The Client
This Houston-based energy company primarily focuses on the exploration for and production of natural gas. As an operator, the company derives the vast majority of its operating income and cash flow from its E&P business.
The Problem
The company faced a common administrative burden among E&P operators: regular, ongoing communication with working interest owners. Working interest owners hold a financial stake in a specific drilling project. Because they help the operator defray a percentage of the well’s operating costs, partner companies are entitled to a percentage share in production revenues. Typically an operating agreement requires the operator to communicate basic information – e.g., drilling reports, completion reports, gas analysis reports, etc. – to the non-operating partners throughout the life of each well in which they have a financial interest. For any operator, gathering this information for partners is complex, extremely time-consuming, and labor-intensive:
- Typically the process involves numerous manual steps in order to create, scrub, package, and distribute information to an individual partner. The information is usually “pushed” out to partners via e-mail or regular mail.
- Each well has multiple working interest partners, and for a large operator withhundreds or thousands of wells, the time and labor involved in pulling partner information together is multiplied.
- The core data resides in multiple, non-integrated source systems; is often difficult to extract; and may be redundant and inconsistent from one source to another.
- The operator bears the risk of the information getting to unauthorized people.
- There is no audit system by which the operator can track if, when, and who has received the information.
For Stonebridge’s client in particular, the partner communication challenge had grown due to increased drilling projects for which it functioned as managing partner. The company wanted to automate its internal processes for gathering partner information and have the ability to “publish” the information so that working interest partners could access their well information via an extranet partner portal.
The Solution
Based on a successful proof of concept prototype of a partner extranet portal, Stonebridge conducted a Phase Zero® assessment with the purpose of comprehensively mapping the client’s current partner communication processes, taking into account such factors as timing, data sources, method of document compilation, quality control points, storage location, personnel accountability, and method of distribution. Based on the assessment findings, Stonebridge consultants developed a custom extranet portal solution for distributing information to the client’s working interest partners. Stonebridge designed the partner portal based on four principles:
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Clarity – limit the portal itself as well as each associated well site to essential information only.
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Simplicity – provide an application that is understandable across the various roles within partner companies (e.g., engineer, clerk, landsman) who may need access to information.
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Security – restrict access to approved wells and authorized partner companies; manage access at the individual user level.
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Flexibility – build in a capacity to add new types of documents and business intelligence related to the wells as the number of partners grows.
Built on the Microsoft Office SharePoint Server 2007 Enterprise Edition, the partner extranet portal provides a secure, self-service mechanism for “read only” viewing of key daily reports on the performance and status of partner-associated wells. After logging in to the portal, a partner can view a list of its well interests and follow a simple navigation structure to individual sites for partner-associated wells. Each well site includes a breakdown of key well master data, derived from the operator’s line of business systems. In addition, a partner can browse the information published for its wells or search for information based on a number of criteria, including keyword or document type. Partners also have the ability to zip and download documents for use in their own local environment.
The Benefits
- The partner extranet portal provides a standard, easy-to-use mechanism for working interest owners to view structured and unstructured well data at their convenience. As a result, a time-consuming, labor-intensive administrative obligation is satisfied.
- Rather than manually compiling and distributing information to working interest partners, the company publishes the information on a secure extranet site.
- The portal provides the operating company with a detailed audit trail showing when documents were added to the system and which partners have viewed them and when.
- Security is managed at three levels, providing greater flexibility to the operator in securing this information:
- The designation of operating company determines the set of wells that are available in the partner portal to each user.
- The wells and their associated sites are related to the operating company based on verification from land/division order data.
- Authentication of individual users through their e-mail address and a managed password ensures that only allowable access is granted.