Unlocking your Data to
Improve Performance in
the Shale
Fred Kunzinger
Upstream Practice Lead
ECIM 2014
Agenda
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Conventional vs. Unconventional
The Rise of the Unconventional Play
Challenges in the Shale
Using Data to Improve your Success
Summary
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Noah Consulting – About Us
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Founded by information services professionals
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Extensive experience providing solutions to the largest and
most complex energy companies in the world
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Focused exclusively on the data / information domain
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Industry and Data Management Professionals averaging
18+ years experience
– Combine significant information and industry subject matter
expertise
– Providing a full spectrum of business solutions Information
strategy, information architecture, solution delivery
– Local and offshore solution delivery options
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Consulting magazine – Small Jewel award recipient - 2012
Houston Business Journal – Best Places to Work – 2012, 2013, 2014
Houston Business Journal –Fast 100 - 2013 and 2014
Inc.5000 – 2013 and 2014
ComputerWorld - Best Places to Work – 2013 and 2014
WorldOil magazine – 2012 Best Data Management finalist
Informatica Innovation Award Partner - 2014
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Conventional vs. Unconventional
Conventional
Unconventional
– Charge
– Reservoir
– Trap/Seal
– Shale plays all three roles:
Charge, Reservoir, Trap/Seal
– High Volume / Lower Cost
Prospects move along the
Value Chain
Exploration – Development –
Production
Challenge is finding the
hydrocarbons
Development requires an
contemporaneous integrated
approach
Challenge is finding the
“Sweet Spots”
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Unconventional Is Not New
• 1694
– British Crown issued a patent to “extract and make great
quantities of pitch, tarr, and oyle out of a sort of stone.”
• 1830’s
– Commercial production of lamp oil from shale oil in France
• 1851
– Commercial oil production from Torbanite (boghead coal)
in Scotland
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Shale Plays
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Impact of Shale Activity
• Global politics
• Commodity prices
• Change in balance of power in the Energy
markets
• Environmental
• Regulatory
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Reserves Comparisons
Area
Oil
Gas
Norway
5.83 Billion bbl Proven
74 Tcf Proven
United Kingdom
3.00 Billion bbl Proven
8.6 Tcf Proven
Bakken
7.4 Billion bbl Technically
Recoverable
6.7 Tcf Proven
All U.S. Shale Plays
58 Billion bbl Technically
Recoverable
665 Tcf Techically
Recoverable
U.S. EIA, 2014
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Challenges in the Shale
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The Speed of the Business
Logistics
Integration
Advanced Analytics – manage the exceptions
And the management of the vast amount of data and
information upon which these Business processes are so
dependent!
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The Speed of the Business
• Business in the Shale is operating at previously unseen speeds
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Strain on operations
Critical need for timely, accurate information
Operating efficiency methods
Re-thinking the “conventional way”
Annual Bakken Production
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
Bakken Production as a Percent
of ND Production
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
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Logistics and Integration
With the number of wells, the drilled footage, and production
all on the rise, information requirements are changing...
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Access to timely and accurate land holding and expirations
Supply chain issues for rigs, tubing, water, sand and other materials
Product and by-product distribution issues
Access to real-time drilling and completions data
Scheduling
Safety... Safety... Safety
This means the DATA need to be fully integrated
Drilling and
Completions
Finance and
Accounting
Supply
Chain
Well
Master
Geoscience
EH&S
Production
Operations
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What do all these core Upstream processes have in Common?
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Reserves Reporting
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Drilling Operations
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Integrated Reservoir Management
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Production Optimization
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Field Material Mgt and Maint.
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Production Revenue Accounting
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Regulatory Compliance
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Annual Report
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Lease Management
Without trusted Well Header data they are ineffective and their
potential value will not be realized.
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Challenges of Well Header Data
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Data continues to be stored in silo’s by functional departments
Well data takes on new meaning as it gets passed to each group
Trust concerns in the data to make business decisions
Trusted source of information changes across the life of the Well
Real
numbers
from a large
independent
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What is Master Data Management?
Master Data Management (MDM)−
A set of disciplines, technologies, and solutions
used to create and maintain consistent,
complete, contextual, and accurate business
data for all stakeholders:
− captured once, on time, accurately, completely,
correctly, and consistently thus enabling master
data quality;
− non-transactional in nature with no rapidly
changing data, quasi-static;
− stored in a way that guarantees integrity and a
single place of reference; and
− made available to those who need it, whenever
they need it, both internally and externally.
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Well Header Governance
Well Lifecycle
Planning
Drilling
Completing
Producing
Disposing
Drilling
Geoscience
Representatives from
all major
departments
Operations
Land
Finance
EHS
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Better Decision Making Capabilities Required
The New Assembly Line
Expanding
Data Sources
Challenging
Integration
Just in Time
Management
• Expanded Data Coverage
• New data sources, e.g. Land,
Production
• Challenging Integration
• Faster, higher volume and
real-time
• Just In-Time Management
• Big Data, Predictive – similar
to the manufacturing process
Continuous Improvement
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Understanding the Assembly Line
Some companies drill over 1000 wells a year in shale plays. The
difference between $7,500,000 per well and $8,000,000 per
well, over an entire year’s operations is half a billion dollars!
Data Analysis can help to create these efficiencies
– Reduce the number of trips (drill bits, muds, motor reliability)
– Geosteering (staying in the formation while drilling)
– Anti-Collision
Advanced analytics to analyze and optimize the entire well
lifecycle
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Categories of Analytics
Analytics is an organizational capability, not a single tool or
approach
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Visualization and data
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Predictive
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Right-time and real-time analytics
Organizations need to build capabilities in several analytic tools
and techniques with a set of use cases that apply to each
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Monitoring and Intervention
– Monitor actual operating statistics relative to
benchmarks and forecasts
– Automatic detection of discrepancies and
anomalies in cost, ROP, NPT, HSE, bit wear,
geologic drilling hazards and equipment failures to
permit timely intervention
• Alarm and notification systems
• Kickoff workflows
• Tailored to client specific needs
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Model Development and Revision
Implement a continuous feedback and
improvement process
– Automatically update correlations and statistics for
both predictive analytics and event simulation
models upon the conclusion of a job
– Tools for development and revision of forecasting
models
– Economics models support value of information
computation to help you decide if further information
or analysis is warranted
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NPT Filters
Date Range
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Drilling Phase
Multi-dimensional filters
– By Date Range
– By Drilling Phase
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By Producing Unit
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By Category
By Vendor
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Sample NPT Visualizations
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Analysis of non-productive time inception-to-date
– By Drilling Phase
– By Vendor
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Part of periodic vendor review
Business Transformation
Business Strategy
Performance
Transformation
Portfolio
Transformation
Cultural Transformation
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Business Transformation
• Improving margins is essential
– Margins are driven by cost per unit of production
– Most companies focus on the costs
– Successful companies focus on both
• Portfolio transformation will attain significant
benefits
• Performance transformation will create
competitive differentiation
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Margins
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*2014 Information based on
public presentations to
Analysts and Shareholders
Focus Areas
Corrective
Actions /
Success Logs
Production
Cost
Optimization
Results
Lift Cost
Optimization
Results
Peer
Performance
Reservoir
Technology
Solutions
Execution
Improvements
Performance
Reviews
Drilling and
Completion
Technology
Solutions
Use of
Best Skills
Portfolio
Operations
Technical
Management
Excellence
Excellence
Integrated Performance Management
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Sample KPIs
Well Lifecycle
Stages
Sample Metrics
Planning
• Time
• Cost
• Quality
→ Staking request to spud (avg. cycle time)
→ Pre-Spud actual versus AFE
→ Drillable well inventory (RTB)
Drilling
• Time
• Cost
• Quality
→ Spud to rig release (avg. cycle time)
→ Total drilling costs versus AFE (sum)/Avg. cost/ft.
→ Percent of lateral in zone; Unplanned Sidetrack Rate
Completing
• Time
• Cost
• Quality
→ Rig release to completion (avg. cycle time)
→ Total completion costs versus AFE (sum)/Avg. Cost/Stage (or Cost/GPI)
→ Percentage of incomplete frac stages; Sand/Fluid Volume per stage
Producing
• Time
• Cost
• Quality
→ Completion to IP (avg. cycle time)
→ Facilities cost versus AFE (sum)
→ WOPLs; gas flared
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Linking Focus Areas – A Sample
Well Construction
Reservoir
Portfolio
Management
Corrective
Actions
Performance
Reviews
Peer
Comparison
Drilling
Program
Management
Strategy
Production
Improvements
Asset
Development
Plans
Improvements
Completion
Operations
Excellence
Program
Execution
Plans
Best in Class
Well Delivery
Results
Production
Optimization
D&C Cost
Optimization
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Business Benefits
Quality
• Improved trust, consistency, relevance, and timeliness of data that is used on a
daily basis to support business decisions
Process
• Established business rules and standards to improve data flow and manage the
data lifecycle
Standards
• Improved data consistency and sharing across applications and data stores
Availability
• Establish an integrated system that delivers reliable information and single source
of truth to support master data management
Governance
• Institute better overall data management process, procedures, and policies to
adhere to business and data quality rules
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Summary
• Unconventional resources are playing an ever increasing role
in the global energy picture
• Success depends upon rethinking your business processes
• Successful operations are dependent on readily available,
integrated data
– Governance
– Integration
– Advanced Analytics
– Perspective
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