Why Oil & Gas Producers Must Up Their Volumetrics Game to Avoid Leaving Money on the Table

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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.

A laser focus on volumetrics is imperative no matter the price of West Texas Intermediate or Henry Hub. When oil and gas prices are high even a small measurement or rounding error can cut deep into margins; and when commodities nosedive, volumetrics accuracy can make the difference between weathering the storm or laying people off. Yet as an industry, we spend a lot of time and resources on trying to reconcile our nonprecise world and reactively 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.