Optimizing Crisis Response: The Role of Strategic Partnerships in Operations

• Situational Analysis: Threats to people and property, like those posed by the wildfires of 2023, need to be thoroughly and quickly evaluated to create clear action plans. Emergency operational evaluations are complex and require an integrated approach, fusing field-level operational expertise with land, accounting, and production accounting considerations to mitigate secondary threats and unintended consequences. This approach requires a customized solution starting with a comprehensive understanding of the company’s operations, finances, and strategy.
• Safety Concerns: Active wildfires resulted in evacuation orders and suspension of field assets. The unplanned emergency shutdown of assets required extensive attention to preserve life, protect equipment, and minimize fire losses, which can include theft and vandalism. 
• Production Impacts: The wildfires of 2023 in northern Alberta severely challenged all local industries. The immediate impact on the petroleum industry was a disruption in production capability, leading to an associated decrease in revenue. This situation underscored the vulnerability of certain remote assets to environmental factors and the need for effective risk management and mitigation.
• Revenue Reduction: With reduced production due to evacuation and shut-in mandates, associated corporate revenues were proportionally reduced. Quick, strategic decisions were required to ensure operational continuity while conserving cash to sustain the business through this unpredictable period. The situation also demanded a thorough examination of expenses, requiring the company to prioritize and reduce non-essential expenditures.

• Operational Integrity: After a comprehensive assessment, Sproule Asset Management field supervision experts implemented proactive measures to temporarily purge and shut-in assets and evacuate affected areas. These activities ensured site safety and environmental stewardship without staff incidents or accidents.​ Sproule also collaborated with the client to identify areas where ongoing Sproule Asset Management services could be temporarily reduced or deferred without compromising operational integrity, thus minimizing spend during an uncertain period. 
• Cost Flexibility: Sproule’s flexible service model emerged as a crucial solution, allowing the adjustment and prioritization of services based on the situation’s complexity. Sproule’s flexible Asset Management model was critical in allowing their client to lower General and Administrative (G&A) expenses and manage cash flow during production interruptions, which would not have been possible under a traditional fixed-cost staffing model. This strategic flexibility helped navigate financial challenges while ensuring efficient resource allocation, emphasizing critical areas for the client’s operational stability and future growth.

Tailored Services: The operator was able to strategically adjust ongoing Sproule Asset Management services during the wildfire crisis. This solution integrated the immediate safety and environmental challenges, ensured the safety and production continuity of the remaining assets, and reduced G&A costs. The custom suite of services included financial accounting, production accounting, daily field operations, land management, engineering, facility management, asset exploitation, and closure activities. This holistic and customer-centric strategy fostered a partnership beyond conventional consultancy, positioning Sproule as a critical partner in the operator’s success amid the uncertainty generated by wildfire disruptions.

Proactive G&A Cost Management