Case Study
Underperforming Division of a $14 Billion Upstream Natural Gas Producer Achieves Increased Extraction, Delivering on Revenue and Shareholder Commitments
$60M
Gain in Well Revenue
Strategic Imperative
To achieve revenue and profit commitments to shareholders by accelerating the productive development of new wells to meet aggressive production targets and reduce overall unit costs
Client Background
- Major North American natural gas producer created through the merger of two large energy companies
- Underperforming upstream division was responsible for accelerating new-well development and extraction performance
- Rapid growth required fast assembly of field operations and rig management positions across an asset-intensive operating environment
- Increasing natural gas prices heightened the need to capture production upside while maintaining strict unit-cost control
- Leadership needed to meet revenue and profit commitments to shareholders through stronger production execution
- Post-merger business-unit integration was ineffective, leaving production standards, cost standards, and operating accountabilities misaligned
Key Issues & Barriers
- Post-merger business-unit integration was deemed “ineffective” and failed to establish consistent operating expectations across field and support organizations
- Management accountabilities were unclear, limiting ownership for production targets, cost control, and field execution
- Production standards and unit-cost standards were not aligned, weakening trade-off decisions across well development
- Metrics did not provide effective visibility into production performance, support-function effectiveness, or unit-cost drivers
- Management cadence was not scheduled around production priorities, contributing to underperformance in operations and support functions
- Internal talent development could not keep pace with rapid demand for field operations and rig management roles
Key Implementation Components
- Aligned organizational accountabilities across field operations, rig management, and support functions to clarify ownership for production and cost outcomes
- Translated production and unit-cost standards into position-level expectations for well operators, supervisors, and support leaders
- Established direct and support position-specific best practices to improve consistency in well development and extraction execution
- Implemented an effective System for Managing with production-oriented routines, performance reviews, and corrective-action ownership
- Developed expert models for well operators and supervisors to standardize role expectations, behaviors, and field execution standards
- Designed and implemented talent development methods enabling rapid assembly of key field operations and rig management positions
Benefits & Results
$60M
Gain in Well Revenue
3%
Daily Production Increase
22%
Cycle Time Reduction
10%
Overall Unit Cost Reduction