When a company is managing a large number of assets, the ability to access data and streamline operations becomes critical.

E&P companies Westward Energy and Escondido Resources knew the projects they were embarking on required a better way of organizing all of the leases they were pursuing. Each had crews working in half a dozen locations.

Westward was working with multiple partners in six states to secure more than 200,000 acres. Escondido was an early entrant in the Eagle Ford play, obtaining 60,000 leased acres in a 200,000-acre area. The companies were using spreadsheets, paper, and email and attempting to use Google docs, none of which enabled them to organize the information or provided a reliable means for communication among all of the parties involved. There was no reliable way to know exactly what they owned or to display or manage their assets.

John Sandager, partner with Westward Energy, had previously managed a US $500 million trust with 600 clients and had used a five-tier accounting system to manage accounts. Travis Walne, South Texas area land-man with Escondido, who was just beginning a 200,000-acre lease check in the Eagle Ford, realized the task was being complicated by the challenges of paper, email, and spreadsheets. Both companies were looking for ways to centralize their efforts.

They found the answer in a real-time, tract-based, uniform land management solution called iLandMan that gave them access to up-to-the-minute project information and mapping. The results were significant.

“At Westward, we now manage to the opportunity rather than merely react to it.” Sandager said. “The system brings together all the variables that are needed to make faster and smarter lease decisions. It is simply better time management. Westward now is able to digest large amounts of tract and contract data visually using the system’s database and integrated mapping capabilities. The company also can add GIS mapping layers of its own or purchase and integrate third-party mapping data that are important to a given project. Management can focus on key areas and capitalize on these opportunities. With consistent and time-efficient data coming in from the field, Westward personnel know where they are at any moment.”

Escondido has had similar results. “This technology changed our lives in terms of organization and productivity,” Walne said. “It became one of those moments where you couldn’t believe you ever did it any other way. This system has led to a sense of leadership from our land group. Everything we need is right in front of us, and if we have a question, it is usually answered in the data or we can refer to the online help instructions.” If management has questions, Escondido land has answers.

John ONiell, partner with R&O Energy, expressed a similar sentiment from the broker’s perspective. “We began using the solution to bring coordination to our projects and avoid stagnant and outdated database sets. What happened was that we gained an entirely more efficient way to manage and run our business.”

Uniformity equals efficiencies

The uniformity this solution has brought to R&O has streamlined the way the company works, including how people are trained. ONiell explained, “Especially for new hires, it is easy to train them to learn the processes and command structure.”

Roland Dugas, partner with Louisiana Oil Group (LOG), agreed. “When we hire people, we explain this system is part of the job to help us work more efficiently because we want people to have the freedom to get their work done with limited supervision,” Dugas said.

In a two-month period, LOG was able to save its clients more than $500,000 a month in broker costs by using this technology. While LOG is confident the system works, the question remains, “How long before this technology becomes the standard?”

According to Sandager, it is the de facto standard today. “It is the standard in our minds because it creates convergence of all our project information and allows all of it to reside in one place so we can truly work as a team without duplication or redundancy. A centralized portal and the real-time maps we are able to create are simply game changers.”

iLandMan helps operators make sense of confusing land data.

From harried to streamlined

Westward Energy experienced the benefits of centralizing its information operations. “We had 14 landmen in six states with multiple partners working several AMIs (Areas of Mutual Interest),” Sandager said. “The company typically would have to wait at least a week to get reporting from the field or office. Often, so many touch points meant that the left hand did not know what the right hand was doing. What leases did the company own? What were the terms? When were the leases reported, or had they even been recorded? Management simply did not know the answers to these rather fundamental and critical questions. There was no centralization of information.”

Meanwhile, broker Magnum Land Services demonstrated data from a large area could be simplified. From June 2007 to May 2009, Magnum managed up to 150,000 acres under lease, and according to accounting manager Bryce Hundley, “There is no way we could have managed the lease process without this technology.” In that time period, Magnum grew its lease holdings tenfold. “What’s amazing,” Hundley said, “is we considered bringing on some additional people, but once we understood how to leverage the program’s features, we didn’t need to do that. At a minimum, the cost of using the product saved us more than 80% compared to what would have been required to add headcount.”

Real-time maps, real-time decisions

Magnum leveraged the system’s reporting capabilities for a better presentation of its assets upon divestiture.

For LOG, this technology provides autonomy to crews and delivers benefits to clients through real-time mapping. “We like being able to bring our client in with our leasing crew and our title crew so we can all focus on the project visually,” Dugas said. “We can turn on a lease layer; we can turn on an overlay of all the wells. In one of our prospects, we downloaded all wells drilled into our map for the entire state we were working. Within the database that generates the map we are provided a link, and from this we can get information on any well immediately as the link connects us directly to the well file in the records for the Department of Conservation. This has been extremely helpful because we didn’t have to get out of the system and go into the state’s database. We can just select the link, and it automatically pulls up that current well file as it exists today.”

The other nice thing about the map, according to Dugas, is that well status and well information are changing on the entire prospect every day, but everyone authorized on the project has access to this information in real time. “Without this convergence of information,” he said, “our crew would have to go into the state’s website and pull up a map and then convert it onto the prospect map on a weekly, daily, even hourly basis. The time savings is significant. In this case, when we pull up our map and we open the layer to the web to put in our wells, the well status automatically shows up on our map in real time.”

In a recent project, LOG was able to accomplish its client’s lease objectives with one-third fewer people than would have been required without the technology: 100 people instead of 150. “Sure, the way we work reduces our top line,” Dugas said, “but it also improves our bottom line by alleviating our administrative burden.”

Acknowledgement

A longer version of this article ran on UGCenter.com and has been reprinted with permission.