In the high-stakes oil and gas industry, staying ahead of the competition is always a top priority. For CEOs of publicly traded companies and other organizations with significant investors, the pressure to outperform market leaders and deliver excellent ROI is especially intense.
In one case, the CEO of a large, publicly traded exploration company found himself in an enviable position - he knew that his company was surpassing the competition in a long-term, sustainable way, he just needed to demonstrate his vision to analysts and investors.
They had acquired the best possible assets in the hottest shale plays and were continually improving operations to optimize cost-efficiency and productivity.The only difficulty lay in demonstrating the company’s industry-leading results to the investor community in a verifiable manner that differentiated them categorically from the rest of the field.
Using expert, unbiased analysis from Drillinginfo, the CEO was able to convince analysts of the company’s superior value and long-term upside - raising the company’s value immediately and sustaining growth in subsequent quarters.
Quantify Asset Value
During the unconventional land grab, companies snapped up acreage as quickly as possible. The CEO needed to demonstrate that his A&D team had been intelligent and selective, and was now reaping the rewards of holding the best possible assets.
Drillinginfo’s proprietary acreage grading methodology provides an independent, consistent way to evaluate lease holdings based on a patented, “whole Earth” model developed by DI geologists, geophysicists, engineers, and data scientists. Combining analysis of more than 100 types of data, the model provides an intuitive “heat map” showing an objective comparison of acreage, which the CEO leveraged as third-party, industry-standard evidence of where the best assets were located within the play.
Without an alternative, analysts review simple, self-reported metrics that don’t tell the whole story. Companies that prepare in-house analyses raise immediate doubts about potential bias, and assessments often depend on a superficial review of nearby acreage based on a handful of factors. In contrast, CEOs armed with definitive, independently produced analytics can have a disruptive impact on market perceptions.
Evaluate Competitor Holdings
Success is relative, so the CEO’s next task was to demonstrate his position against competitors. He wanted a direct comparison to illustrate that the company’s holdings were substantially better.
Drillinginfo’s comprehensive, integrated datasets enabled the CEO’s team to quickly determine where competitors and other top producers were operating. Using DI 2.0’s intuitive map layers and user-friendly interface, the team accessed detailed leasing, permit, and well event data. Overlaying a heat map to grade each company’s acreage was as simple as clicking a button.
Looking up lease, permit, and well activity data requires a lengthy, error-prone effort to pull information from disparate systems and manually import data into various software packages for analysis. Depending on the range of sources and tools involved, consistent comparison across companies might be impossible.
Holding the best assets is critical, but investors ultimately care more about what companies can do with their acreage. The CEO needed to show that his company was consistently delivering market-leading results.
Drillinginfo’s oil and gas industry data experts carefully scrub and aggregate data from hundreds of wells and dozens of operators to generate an operator differential normalized across acreage of all quality levels. This reveals which companies are truly top performers at each grade, and which are achieving subpar results. The CEO used this information to show that not only did his company possess an excellent portfolio, but also that his team was consistently applying best practices across all their assets to ensure that productivity would continue to scale in the long term.
Data on production is widely available, but accurate, unbiased competitive benchmarking is scarce. This may require the involvement of costly consultants, and incomplete and inconsistent data can lead to weeks of rework.
Positioning Your Company
To drive home his point, the CEO chose to showcase specific areas of operational excellence to prove that the company’s outstanding numbers were no accident, and that their competitive edge would endure.
By importing differentiated, meticulously scrubbed data into the DI Transform multivariate analytics tool, the CEO’s team could create intuitive charts proving that their operations were achieving peak optimization points for performance across a number of success factors. The company’s alignment to these points provided a strong visual demonstration of its innovation and success.
Analysis this sophisticated would be beyond the reach of most in-house teams, and would require weeks or months for outside consultants to attempt. Concerns about accuracy and legitimacy would also plague this kind of one-off effort, rendering it ineffective as well as impractical—and potentially raising pointed questions that company leadership couldn’t answer.
Drillinginfo enabled the CEO to deliver a game-changing quarterly presentation. Analysts and investors left with a radically transformed view of the company based on hard metrics and detailed analysis from an unbiased source of industry intelligence. The company’s valuation rose nearly overnight, and sustained results have maintained and increased that value, quarter after quarter.
Contact a Drillinginfo specialist today to learn how DI Analytics and DI Transform could help position your company for maximum value and long-term performance, and request a personalized demo to experience the impact for yourself.