As the oil and gas industry continues to endure belt-tightening times during oil volatility, it’s never been more important for companies to be able to balance both efficiency and prudent capital decisions. Simply put, during times like this, every dollar counts at every level of production. In this blog, we’ll identify two simple steps for people who need to model well, project, or company-level economic forecasting and are looking for greater data clarity to support key decisions.
Step 1: Break Down the Price of Your Well Components
If you’re like most oil and gas companies, you sell your production for an approximate, average price. The problem is, not all of the components have the same value, and not every well produces equal component parts. This means the value of each well varies, and if you’re not breaking down your components by price at the well level, you could be losing out on money.
Take for example natural gas liquids (NGL). There can be 7-8 different components within NGL and some wells may be producing more methane while other wells may be producing more ethane. Different liquids provide different values. Instead of saying “Every well is equal and NGL is $2.00,” a better way is to break down the components by price and then assign more accurate prices accordingly like, “This well should sell for $1.70, whereas that well should sell for $2.25.”
With this level of clarity, you can make better business decisions, like determining when to increase or decrease production at any given well.
Step 2: Regularly Run Near-Time Cash Flow Reports
Updating your operating costs should be more than an annual exercise, but a lot of companies aren’t taking advantage of modern software capabilities that allow them to continually make operational updates to see how much they can actually sell their products for. When you model operational and capital costs on a more frequent basis, you gain more granularity to your business decisions. This is especially important for companies seeking to reduce their capital costs. Like we’ve said, every dollar counts. Experiencing this level of insight ensures you have an accurate understanding of your costs and your company’s cash flow.
Want to learn more about forecasting during times oil volatility? Read "Forecast Oil and Gas Market's Highs and Lows Using Unified E&P Software."
What’s Holding Companies Back from Success During Oil Volatility?
While these two steps seem simple enough, many oil and gas professionals can’t take advantage of them because they’re held back by legacy software or manual processes. Tasks like regularly running reports and breaking down well components by price can feel impossible without employing modern oil and gas software.
Make Better Business Decisions with Modern Oil and Gas Software
If you’re ready to experience greater accuracy and want to make better business decisions, Omnira can help! Our petroleum economics and reserve software, called MOSAIC, ensures you can break down the price of your well components and regularly run near time cash flow reports with ease and efficiency. In fact, MOSAIC is the only oil and gas software capable of doing all of that and more. When you use MOSAIC, you’ll not only get your data faster, you’ll gain options. With powerful reporting, you are much better able to analyze and decide on options to ensure your company is truly making the most of every dollar, even in times of oil volatility.
Discover for yourself why MOSAIC is the oil and gas industry’s most trusted economic management software when you schedule your free demo.