The digital transformation underway across the oil and gas industry has permeated into every aspect of the industry’s efforts to ensure safety, optimize operations, reduce emissions, and more. It has brought innovation to bear where it matters most, enabling companies to create value at an unprecedented scale.
“One of the really nice things about digital is that it has completely leveled the playing field. It allows companies to drive innovation with little critical mass and create value at a scale that is unprecedented," said Weatherford International President and CEO, Girish Saligram, at the company’s FWRD digital conference on 20 September in Houston.
"When you add to that a tremendously deep reservoir of expertise that we have and deep technical domain knowledge in oil and gas, it becomes a formidable combination."
Matt Foder, Weatherford's senior vice president, innovation and new energy, sees digital technologies as the “fundamental enabler” in the industry’s drive toward cleaner barrels of production.
He added that sensors, edge-based analytics, and advances in artificial intelligence through the cloud better optimize operations, providing the perspective needed to “focus on the problems that matter. It’s the 80/20 rule. Pay attention to what needs to be paid attention to and let automation and digital technologies guide you for the other things that are less intensive.”
Diversified Energy, an independent oil and gas company based in Birmingham, Alabama, is doing just that by tapping the power of digital to help optimize production from its 70,000 assets across nine US states.
Since its initial public offering of stock in 2017, the company has made more than 20 acquisitions totaling about $2.5 billion combined. Its latest was in July with a $240-million purchase of assets, including 1,500 wells in Oklahoma and Texas, from ConocoPhillips.
“Our business model is acquisition. We acquire mature, lower-volume, lower-maintenance assets,” Nathan Bookwalter, vice president of digital operations for Diversified Energy, said in the conference keynote session.
With this model comes the challenge of scale, according to Bookwalter.
“Our acquisitions are our bread and butter. It's how we grow since we don't drill wells,” he said. “Our assets come in two flavors. Our Appalachian Basin assets, about 50,000-plus locations, are very traditional, mostly conventional, but older-generation. These are assets that you would use SCADA [supervisory control and data acquisition] to make sure it is still running and producing.
“The other class of assets are unconventional; most of these are in Texas, Oklahoma, and Louisiana. With these we have more artificial lift and decline management. We’re working with infrastructure that is mature enough that is right sized, but we’re just now starting to see that we do not need as much horsepower, so how do we optimize that?”
The company sought out a SCADA tool that it could standardize on and help it get through an acquisition quickly, back to normal business, and begin working on the next purchase, he said.
Diversified selected Weatherford’s CygNet SCADA platform to help collect, manage, and distribute the data and integrate the workflows of its operations.
“Diversified was a company that had grown from 35 employees and a couple of hundred wells to 70,000 wells, 1,600 employees, from one state to 11 states of operation,” he said. “We wanted something that was a little bit more turnkey, out of the box, and known to the industry to work at enterprise scale.”
Of its 70,000 assets, about 15,000 are now on SCADA systems. Step one for the company was to get the well measurement data into the enterprise and production accounting systems, according to Bookwalter.
“First and foremost, it was not a production surveillance or optimization tool. It was not a tool designed to reduce windshield time or help us get more out of a plunger lift,” he said, noting that it took about 3 years for the system to move more toward a production optimization and surveillance tool.
“With 100,000 meters, most of them old paper chart meters, it meant that somebody had to drive to the location every single month or every 60 days to pick up that measurement so that we know how much we made or lost off that specific location,” he said.
“We try to work as fast as we can, and now that’s 15,000 locations we don’t have to drive to anymore. It is a clear reduction in windshield time and manpower safety with miles not driven.”
The company is working to convert its water-hauling requests from manual to automatic, he said. Diversified also is starting to do more with the data it collects, identifying ways to further optimize its operations, for example.
“We’re just starting to take baby steps into using the data in SCADA here at Diversified, looking at basic trends. The data are just now starting to be seen as value proposition in the business,” he said.
“We've been talking about stepping into optimization efforts where we find the next level of return on our investment. We’ve found enough so that we believe SCADA pays for another 20,000.”
