Turbulent times in the oil and gas industry have driven many decision-makers to improve their processes for monthly budgeting, capital management, and forecasting. In order to make the most informed decisions on-the-fly as you execute your capital projects, you need to have timely access to accurate information from your oil and gas data management software. To gain this necessary business insight, companies turn towards monthly budget reserves updates and reconciliation to plan accordingly. Better budget stewardship and project execution lead to improved capital efficiency and ROI for your activities.
You may already know that there’s a faster, more modern way of reconciling data through what is known as the “Rapid Reconciliation” method. In this blog, we’ll discuss how you can take the results of that automated reserves reconciliation and apply it to your operational procedures. Once your company has mastered using rapid reconciliation, you can apply the practice on a monthly basis to quickly understand how your business is performing compared to plan, and what drives the variance in your operations.
Gain Insight Into Your Company’s Data & Understand What’s Actually Happening
As an oil & gas company, you spend a lot of time and energy accurately tracking how your capital dollars were spent. Whether you look at your budget reports month-to-month or quarter-to-quarter, you pay close attention to the duration of the activity (drilling or completing a well, for example) as well as the price and the resources used. You then use all of that information to update your forecasts for the rest of the year. Naturally, these forecasts get more and more accurate the closer to year-end you get.
But in order to do a good job of managing all of those activities and accurately reporting back to your senior management, you need to bring information from accounting, AFE, and economics together in a single system to effectively manage your capital expenditures and deliver to the plan.
You need to answer questions like:
- What are the differences attributable to?
- How are my production volumes doing? How much of a difference is there between the revenue forecast and what was actually received?
- What’s causing any variance to my budget?
Answers to these questions will help you shape your company’s future forecasts and define how your company does its forecasting in general. For example, will you continue doing what you’ve always done or will you take what you’ve learned and figure out a better way to achieve your desired result?
Gain Capital Efficiency and Better Budget Stewardship
Simply put, as an oil and gas business, you need capital efficiency to adequately turn the money you spend into something you can sell and gain a strong ROI on.
Applying rapid reconciliation gives you real-time insight into what’s happening at your company. Get the information you need to run the analysis and make better decisions faster. The frequency that you use your oil and gas data management software really determines your operational efficiency.
Top Benefits of Monthly Automated Budget Reconciliation in the Oil & Gas Industry
- Bring forecast, actual, and AFE data together in one place to allow efficient update of volume and capital projections by engineers.
- Rapid reconciliation of actuals-to-date and current forecast to plan provides you with a detailed breakdown of project variance.
- Quickly generate an analysis for project performance and be able to fine-tune your activity to increase capital efficiency.
Consider replacing old software and manual, time-consuming processes with a modern approach that is designed for the new operating environment that your company competes in. An all-in-one system for managing your project assessments and helps your execution strategy with fast analysis gives you and your team a leg up on your competition.
Experience Capital Efficiency Using Better Data Management Software
When you’re ready to experience the incredible benefits of monthly automated budget reconciliation in your oil and gas data management software, our team at Omnira can help! Our premiere petroleum economics and reserves software, called MOSAIC, is the leading oil and gas software and is the only solution of its kind that’s capable of performing automated budget reconciliations. Learn more by watching our helpful webinar called, “Lower Costs & Improve Results with Automated Reserves Reconciliation.”
Request a Demo today to see for yourself why companies using our single-system platform have been able to adjust their budget on-the-fly through frequent reconciliations, which has improved their capital efficiencies and enabled them to outperform their competitors.