Continuing PwC’s series of papers on lowering the breakeven point, this paper focuses on the challenge of managing bulk logistics – and how improving these processes can help drive significant LOE reduction.
The wide commercially-viable application of hydraulic fracturing in the last 15-20 years has driven a dramatic increase in water and sand demand. That increase in demand has been accompanied by four critical issues:
The sheer volume of transactions overwhelmed operators in the initial shale boom and has the potential to do so again with the recent uptick in activity. From the callout of a truck, to updates on status, and ultimately paper tickets and matching of invoices– a manual-only process can lead to overpayments and higher low valueadd administrative costs. From the truckers’ standpoint, these processes often lead to delayed payments and cash management challenges—automating and speeding up this process is truly a win/win proposition.
Establish commodity-focused teams consisting of completions, operations, logistics, procurement, accounts payable, and IT to effectively coordinate all activities relating to bulk logistics management from contracting with trucking companies to paying invoices.
Principal, PwC US
Director, PwC US