Custom Software Apps & SharePoint Consulting

Onshore Drilling and Lease Compliance

Does your company participate in onshore drilling? If so, you would probably agree that lease compliance is an ongoing issue. Onshore wells are smaller, so you have more of them, with the accompanying lease provisions that your company may or may not have a system for tracking.

If you work for a small to mid-size company, like many of our clients, you probably employ one person to manage lease compliance. He or she references data from rig reports, the land department, regulatory, etc. every week.

This person is a great at what they do, but they also represent a single point of failure. An outdated report, a miscalculated Excel equation, or the departure of this person can represent a significant risk for your company.

Eliminating the Single Point of Failure

Lease compliance and custom softwareAs we’ve highlighted in the past, like for Chesapeake Energy, lease jeopardy can be a very expensive problem for an E&P company. Even leaving out large settlements, the cost in resources for employees to gather the data and prepare for a lawsuit is a huge loss.

One way to free up employee’s time for value-add activities is to develop a custom software application that manages lease provisions. For example, since continuous drilling is often a compliance concern, the application could be a continuous drilling provision tracking system.

The landman inputs the provisions and terms of each lease. The tracking system is then pointed at the drilling data system. As a result, the lease provisions and actual drilling dates are tied together in the database.

When a violation to those provisions occurs, the system can automatically flag this. By contrast, using the old system of a single person and an Excel spreadsheet, this violation might have remained buried in a spreadsheet until the landowner decided to sue.

Streamlined Lease Compliance Reporting

In addition to money saved due to averted lawsuits, the time saved by your landman is not insignificant. Manual reporting takes up many hours each week, and this is time spent that does not lead to better decisions or increased leaseholds.

A custom application can also match your business’ process in a way that no off-the-shelf system ever could. As your company looks to grow or be acquired, a streamlined lease compliance process is a very attractive option.

For more on automating lease compliance, check out this case study, or download our white paper, Avoiding Lease Jeopardy.


Nate Richards
Nate has over 18 years of software engineering and consulting experience. He founded Entrance in 2003. Nate is the past President of the Board of LifeHouse Houston, a Christ-centered maternity home ministry, and is past Executive committee member and Treasurer of Houston Achievement Place, a foster care and social skills training non-profit organization.
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