July 13, 2016
Assessing and Optimizing Your Land Management Systems and Processes
E&P companies with onshore U.S. operations are faced with vigorous challenges in today’s environment, working to keep up with advances in drilling technology, ongoing mergers and partnerships, demanding surface and mineral rights owners and the increasing complexity of data.
As a result of industry changes, the Land Management teams within E&P companies have had to adjust in order to successfully capture and manage the information required to acquire and retain exploration and drilling rights. Typically, Land Management is supported by the Land and the Land Administration departments. Land is typically responsible for negotiating agreements to secure new opportunities for drilling activity while Land Administration is responsible for safeguarding the rights to current assets by addressing contractual obligations, making payments to royalty owners, billing partners, and facilitating extensions and amendments to existing agreements. Both departments are heavily involved in supporting acquisitions and divestitures in addition to on-going activities.
Land Management teams often struggle to address and stay on top their many responsibilities due to a variety of issues, including:
- Lack of standardized processes and procedures: This often leads to data not being captured in an accurate and timely manner and inconsistent use of fields within a software application.
- Manual data entry: Systems do not always take in data in an easy or efficient manner. As a result, more labor hours are required to complete typical tasks than should be necessary.
- Data quality issues: These issues often appear during high levels of activity when resources are stretched or when a company is growing through acquisition and quickly integrates data from other companies and systems.
- Inefficient and inaccurate reporting: Lack of trust in the data reported directly from the system is very common. As a result, extensive manual work to create reports is often required to make business decisions.
- Staff knowledge or training issues: Over time, the quality transition of knowledge to new team members may decline. This can lead to deficient knowledge of the systems, improper handoffs of data between teams and data integrity issues.
- Stagnant Land Management Systems: Applications can become less usable over time due to stale system configuration and lack of regular upgrades. Since E&P companies typically leverage systems for 10 to 15 years before changing, periodic updates and optimization activities are required.
If you are facing any of the above issues, an assessment can diagnose the root cause of your issues and help prioritize where benefits can be achieved. Some assessment activities include:
- Evaluating how your teams can best support corporate goals: What actions can your team take to reduce cycle times, lower costs, increase asset value and reduce risk?
- Understanding which processes are key to supporting corporate goals: Conduct an assessment of your critical processes to determine how to best optimize and incorporate leading practices so that your daily and monthly activities align with your goals.
- Defining which data elements and reports are key to decision making: Not all data is equal. It is important to manage the data that your organization relies upon to support acquisitions, maintain acreage and expand drilling activities. This is the information that needs to be captured accurately and in a timely manner within your system. Knowing where gaps exist or where trust issues exist with the data will drive data governance and cleansing activities. Understanding how data is used for decision making, leads to better reporting and notification solutions.
Periodically evaluating your processes, systems and data, allows for continuous improvement and departmental efficiency gains. It also provides the facts you need to define and communicate targeted improvement goals and change benefits.
In today’s challenging market conditions, most people are not interested in purchasing and implementing a new system, and that’s ok! You don’t have to undertake a large investment. Addressing key activities and adjusting your processes and system configuration to better support corporate goals can go a long way to achieving cost effective and valuable ‘quick wins’.
Visit our Business Process Improvement and Land Service Line Page to Learn more about how EAG can help you address these issues and implement leading practices to improve your day to day business.