XTO Energy taps into IoT and the cloud to optimize operations and drive growth with Azure and Dynamics 365

The Permian Basin—a 90,000-square-mile mineral reservoir in western Texas and southeast New Mexico—is one of the most oil-rich locations in North America, with more drilling rigs than just about anywhere else in the world. It is also a tough environment in which to work. The climate is hot, harsh, and unforgiving, and oil wells are often spaced many miles apart, so field technicians can spend much of their day just driving from one to another. Cellular and radio reception is spotty at best, so collecting data about well conditions and performance typically involves manually writing down information. The technician must then make the long trek to the central office at the end of the day to upload the data for analysis.

But XTO Energy believes there’s a better way.

“The physical infrastructure in place in the Permian Basin doesn’t lend itself to easily collecting data,” explains Anish Patel, Permian Digitalization Manager at XTO Energy. “A lot of the equipment comes from a time when digital technology wasn’t as prevalent as it is today. We recognize the need for fundamental changes, and we see big data and analytics as the way of the future. To get there, we need to be able to access data from our field assets more efficiently and effectively. This will not only drive better business decisions, it will improve safety, sustainability, and the lives of our employees.”

Moving to the cloud and the Internet of Things

XTO Energy, a subsidiary of ExxonMobil since 2010, is an expert in unconventional oil and gas development—for example, drilling wells horizontally instead of vertically and extracting resources through hydraulic fracturing. XTO holds more than 11 million acres of land and interests in approximately 50,000 producing wells, with a presence in all major US regions that produce gas and oil. The company has a reputation for being nimble and making quick decisions.

“We’ve absolutely been an innovation driver,” says Brian Khoury, IoT and Data Architecture Supervisor at XTO Energy. “We recognize the need to further digitize and to use data as an asset that drives insights and solves problems that we couldn’t solve when information is confined to physical paper or siloed across departments. Oil and gas tends to be behind in the use of digital tools compared to other industries, so we’re working hard to be more digitally enabled and connected. Embracing the cloud is an important part of that effort because it frees us up from having to manage hardware, storage, servers—all things that aren’t our core business—and we can scale and spin up resources as needed.”

As wells become more digitally enabled, XTO wanted a method to easily capture data about its wells and aggregate it in a way that the company could take best advantage of it. “Leveraging cloud technologies allows us to gain valuable business insights by helping connect our data to the talented engineers and scientists we have across the company,” says Khoury.

The company found that Microsoft Azure provided valuable cloud solutions like Azure Databricks, Azure Data Factory, and Azure Data Lake. As XTO’s operations in the Permian Basin expand, these tools will provide increased functionality and scalability that can keep pace with the company’s growing needs. But there is still the matter of getting data from geographically distributed Permian assets, and XTO felt that the Internet of Things (IoT) offered a solution.

“We evaluated several different cloud providers—and even on-premises systems—and we decided that from an IoT perspective, Microsoft had a strong offering,” says Khoury. “We already had a lot of Microsoft tools, and we liked the way that Microsoft high-volume storage and big data products work with Azure IoT technologies and the direction that Microsoft is going with cloud and IoT. We also appreciated the fact that Microsoft was willing to work closely with us to solve the digital technology challenges we are dealing with.”

Designing an IoT setup for the Permian environment

To efficiently capture process data, XTO ties in to existing sensors at the well head that monitor key system parameters like temperatures, pressures, and flow rates. Gateway devices equipped with Azure IoT Edge route data through Azure IoT Hub, and the system stores the data in Azure Cosmos DB and Data Lake after preprocessing it with Azure Stream Analytics. Internal IT staff and engineers will use Azure Time Series Insights to visualize the high-resolution data and deliver near real-time analyses. The company appreciates the flexibility and ease of use. “With Azure as a base platform, we can move data within the environment and into the hands of our staff via any tool they want to use,” says David Baumgarten, Lead Architect at XTO Energy. “Azure makes this easy to do. The way we’ve set up the system to capture and store data, we’ve essentially built a cloud-based historian on top of Azure IoT services.”

XTO is currently scaling its IoT deployment across Permian assets and tying in additional datasets based on defined use cases. “We’re making sure everything is manageable, scalable, secure, and supportable,” says Baumgarten. “The devices are self-registering and self-healing in case of power or connectivity issues, which is important in the Permian Basin where we’re using solar power and electrical interruptions are not uncommon. We have devices that can lose connectivity more than 50 times a day, but because of our setup, we’re still able to capture that data and send it to the cloud.”

For more information about the XTO digital technology setup with Azure and Azure IoT, see the technical addendum at the end of this story.

Capturing data through IoT is an important step for XTO, but the company also needs to ensure that its employees gain maximum value from that data. To help do that, XTO embraced Microsoft Dynamics 365 Field Service and considers the combination with Azure solutions a powerful one.

“We’ve made Azure the unifying platform for all our data,” explains Patel. “We are adding Dynamics 365 to provide a connected user experience and user interface layer, and we’ve built dashboards that make it easy for engineers to view well data across the whole basin. With Dynamics 365, we will also have integrated workflow capabilities. For example, when a condition arises that requires attention, the system automatically creates a work order so that it gets addressed immediately.”

XTO will connect Dynamics 365 and Data Lake to provide seamless data transfer and availability, helping office and field workers alike make sense of vast quantities of information. “We have billions of data points we need to sift through on a day-to-day basis,” says Patel. “Using Dynamics 365, we will have efficient ways to access a single source of truth for our data via web and mobile tools, so our employees can do their jobs more effectively. Whether they’re looking at the health of an individual well or the Permian Basin operations as a whole, they can intelligently optimize performance and prioritize new projects. We’re really empowering them to make better decisions.”

Field workers already feel the positive impact of this access to better data. “Our field staff can look at a computer first thing in the morning and know exactly which wells are having issues,” says Dustin Rose, Superintendent of Special Operations at XTO Energy. “They can then go out to those wells and troubleshoot them, getting everything done within an hour, when before it might have taken a day or two just to figure out which wells were down.”

For field operators who may each manage more than 50 wells spread out over 100 miles, the ability to know where to focus their efforts will make work easier and improve well operations. “We’ll use Azure and Dynamics 365 to give us insight into which facilities have the most immediate need, from a downtime or efficiency perspective,” says Patel. “We can then dynamically route staff members to those locations. Having this level of troubleshooting insight will help us operate more efficiently and meet our safety and environmental performance goals by addressing problems promptly and reducing unnecessary driving miles.”

Making a big impact with a small development team

One of the things XTO has most appreciated about working with Azure IoT has been the ease with which the company could create and implement a full-featured system with minimal staff. “We had a team of five people working on this, and they built it from scratch,” says Khoury. “The ease of use of the Azure services and the support we got from Microsoft made that possible. In the past 12 months, the innovation team has gone from the initial idea to devices in the field collecting and sending real-time data to Azure.”

Right now, XTO is using Azure IoT and other Azure solutions to get data into the hands of internal staff where it can drive better business decisions. The company is also taking advantage of its ability to store large amounts of historic data to help engineers better do their jobs. “We’re using Azure Data Factory to move our on-premises data to the cloud and also to facilitate transformations ahead of storing it in Azure Data Lake,” explains Baumgarten. “We’re also using Azure Databricks, which makes it possible to convert data into business insights. The analytics we perform on the data help engineers figure out things like where to drill wells effectively and how to boost production.”

Patel sees additional ways that improved access to big data and analytics can help XTO. “Well optimization is one example,” he says. “Wells in the Permian are being drilled and completed so quickly that often artificial lift methods that are set up on wells are less than optimal. XTO plans to use big data to gain insights on how to further optimize our wells over the course of their production life cycle. We’re looking to use data science to help reduce gas injection rates on gas lift wells or improve electrical submersible pump reliability. We’ll also gain field-wide insights into our biggest downtime drivers and take measures to address them.” Already, XTO has plans in place to move to autonomous artificial lift on its wells, as well as to increase the use of automation in various areas of the drilling well planning and operations. 

Planning for future development and further success

While XTO sees tremendous potential in its current IoT implementation, the company is already planning to expand the deployment beyond the current Permian Basin installation. Future enhancements will benefit even more of its workers.

“The field technicians and lease operators already have tools on their phones that they use every day to see what a well is doing,” explains Khoury. “Our goal is to use Azure to connect these tools to live data from the IoT sensors. So, instead of seeing low-resolution volumes or flow rates, they’ll see what is happening in real time. This way they can respond immediately to problems that lead to downtime or maintenance issues.”

XTO also has AI and machine learning on its technology roadmap—the company sees data science as an integral part of unconventional resource development and recognizes the many parameters it must juggle to maximize total recovery. XTO considers this an area where AI can provide valuable insights.

Looking even further ahead, XTO plans to use the IoT data and the power of Dynamics 365 to do predictive maintenance and dynamic routing of field workers. The company is already using these tools for the dynamic routing of field workers, which will further reduce downtime, increase revenue, and enable field staff to be more attuned to the highest priority needs. Because wells can produce thousands of barrels of oil a day, eliminating 24 hours of downtime is a significant revenue boost. Additionally, cutting down on the time workers spend driving provides an environmental and safety boost because of reduced vehicle emissions and risk of accidents.

XTO’s actions fit nicely into ExxonMobil’s broader digital strategy. “Across the Upstream, ExxonMobil is significantly increasing the way digital technology is used to take advantage of the exponential pace of innovation occurring today,” says Andre Luyckx, Vice President of Digital Transformation at ExxonMobil. “Through our digital approach in the Permian, we’re able to experiment and rapidly scale when successful. The Permian team is forging the way to maximize the value of digitalization.”

Keeping pace with rapid growth

XTO anticipates realizing a wide variety of benefits from its IoT solution—from minimizing downtime to helping the company’s infrastructure keep up with the rapid growth it has seen in recent years. “Our workers are empowered to find ways to do their jobs more efficiently and minimize operational downtime, which enhances value for all parties,” says Staale Gjervik, President of XTO Energy. “Over the coming decade, we plan to drill thousands of new wells and build dozens of new facilities. It’s challenging to keep up with that pace, but with Azure, we have the digital technology to help support our growth in a manageable and sustainable way.”

To make all this happen, XTO is relying on not just Microsoft technologies, but Microsoft expertise as well. “To succeed in the digital space, we need to bring together domain knowledge, industry knowledge, and a knowledge of technology,” says Patel. “We have a lot of very talented engineers and scientists within XTO who understand the industry and the specific problems we’re trying to solve. What Microsoft brings to the table is a fantastic set of tools and services, plus a knowledge of how to use advanced digital techniques to get the most out of our data and help us reach our end goals of efficient operations and environmental safety.”

The investment XTO is making in IoT and the cloud brings benefits that stretch across the company. “This is going to positively impact many of our groups, including reservoir, facilities, drilling, and geotechnical,” says Patel. “We’re taking a holistic approach that’s aimed at helping the entire organization from an operational perspective. With Microsoft, Azure, IoT technologies, and Dynamics 365, XTO Energy is an innovation leader in the oil and gas industry.”

Technical addendum: Drilling down into the IoT solution

XTO has created a system that allows both field workers and engineers to derive maximum value from information generated by IoT devices on field assets. The IoT devices stream data from sensors connected to production equipment into Azure IoT Edge, which then routes data through Azure IoT Hub. The data is passed to both Azure Time Series Insights and Azure Stream Analytics.

The XTO system uses Time Series Insights to store, visualize, and query the large amounts of sequential data generated by the IoT devices, taking advantage of the easy connectivity with IoT Hub. Time Series data shows how assets or processes change over time, so individual data points have time stamps and are most useful when ordered by when they were measured. By looking at how the data changes, engineers gain operational insights and can do sophisticated data exploration.

The system uses Stream Analytics to conduct preprocessing on data through calculations and transformations. It also relies on the integration with IoT Hub to streamline the process and bring analytical intelligence closer to the edge devices, unlocking the full value of the data they generate. The system stores this data in Azure Cosmos DB and Azure Data Lake, and it uses Azure App Service to provide mobile access, making the data available to XTO workers anywhere.

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