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2 months ago

How to Master the Financial Performance of Energy Assets

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How to Master the Financial Performance of Energy Assets

It’s no secret that the energy industry has experienced a massive shift over the past 2-3 years and there’s a new game at play. After years of volatile activity and the prioritization of production volumes, energy producers are now searching for the best ways to maximize value – prioritizing higher cash flows and more predictable returns to meet investor demands. 

We’re seeing that energy execs and finance teams know that the key to this new game is understanding and optimizing the financial performance of their assets. So, if that’s the case, why are energy producers still struggling to get the real-time data that drives strategic decisions to deliver the required returns? 

The issue is this: producers can’t win the new game with the methods from the old game. Massive paper maps, monolithic data blocks, and silos of Excel spreadsheets from separate departments are clunky and time-consuming to wield and often give inaccurate data, leading to different versions of the ‘truth’ across your teams and slow decision-making based on partial insights.

If you want to win the new game, you’re going to need new tools.

When it comes to mastering financial performance, energy producers need to be able to quickly access real-time, accurate insights that enable them to understand and ultimately, optimize their energy assets. 

Why the Old Tools Won’t Work in the New Game

Successfully transitioning into a mindset and structure that prioritizes value over volume comes down to four key areas: 

  • Knowing how to hone current asset performance
  • Identifying where to place or withdraw capital
  • Buying and divesting the right assets
  • Building investor transparency and trust 

While each of these pillars play a different role in mastering financial performance, they all require the same thing: the ability to access a unified, real-time understanding of asset performance at any time and model different scenarios. Energy execs should be able to rely on their teams to pull, assess, and report the latest production, forecast, cost, pricing, and corporate assumption data. 

Legacy tools, systems, and processes such as reserve economics tools and unwieldy excel sheets separate crucial data from each department. When it takes teams weeks or even months to gather, unite, and analyze performance insights, it’s a challenge to keep up and impossible to make timely decisions that allow execs to accurately strategically allocate scarce capital and drive optimal cash flows. As a result, companies expend valuable (and limited) time and energy dog paddling and striving to meet ad hoc investor demands, instead of looking for future opportunities. 

In order to succeed in the new era, having immediate access to the data is only half the battle—energy execs need the data to be accurate. In the past, producers have operated from the bottom-up, importing massive reserve reports from the engineering team, then performing a teardown to set up a project. This leaves huge margins for error, such as incorrect pricing assumptions, start dates, or Excel formulas, and ultimately hinders gaining accurate insights. 

The Promised Land: Winning Control Over the Numbers and Investor Trust 

We’re seeing that energy producers and their CFOs are ready to join the new game. We’re also aware that this is a new space and with unknown territory comes the hesitancy to depart from what’s familiar. 

This shift is daunting because it’s not just asking producers to change their tools—producers are being asked to create a new culture, one that is centered around financial performance. Teams now need to align and seamlessly collaborate in a single platform, rather than operating in silos. Energy execs need to be able to access in-depth scenarios and sensitivities in order to understand performance against plans and assess different future scenarios. 

However, amidst the pressure for adopting the new methods, it’s important to remember that they all point to the same goal: being able to make the strategic decisions that deliver the cash flows and returns investors demand. 

At Zeno, we know that while the goal is simple, mastering financial performance is a complex path with multiple moving parts and dependencies. We built Zeno’s Energy OS as a powerful financial performance platform that allows teams to address and navigate the complexities in a powerful, comprehensive tool. 

With that in mind, the Energy OS goes beyond giving teams the technical capabilities they need. It was created to help energy producers transition into a new era of working and thinking. 

If you’re ready to take mastering the financial performance of your energy assets, connect with our team today.

 

About Zeno Technologies

Zeno Technologies is a pioneer in helping businesses master the financial performance of their energy assets. Zeno’s Energy OS is used by energy producers, investors and partners to drive financial performance by connecting organizations through data on a common platform, building real-time insights so their businesses can exert stronger capital discipline to better deliver the positive cash flows and predictable returns investors demand. Zeno is privately held and headquartered in Austin, TX. For more information, visit www.zenotech.io.

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