Digitalisation as a critical tool in resource asset valuations, acquisitions and dispositions
Douglas W. Hollett A C and Craig N. Phasey BA Nova Systems, 27–31 London Road, Mile End South, SA 5031, Australia.
B Nova Systems, 40 Ross Street, Newstead, Qld 4006, Australia.
C Corresponding author. Email: doug.hollett@novasystems.com
The APPEA Journal 59(2) 609-611 https://doi.org/10.1071/AJ18252
Accepted: 29 April 2019 Published: 17 June 2019
Abstract
Digital twins and digital ‘solutions’ have become increasingly common in recent years, as companies recognise the benefit of greater visibility and control into their operations. When built and implemented properly, a digital twin (DT) offers the potential for significant cost savings, coupled with attractive add-on value in safety, operational integrity and predictive maintenance, all of which can also result in increased production. DTs are also critical for effective portfolio management, in allowing a full understanding of asset or field value, upside, and long-term potential. By identifying areas for optimisation, a DT can help the operator prioritise investment, and accurately understand which assets to keep or monetise. Through building DTs for operating properties, Nova Systems and PTC have gained a deep understanding of the upside potential inherent in the technology. This also means that DT technology can be invaluable in asset acquisitions. During merger and acquisition (M&A) analysis, a company typically looks for technical, operational and financial leverage which can unlock potential not seen by the current owner. These can be commercial (commodity contract, price deck and agreements), technical (e.g. engineering approach and models, and subsurface), operating synergies (common services, facilities and duplication) and digital solutions. While most companies utilise traditional and tested approaches to asset valuation, new digital solutions offer the opportunity for break-out higher valuations which can drive an entirely new approach to M&A growth. In today’s competitive marketplace, the company with an innovative digital solutions skillset will have the advantage.
Keywords: digital twin, innovation, valuation.
Doug Hollett is Senior Advisor-Energy with Nova Systems, an Australian engineering services provider in the aerospace and energy sectors. He is also President of Melroy-Hollett Technology Partners, consulting on technology innovation and strategy across a broad range of energy sectors. He serves as an advisor or consultant with FERVO, SmartUQ and the Colorado School of Mines and is a member of the Sandia National Laboratory Energy and Homeland Security External Advisory Board. Doug served in a series of leadership positions in the USA Department of Energy (DOE) during 2011–2017, including Acting Assistant Secretary and Principal Deputy Assistant Secretary in the Office of Fossil Energy, and Deputy Assistant Secretary for Renewable Power. Prior to DOE, Doug had more than 29 years of experience with Marathon Oil, most recently as Manager and Director for Unconventional New Ventures, and Manager International New Ventures. Doug has a MS in Geology from the University of Utah. |
Craig Phasey is a Senior Consultant with Nova Systems. A Physics and Maths graduate, Craig has over 20 years of experience in Air Force Intelligence. Throughout his career he provided advice to senior military commanders, government ministers and Cabinet and to heads of major industrial corporations. He has specialised in creating workable solutions to intractable problems. Since leaving defence, Craig worked on technologies ranging from submarines and trains to satellites and communications, consulting to defence, rail, electricity, waste, and oil and gas industries. In 2017, Craig was part of a team tasked to find a solution to the electricity cost challenge facing coal seam gas production in Queensland. The solution to this challenge is firmly based on integrated operational control implemented through a digital twin. As part of the Nova Team, Craig is now applying this solution to problems in oil and gas, mining, electricity and general industry. |
