A Lease's Tale: The Best Way to Master Oil & Gas Lease Acquisitions07/03/2017
Mobile capabilities and automated processes are helping upstream companies slash lease cycles from months to weeks
Where will you be six months from now?
Not quite sure? Yeah, me neither.
But if you’re a just-acquired oil and gas lease, you probably have a pretty good idea of where you’ll be. You’ll just be making your way into the acquiring company’s lease maintenance system after a long, zigzagging journey.
You will have met the field broker, the Land Operations team, the folks in Lease Administration, and the GIS group, having watched your contents get entered and re-entered several times, for the most part correctly, but occasionally incorrectly. You may have even gotten lost somewhere along the way, ending up at a company field office instead of where you belonged all along – displayed on a map with your fellow leases at company headquarters. Spring will have turned to summer, summer to fall.
You may be familiar with slow cycle times, inaccurate reporting, poor visualization for those in the back office, redundant work, and missing documents more than you’d like to admit, Mr. Lease. Too many manual processes and paper-heavy workflows could very well be the cause of those.
But what if your owners incorporated mobile capabilities, automated processes, and real-time visualization into their lease-acquisition cycles? What would the process look like then?
Well, let’s take a look …
The broker would still make his regular visits to courthouses and the homes of landowners, but instead of inputting everything that he’s collected into spreadsheets, he’d enter it into a mobile system that would instantly route the information to the Land Operations team. The data wouldn’t have to be rekeyed, just reviewed for completeness. The map would be updated simultaneously, allowing everyone to see their leasing projects progress in real time. After review by Land Operations, the good people in Lease Administration would receive an email alerting them to review the lease for approval and get it set up in the lease maintenance system. Again, no redundant data entry. With these workflows in place, cycle times would be slashed from six months to two to four weeks. If everyone was monitoring their queues throughout the process, it wouldn’t be impossible for a lease cycle to be completed within a week.
Information would need to be captured just once – by the broker in the field. This would allow the teams in the back office to focus on performing important analysis rather than re-entering data. And because everyone would have the ability to watch projects take shape in real time, they’d be able to ensure that their leasing instructions – where to buy, max bonus per acre, which lease terms to pursue – were being followed and budgets adhered to.
The back-office teams would be able to visualize all of the competitor information captured by the broker as part of his regular data-collection exercise. This data could then be used to guide strategic decisions regarding acreage swaps, assignments, and partnerships. The organization would also be able to keep all of the broker-collected information, which means precious dollars wouldn’t have to spent on hiring a brokerage firm to interrogate the data on the company’s behalf.
So as you can see, Mr. Lease, the world in which you currently live isn’t optimal, especially now as upstream firms look to develop time- and money-saving processes to ward off the market downturn.
But there is another world, one that’s aided by mobility, automation, and real-time analysis.
Enter that world and you’ll no longer have to cringe when that Where will you be in six months from now? question gets asked, wondering where the forthcoming odyssey will take you and what will happen along the way.
You know where you’ll be – on a nifty map with the rest of your lease companions, having traveled there directly from the field. Your precious contents will be preserved. You’ll be at the center of many important meetings. And your associated polygon will help your new owners make the best business decisions possible.
That’s the life every oil and gas lease should live.
About The Author
Kyle Hartmann works in P2’s Development department as a Business Analyst and UI/UX (user interface/user experience) designer. Over the course of his 18-year oil and gas career, Kyle has partnered with many upstream organizations to understand their lease-acquisition needs and develop solutions that meet those needs. A graduate of Ball State University, Kyle has many interests outside of work, including abstract art, playing the piano, biking, hiking, playing tennis, and bowling. He’s also involved with various charity organizations.