Maximizing Oil & Gas Profitability with Energy Data in Balance Part1 – Are You Losing Money to Bad Data?

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Maximizing Oil & Gas Profitability with Energy Data in Balance
Part1 – Are You Losing Money to Bad Data?

by Amy Moore

When it comes to oil & gas volumetrics, we live in a nonprecise world. Crude oil storage tanks expand with the sun’s heat, dints in a hauler change its actual volume, and natural gas imbalances inject uncertainty. Consequently, hydrocarbon measurement involves more than taking a meter reading. We also need to record temperature, strap tanks, and continually balance gas streams to account for variances in environment and equipment to accurately measure oil, NGL, and natural gas.

Arriving at a volume often involves sampling and basing a final number on a calculation, such as running a well test to allocate oil production on a lease. Then there are errors that must be accounted for like Lost and Unaccounted For (LAUF) natural gas. E&Ps deploy automated SCADA systems and LACT units that help reduce errors, yet field data capture is still largely a human endeavor requiring large teams of gaugers, lease operators, and pumpers. Errors persist though from poorly calibrated equipment, manual measurement processes, and physical grease sheets.

SCADA, field data capture, measurement and production accounting must work in perfect harmony to ensure volumetrics accuracy. Volumetrics is an oil & gas company’s cash register. It’s where allocations become revenue and volumes booked to pay interest owners. But all too often, an E&P’s volumetrics cash register pays based on bad data resulting from equipment calibration issues, system imbalances, errors, and disconnected workflows.

With West Texas Intermediate oil at $112.7 and Henry Hub natural gas at $6.6, bad volumetrics data is costing the industry billions. As an industry, we spend a lot of time and resources on trying to reconcile our nonprecise world and accurately account, leading to a never ending flow of prior period adjustments and continuous gas balancing accounting.

So, how do you keep your volumetrics engine tuned up and running on quality data? Just as you would review the performance and health of your wells, teams should review the technology, processes, and people involved in field operations and production accounting, which is where Stonebridge’s EnBalance volumetrics advisory adds value. EnBalance transitions volumetrics from a reactive, break and fix situation to a proactive approach that will help your team identify and implement the right digital ecosystem, deploy best practices, and continuously ensure measurement data accuracy.

No matter which way commodity prices are headed, even a small variance in custody transfer, measurement, and production accounting can lead to missing revenue and underpayments to interest owners. EnBalance helps keep your systems in balance to eliminate uncertainty, uplift margins, and build volumetrics excellence into your team’s DNA. Over the course of the next few blogs in this series on maximizing oil & gas profitability, I’ll show you how.