A Smarter Month-End Close Out
“The Lindsey team has played a vital role in Saddle Butte’s month-end close process by helping automate many of the rigorous manual processes required to validate measurement and operational data.
Through automated reporting, data comparisons, and validation processes, the team can quickly identify potential issues that could otherwise require hours of manual investigation. This includes the ability to quickly identify significant GSV swings, gravity errors, BS&W calibration issues, and other measurement anomalies.
Issues that previously required extensive manual review can now be identified in a matter of minutes, allowing operations and measurement personnel to focus on field activities. This results in a more efficient, and documented month-end process, reducing the time and effort required to prepare accurate volumes for accounting and reconciliation.”
— Harley Rangel
VP Operations
Saddle Butte Pipeline
Shared with permission.
what lindsey can do for you
Streamlining Month-End at Scale
The Lindsey team and our partner CRT Services, have worked alongside Saddle Butte to consistently complete month-end closeout within three business days. This process accounts for roughly 200 gathering LACT meters, 10 delivery meters, trucking lanes, tank inventory systems, and segment-level over/short calculations; supporting a system throughput well over 1 million barrels per month across an operational footprint spanning approximately 1500 square miles.
Since 2019, our team has supported portions of the month-end operations process including communication validation, operational reporting, and volume reconciliation activities against field sample pot witness data. Over time, as our team became more operationally integrated, we identified several opportunities to improve efficiency within the process. We suggested changes to procedures and worked alongside the implementation of field grind-out process and reporting adjustments, measurement validation, and archive reconciliation… all geared toward process optimization, reporting automation, and shortening down the verification time before the push to accounting.
Working closely with the operator, measurement personnel, and field grind-out teams, we helped streamline a number of the reporting, validation, and reconciliation procedures. Not including all of the field grind-out efforts, what was once roughly 150 labor hours per month of data comparisons and verifications has been reduced to approximately 40 hours across a small team of 3 or 4 people consisting of operations and measurement personnel. Despite the scale and complexity of the system, month-end close is now typically completed by the second or third business day of each month, while maintaining measurement accuracy averaging within +/-0.05%.
Preparation Overcomes Complexity
Month-end operations can look fairly straightforward to an outside observer. Volume, throughput, and energy reports are generated, accounting receives the numbers, and another month is entered in the books.
In reality, however, month-end closeout is one of the more complex operational activities that takes place throughout the month. This is why Lindsey is focused on working with the operator to identify data and procedure gaps, process bottlenecks, and then provide real solutions.
Behind every month-end closing report there can be hundreds (sometimes thousands) of custody transfer points, thousands of measurement records, dozens of flow computers, communications networks, SCADA systems, historians, reporting platforms, accounting systems and the teams of people responsible for ensuring each system is working correctly and working as part of the overall system. A single communication failure, missing archive record, incorrect meter factor, or bad measurement value can quickly impact inventory balances, producer statements, operational reporting, and financial reconciliation.
That is why month-end doesn’t start on the first day of the month; for us the processes start several days beforehand… though they are built on a practice of diligence and proactive validations that occur each and every day of the month preceding it.
Proactive Verifications
As month-end approaches, one of the primary objectives is validating communications across the entire measurement system. Receipt meters, delivery meters, LACT units, and other critical measurement devices are assessed to verify they are communicating properly into SCADA and the measurement reporting platform. Daily receipt and delivery report automation quickly identify and alert on locations that have stopped communicating, have missing archives, or require additional investigation.
Our solutions also have the ability to integrate data from third-party volume management and measurement systems (eXLent, AutoSol, Flowcal, etc.) into automated reporting and validation programs. Rather than relying on manual review of data from multiple systems, our team seamlessly brings that information together and applies automated checks designed to identify abnormal data. These exceptions are proactively flagged to operations and measurement personnel, allowing issues to be investigated and resolved before they become a month-end reporting problem. Sometimes the cause is a field communication outage, other times it’s a polling issue, an instrument problem, missing archive data, or a flow computer or meter that requires attention. In some cases, however, manual tickets must be generated until communications are restored. When issues are identified, they are addressed before they become reporting problems. The result is a more connected and proactive validation process without requiring the operator to replace the systems already embedded in its operation.
The goal is simple: by the time month-end processing begins, every critical measurement point is accounted for.
Field Operations to Financial Accounting
Once the calendar turns, the focus shifts from preparation to validation. This is when the deliberate collaboration of all the parties involved in the creation of innovative and solid procedures and processes pays off.
Monthly archives begin populating, reports are generated, and the team begins reviewing the data for completeness and accuracy. Every report is scrutinized for missing records, unexpected volume changes, inventory discrepancies, and any measurement value that doesn’t align with expected operating conditions. SCADA engineers, measurement personnel, field technicians, operations management, and support teams are often working in parallel—investigating issues, correcting issues, regenerating records, and validating the results before reports are sent out for the prior month.
One practice that is often overlooked is the deliberate delay of report distribution. Internal report subscriptions remain on hold until operations has confidence that the data is complete and accurate. As any discrepancies or anomalies are resolved, production reports are previewed throughout the morning. This process continues until every exception has been addressed. Only after issues are resolved, inventory balances reviewed, and leadership has signed off are the monthly reports released to internal stakeholders and external parties.
As grind outs continue to occur in the field, the measurement and reporting systems constantly update with new records that are periodically and automatically verified against flow computers, sampling systems, proving reports, BS&W calibrations, pot witness logs, and operator notes. Variances are flagged to the field and measurement teams and reconciled as quickly as possible. Once all archives are in and the field has reported completion, any substantial deviations in monthly volume between grind out and instrument estimated volume are flagged for further investigation and explanation. In many cases these issues are due to temperature or gravity fluctuations, new wells that run hot at initial production, meter factor issues, or batch timing. Despite the cause, these volume impacts to measurement are reconciled, recorded, or substantiated, prior to close out.
Practice Builds Discipline
Ultimately, month-end is about establishing confidence in the operational and measurement (cash register) data.
Operations needs confidence that the pipeline data is represented accurately. Measurement teams need confidence that custody transfer volumes are correct. Accounting needs confidence that the numbers reconcile. Management needs confidence that decisions are being made using trusted information and contract obligations are being upheld. This why we focus on providing non-subjective, defendable, accurate data support and reporting.
None of that happens automatically; it is the result of disciplined procedures that support repeatable processes, continuous system monitoring, experienced personnel, and close coordination between operations, SCADA, measurement, field technicians, and accounting. Like many aspects of industrial operations, when month-end goes smoothly, it often goes unnoticed. That’s usually the best indication that the process—and the people behind it—did exactly what they were supposed to do.