Advances in Remote Monitoring Make Technology Available to Smaller Operators

This article appeared in the December 2009 edition of the Fort Worth Basin Oil and Gas magazine

The well site of the future may feature valves, pipe sections, flow meters and other pieces of equipment that come from the manufacturer embedded with electronic sensors to facilitate remote monitoring. Or perhaps the site will be equipped with video monitoring, with the pictures transmitted back to the pumper or company engineer via digital radio signals, much like basic digital data is transmitted today from some well sites.

These are some of the technological advances that experts with companies who provide remote monitoring services think may be on the horizon. But even the remote monitoring technology available today is a huge leap forward from just a few years ago, with costs dropping so that some form of remote monitoring is probably economical even for smaller, independent producers.

Supervisory control and data acquisition, or SCADA, systems have been used by large companies for years, but typically required an in-house information technology (IT) staff and installation of a proprietary communications network to relay the information between the well site and company offices. SCADA computer systems normally work two ways – they can both monitor and control sites remotely. The original, large SCADA systems also were costly to install and maintain.

However, advancing technology is making SCADA and other types of remote monitoring systems more user-friendly, easier to implement and less expensive.

“A lot of the independent operators of today received their initial training right out of school working with a major oil company. Many of them are familiar with SCADA systems, but they often thought it cost multiple millions of dollars, required huge staff and a bank of computers,” said Greg Scoggins, vice president of sales and marketing for Wellkeeper Inc. (www.wellkeeper.com), which offers remote monitoring systems designed to meet the budgets and needs of small to medium-sized companies. “Only recently has remote monitoring become affordable for smaller, independent operators to do the same thing.”

One advancement that makes installation of remote monitoring systems less difficult is the ability to use wireless sensors on a well site. Sensors must be attached to each piece of equipment that needs to be monitored, such as a tank being monitored for the fluid level inside. Previously, the sensors were connected to the monitoring system by wires.

"You would have to hard-wire the sensors, which required digging a trench, laying conduit, it was very expensive. Now, you just mount the sensors and they wirelessly transmit the information back to the controller. That’s a much easier, cost-effective way of installing a system.”

New technology also allows the equipment on often remote well sites to use less power so it is frequently possible for it to operate on a solar-powered battery, which also reduces costs. Advances in communications equipment and technology are also reducing costs. The data must be transmitted back to a receiver at an office or other location via some type of communications technology. In the past, about the only choice was for companies to set up proprietary radio systems to relay the data from often far-flung well sites. These days, consumer digital cellular telephone and data networks have spread to even remote parts of the United States, and those cellular networks can be used to transmit data from the well site.

“Basically, you’re riding the back of the consumer network, which has expanded as more and more cell phones get out there,” Scoggins said. “There’s still a few dead spots out there, but we’ve found that, even where your cell phone doesn’t work, you can put a fixed 20-foot tower antenna and still get very good coverage

Also, for those who still use radio systems, that technology continues to improve so that larger and larger amounts of data can be transmitted, such as video signals.

Most remote monitoring systems offer at least one-way communications, bringing information from the well site back to a central office or computer. For example, the Wellkeeper production data gathering system offers one-way monitoring of such things as oil tanks, water tanks, electronic flow meters, turbine meters, compressor, pump off controllers (POCs), programmable logic controllers (PLCs), tubing and casing pressure, and plunger lift systems. With a compressor, for example, typically the system will monitor discharge or suction pressure and vibration, which helps tell whether the compressor is running or not. Wellkeeper is also starting to offer some two-way systems, where some of the devices in the field can be controlled through the system from the office or computer.

“For example, we could open and close a valve on a plunger lift system,” said Scoggins. “You could turn a pump on or off remotely – that’s something new that will be really useful to small operators, especially for wells that are somewhat remote and take a bit longer to travel to.”

Remote monitoring systems allow pumpers in the field to prioritize their work day, taking care of the more important needs first and saving on driving time, as well.

“The traditional way of monitoring a field is to send pumpers out every day to collect the data, bring all the information back to the office and manually enter it into some report. So they wouldn’t know if a well was down or not until they actually got out there and looked at it and personally visited the site. With the technology we have now, it allows you to automatically monitor the production battery. You’re able to access all this data and look at several hundred wells to determine which to visit first.”

Wellkeeper’s Scoggins added that having information about a problem before travelling to a site can help with planning ahead for such things as what personnel and equipment will be needed to repair the problem.

“They may need a specialist or company that does a special type of work, which they wouldn’t know until arrival at the location without something like Wellkeeper,” Scoggins said.

In addition, remote monitoring systems can allow pumpers to visit sites less often.

“We see a fair number of companies that have moved back to an every-other-day or a get-it-as-you-can philosophy and then solve the most important problems first,” Scoggins said. “They still want the well site visited several times a week, but they don’t have to go every day. They are fine with going to the problem areas first, instead of just driving a pre-determined route. They are dealing with the mission critical issues first. This can help save money by saving on fuel, truck maintenance and the amount of people it takes to adequately look after a field. You’re able to have existing pumpers handle more wells more effectively and productively.”

Remote monitoring can also help improve the work field personnel can do on site.

“When a pumper goes out to the site, instead of taking measurements, the measurements are already taken and the pumper can spend his time trying to improve the site, doing maintenance, etc. For example, they see that a level has been dropping 10 percent in the past month and try to see what’s happening with that.”

For example, Deanna Poindexter, district engineer for Range Resources’ New Mexico assets, uses Wellkeeper’s one-way remote monitoring system. Via the Internet on her computer in her office in downtown Fort Worth, she can monitor approximately 125 well sites located a five-hour drive away. At the same time, Range’s field staff in the New Mexico area can use the system to monitor sites from their offices or via laptop computers in their vehicles. Poindexter said she and her pumpers out in the field access the Wellkeeper system every morning via the Internet on their computers, where they can review data together as they talk.

“A lot of times, as I’m sitting here in Fort Worth talking to them in Eunice, New Mexico, for example, they’re on their laptops looking at Wellkeeper and saying ‘it looks like I’ve got a problem on this well, that’s where I’m going first.’ So they’re able to prioritize what their daily needs are. Also, if they get an alarm on a tank level that’s getting too high, if it’s too close for comfort, they can go straight out there, address the problem and save us from any incidences or problems on location. The technology is great. We find it to be cost effective, it promotes efficiencies in the field. And anytime you can prevent a spill from taking place, you’ve saved thousands of dollars in cleanup costs.

“Previously, we had a lower level of monitoring,” Poindexter continued. “But it was simpler. Should a tank alarm go off, a phone call was made to a pumper’s cell phone, and all he could see was that an alarm was going off, he couldn’t see the cause behind it or exactly what was going on. He couldn’t see tank levels of anything else related to the battery location. So bringing in Wellkeeper upgraded those abilities, provided the pumpers with more insight into what’s taking place on location, what’s causing the alarm and gives them remote access to the alarm so they can address problems right from their laptops.”

Range also uses remote monitoring in its Hartville, Ohio-based operations. They have more than 800 electronic flow meters installed covering about 80 percent of production. They use barcode technology to read production rates. Six people in the Hartville Gas Measuring Department are responsible for tracking gas sales from more than 10,000 wells in the Appalachian basin, including new wells being drilled in the Marcellus and the Nora fields.

"Even with remote monitoring, we still have a big job,” according to Range’s Mike McLaughlin, who works in the Hartville operation. “We have an electronic alarm system that notifies us of well issues such as low flow or high pressure. It’s not unusual for me to receive 50 or more notifications in a given 24-hour period.

“I think of the Gas Measuring Department as a liaison between operations and accounting,” McLaughlin continued. “We gather the data and help interpret it so that revenue accounting can pay the royalty owners. In the Marcellus, production of liquids such as propane, butane and pentane are significant and add to the challenge. We need to be able to break down the production to the component level. New software is helping us with this task.”

Most remote monitoring systems today provide access to information via the Internet, offering an array of graphs, charts and statistics.

"People want to monitor everything. We live in such an information rich world that people expect all this data coming into them. They know the information is out there on the site and they can have the data coming in for them to monitor, to be able to improve their operation. You can’t improve what you can’t measure. This allows them to measure things, to tweak different sites, try new ways of improving their operation, to improve their margins. We see our clients getting this information and coming up with more sophisticated models of how they analyze the information to improve efficiency. You can have a constant reading of data and you can look at sites over a period of time and do comparative analysis between sites, maybe different operators at the site, to see who is doing a better job of operating the site.”

Of course, all of this new technology requires some training so that workers can learn to use it. Vendors usually include training with their particular remote monitoring application system and the systems continue to become more user-friendly.

“One nice thing about Wellkeeper is it’s very intuitive from the get go,” Range’s Poindexter said. “Our field staff had an introductory training session conducted by Wellkeeper, to the Web site, to the technology, to the capabilities of it, and how each pumper could customize his view of what he was seeing to suit his individual needs. From there, they were turned loose with it and allowed to use it to really optimize their daily routines.”

For those “old school” industry folks who are not yet comfortable using computers, most systems can set up alarms to be forwarded to a cell phone as a text message, for example. Or they can get an office assistant to fax the reports to them.

“Many pumpers have been faxing in reports for a long time, so they have a fax machine in their office or home,” explained Wellkeeper’s Scoggins. “They can have someone else in the office who is more tech savvy actually fax the reports or charts to them (taken off the Wellkeeper Web site). They come in first thing in the morning, pull up each well, print and fax them. That’s one way to work around it.”

And how much does all of this cost? Wellkeeper estimates, for example, that installing its remote monitoring system on an oil tank and a water tank would cost under $5,000, plus a monthly fee of about $75, depending upon how frequently a customer wants to access information.

“The longer you operate a well, the more you spread out the initial installation cost,” Scoggins pointed out. “We’re also able to group multiple locations in the same proximity together. If you monitor a group of five to 10, we’re able to lower the monthly cost even more because we can use low power wireless radios to transmit data from one well location to another that has a digital cellular communication box. We construct a hub and spoke system, where we mesh locations together into a central point.”

All of this data can be analyzed to help facilitate better and faster decision making, according to the IBM Corporation. The “intelligent oilfield” can use advanced technologies to analyze raw data and turn it into meaningful information that experts can use to improve production, reduce costs and streamline operations. For example, staff can identify which wells might benefit from pump upsizing, and which show signs of wear. Incremental production increases quickly add up and can significantly improve the output of mature fields. The applications are seemingly endless for using information to optimize oil and gas operations.

By Pamela Percival, Editor, Fort Worth Basin Oil and Gas Magazine

Implementing Remote Data Monitoring Technology in Times of Economic Crisis

Understanding the value that remote data monitoring technology can bring to an oil and gas company is fundamental to justifying a financial investment, and critical to the successful adoption of the technology. A basic dynamic that is inherent with selling any technology is the “value-point”. The value point essentially assumes that the technology delivering value to an organization is unimportant in the eyes of the buyer, and the benefits the technology delivers is the true selling point.

If the value point delivered by remote data monitoring outweighs the return on investment timeline set by the corporate and operations staff (typically 12-18 months) and the value point benefit is considered important by that organization, then the investment should be seriously considered.

A rather short-sighted argument is to not invest in remote data monitoring during an economic downturn in the oil and gas industry. An economic downturn is typically associated with the requirement of the prospective buyer to limit future spending, cut current field operating costs, and diversify offerings to mitigate losses.

Although the critical value-points are now typically shifted to cost savings, all of the value-points for remote data monitoring still exist. As such, a company evaluating remote data monitoring to address these value-points should, under the same pretext of return-on-investment and corporate prioritization, invest in the underlying system that best supports their needs.

Suffice to say, some companies looking to address economic downturns with an investment in remote data monitoring have accelerated the ROI cycle times and limited their capital budgets. These same companies have an adoption acceptance curve that has shifted to represent their new needs; however, they still have value points that demand remote data monitoring solutions.

In times of economic crisis, vendors must be conscious of the changing corporate and operational priorities of their clients, while buyers must be conscious of not losing sight of the value that remote data monitoring can bring, regardless of their current economic situation.

If the buyer has any hope the industry will eventually rebound, the best time to implement remote data monitoring is when other projects are postponed and more attention can be focused on cost-saving tools. While the breakeven point of an investment in remote data monitoring is usually months, the largest benefits will be realized when the industry returns to a robust state. By increasing production, remote data monitoring is even more valuable when commodity prices are higher. By reducing operating costs, such as spills, pumper fuel costs, pumper truck maintenance and oilfield equipment maintenance, remote data monitoring delivers an even larger impact on profitability when the costs for these things are higher.

In short, the time to invest in remote data monitoring is now. By utilizing remote data monitoring to streamline and better manage field operations today, oil and gas companies set themselves up to cash in on the benefits for years to come.

Critical Value Points for Remote Data Monitoring

There are several critical value points inherent to oil and gas field operations that are addressable through adoption of remote data monitoring technology.

Greater Quality Control to Reduce Wellsite Spills
Faster Quality Control to Reduce Wellsite Spills
Optimized Production Scheduling
Increased Production Throughput
Increase Production Yields
Reduced Production Overhead
Optimized Information Flow to and from Field Worker
Quicker Response to Field Workers
Reduced Need for Routine Wellsite Inspections
Reduced Human Errors during Daily Production Reporting
Enhanced Corporate Decision Making
Scalability to Expand Operations
Scalability to Reduce Operations
Reduced Overhead for Product Storage
Accelerated Auditing
Minimize Shrinkage
Access Real Time Inventory