I’ve heard from several clients this year that they have gotten information from their leadership (and IT departments) that they will have the privilege of embarking on a master data management (MDM) program over the coming year. The resounding question that I heard was “What the heck is master data, and why do I care?”
What Is It?
Master data is a fairly simple concept (that gets extremely challenging in reality). Essentially, the goal is to have a single, defined source of the truth for individual data points in the business. One often used example is Working Interest on a well. In many organizations there might be several locations to get this type of data – and each location may contain an answer that is slightly different.
Most companies have several systems that house data that the business uses. You probably have a system to manage lease data (or <gasp> spreadsheets), a revenue accounting system to manage JIB, revenue decks and production allocation, a system to manage well data, and then a collection of spreadsheets, MS Access databases and post-it notes containing all sorts of other important information. This is what creates the problem that MDM helps to solve. You’ll likely find duplicate information in those different data sources, and all of it probably doesn’t match.
This presents a few problems:
- The time lost checking several places for the same (or different) data.
- The (additional) time lost trying to determine which answer is the most correct.
- The inconsistency that is created by different people finding (and using) different data to answer the same question.
The intent of MDM is for all of your systems to get key data points from the same place. So if the master data for your well names, spud dates, and APIs lives in a system like Wellview – any other system that needs that type of information will request it from there. This prevents data entry errors, stale data, and if the data is inaccurate – you only have to correct it in one place. This is important – one of the biggest contributors to data inaccuracy is data not being updated across all of the systems a company may use.
What Are the Benefits?
Having a defined master data management system in place will save time and money. Let’s look at a few key considerations:
- A standard answer to the question "Where Do I Find 'x'?"
- Less time spent looking at data that is stale or archived.
- Errors are easier to identify because the source of the data is known.
- Consistency is key (even if it is consistently incorrect).
How Is It Useful?
I can hear everyone saying, “all this is great – but what kinds of master data do we really need to create for land departments?”
The short answer: Any kind of reference data that exists in multiple places. I’ll give you a few examples that I consider to be key:
- Well Master Data (How many wells do we own interest in? When were they spud?)
- Legal Description of Leases / Wells / Units (Are the legals all structured in the same way so they can be searched easily?)
- Working Interest of Leases / Wells / Units
- Lease Data (How many acres do we have in XYZ prospect? What leases are contained in what units?)
- Production Statuses (Is our acreage producing or not? What about outside operated wells?)
- Payout Status (Have our non-consented wells reached payout? When they last updated?)
MDM not only defines where certain types of information should live, but also what is should look like. How many decimals places do you expect you working interest to be, 6 decimals or 8? A properly setup MDM system will require the precision that you define.
Who Does It Apply To?
You may be reading this article, and wondering how this might apply to you – because you are a title attorney, or a broker, or a field landman. The concepts ring true across business models, here are a few examples of situations where master data might be useful:
- Field Broker
- non-op owner
- Land Owner Contact Information
- Historical Title Information on Previous Work
- Contractor Skills Information
- Areas Where Title Opinions Have Been Rendered
- Title Opinion Data Including Standard Legal Descriptions, Work Assignments, Dates of Review)
- Customer Contact Data
- Payout Status on Non-Consent Wells
- Lease Data
- Well Production / Status Data
The next time you ask your Landman for the average working interest in a prospect, or you need to know every lease in a unit for shut-in payments – and then the Landman asks a Land Tech to assist in compiling the data – consider the source the information is coming from.
- Can you state with certainty that everyone involved will pull data from the same place?
- Will the location they pull data from be the most current? The most correct?
- Are you willing to gamble on those types of odds?
Want to Know More?
The main industry source of Master Data information is currently the Professional Petroleum Data Management (PPDM) Association. They are working to establish data models for the petroleum industry – although currently there is not a completed model for land data information.
I’m always happy to chat about data governance issues, so feel free to reach out to me through the “Contact Us” page on this website.