Hernandez. “We want customers like Laredo to be able to see these variables change on the fly. This will help the operators conserve capital by immediately noting when a key data value changes.”

At some oil companies, a million-dollar recompletion of a well might be summarized in a spreadsheet or delivered in a fax that sits on somebody’s desk. “It’s much better to grab a live data feed and display it through TAM so people can get this insight right away,” continues Hernandez. “If you keep a well running an extra day, week, or month when the production volume doesn’t justify it, you are losing money.”

In that sense, Hernandez claims, TAM quickly pays for itself. “In this industry, the expenses are vast and the risks are great,” he concludes. “TAM empowers operators to measure their assets in the manner they choose so that the whole organization can be more efficient.”