Cole Whitney, (972) 345 -7537

Impact of Mobile Technologies on Oil & Gas Industry

– A BI Approach

1. “The average cost for terrestrial well completion is $1.5 - $3 million, more for multi-stage frac and off-shore”

2. “Daily lease costs for off-shore rigs (jack-ups) can be more than $250,000.”

3. “War on operations talent in 2006, made acute in 2013 as work force retires.”

4. “Demand for oil & gas continues to rise as BRICS industrialize.”

5. “Oil & gas increasingly difficult to permit, extract and distribute leading to new innovations, e.g., pure pipe, better well master data and faster compliance. ”

The oil and gas industry faces five (5) challenges which will drive the need to do more with less in a safer fashion:

Where Mobility Can Mitigate These Problems

Faster DSP and AFE approvals with mobile Corp. Dev. Rep. (CDR) – first mover adv. New connection contracts (K) recorded accurately and tracked in the pipe to set utility and industrial customer expectations or hedge effectively.Mobile embedded business process aids junior people to “Go Like a Pro.” Forecast well construction profits by integrating AFE with field tickets.Forecast condensate or NGL revenue with accurate PIG status in the field.Reduce accidents from less experienced workforce and lower insurance premiums via accurate inspections.Track and inspect assets to avoid ordering new plant, pipe, equipment (PPE), permit violation fees and additional labor costs.

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Oil and gas acquisition accelerated with mobile Decision Support Packages (DSP) while keeping CDRs in the field to win producers and work with engineers to adjust AFE for right of way variances and expected cost of completion.

Prospecting

P = .5

Gate 1

DSP

Gate 2

DSP

P = .8-.9 AFE $20M

Gate 3

DSP

K $50M

1st Invoice

Producing Customer

Well

Asset

CDR

Location services identify well proximity to assets for CDRs to prospect new producers, maximize chances to add new connections to offset decline rate and route suppliers into the rig site more efficiently.

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Business decisions can be faster if mobile is used to integrate data sources with field behaviors.

• Cost of Drilling/Re-working – cost analysis on the option of performing maintenance on the rig vs. drilling a new well or replacing the rig. Typically it shows the benefits of re-working a rig by showing the improvements in extraction barrel volumes after the re-working has been performed.

• Forecast well construction profits by integrating AFE with field tickets.

• Condensates Tracking – the amount of how much gas is attributable due to condensates. Condensates is when water or other liquid is accumulated when extracting gas, which decreases the amount of gas that is extracted cleanly.

• Forecast condensate or NGL revenue with accurate PIG status in the field.

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Field behaviors can be safer and less costly by mobile management of assets and people.

• Production time – almost the same as cost of drilling except it measures the amount of time spent extracting a certain number of barrels. It shows in different frequencies that rig extracted X before re-working and then Y afterwards. This is used to identify which rigs are ready for re-work and also how much crude will be available for production and subsequent processing for end products to be sold.

• Reduce accidents from less experienced workforce and lower insurance premiums via accurate inspections.

• Cost of Transportation – analysis on the costs directly attributable to getting the crude from the extraction point to the gate of the refining plant. Which is the most profitable means of delivering the crude to the plant.

• Track and inspect assets and people to avoid ordering new plant, pipe, equipment (PPE), permit violation fees and additional labor costs.

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KPIs used by leadership to manage the business must be on a Mobile Business Intelligence Scorecard to make changes quickly!

Volumes in base, Barrels of oil equivalent, and Millions of Cubic Feet (MCF) equivalent “Can we meet customer demands over different seasons?” “Will we make a profit at different levels of demand and

weather patterns or should we hedge based on forecasted price per barrel of oil equivalent?”

Royalty only volumes (base and equivalents) “What are upcoming royalty payments to investors for using

their land or assets?” “How can we increase drilling rights?” Average daily price (base and equivalents)

“How can we align staff with leadership goals?” Discretionary cash flow and ROI

“How much cash flow from new well connections and existing field operations is consumed by field decline rate in order to justify additional capital investment?”

Cash operating costs How much cash is consumed by operating the business?

KPIs used by leadership to manage the business must be on a Mobile Business Intelligence Scorecard to make changes quickly!

Simultaneous comparison of actual to multiple forecast scenarios What is our hedge trade? What is the pipe mix by K volume,

price type (fixed, index, spot)? How much condensate has diminished clean transport value? What is the yield of end products from crude and gas obtained

from the well, producer, field? Dry Hole Costs

What are our sunken costs? This is ROI of overall Exploration and Development, and productivity of the same. Year-to-year comparisons of the accuracy of the Geological engineers in predicting the location(s) of new reserves and will provide a trend analysis that will play a key role in the Budgeting and Planning process.

Upstream Company Case Study

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World’s Largest Offshore Driller Case Study

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