Black Elk Energy specializes in increasing oil and gas production while lowering costs. To make acquired wells profitable, Black Elk needs to process reams of historical documentation; however, managing rising tides of paper was becoming increasingly difficult. To gain the same records management efficiencies with paper that it enjoyed with electronic documents stored in Microsoft SharePoint Server 2010, Black Elk deployed FileTrail for SharePoint. Black Elk has improved paper records handling efficiency by 25 percent and decreased the rate of hiring document management staff, a cost avoidance of US$100,000. Staff can more quickly mine the valuable data buried in paper files and can make newly acquired assets productive sooner. The solution has been so successful that Black Elk plans to extend the tracking capabilities of FileTrail to other physical assets, such as offshore equipment.

Situation
Formed in October 2007 by industry veteran John Hoffman with six employees and about US$1 million in seed capital, Black Elk specializes in buying oil and gas wells, primarily in the Gulf of Mexico, that are under-producing and applying capital and technology to make them profitable. By the end of 2011, the company was valued at nearly $950 million. The company also excels at maximizing value from oil and gas assets through the use of engineering and industry expertise.

While Black Elk was brimming with new oil and gas properties and projects, it was drowning in paper. With every acquisition came boxes and boxes of paper file folders that documented the assets’ history. “Some of these fields were drilled in the 1970s before computers were in common use, so many came with 30-plus years of paper documentation,” says David Cantu, Vice President of IT at Black Elk Energy. “One recent acquisition brought with it 3,500 boxes of documents.”

By moving paper files around our office faster, we can make decisions faster and ultimately realize a payback from our oil and gas investments sooner. David Cantu Vice President of IT, Black Elk Energy

Far from uninteresting historical records, these file folders contained the keys to unlocking the wells’ potential value. Although Black Elk examines land records before making an acquisition to determine a field’s recent production, it does not have access to historical data before buying, so Black Elk never knows the exact potential of a purchase until it digs into the historical records. In fact, much of its business model is based on extracting value from data that former owners have missed.

Consequently, as soon as Black Elk acquires an asset, its engineers, geoscientists, and even accounting staff clamor for these files. The problem was that every file folder needed to be inventoried first by the document control staff, which took weeks or months. Also, the document control staff recorded metadata about each file in a spreadsheet, but the spreadsheets could not be updated quickly enough to track files as they moved from department to department within the office.

“We needed to assimilate and catalog this paper-based data as fast as possible and then give 200 or so employees an easy way to access it,” Cantu says. “With our business growing and acquiring ever-larger assets that brought ever-more paper, we needed a more efficient way to manage paper records.”

Solution
In July 2010, even before the paper management problem emerged as a significant business pain point, Black Elk had implemented Microsoft SharePoint Server 2010 as its enterprise content management system. With the quickening pace of acquisitions, management had witnessed the emergence of “silos” of information in various departments, which it feared could ultimately result in redundant and inconsistent data, lack of information sharing, and an overall slowdown in the pace of business.

With its implementation of SharePoint Server, Black Elk gained a single, central information repository where data could be stored by project and searched and accessed by any authorized employee. By using SharePoint Server, Black Elk gained a cost-effective way to organize and share all electronic records.

FileTrail for SharePoint
When the company began an earnest attempt to solve its paper records management problem, it was natural to look at solutions that worked with SharePoint Server. In May 2010, Black Elk decided to select FileTrail for SharePoint (from FileTrail, a member of the Microsoft Partner Network), a software program that adds complete physical records tracking and management to SharePoint Server. With FileTrail for SharePoint, Black Elk would be able to access and manage both electronic and physical records with the same solution.

With our business growing and acquiring ever-larger assets that brought ever-more paper, we needed a more efficient way to manage paper records. David Cantu Vice President of IT, Black Elk Energy

“By using FileTrail for SharePoint, we were able to extend SharePoint Server compliance, workflow, and search tools to our paper records,” Cantu says. “Our partner FileTrail provided great support to us through the entire deployment, providing any help we needed within hours. The project went so smoothly that I never had to get involved. The whole installation took just three weeks.”

FileTrail worked with Black Elk to identify its specific records needs; create the needed metadata; assign employee access rights to each file; and apply a barcode, a color-coded label, and a radio frequency identification (RFID) tag to each physical file folder. FileTrail is also in the process of importing all of Black Elk’s 2 terabytes of existing file folder metadata into FileTrail for SharePoint.

Black Elk runs its FileTrail for SharePoint implementation on just two servers: a database server running Microsoft SQL Server 2008 data management software and a FileTrail application server, both of which run on the Windows Server 2008 R2 operating system.

Ability to Manage Physical and Electronic Records from Same System
For each existing well, lease, or acquisition in progress, Black Elk creates a SharePoint project site where it manages all electronic and physical records. When the company receives truckloads of file folders for a new acquisition, the document control staff electronically imports existing inventory spreadsheets (or creates new ones) into FileTrail for SharePoint. This makes the physical documents part of the company’s electronic document tracking system and enables Black Elk to extend search, workflows, retention policies, legal holds, and other SharePoint site functionality to these records.

FileTrail for SharePoint installs a physical item toolbar in SharePoint Server that gives employees the ability to determine paper folder contents from their PCs. When employees search for a topic, they see integrated results for both physical and electronic records. If they want to examine the contents of a file folder in detail, they can request the folder (or hundreds of folders at once) using SharePoint Server.

When the document control center receives file folder requests, staff members can quickly fulfill the requests, aided by the RFID tag and color-coded label on each folder. The document control staff uses the barcode on each folder to quickly access the files and check out the records from the File Trail system before sending the physical data to requestors.

By using FileTrail for SharePoint, we were able to extend SharePoint Server compliance, workflow, and search tools to our paper records. David Cantu Vice President of IT, Black Elk Energy

Raising Visibility with RFID
Black Elk also uses FileTrail RFID technology in SharePoint Server to simplify handling, automate tracking, and locate misplaced files quickly.

Using the SmartMobile application on a handheld RFID device, the staff can locate a misplaced folder in a room full of folders: a Geiger counter function beeps as one approaches the needed folder.

Black Elk also installed RFID sensors in doorways and ceilings throughout its office, which note when folders leave a room and capture their locations. “People don’t always comply with proper check-in and check-out procedures, and RFID helps with that,” Cantu says. “With FileTrail for SharePoint, we have a complete check-in, check-out, and history of requests and movements for every file folder we own, which is really quite amazing.”

Black Elk also extended standard SharePoint Server rights management features to its paper files (through the RFID tags) so that it can better control the security of physical folders. If a file folder that is not authorized to leave the document control center is removed from the room, an alarm goes off.

The solution has been so successful that Black Elk plans to extend it to other physical assets, such as offshore equipment. By combining SharePoint Server with RFID technology, Black Elk can extend the content management capabilities of SharePoint Server to any physical object.

Benefits
By deploying FileTrail for SharePoint, Black Elk Energy was able to extend all of its electronic content management efficiencies to its physical records. The company improved paper records handling efficiency by 25 percent and realized a document control staff salary cost avoidance of $100,000. Best of all, Black Elk employees have faster access to the valuable data buried in paper folders and can more quickly determine strategies for extracting value from new oil and gas assets.

Paper Records Handling Efficiency Increased by 25 Percent
By using FileTrail for SharePoint with SharePoint Server 2010, Black Elk is able to speed its paper records intake process, which leads to getting historical well data to the various Black Elk departments faster. “We are processing more physical records per person today than ever before,” Cantu says. “Our processing efficiency has increased by 25 percent, which means that as we grow, we don’t have to add staff in our document control area as rapidly. That’s a salary cost avoidance of $100,000 over the next one to two years.”

Our processing efficiency has increased by 25 percent, which means that as we grow, we don’t have to add staff in our document control area as rapidly… That's a salary cost avoidance of $100,000 over the next one to two years. David Cantu Vice President of IT, Black Elk Energy

Faster Access to Valuable Data
With the new system, Black Elk employees can immediately discover the contents of paper folders and access the folders themselves faster than ever before. “Now that we have a structured repository for our paper records, we can speed up our overall pace of business by giving employees faster access to needed information,” Cantu says. “Our turnaround time for information requests is easily 75 percent faster. By moving paper files around our office faster, we can make decisions faster and ultimately realize a payback from our oil and gas investments sooner.”

As an example, Cantu was recently able to create a report on all of the company’s production handling agreements, which are contracts to process other companies’ oil and gas using Black Elk drilling platforms. “In just a day or two, I was able to put together a list of every production handling agreement we have; previously, this would have taken a month,” Cantu says. “We were able to move on to analyzing those agreements to ensure that we were getting all the revenue that we were due. In this case, the ability to immediately lay our hands on needed documents translated into money in our pockets.”

At the rate that Black Elk is growing and acquiring new and larger assets, the ability to quickly track and access paper documents is critical. “In 2008, we had one offshore field, and today, we have 80-plus,” Cantu says. “It’s phenomenal that we can pull together reports on our paper files in any amount of time, especially in the amount of time we can do it today. We have very sophisticated document management capabilities for a small firm, thanks to SharePoint Server.”

Flexibility to Manage Other Physical Assets
Black Elk has had so much success in using FileTrail for SharePoint to track file folders that it is evaluating how it might use the software to track other physical assets, such as IT and offshore equipment. Cantu’s staff puts computers and satellite units on offshore platforms and, with FileTrail for SharePoint, will be able to better track them. Black Elk could also use the software to track rental equipment used on offshore platforms.

“Some of these items cost $500 a day to rent, and often no one had a good way to track them,” Cantu says. “We’ve had rented equipment sit on a platform for months with the rental bill ticking away. Now we can track these assets and return them as soon as we’re done with them. The cost savings there could be in the millions of dollars.”

Microsoft SharePoint Server 2010
Microsoft SharePoint Server 2010 is the business collaboration platform for the enterprise and the Web.

For more information about Microsoft SharePoint Server 2010, go to:
www.microsoft.com/sharepoint

For More Information
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For more information about FileTrail products and services, call (408) 289-1300 or visit the website at:
www.filetrail.com

For more information about Black Elk Energy, call (281) 598-8600 or visit the website at:
www.blackelkenergy.com