Archive Monthly Archives: August 2010

Nine Mistakes People Make When Selecting Oil & Gas Software – Part 1

Earlier I wrote 10 steps for choosing your oil and gas software. On a spin of that, I’d like to tell you nine mistakes to avoid when choosing what oil and gas software you need for your company.

1. They didn’t figure out beforehand what they wanted the software to do. This seems like a no-brainer mistake that you wouldn’t dream of doing yourself. Unfortunately, all too many companies make this mistake by not creating a specific list of what they want/need the software to do. selecting oil and gas softwareIt’s easy to get lured into the marketing hype of a product because it appears to easily solve the problem that is clearly causing you such grief. But buying a product without making sure it actually fits your business can end up causing you more headache than necessary.

2. They purchase a product based on price and not based on needs. You don’t need to tell me today how important cost is in the business equation today. I, too, read the news and understand how bleak the economy can appear. But in reality, the lowest price doesn’t always mean the best solution. Understanding your budget is an important part of the software-buying process. But being able to evaluate a product that can boost your bottom line without bankrupting you is equally important. Make sure that you don’t purchase solely because it’s the lowest or even highest price. Make sure you’re getting your money’s worth for what you need the product to do. Investments pay off in the future if they’re made wisely.

3. They didn’t get any one else’s opinion on the software. Of course software vendors are always going to think and tell you they are the best product available. That doesn’t mean you should jump in head first and purchase. Find out what other clients have to say about the staff, product and service. Get references from the company, read testimonials from real clients and talk to people in the industry to see what they think and have heard as well.

4. They don’t see (physically) how the software can work for their business. It’s important that you can visualize using the software in your office before making your decision. View the software with a trained representative, so you can see firsthand how the software works. You want to work with real person so you can ask questions and have them demonstrate scenarios that you’ll need on a day-to-day basis. Viewing a demonstration on your own time, in your office alone, will invariably lead to frustration and confusion without first having knowledge of how the software works.

5. They have too many people involved in the selection process. I’m sure you’ve heard the saying ‘Less is more,’ which is precisely the point with this common mistake. Companies often want to make sure everyone possible can be involved in choosing the best product. Too many people involved can end up causing the group to divide, and stall the decision between several products. Instead, select a smaller, targeted group of people from your company with a array of job duties who can come to a consensus.

Next post, I’ll tell you the last four mistakes companies make when choosing their software products.

Happy National Oil & Gas Appreciation Day!!

Everyone’s heard of those random holidays you swear someone made up just so they could celebrate something such as National Nothing Day on January 16, National Shrimp Scampi Day on April 29 and International Moment of Frustration Scream Day on October 12.

But did you know that today is National Petroleum Day or National Oil & Gas Appreciation Day as we’ll call it? Here are a few interesting facts about oil and gas in the United States from the United States Department of Energy Information Administration as we celebrate everything oil and gas has done for us since it’s discovery.national oil and gas appreciation day

– This week the price per barrel of oil in dollars was $72.28. Last year the price was $68.52. Ten years ago the price was $27.88

– There are 672 cups (think household measuring cups) in a oil barrel

– The first commercial oil well was drilled in Titusville, Pennsylvania.

– Signal Hill, California, had one of the most productive fields per acre the world as ever known when oil was first discovered there in the early 1920s when Shell Oil Company’s well Alamitos #1 erupted. Soon the hill was covered with hundreds of oil derricks and became known as “porcupine hill” because of its appearance from a distance.

– Last year the top crude oil-producing states were: Texas, Alaska, California, Louisiana and North Dakota

– One barrel of crude oil, when refined, produces 19 gallons of motor fuel, 10 gallons of diesel and other petroleum products such as ink, crayons, bubble gum, deodorant, CDs, tires and heart valves.

– The wellhead price of gas in May 2010, per thousand cubic feet, was $4.04. In May 2008, the price was $3.45, and 10 years ago it was $3.04.

– Twenty-five percent of the energy used in the United States came from natural gas in 2009. Natural gas is used to produce, steel, paper, glass, brick and electricity.

– A little more than 50 percent of the houses in the United States use natural gas for their main heating fuel. The top consuming natural gas states in 2008 were Texas, California, Louisiana, New York, Illinois and Florida.

Have any other interesting facts you’d like to share?

Changing Public Opinion on Oil & Gas Industry Vital to its Future

From angry politicians to a clueless public, it’s no surprise that the industry seems to have negative reactions from Americans across the country today. Now, more than ever, an important question those who support the oil and gas industry need to be answering is: How do we change the public’s perception of the oil and gas industry?

influence public opinion on the oil and gas industry“When people are angry about the high cost of gasoline they tend to consider the suppliers as their enemy. Most American consumers cannot relate the high energy prices to the inflationary policies of the government. As far as the average automobile driver is concerned, the oil companies are taking their money unfairly and putting it in their pockets. The fact that crude oil is an internationally traded commodity and that the price is determined in London, Paris, Tokyo and Beijing is lost on them. The American independent oil companies are trapped. They have little recourse against irate consumers and vindictive politicians,” writes Michael Lynch, analyst at Gerson Lehrman Group in response to a recent article in the Oil & Gas Journal noting that negative public opinion rises towards the oil and gas industry.

Lynch’s analysis reflects a growing unease the industry has faced in recent months and years, as the political landscape with a “green energy” agenda and offshore drilling mishaps have shaped the public’s opinion.

At California’s Independent Petroleum Association’s annual meeting in June, leaders announced the launching of a new web site, www.energyforcalifornia.com, as a way to get the industry’s message out.

The site includes an RSS feed of recent energy articles, quick facts about the industry, a comparison of energy prices, comparing a gallon of oil to other commodities Americans love like mochas, Coke and ketchup, energy facts and ideas for how operators and producers can get involved.

“The new message is that we are not the same as the deepwater developers. We are safe operators and we are local businesses,” wrote Gregory DL Morris in the American Oil & Gas Reporter’s July issue of the magazine, quoting California’s Independent Petroleum Associations’ director Dave Kilpatrick.

Morris also quoted Gayle Pratt, a volunteer with Central Coast Education Collaborative, who gave tips for getting the industry’s message across: 1. Make the info relevant, 2. Know your audience, 3. Provide basic facts and 4. Keep repeating your story.

What are other industry associations doing to help spread the importance and heritage of the oil and gas industry?

Here are a few of recent initiatives by state associations I found:

Independent Petroleum Association of America: has established an Academy for Petroleum Exploration, Production and Technology in Houston; sponsored the 49th Science and Engineering Fair of Houston, which the second largest fair of its kind for 7-12th graders, and more than 35,000 projects entered; facilitating energy education curriculum in Houston independent school districts; and helped launch the Global Energy Initiative with the World Affairs Council of Houston, which brings energy policy issues to students.

Kansas Independent Oil and Gas Association: focuses on public and classroom education by creating education campaigns designed to increase awareness and significance of the Kansas oil  and gas industry, as well as a public relations campaign to improve the image and credibility of the oil and gas industry.

Louisiana Oil & Gas Association: has created an iPhone app that gives oil and gas news updates, one of the first of its kind in conjunction with Apple. The organization also has presentations on its website to educated Louisianans on the Haynesville Shale.

Oklahoma Oil & Natural Gas Producers and Royalty Owners: Has created free teacher workshops, in-class presentations, videos and educational animations to educated educators and children about the industry in Oklahoma. They also have a Kids section of their website called Petroville, OK, where kids can sign up to be a safety partner and download games, coloring sheets and science fair project ideas about the industry.

–  Ohio Oil & Gas Association: Has created the Ohio Oil & Gas Energy Education Program that produces teacher workshops, scholarships, industry and workforce training, firefighting training and guest speakers in an attempt to educate Ohioans.

–  And finally, Energy Indepth, a website create by American natural gas and oil producers to educate the public on the facts and fiction on the oil and gas industry from emerging policy issues like the environment and taxes.

What are the associations and organizations that you are a member of doing to educate the public on the importance of the oil and gas industry? How can you get involved?

Author asserts Natural Gas is the future for America’s energy

Natural gas holds the future of America’s energy in its hand, asserts Robert Bryce, author and managing editor of the Energy Tribune in his latest book, Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future.

Power Hungry Book coverBryce, a keynote speaker at Kentucky’s Oil & Gas Association’s annual convention in June, boldly breaks down how promised “green” energy sources such as wind and solar power will not work for America, like energy experts and the government would like us to believe.

In Power Hungry, Bryce basis his theories on four imperatives that the energy business is policed by, and always has been. He says power density, energy density, cost and scale determine the value and future of energy sources, which is why leaving hydrocarbons such as oil, gas and coal behind, will be costly and time-consuming.

Bryce loves to use numbers and large numbers at that, to prove his points and show how data can really tell the truth in this energy battle that has become just as political as it is economical.

In his first chart of the book, in the introduction, he shows how “green” options such as wind and solar power only produced less than 25 percent of the amount of energy that Oklahoma alone did with natural gas in an entire year.

Bryce explains why natural gas and the transition then to nuclear power is the most viable energy option for the future, which is good news for gas producers nationwide, who are discovering easier, more reliable and faster ways to extract natural gas wells.

I haven’t even finished reading the book and I find it both fascinating and enlightening with how our future can look with continuing to use hydrocarbons as our energy source.

You can check out the book on Amazon here.

What do you think? Is Bryce on the right track? How does his predictions of the future bode with your businesses? Do you too think natural gas production could be the future of our energy?

Going “Green” With Your Oil & Gas Accounting Software

In the American Oil & Gas Reporter magazine’s July 2010 issue, an article was posted about how new technologies and methods reflect the oil and gas industry’s quest to reduce its drilling footprint in America.

oil & gas software goes green

“Operators, service contractors, equipment manufacturers, and major university and research laboratories are teaming to devise innovative methods to reduce the environmental footprint of onshore drilling, completion and production operations. Examples include drilling multiple horizontal or directional wells from a single pad using smaller and lighter rigs, well site and road construction using low-impact technologies, […]” writes author Al Pickett, special correspondent for the AOGR.

The phrase environmentally friendly drilling has been coined to reflect the industry’s efforts. Programs such as the Environmentally Friendly Drilling program exist to accomplish everything Pickett wrote about above, as well as control on-site waste management and to educate the public in a way to gain acceptance from the public and regulatory agencies to operate in environmentally sensitive areas, to continue producing energy with oil and gas and to create jobs, according to the Houston Advanced Research Center’s Website.

With such advances being made in the area of drilling and producing in the oil and gas industry, why should how your office operates be any different?

At SherWare we’ve come up with several ways for your office to “go green” and further reduce your footprint in the world as you complete your distributions each month with our oil and gas accounting software.

Three options are: 1) E-mail distribution and joint interest billing statements and reports to your owners instead of physically printing and mailing every one. 2) Use direct deposit to pay your investors instead of cutting and sending out checks each month. 3) In conjunction with direct deposit, we offer Online Reporting, where investors can sign on to your company’s website and download their reports, check stubs and 1099 information at any time – without you having to print anything!

E-mail investor reports & check stubs

About one billion trees worth of paper are thrown away every year in the U.S., according to Recycling Revolution. Imagine how much paper you alone could save if you decided to e-mail statements and reports to your owners and investors instead of having to print and mail them each month?

Every owner distribution statement, joint interest billing statement and owner check stub can be e-mailed to owners automatically after you close a run with any of SherWare’s software packages.

Use Direct Deposit instead of printing checks

An article written by Matylda Czarnecka on GreenTech.com suggests that up to 72 percent of employees in the U.S. receive their paycheck via direct deposit, although only 40 percent of small businesses actually offer it.

Czarnecka claims a company issuing 300 checks twice a month only via direct deposit would save 121 pounds of paper, 1,159 gallons of wastewater and 45 gallons of gas annually, and that is only for one company.

Furthermore, a study she cited found that people who use direct deposit find its environmental benefits motivating.

With the option to pay your investors via direct deposit instead of messing with checks each month, your office could not only reduce the amount of paper used, but also help to motivate others to be environmentally conscious.

After setting up your information with your bank, and collecting your investor’s banking information, the only other step you’ll have to take each month is to transmit your direct deposit  file to your bank after you close out your production period and are ready to pay investors.

Post reports online for your owners to download and print themselves

And lastly, as a way to combine the two options and remove a lot of the paperwork  at your office, our Online Reporting option allows us to create a website for your business where each owner can sign on to access their owner statements and check stubs for each month, as well as year-end 1099 reports in one location.

Gone is the headache of mailing each month’s statements, as well has having to reprint missing or lost reports for each owner. All reports are stored online for each owner to access at any time.

Combined with our direct deposit module, this option just made your distribution process a whole lot smoother, cheaper and saved a few trees in the process.

If you look at the bottom line, anytime you can reduce resources and cut down on hours needed to complete a task, you save money. It’s a win-win for your business and for the environment.

Are there any other ways we can help make how you operate your business environmentally friendly?

If you are interested in finding out more about our “green” options for our oil and gas distribution software, please sent me an e-mail or leave us a comment!

Can the Gulf Oil spill be used to help the oil & gas industry?

No one thought 2010 would be an easy year for the oil and gas industry.

With likely the most anti-oil and gas president in office, and control of both the Senate and House in the hands of Democrats, who time and time again claim the industry makes outrageous profits hurting Gulf Oil Spill - Deepwater Horizon rigthe economy and protest the ability for local operators and legislators to enforce and abide by safety regulations, those fighting for the industry knew they’d have an uphill battle to climb to keep bills off the table that restrict and hinder the energy production in America.

From legislation tackling cap and trade to fracing regulations, oil taxes and moratoria on drilling, operators and producers in every state have had to work hard to protect their businesses from environmentalist fanatics and misinformed residents.

While many states have been successful in educating the public on the merits of a productive oil and gas industry for not only the state’s economy, but the nation’s, BPs monumental Deepwater Horizon well’s explosion and consequential leak, sparked a national outrage and refueled the fire for the government to again try to push bills through that have been stalled by their opponents.

Everything from the resignation of BP’s CEO to billions of dollars of restitution and fines, and a moratorium on deepwater drilling in the Gulf has been expressed. Senators Joe Lieberman (I-Conn.) and John Kerry (D-Mass.) pushing for cap and trade legislation to control greenhouse gas emissions and in its current format, will lead to higher energy prices for consumers and businesses, are using the supposed environmental disaster of the Louisiana gulf spill to force the legislation through Congress.

But despite all the media coverage that showed 24/7 footage of oil seeping out of the well and those claiming penance be paid, what if it wasn’t such an environmental disaster as claimed?

An article on Commodity Source’s blog by Gary Thomas offers interesting insight into how un-disaster-like the Gulf oil spill appears to really be.

Here’s an excerpt of his recent post:

The hype of the media over the unproven assertion the BP oil spill was an environmental disaster brings into question their integrity, research and sources, as now that the oil spill has been contained, the amount of oil in the Gulf has been found to be minimal, and the alleged damage to the coastlines and animals far  less than originally reported and thought.

Many scientists and university professors are now calling into question whether the idea that this is really an environmental disaster is true. Facts are beginning to reveal that it isn’t even close to that.

Two examples of that as far as wildlife goes, are the total deaths of three dolphins. That’s not a misprint or guess, that’s the total count wildlife rescue teams found. And when compared with the damage from the Exxon Valdez in Alaska, the number of birds perishing has been less than one percent of that disaster.

While there has been some damage to coastlines, again, it is far less than it was thought to be, undermining the environmental disaster narrative that was assumed but never proven. Now we know it’s not true at all, when measured by the degree of hype.

Read the rest of the article here.

What do you think? Even though we are an oil and gas accounting software company, and not an operator or producer like most of you, I still can see how devastating it could be to our industry if public opinion is left unchecked and controlled by the media and government. Is there a way to sway public opinion on the importance of our industry?