Knowing exactly what a midsize company has and where it is located can result in big savings from redeployment of idle equipment.

Keeping up with equipment in numerous oil and gas fields is an age-old problem. Without comprehensive knowledge of the location and specifications of equipment, producers cannot deal effectively with dynamic conditions, such as changes in line pressure or equipment malfunction. Moreover, the producer can lose out on the enormous cost savings achieved by redeploying idle equipment.
Small producers may be able to keep tabs on their equipment manually or mentally, and many major operators and large independents have either crafted in-house equipment tracking solutions or purchased enterprise software systems that go far beyond mere equipment tracking. However, many producers find themselves stuck in the middle, where the problem exists but the solution is prohibitively expensive.
The Royal treatment
Royal Production Co. of Corpus Christi operates more than 200 wells. Before the company implemented InControl 2.0 in summer 2000, equipment records were all on paper, impossible to search effectively and difficult to maintain. InControl is a database program that gives producers easy access to complete information about a company's field equipment.
"We didn't always know exactly what we had out there, so we had to come up with strategies that would help," said Royal President Bill Gregorcyk. "For example, we'd always try to buy separators with a working pressure of 1,440 psi, but we knew that there were a few old ones out there with a working pressure of 1,000 psi. If the line pressure were to shoot up above that, that wouldn't be in compliance with any sort of safety regulation, and we wouldn't even know about it. Now it's a simple matter of looking it up with InControl."
InControl was developed in-house at Magnum Producing and Operating Co., also in Corpus Christi, and the company has seen the program's positive impact on its operations. "After it's been out in the field for a year, your compressor may be underutilized because of a production decline," said Roy Riewe, an engineer at Magnum. "At that point, you want to move your equipment around so you're not using a (US) $1,500-a-month compressor for a job that can be done by a $1,000-a-month compressor. But that was easier said than done - it was difficult to get the data on which compressors were where. With InControl, however, it's a pretty straightforward task." InControl enabled Magnum to transfer five compressors in 2001, saving almost $2,000 a month.
The impact of InControl may also be qualitative. Royal's Gregorcyk believes having thorough information about equipment at one's fingertips "shows that you are a good operator. If you've taken care of the small things in a judicious fashion, you never know when that will translate into someone doing a deal with you, or someone giving you more latitude than they otherwise would have."
Maximize the value
Production equipment is either a capital asset or a product on the auction block. Either way, it is advantageous to have comprehensive information about the equipment instantly. When a need for equipment arises, it frequently is more economical to transfer idle equipment to the site. Yet without knowledge of the specifications and location of idle equipment, a producer is likely to waste money buying new equipment. "You wouldn't think you could forget about 300 joints of tubing sitting around in a yard. But you do, and before you know it, it's worthless," Gregorcyk said.
That very problem was the initial target of InControl during its development at Magnum. At first, the project was to transcribe paper inventory records to a spreadsheet, but it soon became obvious a database program would serve the company's needs better, and InControl was born. It allows the user to submit a customized search query and view the results quickly. For example, the user could execute a search for idle dehydrators in Colorado County, Texas, and then decide from the list of matching records which dehydrator to transfer.
From November 2000 to November 2001, Magnum used InControl to locate and transfer idle equipment - from tanks to tubulars - 39 times for a savings of $276,000. Three transfers were valued at more than $15,000.
Following the paper trail
InControl also generates detailed material transfer documentation electronically. These documents are vital for the accounting department, but they are time-consuming for operations personnel to complete. "If there is a barrier to some task, if it's anything less than super easy, then it goes in a stack and never gets done. With InControl, creating material transfer orders is super easy," said Magnum's Roy Riewe.
Royal's Gregorcyk agreed that InControl made it easier to follow the paper trail. "The details contained in (transfer orders) are just as important as the details of equipment specs, and they are crucially important to accounting departments." He said that before InControl, "Royal would go through five to 10 pads of material transfers a year - it was difficult following all those tiny slips of paper." Because InControl can work over a local network, it eliminates the need to print transfer orders. A transfer executed by the operations department would be reflected in the accounting department instantly.
Learning InControl takes less than an hour. "One of InControl's main strengths is that it does not require oil and gas expertise to use effectively," Gregorcyk said. Data entry may require some effort, but equipment data, such as dimensions and serial numbers, do not change over time. And for those data that do change, such as accounting data and location data, InControl facilitates making the changes by automating them. In addition, Datamation Software, which licenses InControl, offers a database-building service.
The investment of time and money has been worth it for Royal. "At some point, you must spend money to get information about your equipment," Gregorcyk said. "With InControl, you'll get your answer cheaper and faster."

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