Regardless of the duration of the current market turmoil, E&P’s will become increasingly dependent on cash flow forecasts (accruals) for everything from operations planning to financial reporting. Getting your hands on the necessary data to accurately calculate those accruals is key.
While commodity prices and operated production volumes are relatively easy to calculate, the impact of income interruptions from your third party producing assets (non-op, OBO, etc.) being shut-in due to prices can be very difficult to monitor and account for with any accuracy. Even your operated properties can require sudden, involuntary production interruption due to surrounding fracking operations. This can mean any operator’s new well, probably at the peak of production, could be shut in for 30-45 days.
While you may not have any ability to control these types of scenarios, there are tools to help you prepare and significantly improve the accuracy of your short-term accruals. PDS has literally hundreds of operators who utilize our reciprocal data exchanges to achieve the highest possible levels of forecasting. Our Well Data Exchange enables near real-time sharing of drilling and completion data as well as daily production estimates from OBO assets and our FracX platform facilitates the secure sharing of frac schedules to allow for proper planning. While FracX was primarily developed as a tool to prevent losses due to interference from offset completion operations, the same data can be critical to forecast future interruptions in nearby wells. Our run ticket data can confirm sales within minutes of purchaser’s trucks leaving a lease.
If you are interested in learning more about how your peers are optimizing their accruals with PDS, contact us today.