My son enters high school next year, and he will have Shakespeare in his reading list. I’m sure he will have to memorize lines for his English class just as I did. It’s been a while, but does anyone remember what came after “To be, or not to be?” It was “…whether ‘tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles and by opposing end them….” That part stuck with me as it describes the fundamental choice we have when times are especially bad. Put more simply, when you are taking a beating, do you ride it out or fight back?
We are absolutely dealing with outrageous fortune as an O&G industry. The drop in global demand due to COVID-19 coupled with an oversupply condition created by OPEC and Russia has devastated our industry. Fortunately, we have taken arms by slashing capital and operating expenses. Those are significant steps and necessary, but E&P companies really didn’t have much of a choice. The hard choices come next when we determine what additional arms to take against a continuing sea of troubles?
The primary objective for every E&P company in this market is to reduce LOE and drive additional free cash flow. Besides shutting in wells, the most obvious weapon available is production optimization. Optimizing production to lower costs is nothing new. Engineers have optimized wells for decades relying on primarily SCADA systems and legacy software tools from big iron vendors. Unfortunately, we haven’t seen the desired outcomes we hoped to see. Shrinking workforces and legacy software limitations have resulted in only one out of every five wells optimized in North America.
If lower LOE is what matters most, then relying on traditional approaches to production optimization is analogous to bringing a knife to a gunfight. To win, the industry must embrace a step-change in how we optimize production. That step-change is found in using artificial intelligence (AI). And not just any AI, but one that leverages physics and subject matter expertise – a potent combination that provides real LOE firepower. Ambyint has seen operating expense reductions as high as 30% on producing wells with its brand of physics-based AI.
For some, AI sounds too futuristic or akin to the advanced analytics we have today. Neither is true. AI is a mature technology in use on thousands of wells today driving down operating costs and increasing production. Unlike analytics products, AI goes beyond presenting information and instead sifts through the haystack of well data to present exactly the needle that requires optimization attention – no additional data gathering, analysis, or guesswork required. With smaller workforces having to cover more wells than ever, Ambyint AI goes one step further and automates controller setpoint changes, which allows for full field coverage and a sustained state of optimization.
What arms are you taking in this fight? Our sea of troubles is not going away soon. What steps can best end them? If you are interested in learning more, check out our latest white paper on AI-driven production optimization.