Jay Holstine presentation on Oil and Gas Process Intelligence

Oil and Gas Process Intelligence Leverage Process Execution And Data Management for True Business Intelligence

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Oil and Gas Process Intelligence Leverage Process Execution and Data for true Business Intelligence Optimal Oil & Gas exploration operations are enabled by making Well information more accessible with realtime feedback on the impact of changes, and inaction.

SigmaFlow WPM (Well Process Management) improves your operations, by delivering the capabilities to: 

Exchanging your Well data and documents with other systems for improved collaboration and decision making. (This enables an execution-focused ‘Well Master’ portal.)

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Define Business Entities and data relationships for improved operational productivity and data accuracy.

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Manage your Processes and Resource Schedules for process standardization, forecasting milestone dates, and reduced fire-fighting.

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Create Operational Reports and Dashboards to streamline work management, meetings, and provide measurements for continuous improvements.

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Create Analytical Pivot Table Reports for efficient area-level Work Planning, Execution, and Management for improved prioritization of resources and working capital.

These capabilities enable a continuously improving circular process where: 1. Employees work “in-the-system” to create deliverables, and make process decisions, because it unequivocally contains the most comprehensive and accurate source of valuable information on the Wells. Working “in-the-system” requires less work for employees because the data they need is oneclick away.

2. Working “in-the-system” improves data accuracy, and enables accurate process transparency.

3. Accurate process transparency (Process Execution and Resource Schedules) provides time-based context, that, when combined with Well attribute data (AFE & Production Estimates,) creates valuable information.

A circular, closed-loop process is essential for capturing and creating knowledge that continuously improves the process, and perpetuates employees’ preference to work in-the system.

These capabilities enable an integrated Work Planning, Execution, and Management solution. Planning work automatically generates operationally-realistic production forecasts. As work is performed, the forecasts are automatically updated to reflect reality. Management and analytical reports are an “output” of executing work that contrast planned vs. actual results.

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Optimizing your Well Data and Documents Upstream E&P data and documents are typically stored in multiple systems, with the systems referencing the same Well by different names and numbers. When data is not easily accessible, (due to licensing constraints,) or easy to identify, (due to variations in the naming and numbering of the Wells,) employees can’t access needed information.

The best way to reduce complexity for E&P employees, and to improve their productivity, is to provide a central ‘Well Master’ portal that displays key Well data, with name and number alias referencing the originating systems.

Execution-focused ‘Well Master’ portal via SigmaFlow WPM SigmaFlow WPM provides unmatched capabilities as a ‘Well Master’ Portal, because it provides a flexible ‘generic’ capability for non-technical users to manage the import and export of data & documents. This ‘generic’ capability enables easy emulation of data formats from the other systems and alias referencing when a Well has different names and numbers in different systems.

Well API number is normalized for SAP, Aries and ProCount solutions.

Traditionally, the Well delivery process (Idea Generation, Well Planning, and Well Permitting) is manually managed in spreadsheets. With SigmaFlow WPM, the Well delivery process is actively managed, acting as the system-of-origin for most planning and permitting Well data. Systems used later in the process can benefit by integrating with SigmaFlow WPM. For example: 

ERP system - manages AFE budget and actuals

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Economic Evaluation Software - provides production decline curve estimates

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Enterprise Project Management - for pipeline and facility construction schedules

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Well Lifecycle Management - for visualization of down-hole data, Wellbore schematic, etc.

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Land systems - for lease and land owner information

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Geology systems - for well log analysis, cross-sections, production & reservoir analysis

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Enterprise Document management systems

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Data Integration is simplified by creating AFE and Lease entities.

An execution-focused ‘Well Master’ improves employee productivity by making data available as work is performed, regardless of the data’s actual system of record. For example, when: 

Viewing a Well, all data for the Well and its related entities (AFE, lease, pipeline, facility, other) is available

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Performing work in a process Task, all data is one-click accessible with role-based data collection.

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Reviewing a Resource Schedule, employees can click on the Well and view all available attribute data (Well type, Total vertical depth, Target formation, APD status, AFE status, AFE number, Lease, Capital, Rate of Return, Anticipated Production, Reserves, etc.)

Define Business Entities and Data Relationships The Need for Productivity Current systems often hinder process evolution and agility. For example: A Coal Seam Gas (CSG) company planned to drill 8,000 Wells in five years. They retained an Oil & Gas process consulting firm to reengineer their processes by grouping Wells into operational packages and having the employees work the process at the group-level. This approach would minimize transactional effort in proportion to the number of Wells included in the group. 

Field group. Perform a single AFE transaction for 125 Wells.

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Lease group. Manage surveys and approvals for 7 Wells.

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Landholder group. Negotiate compensation agreements for 2 or more Leases (14 Wells).

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Development group. Ensure program ROI, and contiguous land to tie-in Wells and pipelines, by grouping 4 or more Leases (28 Wells).

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Drilling & Completions at a single Well level.

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Gathering group (same as Development group, 28 Wells).

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After management and employees agreed on the new process approach, it was discovered that their existing project management solution did not support either the grouping of Wells, or the complex data management required to ‘inherit’ milestone dates and Well data from the group-level to the individual Well-level.

Consequentially, they were forced to hire 10+ contractors to manage keep the project management system updated. This created a chasm between ‘informal process’ performed by employees, and the ‘formal system process’ of their project management solution.

Realizing Productivity with SigmaFlow WPM Recognizing the inherent chasm inefficiency of an ‘informal’ process performed by employees and the ‘formal’ process necessitated by the project management system, the CSG Company decided they needed a flexible solution that could evolve with their process improvements. SigmaFlow WPM provided the following capabilities: Operational Group entities (Field, Lease, Development, and Gathering) enable Wells, Infrastructure, and other entities to be grouped for efficient one-to-many process execution productivity. Each procedure task provides forecasted milestone dates and role-based data collection that can be “inherited” by the group members.

Business Entity hierarchy enables efficient data inheritance.

This approach minimizes transactional effort in proportion to the number of Wells included in the group while improving data accuracy and consistency.

Ramifications of Inefficient Data Management Every E&P Company has experienced the inefficiency of: 1. Completing Wells prior to infrastructure, which holds valuable working capital hostage, or causes additional transportation costs.

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2. Well completions being placed on hold, (due to a sub-surface conflict from nearby drilling,) which builds ‘Well work in progress’ inventories, and ties up working capital.

3. Loss of Lease, due to non-compliance of a continuous drilling obligation. (Many lease agreements specify that Wells need to be continuously drilled every 120 days or the E&P company can lose the ‘yet to be drilled’ portions of the lease.)

These inefficiencies occur because existing E&P systems don’t sufficiently manage vital Business Entity data relationships.

Data Management benefits with SigmaFlow WPM Recognizing the business need to optimize working capital, accelerate cash flow, and avoid losing valuable leases, E&P companies are placing a higher value on business entity data relationships. For example: 1. Completing the Well prior to its infrastructure is a classic case of the asset manager not having a report that links Wells with their Pipelines and Facilities, which would show when the assets will be ready for production. If the Well is scheduled to be ready for production prior to the infrastructure, then the manager may want to redirect capital with Wells that already have infrastructure in production.

2. Avoiding sub-surface conflict necessitates a similar solution that links Wells with nearby Wells, and forecasts the drilling and completion dates for each Well, to illuminate the potential conflicts.

3. Avoiding continuous drilling default can be accomplished by linking all of the Wells on a Lease and providing an indicator if the span between spud dates exceeds a designated number of days.

Forecasted milestone dates are provided for Wells and linked Pipelines and Facilities

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SigmaFlow WPM uniquely enables non-technical users to: create entities, add fields, and relate entities, (via relationship options: one-to-one, one-to-many, many-to-many,) to ensure data accuracy, consistency and reduce business risks.

Manage your Processes and Resource Schedules A Manual Process is an Unmanaged Process Well planning and approval processes typically take 20 times longer than when they are expedited. The question is; why can’t the process normally run as efficiently as it does when it is expedited?

The answer is that the current process is probably undocumented and being held together by weekly meetings, tracking spreadsheets, and a couple key resources performing process heroics. There is no substitute for a systematic Process Execution solution that provides the needed structure and standardization to evolve from a manual undocumented process to a repeatable process with guidance and controls.

Process Execution minimizes the time lost in hand-offs between people, enables more work to be performed in parallel, and reduces rework by providing task-specific guidance (avoiding ‘after-the-fact’ data entry by those unfamiliar to the process and data context.)

Process Execution with SigmaFlow WPM SigmaFlow WPM differentiates itself from other process execution alternatives by making it easier for employees to work in-the-system. A Task Workspace including all information needed to perform the task saves them from having to log into multiple systems.

Task Templates can be configured once, and are available for each process execution. Improvements only need to be added to the Task Template. Once a change is added, all future procedure instances automatically benefit from the change. Task Workspace includes: 

The ability to manage task dates (baseline, planned, projected, actual)

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Access to Well master data critical to the task

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Task Guidance that integrates Knowledge Management with Process Execution and explains the work to be performed. (This kind of practical guidance accelerates employee peak performance and reduces re-work.)

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Task-specific document management that provides references to help perform the task. Deliverable documents are tagged to the procedure-level and to the business entity in which the procedure is being performed.

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To-Do’s and checklist questions to institute self-audit compliance that the task was thoroughly performed.

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Task Workspace consolidates dates management, Well Master data, task guidance, To-Do’s and document management.

Template-based Process Execution with Forecasted Milestone Dates The best decisions are enabled when you have all the facts and understand the big picture. The problem with top-down solutions is that they require constant updates, which, by definition, means they are often inaccurate.

A more robust approach is a bottom-up solution that ‘projects’ future milestone dates and schedules. The projected dates automatically adjust with the cadence of the process, to “pull in” if work is being expedited, or “push out” if work is delayed.

Asset Managers can configure reports that are scheduled for desired frequency

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Integrated Drilling Rig Scheduling The SigmaFlow WPM integrated drilling schedule provides rig scheduling performance management (Planned vs. Actual, plus tracking of down-time reasons,) and one-click access to all Well data (via role-based data collection and data integration.) To reduce the risk of scheduling conflicts, indicators are provided for Well permitting and construction progress, no drilling stipulations, and permit expiration. (These indicators can be provided automatically because SigmaFlow WPM is the source of record for permit approval workflow data, permit expiration dates, lease terms, and ‘no drilling stipulation’ dates.)

Drilling Schedule with visual warning indicators.

Integrated Resource Scheduling It is important for a solution to also support schedules for non-drilling tasks, such as survey teams, construction teams, completion teams, gathering teams, etc. To save the scheduler time and minimize conflicts, SigmaFlow WPM provides transparency into the consequences of a schedule change on down-stream schedules.

Survey scheduler can view Well data and immediately see the impact of survey changes on downstream schedules.

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Exception Management It is common in the manufacturing world to track exceptions.

(For example, when a stamping machine is idle the plant captures the downtime root cause: material, machine, and operator.)

Process management enables this powerful management concept to now be available in E&P processes. An exception might be the reason provided by the Bureau of Land Management (BLM) when they reject a Well permit, or a Land Holder issue, or it could be a drilling rig maintenance issue.

The key is that by tracking these reasons, a team can run reports to determine how to reduce reoccurrence.

Exception reports reduce the risk of problems slipping through the cracks and enables efficient look-back analysis.

Operational Reports and Dashboards E&P Companies rely on weekly planning meetings to collect the ‘true’ status of Well progress and determine who is working on what. The meetings have a large payroll cost and typically focus on obtaining the as-is status, instead of resolving forward-looking issues and barriers.

Process execution enables the most constant view of accurate and up-to-date status, because task work is performed in the system, instead of updating the system after the fact. By linking flexible operational reporting with the system, the effort of collecting ‘true’ status is eliminated.

Operational Reports with SigmaFlow WPM The flexible custom reporting capability in SigmaFlow WPM enables non-technical users to create reports on any information in the system. The process is as simple as selecting the desired fields, adding some filtering rules, and designing the report layout. Each report supports drag-and-drop data grouping and column filtering.

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Example reports include:  Open Work Report: Group work by: role, person, Well, lease, rig, AFE, other.  Exception Reports: Review patterns for APD deficiencies, rig downtime reasons, land owner issues, other.  Resource schedule reports for Survey, Drilling, other  Process execution cycle-time reports  Warning Reports: Alerting a process owner of issues for a Continuous Drilling obligation, or if drilling is occurring during a stipulation period.

Users can double click on dashboard components to view detailed reports

Analytical Reports – Enabling Oil & Gas Process Intelligence E&P Companies struggle with Business Intelligence because the data is compartmentalized in disparate systems. Consolidating the data into a central warehouse is problematic because the same Well is referenced by different names and numbers in the systems. Unless the E&P Company has a Process Execution solution with Resource Scheduling, the data will not contain the time dimension and will be relegated to a large repository of Well attribute fields.

Tremendous value can be derived by providing a highly focused Business Intelligence solution that leverages Process Execution with Well attribute data imported from other solutions.

Oil & Gas Process Intelligence with SigmaFlow WPM SigmaFlow WPM provides integrated Work Planning, Execution and Management. Work planning automatically generates operationally-realistic production forecasts. As work is performed, the projected dates for tasks are automatically adjusted to accurately reflect the true project status, and to forecast when future milestone tasks will be completed.

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WPM data management capabilities provide: 

‘What-if’ drilling schedules, with time-phased sequence for Wells to be drilled. Different Well drilling scenarios can be developed and contrasted to optimize production and cost attributes.

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The Forecasting of Well milestone dates for the approved schedule. Forecasting future dates enables better long-term planning and reduces firefighting.

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The forecasting of milestone dates for the infrastructure linked to the Well. Forecasting productionready milestone dates for Wells, Pipelines and Faculties as a group enables the optimal use of working capital, and faster return on investment.

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Anticipated Well production. SigmaFlow WPM can provide your economic evaluation software with a production start date that is validated from process execution and schedules. The economic evaluation software can reply with monthly Well decline curve estimates.

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The import of AFE budgets and actual expenditure data from your ERP system.

Asset-level analysis is enabled by organizational filtering of Wells with grouping and sorting of key attribute data for improved optimization of working capital and return on investment.

SigmaFlow WPM delivers Time-based Oil & Gas Process Intelligence

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Appendix I. An Effective Well Process Management Solution Must: 1. Support ‘generic’ data integration. The ‘generic’ capability enables easy emulation of data formats from the other systems and enables alias referencing when a Well is referenced by different names and numbers.

2. View integrated data via user interface and reporting.

3. Create business entities, and run procedures at the group level and inherit data back to the member Wells.

4. Link business entities and manage complex one-to-many and many-to-many relationships 5. Create modular procedures that contain common and unique tasks.

6. Create tasks with all information and data needed to perform a task. Each task page can provide forms to view previously collected data, references, examples and check lists.

7. Manage dates and automatically forecast future dates as processes and schedules are pulled in, and pushed out.

8. Schedule Wells on drilling schedule with interactive warning indicators for drilling stipulations, process conflicts, and permit expiration.

9. View Well attribute data from the drilling schedule and other resource schedules 10. Link Wells with infrastructure (Pipelines & Facilities) to determine First Production Date.

11. View the impact of resource schedule changes on downstream schedules 12. Create operational reports, schedule reports for delivery 13. Create dashboard components from dashboards 14. Create ‘what-if’ pivot table analytical reports

About SigmaFlow As a leader in Business Process Excellence software, SigmaFlow delivers standards, consistency, and productivity for Continuous Improvement Project Management, and deep solution expertise for both the Upstream Oil & Gas pre-production processes, and the Electric Utility NERC Compliance Management processes.

Thousands of professionals at hundreds of organizations such as Avaya, Babcock & Wilcox, Canadian Natural Resources, Cenovus Energy, Central Garden and Pet, Consumers Energy, Encana Natural Gas, Gas Technology Institute, Henkel, Invensys, Meijer, Newmont Mining, PNM Resources, Pratt & Whitney, Rockwood Lithium, Tamko Building Products, Valspar Paint, Walgreens, Wyndham, and Xylem are deriving improved results from SigmaFlow software today.

For more information on the SigmaFlow Well Process Management http://www.sigmaflow.com/well-lifecycle-management-and-rig-scheduling-software/ moreinfo@sigmaflow.com.

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