il and gas companies continue to search for and develop hydrocarbon resources, and seismic data remain an effective tool for identifying and delineating these resources. As a result, the inventory of seismic data that a company has continues to grow.

A seismic data library in most cases has been acquired over many decades, which makes keeping track of data contracts, ownership and entitlements a complex and challenging task for oil and gas companies. The consequences of not knowing ownership status and entitlements can be severe.

This article describes the processes by which an oil and gas company can establish a strong understanding of the ownership status and entitlements of their seismic assets. As a starting point, understanding the difference between ownership and entitlements is necessary and acts as a foundation for the rest of the process.

Ownership

Seismic data ownership informs an organization as to whether they have proprietary rights to their data. If they own the data, in many cases, it can allow the corporation freedom in how they handle it. It should be noted, though, that most companies only have proprietary rights to 10% to 25% of their seismic data. That means most of their subsurface database or asset is licensed or nonproprietary data, and there are many potential restrictions regarding usage to keep in mind.

Entitlements

Entitlements inform on who has the right to access data and how those data can be used. These rules are outlined in licensing agreements. Given the majority of a company’s seismic asset is licensed or nonproprietary, it becomes important to understand how one should use the data to ensure not to breach a contract.

As mentioned previously, the consequences for breaching entitlements conditions can be severe. In most cases this is done through no ill will or intent but rather because the conditions of use are not well documented or understood. When these breaches happen, it can cost the company hundreds of thousands or even millions of dollars depending on the nature of the violation.

Because the stakes are so high, many E&P companies embark upon projects to thoroughly understand the ownership and entitlements of their seismic data to accomplish the following:

• Complete due diligence to divest or dispose of specific assets or the company as a whole;
• Mitigate corporate risk or reduce liability exposure; and
• In response to a current lawsuit or litigation.

The “cause and effect” approach has proven helpful when performing these types of projects.

Cause & effect method

On the Cause side, there are five action steps to ensure that an organization is using data appropriately: classify, assess, utilize, secure and establish.

Classify: Classifying is a first step that defines which seismic data are proprietary and which are licensed or nonproprietary. It is a great place to start when trying to understand the overall status of a data asset.

Access: Access refers to entitlements, and it outlines what use is allowed or disallowed for the seismic data. It is an important step to focus on and involves asking a series of questions:

• Does the company have an understanding of the entitlements that are associated with the data in their subsurface database?
• Does the company know who can have access to the data? Is an external consultant allowed to interpret the data?
• Does the company have embargoed data that cannot be displayed?
• Can the license be transferred? In the case of a disposition, how the deal is structured may determine whether the license can be transferred.
• Can the data leave the premises? Most contracts say that the data can go to a processor or storage vendor, but other restrictions are often in place.
• What are the specifications regarding data rooms? Documentation may be required to identify what companies and individuals attend the data room. If data are time sensitive, it may need to be removed after a certain period. One common disclosure clause prohibits copies, transcriptions, summaries or reproductions of the data of any type.
• What about termination of the license? Organizations must understand how to dispose of the data properly. They may be allowed to delete the data, but it’s important to know if disposing of the data includes reprocessed data or derivative data/intellectual property. How to dispose of data is normally spelled out in an agreement or contract. However, if that contract is silent, companies cannot simply delete the data without clarifying the conditions to be met.

Utilize: When evaluating ownership, it is valuable to perform a risk assessment. The purpose of the matrix is to identify the current level of corporate exposure and determine what corporate risk legal is willing to accept. Green means confirmed ownership and entitlements. Yellow means confident in the ownership and entitlements. Orange means unknown.

The risk that a company is willing to accept for the use of unknown data will dictate the level of accessibility to the seismic data. There will inevitably be some surveys that the corporation cannot confirm, and the internal business unit will need to determine whether they are willing to have those data deleted. If the data are important to them or in a core area, they may want to repurchase a license.

Secure: The fourth step refers to securing documents. Gathering all documentation used to prove an organization’s data usage rights should include securing those documents within the company’s data management platform.

Establish: The last step is to establish a data access system. One example is to place users within the CRUDE access model: create, read-only, update, delete and extract. It dictates who can create within the asset, who can read-only, who can update or modify, who can delete or destroy, and who can extract and download.

If a company completes all five Cause steps, they inherently create a positive Effect on their subsurface data and work environment:

• Efficiency: workflows become more effective;
• Faster: the company has faster response times to business needs;
• Find: the company can find documents easier, which can be made accessible to the business so that they have that critical information at their fingertips;
• Evaluate: if the company acquires a new asset, these steps will help evaluate potential risks that come with ingesting that asset;
• Control: the company has direct control over the asset; and
• Trust: ultimately, the data will be looked at as a trusted data source from the business.

Entitlement and ownership best practices

A seismic database is a very valuable asset for a company, but it can also present risk if ownership and entitlements are not well understood. Although agreements are typically well designed to direct what companies can and cannot do with those data, it is critical that the agreement is organized and available for reference. Due diligence regarding agreements has long lasting and beneficial impacts on a company, improves internal processes and materially decreases risk.