Low oil prices took their toll on the oil and gas industry and operators are making broad brush budget cuts to create a sustainable business to survive all commodity pricing pressures. Leading operators are asking these questions to reduce lease opex instead of making broad brush cuts. They are acting smarter and becoming more efficient in the oil field. By asking these questions they are also able to optimize cost performance by having more control over their lease operating expenses and overhead. With immediate visual insights of their costs they are able to to efficiently attack operating and overhead expenses head on.
10 Questions to Ask When You Are Cutting Costs to Reduce Lease Opex
- Is every employee able to view vendor invoices relevant to them immediately to ensure that they are being billed the right amount?
- Are your actual costs hitting the right cost centers?
- Are your automatic payments being validated and reviewed in the field?
- Do you know if you’re being wrongfully billed with duplicate invoices?
- Are your budgets versus actuals being allocated correctly?
- Do all of your users, from operations to foremen, have access to view cost and invoice details?
- Is your front line able to view losses or production deficiencies immediately and take action to improve performance?
- Are you able to strategically decrease your costs?
- Are you able to group specific wells and quickly identify best-performing and worst-performing wells based on operating margin and lifting costs?
- Are you able to analyze the trends in historical costs to determine whether to maintain properties or not?
“We didn’t have accurate costs/insight into overages or an easy interface to find errors. We had to go to the internal data warehouse and the ERP to find variances. Now, we can go right to the specific invoice and verify whether it is correct. It’s easy to locate what you need now and you don’t need to hop over to SAP to see the invoices there. Now, we can find duplicate invoices and cost variances easily,” a quote from a Data Analyst at an E&P company that reduced LOE by 8% over the past year by advanced LOE analytics.
To learn more, visit www.sevenlakes.com.