Operating performance varies dramatically across oil and gas companies even when they have similar assets. The differences are not random; they reflect specific operations practices that some operators do consistently and others do not.
Here are 6 practices that consistently separate the best operators from average ones.
1. Disciplined production reporting and analysis
The best operators have rigorous production reporting that catches issues quickly. Not just "what produced this month" but "what changed and why."
What good operators do:
- Daily production reports with variance analysis
- Real-time monitoring with automated alerts
- Decline curve tracking against expectations
- Specific accountability for production deviations
- Quick response to production drops
What average operators do:
- Monthly production summaries
- Reactive response to obvious problems
- Limited variance analysis
- Diffuse accountability
Why it matters: Production loss compounds. A well producing 15% below expected for 6 months has lost months of revenue that may not be recoverable.
2. Aggressive but realistic well intervention
The best operators intervene on underperforming wells more aggressively than average operators. Not without analysis, but with willingness to invest in fixes.
What good operators do:
- Regular review of underperforming wells
- Willingness to invest in workovers, recompletions, or refrac
- Track intervention outcomes to inform future decisions
- Develop intervention playbooks for specific failure patterns
What average operators do:
- Defer interventions to next budget cycle
- Focus capital on new drilling rather than existing well optimization
- Limited tracking of intervention success rates
Why it matters: Existing well optimization typically has better economics than new drilling but is often deferred. The opportunity cost is substantial.
3. Strong vendor and contractor management
The best operators get better performance from the same service providers that average operators use. The difference is in the management.
What good operators do:
- Clear performance expectations defined in contracts
- Specific metrics tracked across vendor performance
- Regular performance reviews with consequences
- Long-term partnerships with proven performers
- Willingness to terminate underperformers
What average operators do:
- Lowest-bid selection without rigorous performance management
- Tolerance of recurring issues with same vendors
- Limited performance tracking
- Vendor relationships based on personal connections rather than performance
Why it matters: Service quality directly affects production economics, safety outcomes, and operational efficiency. Vendor management is one of the highest-leverage operational practices.
4. Genuine safety culture (not just safety paperwork)
The best operators have safety cultures that affect actual behavior. The average operators have safety paperwork without corresponding behavior change.
What good operators do:
- Senior leadership visibly engaged with safety
- Stop-work authority for any worker without consequences
- Investigation of near-misses, not just incidents
- Safety performance affecting management decisions and compensation
- Continuous improvement of safety practices based on lessons learned
What average operators do:
- Safety as compliance exercise
- Safety meetings as ritual rather than substantive
- Implicit pressure to continue work despite safety concerns
- Focus on lagging indicators (incident rates) rather than leading indicators
Why it matters: Safety culture affects everything from incident rates to operational efficiency to talent retention. The cost of poor safety is enormous and often hidden.
5. Operational simplification over operational complexity
The best operators systematically simplify operations. The average operators accumulate complexity over time.
What good operators do:
- Standardize equipment across fields where possible
- Eliminate unused or duplicative procedures
- Reduce unnecessary meetings and reports
- Question new procedures before adding them
- Reward simplification efforts
What average operators do:
- Allow procedures to accumulate without review
- Add new tools without retiring old ones
- Maintain custom solutions where standard ones would work
- Tolerate parallel processes for similar functions
Why it matters: Complexity accumulates. Without active simplification, operations become progressively harder to manage. Simple operations are more efficient and safer.
6. Sustained focus on lifting cost discipline
The best operators continuously work on lifting cost optimization. The average operators address it episodically when prices drop.
What good operators do:
- Monthly review of lifting costs by field and well
- Specific accountability for cost performance
- Continuous improvement initiatives
- Investment in cost-reduction technology when justified
- Sharing of best practices across operating areas
What average operators do:
- Aggressive cost cutting during downturns, then drift back
- Limited tracking of unit economics
- Diffuse accountability for costs
- Resistance to operational changes that would reduce costs
Why it matters: Lifting costs determine profitability. Operators with consistently lower lifting costs survive downturns and prosper in upturns.
What separates these practices is execution, not knowledge
The interesting thing about the 6 practices above is that everyone in the industry knows they matter. The difference between good and average operators is not knowledge — it is execution discipline.
Average operators know they should:
- Track production rigorously
- Intervene on underperforming wells
- Manage vendors actively
- Build genuine safety culture
- Simplify operations
- Control lifting costs
They just do not consistently do these things. The good operators do.
What this means for individual professionals
If you work in oil and gas operations, the practices above are useful in two ways:
Career signaling. Operators that practice these well are better employers than operators that do not. Worth paying attention to in employer evaluation.
Personal practice. Even within a less-disciplined operator, individuals can practice these approaches in their own scope of work. The personal performance differences are noticed.
The broader pattern
Across industries, the difference between great companies and average companies is rarely about strategy or innovation. It is usually about execution discipline on practices that everyone knows matter.
This is true in oil and gas. The companies that consistently outperform peers are not doing different things. They are doing the same things more disciplined.
The takeaway
Operating performance differences between companies are larger than they should be given that all the practices that produce performance are well known. The differences come from execution discipline.
For operators looking to improve, focus on execution of the 6 practices above rather than searching for new operational ideas. The improvement potential from better execution of known practices is larger than the improvement potential from new strategic initiatives.
For professionals choosing employers, look for evidence of these practices. Operators that execute them well are better long-term employers than operators that do not.
