As an oil & gas investor, your data consumption needs are drastically different from those of an operator. Datasets and software tools tend to be very producer-centric, leaving non-ops to fit a square peg into a round hole. Easy access to quality oil & gas data is part of the solution, but investors also need effective ways to compare public data with their own data inside software that fits their workflow.
Pitfalls of Accessing Public Data
Non-operated interest owners don’t always get paid what they should for production. Oil, gas, and NGL production reported on check stubs might be lower than what was reported to the state, translating to lost revenue.
To capture lost income, non-ops need to verify production. It’s a major headache given the information sprawl of state websites, lack of data standards, and cumbersome data access methods. And the reporting burden placed on operators is ultimately designed to fit county courthouse requirements, rather than the needs of producers and investors, so it’s no wonder why the process is so painful.
Let’s say you want to verify production for a well in Midland County. Finding the production volumes on the Texas Railroad Commission website’s GIS viewer entails more than 10 steps if you don’t have the API number memorized. And once you drill-down, you discover that Texas only reports lease level production and your check stub, of course, is allocated.
Easy Access to Quality Data
A non-op portfolio can contain thousands of wells, making production verification using state websites impractical. Additionally, oil & gas investors need to do way more than verify volumes. Acquiring positions requires constant tracking of activity and key indicators, like rigs, permits, and leases. And if cumbersome access to state data wasn’t enough, non-ops are also faced with state data that is often inaccurate, incomplete, and unreliable.
To thrive in today’s fast-paced and competitive environment, investors need on-demand access to reliable data.
The Power of Context for Non-ops
When it comes to the information consumption needs of a non-op portfolio manager, public data is just one side to the coin. On the flip side is proprietary data. This includes expenses, revenue, prospects, NGL prices, and land data.
The goals of a non-op are the same as any investor– buy low, sell high, track performance, and maximize ROI. But mineral and royalty interests are specialty assets with unique risks, like underpayment, non-payment, and incorrect deductions by operating companies. For the individual interest owner, tracking even a few wells is time-consuming. However, at scale, the accounting and data management requirements for non-op portfolio is staggering.
Most oil & gas investors rely on the same tools that operators use for production accounting. Such software is designed for the unique aspects of production operations, compliance, and operator reporting, forcing non-ops to adapt their workflows to technology that was not built with them in mind.
Fundamentally, non-ops need a better way to get organized and track their investments. A 1,000 well portfolio generates a flood of check stubs each month, so effective production verification starts with effective revenue data management. Importantly, investors need their proprietary data in context with public data, bringing both sets of data together in one place to automate the comparison of check stub volumes and public production volumes, for example.
The solution needs to be more than accounting software built for non-ops. By putting proprietary data in context with public data sets, investors can make faster, data-driven decisions across all of their workflows, from accounting and auditing to acquisitions and divestitures. For instance, an investor interested in acquiring NGL assets might maintain proprietary volume data for Texas, which is currently not reported along with oil and gas. The non-op can then capitalize on opportunities faster armed with publicly reported lease, permit and rig data.
What the Solution Looks Like
Viewing production accounting, A&D, and profitability through the lens of a non-op reveals a roadmap to the ideal solution:
- Fit-for-purpose non-op accounting software
- Centrally managed proprietary data and documents
- Integrated public and non-op data sets
- Analytics and ROI reporting
MineralSoft was founded to address the specific requirements of non-op portfolio management. The result, is a complete platform for managing minerals, royalties, and non-operated working interests. The cloud-based software-as-a-service (SaaS) taps into the DrillingInfo API to put key data in context with non-op revenue and proprietary data, including production, leases, permits and rig activity.
Through this exclusive partnership, investors gain unprecedented access to the quality public data they need to make faster, more informed decisions. And when it comes to production verification, investors can easily compare lease-level production reported by states such as Texas with their check stub numbers, thanks to DrillingInfo’s allocation algorithm.
Just as operators are flooded with data, non-ops face a similar challenge in managing accounting and wellsite information. To succeed in the digital oilfield, investors need a data strategy and the right technology. MineralSoft and DrillingInfo give non-ops a complete solution that is enabling investors to work with data in powerful new ways, extract more value from their data, and drive more profitable decisions.