Cover Story:
Digital Journey Guide
Cover Story:
Digital Journey Guide
Devon employees use rich data visualizations to make wellsite decisions, improving operational efficiency. (Source: Devon Energy)
Digitalization:
A Guide to Building a Legacy
Industry leaders showcase how the integration of intelligent infrastructure can be a transformative business strategy for long-term success.
Mary Holcomb, Associate Editor
T

he oil and gas industry has reached another tipping point, and staying innovative has become imperative to building resiliency. The challenges brought on by the pandemic have taught industry leaders that even the smallest digital steps can be transformative.

While consistency has never been a term synonymous with the oil and gas industry due to fluctuating prices, some leaders have mastered coexisting with unpredictability. Some have not. And an elite group of others have uncovered the golden nugget to surviving through it all: digital innovation.

Industry heavyweights Chevron Corp. and Devon Energy Corp. and newcomer Hibernia Resources III LLC have accelerated their organizations by prioritizing a strong digital strategy. By investing in advanced analytical functionalities to produce new insights and optimize operations, these upstream players have established valuable roadmaps for digitizing at any scale.

TCO utilizes data analytics and automated performance monitoring to improve returns. (Source: Chevron Corp.)
Chevron: ‘Technology is in our DNA’
The energy sector has become increasingly focused on digitizing, and looking at Big Oil’s digital transformation can provide a helpful blueprint for smaller operators.

Industry leader Chevron Corp. has powered a 141-year legacy in oil and gas by betting on digital in its infancy, exploring emerging technologies to unlock value across its oilfield assets.

“Technology is in our DNA, which is the genesis for where we are today on our digital journey,” said Frank Cassulo, Chevron’s chief digital officer. “In the early 2000s, we started thinking about tools and applications that could help digitize the oil field to unlock value. From that point in time, we’ve matured significantly to the point that today we’re moving into a cloud environment.”

In 2018 the global energy provider received a push from CEO Michael Wirth to apply digital solutions at scale to improve the velocity of how it delivers business outcomes. That executive-level mindset shift has transformed Chevron into a sophisticated enterprise of smart machinery, cloud-based solutions and digital analytics.

“We believe capitalizing on new and emerging technologies is a differentiator,” Cassulo said. “In today’s environment, digital is accelerating at a rapid rate, and we see that technologies such as computing, cloud sensors and other algorithms are really growing and expanding in our business in a way that we can harness data in a manner to help drive improved business insights.”

By 2020 Chevron reshaped its entire digital footprint to strengthen its commitment to deliver higher returns and lower carbon.

“We’re actively working on upscaling our organization and building fluency and digital capabilities within the workforce at all layers of our organization from leadership through frontline workers,” Cassulo said.

Power of collaboration
One venture that has been transformative to the business has been strategic partnerships within the technology sector, according to Cassulo.

In 2017 Chevron inked a seven-year partnership with Microsoft Corp. to build its knowledge of cloud technology via the Azure platform. The deal established Microsoft as the company’s primary cloud provider, accelerating the application of advanced technologies—like the Internet of Things—to drive performance and improve efficiencies.

“With the partnership, we’ll not only leverage the cloud but also cloud computing, data analytics and other capabilities that they offer on their Azure platform,” he said.

Recently, Chevron combined forces with Microsoft and Schlumberger to develop a groundbreaking carbon negative bioenergy in Mendota, Calif. The plant will covert agricultural waste biomass into a renewable synthesis gas that is expected to remove about 300,000 tons of CO2 annually.

“We view partnerships as enablers,” Cassulo said. “For example, bringing together Microsoft and Schlumberger has the ability to unlock potential that none of the companies could do alone. So uniting three companies with incredible talents and capabilities really solves some of the most complex problems in our industry.”

Utilizing technology as a differentiator has helped Chevron keep a competitive edge across all its assets, especially in the Permian Basin. The ingenuity of the organization’s workforce—paired with advancements in horizontal drilling and hydraulic fracturing—has increased its shale and tight oil production.

“One of our largest development opportunities has been in the Permian Basin,” he said. “So we view technology and digital as a way to continue improving our ability to compete in the Permian. We’ve used tools to automate workflows. We’ve improved well performance, and we’ve even got into data insights that help us with capital allocation and our prioritization process, positioning us as a leader in the shale and tight oil community.”

According to Cassulo, the company has leveraged technology like artificial intelligence (AI) and machine learning to reduce the uncertainty of its subsurface characterization of reserves classifications in the Permian.

“Our opportunity lies in applying it and continuing to innovate at the edge,” he added. “I think AI and machine learning have been helpful in terms of the massive amounts of data that we capture each and every day in our business and being able to use that data to drive and inform better decisions at speed.”

Additionally, Chevron has integrated geofencing within its Tengiz oilfield operations and implemented digital initiatives to train its workforce at its offshore environments like the Gulf of Mexico.

“A category of digital that I think is really interesting involves putting in safeguards to protect our employees and improve the safety of our operations,” Cassulo noted.

While the focus has been improving its technical side, the company has adopted functions to upgrade its internal systems like moving its HR platforms to a cloud-based system.

“A lot of our procurement systems are cloud-based,” he said. “Some of the basic fundamental business aspects have been transformed by just simply having access to large scale cloud environments, so digital is really permeating all of our business.”

Strategy for success
To experience similar success, Cassulo advises operators newly on their digital journey to focus on scaling up and building the capabilities to solve problems at speed.

“We’re in the middle of a transformation where we’re thinking about the cross-collaboration of our business units across and focusing on the enterprise value first versus discrete business segment value,” he said. “That’s the power behind it…getting to unlock the true potential of a company is through collaboration and then applying technology and digital solutions at scale.”

Chevron’s delivery model has been to deliver at a velocity—combined with an agile mindset—that has never been done at this scale before, he noted.

“There’s a cultural component to it, and then organizationally there’s setting up the right structure to help deliver that,” Cassulo said. “The bottom line, and the way I view digital today, is that it’s integrated into just about everything we do. Digital doesn’t stand alone. It’s an integrated way of delivering solutions across our business.”

The supermajor plans to double down on digital acceleration efforts with the intention of providing cleaner, more reliable and affordable energy.

“We see digital as really unlocking the full potential of our company,” Cassulo concluded.

Field employees use streaming data delivered to their mobile device, making their jobs more efficient. (Source: Adobe Stock/Devon Energy)
Devon Energy: ‘More technically sophisticated’
Devon Energy Corp. has maintained an active role in leveraging new technologies to accelerate its business operations.

The shale producer was an early adopter of Big Data architecture like real-time streaming, software solutions and deep learning infrastructure, which have all helped solidify the operator’s competitive edge in today’s upstream field.

Following the acquisition of several companies in 2010 and its transition from an international operator to focusing purely on U.S. land operations, Devon’s digital journey became a bigger priority, according to Trey Lowe, Devon’s vice president of technology.

“We had a cultural alignment many years ago,” Lowe said. “One of the very first foundational things that we had to do was to collect data the same way across the entire company whether someone was in the field in South Texas, in the Delaware Basin or western Oklahoma. We gained alignment early in the journey, which allowed us to start building more advanced and impactful tools on top of our collected data over the last several years.”

Good data
The first undertaking was a companywide data cleanup and governance initiative, and during that period Devon began preparing all its data in centralized data warehouses. This effort ensured that its experts and decision makers were provided high-quality, reliable data.

Soon after, the company implemented decision support centers (DSCs) in core producing areas for its operations. The DSCs stream real-time data from producing wells back to field teams that then utilize the information to optimize performance and lower operating costs.

“Throughout that time, we were becoming more technically sophisticated,” Lowe said. “We saw this as the next step to differentiate ourselves from our peers and take our technical knowhow and excellent set of engineers and scientists and provide them with the toolkit to make decisions faster. We had some very forward-thinking leaders, and they helped guide the ship and get us started down that path.”

Initially, the premise of the DSCs was to promote wellsite productivity and reduce downtime. Over time, Lowe said the organization realized it could make better decisions across the entire enterprise if it had good data and provided a transparent and accessible avenue to the data for its engineers and geoscientists.

All of Devon’s assets are now highly instrumented and automated, resulting in more than 90% of information being digital, according to Lowe.

“We continue to execute on that plan and it’s guided our migration and helped us identify and prioritize our efforts the last several years,” he said.

Real-time analytics
Devon has seen the biggest benefit from analyzing real-time data on the production side, Lowe said. Similar to the DSCs, a well construction center (WellCon) was developed to optimize drilling and completions operations on Devon’s wells.

WellCon applied analytics to real-time drilling control and geosteering as well as completion and flowback operations. With this technology, engineers and geologists improved out-of-zone footage and sidetracks, and it optimized hydraulic fracturing operations.

Lowe said advanced analytics and remote monitoring have also boosted asset performance, improved decision-making, lowered costs and optimized efficiencies across the organization.

From its producing fields, Lowe said well downtime improved by up to 50% and flaring emissions reduced by nearly 60%.

“In the drilling organization, we continue to break records almost every month on costs per foot and the footage per day with successes across all of our drilling rigs,” he said. “On the fracturing side, we are now at such an efficiency level that we have pumping operations running more than 21 out of the 24 hours in a day, which is a major improvement of over 100% from four to five years ago when we started down this path.”

With these insights, Devon developed its Sealed Wellbore Pressure Monitoring technology (SWPM), a fracture diagnostic tool designed to help E&P companies maximize cluster efficiency. Essentially, the software monitors fracture growth and the fluid volumes between treated wells by tracking the pressure response in nonperforated wellbores.

“We had new inventions that came from that data. Specifically our Sealed Wellbore Pressure Monitoring was a direct result of one of the real-time data initiatives combined with our innovative culture,” he said.

Wellsite video
Wellsite video is analyzed in real time using AI, converting images to actionable data. (Source: Devon Energy)
Learning new capabilities
“Today we’re deep into image analytics and computer vision,” Lowe said.

Cognitive analytics using AI, machine learning and deep learning is an area of opportunity that Devon is actively exploring.

“We are trying to understand how we can push models to the edge,” he said. “For example, advancing our drilling rigs and fracturing operations so that they can either interface directly with the equipment on location or provide deeper insights to the people making decisions.”

Lowe said making subsurface data available, uniform and accessible across the company has been a recent challenge, particularly with its geoscience and reservoir engineering data. Devon is working on deriving further insights from its seismic and other subsurface data by leveraging AI and combining it with operational data.

“Both of those are fertile grounds for further development,” he added.

In January 2021, Devon closed its merger of equals with WPX Energy and became a top U.S. unconventional company operating in five basins with premier acreage including more than 400,000 net acres in the Delaware Basin. Now going through a large-scale integration, Devon has inherited WPX’s portfolio of legacy solutions, including digital transformation initiatives the company had pursued prior to the merger.

“WPX had an innovation team, and we’re working on some pretty innovative products across the company that are going to be incorporated very nicely into the things that legacy Devon developed,” Lowe said. “A great example is in real-time fracturing data, where Devon had done a lot of work developing algorithms and visuals with the data in-house, and WPX spent a lot of effort and time trying to understand the architecture of how you run analytics at the well site.”

Lowe added, “Those two are so complementary that it’s been great getting our teams together and taking the learnings from both companies. It’s going to be a win that we can accelerate with pushing the models that we’ve created in-house back to the well site. We’re all really excited about that.”

Moving forward, Devon plans to continue its digitization journey by sticking to its system of prioritizing innovative ideas and being deliberate in scoping out tangible benefits, Lowe said.

“We’re going to continue building things for our field operations so we can make faster decisions based on data,” he said. “We’re going to be nimble and agile on what we approach and what we tackle next, and we’re definitely really interested in applying digital technologies into improving ESG initiatives across the company, so that’s going to continue to be a focus for us and our future.”

Hibernia Resources’ frac stack is shown on its three-well Hartgrove pad in western Reagan County, Texas. (Source: Hibernia Resources)
Hibernia Resources: ‘Major gains for us’
In the early innings of automation, Houston-based E&P Hibernia Resources LLC’s selective vetting of digital enhancements has helped the company capture impressive results across its well sites.

“You have to be really intentional in the types of technology you take on,” said James Gray, Hibernia’s vice president of reservoir engineering. “It can’t be technology just for the sake of technology. At times we’re acquiring more data than we have the manpower to process so we ought to be deliberate about the value of information we’re obtaining and ensure it is actionable.”

Fracture optimization
In 2019 the Permian-focused producer entered an agreement to trial Cold Bore Technology’s SmartPAD completions optimization system. Using a combination of sensors and proprietary state detection algorithms, the technology tracks operations directly at the wellhead and connects all onsite service companies to a trusted source of formatted and timestamped operational data.

“We found Cold Bore better captured the parallel inter-related activities associated with multiwell frac ops,” Gray said. “It also does a better job categorizing downtime and productive time by the minutes and seconds than the standard well reporting platforms we traditionally relied on.”

By November 2020, the producer digitized 100% of its completion operations on its well pads thanks to the early success of the trial.

Across Hibernia’s six pads, the company replicated double digit percentage reductions in non-pumping time across multiple sequential pads, reduced non-pumping time from an average of 8.91 hours per day to 4.19 hours per day, reduced its 2020 campaign by 15 days saving over $300,000 in fixed costs and maintained 100% onsite safety.

Graph
Cold Bore’s SmartPAD technology provides a full analytics overview of key performance indicators. (Source: Cold Bore Technology)
Cold Bore President & CEO Brett Chell
Cold Bore President & CEO Brett Chell coordinates with an engineer at a Permian field site. (Source: Cold Bore Technology)
“Cold Bore came in with their sensors and a dedicated hands-on location that consistently categorized each activity in a useful and detailed way,” Gray said. “We were able to look at any specific part of our operations and see how we’ve performed, how long it has taken us to execute that particular stage or step of the operation through time, and see where we’ve progressed.”

Since multiwell pad fracs can be a month or longer, being able to shave off any time on frac jobs can make a world’s difference for any company, according to Gray.

“With where we are on our journey as we scale up, and as we go to more wells per pad and longer lateral lengths, those little efficiency gains will save even more days on those operations,” he added.

Drawing off that success, Hibernia plans to trial simul-frac this year, which is a two-well stimulation technique gaining popularity across horizontal wells in U.S. shale. The trend has awarded some producers slashed completion times.

In January 2021, Rystad Energy reported that the approach represented 8% of all well completions in the U.S. onshore sector during fourth-quarter 2020.

Hibernia’s first simul-frac commenced in April. Gray said if the expected efficiencies are realized, the company will consider employing it on 70% of this year’s program and 90% to 100% of their 2022 program.

“That could be a big step change for us,” he said. “Going forward we’re planning six additional well pads and more 3-mile laterals, so efficiency gains that before would’ve shaved hours and days could now shave days and weeks on our most ambitious projects. Major reductions in time from first spend to first production is the objective, and digitizing the completion data will become even more important as the rate of execution increases.”

A workover rig drills out frac plugs on Hibernia Resources’ six-well UL Boss Hogg pad in central Upton County, Texas. (Source: Hibernia Resources)
Prioritizing data
The next big task on Hibernia’s digital journey involves improving its data management process.

Currently, Hibernia utilizes SCADA sensors and equipment on its wells and batteries to collect its data. However, the company is moving away from spreadsheets and working on getting its streams of data into a central location.

“We’ve got companies that acquire the data for us on their own individual platforms that we can view our data on, which is very handy,” Gray said. “But aggregating that data into our own production accounting software and then into a central database that the rest of the organization can leverage is huge.”

With the data in a consistent format, he said various applications and workers of different disciplines could leverage the data faster, helping speed up the workflows and prevent Hibernia “from spinning our wheels.”

Additionally, the company sophisticated its internal business operations with the implementation of Microsoft’s business analytics service Power BI. The software collects unrelated sources of data into coherent, interactive visualizations and business intelligence capabilities.

Gray said the unified data allows the organization to do production reports and accounting surveillance, which is “a core part of our business.”

Arial View of work area
A workover rig drills out frac plugs on Hibernia Resources’ six-well UL Boss Hogg pad in central Upton County, Texas. (Source: Hibernia Resources)
Staying relentless
Gray noted that while on its digital path, Hibernia has learned the value of incorporating technologies that larger operators either ignore or are fortunate enough to have a team to focus purely on that issue.

“As a growing company, some of the established processes that the large companies probably take for granted can be major gains for us,” he said. “When we’re able to implement improved accounting surveillance or standard operating procedures in the field, that’s the kind of stuff that can pay dividends for growing companies like Hibernia.”

Table graph
Hibernia cut non-pumping time by more than 50% on pads during 2020. (Source: Business Wire)
Hibernia intends to keep an optimistic approach to new technologies, and Gray anticipates continued success by remaining dedicated to one of the organization’s core philosophies: it’s not technology for the sake of technology.

“Emerging companies shouldn’t explore technology just because it’s cutting edge,” he said. “They should relentlessly pursue technology that offers a clear path to help you do your job better, faster or safer. It’s an approach that benefits all stakeholders.”