The oil industry has certainly experienced its share of ups and downs. Booming one month, tight the next, seems to be the order of business as of late. Speculation of $30 a barrel oil means more layoffs and leaner times. The real question is, “What do drillers do to survive as the profits disappear?” While most in the business know that this dip in prices can’t possibly last forever, some have taken the low prices to task by looking for ways to maximize profits during the slowdown. The way to do it is to leverage technology and efficiency.
It is easy to overlook over billing or process inefficiencies when profits are high or otherwise not a factor; the government does it all the time. Unlike the government, companies have to manage profit margins and stay competitive. So while it may not be something that is noticeable when profits are high, overbilling of contractors is one of those places that companies might look to save money they would have otherwise lost. Technology is paving the way for this to happen.
One way that drillers are cutting costs is by leveraging Internet technology. Greasebook is a tablet application that can be used to automate the process of reporting oil production. The old way of doing it typically involved workers writing the data down in a notebook, called the greasebook, while on the site. The notebook data was transferred to forms that were faxed or mailed back to accountants, who then had to type the data onto their tracking software. This was long, involved and totally inefficient process. Greasebook fixes that.
Workers enter their data directly onto a tablet and then transfer the information online back to the main office. Cutting down the process saves money. It also allows quicker access to real time data so that decisions can be made with the most up to date information.
It can take hundreds of trips onto a site to bring enough fracking water to drill a well. This means contractors are moving on and off the site constantly, and that is only for the water. This constant stream of people on the jobsite can be hard to track, which leads to overbilling by contracting firms.
This overcharging is typically not malicious, but rather an artifact of doing so much business with so many different sites. Tracking down these overcharges can be difficult or impossible if accurate records are not kept. That’s where technology comes in to save the day.
Guard 1 Services has created a tracker and auditing tool that is capable of tracking contractors while they are on site and give real time snapshots of those visits. This allows site managers to track just who is on site and for how long. When the bills come in, they can be resolved against this data to make sure that contractor charges are accurate. Some companies have reported savings of up to $40,000 using the tool.
Companies are also looking for ways to improve the efficiency of the drilling site process. Technology companies are putting time and effort into developing imaging technology that will help drillers determine the best locations to drill. This technology could reduce the number of wells that need to be drilled by increasing the yield of those that are put in. Obviously, this would save a lot of time, money and resources.
Lower oil prices can turn out to not be a bad thing, if companies are poised to take advantage. This means being smart about all parts of the process and making sure that the business is working at top efficiency.