Navigating Bakken Data
Sean Morgan wants to provide accurate, nonskewed downhole oil and gas data—“data that sings”––to every business entity linked to hydrocarbon production.
Since early 2014, Morgan and a small team of data analysts and industry veterans have been working to break into the lucrative unconventional oil and gas data sector by utilizing personal experience gained from time spent in the frack sand supply and distribution world. The team, led by Morgan, vice president of sales and operations, and Eric Foster, president, has developed a data subscription service that provides downhole well data to clients through multiple platforms with varying degrees of in-house analyst interaction. One particular group of clients—investors and analysts—receive simple data sheets showing individually selected exploration and production company information across the entire U.S.; some subscribers desire access to an online dashboard equipped with an activity meter for each individual U.S. unconventional play; certain customers work with data analysts to create customized reports (just as The Bakken magazine did for supplemental information for this story).
Although the company name Navport may not yet be commonplace in boardrooms, field operations or analyst calls, the team believes its flexible approach to data analysis and experience selling and moving frack sand will change that.
Early Days Of Data
Before working on software and online data dashboards, Morgan worked for Preferred Sands, a major frack sand supplier, prominent in several U.S. unconventional resource plays. During Morgan’s early days, demand for sand was large and energy service providers required sand quantities, in some cases, only two to three weeks after signing a supply contract. “Unless you had product forward positioned into the basin, you couldn’t meet demands,” Morgan says.
Because management didn’t want to turn down sand orders, several sand transloading site set-ups were arranged, many in the Bakken shale play. In the Bakken, as the locations of well activity evolved, and the amount of sand needed at them, it created difficulties for Morgan and the team assigned to allocate sand volumes. “How do you know if you want to be in Berthold or Minot?” he says. On top of that, he says, “we needed to be within 100 miles of the client’s ending location because the sand drivers wanted to get three turns of sand delivery in during a single shift.”
The only way to truly gauge production activity was to meet with sales associates designated to each unconventional shale region. Eventually, between 30 and 40 transload facilities were opened across the U.S., Morgan says, because the industry was evolving so quickly and there was no way to accurately predict the best sand unloading sites while producers were constantly changing plans and techniques.
With the transload facilities, the team quickly learned that backend costs—demurrage fees for rail cars filled with sand or on-site sand storage—were washing out perceived profits generated from supply contracts. After learning of the impact of backend costs, the team realized it could no longer commit sand volumes to transload facilities. “We needed a tool that could help us determine the best place for our sand,” Morgan says.
The tool was data. And, it wasn’t outside data provided from other firms. After reviewing industry offerings, Morgan spurned the chance to pay for information and instead worked with an internal team to collect, analyze and ultimately utilize downhole data, producer plans and fracking trends to determine where frack sand was truly meant to be. Shortly after, he was moved from the supply team and was tasked with helping the sand sales division understand and utilize data. “It all made us smarter about the marketplace,” he says.
Starting A Stand-Alone Service
Soon after the in-house sand data collection and downhole information effort started, Morgan and his team had earned the respect of Preferred Sands management and broke off into a separate company. Today, roughly one year after official launch, Navport is still a small team.
The company believes its data is crucial to the industry because all the data—from pounds of proppant per lateral, to average barrel of oil produced per short ton of proppant—is spot on. “The biggest challenge with data isn’t getting it,” Morgan says. “It is making the data make sense, making it sing.”
Bringing numerical spreadsheets into harmony requires Navport’s analysts to sift through vast amounts of data in search of outlying numbers that don’t make sense. In some instances, the team will find a well that shows an amount of proppant used that is physically impossible. Analysts will flag the particular data set and remove it from the main data set. “We are constantly running quality control.”
The data control efforts aren’t just for frack sand mining firms, suppliers or logistics firms. According to Morgan, financial analysts, bankers, politicians, energy service providers and nearly all other possible entities impacted by oil and gas production are using or are interested in Navport’s offerings.
For The Bakken magazine, Amie Parenti, market data analyst created a unique, one-off Bakken report guided by our team’s input. The exercise was meant to showcase the data offerings and analyst interaction process. For the report, we focused on four North Dakota counties: Dunn, McKenzie, Mountrail and Williams. Within the counties, we focused on overall proppant market share by county, well completions and proppant pumped; proppant intensity tracking by county; proppant ratio tracking by county; operator market share per county; and, production results by operator per county.
The resulting custom report revealed several informative takeaways about production variances between counties and which operators are getting the most production from the least amount of proppant. For each county, Parenti provided information from the top 10 producing companies and compared each to each. During Parenti’s interpretative analysis of the data report, it was clear that although she and Morgan were not actually singing over the phone on our conference call, there was an unspoken harmony between the data and the reality of the Bakken.
Author: Luke Geiver
Editor, The Bakken magazine
CLICK HERE TO SUBSCRIBE