The Shocking, Simple Math of Deferment

“Y’all talk about deferment too much! We’ll get that out of the ground eventually.”- This mentality is costing you $$$

For the last 25 years that has been true. Operations didn’t prioritize wells that were underperforming, why bother? Check them out quarterly. Tasq enables operators to respond more quickly and accurately to deferment events. Here are some real numbers showing our value, and the value of moving quicker.

First, what is deferment? What is cycle time? And what is the time value of money?

Deferment is production under a well’s potential. Deferment happens for a number of reasons, and has historically been hard to find with reservoir and well dynamics. Measured in barrels or cubic feet for gas daily (bbl/d or mcf/d), deferment gives us an easy dollar cost to help prioritize work. We calculate our targets on each well’s individual performance and history, giving us early indications when things go wrong.

Deferment… you are missing it

Cycle time is the duration a well is deferring. If a well begins deferring on January 1st and returns to normal production on January 21st, this deferring event has a cycle time of 21 days.

Cycle time measures your operations response time

The “time value of money” is the idea that money today is worth more than it would be tomorrow. It’s pretty intuitive — Can you use a paycheck you get tomorrow? Yeah, when it comes in. What if it comes a year late? It’s worth even less to us! We could’ve used that money for a whole year, and inflation has taken a (2%+!) cut too.

The more you defer, the more $ you lose during a fields life

With that explained, why is deferment a problem? It’s pretty typical for deferment from underperformance to continue until:

• Well reviews
• Deferment leads to a well loading
• Foreman, lead, or optimizer actually sees it
• A shut-in event brings more eyes on the well
• Operational “spring cleaning”

But if we just watch for deferment (or, have an army of robots do it for you), we can avoid waiting for most of the events above, or at least make them less painful to find.

It might be obvious, but if you can react quicker to deferment, you can spend more time producing more oil & gas.

3 deferring events per year @ 5 BOPD & 50 mscf/d

Yearly volume comparison of a 30 day cycle time operation vs a 10 day cycle time

As we can see above, we can see an actual annual rate increase in wells that have lower cycle time. We call this rate acceleration. These results show a small improvement in one well, but this sort of improvement is common and scales.‍

Finally, the Shocking Part

Rate acceleration is a big part of what our platform aims to achieve. The idea here is oil and gas reservoirs have a pretty fixed amount of stuff in them. If we can pull that money out of the ground today, it is just worth more than it would be over another few months or years of a well’s life. Maintenance expenses, leases, market fluctuations, all mean we want to drain a well as fast as we can. Focusing on deferment & cycle time is proven to achieve this.

Production shifts forward by focusing on deferment & cycle time

Common arguments against rate acceleration

I have to spend more money on interventions and workovers to get it.

• In the last few years, we’ve analyzed about twenty thousand underperforming onshore wells. Of those, roughly 55% of those wells had artificial lift and surface equipment issues. These issues require only prioritization, control adjustments, a wrench, time, and some zip ties.

I don’t have the workforce to achieve it.

• Great! Tasq is a workforce multiplier. We help teams big and small find problems early, and target the problems costing you the most. Automation is pretty much required. Automation and machine learning together help humans find real problems a lot faster, regardless of size.

My field is mature and doesn’t have much to be gained.

• Mature fields = Artificial lift. Have you ever seen artificial lift working right 100% of the time? Me either.

We are already doing everything we can.

• People are doing their best, but operations just hasn’t caught up to the rest of the industrial world yet. Automation is required, and good machine learning helps. SCADA screens and alarms are helpful, but don’t give you the insight a holistic production model does. Even if your team checks every well every day, frac hits, aging downhole equipment, and surface constraints are all risks we can mitigate by draining the reservoir faster.

Keeping wells going is expensive and uncertain, we need to get the reserves out of the ground to keep the SEC out of our office.

Efficient operations just make more money

The math above is clear, draining a reservoir fast frees up your money sooner. We’ve seen excellent feedback from everyone from executives to engineers to field operators — They collaborate easier, and are catching problems sooner. Rate acceleration is a bold strategy, but it is attainable at any scale with automation.