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Data Mining:
Unlocking the Intelligence in Your Data
Marlon B. Williams, CPA, ACDA Partner, IT Advisory Services | Weaver Brian J. Thomas, CISA, CISSP Partner-in-Charge, IT Advisory Services | Weaver
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Today’s Agenda
Big Data – What is it?
Data Mining at a Glance
Why the Oil & Gas Industry Needs Data Mining
Know Your Tools
Next Steps & Final Thought
Questions & Answers
BIG DATA
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What is Big Data
Wikipedia says:
“A collection of data sets so large that it becomes difficult to process using traditional data processing applications.” Marlon says:
“So much data that it freezes Microsoft Excel.”
Data is produced from all parts of a company
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What is Big Data
A company
generates
multiple sources
of data
It’s not
uncommon for
each data
source to have
50,000+ lines
What is Big Data
•
Having large amounts
of raw data does not
necessarily translate to
effective
decision-making
•
Interpretation is key,
and this is where data
mining shines
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Data Mining at a Glance
Output is usable data:
Reveals correlations and patterns
to support decision making
Process and interpret the data using: • Software – ACL • Scripts and formulas • Industry statistics • Artificial intelligence • Database management • Accounting knowledge JIB Reports Vendor Data LOS Reports
Start with large amounts of disparate, raw data
from different sources
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Data Mining at a Glance
Manual Sampling
– See only part of the picture
•
Eyeball large reports
•
Make decision based on
small parts of the data
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Constrained by time
Automated
– See the full picture
•
Leverage all of the data
•
Combine data from all parts
of the company
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Better data in less time
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Analytics that are customized to your processes
Oil & Gas Industry:
Prime Candidate for Data Mining
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8-9% average profit margins
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High risks per project
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Geographically dispersed
operations
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Multiple service providers and
subcontractors
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Joint interest billings
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An abundance of disparate
data:
–
AFE
–
Cost by well
–
Production by well
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Supplier Side
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Are you getting paid in a
timely manner?
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Are you billing completely
and accurately—to
contract terms and
capturing all services?
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Are you overpaying your
employees and
contractors?
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Do you know who your most
profitable customers are?
Production Side
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Are you leveraging
production statistics to
produce most efficiently?
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Are you being charged
correctly by your vendors?
•
Are you paying invoices
twice?
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What about fraud? Would
you know if kickbacks were
happening?
Oil & Gas Industry:
Prime Candidate for Data Mining
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JIB Reporting:
Sample Cost Questions
JIB Reporting:
Sample Cost Questions
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Well Costs
– Do costs to production vary from expectations?
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Vendor Costs
– Do vendors charge for the same price for similar services? – Have new vendors been
properly vetted? – Production trend analysis by
various drivers: cost to barrel, MCF by well, region, location, project, etc.
– Looking at trends within production against geologists’ reports; pinpoint non-productive elements
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Well Costs
– Do costs to production vary from expectations?
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Vendor Costs
– Do vendors charge for the same price for similar services? – Have new vendors been
properly vetted? – Production trend analysis by
various drivers: cost to barrel, MCF by well, region, location, project, etc.
– Looking at trends within production against geologists’ reports; pinpoint non-productive elements
Oil & Gas Industry:
Prime Candidate for Data Mining
JIB Reporting:
Sample Cost Questions
JIB Reporting:
Sample Cost Questions
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Transportation Costs
– Analyze trends within the costs to better explain truck tickets – Is it cost effective to develop
your own disposal well?
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Production Costs
– Volume vs. sales – are there discrepancies that may point to a significant shrinkage problem that needs to be investigated?
– Timing of production – can we maximize efficiencies? – Should we convert from
electric compressors to natural gas?
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Transportation Costs
– Analyze trends within the costs to better explain truck tickets – Is it cost effective to develop
your own disposal well?
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Production Costs
– Volume vs. sales – are there discrepancies that may point to a significant shrinkage problem that needs to be investigated?
– Timing of production – can we maximize efficiencies? – Should we convert from
electric compressors to natural gas?
Oil & Gas Industry:
Prime Candidate for Data Mining
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Outliers Reveal Patterns
Oil & Gas Industry:
Prime Candidate for Data Mining
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Know Your Tools
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Excel vs. Other Tools
–
Excel is good to a point
–
Maxes out, freezes up
–
One changed formula has domino
effect
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Data mining tools
–
Made for very large data sets
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Sophisticated data analysis
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Custom queries that are
repeatable and reliable
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Next Steps
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Know your data
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If you don’t know your data, you
will not develop a successful
program
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Key points to consider in
designing a successful program:
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Develop a plan
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Identify the risks
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Determine your stakeholders
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Determine the tool and who will
implement the tool
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Final thought:
Mining your company’s data can
unlock key information
to reduce risks and
improve your bottom line
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Questions & Answers
Marlon B. Williams, CPA, ACDA
Partner, IT Advisory Services WeaverDirect: 972.448.6919 Marlon.Williams@Weaver.com
Brian Thomas, CISA, CISSP
Partner-in-Charge, IT Advisory Services WeaverDirect: 832.320.3280 Brian.Thomas@Weaver.com
