Essential Guide to Modernizing the Land Department – Part 1

Part 1 – What Energy Companies Need to Look Like in the Future

As land leaders consider strategies to navigate current and future complexities, several business priorities are top of mind: maximizing asset base, driving data-driven decisions, and containing G&A costs. Technology thought leader and CEO of ThoughtTrace, Nick Vandivere, shares his perspective on the challenges facing land departments and how to future-proof energy companies with artificial intelligence, automation, and a single version of the truth. These approaches aim to increase business agility, reduce costs, and improve free cash flow.

When it comes to capital expenditure, generating cash flow is now more important than reserves. This shift from growth to shareholder value sets the tone for the future, yet many land teams remain reactive, making daily decisions about acreage development and site selection with poor access to reliable data, large data volumes, and manual workflows. Land teams need to shift into proactive mode, supported by technology and a data-driven culture that provides a clear view of contractual obligations and integrates business intelligence into daily processes.

The industry has not discussed enough what energy companies need to look like going forward. This blog series focuses on modernizing the land department, sharing strategies for profitability through data-driven asset optimization, achieving higher targets with existing resources, and navigating the energy transition with solutions to the "big reading problem."

Creating a Digital First Culture

Volatile commodity prices, increased emphasis on ESG, and fierce competition for acreage have created a catalyst for change. Energy companies must look very different in the future to survive and thrive. Historically, the industry responded to growth by adding people and to downturns with layoffs. The future energy company is digitally enabled and agile, empowering teams to do more without increasing headcount. The land department is at the digital center, forming a hub and spoke model for the modern oil & gas enterprise.

The new energy enterprise is managed by people who understand both land and lease complexities and the technology needed to extract value from the digital oilfield. As a new, digital-first generation of energy professionals emerges, they expect answers in minutes, not days or weeks, and do not want to be held back by outdated technology.

Creating better data is part of the solution, but building a data-driven culture that attracts progressive talent is also essential. There are two paths: one that positions oil & gas companies to excel with a lean, digitally-enabled team, and one that leaves organizations with underpowered capability—innovators versus digital laggards.

Future-Proofing with the Right Technology

Leveraging artificial intelligence to automate lease analysis, navigating big data, and extracting answers from vast land records are the new digital skillsets that can determine a company's future success. The right technology choices will future-proof the land department, enabling teams to move forward confidently with the digital capabilities and skills needed to meet evolving business and market conditions.

The energy company of the future will be able to construct elegant solutions to complex business processes and scale rapidly, such as importing 40,000 contracts in the morning and interrogating that data for answers before lunch. Software should not hinder the answers your team needs.

Getting Answers from Big Data

Both Amazon shoppers and land teams face big data challenges, needing to rapidly access, search, and present relevant results from tens of thousands or millions of records. Navigating answers about acreage should be as easy as selecting a category and filtering on criteria such as tracts, assignments, and Pugh clauses.

A key trait for future energy companies and land departments is how they ask questions of their data. Organizations need to move beyond answering one-off questions and instead train systems to continuously monitor for relevant risks. Rather than only answering questions with limited shelf life, companies should maintain a persistent line of inquiry, constantly seeking new answers about royalties, leases held by production, and other contractual obligations. This allows land teams to monitor by exception and intervene only when action is needed.

The next part of this series will explore how a digital-first culture can achieve significant rewards through asset optimization that increases revenue.

This is Part 1 of the guest blog series: Essential Guide to Modernizing the Land Department.