New operating methods: Data handling to downhole completions - Statistical Data Included

World Oil, June, 2000

For proven techniques that improve field and office operations, here are five new technologies. These range from suggestions for management on how growing companies should proceed in updating computer networks; to two reports on downhole equipment used in well completions; to a lower-cost, heavy oil stimulation tailored for a Southern California field. And the Petroleum Technology Transfer Council describes a new website for its Eastern Gulf Region that offers comphehensive data on state-wide operations in Mississippi.

Specifically, these five summaries include: 1) suggestions from Cierra Solutions, Houston, for sorting out the data network dilemma; 2) an Expro Group review of an SPE report from North Sea case histories on the concept of completions without packers and downhole safety valves; 3) SmarTract's review of unique applications of a new downhole tractor; 4) a summary by Baker Oil Tools of an improved, lower-cost water-frac treatment that boosted a heavy-oil well's productivity over previous stimulations; and 5) a report from the Mississippi Office of Geology on design, installation and applications of its new website and how it can help independent operators get critical data.

Sorting out the data-network dilemma

Franklin M. Cantrell III, President/CEO, Cierra Solutions, Houston, Texas

Data networks or systems are no different than building a house--a blueprint is needed to avoid arbitrary decisions. By dealing with networks from a business perspective, oil and gas companies should take a common-sense approach. That is, examine the current technology setup, evaluate the issues, then develop and execute a game plan to deliver a clear-cut capital and operating cost justification. This presentation explains how an independent party can be effective in creating the right network solution.

Growing company, outdated computer network. A small, publicly traded, independent E&P company was much smaller just a few years ago. Its corporate offices in Oklahoma were staffed by four people, and its Houston production office was staffed by five. Then, capitalizing on 3-D seismic, horizontal drilling technology to recover bypassed pay and a few key acquisitions, the company grew quickly.

Meanwhile, in today's computer-driven business environment, their systems were on the verge of becoming a business liability. Essentially, a network had internally been cobbled together, and an outside service was called periodically for equipment repairs (such as servers). In the process of consolidating corporate/production offices into substantially larger Houston office space, management seized the opportunity to upgrade its computer networking.

They wanted to move up to an entirely new plane of services, including: increased Internet service, integrating AS400 systems for their main accounts and remote-access requirements for roving executives. But that created a dilemma. Not only did the wiring plan have to be changed, literally everything plugged in also had to be changed and expanded. Additionally, they debated whether to bring an information technology (IT) specialist on staff to be responsible for implementing and maintaining the new network.

What this company experienced is as old as the rapid growth of small companies, but the connectivity aspect of computers makes it a whole new ballgame. How did it solve the dilemma and move seamlessly ahead? Instead of rushing out and purchasing much more than actually needed in equipment and associated services, management took a business approach to a technology problem. An independent technology consulting firm developed a plan, with the end result essentially balancing capital costs and operating costs to fit the company specifically--not an off-the-shelf solution.

Business approach, independent evaluation. Like a seesaw on a fulcrum, a company can minimize operating costs by strategically incurring capital costs. The opposite is potentially a greater burden--going light on capital costs may drive the company to distraction on operating costs. Therefore, the only practical way to look at data-network problems and solutions is from a financial perspective (capital and operating costs) while staying in the technological mainstream.

In the technological spectrum (with the mainstream occupying the wide middle) outer edges include the highest end (Bleeding Edge systems) and the lowest end (outdated systems). Each technology must be weighed on its performance, cost and benefits in the same way a company would approach purchasing a new telephone system, Fig. 1.

[Figure 1 ILLUSTRATION OMITTED]

The key consideration is which system is most appropriate to drive the company's core operational business, not which brand names of computers, servers or routers to buy. Unless business needs demand otherwise, companies should stay in the technological mainstream for their data network that--at a basic level--lets their PCs communicate and share files.

Realistically, there are unlimited data network solutions. As with any segment of any business, a company coping with data networks needs a fundamental design that serves the core business. Preferably, this design phase should be handled by an independent party that develops a conceptual plan based on a review of the company's existing business and technology.