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Five Questions for ETRM Users Generating Forward Curves

As ETRM users move away from their legacy, Excel-based forward curves, they are choosing to collaborate with external partners to give them the flexibility, scalability and compliance options they need. But what questions should you address before you decide to collaborate with a solution provider?

  1. Will you have access to the data you need?

Ensure your data and curves are housed in a tightly coupled solution. You should be able to incorporate market data and proprietary data that really matters to your business today, and you must be able to make changes as needed in the future.

  1. Are you working with a partner that has the scale you need?

The choice of a curve building solution is an investment in the future, so you need to ensure that your partner can support you as you grow. (PS. Did we mention that Enverus CurveBuilder serves 15 million curves every single day across 75 countries?)

  1. How can your curves be audited?

In a market that is changing every minute, your forward curves must keep up. But you also need to make sure that you can track every single change, who made it and why, so that you can ensure that you meet all your compliance standards.

  1. Will you get the support you need?

Does your partner have global support teams to help your traders and risk managers wherever they are based? Are there sufficient support and development resources to give you the assurances you need?

  1. Is the tool easy to use, without relying on developers or quants?

It’s important that the interface is easy to use, while still delivering the depth of functionality needed to create the most accurate complex forward curves.

The benefits of outsourcing forward curve and data management to a cloud-based provider are huge, so it is essential that you make the right choice. At Enverus we have the expertise and experience to ensure that we can tick every box. Why not talk to us today and see for yourself?

 

 

Project Tracking Review: Top 10 US Solar Developers

Solar photovoltaic (PV) adoption is pushing boundaries in the U.S., despite recent headwinds and growth slowdowns caused by supply chain disruptions and economic challenges associated with COVID-19.

Approximately 11.86 gigawatts (GW) of new solar PV became operational in 2020 — a record to date — and around a 68% increase from 2019 additions, according to data from Enverus Foundations™ | Power & Renewables.

Globally, solar PV generation increased 22% (+131 terawatt hours) in 2019 and represented the second-largest absolute generation growth of all renewable technologies, according to the International Energy Agency (IEA) Renewables 2020 report. Once considered a niche segment of the broader energy industry, it is easy to see how solar PV is becoming a dominant and essential energy source for the U.S.

Pursuant to Enverus’ renewable energy project tracking analytics data set, capacity deployment will continue to grow over the next five years. The growth is fueled by the relatively low cost of electricity generation from solar PV compared to other alternative sources of energy, and by companies continuing to diversify their portfolios across the energy stack. It is important to note that economic conditions and government incentives will impact future growth.

That said, as total production from solar PV continues to grow, so does the investable space. Below is a list of the top 10 U.S. solar developers by total capacity (MW) and project status as of Aug. 31, available within the Enverus Foundations Power & Renewables platform. Existing Foundations clients with the Enverus P&R project tracking add-on can access a workbook showing the analyses and more here.

Figure 1 | Top 10 U.S. Solar Developers by Megawatt

Figure 1 | Top 10 U.S. Solar Developers by Megawatt

1) NextEra Energy Resources | Juno Beach, Fla.
Capacity (MW) | 16,477
Projects | 234

NextEra Energy is a clean energy company headquartered in Juno Beach, Florida. NextEra Energy owns two electric companies in Florida: Florida Power & Light Company, which serves more than five million customer accounts in Florida and is the largest rate-regulated electric utility in the United States as measured by retail electricity produced and sold; and Gulf Power Company, which serves more than 460,000 customers in eight counties throughout northwest Florida. NextEra Energy also owns a competitive energy business, NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun and a world leader in battery storage.

2) Invenergy LLC | Chicago
Capacity (MW) | 13,977
Projects | 71

Invenergy and its affiliated companies develop, own and operate large-scale renewable and other clean energy generation and storage facilities in the U.S. and Europe. Invenergy’s home office is in Chicago and it has regional development offices in the United States, Canada, Mexico, Japan and Europe. Invenergy and its affiliated companies have developed more than 29,000 MW of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects.

3) EDF Renewables | San Diego
Capacity (MW)| 11,943
Projects | 79

EDF Renewables is an industry leader in wind, solar and biogas project development, and a premier provider of operation and maintenance services throughout North America. EDF also provides extensive services along the entire value chain, from site selection to asset management.

4) Cypress Creek Renewables | Santa Monica, Calif.
Capacity | 7,497
Projects | 432

Cypress Creek Renewables business model is primarily focused on utility-scale ground mount projects. Cypress brings extensive development experience and aggressive financing to create new opportunities in emerging solar markets. With more than 3 gigawatts of solar developed and deployed in more than a dozen states, Cypress Creek Renewables is currently (as of February 2019) the largest solar developer by capacity (MW) in the United States.

5) 8minute Energy | Folsom, Calif.
Capacity | 7,436
Projects | 33

8minutenergy develops, finances, engineers, constructs, holds, operates and maintains solar projects. Their projects target all regions of the United States, including California – the largest renewable energy market in the U.S. – where demand for their power is considerable. 8minutenergy also acquires and develops projects that are ready for construction.

6) First Solar | Tempe, Ariz.
Capacity | 7,262
Projects | 50

First Solar is a global provider of comprehensive photovoltaic solar systems which use its advanced module and system technology. The company’s integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar’s renewable energy systems protect and enhance the environment.

7) Clēnera | Boise, Idaho
Capacity | 7,237
Projects | 94

Clēnera specializes in solar energy project development, construction, finance and management. The company was established to develop, acquire and operate smart solar energy projects throughout North America. In partnership with CRE, Clēnera combines deep capital and tax equity capacity, with strong technology, development, engineering, construction and operations management experience. Working closely with developers, Clēnera helps make smart projects successful.

8) EcoPlexus | San Francisco
Capacity | 5,935
Projects | 151

Ecoplexus develops and operates utility-scale solar PV projects for the wholesale and retail market in the U.S. and internationally. With a large construction and development pipeline of more than 1 GW in the U.S., Japan, Latin America and Turkey, representing more than $750 million in project value, Ecoplexus is actively developing or buying renewable energy assets at every stage. The company also provides operation and maintenance (O&M) services for investor/owners for approximately 55 projects. Ecoplexus focuses on distributed generation projects in the 500 kW to 5 MW range

9) Hecate Energy LLC | Nashville, Tenn.
Capacity | 5,394
Projects | 35

Hecate Energy is a developer, owner and operator of power plants in North America and internationally. Hecate Energy brings together business acumen, technical understanding and significant experience in the industry to develop world-class power projects. The company specializes in solar and wind power, natural gas plants and energy storage, unearthing creative approaches to structuring PPAs and financing power projects. Hecate Energy believes in collaborative, long-term partnerships with the communities, organizations and the countries it serves.

10) Recurrent Energy | San Francisco
Capacity | 4,440
Projects | 68

Recurrent Energy is a utility-scale solar project developer, delivering competitive, clean electricity to large energy buyers. Based in the U.S., Recurrent Energy is a wholly owned subsidiary of Canadian Solar Inc., and functions as Canadian Solar’s U.S. project development arm. Recurrent Energy’s development strategy is to build a balanced portfolio of utility-scale solar projects ranging in size from 20-500 MW to meet the increasing demand from utilities for clean electricity at highly competitive prices.

As the solar industry continues to prosper, it is more important than ever to respond quickly with confident, data-driven decisions. Enverus Foundations brings clean, analytics-ready data into an intuitive platform, empowering you to get straight to higher-value analysis and insights. For detailed renewable energy data designed for project tracking and project developers, access your preview of Enverus Foundations™ | Power & Renewables here.

Oil & Gas Markets: Can the Balance Hold?

Austin, Texas (August 24, 2021) — Enverus, the leading global energy data analytics and SaaS technology company, has released its latest FundamentalEdge report. Oil and Gas Markets: Can the Balance Hold? focuses on Enverus’ latest medium-term oil, gas and natural gas liquids (NGL) outlook.

“We think there are three critical pillars that will drive oil and gas prices: a smooth economic recovery coming out of the pandemic, OPEC’s ability to maintain control of the oil market, and the U.S.’ response to OPEC’s Goldilocks price target,” said Bill Farren-Price, director at Enverus and one of the lead authors of the company’s latest FundamentalEdge report. “Demand growth will likely accommodate modest North American production growth and OPEC’s $65/bbl Brent target, but even flat oil demand could upset that equilibrium.”

Farzin Mou, vice president of Intelligence at Enverus and co-author of the report, added, “We believe capital discipline and supply growth are not mutually exclusive in a high-price environment even if public perception muddies the picture for clear economic incentives to drill. Increased activity from private operators, high-grading core inventory and low base declines will allow U.S. oil and gas production to grow in 2022 while achieving a reinvestment rate in the 45% to low 50% range.”

Key takeaways from the report:

  • Oil demand growth in 1H22 decelerates at the same time U.S. oil production grows, reflecting the lagged impact of shallow base declines and high prices this year, pushing prices briefly to $60/bbl Brent and sub-$60/bbl WTI. According to Enverus’ analysis, OPEC will need to take ~2 MMbbl/d of production off the market.
  • With OPEC supporting high prices, we expect U.S. producers to deliver ~1.2 MMbbl/d of supply growth exit-to-exit 2022 and 90-300 MMbbl/d per year thereafter – mostly Permian driven. The muted and delayed drilling response to tighter oil and gas markets this year keeps Henry Hub prices in the $3.50s through winter 2022-23. Associated gas production grows 1.7 Bcf/d by year-end 2022, just keeping pace with new liquefaction facilities coming online.
  • Gas prices soften in the 2023-24 period, likely trading under $3/MMBtu, as Mountain Valley Pipeline’s anticipated start temporarily debottlenecks the Northeast, LNG development slows and associated gas production continues growing. Henry Hub prices rise in 2025-26 as feedgas requirements accelerate again.
  • Enverus expects a strong post-COVID-19 recovery in oil demand in 2H21, with growth moderating in 2022 as demand moves closer to outright pre-pandemic levels. Oil demand declines begin in the latter half of this decade, but growth from 2023-26 is enough to accommodate rising U.S. production of ~200 Mbbl/d annually and keep prices within OPEC’s desired band.

Oil and Gas Markets - Can the Balance Hold- FundamentalEdge Report

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Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

Vaca Muerta — Nothing Dead About These EURs

Over the last five years, oil production from the Vaca Muerta has increased a staggering 600%, all while total Argentine oil output has decreased by 5%. Ramping investments in the shale play — from not only YPF and supermajors, but also SMID and private operators — have nearly been able to stymie historical conventional declines. Loma Campana (YPF 50%, CVX 50%), the provenance of the play, currently has more than 500 producing wells (~40% horizontals), totaling an output of ~45 Mbbl/d. Since a shift from vertical to horizontal well developments in 2016, lateral-normalized EURs for the joint venture have increased 10-20% annually (Figure 1) in part due to increased proppant intensities, fluid intensities and tighter stage spacing.

While Loma Campana has long been considered the core of the play, neighboring operators have shown that the world-class oil productivity extends beyond YPF’s and CVX’s acreage, where recoveries of 140-170 bbl/ft are observed (Figure 1) making the assets competitive with any U.S. shale play. Using Enverus’ PRISM solution, clients can readily benchmark completion and productivity trends not only between Vaca Muerta assets, but also with U.S. shale analogues. Performing these analyses drives insights for clients investigating the growth of the Argentine play, while utilizing the past learnings of developments in the Lower 48.

Figure 1 | Loma Campana Well Type Curves by Vintage Compared to Neighboring Blocks

Figure 1 | Loma Campana Well Type Curves by Vintage Compared to Neighboring Blocks

Introducing Weekly Power & Renewables Price and Congestion Analysis

Enverus power market publications serve a large swath of power traders and utility professionals. From our granular twice-daily ISO updates to our bimonthly 90-day price forecasts, we are constantly innovating to bring our customers improved market insights.

Understanding the macro fundamentals behind power market price movement and congestion is essential for many of our customers, from power traders to solar farm owners. You don’t have to be a minute-by-minute real-time power trader to get the benefits from a deeper understanding of why ERCOT power prices moved the way they did during the previous week.

Now, the Enverus team that delivers twice-daily granular market updates and load forecasts is expanding to publish a weekly market analysis lookback that will include the following:

  • Enverus price forecast analysis.
  • Price map analysis.
  • Congestion impacts on prices.
  • Enverus/ISO load forecast analysis.
  • Enverus/ISO peak load forecast errors.
  • Enverus/ISO wind forecast analysis.
  • Enverus/ISO solar forecast analysis.

We’re most proud to unveil our new Congestion and Price Impacts analysis, which is now possible with the incorporation of Marginal Unit’s technology within the Enverus Power & Renewables product suite. This analysis includes a price map with the congestion points labeled on the map to illustrate how congestion is impacting wholesale power prices.

We have included a snapshot from our ERCOT and PJM reports. We’d love to give you a peak of the full report. Sign up on the form below to receive your complimentary copy.

Figure 1 | Snapshot of ERCOT Transmission Congestion Price Impacts

 Figure 1 | Snapshot of ERCOT Transmission Congestion Price Impacts

Figure 2 | Snapshot of PJM’s Price Analysis

Figure 2 | Snapshot of PJM’s Price Analysis

 

 

Sign up today for a free trial!

Enverus Welcomes PureWest Energy’s Collaborative Agreement To Enhance ESG™ Analytics

Austin, Texas (August 17, 2021) — Enverus, the leading energy data analytics and SaaS technology company, has announced that PureWest Energy has agreed to use its Enverus ESG™ Analytics capabilities for its environmental, social and governance (ESG) benchmarks and scoring.

PureWest is a leading energy producer in the Rocky Mountain region and the top natural gas producer in the state of Wyoming. As a part of the agreement, PureWest Energy will be working collaboratively with Enverus to provide in-depth data and recommendations to enhance Enverus ESG™ Analytics.

“Providing low-cost energy to the world is an extremely complex process,” said Manuj Nikhanj, president of Enverus. “It relies heavily on capital, materials and labor that is constantly changing and in competition with multiple industries. How we measure a company’s success in energy is no longer solely by the barrel, Btu or bottom line; it’s about the boardroom, social and responsible development, and stewardship, while still being highly efficient and profitable. With ESG performance influencing market perception and being placed as a critical investment criterion, energy companies must take appropriate action to improve their scores. PureWest Energy is a leader in the Western Rockies, and they are fulfilling their corporate mission and social responsibility simultaneously.”

Enverus has been underscoring its direct relationships and unmatched capabilities to work hand-in-hand with energy companies to accurately score a company’s ESG initiatives and provide much-needed transparency for operators and investors alike. With the exception of Enverus, most ESG scoring systems are performed by generalists who do not carry the same depth and breadth of knowledge around the energy industry’s distinctive nuances.

“We are incredibly proud of our broad sustainability initiatives and the long-term value we have created with low-cost, low-methane, ESG-focused natural gas for our investors, communities and customers,” said Kelly Bott, senior vice president of ESG, Land and Regulatory at PureWest Energy. “Responsibly sourced natural gas that has been third-party verified is becoming a key component of the energy evolution and will be a valuable tool as our industry works toward net-zero emission goals, both in the U.S. and globally. With Enverus ESG Analytics, our customers and investors have proof positive that we’re doing it the right way. You can’t have transparency without allowing an outside source to evaluate your operations. Today, we’re changing that.”

As the topic of ESG evolves, much like the energy industry itself, there are opportunities to rethink ESG. Wall Street is sending a clear message that ESG performance will be a fundamental input into its investment process and Enverus ESG™ Analytics scores U.S. energy companies on several proprietary and company-reported metrics, giving users, including operators and investors, visibility into ESG performance with consistent, transparent data. Enverus’ rankings show how operators compare among their peers while highlighting the most environmentally responsible and investible opportunities in the space.

For more than two decades, Enverus has cultivated both public and proprietary energy data to create industry-leading analytics and insights for its 6,000 customers. Enverus ESG™ Analytics lets users track emissions intensity, flaring rates, land use and water use via satellite-enabled proprietary analytics alongside industry-leading data related to production and economics. Users can also track the “S” and “G” elements, including pay disparity and diversity, allowing operators to benchmark themselves holistically against their peers, and giving investors the objective, verifiable data necessary to rank investments for the first time.

For a complete overview of Enverus ESG™ Analytics visit enverus.com/solutions/energy-analytics/ep/esg.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About PureWest Energy
PureWest Energy, LLC is a private energy company focused on developing its long-life natural gas reserves in the Pinedale and Jonah Fields of Wyoming’s Green River Basin. PureWest controls more than 126,000 gross (115,000 net) acres in and around the prolific Pinedale and Jonah Fields. Additional information on the company is available at PureWest.com.

Breaking Down Enverus’ ESG Methodology

A company’s environmental, social and governance (ESG) profile is notoriously difficult to define. The three categories are broad and can potentially include hundreds or even thousands of datapoints that make it difficult to decipher a company’s rating. This creates a challenge for investors and management teams to effectively engage on what initiatives will produce the best long-term impact and ultimately reward both parties. This is particularly true for the North American energy industry, one of the most heavily scrutinized sectors.

Producing the world’s energy is an extremely complex material- and labor-intensive process and warrants more attention, but proper stewardship deserves equal acknowledgement. To do this effectively, the industry needs a transparent, quantitative way of comparing the performance of different companies. We view this as a major challenge in communicating initiatives, both good and bad, that the industry is undertaking today. Our ESG ranking methodology breaks through this barrier. There is no shortage of providers that analyze ESG in today’s market, but we are the only firm focused on energy, which allows us to concentrate on what matters for our industry.

Transparency is key at Enverus. Our ranking system is based off 32 factors, selected due to our 20 years of experience in the industry, and feedback from our institutional and corporate clients. We go beyond company disclosure and include industry-specific data from a variety of federal and state/provincial oil and gas reporting agencies, SEC/CSA filings and satellite imagery. We consolidate and standardize this data, all available at your fingertips in our PRISM platform, to give clients the freedom to dive into the statistics and get to the root cause of ESG performance. The score is based on a range-normalized scoring algorithm that assigns each company a value between 0 and 1 for the 32 factors depending on performance. The final output is the overall ESG score, out of 100, for each company we cover (Figure 1). Calculating ESG scores this way allows for a transparent breakdown of each score. An example on an environmental breakdown is shown in Figure 2.

Investing is hard but defining ESG doesn’t have to be. 

FIGURE 1 | Enverus ESG Scores

Enverus ESG Scores

FIGURE 2 | Environmental Summary

Environmental Summary

Click here to see the Top 10 energy companies by ESG score.

Enverus ESG™ Analytics clients can access full rankings here.

Top 3 Reasons ETRM Users Outsource Curve Management

For daily ETRM users, managing and maintaining accurate forward curves is a critical component of commodity trading and risk management because it provides a snapshot of what a commodity is worth today, based on a buy or sell in the future. Premier forward curve analysis is essential to increasing trading teams’ operational efficiencies, managing compliance, mitigating risk and driving business growth.

As risk analysts and risk management professionals know, creating curves can be time-consuming and complex. Without essential tools in place like automated data feeds, detailed audit trails and advanced monitoring tools, risk managers take the chance of inserting human error into vitally important end-of-day processes.

While some trading firms still grapple with the decision to “build or buy” a forward curve management solution that checks all the boxes for risk management success and connects easily to existing ETRM systems, more and more companies are choosing to turn to external solutions like CurveBuilder, Enverus’ easy-to-use web-based platform, to manage their forward curves.

How can ETRM users that haven’t yet made the leap to CurveBuilder decide if outsourcing their forward curve management is right for them?

  1. No technical coding skills required

In the past, companies have created their own, in-house, Excel-based forward curves. But making changes wasn’t quick. It required the expertise of developers, quants or analysts to edit or create curves. Traders or risk analysts couldn’t create their own curves in just a few clicks. The simple ‘drag and drop’ interface of Enverus’ CurveBuilder enables traders to build curves on the fly.

  1. Ensure compliance and risk management

With the right outsourced solution, companies will get comprehensive audit trails and advanced monitoring tools. Risk managers can track every single change in the history of a curve, view the price components and market conditions associated with calculations and quickly identify risks as they arise.

  1. Scale for the future

No longer is curve building dependent on the availability of those with the coding skills to create them. Traders can create and run complex curves in real time, seeing instantly what their positions are and reacting to market changes as they happen. Enverus clients calculate that they spend 90% less time calculating curves by using CurveBuilder.

Ready to learn more? We’ll arrange a personalized curve building session for your team using our technology. Sign up below today.

Natural Gas Flaring

No one drills a natural gas well just to burn their investment.  On the other hand, an oil well is drilled for the more profitable liquid hydrocarbon while the associated natural gas is often flared to prevent a financial loss, especially in areas that lack the necessary infrastructure to move, store, process, and market natural gas.  Natural gas flaring is a complex and evolving practice governed by economics, regulation, and safety.

Read on to learn more about natural gas flaring, key statistics, environmental impact, and alternatives.

 

What is Gas Flaring?

In the US, gas flaring falls into two main categories: processing plant flaring and associated gas flaring.  While the news flow tends to focus on the latter, processing plant flaring accounts for the bulk of all flaring in the US where dangerous acid gas streams are burned off to prevent release into the environment.

Associated gas flaring occurs in areas like the Permian Basin and Bakken Shale of North Dakota, where infrastructure is first built out to accommodate oil gathering and transportation.  The associated gas that is produced is “stranded” or stranded gas because it lacks the specialized infrastructure needed to economically transport and process it.  As a result, stranded gas is flared.

 

What is the Procedure of Gas Flaring?

Gas flaring occurs in multiple stages of the oil & gas value chain, starting with exploration and field development.  While drilling, pressure in the circulating mud system can build up and create flowback, or kicks.  This buildup of gas must be contained to avoid dangerous well control events, which is why the gas is routed to specialized gas busting equipment then fed into a nearby flare stack.  Flare stacks are used during drilling, completions, production operations, and midstream processing.  The tall tower ignites natural gas in a safe and controlled combustion process that directs flames and fumes upward into the sky.

 

Why is Flaring Necessary?

Flaring is necessary for economic and safety reasons.  Moving stranded gas in most basins is simply not profitable to bring to market resulting in it being flared.  Flaring is also standard operating procedure during well tests, flowback following hydraulic fracturing, certain maintenance operations, and workovers.

 

Gas Flaring and Venting / What is the Difference Between Flaring and Venting?

Flaring is the controlled combustion of uneconomic or waste natural gases and is typically performed in a flare stack or combustor.  Venting is the release of methane and other gases directly into the environment, typically through loss and leaking at multiple points in the value chain.

 

Gas Flaring Environmental Impact

Natural gas flaring and venting have significant impact on the environment and in some cases safety of field staff and nearby ecosystems.

 

What are the Byproducts of Natural Gas Flaring?

When combusted, natural gas (typically methane) releases a variety of by products and greenhouse gases (GHG), such as carbon dioxide.  It also produces black carbon/soot adding to the global warming process.  In comparison, venting methane directly would be far more  detrimental to the environment.

 

Effect of Gas Flaring into the Ecosystem

While flaring remains a preferred solution in lieu of venting, it nonetheless carries its own risks to the ecosystem.  Hydrogen sulfide is one byproduct that anyone working around oilfield facilities should be aware of as this gas can be deadly with just a few breaths.

Alternatives to Gas Flaring

Much of the natural gas that is flared occurs at gas processing facilities where it is safer to flare acid gas containing hydrogen sulfide and other deadly gases.  While flaring remains a preferred solution for many oil-producing basins lacking the infrastructure to transport large volumes of associated gas, alternatives solutions to gas flaring are becoming more widely available.

Natural Gas Combustor vs. Flare Stack

while flaring generally refers to igniting unwanted or waste gas, there are different methods to accomplish this.  Most well-known is the flare stack located on wellsites, offshore platforms, and midstream facilities.  Flare stacks direct flames up and away from nearby equipment and personnel.  In contrast, combustors are designed to fully enclose the combustion process and are shorter and wider in size.  Flare stacks are typically a short term solution to burn off gas produced from oil storage tanks, during well tests and maintenance.  Combustors are typically designed to burn natural gas for extended periods.

 

Wellsite Gas Processing

Ironically, many types of oilfield equipment, such as compressors and separators, run on natural gas fueled power generation, however, these systems require purer forms of methane then is typically produced from wet gas wells.  In the Bakken for example, only about 50% of the gas stream is methane with the remainder comprised of natural gas liquids.  Emerging wellsite gas processing technology is enabling producers to separate the gas stream into pure methane, ethane, and NGLs that can be monetized or used for oilfield power generation instead of being flared.

 

Flare Gas Capture and Reinjection

Where the infrastructure exists, producers can also capture and store gas that would otherwise be flared.  In some cases, flare gas can be transported to injection wells and stored in subsurface reservoir rock.

 

Global Gas Flaring Reduction

Reduction of gas flaring GHG emissions is embodied in the spirit of the Paris Agreement, however, government agencies and international organizations are taking lead on specific efforts to minimize and eliminate flaring.  Notably are the World Bank’s Global Gas Flaring Reduction (GGFR) Partnership and Zero Routine Flaring by 2030 initiatives.

 

Global Gas Flaring Statistics

Annually, 140 billion cubic meters (BCM) of natural gas is flared worldwide.  That’s enough to generate 750 billion kilowatt hours (KWH) of electricity and power the entire African continent each year.  Flaring also introduces more than 300 million tons of carbon dioxide into the atmosphere annually, contributing to global warming and climate change.

 

Natural Gas Flaring in the Permian

Spanning vast areas of west Texas and southeast New Mexico, the Permian Basin represents a premier oil and natural gas producing region in the world, largely thanks to unconventional shale extraction technology like hydraulic fracturing.  Supermajors, majors, and hundreds of smaller independents came for the oil, which can be more readily transported by truck in the absence of gathering and pipelines.  Natural gas processing facilities continue to be built in both the Midland and Delaware ends of the basin, enabling producers to process and sell more of their associated gas and reduce flaring.

 

Gas Flaring in Texas

Given the immense impact of the oil & gas industry on its economy, Texas has historically taken a more liberal/accommodating view of flaring.  However, amidst growing concern of the environmental cost, evolving legislation, and improving takeaway capacity for natural gas, flaring in Texas is expected to steadily decline.

 

Gas Flaring Data

The following chart summarizes the top 10 sources of flaring in the oilfield.

 

Gas Venting Data

The following chart summarizes the top 10 sources of venting in the oilfield.

Gas Venting Data by Methane Source

Gas Venting Data

 

Greenhouse Gas Inventory Distribution of Methane Emissions

Greenhouse Gas Inventory Distribution of Methane Emissions

Greenhouse Gas Inventory Distribution of Methane Emissions

 Source | US Department of Energy

 

Gas Flaring by Country

Natural gas flaring is heavily weighted towards countries with limited regulations and transparency into oilfield operations as well as producers like the US who are continuing to build out the required midstream infrastructure to economically transport and market associated gas.

 

Top Gas Flaring Countries

Together, the top 7 countries account for 40% of global oil production but over two thirds of flaring.  These include Russia, Iraq, Iran, the United States, Algeria, Venezuela, and Nigeria.

 

Gas Flaring in Nigeria

Nigeria is one of the first big flaring countries to implement aggressive plans to eliminate flaring by 2030 and meet its GHG emissions reduction target of 20%.  As part of its strategy, it is accepting third party bids to capture flare gas and export it as liquefied natural gas (LNG), however, amidst the COVID-19 pandemic the plan has stalled.

 

Current Government Regulations

Government regulations for natural gas flaring and venting vary widely from country to country.  Even within the US, state regulations vary from flaring friendly to bans on many types of flaring.

 

Natural Gas Flaring Regulations

Most natural gas flaring regulations focus on limiting flaring to a few hours per day, set guidelines on extended flaring, or completely eliminate flaring of stranded natural gas.  In Texas for example, flaring is allowed for both continuous combustion of stranded gas while Colorado limits flaring to only short term oilfield operations, such as well tests and maintenance.

 

Natural Gas Venting Regulations

Natural gas venting regulations are uniformly restrictive due to the hazards of allowing methane to be released into the environment, including hazard of explosive events and atmospheric damage.

 

Gas Flaring and ESG

The oil & gas industry finds itself in a ‘catch 22″ situation with Wall Street.  The Climate Action 100+ group of investors has taken the initiative to ensure that publicly traded energy companies take action to reduce GHG emissions  through environmental, social, and governance (ESG), including disclosure of natural gas flaring and venting.  To achieve the ESG targets that investors are increasingly demanding, the oil & gas industry needs the capital infusion traditionally provided by Wall Street to build out gas gathering and transportation systems, among other infrastructure.  Absent that investment, flaring and venting will remain part and parcel of oilfield operations.

 

Methane Emissions Monitoring

While natural gas flaring has a significant environmental impact, keep in mind it is the lesser of two evils, so to speak.  Methane contributes 82 times more to global warming over a 20 year period compared to carbon dioxide emissions.  Therefore, if quickly curtailing GHG and climate change is the goal, the logical first place to start is vending and, perhaps more importantly, natural gas leaking along the energy value chain.

 

Methane Regulatory Reporting

Propelled by ESG focused investors and market participants, the oil & gas industry is under increasing pressure to disclose more about its carbon dioxide emissions from flaring as well as methane emissions from venting.  This movement intersects with evolving federal and state regulations around reporting GHG intensity, ultimately leading major and smaller independents alike to take a more proactive approach to gathering and disclosing emissions data.

 

MethaneSAT / Cutting GHG Emissions in Years vs. Decades

The Paris Agreement has set out to achieve a carbon neutral planet by mid-century.  This long term vision is match by an equally ambitious short term methane reduction initiative through the launch of MethaneSAT, a joint project between the US and New Zealand.  Following its expected launch in October of 2022, MethaneSAT will stream high resolution methane intensity data for every natural gas producing region on Earth, enabling unprecedented visibility into actual methane emissions and leaks at oil & gas facilities, gathering, and pipelines.  Armed with this knowledge, the global oil & gas industry gains unprecedented opportunity to reduce methane emissions in a matter of years instead of decades.

 

The Future of Gas Flaring and Venting

Producers are under intensifying pressure not just from Wall Street to end the practice of flaring, but from governments and sovereign wealth funds as well, including the European Investment Bank, Norway’s Government Pension Fund, and the United Kingdom’s Export Finance.  In addition to its commitment to reducing investment in fossil fuels, The World Bank has launched a Zero Routine Flaring by 2030 initiative to incentivize governments to invest into the infrastructure needed for flare gas capture and other repurposing.

Innovation is also playing a major role in the future of flaring and venting.  Advancement in wellsite gas processing will ultimately render flaring moot as the natural gas stream is broken out into pure methane, ethane, and natural gas liquids that can be readily used for powering oilfield facilities while more valuable NGLs are transported to points of sale.  Methane monitoring innovations, like MethaneSAT, will also be invaluable in detecting venting and oilfield leaks for rapid remediation.

 

Natural Gas Flaring FAQ

Below are answers to some frequently asked questions.

What is the Purpose of Gas Flaring?

Flaring is purely an economic consequence of oil production.  Associated natural gas that cannot be efficiently transported and sold for a profit is flared at the wellsite.

Is Gas Flaring Illegal?

For the short term, flaring is an essential operation in the oilfield, however, federal and state regulations limit the practice.  Venting, on the other hand, is strictly limited to certain operations, such as maintenance on tanks, and venting from flare stacks is illegal as natural gas streams contain deadly or carcinogenic gases like benzene.

What are the Effects of Gas Flaring?

Depending on the efficiency of the flare, controlled combustion of natural gas releases a broad range of by products, including carbon monoxide, carbon dioxide, nitrogen oxide, sulfur dioxide, and other gases.  Many of these gases are not visible but can be seen with specialized cameras.  Flaring also creates black carbon (soot).

Modernizing Mineral Rights Management: Automating Oil & Gas Accounting Data Delivery

Managing thousands of mineral and royalty investments creates never ending oil and gas accounting complexity. Your mineral rights management team is inundated with monthly revenue statements from dozens, or hundreds, of different operating companies, each with unique reporting standards. Assuming you own mineral interests in 1,000 wells, operated by 40 different producers, with three to 10 lines of data for each well, you could be flooded with anywhere between 3,000 to 10,000 lines of data spread across hundreds of check stub pages for a given month.

Your team has an oil and gas accounting data management dilemma. Adding to the large-scale challenge of monthly revenue processing are prior period adjustments and the ever-present threat of bad data seeping into your general ledger through operator oversight or human error in your accounting department.

Enterprise mineral rights management demands more than partial solutions to revenue data delivery, quality control and analysis. Your team needs an enterprise-level approach that matches the scale and complexity of the assets you manage.

There is no silver bullet or push button solution to the problem; but the right mix of strategies and technologies will enable your team to accelerate and deliver 100% of revenue data directly to the general ledger and purpose-built mineral rights management software. Get started by implementing the following strategies for automating oil and gas accounting data processing so you can close the books faster than ever with the added confidence that your team always has validated, analysis-ready revenue data at their fingertips.

The mineral rights management paper problem

Ask your accounting team just how overwhelmed they feel processing the torrent of mineral revenue streams received monthly. Like most institutional investors, you receive a chaotic mix of physical and digital statements in widely varying formats. Check details hold vital revenue, pricing and expense information, yet your team likely waits weeks for oil and gas accounting data to be gathered and uploaded or manually keyed into accounting systems. This labor-intensive process delays mission critical reporting and workflows. Your accounting team is simply overwhelmed by the daunting scale of processing revenue, not to mention the added pressure from management to run up-to-date reporting.

Check data exchanges provide an ideal solution to the problem by converting paper statements into a common format and streamlining delivery of revenue data for operators that participate in the exchange. By subscribing to a check data exchange, your team will receive digital copies of revenue statements as well as structured data that can be loaded directly into your oil and gas accounting software.

To solve the mineral rights management paper problem, you also need a strategy to efficiently convert the paper revenue statements for your operating partners that do not participate in check data exchanges. This is where a third-party document conversion service can help. But loading and correcting errors through manual, in-house revenue processing is time consuming, injects risks and delays higher value tasks.

By outsourcing your monthly revenue processing, including scanning and data entry, your team can simplify and accelerate mineral rights management workflows. Professional oil and gas accounting data processing providers also leverage advanced technologies to ensure revenue statement accuracy through double-keying validation and other techniques.

Normalizing oil & gas accounting data

Participating in a check data exchange and outsourcing your revenue data processing to a professional third-party service is just the first step to completely automate oil and gas revenue delivery. Operator reporting preferences and formats vary widely. Lease and well names, for example, are often different from operator to operator. Normalizing information across oil and gas accounting data received each month is essential for you to make critical, timely investment decisions, yet may go unaddressed given the time required and limited bandwidth of your accounting department.

With millions of dollars lost each year to underpayments and incorrect deductions, oil and gas investors must have a strategy to ensure data integrity.

Effective mineral rights management should incorporate the right technologies that support master data management and help your team automate enforcement of data standards and normalization. Cloud-based mineral rights management software platforms can standardize and normalize your check stub data while also quality controlling critical asset information, such as interest decimals, commodity pricing and deductions.

Putting oil & gas accounting data in context to streamline mineral rights management

Whether you use WolfePak, OGSys, QuickBooks or another oil and gas accounting solution, your team needs a seamless way to work with revenue data along with the tools needed to get work done. In the ever-evolving digital oilfield, you need more than data sets. Your mineral rights management team also needs integrations that can deliver revenue data into the accounting and analysis software your organization uses.

By participating in a check data exchange, your team can also leverage an application programming interface (API) to automatically load oil and gas accounting data into your general ledger of choice. While this offers advantages in terms of making revenue data immediately available for financial reporting, specialized mineral rights management workflows — like NRI calculations and production verification — must be performed outside the GL.

Mineral managers need purpose-built oil and gas accounting that matches their unique non-op reporting and analysis challenges. Consider adopting a full stack mineral rights management platform that offers multidimensional benefits, including:

  • A fully managed revenue data service that delivers 100% of digital revenue details for both check data exchange and out-of-network operators.
  • Cloud-based mineral rights management tools that solve non-op accounting challenges, centralize, normalize and validate revenue data.
  • An integrated data and mineral rights management platform that brings revenue together with category leading wells and production, activity analytics and courthouse data sets in context with accounting, land and GIS workflows.

In-house processing of non-op oil and gas revenue is time-consuming and error-prone, creating multiple risks and costs. Chances are your team spends a large amount of time each month on data processing, including hand-keying check stubs, manipulating operator files and troubleshooting data quality issues. The result? Information delays and incomplete or inaccurate financial data make it difficult to answer important questions about your portfolio.

A full stack mineral rights management approach that automates revenue delivery inside purpose-built cloud software will free you from the overwhelming monthly burden of processing statements in-house while ensuring the integrity of your oil and gas accounting data. Adopting such an approach also future proofs your mineral rights management business and ensures your team is always running on the latest enterprise-level technologies and data sets. By jettisoning in-house revenue processing, organizations can efficiently operate with a leaner team, enabling everyone to focus on high value workflows, evaluate more deals in a day, pinpoint underpayments and confidently acquire acreage ahead of the competition.

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M&A Hot Streak Returns As 2Q21 Value Reaches $33 Billion

Austin, Texas (July 12, 2021) — Enverus, the leading energy data analytics and SaaS technology company, is releasing its summary of 2Q21 U.S. upstream M&A activity. After a cold start to the year, upstream M&A resumed its scorching pace and recorded $33 billion from more than 40 deals with an announced value during the latest quarter, including seven deals worth more than $1 billion each. That is the highest quarterly value total since 2Q19, which included Occidental Petroleum’s historic buy of Anadarko Petroleum, and is tied for the most announced deals above $1 billion since 2014.

“Responding to investor pressure to operate more efficiently, E&P companies have prioritized consolidation,” said Andrew Dittmar, senior M&A analyst at Enverus. “With three extremely active quarters out of the last four, there has been more than $85 billion announced in upstream M&A during the prior 12 months.”

Upstream Deals During 2Q21 Exceeding $1 Billion

In 2Q21, the targets of the acquisitions showed a significant shift from last year. During 2020, consolidation between public companies focused on operational and general and administrative synergies drove activity. This year, there have been only two public company tie-ups above $1 billion: Bonanza Creek Energy’s $1.4 billion purchase of Extraction Oil & Gas in Colorado’s DJ Basin and Cabot Oil & Gas merging with Cimarex Energy in a deal that valued Permian and MidContinent producer Cimarex at $9.3 billion. Of those two, only the Bonanza Creek/Extraction deal had operational synergies.

Public companies instead turned to acquiring private and private equity-sponsored E&Ps headlined by Pioneer Natural Resources’ $6.4 billion purchase of Midland pure-play DoublePoint Energy and including Southwestern Energy’s entrance into the Haynesville via its $3 billion acquisition of Indigo Natural Resources and EQT’s buy of Marcellus-producer Alta Resources for $2.9 billion.

“The uptick in acquisition activity targeting private equity-backed E&Ps is likely a welcome relief for sponsors that were challenged to find exit opportunities over the last few years,” commented Dittmar. “The deals targeting private E&Ps are less about cost-cutting synergies and more about adding inventory. That can be in a buyer’s home basin, like Pioneer/DoublePoint, or entering a new area as Southwestern did by acquiring Indigo in the Haynesville Shale.”

Private equity sponsors are receiving mostly buyer’s equity in these sales, with stock constituting ~70% of the value paid and cash plus debt assumed making up the other 30%. That contrasts with past years when private sellers took primarily cash.

“Following a rally in equities that raised the valuation for public E&Ps, their stock represents an attractive currency to buy private and PE-backed counterparts,” added Dittmar. “For the sellers, stock gives them upside exposure plus the flexibility to monetize into cash once lock-ups expire and when the market is favorable.”

Not all private equity backers view public markets as an exit though. For KKR’s Energy Real Assets team, which formed Independence Energy, a combination with Contango Oil & Gas that valued their stake in the combined company at ~$4.5 billion is an opportunity to grow their business as a public company via deals. With private equity-sponsored E&Ps still looking for an exit, plus public companies selling noncore assets, further acquisition opportunities should abound. Public companies will likely target the Permian to add oil-weighted inventory and possibly the Haynesville to add gas inventory. For more mature assets, companies might focus on the Eagle Ford or Bakken.

“As long as there isn’t a sharp retreat in commodity prices, M&A activity is likely to remain strong during the second half of 2021,” said Dittmar. “There are numerous opportunities for further acquisitions of private E&Ps or non-core assets. The public company consolidation story is also not finished although its pace has slowed. But we may not see another quarter with $30 billion or more in M&A this year simply because so many of the marquee public and private deals have been accomplished during the last 12 months.”

Members of the media can contact Jon Haubert to request a copy of the full report or to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

How Population Decline Could Impact the Energy Industry

In 1992, novelist P.D. James published “The Children of Men.” It is a brutal novel, set in 2021, about a world without births, where mankind is on the brink of extinction, the British government is unrecognizable, and hope for the future of an aging population has crumbled into a decaying spiral of suicides, crime and exploitation.

Well, it’s now 2021 and our world is still creating children, but according to a July 2020 BBC article, at a lower rate. And this trend may well present us with new realities, including when it comes to the energy industry.

How populations are projected to change by 2100

China and Japan, currently high demand oil and gas consumers, could see their populations drop by roughly 50%.

India could fare a bit better but may still see a population drop of nearly 25%, while Russia is projected to see its population drop between 15-50% by 2100.

Other high hydrocarbon demand regions of the world have different outlooks.

U.S. population growth is projected to increase from 331 million in 2020 to 404 million in 2060, but flatten out from then to 2100.

According to data from the European Commission, the European Union is projected to lose population by 2100.

However, according to the U.S. Census Bureau, Africa will offset this trend, with Nigeria projected to have the second highest population in the world by 2100.

Data source: U.S. Census Bureau

 

Overall, the world population is projected to gain about 3.1 billion people by 2100, according to the Pew Research Center, almost all of which will be in Africa.

Elderly population on the rise in Europe

Aging trends will probably dampen demand for transportation fuels.

The world’s number of 80-year-olds is expected to rise from 141 million currently to 866 million by 2100, according to the BBC.

In the U.S., the numbers of Americans aged 65 or older will swell from 56.4 million to 98.2 in 2060, an increase of nearly 75%. Since miles driven per year drops dramatically from the 55-64 age bracket (11,972 miles per year) to 7,646 for the 65 and over age bracket. This translates into a demand drop for gasoline of about 5%, when looking at 2019 usage statistics and assuming an average of 20 miles per gallon, per driver.

Aging will affect GDP as societies grapple with how to care for an aging population, adjust to lowered consumer spending and reductions in tax base as populations age out of the workforce, and replenish dwindling labor supplies.

As populations age, it’s probable that families will become geographically more compact in order to provide care for their elders. It is an open question as to whether this translates into a higher demand for fuel (running errands for elders), more electric vehicle ownership to offset fuel costs or has zero impact on consumption patterns.

Aging trends vs. oil and natural gas demand?

So, what might these population growth slowdowns and aging trends mean for oil and natural gas demand?

If demand follows population growth, then we should focus on Africa given its expected population growth trends.

We have always assumed that the economic growth in less developed parts of the world will follow the path taken by first world nations — industrialization, large distributed power grids, large distributed communication infrastructures based on a foundation of thousands of miles of cabling and copper, and massive buildouts of highways to get goods to and from markets.

But will this be the path taken by Africa?

No doubt that factories will be built to shorten supply chains for goods, whether they be next-gen electric vehicles or cement.

Large power grids provide the power that secures better lifestyle options for those with access to them. But they require massive capital outlays for construction and maintenance.

Mini grids — the future of energy in Africa

A model of power access that is gaining traction in Africa relies on mini grids that are driven by localized solar delivering power to battery packs.

Ghana Energy Development and Access Project (GEDAP) has targeted 11 different locations for these kinds of nodal community power projects, with financing underwritten by the World Bank.

A pilot project created five mini grids and provided 24/7 dependable power sourced from solar PV cells for about 10,000 people living on islands in and around the Volta River.

Noor, located in Morocco, is the world’s largest concentrated solar power array, generating 580 megawatts. It will be augmented by the 800-megawattMidelt project slated to be built 300 miles away in the Atlas.

The shift in African power consumption to renewables

Compared to Texas’ energy generation — about 35,000 megawatts per hour — the total power output of these two complexes is modest, but in combination with the GEDAP project, it shows that renewables are gaining in importance across Africa.

The IMF can see a meaningful shift in African power consumption to renewables by 2050, according to a March 2020 Finance & Development article, with most power being generated by solar and wind by 2100.

Part of the “new way” to African modernization can also be seen in the rapid adoption of mobile and smartphone adoption. A February 2020 AppsAfrica.com article highlights how the number of individuals in Sub-Saharan Africa using mobile devices will increase through 2025.

No telephone poles, no thousands of miles of copper wiring and, for an appreciable number of folks with smartphones, online banking and funds transfer options. No need to drive to the bank.

Africa may be on the cutting edge of developing nodal communities that are organized around densely concentrated resources that efficiently provide consumers an increasing array of lifestyle options.

Will this play a major role in the future worldwide demand for hydrocarbons?

Probably not in the next 10 years, which is the time frame around which most medium and smaller U.S. independents craft their business models.

But for companies with business models that contemplate more than 20 years of operations, the combination of worldwide drops in birth rate, aging populations, adoption of renewables, and new thinking — like the African model — may well amplify the story of demand destruction beyond simplistic assumptions about electric vehicle adoptions.

Recent shareholder revolts against ExxonMobil and the Dutch government’s guidance to Royal Dutch Shell show that both private markets and governments are moving to reduce carbon in ways that put additional downward pressure on demand.

Modernizing Mineral Rights Management

How technology is revolutionizing specialty asset management in banking

A large and growing market of mineral interest owners relies on banks and trust departments to manage their assets. Banks and the highly-personalized services they provide have been a cornerstone of specialty asset management since the beginning of the oil and gas industry, helping family offices and high-net-worth individuals navigate mineral rights management complexity.

If you are part of a financial organization that offers mineral rights management services, digital transformation is the key to delivering higher service excellence and efficiently managing customer portfolios at scale. In fact, according to a 2017 PwC survey, 77% of respondents expect to increase their financial technology innovation efforts over the next three to five years. Does your organization have a mineral rights management digital transformation strategy?

Status quo mineral rights management and the cost of doing nothing

Banking is an industry built on trust and personal relationships. Some fear technology hinders the ability to deliver the type of personalized, quality service customers expect. In reality, technology benefits banks, financial advisors and customers, even more so for specialty asset classes like minerals, royalties and non-op working interests. Transforming mineral rights management with digital innovation is essential to help you build that trust, providing a way for your employees to work faster and more efficiently while enhancing customer experience for the services you offer.

Oil and gas market cycles and the global pandemic continue to inject uncertainty for specialty asset management. Organizations fail and lose customers during times of uncertainty because they continue to invest in mineral rights management processes that have worked in the past. Instead, specialty asset management teams should double down on digital transformation and invest in the technology and business automation that will set them up for growth in the future.

Customer expectation is an important driving factor for banks to upgrade their mineral management technology. Just as online banking transformed personal checking and savings from paper-based processes to on-demand digital account management, today’s mineral owners expect more than a printed monthly or quarterly report from their mineral manager.

Your customers have more options than ever. Failing to modernize your portfolio management, revenue processing, A&D and auditing workflows can only lead to a dwindling oil and gas practice as customers simply open an account with competitors who can outmatch your team. Organizations that can overcome resistance to change and embrace digital transformation will reap the benefits of increased market share backed by superior technology, automation and data.

Specialty asset management demands purpose built solutions

Consider your existing processes for managing customer check details, preparing reports and auditing portfolios for missing wells and underpayments. What could you do differently to optimize the time your highly paid mineral managers spend on critical workflows? These include:

  • Identifying mineral assets held in trust and agency accounts.
  • Tracking revenues, operating expenses and providing customers with reporting.
  • Negotiating leases and other oil and gas contracts.
  • Valuing mineral assets for sales and tax purposes.

All too often, mineral managers rely on spreadsheets or “one size fits all” accounting software to track, manage and report customer portfolios. In today’s highly competitive mineral rights management space, these solutions are no longer enough to get new clients in the door and keep the ones you have.

The highly specialized requirements of non-op accounting and complexities of the mineral’s asset class demand purpose-built technology. Without the right tool for the job, your organization has likely had to create workarounds by bolting together different technologies or develop custom solutions that all too often achieve partial success. Importantly, legacy and one-off solutions cannot scale as your business scales.

If you want to ensure your team is delivering exceptional customer service for managing your clients’ assets, it’s time to pick the right digital tools for the job.

Benefits of a cloud-based, data-driven mineral management platform

A recent Accenture report noted that 90% of enterprises have made the transition to the cloud. However, only 30% reported achieving the full value they had expected. While the cloud is no longer a debatable place to host business applications and securely store data, most organizations are looking for more value, both internally and for their customers. Cloud-based software, or Software as a Service (SaaS), tailored to fit the unique complexities of non-op portfolio management and accounting deliver more value than all-purpose financial reporting and ERP, even if they are deployed in the cloud. Combined with integrated datasets and business automation, cloud-based mineral management platforms create exciting opportunities to drive operational and customer portfolio performance to new heights. The advantages are manifold.

Manage multiple portfolios

Manage dozens or even hundreds of portfolios in a multi-tenant environment that enables new accounts to be rapidly onboarded. Significantly reduce manual mineral rights management workflows to enable portfolio managers to focus on high value reporting and analysis.

Automate revenue and JIB processing

Eliminate in-house revenue processing with check data exchange integrations augmented by managed revenue services to deliver out-of-network operator statements. Reduce the potential for incorrect or missing data to base strategic and tactical portfolio decisions on the best possible information.

Scale up with a lean team

Drive operational efficiency with real-time insights and alerts that let your team monitor rig and permit activity by exception then act when needed. Take on more clients, without the need to add headcount.

Accelerate analysis and tax

Gain real-time portfolio insights, integrated income and expense tracking, audit and revenue recovery. Accelerate key workflows, like lease negotiation, acquisitions and divestitures, NRI and breakeven analysis, and income and expense reporting for tax preparation.

Seamless data set integration

Access mineral-related data sets in context with your workflows, including wells, production, land and lease documents. Plus, advanced activity analytics to identify well status change in real time, including pad clearing and frac crews moving to well sites.

Retain and attract new customers

Efficiently manage portfolios at scale, tailored to the unique mineral rights management and reporting of each customer. Enable specialty asset management teams to elevate customer experience, maximize ROI, retain customers and win new business.

The shale revolution of the past decade has led to increased leasing activity in booming and developing oil and gas regions. Land and mineral owners are increasingly leaning on banks to help manage their assets, track division orders, curate land records and ensure that they are getting paid correctly.

To succeed and cost-effectively manage a large volume of customer portfolios, your team can leverage purpose built mineral rights management technology, automated revenue delivery and evergreen datasets in one cloud-based platform. As a result, you will spend less time on low-value data curation and manual processes and more time optimizing customer portfolio performance and attracting new business.

 

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FAQ

How do you manage your minerals rights?

Some mineral owners prefer to outsource the management of their mineral rights.

Mineral Management Services
1. Production and income verification.
2. Division orders.
3. Oil and gas lease negotiation.
4. Lease and offset activity monitoring.
5. Reporting.

What is Mineral Management?

Department of the Interior. Footnotes. The Minerals Management Service (MMS) was an agency of the United States Department of the Interior that managed the nation’s natural gas, oil and other mineral resources on the outer continental shelf (OCS).

How much should I sell my mineral rights for?

Your mineral rights could be worth $1,000/acre because there isn’t much oil left while your neighbor could be getting an offer for $10,000/acre based upon an active rig and a 25% lease. This why there is no average price per acre for mineral rights. Every owner (even in the same wells) is unique.

What is MMS in oil and gas?

Abbreviation for Minerals Management Service, a branch of the US Lands and Mineral Management Department formerly charged with supervising national resources. MMS had oversight of oil and gas leasing, royalty collection and other operations in US-owned areas.

Project Tracking Wind Power in Texas — Pick the Winners

Where are these Texas wind turbines everyone is talking about that keep the ERCOT power grid going? Who owns these wind farms in Texas? How much power is generated by these assets in the state of Texas today?

We can answer all these questions and more in Enverus Power & Renewables’ latest tool for renewable energy developers, investors and market analysts — Project Tracking Analytics.

Before we delve into Texas and the market dynamics at play, let’s start by clarifying how our new platform works. With Enverus’ Prism™ platform, it is now possible to view traditional energies data sets such as well data, permits and activity analytics, alongside the various Foundations | Power & Renewables data.

With the correct Power & Renewables permissions, users can filter power plants, power production data, substation and transmission data.

Watch the video below to view an ERCOT use case, with transmission, substation and power plant layers enabled, to answer the following questions:

  • What is the mix of power sources that compose total capacity?
  • How much capacity is operating, pre-construction, under construction, repowering or decommissioned?
  • Who owns these power plants and what is their capacity?
  • How much primary voltage is available at substations?

[[EMBED VIDEO HERE]]
In the video above, a customized widget shows power plant project capacity in terms of the mix of power sources that come online.

The wind power boom in Texas and growing solar capacity add-ons

To start our use case of Texas wind power plants and renewable project tracking analytics, we will begin by showing project capacity by the mix of the different energy sources that have come online.

Figure 1 | Texas power plants and the changing mix of generation fuels powering ERCOT’s grid.

Historically, coal and natural gas made up the majority of generation fuels for power plants. However, over the past five years there has been a huge push towards wind. Wind (turquoise bars) has become a much larger part of the mix of new power plant capacity coming online. And what is interesting is how much solar (yellow bars) is projected to possibly come online in the future. Solar is projected to take a large part of the future energy mix.

Taking a closer look at the actual volume or the actual capacity projected to come online, it’s apparent that there’s an abundance of megawatt capacity planned in the next several years.

We don’t need that much capacity. So, what this means is that there are a lot of projects out there that are at risk of never making it past the planning or subsequent stages.

Picking the winners and losers in wind energy project development and investment

Because there is so much capital and so much interest in this space, project developers and investors must be able to pick the winners to be successful. Most developers only make it to the finish line on one of every five projects in their portfolio.

As the renewable energy market continues to boom in Texas, there is an abundance of new project developers rushing into the space. This makes it so much more important to have the data to be able to understand what these projects are, where they are in their lifecycle, who is building them, and with what economics will be key not just for the project developers, but also the investment community.

Filtering for operating power plants and the biggest players in wind power in Texas

Our next step in analyzing the Texas wind power market leads to a widget displaying operating wind assets in Texas (view the video above to see the full workflow).

Within seconds, Project Tracking Analytics shows us that NextEra is the largest owner of operating wind capacity in Texas today. Using the power plant card function, we can view all the important details that project developers, investors and analysts need to know when scoping out a plant:

  • Construction start date.
  • Plant operating start date.
  • Plant operating capacity.
  • Owner(s) of the power plant.
  • Project developer.
  • Power purchaser details.
  • Power contract price and length.
  • Power contract volumes.

With these details, users can begin to analyze and forecast whether a power plant will get the rate of return its investors are targeting.

Additionally, users can identify wind turbine suppliers for various projects and who the engineering, procurement and construction (EPC) partners are on projects. These tools help users understand who the big players are and which companies provide services to larger projects.

So much of the information that Enverus provides in its Power & Renewables platform is incredibly difficult to gather. This data does not exist in sources that are easy to scrape. That means our analysts are synthesizing those disparate, disorganized data sets to produce this tabular format. Also, every project is tagged with any of the documents that they collect, along with notes regarding where the project information’s coming from, what the anticipated operating data is, etc.

This is invaluable information for project developers, renewable energy investors and EPCs. We hope we can show you more ways that the tools will benefit your workflows. You can book a preview of our solution with us here.

 

WATCH ON DEMAND: Fill in your details below to access a preview of Enverus Power & Renewables Project Tracking Analytics instantly

Enverus Acquires Marginal Unit to Address Power Congestion, Predictability and Price Impact

Austin, Texas (June 29, 2021) — Enverus, a leading global energy data and SaaS technology company, announced today that it has acquired Marginal Unit Inc., a power market analytics firm that helps users understand the past, present and future of the electrical grid. Marginal Unit specializes in congestion analysis, power flow, identifying pricing opportunities and empowering customers to make better investment decisions in the power marketplace.

According to Goldman Sachs, an estimated $16 trillion in capital expenditures will be made related to cleaner energy and renewables through 2030. While massive investments are underway to “electrify everything,” and climate-focused energy policies seek a shift from carbon-intensive fuels to alternative and renewable energies, one of the greatest challenges with modernizing today’s power grid is improving grid congestion and the impact it has on price.

Yet, as the U.S. power grid evolves into a more complex system capable of accepting power from additional intermittent energy sources like wind and solar, power flow patterns are continually changing and affecting prices. This has resulted in a major problem for investors, utilities and customers. In near-real time, Marginal Unit bridges the gap between the market and the physical power systems across all energy sources, renewable or other, that enable electricity to reach its end market.

“Marginal Unit is the market leader in grid congestion and constraint analysis, the primary driver of power prices. Its unique systems allow all types of users, from traders and independent power producers to power marketers, utilities and asset managers, to make more informed decisions and, in the end, improve our energy infrastructure,” said Manuj Nikhanj, president of Enverus. “As Enverus continues to make significant investments in Power & Renewables through targeted acquisitions and organic development, we are rising to the challenge to make sense of a market tormented by disorganized data.”

“Unfortunately, some choices are made blindly, with literal guesses driving decision-making,” said Sylvain Ross, chief algorithms officer and principal at Marginal Unit. “By combining our talented teams, we can be the catalyst for the energy evolution. Our expertise in power flow and congestion, combined with Enverus’ forecasting technology, will allow us to provide unmatched solutions that will create better efficiencies to improve the electric grid.”

Enverus will integrate Marginal Unit’s data systems into its new Power & Renewables software suite. Marginal Unit’s 15 employees will join Enverus’ growing workforce that now exceeds 1,500 worldwide.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Marginal Unit
Based in Austin, Texas, and founded in 2016, Marginal Unit Inc. is a leading provider of grid congestion modeling and analytics software for the power markets. Leveraging advanced physics simulations, artificial intelligence and powerful visualization, Marginal Unit makes traditionally complex power market analysis quicker, simpler and more accurate, enabling power market participants to make better investment decisions. Learn more at MarginalUnit.com.

Extreme Weekend Temperatures Could Lead to Power Blackouts in Northwest US

Austin, Texas (June 25, 2021) — Record-high temperatures and below-average hydro-generation conditions will rock the Pacific Northwest in the coming days, with a record summer load forecast for the wholesale electrical providers in the region.

Temperatures are expected to reach or exceed all-time record highs in Seattle and Spokane, Washington; Portland, Oregon; and Boise, Idaho; after a “heat dome,” or large ridge of high pressure, that was over the southwestern U.S. and California last week reestablishes itself over the Northwestern U.S. late this week through early next week.

The heat will be a shock to residents of the region, especially those without air conditioning. Seattle and Portland rank first and third respectively for major U.S. cities with the fewest air-conditioned households, according to the U.S. Census.

And it’s showing up in Enverus’ data, too.

If you find yourself writing on this topic, please consider using one of these quotes from our lead on power analytics, Rob Allerman, Senior Director of Power Analytics.

“Due to the extreme heat, current forecasts show the Pacific Northwest reaching record summer electricity demand on Monday or 132% of average June demand. Unfortunately, supply may not be able to keep up with the record demand we’ll see over the coming days with forecasted temperatures exceeding all-time record highs.  Enverus is forecasting Pacific Northwest hydro-generation on Monday to be 3,000 megawatts (MW) below average during this period.  In addition, 1,300 MW of coal generation was retired earlier this year reducing supply even more.  However, to address this gap, scheduled Transmission work between Southern California and Pacific Northwest was canceled for next week which will allow Southern California to send power into the Northwest. Usually, it’s the other way around.

This event will lead to scarcity wholesale power pricing for the rest of June. While it is still hard to say where wholesale prices will end up at the end of this event, the data shows a risk for rolling blackouts in the region.

The heat will be a shock to residents of the region, especially since many are without air conditioning. We are hoping that residents will be prepared for the heat and stay safe during this difficult time.”

Enverus is continually monitoring the ongoing power issues impacting utility customers throughout the country.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

READ ANALYSIS

Record Heat and Potential Blackouts Roll Into Northwestern US

Record-high temperatures and below-average hydro-generation conditions will rock the Pacific Northwest in the coming days, with a record summer load forecast for the wholesale electrical providers in the region.

Temperatures are expected to reach or exceed all-time record highs in Seattle and Spokane, Washington; Portland, Oregon; and Boise, Idaho; after a “heat dome,” or large ridge of high pressure, that was over the southwestern U.S. and California last week reestablishes itself over the Northwestern U.S. late this week through early next week.

The heat will be a shock to residents of the region, especially those without air conditioning. Seattle and Portland rank first and third respectively for major U.S. cities with the fewest air-conditioned households, according to the U.S. Census.

Figure 1 | Temperatures in Portland, Seattle, Spokane and Boise are forecast to break records in the coming days.

Enverus is forecasting record summer load on Monday in the Mid-Columbia market, which exceed 132% of average on-peak average June load, or approaching 30,000 megawatts.

Figure 2 | Current Enverus forecasts show WECC Mid-C load peaking at a new record on Monday, June 28, 2021.

Power supplies struggle to keep up with strong pace of demand

While demand strains the grid amid high temperatures, unfortunately supply is not keeping up. Last year, two coal-fired power units retired: Centralia Unit 1, which has a capacity of 670 megawatts, and Colstrip 1 and 2, which is a 607 megawatt capacity plant.

In addition, Columbia River water conditions are below average, and Grand Coulee inflows are nearly 50% of average of where they should be this time of year.

Figure 3 | Enverus Pacific Northwest hydro-generation forecasts show below-average water conditions.

The coal plant retirements and below-average water conditions will limit BPA’s generation capacity at Grand Coulee as it drafts the Lake Roosevelt to try to generation power. Enverus is forecasting hydro-generation on Monday will be 3,000 megawatts below average for late June to try to supply enough generation for the region.

Enverus is forecasting scarcity pricing for the rest of June and has net load at the top of the “Mid-C Stack” for the rest of the month.

Figure 4 | Enverus predicts scarcity pricing for the remainder of June in Mid-C.

While it is still hard to say where wholesale prices will end up at the end of this event, the data do show a significant risk for rolling blackouts in the region.

If blackouts are a possibility, Bonneville Power Association (BPA), which provides wholesale power to the region, could be forced to reduce or stop spill passed hydro turbines so that they can produce more power. In addition, more water may be moved out of the reservoirs in Canada to Grand Coulee.

We know that western markets won’t be easy to manage this year. Having a reliable forecast will always be the key to managing volatility. Sign up below for complimentary access to our daily power market reports to keep ahead of the markets.

 

Sign up to access a free trial of Enverus western power market coverage today.

Accurate Power Forecasts Essential to Survive This Summer

It’s going to be a long, hot summer for folks living on the U.S. West and Gulf Coasts.

As early as April, the Enverus Power Market Analytics team has advised its customers to prepare for extreme high temperatures this summer. As we noted last week, western power markets from California to Texas came up against severe heat waves and low wind production, which led to a new June record for power demand in ERCOT last week.

When extreme weather hits and power price volatility goes haywire, energy traders need the most accurate forecasts available to make difficult choices. And as dangerous and deadly as February’s winter freeze and subsequent power outages in Texas were, the high temperatures we’re experiencing early in the summer months are equally unsafe. Secure power supply and accuracy in predicting load will be essential this summer.

Here’s a recap of the impacts to Texans and Californians in last week’s high temperatures:

  1. From June 14 though June 18, ERCOT and CAISO asked their customers to conserve power to prevent rolling blackouts.
  2. Historically high temperatures were measured from Houston to San Diego to Palm Springs, California.
  3. Houston reached 100 degrees Fahrenheit, which was its third earliest time to reach 100 degrees since 1930.
  4. Palm Springs matched its previous all-time max temperature of 123 degrees Fahrenheit.

The importance of getting load forecasts right throughout extreme weather events is the key driver of Enverus’ innovation in developing the outlooks that guide power traders around the country.

Record-high power demand to match extreme high temperatures

Even as Texans and Californians took on the responsibility of turning up thermostats and conserving power last week, peak loads were breathtaking in both ERCOT and CAISO.

  • In Texas, peak loads were tremendous for ERCOT with peak load 104% above last year’s June record peak, or 115% above the average June peak load.
  • California peak loads were even more impressive with peak load 120% above last year’s June peak load, or 140% above June averages.

Despite the severe demand and heat conditions, the Enverus peak load forecasts for ERCOT and CAISO SP-15, the grid that serves Southern California, were exceptionally accurate. We’re pleased to share the results from last week’s analysis:

In ERCOT, Enverus averaged a MAPE of 1.41% for June 14 through June 18, beating out the ISO peak MAPE average of 1.59%.

In CAISO SP-15, the results were even more dramatic. Enverus peak MAPEs averaged 6.54% vs. the ISO’s 10.15% — that 3.61 point difference in accuracy can mean the difference between profits and losses in power trading.

Deep learning enhances AI for a better accuracy and lower MAPEs

Last year, we started implementing deep learning into our machine-learning-based power market forecasts. Deep learning can be described as the more advanced cousin of machine learning, with stronger computing power and more granular datasets. The results of this product innovation blew us away and brought immediate results — our MAPEs (mean absolute percentage error) were now significantly lower than that of the Texas power grid operator.

We are proud to continue to help utilities and power traders get through tough spells of grid insecurity. And we continue to look to the future and how we will use our technology to support the management of volatility as renewables’ influence grows.

We know that western markets won’t be easy to manage this year. Having a reliable forecast will always be the key to managing volatility. Sign up below for complimentary access to our daily power market reports to keep ahead of the markets.

Sign up to access a free trial of Enverus western power market coverage today.

Will Fracture Sand Pricing Power Return?

Rigs have jumped nearly 30% YTD in the Lower 48. The average number of actively fracturing fleets jumped 20% month-over-month in January and has remained steady since. Due to both a large backlog of drilled uncompleted wells (DUCs) built during the pandemic-induced activity crash and the higher-than-anticipated crude prices we’re now experiencing, completion activity — and by extension hydraulic fracture sand demand — is set to increase meaningfully Y/Y.

Enverus tracks a multitude of metrics to help companies understand anticipated sand demand, regional sand production levels, total sand supply, and sand pricing. Figure 1 describes the relationships between these metrics. Starting in early 2018 with the large influx of in-basin sand in key regions such as the Permian, the fracture sand industry went through a period of rapid capacity expansion. The total theoretical sand supply grew ~65% over 12 months while actual demand for fracture sand increased only ~35%. With the cost advantages inherent to in-basin sand, many operators abandoned the use of northern white sand (NWS) in favor of the cheaper alternative.

Figure 1 also exhibits of one of our proprietary proppant price indices. It clearly shows the impact of in-basin sand on proppant prices starting in 2018.  It appears the steep drop in the price curve has begun to flatten, approaching a minimum threshold cost for sand production. As completion activity begins to return, should we also expect sand prices to increase? Given the large excess capacity that exists, our view is that any price increase will be transitory as plants operating at reduced capacity ramp back up to meet demand needs.

For more on the state of the sand markets, specific regional price indices or information on an ever-increasing number of consumables our team tracks demand and pricing for; contact us at Enverus.

FIGURE 1 | Sand Capacity, Production, Demand and Pricing

Source | Enverus, company reports, FactSet, MSHA

Enverus Acquires Integrity Title to Create Faster, Easier & More Accurate Land Title Services

Austin, Texas (June 16, 2021) — Enverus, the leading global energy data analytics and SaaS technology company, announced today that it has acquired Integrity Title Company, the largest provider of title plant access in Texas and New Mexico, and premier land and real estate verification company. Enverus plans to integrate Integrity Title’s technology into a unique-to-market source platform called Integrity Title Plants to create the most robust and accurate title evidence research platform accessible online.

Integrity Title’s title plant databases currently cover 92 title plant counties in Texas and 15 title plant counties in New Mexico and constitute more than 90% and 75% of the population and title premium remittance respectively for the two states. The Texas title insurance industry annually produces revenue in excess of $1.8 billion. Enverus’ technology and quality control processes, combined with Integrity’s Title’s geographic coverage, will enable the creation of the highest quality, easiest to search and most current title plants in Texas and New Mexico.

“Anyone who works in a land-based industry knows that constructing a chain of title is a very time-consuming, document-intensive task requiring multiple searches through cumbersome card and tract plants, and often, in-person trips to county courthouses,” said Scott Luna, director and former owner of Integrity Title. “As the Unities States’ real estate continues to evolve and transform, Integrity Title Plants is best positioned to support land diligence for all residential or commercial projects be it land or energy development, including wind or solar farms, highways and road expansion and transmission lines or pipelines.”

“Combining forces with Enverus creates enormous opportunities for Integrity Title and our customers, not only for title research, but also in providing energy companies the opportunity to seamlessly unite title insurance products,” said Manuj Nikhanj, president of Enverus. “This is about accelerating innovation through high-powered technology and we couldn’t be more optimistic about our future together.”

In title research, most title plants typically extend back 40 years and give in-depth overviews of critical information regarding a tract of land. This data is used by title companies, attorneys, investors, developers, builders, real estate agents and banks to add confidence, minimize risk and reduce the cost to produce title insurance. Mistakes during the title process can be expensive and even terminate projects. By merging the digitization of land and courthouse records owned by Enverus, Integrity Title Plants converts weeks of time-consuming research into seconds.

“Texas has become the number one state in the nation for net new population growth resulting in accelerated demand for title research,” added Silas Martin, general manager of Land products at Enverus. “If title companies and underwriters are not prepared for the spike in activity, they will miss capturing their share of this expanding market. Integrity Title Plants allows our customers to process more closings, directly resulting in revenue growth without an increase in spend.”

Today’s announcement combines the companies’ complementary strengths to accelerate technology, machine learning and advanced analytics. Integrity Title data within Enverus’ SaaS platform allows users to benefit from improved quality of data, speed and ease of access to that data, and confidence in the results returned.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Integrity Title Company
Integrity is the largest provider of title plant access in Texas and New Mexico with an agency network of over 1,800 subscribed county licenses across the two states (45% of the subscriber market in Texas).  In terms of coverage, Integrity surpasses any of the competitors by providing access to 94% and 75% respectively in regards to the state’s population and title premium remittance.* Integrity Title continues to be industry innovator on the technology front over its 18 years of working with title agents, being the first data provider to offer title plant access through the internet, as well as the first to digitize historical backplants and sovereignty document image libraries and make them available to users online. Added on this history are the continued innovations, such as the ability to produce a GIS interface, proactive monitoring of title searches and ability to perform statewide plat and probate searches not tied to individual counties. Learn more at integritytitle.com.

*- Based on statistical data compiled from the Texas Department of Insurance and the Office of Superintendent of Insurance (NM).