Oilpocalypse Now: Weathering the Storm with Integrated Project Management Samarth Jain Andrew Lavinsky

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2 Oilpocalypse Now: Weathering the Storm with Integrated Project Management Samarth Jain Andrew Lavinsky June 2, 2015 Devon Energy Center Oklahoma City, Oklahoma, USA

3 Welcome 3

4 Agenda Business Context Importance of PPM PMO focus Managing the organizational portfolio Drilling operations focus Driving performance in the oil field Q&A 4

5 Performance Challenge State of Oil & Gas Industry Importance of improving operational performance 1. Pricing pressures 2. Increased complexity of operations, 3. Rising costs 4. Increased risks All of this combined make efficiency more important then ever!!

6 Introduction Energy companies are not meeting their own targets for project delivery Business insight, decision making and IT support need improvement Data and analytics are needed to compare estimates on past projects, review variances and analyze causes Effective capital project delivery is critical to high performance

7 PMO History Incorporated a portfolio change focusing on business and technology projects ~ 28 PMs 2 Portfolios: ~ 110MM Capital program support embedded, 33% PMO PM s focused on business projects ~ 40 PMs 3 Portfolios: ~ 121MM Pre-2013 January 2013 June 2014 April 2015 Primarily an IT PMO managing IT projects ~ 17 PMs 2 Portfolios: ~ 50MM Support of large scale capital programs ~ 51 PMs 4 Portfolios: ~ 145MM 7

8 Best in Class Portfolio Execution Excellence High rate-of-return projects Exceptional safety results Significant inventory in core areas Technical excellence Optimize the base Operational excellence Continually high-grade Project management Aligned support functions Excellent Financial Position Top Quartile Share Price Performance Optimize cash flow Disciplined capital allocation Strong balance sheet Maintain financial flexibility

9 Agenda Business Context Importance of PPM PMO focus Managing the organizational portfolio Drilling operations focus Driving performance in the oil field Q&A 9

10 Past Fragmented Tools & Processes Lack of Integration

11 Present Integrated Capabilities

12 Capabilities Enabled Workflow Automated Stage Gate Process Drives Approvals, Consistency and Governance Resource Management ERP, Capacity, Demand, Assignments, Commitments, Utilization, and Time Tracking (CATS Integrated) Schedules / Work Mgmt Project Manager owns tasks and delivery (Team Members may optionally have assignments) Microsoft & UMT Platform Integrated, scalable architecture Collaboration Sites Entire Project Team has access for collaboration on deliverables, tracking of issues, and risks Project Management Automated Status Reporting of Details, Health, Activities, Issues, Risks Portfolio Center Consolidated project portfolio management functionality visible to all PMs and Leadership Financials Budget Cost Planning, Appropriations Requests, Change Request, and Accounting Periods Supported

13 Agenda Business Context Importance of PPM PMO focus Managing the organizational portfolio Drilling operations focus Driving performance in the oil field Q&A 13

14 Business Problem Disparate disconnected repositories Lack of standardization inhibits continuous improvement Wasted time gathering data and documents Slower ramp-up when staff change BU s Difficult to proactively measure overall plan & cost / schedule performance Limited view of the end-to-end well lifecycle

15 Enable project management process and toolset to improve coordination and performance of operations in well planning and execution Performance Enhance performance, become more effective at performing well operations Improve efficiencies and minimize waste associated with uncoordinated operations and rigs suffering unnecessary down time Consistent & common approach for managing well delivery Common toolset Standardization Transparency Enable transparency to program & rig schedules and improve consistency for planning and meeting schedules Better insight for decision making 15

16 Solution Project Management Portal Centralized platform to enable transparency and reporting Integrated Program Schedules by drilling rig Project Planning to improve schedule estimates Cost Estimation to enable budget planning and tracking Issues & Risk Management support identification, evaluation and mitigation Scope Management enable visibility and governance to manage changes to program scope Task Management enable communication of task progress by execution team members Reporting & Data Integration Schedule Reports provide detailed insight into schedule activities for each well, enable different views Earned Value enable CPI & SPI calculations across the well delivery lifecycle; understand performance relative to plan Integration interface to existing operational systems to minimize inefficiencies in the process

17 E&P Solution Summary Functionality Schedule Reports Ability to report on schedule across different functions or disciplines. Flexible reporting framework allows unique perspectives based on needs of the program. Key Decision(s): How are we doing in all the activities leading up to Rig arrival? Ensure on-time execution

18 E&P Solution Summary Functionality Timeline Reports Visual representation of rig, pad and work crew schedule and status of each well. High level management report. Key Decision(s): Understand status of wells and identify wells that may be at risk of delays Drives management visibility and discussion

19 E&P Solution Summary Functionality Earned Value Reports & Metrics leverage earned value methodology to monitor health of programs and estimate future cost and timeline CPI and SPI calculations for each activity Utilize CPI and SPI calculations to estimate future costs and durations of same activities Enable Planned vs. Field Estimate comparisons Understand CPI and SPI variances for programs, well types and disciplines

20 PPM Across the Enterprise Summary Business Objectives Information Technology Exploration & Production IT Projects & Programs Business Initiatives Oilfield Operations Implement Standardized & Simplified Processes Enable Common & Integrated toolset Ensure Data Governance & Standardization Enable Budget Approval Process Better insight to Cost & Schedule performance Better manage Business and IT resources Improve planning and execution consistency Improve portfolio planning horizon Improve KPI s of Initiatives Better coordination Increase performance of well operations

21 PPM Across the Enterprise Summary Capabilities Enabled Information Technology IT Projects & Programs Opportunity Management Portfolio Management Business Initiatives Exploration & Production Financial Estimation, Budgeting and Tracking Project Schedule Management Resource Management Task & Schedule Tracking Oilfield Operations Rig & Facilities Scheduling Rig & Crew Management Issue, Risk, Scope Change Management and Team Collaboration Integration to operational systems (SAP, Well Management, and more)

22 Thank You 22