Every reporting cycle, oil and gas companies ask their reserves department how many wells they own. And every year, in all but a handful of companies, the department has no good answer. In some companies, it takes months of cobbling together lists from every department, none of which agree. And often the result is still dubious. At TriStar, Synergy has the answer.

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Every reporting cycle, oil and gas companies ask their reserves department how many wells they own. And every year, in all but a handful of companies, the department has no good answer. In some companies, it takes months of cobbling together lists from every department, none of which agree. And often the result is still dubious. Eric Rasmussen, Reserves Coordinator at TriStar Oil & Gas, feels that this “unhealthy” state of corporate data is doing oil & gas companies a disservice.

"Having healthy data means that when you ask a question, you get the same answer from every department— land, reserves, accounting, production, your consultants—everyone."

“Having healthy data means that when you ask a question, you get the same answer from every department— land, reserves, accounting, production, your consultants—everyone. If you don’t get the same answer, you’re not quantifying your value properly. And you’re not reporting to shareholders accurately.”

Also the leader of the data health group at TriStar, Rasmussen strongly believes that the path to harmonized data is starting with a small project and then steadily chipping away at the goal. At TriStar, gross well count was the first and most obvious problem to tackle. But the company quickly moved on to a net well count, reserve forecasts and verifications of operator surface loss reports. Synergy software provides the basis of all of these applications.

A living well count in seconds, not months

Why do most oil & gas companies find well counts so perplexing? While the industry has always been keenly interested in wells that produce, non-productive wells fly low under radar. Ignoring them would be fine if you didn’t need to report on them every year, if you didn’t have to insure them, and if abandoned wells weren’t liabilities that must, by law, be reclaimed.

"I think of Synergy as the brain that sits on top of all these different parts of the body, and makes them work."

At Rasmussen’s previous employer, an engineer spent three months every year compiling well lists from every department to report well count—operated, not operated, producing, non-producing, by province—to the OSC. Every department’s list was different. Production only receives electronic production volume reports (PVRs) from wells in operation. Reserves is only concerned with wells that have reserves. Accounting only counts wells that make money, and so on. Rasmussen estimates that only 40 to 45 percent of all wells were found on any one department’s list.

As project manager of the well master list, he began looking for software to help compile an accurate, consistent list. Synergy was a clear choice because of its solid ability to plug into and unite corporate data of all forms, its flexibility for custom applications, and its knowledgeable and committed staff. Rasmussen worked closely with Synergy to co-develop the Well Matrix, a workflow that draws on corporate data sources and publicly available structured land rights to provide a living report that reflects changes in real time.

When TriStar later hired him to create its well master list, he brought Synergy workflows with him. “I think of Synergy as the brain that sits on top of all of these different parts of the body and makes them work,” says Rasmussen.

Having instantaneous and accurate knowledge of all wells in its portfolio—producing and non-producing, abandoned and reclaimed—has let TriStar save months of time, comply with reporting requirements, and gain a fuller understanding of assets and liabilities.

Net well count

The TriStar data health group and Synergy went on to develop a Working Interest Matrix to get a complete and accurate overview of its capital responsibility. The net well count multiplies all well bores by their working interest, whether individual or unitized, to get a clear insurance and liability picture. With ownership and working interests fluctuating daily, a living model became invaluable.

Show me the money pit

Because even wells with a working interest of one percent need to be insured, all non-producing wells are a cost item. In Rasmussen’s opinion, putting off the inevitable reclamation of an abandoned well just worsens the health of your balance sheet. “Understanding liabilities is useful whether you’re shedding or acquiring assets,” he says. “These are not fun things, so they’re easy to overlook. But doing so is like forgetting about the fibre in your diet.”

"Better analysis of early drilling results has enabled us to put in more realistic bids at land sales. All of this saves us a lot of money."

Daily production ‘type curves’ forecast quality

TriStar also put Synergy to work for early results analysis in its recently acquired Bakken formation plays. According to Rasmussen, knowing how different areas of the field were performing helped them make more accurate land sale bids and avoid throwing money down the borehole.

“There is a good deal of variation between good and bad Bakken. All Bakken comes on at anywhere from 300 to 600 barrels a day, but bad Bakken can go down to 50-100 barrels within eight months.”

Synergy and TriStar created ‘Type Curves’ for an owned area by averaging daily production of every well in that area. After a month or two, the type curves help the company quantify well reserves. Within a year, the probability of a well’s success is clear. Another company in the formation continued to drill for two years without realizing that it was losing money, because the data didn’t come through early enough.

“In the past, we’ve put in a stink bid on what turned out to be a good formation and lost the land. But now that we can better analyze early drilling results, we can put in more realistic bids on the land that’s going to pay off. And we can also shed those wells with falling production. All of this saves us a lot of money.”

Sanity checking surface losses

Another useful application of Synergy has been verifying the natural gas production reports of third-party operators. At one plant, operators reported production at a much lower rate than the TriStar analysts had expected, quoting high surface loss as the reason for low gas and liquid sales. Because the surface loss reported was double the predictions, it was worth looking into.

Using Synergy, TriStar compared the publicly available raw gas production data from the well head with the post-processing sales volume for natural gas and liquids in the accounting system. The company used this comparison to verify that sales data was consistent with the potential gas and NGL content the company had modelled for that well. The discovery of an accounting error ultimately explained the surface loss anomaly.

Rasmussen plans to use Synergy to model the company’s historical data into the future for raw production, sales volumes and surface loss at any given gas plant.

Hierarchies and siloes

At TriStar, growth through acquisition and merger has been the modus operandi. The key to aggregating and making sense of data residing not only in disparate corporate systems but also in acquired companies’ systems has been consistent data hierarchies. Tristar uses the Synergy Hierarchy Matrix to quickly absorb new acquisitions into its highly focused environment.

An important example is ensuring wells are consistently listed within a single property. “For example, lease accounting may report 30 wells in Hastings, while reserves lists 40,” says Rasmussen. “Ten of these may actually be in a different area. Each entity must be defined and explained for reporting to third-party reserves evaluators on our revenues and costs in any one area.”

"Synergy plugs into everything—budgeting, reserves modeling, public info—and relates it all in a big picture..."

The industry uses the Unique Well Identifier (UWI) to name every well. But several factors complicate this naming, including:
TriStar’s accounting software, Cubit, needed to combine 10 different fields to make a UWI field.
The UWI of a conceptual well in the reserves database may change when built, if it ends up being drilled in a different location.
Data contributors tend to take shortcuts and enter “8” instead of “008.”

TriStar ensures integrity by not allowing data from one system, such as PVR, to be pulled into another, such as Mosaic for reserves, if the UWI doesn’t match perfectly. Rasmussen describes enforcing standard data practices as a battle against ownership and inertia. “We’ve been trying to gently express to people that “your data is not your data—it’s everyone’s data. In the past, departments have thought of themselves as their own company. People resist change. But now they’re starting to realize the benefits of shared, consistent data.”

Systems are in such a good state that data from a recent acquisition of Talisman’s interests in Southeast Saskatchewan has already been absorbed. Rasmussen feels that the merger of TriStar and Petrobank Canada to form PetroBakken Energy Ltd. should not present a problem.

Synergy for reporting

Beyond data consolidation, Synergy has become the de facto interface for analysis and reporting. Because it is plugged into all systems, it reflects the whole data picture. But employees also find the Synergy reporting interface easier to use than the source software products, and learning to use Synergy is much quicker than learning all of the subsystems.

“Synergy plugs into everything—budgeting, reserves modeling, public info—and relates it all in a big picture instead of in siloes,” says Rasmussen. “It has become an indispensable time saver and report generator throughout Tristar.”

"High quality, consolidated, and easily-accessible data lets us reduce frustration, save time, shed liabilities, and ensure we get our fair share."

Crowd sourcing

Rasmussen feels that sharing data as widely as possible can only help. “The more people looking at data, the better it gets. When all employees can add their opinions and changes, it’s like painting a picture by grid. When one square is wrong, you fix it and continue on.”

The new strategically combined company, PetroBakken, will continue to use Synergy under the current contract. “While it’s hard to quantify the exact value that Synergy has brought to TriStar so far, we know it’s significant. We once did things slowly, and now we do them quickly. We get a consistent, evolving view across departments. If Synergy does something 10 times better than another tool, then it’s not redundant.”

Rasmussen sees good data and quick analysis as the future of business. “High-quality, consolidated, and easily-accessible data lets us reduce frustration, save time, shed liabilities and ensure we get our fair share. In these economic times, an accurate and highly focused model of our business lets us be certain of our performance and communicate where we’re going.”