How Oil & Gas Companies Can Get the Highest ROI From Their Assets

As the U.S. oil and gas industry continues to expand, the industry’s leading companies are making significant asset-specific investments by way of mergers and acquisitions.  

O&G behemoths like Chevron and Exxon both recently acquired businesses that have helped them secure high-quality drilling sites and state-of-the-art equipment. While these assets may yield a sufficient return on investment, oil and gas companies can do even more to get the biggest bang for their buck — and so can you. 

On top of preventing theft and maintaining expensive equipment, companies must also meet tight deadlines to minimize their costs and make the most of their asset investments. The problem is companies don’t always have visibility of these processes, making them significantly harder to optimize. By implementing asset trackers into their businesses, oil and gas companies can realize significant cost savings. 

A look at typical operating costs

On-land oil & gas drill pads deploy a conservative average of over 40 industrial-grade assets, totaling upwards of $35 million in equipment. Adding manual labor, drilling fluid, power and other variable costs to the mix leaves you with an average of $65,000 in operating costs per day. These expenses add up rather quickly over the span of a one-to-two-month lifecycle spent preparing a drilling site. 

Optimize your process, realize cost savings

Oil and gas companies have expensive workflows to manage. As such, making any optimizations — big or small — to these processes can result in substantially lower costs. 

GPS trackers provide companies with the visibility and data they need to tweak how they handle their assets. For instance, keeping tabs on your equipment’s locations can ensure deadlines for delivery, setup, and removal are made. Tracking equipment can also help businesses schedule preventative maintenance and compliance checks while improving asset utilization to reduce idle time. Over time, these cost-cutting tactics can result in considerable savings for your bottom line. 

Let’s look at a realistic example of what you can expect from equipping your team with asset tracking solutions:  

Examining a typical on-land drilling site in the Permian Basin, with 18 wells (three pads, with six wells per pad) will give you an idea of just how much you can save. Tracking equipment to ensure you meet deadlines while intercepting and resolving any mishaps could save half a day’s worth of operating costs, amounting to $32,500 per 18-well site. Taking advantage of GPS trackers’ software capabilities can help provide diagnostics, suggest preventative maintenance and conduct compliance checks. On average, these software-related processes can prevent one to two days of equipment inoperability, saving a drilling site as much as $65,000. Using asset trackers to monitor equipment idle time can help you better mobilize assets like drill rigs, and ultimately avoid unnecessary rental fees that can amount to $175,000. In total, these three cost-cutting tactics can add around $272,500 to your bottom line every month. 

Grow your bottom line with Geoforce

While asset tracking technology of any kind can cut your oil & gas business’s costs, not all solutions are made equal. Geoforce’s rugged hardware and software solutions work together to provide the highest level of equipment visibility, in the harshest of conditions. 

With Geoforce, a full drill site can easily save millions in operating costs alone. See what it could do for your business. Get a quote today. 

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Citations

“Capturing Value from M&A in Upstream Oil and Gas.” McKinsey & Company, https://www.mckinsey.com/industries/oil-and-gas/our-insights/capturing-value-from-m-and-a-in-upstream-oil-and-gas. Accessed 2 July 2024. 

“Energy, Utilities & Resources: Deals Trends.” PwC, https://www.pwc.com/gx/en/services/deals/trends/energy-utilities-resources.html. Accessed 2 July 2024. 

“Oil and Gas Investments: Trends for 2024.” YouTube, uploaded by Energy Insights, 2 July 2024, https://www.youtube.com/watch?v=0r4J34FEsTk. Accessed 2 July 2024. 

“Oil and Gas Merger Mania To Continue in 2024.” OilPrice.com, 2 July 2024, https://oilprice.com/Energy/Energy-General/Oil-and-Gas-Merger-Mania-To-Continue-in-2024.html. Accessed 2 July 2024.