You should not trust that your current or prospective data provider is perfect. Here are five questions you can ask to make sure that your data provider is worth the cost.
1. Where does your Oklahoma data come from and how do you go about matching up the sources?
It may sound funny, but Oklahoma is one of the more complicated states to handle. The Oklahoma Corporation Commission (OCC) provides data on permits, completions, and gas production. The Oklahoma Tax Commission (OTC) provides data on oil production with some gas, NGLs, and condensate as well. OTC production uses a Production Unit Number (PUN) as a key for production. The OCC knows some well’s PUNs, but not all. How does your prospective provider connect these wells? Do they catalog NGLs and condensate? What about the multi-well PUNs? Are they allocated to the wells? All good questions and if they can answer them then you have a good start.
For extra credit, ask them how they deal with all the missing production. You know, the production on the purchaser reports (available from the OCC) that doesn’t make it to the OTC records. Primarily caused by operator changes. Expect some confusion there.
2. Do you catalog the additional data provided by the Railroad Commission for the initial completion well test?
You might be thinking, what on earth are you talking about. That is how little many people know about the data provided by the Railroad Commission (RRC). The well test report on the initial completion contains some useful data. Things like lifting method, pump type, choke size, pressure data, and more. Even if you don’t need these specific fields, it is important that your prospective provider is thorough.
3. What usage rights do I have for the data I pull from you?
So, this is public data, right? …right? It might surprise you to find out that you can’t keep the data you download. You may not even be able to use the data in presentations. Even derivative works many times are restricted. Where can you use this data? What do you have to do should you decide to cancel? What if you download the data from the state site as well? Do you have to prove that it didn’t come from the provider? It all amounts to a massive pain. Make sure you know what you can and cannot do with the data.
4. Do you require a contract? What is the minimum term? What is the cancellation policy?
You may have accepted that most providers require a contract (I know one that does not). Many times the minimum is a year, but they might try to get you to sign on for longer. The cancellation policy is one of the sorest subjects for many users. Should you miss your cancellation period by a single day, you’re locked in for another year. They’re not going to do you any favors here; so be clear on what the cancellation policy requires. Also, be sure to question them on why they have that policy in the first place…because it’s stupid.
5. How do you allocate production to wells in Texas? Details please…
Some people might say that this one is impossible. That you shouldn’t trust allocated data regardless of process. The point of the question has more to do with how open the prospective provider is with this information. That doesn’t mean you shouldn’t question their process. Are they using test data? Are they using allowable data? What about pending lease production? How do you account for shut-ins? Down months with new wells coming online? Re-completes? The only absolutely wrong answer is, “We can’t tell you our process. It’s proprietary.” Black boxes in this instance are not acceptable. If you are expected to make decisions on this data, you deserve to know how they came to it.
There are plenty of other questions I’m sure you’ll have (I didn’t even mention price). These questions will serve as a good, quick test of whether the prospective data provider is worth your time.
If you need the answers to any of these, feel free to give me a call first.