Entrance Experience: Day 1 at TIBCO NOW

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When it comes to Data Visualization, there is no bigger or more significant gathering than the TIBCO NOW annual event. Whether you are a partner, user, or just a data scientist, this was the place to be for the latest TIBCO Spotfire product developments and usage best practices. As a new TIBCO silver partner, Entrance was extremely excited to be attending for the first time.

Day one did not disappoint with an outstanding line-up of keynote speakers.

The theme of the event for 2015 is Your World is Being Disrupted. They delivered against this theme with a number of great presentations with tips for winning in the age of technology and staying ahead of the competition.

TIBCO CEO Vivek Ranadivé kicked off the first day with morning keynote and brief address by San Francisco’s mayor, Ed Lee about how San Francisco is embracing technology. After the mayor left, he later addressed his belief that we are in the era he calls Civilization 3.0. Civilization 1.0 was the pre-industrial revolution era, the agrarian revolution. It was the age of the artisan. People were individual contributors, farmers, shopkeepers, carpenters, painters, and artisans. The industrial revolution brought us Civilization 2.0, which ushered in the age of the corporation, beginning with Ford’s assembly line in 1913 with the main focusing being to organize people and systems for efficiency.

Vivek says we are now entering Civilization 3.0 and the availability of platforms where individuals can reach large audiences, The emphasis shifts back to the value creators. Civilization 3.0 is about offering a service that delivers extreme value to its constituents.

In Civilization 3.0 there are five forces powering the movement including:

  1. The explosion of data
  2. The rise of mobility
  3. The emergence of platforms that allow you to reach a bigger audience for example Twitter
  4. The rise of Asian economies
  5. The understanding of how math is trumping science

These forces drive us toward the age of service and thinking of it constituting as a social network and all information being perishable. However with the age of Civilization 3.0 Ranadivé predicts that in 15 years computer programming will be the solution to curing diseases and perhaps predicting certain diseases or heart attack.

Data visualization tools such as TIBCO Spotfire allow companies better collaborate internally and externally, as well as drive greater shareholder and investor value. When we implement such tools, we are empowering our clients with Civilization 3.0 capabilities – which including being able to analyze data for signals, compare new data against past data, visualize data and finally instrumenting the insights gleaned into competitive advantage.

As a company committed to delivering software that enriches people’s lives, we loved Marc Andreesen’s keynote which really more of a conversation about innovation and how every business is “becoming” a software company. As the inventor of Mosaic, the first graphical web browser, co-founder of Netscape and as a venture capitalist backing an array of web companies including Twitter, Skype, and Instagram to name a few, Marc makes that point that we need to assume that customers are connected 24×7 with mobile devices. This provides a great opportunity for allowing people to order products, services, software through the internet at any time. This also presents companies with a great opportunity for advancement and innovation if they stay ahead of the curve. With this shift of every business, marc see every company becoming a software company. Marc foresees that in the next 10 to 20 years the healthcare and education industry are going to change the most, as they are vital to people, which will require the need for new software. In closing similar to Vivek Ranadivé, Marc believes strongly in teamwork and that only when people work together and in an environment that encourages risk will companies see exceptional progress.

After a few more speakers, they played a pre-recorded interview that Ranadivé did with PepsiCo CEO Indra Nooyi keeping with the theme of people and technology stating the importance of change. Named CEO in 2006 and included five years in a row on Fortune magazine’s list of 50 Most Powerful Women in Business, Indra Nooyi’s believes that you should put your whole self into the job, which helps businesses change and evolve. The world is getting smaller with technology and the growth of the world beyond Western Europe and United States making it a requirement for companies to transform and increase the transparency even at a loss to privacy to engage with their customers. Sometimes to get the message across to their customers a company must tell their story repeatedly to win over their prospects. Companies need to create return and value to their customer to succeed. It is vital for a company to not only improve but breakaway from the status quo and the leader’s role should envision the future as well as making the vision attainable.

Overall, a great line-up of very inspiring speakers and a great way to kick of the event. We look forward to posting more insights from our experiences on day 2 and 3.

 

 

Lease Compliance and Disparate Data

Lease Compliance and Resolution of Data

Lease compliance issues in domestic shale have become critical to E&P asset protection. Lease jeopardy has grown into a major component of risk management of upstream resources.

It demands a well-defined, cohesive data management strategy that creates business intelligence from disparate sources.

Land Administration Information Systems Inadequate

Land Administration is a traditional role within an E&P enterprise.  Within Royalty complianceits domain falls the safeguarding of all of a company’s land assets, among them the oil and gas leases.

Landmen are highly specialized members of an E&P exploration and production team whose duties include assisting in the analysis of deeds, leases and other contracts.  A landman’s responsibility typically includes ensuring that the company’s land assets database is maintained and key attributes of lease provisions recorded and updated.

Unfortunately, these talented and versatile members of the upstream resources team are increasingly handicapped in their lease administration duties. This is because information technology hasn’t kept pace with changing demands in the leasing arena.

The data they’re so meticulously maintaining is in a static data repository. As a result it’s unused by advanced oil and gas software with lease analysis and business intelligence capabilities.

Changing Aspects of Lease Compliance

Several factors are driving changes in shale lease compliance.  As competitors move rapidly in vying for a shrinking pool of unconventional land assets of increasingly significant value, lessors are reexamining the royalty structure of their existing leases.

This and falling natural gas prices have helped motivated lessors, newly focused on their monthly royalty payments, to analyze their lease provisions, often with professional legal advice.  This has become a highly litigious area, with more and more attorneys building a lucrative practice area in oil and gas lease compliance and its growing body of case law.

“Royalty and land and lease rights disputes were the most common types of unconventional oil and gas litigation during 2012,” reports Navigant.

“Oil and gas companies involved in unconventional exploration continue to face not only the challenge of differing state laws, but also a constantly evolving legal landscape as landmark cases make their way through state courts,” noted Navigant, referring to Butler v. Powers Estate, litigation based upon the provisions of a 19th century oil and minerals’ lease.

If an E&P company isn’t performing due diligence on lease provision compliance, it is exposing itself to the potential of costly litigation and risking the devaluation or loss of key productive assets. Overnight what was regarded as a stable corporate asset can become a legal liability if lease oversight has failed.

A company lacking a consistently reliable system for proactive lease compliance is apt to be blindsided by an eager attorney who’s found a non-complaint lease under which he can get his fingernails.

Consolidating Disparate Lease Data into Business Intelligence

Most companies already have on hand the data needed to be proactive in their unconventional E&P lease compliance.  It often exists in various forms that convey different meanings in non-integrated data stacks. Examples include the property management data base, the financials system, the reserves model, and the drilling information.

With the right analytical methodology, this disparate data can be consolidated into an information system that provides reports and alerts that help lessen lease jeopardy.

Building a Viable Lease Compliance System

A multi-part, iterative process is used to build and deploy a viable lease compliance application.

First, leases are identified and reviewed, with their critical provisions defined, e.g., key dates, key quantities.  Next, the different systems of record are identified, and the key attributes that define the leases’ critical provisions are mapped to the destination system, with inconsistencies corrected.

At this point the source data is cleansed — incorrect or inaccurate data is modified, deleted or replaced. The resulting “good” data is synchronized to the master data set, with links established to the various source systems.

Integration with the initial lease provision inventory now occurs, with processes put into place to ensure the lease provision inventory remains accurate and current.  Lastly, lease provision tracking is established, with sensitivity cases defined.

Some of the critical sensitivity issues are royalty escalation, cessation of production and continuous drilling. Business process owners are assigned to the system and critical, sensitivity-driven alerts established for key users.

For more, read our post on leveraging unconventional information assets for Upstream…

What is a Well Spacing?

What is a Well Spacing?

Well Spacing is a restriction on the number of wells that can be drilled on a given area.

How is it important to us?

Well Spacing regulations are based on some economic, environmental and/or safety concerns like drilling unnecessary wells and wasting oil and gas. It also protects the correlative rights of landowners and well operators and maximizes the reservoir production (by avoiding inter-well interference).

Well spacing depends on the reservoir characteristics (i.e. the depth); but for most oil wells, the spacing is 40 acres and 640 acres for gas wells.

What is an Enhanced Oil Recovery?

What is Enhanced Oil Recovery

Enhanced Oil Recovery (EOR) also referred as improved, extended or tertiary oil recovery. It is a method for increasing the amount of oil that can be extracted from depleted or high viscosity oil fields.

How is it important to us?

The three main EOR techniques are:

  • Chemical flooding which involves the use of chemicals like polymers,  surfactants, micellar/polymer, and alkaline/caustic substances to lower the surface tension that prevents the oil from flowing up. This technique is used in 1% of U.S EOR production.
  • Thermal recovery which comprises the use of heat such as steam, hot water or in situ combustion to decrease the oil’s viscosity. 40% of U.S EOR production are thermal.
  • Gas injection which uses gas such as natural gas, nitrogen (N2), carbon dioxide (CO2), hydrocarbon to push the oil throughout the reservoir. Gas injection constitutes more than 50% of worldwide EOR projects and more than 60% of U.S EOR projects.

Other EOR methods are: microbial injection and downhole seismic stimulation.

The optimal efficiency of each method depends on factors such as: the reservoir temperature, pressure, permeability, porosity and the fluid viscosity.

Enhanced Oil Recovery has a higher recovery rate than primary and secondary recovery: 30 to 60 % compared with 20 to 40 % using respectively primary and secondary recovery.

Bad Oil and Gas Software: Key Concerns

Optimizing Oil and Gas Software

Oil and gas software is an essential component for businesses in the energy industry. It allows them respond to problems more quickly, review historical data more easily and send reports to managers automatically.

Oil and gas software also allows enables the implementation of  a formal process for tracking production as opposed to the collection of spreadsheets that has traditionally been used in this industry.

However, poor oil and gas software can also create problems, which may be classified into the areas of assets, production and revenue.

Assets

Oil and gas software can cause a failure to pay out on a well interest. This can occur when the software Oil and Gas Software: Field Data Capturecalculates the royalty improperly, causing the balance to fall below the minimum pay requirement for that account.

Poor software can also cause a business to over bid or under bid on an asset by miscalculating the expected value of that asset. The primary factor that determines an asset’s value is the current price of crude oil or natural gas, which can fluctuate greatly over time.

Political factors can also have a significant effect on asset valuation, especially in areas characterized by civil unrest. Technological improvements can increase an asset’s value in the future by reducing the recovery costs.

Production

Software can also create problems with production such as inaccurate estimates of production and reduction in actual production. These problems include double-counting the output of one or more wells, causing your company’s total production to appear higher than it actually is.

Software can also cause your company to drill a hole in a poor location that costs more to operate than it produces. The incorrect allocation of production is another problem that can be caused by poor software.

Facilities with multiple wells must allocate resources to each well, which is generally based on each well’s production. Software that reports production incorrectly can result in a sub-optimal allocation of resources.

Revenue

The loss of a lease is one of the most significant problems for an oil and gas company that relates to revenue. This problem typically occurs when a company is unable to successfully market a lease or sustain its production for an extended period of time.

The failure to receive revenue from all well interests can also be a major problem affecting a company’s revenue. Well interests include basic royalties that are paid to the mineral rights owner and overriding royalty interests that are retained by third parties such as geologists.

Well interests include working interests that a company receives after royalties in exchange for exploring, developing and operating the property. Bad software can also reduce a company’s revenue by inaccurately estimating the reserves remaining in a particular well.

For more, read this post on how oil and gas software can improve decision making and forecasting.

What is Air/Gas Lift?

What is Air/Gas Lift?

Air/Gas Lift in the oil and gas industry is a technique of raising oil from the bottom of the well to the surface by injecting compressed air or gas into the fluid within the casing

How is it important to us?

The injections of the air/gas, contributes to lighten the fluid within the casing and therefore helps in increasing the flow regime.

Air/gas lift is an effective method of increasing the oil recoverability and increasing the production rate.

Air/gas can be injected either continuously, intermittently or rotationally depending on the well productivity.

Air/gas lift technique accounts for 10% of the United States oil production and 50% of its Enhanced Oil Recovery production.

Oil and Gas Software: IT is Adapting in a Brave New World

Oil and gas software helps support IT transformation into valued business partner

It’s no secret that the exploration, drilling and production industry is not the same industry it once was, and oil and gas software can provide companies with the new Oil & Gas Software: The role of ITcapabilities they need to respond to the increasingly competitive environment around them. In a recent article from The American Oil & Gas Reporter, titled “IT Leaders Embrace Challenging Transformation In Upstream Operations”, Johnathan Zanger and Gerry Swift discuss how change in the oil and gas industry has created both challenge and opportunity for IT.

Zanger and Swift argue that oil and gas companies have a choice: they can either look at IT as a necessary but inconvenient utility—that is, they could continue to look at IT the same way they always have—or, they can start looking at IT as a valued partner that can help meet desired business outcomes.

Decision Making and IT

Zanger and Swift analyzed data provided by seven different exploration, drilling and production IT groups to gain a better understanding of how decisions are being made in these organizations, and how these decisions affect the business. The results of the analysis show a number of ways that growing the partnership between IT and line of business can benefit oil and gas companies:

  • Improved data management
  • Greater customer satisfaction
  • More opportunities to innovate
  • More well-defined corporate structure

Improved data management

As oil and gas companies change the way they operate, they must also change the way they capture, analyze and apply data. It’s no longer sufficient to gather data just for the sake of gathering data. Successful companies must be able to capture pertinent data that can be directly applied to business operations. Oil and gas software can provide the data management capabilities needed to make this happen.

Greater customer satisfaction

Ensuring customer satisfaction has long been one of the most important objectives of oil and gas IT organizations. However, changes in the oil and gas industry have also altered the meaning of the term “customer satisfaction.” It’s no longer just a matter of meeting business objectives and focusing on customer needs. IT organizations now need to make themselves truly customer-centric, aligning themselves to provide business value, before the customer even has to ask.

More opportunities to innovate

The importance of innovation in the oil and gas industry is well established. What seems to be less clear is the difference between change and innovation. Innovation constitutes a change for the better, that opens a new and more effective way of doing things. Many oil and gas companies have difficulty identifying innovation opportunities, but Zanger and Swift predict that a greater partnership between business and IT would make these opportunities easier to find.

More well-defined corporate structure

In order for IT to support the business effectively, there must be established processes in place to show the alignments and accountabilities of everyone involved with the IT organization. IT organizations can no longer continue to exist in their own little world. In order for IT organization to provide true business value, they must understand their relationship with the business, and be able to collaborate consistently.

One of the key misconceptions that Zanger and Swift try to do away with in their article is that changing IT requires bleeding-edge technological solutions. In reality, the solutions needed to drive greater IT involvement with business processes already exist, and they’re already proven. IT just needs to find new ways to apply these tools, such as oil and gas software, to support their mission.

For more on this topic, read this article on how the IT service model is changing…

What is Air Drilling?

Air Drilling

Air Drilling is the use of high volumes of low-pressure air as a substitute to drilling mud.

How is it important to us?

Air drilling is mainly used to reduce hydrostatic pressures in wellbore. Other benefits can be listed as follows:

  • Lower cost and faster drilling: up to five times faster than drilling with conventional fluids
  • Real time  detection of hydrocarbons
  • Increased penetration rate in hard hydrocarbon formations,
  • Minimized deviation tendency in faulted formations
  • Extended bit life
  • Minimal formation damage due to the lack of hydrostatic pressure
  • Better control of fluids during the drilling, etc.

Air drilling does not only have some advantages. It also presents some disadvantages such as the risk of down hole fires and explosions (with the use of nitrogen, mist, etc.), the sloughing of formation and its incapacity to handle fluids therefore limiting its applications to regions with mature, stable and relatively, dry formations.

Software Selection: Assessing Your Options on the Market

Software Selection and Available Product Offerings

In this software selection series, I have covered how to assess the need for custom software in addition to business drivers. In this third post, I’d like to spend some time covering how to answer a specific question. What percentage of my needs are addressed by available product offerings?

It can be a very obvious choice to go for an off-the-shelf product. You don’t need to hire or manage a custom software team. In addition, the costs for a software product that already exists are often more clear.

Custom software projects can stretch out over many months or even years. Depending on the quality of your team, the end product may not even be what you bargained for.

Existing Software Platforms

Software selection: connectorsBuying an existing product is no guarantee that you are purchasing all the functionality that your business requires. In the illustration to the right, you can see an example of a platform. This platform provides the baseline of functionality, with applications and a portal bolted on.

Many customers come to Entrance and say, “We’re spending $100,000 a year on SharePoint and we’re getting no ROI. What gives?”

What we tell them is that SharePoint only provides the toolbox. Your company needs to be prepared to make the further investment in customization and workflow in order to prove out the true business value of this platform.

The same is the case for many platforms. Before you make the investment in expensive software tools like these, a team that understands your business needs, budget, and resources should make a full evaluation.

When Software is Too Much

By the same token, there will also be times when a given software tool is way overpowered for your company or department’s needs. In this case, it would be a waste of money and resources to buy SAP if only one report was needed.

Doing a full evaluation of the available products in the market for your industry will help your company to see where a simpler option might fit the need very well. This will save your team and the IT staff the time for and money for investing where a larger business problem exists.

For more on the process of software selection, check out this case study for an oil and gas services company!

Bad Software Consulting: Offshore Voicemails Part 1

Software Consulting that Works for Your Business

Software consulting: genie

There are a lot of bad software consulting vendors out there. Let’s face it, lots of people can write code. But the ability to understand your business needs and execute effectively is another story!

If your company is looking for a software consulting company, it’s important to consider a number of factors, such as:

  • Do they know your industry?
    Clients come to us all the time saying about their previous software consultant, “They were OK, but they didn’t understand oil and gas.”
  • Do they understand good UI (user interface)?
    There is software, and then there is software that is easy to use and navigate. Not every developer has the skills to accomplish this.
  • Do they off-shore?
    Off-shoring always sounds cheaper from the get-go, but take into account factors like language barriers, different time zones, and a lack of understanding how an American business is run. All of these together can add up to software that is confusing, over budget, or never completed.

We get calls all the time from off-shore telemarketers asking us to outsource our development work. Whose hands do you want to leave the success of your software project in?

For more, check out our post on the “Top Five Signs of Bad Software.”