Lease compliance quickly gets out of control with one big spreadsheet
THE CLIENT
Our client is one of the leading producers in the Eagle Ford shale in South Texas. They produce 28,000 barrels of oil a day and operate on thousands of leases. They focus on high-return low-risk unconventional drilling opportunities, and brought us in to help push them from risk to return, despite the ever-increasing complexity of land contract clauses.
THE PROBLEM
The client tracked well leases via one employee who managed a single, large spreadsheet. Recent high turnover and complicated lease provisions raised concerns within the company that a missed detail or the loss of this one employee would leave them open to risk.
In addition, information for maintaining regulatory compliance was spread over many areas of the company, making records difficult to find. They needed a modern, integrated approach to understanding well status across departments to answer increasingly pressing regulatory questions. Proactive warnings were also needed to raise an alert when provisions were in jeopardy and required action.
THE SOLUTION
Entrance created a compliance solution that pulls relevant information from across accounting, operations, legal and other departmental systems into a central database. Relevant data points, like SPUD, Rig Release and Completion dates, are gathered for each sensitivity case driven by lease provisions and implicit duties. SharePoint alerts, reports and workflows then drive compliance by notifying users of potential ways to prevent noncompliance from occurring.
In addition, if lease holders want to see that provisions are being followed, or if regulatory issues arise, the central database allows records to be pulled on demand. All of this results in less lost paperwork and better risk mitigation, which is a win for everybody.