Industrial blockchain network Data Gumbo has facilitated real-time tracking of lease operating expenses (LOEs) for oil and gas operators. By using validated field-operating data to trigger automated payments based on agreed terms, the real-time LOE will let operators access real-time information continuously, an ability the company claims is an industry first.
Based on the company’s industrial blockchain network GumboNet, the real-time LOE allows operators to match contractual terms without a human interface instead of relying on field estimates to book accruals and paper tickets and invoices. Data Gumbo says the real-time LOE will bring transactional transparency and an immediacy that provides the ability to analyze variable well costs as often as daily.
“Real-time LOE is revolutionary,” said Andrew Bruce, Data Gumbo’s chief executive officer. “Operators are able to combine all of the disparate threads that go into production in one centralized location to see expenses as they happen. There is tremendous value in knowing to the penny exactly what actual expenditures are instead of finding out 90 days later.”
The current methods for managing LOEs for commodity production, chemical consumption, water haulage and disposal, fuel, power, labor, rental equipment, and other well-service expenses are time- and resource-intensive, using paper trails and manual tickets that can take up to 90 days to work through field approvals and accounting processes.
LOE reporting also has long been reliant on estimates of events and services instead of verifiable real-time data. GumboNet uses smart contracts based on existing operational field data, with precise information and measurements supplying continuous visibility. Data Gumbo says that, by enabling a reduction in friction between counterparties, eliminating inefficiencies, and automating transactional events, GumboNet enhances financial statements to deliver costs as they unfold. This, the company says, will help operators identify waste and spending that can be reduced as an action occurs rather than afterward.
“Right now, operators are in a position to adapt digital perspectives to speed payment processes, eradicate paper invoices and tickets, and achieve a desirable competitive differentiator: real-time LOE visibility,” said Alan Carnrite, the chief executive officer for Carnrite Group. “Data Gumbo sets up operators to achieve a huge economic payoff of improved cash flow and terms and attract better investors.”