A Permian operator wanted to understand the impact of sourcing key chemicals from manufacturers versus a bundled offering and quantify either strategy’s fiscal implications.
The Enverus OpenInsights Strategic Advisory Services team worked with the engineering and supply chain teams across the client organization to identify the completion design that fit the criteria both from an engineering and cost perspective.
The client’s friction reducer usage had been steadily increasing in the preceding months, but their comparative spend on friction reducer was increasing at a much faster pace. This typically is driven by purchase of more specialty higher viscosity products or could showcase cost saving optimization potential.
Looking at the trends below and the completion forecast for the organization, an expected spend forecast was generated. This helped quantify the need for cost optimization as it was becoming an increasingly critical component of the completion spend portfolio.
OpenInsights’ highly granular datasets identified seven vendors that had supplied the operator with friction reducers in the preceding 24-month time span. Over the same time period, normalized unitized pricing data indicated there were wide discrepancies in the pricing that had been offered.
Based on existing relationships, as well as the volumetric need for the client, the following steps were taken:
Vendor consolidation, completion design review, longer term price contracts and strategic sourcing helped the customer uncover significant cost savings based on their annual completion schedule.