Merak – Company Profile (April 1997)

The Calgary based Merak Projects Ltd. (www.merak.com) provides an integrated suite of applications which work atthe interface between engineering and finance in a producing oil company.

The scope of Merak’s software runs from well completion data management and well-head data capture through production forecasting, economics and decision tree analysis to portfolio management and budgets. Merak has been developing software for the oil industry for over fifteen years and was initially a Unix shop. Since 1990 Merak has migrated into the Microsoft windows environment, first to DOS, then 16 bit Windows. Today all Merak development is for 32 bit MS Windows environments (Windows 95 and NT). Merak utilizes standard technologies such as Microsoft OLE/COM, ODBC and the Microsoft Foundation Class Libraries. These may seem arcane considerations for end users. They are not. Building software from these component technologies has very real immediate benefits for the end user. Firstly the use of the MFC libraries makes for a familiar look and feel, minimizing training; anyone who is used to word processing or a spreadsheet will immediately know how to open projects, print and move around the program. Secondly the OLE/COM object technology means that data can be shared between different products in the Merak range eliminating the need for data re-entry, and also between other OLE/COM compliant Windows apps, such as Excel, Word and so on. Finally the ODBC bit gives Merak independence from a database vendor, so their products can run on Access, in a single user environment or can plug into a Unix based Oracle server in a larger organization. Multiple databases can be used for security or organizational requirements.

Merak’s flagship product is the Petroleum Economics Evaluation Package – PEEP which comes in two flavours, US PEEP and World PEEP. As one might expect, the US version is hardwired for the tax and reporting regime of the US, while the World version allows these parameters to be configured on a country by country basis. Tax computation is something of a black art, and is generally not amenable to generalised algorithms. World PEEP can be pr-configured (Merak can supply what they term "base generics" for some 30 countries) but its strength is that a company can configure PEEP to suit its own tax and reporting requirements. Merak moved into the North Sea marketplace last year, setting up an office in London and acquiring the OGLE economics package from PGS. This is still supported by Merak, but the philosophy behind the acquisition was cannibalistic, with OGLE destined to be subsumed into PEEP in the medium term.

PEEP provides the motor for Merak’s Portfolio product which is described as a petroleum "volume and value" management system. A company’s producing assets can be broken down into subsidiaries, partnerships and fields and managed as individual units, or consolidated at various levels for forecast, budget or reporting requirements. An attractive aspect of the design of Portfolio is the way in which data can be defined at an appropriate level and then will ripple down through the organizational hierarchy. This is described as "inheritance" – a groovy Object Oriented term used, for once, in an entirely comprehensible and appropriate manner. Other members of the Portfolio family are Forecast – which does just that abd Decision Tree. I was ready for my eyes to glaze over when I was shown this tool, decision tree analysis has been around for a while without exactly setting the world on fire. But I was in for a surprise, Decision Tree, with its tree and "tornado" plots is quick and intuitive, and the results presented in an intelligible manner. Maybe this will be the "killer" app for this type of analysis. Merak state that it is a sure fire way of closing a PEEP sale, so you had better leave your checkbook at home when they show you this one!

Merak’s products are divided into two camps, the Economic Engineering Workstation which includes PEEP and Portfolio, and the PetroDesk field operations environment. The "division of labour" is not always easy to grasp, and there is overlap between several of the products. Merak would probably claim that this reflects working practices, and that anyhow, the commonality of the database means that overlapping product functionality is quite manageable.

These products are well crafted and have obviously grown up over a period of time into mature applications loaded with functionality. One example of Merak’s thoroughness is the way units and currencies are handled. These can be switched around at will at any desired level of the Portfolio hierarchy, and the data seamlessly takes the new frame of reference into account. engineers, asset managers and financial controllers should take a close look at these innovative tools.