Data is valuable. It can mean the difference between getting the lease or losing it to the competition. Companies that have data have a crystal ball into the future and companies that don’t can seem like they are throwing darts while wearing a blindfold. It doesn’t matter if you are part of a large company or a small company, a mineral buyer, running full title, doing supplemental or just a lease check, below are key metrics that as a land manager, you NEED to know.
1. Document Translation Cost
Pop Quiz: What does a document cost to appear in your division order title opinion after it has been pulled from the dusty courthouse by your landman and reviewed in your attorney’s office? Hint: The answer is not the $2.00 you pay to the electronic courthouse.
Often the final cost ends up higher than $100, and when you think about it, it makes sense. By the time your landman collects, interprets, organizes, adds it to the run sheet and calculates the ownership changes, he’ll have spent quite a while with that one document. A $500.00 day rate works out to $1.04 every minute. At $1.04 per minute, if your landman works with that document for just half an hour, you are already paying $31.20 for that document.
And you’re not done spending yet. When your attorney sits down with that same document, the cost goes up 5x per minute, or to approximately $5.00 per minute. Even if she spends only ten minutes finding, organizing, interpreting, adding it to the chain of title, updating the ownership spreadsheet, and drafting the document’s influence into the DTO (which would be pretty incredible), you’re still paying $80.00 in total for one document.
If you want your land department to excel, you need to know your per document cost. It is your number “1” performance indicator.
2. Documents Processed
Is your project moving as fast as you need it too? Are you often left waiting for word-of-mouth updates and excel spreadsheets? If a problem arises, can you see it and address it proactively or do you have to count on the people in the field to report it to you? If you have high-performers out there, you want them working on the hottest acreage. How many documents do your best guys run through in a day? If you don’t know, you are missing out on production.
If time is critical, you need to know your best performers. It isn’t enough to guess. On average, or over a given period, which landmen process the most instruments per day for you?
If cost-effectiveness is imperative, you should know each landman’s, or brokerage’s, day-rate to document ratio or their, Landman Cost-Performance Ratio.
Example: $500 day-rate / 20 instruments = 25 Landman Cost-Performance Ratio.
The landmen with the highest scores in these two areas (Most Documents Per Day or Landman Cost-Performance Ratio) DESERVE your business.
3. Project Projections
It is simple math. If you know how long it takes to get a document and how much it cost you to understand that document, then you can calculate more accurately your project cost & time projections. You can take the guesswork out of budgets and plan your attack on the courthouse with razor precision. Knowing who to allocate money and time to can be the difference between drilling your next gusher or watching your competition celebrate it.
Contact us to learn more about how E&P companies and Mineral Buyers are using SAAS products like Tracts to fuel their own digital revolutions.