CON8438_Hendrickson-Oracle and Accenture Well Delivery Solution Presentation September 29 2014 FINAL

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. |
Integrated Well Delivery – Unconventionals
Driving Improvements Across the Value Chain
William Hendrickson
Managing Director
Accenture
Intercontinential Hotel
San Francisco, CA
September 29, 2014
Copyright © 2014 Accenture All rights reserved.

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Copyright © 2014 Accenture All rights reserved. 2

• USA is largest producer of oil and natural gas
• Global reserves may exceed cumulative
production for the last 100 years
• Capex investment has increased from
$5 Billion in 2006 to $80+ Billion in 2013
• The Speed of capital investment and innovation
in USA has not been replicated anywhere
The Opportunity

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | 4
Industry Challenges
Increased capacity puts
downward pressure on prices
Rapid growth creates supply
and resource challenges
Requiring effective project
and resource management
Requiring increased focus
on costs and efficiency

Industry Challenges
Large field sizes increases complexity,
creating logistics challenges
Rapid well decline rate creates
need for increased well count
Requiring repeatable and
cost effective execution
Requiring robust sourcing, increased
visibility and technology enablement

Increased
Complexity
Poor
Execution
Loss of
Control
Poor
Business
Results
Reactive
& Poor
Decisions
6
Business Challenges – Increased Complexity
Vicious cycle negatively impacts business performance
and ability to achieve “Execution Excellence”
Vicious Cycle

Well Delivery Planning, Scheduling and Execution Challenges
• Silo’d functions with lack of collaboration
• Non-optimized resources & cost overruns
• Reactive vs. proactive problem solving
• Multiple disconnected manual tools
(phone, email, spreadsheets etc.)
Asset
Team
Leases &
Permits
Service
Providers
Engineers,
Planners &
Schedulers
Field
Supv. &
Operators
Supply
Chain /
Materials
Mgmt.
Finance /
Reporting
Pressure to improve execution due to
increasing cycle time, costs and risks
7

Inefficient Well Delivery Execution
“Our Rig Supervisors make 700+
phone calls over the course of
bringing a well online”
Front line field supervision fire fighting negatively impacts
productivity and increases cycle time, costs and risks
Highly Reactive and People Dependent
Lack of visibility
between Op’s & SCM
Functional silos with
reactive culture
Manual and non
standardized processes
Immature organizational
capability & experience
Multiple disconnected
technologies and data
8

Where are Organizations Today?
Disconnected Spreadsheets,
Whiteboards & Tally Books
Master Planning &
Scheduling (Offline)
Struggling to implement fully integrated end to end planning and
scheduling process which is essential for safe and efficient well delivery
~80% ~20%

What are the Potential Benefits?
15% Reduction time to first oil
How the oil and gas industry cuts cost through replication -
Economist Intelligence Unit
Reduction in downtime
through improved
supplier collaboration
Unconventional Gas Projects Big Gains from Lean
Supply Chains - Booz & Co. (PWC) 2010
Reduction in drilling costs
through repeatable lean
practices
Unconventional Oil & Gas: Unlocking Value Through Collaboration
- JPT Nov 2013 McKinsey
10
12% 20%
Annual revenue
increase due to
reducing cycle time
Fortune 50 E&P Company
$250M

How Can The Industry Best Address These Challenges?

Well Portfolio
Planning
Well
Readiness
Site
Engineering &
Construction
Drilling &
Completions
Production
Plug &
Abandonment
Efficient and Effective Integrated Well Delivery Process
• Full “Field Basin” view
• Portfolio optimization
• What-if scenarios & risk analysis
• Alignment with long range
materials and resource planning
• Robust workflow
management
• Complete well readiness
documents
• Scope, schedule and resources
• Cost management
• Change management
• Materials management
• Services management
• Scope, schedule and resources
• Drilling activity status
• Logistics management
• Facilities engineering
• Schedule management
• Cost management
• Forecast accuracy
• Well and work history
• Scope , schedule and
resources

Oracle & Accenture Integrated Well Delivery Solution
Resource
Optimization
Supply Chain
Management
Logistics and
Transportation
Cost
Containment
Risk Mitigation
Digitally Enabled - Visibility - Actionable Insights
Well Portfolio
Planning
Well
Readiness
Site
Engineering &
Construction
Drilling &
Completions
Production
Plug &
Abandonment
Workflow Tracking - Automation - Reporting
Organizational Effectiveness - Performance Management
Enabler for Oil & Gas companies to reduce time to
initial production, maximize output, minimize costs and risks
13
Integrated Activity Planning and Scheduling

• Single integrated schedule for entire basin
• Ability to effectively deal with rapid changes
in rig availability, rates, permits and more
• Increased visibility and management of
available resources, materials, services
• Improve scheduling accuracy by 30%+*
• Reduce non productive time 50%+*
*How to Reduce Costs and Manage Risk in the Upstream Oil & Gas Industry with Enterprise Project
Portfolio Management Solutions – Oracle 2011
Effectively manage all activities across the entire well lifecycle
14

• Holistic view across the entire basin
• Systematically capture field data
• Quickly review status to highlight
issues and proactively address them
• Drill down capability to determine
root cause
Utilize near real-time data and analytics
to make informed business decisions
15

Resource Optimization
• Single resource dictionary across Labor,
Equipment & Materials
• Easily view resource usage and bottlenecks
• Allocate resources to optimal capacity
• Optimize schedule with resource scenario
alternatives
Manage and optimize resources across entire portfolio
16

Risk Mitigation
• Risk and mitigation strategies with
closed loop process
• Leverage scenario planning with
supply chain impact analysis
• Flexible risk scoring and reporting for
project status and evaluations
Develop and manage risk mitigation plans
17

Cost Containment
• Manage and view costs centrally for
quick analysis of status and trends
• Provide roll-up of financials with drill
down into financial details
• Proactively track and manage
estimates, budget, revisions,
contracts, direct costs, indirect costs,
invoices, and actuals
Manage and optimize costs across entire portfolio
18

Cost Containment
• Ensure payment integrity
• Online bid management process to
improve turnaround times
• Bidder portal with auto tabulation
• Reduce bid management expenses
Tabulated bids with overall
bid amounts and other
requested information
Bid Item Details
Effective contract lifecycle management
19

Supply Chain Management
• Foundation for material planning
• Leverage visibility of item attributes
in project planning for improved
decision support
• Work across systems for a common
platform to manage items and bills
of materials
Standardize process and instill discipline in
Bill of Materials (BOM) management
20

Supply Chain Management
• Rapid replanning to evaluate process
changes/ alternatives
• Proactively address material
shortages and constraints
• Evaluate alternate sources of material
or resource supply
• Leverage exception management
based materials planning
Align and connect Project and Supply Chain planning
21

Supply Chain Management and Forecasting
• Increased confidence in forecasting
• Improved supplier collaboration
• Reduce shortages and spot buys with
improved coordination
• Insight into workforce requirements
• Provide more predictable production
and financial performance
Integration of suppliers, plans and schedules to improve forecast accuracy
22

Logistics and Transportation
• Increase efficiencies through automated
transportation sourcing, payment, billing
and claims
• Improve contract, rate and bid
management
• Reduce 5% - 25% transportation spend*
*Logistics institute at Georgia Tech
Holistically manage and automate logistics and transportation
23

Logistics and Transportation
• Track shipments and delivery
• Review historical performance of
carriers focused on accountability
• Improved supplier selection
• Leverage Decision Control Center
for increased visibility and support
Improve performance through visibility and event management
24

Organizational Effectiveness: Asset Centric Organization
Well Delivery Plan & Schedule
Functions
Asset Team Leads
Supply Chain &
Operations
Drilling
Completions
Facilities
Pad
Construction
AssetTeam
AssetTeam
AssetTeam
AssetTeam
AssetTeam
AssetTeam
Asset
Planner
Asset
Planner
Asset
Planner
Asset
Planner
Planner
Planner
Planner
Master
Schedule
Integrated Planning & Scheduling Meetings
Asset KPI Scorecards
FunctionalKPIScorecards
Asset Plans
Functional Schedules
Breaking down organizational silos operating as an aligned,
collaborative, integrated team with shared goals and metrics
Digitally Enabled - Actionable Insights - Reporting
Lead
Planner
Asset
Planner
Asset
Planner
Integrated Technology Platform

Business Performance Management: Actionable Insights
• KPI’s, insights and information
• Visibility of performance
• Management by exception
• Closed loop management system
• Continuous Improvement
Effective decision making and accountability
Alignment
Near real–time data collection
Automatic filtering and data
quality improvement
Merge & integration of data from
multiple sources
Transform data into insights
Visualize the Right info
to the Right people
at Right time
Digitally Enabled
Functional &
Asset KPI’s
Corporate KPI’s
Asset planning &
scheduling KPI’s
Key performance
Indicators and dashboards

Business BenefitsValue Drivers
Reduce Costs
Reduce
Cycle Time
Improve
Forecasting
Reduce Risk
Cost Containment
Capital efficiency
Predictability
Health, Safety & Environment
Business Benefits
Safe, Efficient and Effective Integrated Well Delivery
27

Oracle’s industry leading project portfolio and value chain planning
Accenture’s industry expertise and value proposition
• Leading global management consulting,
technology and outsourcing services
• End to end service offerings
• Strategy
• Digital
• Business process optimization
• Systems integration
• Change management and training
• Fit for purpose
• Value proposition: results delivery
Integrated Well Delivery Solution
• Leading project portfolio and value chain
planning software suites
• End to end solutions
• Integrated planning and scheduling
• Supply chain and logistics
• What if / scenario enablement
• Electronic workflow
• Analytics / reporting
• Ease of use
• Flexible deployment
28

Where Is Your Organization Today?
Disconnected Spreadsheets,
Whiteboards & Tally Books
Master Planning &
Scheduling (Offline)
Digitally Enabled
Fully Integrated Well Delivery
? ? ?
29

Final Remarks
“The best thing about the future is that it
comes only one day at a time.”
Abraham Lincoln

Integrated Well Delivery Unconventionals - Driving Improvements Across the Value Chain
31
William Hendrickson
Managing Director
Accenture
1301 Fannin, Suite 1900
Houston, TX 77002
Office: (713) 751-1459
Mobile: (561) 758-0143
w.p.hendrickson@accenture.com

CON8438_Hendrickson-Oracle and Accenture Well Delivery Solution Presentation September 29 2014 FINAL

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CON8438_Hendrickson-Oracle and Accenture Well Delivery Solution Presentation September 29 2014 FINAL