Methods and systems for aligning business interests
First Claim
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1. A method of profit sharing between business entities including an oilfield operator and a service provider, the method comprising:
- determining a baseline cost for a service, wherein the baseline cost is expressed as an invoice calculated in accordance with a non-cost-based method, and wherein the service includes at least one of a fracturing service, an acid service, and a cementing service;
determining a savings relative to that baseline cost, wherein the savings is determined by;
obtaining a product of a burdened service cost and a profit multiplier, wherein the burdened cost is mutually determined by the business entities and adjusted on a quarterly basis based on an accumulated difference percentage from a preceding quarter, and wherein the product is expressed as an hourly rate; and
multiplying the product by a number of gate-to-gate hours, wherein the gate-to-gate hours is an amount of time required by the provider to provide a service including transportation from a holding facility, wherein the transportation time included in gate-to-gate hours is apportioned from among all services provided in a round trip to and from the holding facility; and
allocating a portion of that savings to a provider of that service or product by increasing the profit multiplier, wherein the profit multiplier is further based on additional metrics including an operator-based utilization rate, a safety incident rate, and an operator cost per barrel of oil equivalent (BOE), and wherein the profit multiplier dependence on at least one of the additional metrics is determined using a predictive business model.
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Abstract
Methods and systems of dynamically aligning interests in a business relationship are disclosed. Some embodiments provide a method of profit sharing between business entities, comprising: determining a baseline cost for a service or product; determining a savings relative to that baseline cost; and allocating a portion of that savings to a provider of that service or product as an increased profit multiplier to a burdened cost of that service or product.
36 Citations
4 Claims
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1. A method of profit sharing between business entities including an oilfield operator and a service provider, the method comprising:
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determining a baseline cost for a service, wherein the baseline cost is expressed as an invoice calculated in accordance with a non-cost-based method, and wherein the service includes at least one of a fracturing service, an acid service, and a cementing service; determining a savings relative to that baseline cost, wherein the savings is determined by; obtaining a product of a burdened service cost and a profit multiplier, wherein the burdened cost is mutually determined by the business entities and adjusted on a quarterly basis based on an accumulated difference percentage from a preceding quarter, and wherein the product is expressed as an hourly rate; and multiplying the product by a number of gate-to-gate hours, wherein the gate-to-gate hours is an amount of time required by the provider to provide a service including transportation from a holding facility, wherein the transportation time included in gate-to-gate hours is apportioned from among all services provided in a round trip to and from the holding facility; and allocating a portion of that savings to a provider of that service or product by increasing the profit multiplier, wherein the profit multiplier is further based on additional metrics including an operator-based utilization rate, a safety incident rate, and an operator cost per barrel of oil equivalent (BOE), and wherein the profit multiplier dependence on at least one of the additional metrics is determined using a predictive business model. - View Dependent Claims (2)
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3. An information carrier medium that communicates software to a computer, wherein the software when executed effects an invoicing method that comprises:
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showing a cost rate for each of various components of a service, wherein the cost rate is a product of a burdened cost rate and a profit multiplier, wherein the burdened cost rate is mutually determined by an oilfield operator and a service provider and adjusted on a quarterly basis based on an accumulated difference percentage over a preceding quarter, wherein the service includes at least one of a fracturing service, an acid service, and a cementing service; showing an associated gate-to-gate time required by a provider to provide each of the service components and a consequent cost for each of the service components, wherein the gate-to-gate time includes transportation time from a holding facility, wherein the transportation time included in the gate-to-gate time is apportioned from among all services provided in a round trip to and from the holding facility; showing a total service cost calculated from the cost rate and the associated gate-to-gate time; and comparing the total service cost to a baseline cost to determine a savings, wherein the baseline cost is expressed as an invoice calculated in accordance with a non-cost-based method, wherein the profit multiplier for a current reporting period is determined from an accumulation of such savings over a preceding reporting period, and is further determined based on additional metrics including an operator-based utilization rate, a safety incident rate, and an operator cost per BOE, and wherein the profit multiplier dependence on at least one of the additional metrics is determined using a predictive business model. - View Dependent Claims (4)
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Specification