Scaling up efficiency in a digital future will require better data management, standardization

By Stephen Whitfield, Senior Editor

Molly Smith is VP of Drilling and Completions at Murphy Oil Corp.

What would you say are some of the biggest challenges that the global oil and gas industry currently faces, and how do you think the industry should best address those challenges?

From Murphy’s perspective, I’d say that advancing our strategic priorities is key to addressing those challenges.

For one, we need to deliver to our shareholders and partners. Our primary focus is maximizing free cash flow to alleviate debt and return value to our shareholders. In the past three years, Murphy has reduced its spud-to-production time by 64%. How have we done this? Primarily through an operational strategy that centers around applications and tools that allow for the real-time sharing of best practices across our organization and with our service partners. That’s been really important to us.

Our drilling and completions team has also been dedicated to accelerating the well delivery process. Our approach to execution involves deploying two rigs on the same pad, accompanied by frac crews chasing the rigs to put our new wells online early. In doing so, we’ve often encountered inconsistent operations, but we have addressed that by implementing robust measures that mitigate irregularity and improve both reliability and efficiency.

We also need to explore, and Murphy is committed to exploration. In addition to delivering our developmental well program in the US Gulf of Mexico, we drilled a discovery in early 2023 and are currently drilling another prospect. Our organizational structure and technical planning have allowed for the agility to navigate the dynamic regulatory environments that we’re facing. Murphy’s looking to expand its footprint this year – we’re planning to enter Côte d’Ivoire and drill in Vietnam.

Still, there’s a lot more we can be doing. I believe we need to enhance data capturing and quality to highlight inefficiencies and delays in project delivery, specifically real-time monitoring. That’s going to help us streamline our operations.

We also need to prioritize sustainable practices and adopt proactive measures to mitigate the impacts of our operations on the environment. And we’ve got to invest in upskilling the workforce. The landscape of the energy industry is constantly evolving, and we need to bridge the gap.

You mentioned data capturing. The industry already captures a wealth of data from its wells, and with the increasing prevalence of digitalization, the amount of data available has only increased. Do you think the industry is making the best use of the data it has at its disposal?

You’re right – the amount of data is constantly increasing with the modernization of devices, the development of IoT devices and sensors, as well as the digitalization of workflows. This brings demands for higher quality and higher quantities of data.

As an industry, we’ve been focused on increasing the quantity of data, but now we’re looking to integrate these new technologies together. We’ve got to shift the priority from increasing quantity to solving the challenges involved with integrating these technologies. We need to look at the lack of standardization with our data, and we need to create useful reporting and analytics structures to generate more value.

Looking at what Murphy’s doing, we’re trying to find ways to help our data lead to better and more strategic outcomes. Our drilling and completions team has been collaborating with our subsurface and production teams on creating a data infrastructure that’s allowing us to manipulate and analyze large quantities of data by applying an intelligent standardization, Murphy Unique Well Identifiers (MUWIs).

MUWIs have helped us integrate a diverse system of data, improving data management and increasing data utilization across our organization.

On top of that, our open-source data culture is allowing us to ask better questions about where our data is coming from, how we’re using that data, who the stakeholders are within our organization and, most importantly, what the interdependencies are within the data that lead to whatever insights we can glean.

What do you see as the next steps for helping the industry gain better insights from its data?

I think the answer to this question ties into some other issues we’re seeing in the industry. Right now, we’re struggling with volatile market pricing, upskilling and retaining our workforce, and attracting new and diverse talent. It’s really important that we have a data strategy that addresses these challenges and allows us to meet our business objectives.

With that in mind, I think there are three things the industry needs to focus on with data. First, standardization needs to improve so that we can reduce the time we spend engineering data and increase the time we spend analyzing data. Second, we need to invest in innovating machine learning and artificial intelligence methods so that they can fit with more industry-centric datasets and workflows. And third, we must improve the efficacy of our data-modeling methods so that they can give us a more comprehensive understanding of our operations.

Eric Hambly, Executive VP at Murphy Oil, put it best in some of his townhall presentations: As an industry, if we don’t learn to adapt our strategies toward data, we’re going to go extinct. There’s no in-between.

Stepping back to a broader topic, we’ve seen the industry significantly increase its adoption of digital technologies in recent years. What kind of value has Murphy Oil derived from digitalization? Can you provide some examples of the benefits you’ve seen?

The industry has undergone a shift in recent years, with more widespread adoption of digital technologies. Murphy is working to leverage this digitalization to enhance our operations, and that goes back to data: In order to really get the most value out of digitalization, we have to harness the power of our data as best as we can.

My vision for innovation to scale up efficiency in a digital future is reflected in many initiatives we have at Murphy, such as enabling a procedure to store data under different tags by classifying via fuzzy logic. I also spearheaded an initiative to digitize our Safety Observation Program, which has revolutionized our safety workflow, in my opinion. The initiative also enabled the digitalization of our onshore operations through our Integrated Operations Platform program, and I’ve supported the launch of the Murphy Labs Apps store, which integrates multidisciplinary data with transparency to drive real-time analytics.

Right now, I’m focused on the integration of digital solutions like machine learning and data processing. Overseeing drilling and completions means that safety must be at the forefront of any initiative we undertake, and our approach ensures that we’re all working as one unified team.

Do you see the industry embracing the digital mindset as much as it needs to?

Embracing technology is an ongoing process, and leaders across the industry have started realizing the benefits of adopting technology and modernizing their processes. At Murphy, we recently implemented a structure to adopt technology and drive innovation. Our organization has become more responsive to shifts in the digital landscape by adopting machine learning, cloud computing and robotic process automation. By adopting all of that, we’re driving value for our shareholders and producing more sustainable operational practices.

The industry is focused on more data-driven decisions and supporting more controlled risk experimentation – which leads to incremental improvement – versus the more transformational changes that come from pure innovation. This commitment to long-term continuous improvement, with regular assessments and refinements to our protocols, will help us evolve regardless of the volatility of the pricing markets.

However, without standardization across the industry, I think we’re going to be challenged to embrace the digital landscape in ways that benefit more than just our company.

There are several examples where we’ve faced this type of challenge. In 2019, we created a software program called the Global Downtime Report that measures NPT related to drilling, completions and production operations. It was something we came up with while we were assessing existing workflows and tools across our assets at the time. We saw that there was a need for a consistent visualization of NPT to help us identify areas of concern and improve operational downtime.

We had another project where we created a digital app for our Safety Observational Tool. The tool collects and processes safety observations in real time from our employees and contractors, analyzes that data and converts it into various graphs and visuals that can help us identify hazards, predict trends, take corrective action and reinforce desirable behaviors.

The app is available on everyone’s cell phones and tablets, so that can really help us speed up the collection of safety data. If someone spots a hazard in the field, they can put that information into the app and give specific details like the date and time of the hazard, the equipment being used, the rig, the vendor, the location.

Then there’s the proposed framework we have for normalizing tags for completions data with no standard naming convention, categorization or tracking method. We complete our onshore wells through multistage horizontal hydraulic fracturing. A typical well will have between 20 to 40 stages, and the data set we compile for each well is comprised of one Excel file for each stage. Each stage has time series data for around 150 tags. With more than 18,000 stages executed, that’s more than 2.5 million tags. That’s a lot of tags.

On top of that, the data quality within each Excel file is inconsistent. Some tags are referenced differently from well to well, and this can cause large variances in the data set. That makes it impossible to run any meaningful analytics on our completions data. So, we’ve been working to drive adoption of a standardized tagging framework with our service partners.

Are there any other innovations you’d like to see around completions?

I would say that we’ve been innovating our completions onshore at Murphy. With respect to unconventionals, the majority of our CAPEX lies within completions, and we’ve seen large production gains with easily executable optimizations.

In 2023, we implemented a real-time perforation optimization that was spurred by the high treating pressures we saw when pumping 90% recycled produced water in our Tupper Montney asset. This led to record production levels for us in Canada.

I’m also optimistic about refracs. We’ve had tremendous success re-entering and pumping our optimized frac designs on parent wells as part of our development program. It’s remarkable that we’re outperforming initial production rates on wells that have been producing for over a decade.

Looking to the future, I think there is more we can do to leverage data from existing wells. In the Eagle Ford, we have nearly 1,000 wells drilled and completed, totaling more than 1.925 million ft of laterals. In some of that footage, we have permanent fiber optics installed along the wellbore – now that’s big data!

You’ve spoken in the past about the importance of oil and gas evolving in the ESG space. What steps do you think the industry needs to take to further that evolution?

At Murphy, we’re fortunate to be able to experiment with various methods that allow us to learn and adapt quickly in this space. Building on our successful displacement of diesel with natural gas on both rigs and frac fleets, we’re now piloting additives and even hydrogen in our onshore business. When these pilots are successful, we can easily translate any learnings into offshore.

On top of that, we’re continuing to reduce our water intensity through the creation of an onshore water management app that allows transparency of the full water lifecycle.

As an operator, what do you think of the investments drillers have made in emissions reduction technologies like battery energy storage systems?

There have been strides on that front. We’re constantly challenging our service partners to innovate within this space, and we’ll support that innovation through a variety of pilot programs and partnerships. Regarding battery storage systems, Murphy is going to begin utilizing those in our onshore drilling program starting in 2024. Focusing on Scope 1 emissions, specifically power management, we feel there are quick wins that are easy to implement, and we’re continuing to trial technologies that will further reduce our carbon footprint.

The recruitment and retention of young talent hat been identified as one of the key factors in helping the industry sustain its future in the long term. What can the industry do better to help bring them into the fold and keep them here?

I can say from Murphy’s perspective, all of our departments, including drilling and completions, are invested in workforce training, rotational development programs and one-on-one mentorships to support our business strategy. Our teams are designed to attract and retain top talent, both in the office and in the field. We want to empower employees at all levels and foster leadership opportunities. Now, we’re embracing technology to automate routine tasks, but this will allow our skilled workforce to focus on more complex activities.

In summer 2023, our D&C and subsurface teams collaborated by hiring two data science interns through the Murphy Internship Program. One participant was a PhD student studying medical data science. This person had zero energy industry experience coming in, but in just 10 weeks they were able to solve a complex data challenge associated with fiber in horizontal onshore wells. I think collaborations like this highlight the potential of an important new pipeline of workers.

We need to promote diversity across all backgrounds, including but not limited to field of study and experience, gender, race, ethnicity and more. Diversity is key to helping us innovate and solve complex problems, so we’re constantly working to bring talented individuals into our industry and retain them. DC