Pump by Priority: Go Beyond Production Targets with Well Economics
The eLynx application allows operators to prioritize wells based on economics, not just oil and gas production.
Oil & gas SCADA systems typically use down wells and production reports as key performance indicators. These reports focus operators on wells with the greatest production impact, but not necessarily the greatest economic impact. eLynx’s new Well Economics feature gives oil and gas operators a ‘real-time’ view of which wells are down or underperforming. Take production costs and budgeted target numbers into account to hone in on the impacts to the bottom line in real time.
Wells vary in profitability. Some high producing wells have equally high costs associated with their production. Lift costs associated with water production and disposal costs can offset some of the financial gain of an oil and natural gas well.
With volatile oil and gas prices, and equally volatile service costs, it is critical for operators to pump by priority. Operators should be mindful of the wells that are having the greatest impact to the bottom line. For this reason, eLynx added the Well Economics feature to the Production Dashboard.
eLynx’s Well Economics calculates an estimated target and actual daily net income on a per well basis. The variance between ‘target daily net income’ and ‘actual daily net income’ highlights the potential impact to the bottom line. The impact to the bottom line is the cost associated with stabilizing production numbers. This is generally accomplished by getting a well back online or getting an underperforming well to return to normal production.
eLynx brings in the current price of oil and natural gas and calculates estimated net income on a per well basis. Operators input the following on a per well basis:
Two estimated net income calculations are performed. One is based on the well’s target daily production. The other is based on the well’s actual current day production. The variance between the ‘target daily net income’ and the ‘actual daily net income' provides operators with an estimated dollar figure. This figure represents the amount by which each well is performing below their production targets. Operators can easily see which wells should be prioritized based on the economic impact.
The calculation is performed on each product type and summed. A simplified version is as follows:
$$$ Target/Current = ((Target/Current Production * Market price) - Cost to produce)
The Well Economics calculation can also factor in working interest. The working interest percentage can be adjusted on a per well basis. This provides even more perspective of the financial impact that each well has on the operating company.
Whether it be natural gas production or crude oil, the all-new Well Economics feature allows operators to understand how much they expect to earn from a well. Operators can now make decisions and prioritize their day based on each well’s individual economics.
When a well goes down, operators can quickly know how much money they are expected to lose. With Well Economics, all wells are shown with the production targets and variances based on the well’s cost data. Operators can prioritize their day based on the greatest impact to their bottom line.
In the oil and gas industry, the highest producing well does not always equate to the most profitable well. Factoring in the associated production costs, provides operators with the big picture. They now know which wells have the highest financial impact on their organization.
The all-new Well Economics feature allows operators to understand how much they can expect to earn from a well. Operators can now make decisions and prioritize their day based on each well’s individual economics.
In the oil and gas industry, the highest producing well does not always equate to the most profitable well. Factoring in the associated production costs, provides operators with the big picture. They now know which wells have the highest financial impact on their organization.
The all-new Well Economics feature allows operators to understand how much they can expect to earn from a well. Operators can now make decisions and prioritize their day based on each well’s individual economics.
All of the daily well economic data is stored in the application. This means, you can view a trend line of your well’s economic performance over time. Understand your current position with regard to monthly and quarterly production goals.
Current eLynx customers can get set up with Well Economics today. Provide eLynx Support with the relevant cost data to get started.
To receive a 20-minute demo of the Production Dashboard, book a session today.