Envision the meetings E&P executives sit in today with engineers, production management, and land executives hovering over four or five separate printed maps. The purpose of the meeting is for the team to understand the company’s leasehold positions. The maps can include contract conditions, expirations, surface use restrictions, and a mineral leasehold map, all of which were typically generated at different times (by hand) with limited visual or functional relationship to one another.
The old way requires that each map must be created by reviewing the separate lease contracts to determine each contract condition on a tract-by-tract basis, then have GIS or lease administration color each tract based on the contract associated. Historically, the idea of combining the relationship of what these maps represent is not possible other than eyeballing the maps alongside one another.
What is now analytically possible using a land database that has integration to fully functional GIS mapping has remarkable decision-making implications and associated cost reductions. All maps can be viewed layer upon layer, dynamically and in real time, through the practice of spatial relationship queries.
Multi-dimensional Views – A Great Advantage
Take the situation of ORX Exploration, an independent operator that between May and June this year saved US $230,000 leveraging actionable mapping capabilities. “The software becomes a network for collaboration among the land-legal, geologic, geophysical, accounting, operations, and executive management,” said J. Luis Banos, CEO of ORX. “In our case we have even used this solution in our board meetings to address a range of issues in real time.” The company has used the technology to make informed decisions based on intelligent queries ranging from monitoring the competition to finding the optimal drilling location that meets the requirements of the G&G team, operations, land/legal, and finance. With the system, ORX can better prioritize its activity based on terms, requirements, and costs.
“Frankly, the technology is an invaluable strategic tool,” Banos said. “Everyone from landmen to directors can ‘see’ the scope and scale of our projects. This technology does for land what 3-D did for G&G; it is a technology leap. Earlier this year, we could determine not only which leases we wanted to drop but also determine by contract conditions mapping which leases allow us to partially release only the tracts outside of the new prospect area. Then we overlayed the new geology to show why. This is a great advantage in today’s market.”
Real Time vs. Timed Out
Every E&P operation wants and needs to know what its legitimate mineral leasehold is in as current of a timeframe as possible. Most do not have correlating data or maps in a timely manner. “The technology allows us to work faster, more effectively, and to conserve capital in the very costly leasing process,” Banos said. “For example, in a matter of hours we can deploy brokers to begin leasing specific areas after a team review that may include a geophysicist in Houston, a geologist in Mandeville [La.], our management team in New Orleans, and lease brokers in Baton Rouge.”
Given the ORX leases, company executives were working to determine the best near-term opportunities for maintaining the assets they hold and the nominal value of each tract of land they had under lease. They knew what leases to release but also which tracts on multitract leases to release or to pay partial rental payments on because they had real-time information. They were able to make an intelligent decision as to whether to let the leases lapse or “top lease” them. It is common for companies to pay all rentals on leases simply because they cannot determine on a tract-by-tract and contract-by-contract basis where partial rentals are permissible. When a company can see all these factors layered on a map in relationship to one another, the decision-making becomes highly relevant and can be expedited with confidence.
Not Just A Dated Picture
Past-tense maps were manually drawn and became dated within days or weeks of being generated. The maps generated today using spatial queries are as current as the day’s work. E&P companies are rendering visual scenarios rather than drafting a picture from some point in time in the past. Now managers can apply dozens of “what-ifs” and visually see the results of those queries in less than a minute. Land executives can combine a halo outline, shape files, township sections, geology, seismic bright spots, amplitude, isopach, and contours to view in association to one another. Or they can zoom into a particular area for closer view or zoom out, adding aerial photography layers, because it is a dynamic database and not a hard-copy print. Well sites and infrastructure can be added on the fly so the map literally becomes a source of strategy. Once the map is rendered, all of the layers and color attributes are identified in the “Legend” as seen in Figure 2.
Two other major E&Ps recently have been applying this mapping technology because it is simplifying how they view complicated leaseholds. Typically they have a tract of land with three different leases covering different mineral interests, so they have to create three “lease” polygons instead of one “tract” polygon. In a database system this can be mapped in less than a minute with a few clicks, and those tracts can be viewed in any context desired.
Cost Reductions, Better Decisions
The expedience of generating mapping in minutes instead of weeks that holds dynamic information instead of a static print improves the accuracy and speed of decision-making. All levels of E&P management and staff are doing less menial work and are provided the opportunity to spend more time on strategic thinking in real time to further operations. This allows individuals to bring more value to their role and provide greater yield to the company in the immediate and longer term.
To view a brief demonstration of this mapping technology, visit hartenergy.com/ilandmanmapping.
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