A perspective for the Canadian Oil & Gas Industry

1. Drowning In Data
A Perspective for the Canadian Oil & Gas Patch
Prepared By:
The Censeo Group
Sponsored By:

3. Contents
About Censeo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
About P2 Energy Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Our Market – The New Reality . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Answer Is – There Is No Silver Bullet! . . . . . . . . . . . . . . . . . . 9
Business Intelligence, Or Is It? . . . . . . . . . . . . . . . . . . . . . . . . 11
Looking For The Answer Where? . . . . . . . . . . . . . . . . . . . . . . . 12
Utopic View of the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3
THE CENSEO GROUP

4. Section
Title
THE CENSEO GROUP IS A CALGARY, ALBERTA BASED MANAGEMENT
CONSULTING GROUP THAT PROVIDES EXPERT ADVICE AND QUALITY
SERVICES. WE HELP YOU DRIVE EFFECTIVE DECISIONS AND ACHIEVE YOUR
GOALS WITH A BALANCED APPROACH TO PROCESS AND EXECUTION.
The Censeo Group Services:
We provide independent and objective consulting services to our clients.
They include Advisory, Strategic planning for Information Technology,
Leadership Coaching, CIO for Hire on a part-time and/or short-term basis,
Program and Project Management and Business Analysis.
The Censeo Group Approach:
Every assignment or project we do is client focused and business driven.
They are characterized by a pragmatic and practical approach that is always
adaptable to the client’s culture and specific needs. We bring creative and
innovative thinking and we are process guided, not process driven. Our
focus is on solving business problems with effective solutions.
The Censeo Group Differentiators:
• Our pragmatic approach to consulting that optimizes value for our
clients. While we leverage our experience and methodologies to
bring value to our clients we also approach each client knowing
their organization and culture make them unique.
• Censeo consultants have a diverse skill set spanning all aspects
of the business. Censeo leverages that business experience in our
approach and understanding of processes.
• Censeo’s reputation speaks to our ability to provide a service that
is unparalleled in our marketplace. Censeo’s marketing is our
reputation and our customer base speaks to the relationships we
have grown over time.
• Unlike the large systems integrators whose experience is based
on a particular set of technology, Censeo is focused on and works
directly with the business to drive solutions.
• Censeo has worked with organizations to develop strategies and
optimize processes for capital projects through all phases of their
lifecycle (planning, design, implementation and operations).
• Censeo is able to bridge Business and Information Systems/
Technology ensuring an effective linkage between technology,
processes and strategies.
About The Censeo Group
For more information on The Censeo Group, visit www.thecenseogroup.ca.

5. P2 ENERGY SOLUTIONS PROVIDES A COMPREHENSIVE RANGE OF
UPSTREAM OIL & GAS SOFTWARE, INCLUDING ACCOUNTING, GEOSPATIAL
DATA, LAND MANAGEMENT, PRODUCTION OPERATIONS, AND RESERVES
MANAGEMENT SOLUTIONS.
The P2 Energy Solutions Approach:
All upstream oil and gas organizations strive to be execution-driven, to
get oil and gas out of the ground and to market efficiently and profitably.
Upstream professionals want to make fast decisions based on reliable
data, backed up by robust systems, but getting there isn’t easy. No vendor
is better equipped than P2 Energy Solutions to help upstream organizations
navigate today’s challenging environment.
P2 Energy Solutions Differentiators:
• Empowering the People who Power the World: At P2 we exist
to arm your people with the right tools to get the job done and
solve big problems. We closely collaborate with our customers to
understand how change is impacting your upstream business, and
to identify what’s most important to drive business performance.
• Driving Customer Value: We help customers maximize the value
of their assets by helping them optimize production quality and
control costs. P2 solutions address critical business challenges
including how to increase free cash flow, reduce finding and
development costs and grow net back margins.
• Trusted Industry Partner: P2 serves oil and gas companies
worldwide. Our software and data solutions reach across the
upstream organization, from the back office to the field. Our
customer base totals more than 1,500 customers who rely on P2 to
support billions of transactions across hundreds of thousands of
wells.
• Broad Portfolio & Integrated Solutions: P2 solutions cover
important upstream domains: Production operations, finance
and accounting, land management, geospatial data and reserves
management. P2 delivers total solutions to help you drive the
most value in your business operations.
• Full Lifecycle Support: It’s one thing to say you’re committed to
serving customers—P2 backs it up with results. Our support and
services team responds quickly to customer needs with high
quality execution. P2 support personnel are capable, friendly and
help upstream people to get their jobs done.
About P2 Energy Solutions
For more information on P2 Energy Solutions, visit www.p2energysolutions.com

6. The recent economic downturn is showing signs of being long lasting and Oil
& Gas companies must find new ways of operating at lower costs and with
fewer people. Operational efficiencies need to be one of the top objectives
that drives all activities focusing on a new operating model for tomorrow.
G&A expense reduction in companies will be a continued push but that will
not be enough to get companies where they need to go to be successful
and optimize their profitability. They will need to be innovative and look for
areas to leverage data more quickly and effectively to make better decisions
that truly affect the bottom-line.
The following principles will guide decisions in the new economic environment:
• Data management will be aided by strong discipline and
integrated application solutions.
• Companies will seek solutions that help to enable the sharing
of information and reporting of corporate key performance
indicators
• Companies will leverage technology solutions that enable the key
attributes of data (shown in figure 1 below) that drive business
intelligence within their organization
Executive Summary
Focusing On a New Operating Model for Tomorrow.
»» Figure 1: Key attributes of data
6 Drowning In Data - A Perspective for the Canadian Oil & Gas Patch
THE CENSEO GROUP

7. The Oil & Gas industry needs to support technology based tools that
promote the transparent sharing of private data internally and public data
externally. This external sharing will leverage both cloud technology and
some form of “data-hubs” that drive a publish and subscribe mentality to
allow organizations to simplify the population of public data throughout
their respective software tools. This technology will also provide better
solutions to support ongoing M&A activities in the oil and gas sector with
efficiencies in the exchange of data between companies.
The understanding of the “ten square blocks” we call the Calgary Oil &
Gas community will become very obvious as software tools enable more
collaborative sharing and truly allow organizations to focus on the ingredients
of their internal organization that give them a competitive advantage.
Internally, organizations need to build their data management strategies
to focus on turning the mounds of data into knowledge. Classifying the key
data elements, understanding the ownership of the data and identifying
the sources of truth for the organization will be essential. Technology is
not the answer to the problem it is simply an enabler. Success with a data
management strategy will be driven by a design that looks at the company
as a whole and with a view towards integrating data across the organization.
Data growth between now and 2020 will cripple organizations that don’t
have a data management strategy as well as the effective processes and the
software tools to manage the information. Those companies that recognize
the value of the information and leverage it to their advantage will drive
a paradigm shift in the way they operate their business with the ability to
affect the bottom-line of their company. Vendors who provide tools focused
on integration and providing easy access to knowledge will form strategic
partnerships with their clients aligning their solutions to the valued based
objectives of the oil and gas community.
The value of data as an asset will become a priority in oil and gas with a
focus similar to that paid to a barrel of oil and the impact to the bottom
line will be well articulated and data governance mandated.
»» Figure 2: Data = Value
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THE CENSEO GROUP

8. More than 35,000 workers have lost their jobs in the Alberta market place
and oil has lost more than 50% of it’s value in less than a year. The trend in
commodity prices shows no sign of recapturing its value in the near future
and many are speculating that we have reached a new norm with the oil
price stabilizing somewhere between $40 and $60/bbl. (U.S. dollars).
With that in mind, Oil & Gas companies need to find a new way to operate
and drive efficiencies to optimize their profit from every barrel of oil they
produce.
Managing an Oil & Gas business, like many other businesses, is all about
the data. There are millions and millions of data elements generated and
used by Oil & Gas companies every day to make informed and strategic
decisions for their organizations. These companies have terabytes of data
stored on computers and it is growing exponentially day by day. This has
decision makers in organizations scratching their heads and asking “how
do I survive the data flood gates and how do I make sense of it all?”
The reality is that companies have too much data (not knowing where to
start), too many disparate sources of data (not knowing where to look),
less people to do the work and too much knowledge that has left the
organization (layoffs and retirements). This all adds up to lost opportunity
as the organization is not taking full advantage of one of its largest and
most valuable assets – “business intelligence” driven by data.
Our Market – The New Reality
Reaching a New Norm With Oil Prices Stabilizing Somewhere Between $40 and $60/bbl
»» Figure 3: The Oil & Gas business is all about data
8 Drowning In Data - A Perspective for the Canadian Oil & Gas Patch
THE CENSEO GROUP

9. Data volumes are growing at unimaginable rates (IDC released a study in
2011 stating data will grow 50 times greater by 2020).
The volume of data is becoming a crippler for some organizations as
they struggle to make sense of the information and lose trust in the data
leveraged for decision making. There is no single answer to this issue and
there is no single technology solution that that will address this issue. Oil
& Gas companies will need to improve their use of data and their analytics
capabilities in order to compete in an industry where decisions are moving
faster and the stakes are growing ever higher.
The Answer Is – There Is No Silver Bullet!
The Value of Data and the Bigger Picture for Oil & Gas Companies
»» Figure 4: Data is growing at unbelievable rates
The volume of data is becoming
a crippler for some organizations
as they struggle to make sense of
the information and lose trust in
the data leveraged for decision
making.
9
THE CENSEO GROUP

10. Oil & Gas companies need to look at data management from a bigger picture
perspective by focusing on the following:
• Information Management Strategy – How do we deliver knowledge
(not data) to the organization to drive faster and more impactful
decisions
• Classification of Data – Focus on what is important to the
company and investing effort at the right level on the right things
at the right time
• Ownership of Data – Identify and grow data stewards in their
organization to drive value from the data, ensure accuracy of the
data, and steward the propagation of data sets for company value
• Integration of Software Solutions - Enter data once and it is
available where it is required. This should address both public
and private data sets with the ability to strengthen collaboration
across the Oil & Gas industry
• Elimination of Redundant Data and Software – Leverage the
capabilities of existing software tools, exercise more discipline
around software selection and establish processes to merge data
and software solutions from company acquisitions
• Security – Treat data like the valuable corporate asset it is by
ensuring it is secured and protected like other corporate assets
from corruption, damage, loss and compromise
»» Figure 5: Lack of data management creates issues
10 Drowning In Data - A Perspective for the Canadian Oil & Gas Patch
THE CENSEO GROUP

11. Data is the gold of tomorrow’s Oil & Gas companies and those companies
that develop and execute an effective information management strategy
will be able to unleash the power of one of their most valuable assets –
INFORMATION.
Business Intelligence, in many organizations, is seen as a technical solution
on top of data and thus we see a proliferation of reporting tools, largely
focused on vertical silos of information. This data has not been classified,
mapped to the source of truth or prioritized with respect to the importance
to the organization. Therefore, the old adage “garbage-in garbage-out”
typically is the frustration that end-users face. All too often we as users
want to jump to solutions when we do not really understand the question
or business problem that we are attempting to solve.
The reality is that business intelligence is derived from data that has
been turned into knowledge and identified through key information (key
performance indicators or KPI’s) for the organization. This business intelligence
can then be the basis to drive value-based decisions that can have a positive
impact on company performance. It is often said that knowledge is power so
if large amounts of data can be turned into knowledge then organizations
that maximize the value of their data can build powerful corporations.
Unleashing the power of data will allow organizations to make faster, strategic
decisions with respect to their operating key performance indicators, driving
value while empowering the staff to leverage innovation for the benefit of
the company.
Business Intelligence, Or Is It?
Unleashing the Power of Data to Make Faster, Strategic Decisions
»» Figure 6: Value of data
DECISIONS/STRATEGY
INTERPRETATION
ANALYSIS
CAPTURING/RECORDING
POWER
INFORMATION
KNOWLEDGE
DATA
VALUE
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THE CENSEO GROUP

12. Oil & Gas companies today have hundreds of software applications to
support their business processes. These applications have propagated
organically and/or through corporate acquisitions creating environments
with superfluous solutions to business problems. Where integration does
exist it is usually through point-to-point connections and intermediate
database tables. These one-off connections add time and usually cannot
be shared or reused by other applications. The net result is a hornet’s nest
with redundant applications, redundant data and limited ability to find the
raw data, let alone the ability to turn this into knowledge to drive decisions
and value for the company.
Acquisitions and dispositions of assets or entire companies is a perfect
example of an opportunity for our market place. We often use the term
M&A (mergers and acquisitions) to describe this activity yet very rarely do
we achieve the full meaning of the word “merge” during these transactions.
It is not due to a lack of commitment as the plan and thought process are
well laid out and the intentions are good. However, more often than not the
effort to achieve a full integration and merger of the data and software solu-
tions is underestimated and not as easy as first believed. Again referencing
back to the community of 10 square blocks in downtown Calgary, most Oil
& Gas companies share many of the same applications and leverage the
same data yet, when it comes to absorbing or consolidating data sets, the
lack of standardization and consistency make this process overly complex,
expensive and time consuming.
Looking For The Answer Where?
The Hornet’s Nest: Redundant Applications and Redundand Data
»» Figure 7: The Hornet’s Nest
12 Drowning In Data - A Perspective for the Canadian Oil & Gas Patch
THE CENSEO GROUP

13. Another factor that adds to the hornet’s nest is the multitude of software
tools that are in our market space that basically do the same thing with some
minor exceptions. Talented Oil & Gas professionals (Engineers, Geologists,
Geophysicists, etc.) leverage their own analytic modeling systems with little
or no connectivity to other tools. They move from company to company
requesting their tools and insisting it allows them to perform their job more
efficiently delivering greater results. Company leaders, understanding these
are the professionals directly associated with the finding and production of
oil and gas, often see value in just supporting these software tool requests
that ultimately lead to redundant data and tools within the organization.
The third and one of the most important factors is that IT costs within Oil &
Gas companies is generally considered unimportant, a drop in the bucket
or a rounding error. Data strategy and overall investment in IT tools during
strong economic times gets very little attention from senior management
of companies. This allows redundant data and tools to grow without strong
discipline around the planning and design of a proper data strategy and
architecture. Due to the rapid pace in the Oil and Gas industry there has
been a precedent to rush to a technology solution to a problem before
fully understanding the opportunity. Again this leads to redundant data
and application solutions driving the need for more effort on gathering and
identifying the data versus the analysis and interpretation of the information.
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THE CENSEO GROUP

14. In an ideal world the complexity of integration and addressing the source
of truth would happen “auto-magically” enabled by technology. The Oil &
Gas organizations would leverage common data hubs to enable a publish-
and-subscribe population of public information where and as required.
Business Application Solutions would be designed to handle the nuances of
Oil & Gas and have a tight integration across the suite of tools provided. In
the ideal state, A&D activity would be supported by the standardization of
platforms and the centralized data hubs allowing for the seamless transfer
of information and the ability to easily merge solutions and data.
Reporting key performance indicators for organizations would be streamlined
with a single tool to look at company data with sources of truth and data
ownership clearly identified.
While we have classified this as the ideal state that should in no way imply
that it is unattainable nor that it is far off in the future. In fact - companies
need to get the added value from data now and work in partnership with
their technology vendors to ensure solutions support leveraging data across
the company and functional disciplines.
Utopic View of the Future
On the Cusp of Reaching a New Plateau of Profitability by Leveraging Data
Companies need to get the added
value from data now and work in
partnership with their technology
vendors to ensure solutions
support leveraging data across
the company and functional
disciplines.
»» Figure 8: Integrated Direction versus Point to Point Interfaces
Drilling
CompletionAccounting Accounting
Land
SciencesManagement Capture Marketing
–
Reserves
Management
Reserves
Financial
Accounting
Production
Accounting
Land
(Source of Truth)
Drilling /
Completion
AFE
Management
Asset
Management
Field Data
Capture
Marketing
Earth
Sciences
Data Exchange - Publish & Subscribe
14 Drowning In Data - A Perspective for the Canadian Oil & Gas Patch
THE CENSEO GROUP

15. Analysis & Reporting
Consolidate Data for Reports
Data Integration and Data Flow Automation
Data Standardization
Rationalize Data Sources
Data
Consumption
Data
Production
In the complex and demanding Oil & Gas industry, choosing the right
solutions and processes to help improve efficiency, reduce costs and enable
new capabilities can be imperative to profitability and growth. Moving
the dial from data collection and manipulation to data consumption,
interpretation and analysis will drive more value from the highly skilled
resources organizations employ. Oil & Gas companies are all about optimizing
their assets and data is one of the biggest unharnessed assets they own. It
could be considered a low-hanging opportunity that will help companies
achieve their corporate goals by producing information to drive strategic
decisions while leveraging technology tools.
Oil & Gas companies are on the cusp of reaching a new plateau of profitability
by leveraging data and the one thing stopping this from happening is the
implementation of an integrated data management strategy.
While we have classified this as the ideal state that should in no way imply
that it is unattainable nor that it is far off in the future. In fact - companies
need to get the added value from data now and work in partnership with
their technology vendors to ensure solutions support leveraging data across
the company and functional disciplines.
In the complex and demanding Oil & Gas industry, choosing the right
solutions and processes to help improve efficiency, reduce costs and enable
new capabilities can be imperative to profitability and growth. Moving
the dial from data collection and manipulation to data consumption,
interpretation and analysis will drive more value from the highly skilled
resources organizations employ. Oil & Gas companies are all about optimizing
their assets and data is one of the biggest unharnessed assets they own. It
could be considered a low-hanging opportunity that will help companies
achieve their corporate goals by producing information to drive strategic
decisions while leveraging technology tools.
Oil & Gas companies are on the cusp of reaching a new plateau of profitability
by leveraging data and the one thing stopping this from happening is the
implementation of an integrated data management strategy.
»» Figure 9: Shaping data for strategic corporate decision making
15
THE CENSEO GROUP