Operations Cost Analysis Next Step for Oilpatch Software

By L. D. Barney | THE JOURNAL RECORD, April 15, 1986 | Go to article overview

Operations Cost Analysis Next Step for Oilpatch Software


L. D. Barney, THE JOURNAL RECORD


The owner, chairman or chief executive officer of a small independent oil and gas company should be able to swing around in his chair to a computer terminal and with a few knowledgable keystrokes know:

- How much money his company has in a particular well at that moment.

- Which vendors offering similar services have done him the least expensive job over the last six months.

- A list of wells and the economics without calling accounting or generating a special report. He should be able to compare total costs in an area on a well to well basis.

"There's no reason in the world with today's computer industry that high level people in an oil and gas company shouldn't be able to do that," said Pete Martindale, partner in Martindale, Baker andMyles, an Oklahoma City accounting firm specializing in computer applications for oil and gas companies.

"The technology is there," said Martindale. "There is some software that will do it and some that remains to be written, particularly from an operations, cost analysis and management viewpoint of oil and gas operations.

"Computer uses in oil and gas operations are usually for cranking out straight line accounting, joint interest billing and financial statements," Martindale said.

"Operations cost analysis is an area not developed yet."

But such cost analysis is a vital and useful area given today's prices and the problems some companies could have just keeping their doors open. Martindale suggests that if the accounting office isnot automated, it should be during these times.

Automation, agrees Roxanne White of Tulsa-based Kenworth Oil Management Systems, may be a short-term necessity for long-term survival in today's oil and gas market.

The company teetering on the brink of survival is likely there from bank pressure on loans. The bank is telling them to cut overhead. A computer system would help reduce the needs of numbers of employees in accounting, Martindale says.

A computer should also help increase cash flow, he says. With an automated accounting office joint interest billings are sent out faster than by hand.

That can speed payments as much as 30 days, Martindale said, increasing cash flow.

It can also generate productive time for employees to question joint-interest billings the company receives from wells it does not operate or do collections work.

"They can question a few charges or look over revenue checks a little longer," Martindale said. …

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