3-Point Blueprint to Immediately Boost Operator Cash Flow: Part 2

The first step senior leadership can take right now to impact cash flow is to engage with your field production teams (the topic of the last post).  This entails getting out in the field and listening to your field staff as well as acknowledging fractured production operations leadership.  This opens up a clear channel for incorporating valuable field-level insights that can provide an immediate payoff for production optimization and increased cash flow from the start.  Leveraging your new channels of communication, the next step in the 3 Point Blueprint to Immediately Boost Operator Cash Flow is to create a clearly aligned and unified plan to enhance base production backed by a small budget and investment of your time.

Empower Your Field Production Teams to Create a Short-Term Plan

Due to fractured leadership, field production teams often receive multiple different plans, strategies & initiatives.  Rather than taking a top-down planning approach, start a grassroots initiative that enables field production staff to initiate their own plans for optimizing production for their well set.  Listen to their ideas and align what you hear across teams to begin building a broader plan guided by those closest to the wellhead.  That plan can serve as the initial draft for foremen, optimization teams, engineers, and others to add their contributions.

Most pumpers, lease operators, automation, or measurement techs have untapped ideas about improving base production – (wells they know will respond if someone will listen).  Let those ideas help you design your short-term road map.  That plan should be simple and cohesive with a laser focus on improving cash flow immediately, including:

• Artificial Lift – insights into optimal set points and equipment configuration for rod lift, ESPs, etc.
• Oil Stock Management – ideas around improving hauler efficiency and accelerating sales runs
• Daily Process Optimization – reducing pumper admin burdens so they can focus on optimizing their wells
• Operating by Exception (OBE) – giving explicit permission to prioritize wells with most down volume
• Downtime Reduction – ideas around proactively preventing compressor/equipment failure and minimizing downtime when wells are offline
• Technical Innovation – Short-term technology ideas with big potential for increased volume and reduced risk/LOE

Establish Goals and a Budget

Field production teams will often move heaven and earth to hit a goal set by their CEO, COO, or VP.  Set challenging but achievable goals in each of the above areas with a short-term end date, then measure the progress on at least a weekly basis.  And there’s nothing like injecting a little competition for field production teams to get their game on and start consistently hitting their targets.

Sometimes you have to give a little to see bigger returns.  In addition to investing your time and energy, find ways to redirect capital to your field production staff and their cash flow projects, such as investing portions of unused drilling and completion budgets.  The combination of a grassroots production optimization plan, weekly targets, and relatively small-scale infusion of capital into field operations will deliver an immediate impact on your base production and cash flow.

Be sure to catch the last part in the 3 Point Blueprint to Immediately Boost Operator Cash Flow, which will explore how to leverage your production and non-op data to drop more revenue to the bottom line. If you’ve been following this series and have any questions about the topics I’ve covered or what your team can do to prepare for intelligent production operations, please reach out to me or the W Energy Software team.

Kevin Decker, President PEAKE, LLC. Kevin Decker has nearly 30 years of experience with independent E&Ps, building and leading teams in the space where finance, field technology, and operations services converge. His extensive experience includes optimizing field production processes, developing best-in-class M&A integration processes with 135 acquisitions in 10 years, and optimizing drilling efficiency and base production by applying data science and analytics to operations support center challenges. Kevin is President of Peake, LLC, an energy, technology, and management consulting firm. He spent the bulk of his career at Chesapeake Energy where he held various senior management positions, including Director of Intelligent Production Operations, Director of Integrated Field Operations, and Director of Operations Data Services. Kevin earned a B.S. in Accounting from Oklahoma State University and is a Certified Public Accountant.