Meeting the demand for positive free cash flow through efficient drilling scheduling

Unlocking cash means more than volume growth and G&A reduction

There is a lot of talk these days about the need for E&P companies to transform their operations, refocusing on investor and market demand for positive free cash flow. We’re not just hearing about this in conversations with operators and our oil and gas consulting contacts. In a recent McKinsey report titled “An operator’s guide to transforming E&P” they stated, “Refocusing on cash means operators must squeeze every dollar from their assets while simultaneously retooling for the new era. Unlocking cash will take more than volume growth and G&A reduction; it will also involve rethinking capital allocation and creating long-term value from both technical functions such as drilling and organizational functions such as logistics.” 

Creating long-term value through efficient scheduling

How do you gain long-term value from drilling and logistics? One way is to optimize how drilling program activities are scheduled, paying close attention to how money is allocated on resources, as well as how you’re spending money over time. Balancing costs against expected production is critical, and with multiple potential schedule scenarios to choose from, you need rapid and accurate information to make the right decisions.

Leveraging AI to reduce gaps in schedules and free up cash

Modern scheduling tools leverage AI to automatically optimize drilling program schedules, dramatically reducing cycle times and ensuring resources are used as efficiently as possible. Simple scheduling tools may show you how individual resources are being used, but they don’t enable you to see how activities are related to one another over time, and where unwanted gaps appear in the schedule. These gaps are where you can free up costs. With today’s advanced scheduling tools, you can create an optimal schedule that minimizes gaps to reduce this non-productive time and lower costs. As well, you can rapidly create and evaluate multiple schedule scenarios to determine the best course of action (“When should we add a rig?”, “Do we start a second frac spread in Q1 or Q2 of 2021?”). And because advanced scheduling tools give you insight into how you’re spending money over time, you can easily predict cash flow and see how efficiently you’re using your capital to drive profitability. 

Adopting a modern scheduling tool like Actenum’s DSO/Upstream can reduce cycle times by as much as 10% and shorten the time to first oil, all while ensuring predictability of cash flow. If you’d like to see how Actenum can help you meet the demand for positive free cash flow, contact us at info@actenum.com.

 

Owen Plowman
Vice President Business Development