Petroleum companies use state-of-the-art software and other technologies to find, drill for and produce the natural gas that fuels Alberta’s economy.
But when it comes to monitoring production from their gas wells, nearly all companies still use an antiquated and cumbersome paper-based system, says Keith Smith, president and chief executive of zed.i solutions.
“They use 40-year-old technology” to measure the well’s flow and other parameters to calculate revenues and royalties, he says.
Monitoring the security of energy supplies has become crucial in the wake of the Sept. 11 terrorist attacks in the U.S., Smith notes. “Resources in North America are going to become more and more important . . . and every gas well in Canada is critical.”
Zed.i solutions of Calgary is determined to revolutionize the way gas wells are monitored. At stake is a potential North American market worth at least $1 billion a year.
Denise Laforge, vice-president of marketing and sales, says the company’s patented Smart-Alek system is the industry’s first cost-effective, field-to-computer remote monitoring solution.
So how are the estimated 400,000-plus gas wells across North America monitored now?
More than 90 per cent of them use a mechanical flow meter with a paper chart, says Rod Heard, zed.i’s vice-president of corporate development.
This mechanical system consists of a circular-shaped chart recorder inside a small box atop each gas well. Every day, a well operator must visit each well and wind a little clock in the recorder.
The well operator puts a round piece of paper in the recorder and a couple of pens scratch out a pattern on the paper. The operator takes all the paper charts back to the field office and, based on the traced pattern, figures out how much gas is flowing from each well. The operator then mails all the charts to an independent service company, which puts each chart on an “electronic spinner” to confirm each well’s average flow rate on the day it was measured.
The information is faxed to the petroleum company’s head office, where a production accountant enters the data into a computer spreadsheet. The company can then calculate the revenue produced by each well, and the amount of royalties owing to the government.
“The Smart-Alek system,” Smith says, “does all that for you electronically, seamlessly, automatically – without human intervention.”
One of the biggest problems with mechanical charts is that no well monitoring occurs during the period between the operator’s daily visits. If a large well flowing, say, two million cubic feet of gas per day stops producing during that time – because of a plug caused by water freezing in the gas, for example – it can cost a company thousands of dollars in lost revenue.
Not so with the Smart-Alek. It is a digital flow computer with advanced analytical capabilities, wireless communications and a web-based geographical interface. The technology allows the operator to remotely program the data desired on each well, and call up the information anytime on a laptop or desktop computer via a secure Internet connection.
Smart-Alek is also equipped with alarms that instantly notify the operator, via cell-phone, pager or Personal Digital Assistant, if the well suddenly shuts down.
Smith predicts that “in three to five years, there will be no mechanical charts . . . it’s dead-end technology. They’re like typewriters.”
Companies have been slow to replace mechanical charts because the cost of alternative technologies has been too high, until now.
Laforge says a new mechanical chart costs about $3,500 per well, plus at least another $1,500 to install it.
A Smart-Alek unit retails for $6,950. Basic ongoing service support from zed.i solution’s wireless network costs an additional $80 a month.
Laforge says that over three years, if you add the costs of collecting the information daily from mechanical charts and integrating the data into a computer, Smart-Alek is the less expensive solution. “To have accurate information and to be able to know what your well is doing in terms of pressure behaviour and flow behaviour, you can pretty much optimize your production,” she adds.
Ken McDavid of Apache Canada Ltd. says the analysis from Smart-Alek enabled the company to increase gas production in one field from one million cubic feet per day to 1.3 million cubic feet. “In addition, it will allow us the ability to operate more wells with existing operators,” McDavid says.
Rob Paul of Boundary Creek Resources Ltd. says the company’s existing infrastructure was costing about $6,000 for every 15 hours of down time in between the operator’s daily visits to the wells. “With Smart-Alek (and the automatic call-out feature) . . . we can address problems within an hour.”
Each unit has its own modem and is powered by a miniature battery-equipped solar panel. The CSI-approved monitor is the only one on the market that’s also approved for installation in hazardous environments directly on the wellhead, the meter or inside a well-metering shack.
Zed.i solutions makes the Smart-Alek at its Edmonton manufacturing plant. The Canadian Stock Exchange-listed company, with about 80 employees, began about 15 years ago making downhole tools and gauges that went inside gas wells. The firm then branched out to develop surface tools and monitors.
“This is the future of the company,” Smith says.
“We want to be dominant in the market of replacing mechanical charts.”
Web Watch:
www.zedisolutions.com
