How ConocoPhillips Plots to Use Technology to Improve Production

Photo credit: ConocoPhillips

Striking oil or gas is just the first step for a company like ConocoPhillips (NYSE: COP  ) . It must then invest millions of dollars to drill each and every well to extract those resources. From there, the company must battle the natural decline in production at each well. That process forces it to invest more money just to keep up with the production drops. With returns and profitability tied to production, it's important to try to collect every additional barrel of oil or cubic feet of gas as it can from its wells.

That is why there is a plot under way at ConocoPhillips to figure out new ways to increase production. One of its latest creations is a new proprietary software that yields information enabling it to improve the production of optimized wells by more than 5%. The customized software is called the Plunger Lift Optimization Tool, or PLOT.

The software allows the company to optimize a well to its true capacity. It gathers data specifically related to Conoco's use of plunger lifts, which are installed inside a well to artificially lift accumulated fluids that are stopping the flow of gas. Conoco's software allows it to hone those lifts, as well as recognize sooner when the plunger lift might need maintenance.

A number of companies make these lifts, including Weatherford International (NYSE: WFT  ) and Lufkin, which is now part of General Electric's (NYSE: GE  ) oil and gas division. What's interesting is that neither company was able to provide Conoco with the solution it needed to make these lifts more efficient. In fact, Conoco even noted that it could not find a tool nor anyone willing to collaborate to develop one in a timely manner -- so it went solo on the work. That really shows how far a company will go to get more oil out of the ground.

That's not to say GE and Weatherford aren't interested in helping oil companies optimize and extend production. GE offers a vast portfolio of products to prolong the life of an oil and gas field. That was one of the key reasons why it purchased lift maker Lufkin. Its solutions enable enhanced recoveries that increase the return on investment for an energy company. Likewise, Weatherford offers customers a range of products and services designed to get more oil and gas out of existing wells. It also provides critical oil-field services to help optimize each well. It's important for both companies to pursue innovation in that direction, because with all the easy oil found the future of oil and gas will be fueled by increasing production from more complex reservoirs. 

Investors really have to give ConocoPhillips credit for doing whatever it can to boost production. It's embracing technology and is on the cutting edge by developing its own systems when vendors don't have what it needs. That leads me to believe that the company should not have any problems reaching its goal to grow production by 3%-5% annually.

The Only Energy Stock You Will Ever Need

With so many energy companies vying for your investment dollars it can be hard to choose just one. The good news is that The Motley Fool's analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 01, 2013, at 11:46 PM, prayaggandhi10 wrote:

    It is worth to mention here that ConocoPhillips used OVS Group and software framework it provides to successfully implement PLOT project. Out of the box capabilities OVS software provides shorten the implementation timeline for PLOT project from several years to several months and successfully put PLOT in production. Glad to see that use of OVS software as the underlying technology in PLOT is helping ConocoPhillips achieve significant production gains.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2662744, ~/Articles/ArticleHandler.aspx, 9/25/2016 11:53:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
COP $39.94 Down -1.08 -2.63%
ConocoPhillips CAPS Rating: ****
GE $29.89 Down -0.15 -0.50%
General Electric CAPS Rating: ****
WFT $5.57 Down -0.26 -4.46%
Weatherford Intern… CAPS Rating: ****