At EVOLVE, a one-of-a-kind virtual event for oil & gas professionals presented by Digital Wildcatters, Andrew Bruce, CEO and Founder of Data Gumbo, had the opportunity to sit down with Yousuf Chaudhary, Executive VP of Atlas Operating, and dive into how blockchain technology can provide real-time visibility into LOE.
As the industry currently functions, a majority of operators including independent energy producers, cannot tell you the marginal cost of their wells. Pain points often revolve around a lack of granular data to ensure economic productivity. With operators looking to diversify into efficient, new reporting and data mechanisms to change this, smart contracts based on a blockchain network are an answer that support real-time visibility into costs, expenses and profits.
“The data exists, not necessarily within the four walls of one company, but it exists within a supply chain and companies that are already contracting with one another can leverage technology to access data founded on trust supplied by blockchain,” said Andrew. Instead of relying on long payment cycles and manual workflows rife with disputes and human errors, operators can tap into connected data streams to provide continuous information.
“For example, two companies can pinpoint a trusted source of data to use to automate transactions in an existing commercial contract,” continued Andrew. It’s an explicit agreement similar to that of going to a gas station, swiping a credit card and pumping gas, and knowing the quality, price and amount pumped agree to pay immediately for the exchange. It can be the same way for industrial transactions.”
As contracts evolve to account for variability in the market, operators are turning to smart contracts to better control their risk profiles, streamline operations and save on costs. In essence, better visibility to spend as it happens leads to smarter, better production decisions.
Catch the replay as well as other great panels from EVOLVE here.