All posts by Greg Archbald

Rigzone Feature, Virtual Operating: The New Oil Entrepreneur

One survey by GoBankingRates found that 29 percent of Americans believe they’ll become a millionaire. With a little bit of know-how, a good enough idea and a little luck, any of us could end up being the next Mark Zuckerberg or Elon Musk, right?

And while there are more millionaires than ever before in the United States, they make up less than 10 percent of the population, and about half of the nation’s millionaires are retirees… not millennial tech entrepreneurs.

For many people, what happens in the oil patch is mythical.

And while everyone is busy talking about Exxon, Chevron or the acquisition of Anadarko by Occidental, there’s a much smaller subset of oil and gas companies known as independent operators.

And by coupling ingenuity and technology, these tiny operators have identified an opportunity by morphing into an altogether new type of oil entrepreneur.

virtual oil entrepreneur

Enter: John Graham

John Graham is a virtual operator.

John is a second-generation petroleum engineer, and he has nearly 40 years of experience in the petroleum industry under his belt. He founded Select Exploration Group alongside his former Devon Energy colleague Paul Baclawski. And they’re running their small oil and gas company as virtual operators.

After opting for early retirement, John and Paul decided to strike out on their own.

The two did some research, and then it was time to start buying up wells. And as they got started, they had some decisions to make.

John says, “We see a lot of our friends go the private equity route to get started. If you get backed by a private equity company, they want you to be structured with an office and all the overhead that comes with it.”

According to John, this is bad news.

“We talk to a lot of companies about acquiring some of their existing oil and gas properties that are uneconomic are marginally economic. And with these companies it’s their general administrative expense that’s eating them alive. They have office and staff overhead – what’s more, is they’re leasing prime office space which gets expensive. There’s a lot of oil and gas properties that are profitable if you don’t have that overhead.”

Instead of going that route, John and Paul looked to Houston’s Harbinger Resources. Another small petroleum startup, their partnership also allowed them to keep operations lean.

John says, “They’ve got the operations and the financial background; we’ve got the reservoir engineering and geoscience background.”

It’s also worth noting that the Harbinger team, like Select Exploration, works out of their homes.

John told us, “We have no desire to all live in Houston or all live in Oklahoma City and have a conventional company. What we want to do is to acquire and operate producing assets. And we plan to achieve this by working online from different locations.”

And since the business’ inception, they’ve been doing just that.

 

Tools and Tricks of the Trade

There are plenty of resources out there that make being virtual operators a possibility. Thanks to those, John says, “We don’t have to be in the same office every day with that overhead.”

So what does virtual operations look like? John told us:

“During the past year, I have probably analyzed two or three acquisition opportunities per month for the group using my petroleum engineering software I have on my laptop. The information we need is available. It is not always free; there are a lot of state oil and gas boards, corporation commissions that have online well and oil and gas data which can be complemented and augmented by new oil and gas production data services.”

The same industry software that would be installed on computer systems in those high-overhead offices can be accessed through the cloud.

Additionally, there are some solutions out there that are specifically made for independent oil and gas operators.

GreaseBook is an option for gathering, tracking, recording and analyzing production data direct from the pumper and field crew. Essentially, it replaces the Excel and paper production reports between operators and their pumpers in the field.

When simple apps are combined with a more powerful SCADA, telemetry and remote monitoring engine, small and mid-sized operators are able to bring all their production information into one system and scale out their operations at a fraction of the cost it would take to do so with more conventional workflows and software.

By essentially ‘renting’ these cloud-based products, independent operators are enabled to focus on what matters most: producing oil and gas at the lowest cost possible.

These tools coupled with some of the programs being used by other location-independent entrepreneurs (like Google Drive for file storage and sharing) or Join.Me (for meetings) round out the tools of the trade.

But what about the stuff that happens locally, you ask? Well, we asked John about that. It seems that one of the tools of the trade is networking. Another is trust. He told us:

“When we acquired the properties, I spent at least a couple of days with the engineer that works for the company that we acquired the properties from and I quizzed him. Who do you like working with? Who do you not like working with? We prepared a vendor list with contact information that he handed off to me, then I either met or introduced myself to those vendors and picked who I thought could do the job and would be responsive to my needs.”

 

The Reality of Being a Virtual Operator

The reality is that being a virtual operator in the oil and gas industry is 100 percent possible.

John and Paul and their colleagues aren’t the only ones doing it. There are plenty of small oil companies running virtual operations, and their ranks continue to increase. And for many of these small companies, they wouldn’t be profitable or even viable if they had those traditional setups with high overhead.

Of course, being a virtual operator doesn’t mean you’ll never visit the lease again.

We asked John about how often he finds himself out in the oil patch. His answer: every four to six weeks. On these trips, he visits the lease and meets with his pumper. But most importantly, he visits with his youngest daughter and her children; they live conveniently nearby.

digital oilfield, big data

Big Data Goes Bust

Back in 2012, Steve Lohr writing for the New York Times did average folks a favor and introduced us to “Big Data.”

Yes, analysts, data scientists and the people in Silicon Valley had already heard of it, but thanks to Steve and the Times, the rest of us found out that it’s a “meme and a marketing term, for sure, but also shorthand for advancing trends in technology that open the door to a new approach to understanding the world and making decisions.”

Sounds intriguing, huh?

digital oilfield, big data
Despite a few years of boom for the concept of ‘Big Data,’ the term itself is old news.

Despite a few years of boom for the concept of “Big Data,” the term itself is old news. Big Data came with a “measure it all” attitude that eventually gave the phrase a bad rap, but smart companies didn’t throw the baby out with the bathwater. Data plays an expanded role in our daily lives, including how we do business. Now, instead of worrying about how big the data is, the winning trend is to focus in on only what’s actually relevant.

Now fast forward to today: leveraging data for higher productivity and reduced costs in the oil patch is a reality. Not Big Data, but the right data. And to capitalize on this reality, we must think much, much smaller

Forget Big Data

Why small data? In part, that’s because Big Data is a pain in the you-know-what. It’s hard work, plagued by data quality issues, and it’s expensive to boot.

Matt Turck points out that an organization who buys into Big Data (and yes, it has to be the wholeorganization), needs to “capture data, store data, clean data, query data, analyze data and visualize data.” And while software can handle it, “some of it will be done by humans,” and all of it needs to be part of a seamless integration.

If this doesn’t sound easy, it’s because it’s not.

After you analyze anything and everything to get whatever info is available and come up with correlations, sometimes your takeaways aren’t only unexpected, but off the wall. For many businesses, coincidences continue to be suddenly pegged on cause and effect, leading many on some expensive wild goose chases.

At Slate, Will Oremus points out that Big Data’s problem isn’t that the data is bad, it’s this over-enthusiastic, fetishistic application of data to everything as often as possible. Data in the short-lived boom of Big Data was not being used in a careful, critical way.

Really, all of the data being collected was hard to interpret. When you’re collecting billions of data points – clicks or cursor positions on a website, turns of the drillbit or strokes of the pump – the actual importance of any single data point is lost.

So, what may seem to be a big, important high-level trend might not be a trend at all. There could be problems in the data, an issue with the methodology or some kind of human error at the well site.

Simply put, Big Data alone doesn’t always add up.

Oil, Gas and Data

While most oil and gas producers are relatively late to the Big Data party, we might consider ourselves lucky.

Why? To start, the wider the gap between the proxy and the thing you’re actually trying to measure, the more dangerous it is to place too much weight on it.

For example, well performance indicators are a function of numerous important factors outside of an engineer or supervisor’s control.

Part of the draw of Big Data was the idea you could find meaningful correlations even in very noisy (and seemingly completely unrelated) data sets. And, thanks to the sheer volume of data, coupled with powerful software algorithms that can theoretically control for confounding variables. The model we’re describing would draw upon a very wide range of well production correlations from across many basins and production environments to generate an “expected” set of production outcomes against which actual results could be compared.

Now, imagine for a minute that such a system were applied within the context of a single company or field – with just the wells in a particular area compared with one another.

Without the “magic” of Big Data, anomalies in total production in a given timeframe would be glaring. Thank you, small data!

No intelligent oilman (or woman) examining them would be under the illusion each well’s performance corresponded neatly with the historical trend of that well, let alone the particular field of wells.

Moreover, it would be relatively easy to investigate each well on a case-by-case basis and figure out what was going on.

However, a system based on the idea of Big Data would be far more opaque. Because the data set was big rather than small, it’s many times crunched and interpreted by a third-party using a proprietary mathematical model.

This lends a veneer of objectivity, but it forecloses the possibility of closely interrogating any given output to see exactly how the model arrives at its conclusions.

For example, some wells may have underperformed not because of a technical issue, but because of a skimming vacuum truck operator or a pencil whipping pumper – common occurrences apparent to humans but lost on the data.

You Are Your System

In the oil and gas market, the cost at which you extract oil and the system that enables you to do it is who you are. This ‘machine’ you either create or ascribe to is the reason your company is alive.

However, as the world changes, you and your operations must become street-smart if you’re going to succeed – perhaps, even survive.

Remember, all the work we’re doing is about getting results. We’re not innovating simply to be innovative. We’re not creating only to be creative. We’re not producing oil and gas simply to produce oil and gas. We’ve got a serious goal in mind.

To discover how to get there, we’re going to want to study the laws of production and cost to most effectively produce exactly what we’re looking for from our oil and gas assets, which is maximum profit.

That said, we look for a machine that has already proven itself: one that can be successfully implemented and enables you to scale at will, in the hands of ordinary people, all at a low cost, to give you an extreme competitive advantage.

And we simply believe that a new breed of machine serving up ‘small data’ to the right people at the right time is the quickest to get you there.

Sure, we’ll continue to hear a lot of talk about Big Data. And while this idea of Big Data has some merit, the operators who take on these type of challenges do so before they come to understand their most chronic dysfunction.

And that underlying dysfunction is always a strategic problem, a workflow problem, something easily solved by reevaluating the way they communicate – never a technological problem.

For software to be successful, it must focus on the human element, not just the technical. And the companies that forget this are setting themselves up for failure.

This is why we must focus on small data, starting on the front line, in the field with the pumpers and field staff who collect it. Because Big Data is a bust for smart oil.

Special Note: This thought piece was originally published on Rigzone. Original article can be viewed here.

https://www.rigzone.com/news/wire/big_data_goes_bust-23-mar-2018-153993-article/?all=hg2

Now, GreaseBook for Android

Oklahoma City, OK — GreaseBook, developers of a mobile oilfield app by the same name, announced today they are expanding their field-ready mobile capabilities to another device with the introduction of the first-ever native GreaseBook Android app.

The GreaseBook Summer ‘17 release comes fresh off the heels of the company announcing it had just rolled the 35MM barrel mark— since the company’s inception a short 4 years ago, America’s independents have scrolled, swiped, and tapped more than 35 million barrels into the modest field production app.

GreaseBook now boasts that its trailblazing mobile solution is now being leveraged by more than 100 Operators and 1000 Pumpers, including several of the nation’s top 100 largest producers.

Like the GreaseBook iPad app, the new GreaseBook for Android phones and tablets offers a complete end-to-end oilfield production reporting solution that fits conveniently in your Pumper’s pocket.

And, while many legacy software solutions are one-way communication tools from field to office, GreaseBook gives the Operator’s pumpers feedback at the well site by granting them access all historical commentary, production graphs, and well history while in the field.  The GreaseBook even goes as far as to grant Pumpers the flexibility to work offline in low or no-connection areas.

“With the native Android app from GreaseBook, not only will the Pumpers have all the capabilities they need to keep those production updates moving from field to office, but they’ll also have access to things like perf depths, the last time a well was worked over, and access to all historical notes made by any other member on the Operator’s team who has ever set foot on the lease.” said Greg Archbald, Founder and CEO of GreaseBook.

Once the Pumper has submitted his data to the GreaseBook system, it’s automatically compiled and sends out scheduled, automated in-house, State, and investor reports enabling operators to significantly reduce the amount of labor required to gather (or chase down – ahem!) production information and field tickets if not reduce operating overhead by a full step improvement.

“Being “field-ready” means making sure that not only in-house team members like admin, production engineers, and field sups have the data they need when they need it, but by also granting this info to the Pumper you’d be amazed by how many of these guys and gals are able to further engage and rock those wells. And that’s essentially what we’re delivering with the GreaseBook – not only offloading much of the production reporting work on the Pumper but also giving them the information with which to reduce oversight and better engage your wells,” said Ryan Gillette, development consultant for GreaseBook. “With the introduction of our Android smartphone and tablet apps, in addition to our native iOS app for iPad, we are working toward giving operators the ability to enter and review production on any device, which means employees not only get to work with the personal devices they’re already familiar with but also lower the Operator’s buy-in because they’re not required to purchase devices or laptops for their employees.”

High off it’s recent release, GreaseBook Founder Greg Archbald closed by stating, “GreaseBook has a funny way of making Operators think for a moment – realizing that in comparison the GreaseBook app simply makes sense. Many Operators spend tens if not hundreds of thousands of dollars each year on brain-dead, ineffective Band-Aid approaches to solving what’s become a broken, mission-critical process. Trust is built on credibility, and pricing the solution low “because we can” is a remarkable statement. We see the company-customer relationship as a partnership – we don’t gouge the Operator. We want the product to help the Operator. We want to make clear to everyone involved in oil & gas that a technology shift is under way here, and that old solutions simply cannot hope to keep up.”

For more information about GreaseBook and how its app may be a fit for your company, check out www.greasebook.com or schedule a demo here.

 

About GreaseBook

Since GreaseBook’s inception a short 4 years ago, America’s independents have scrolled, swiped, and tapped more than 35 million barrels into the modest field production app.

GreaseBook Android

For our clients, that’s 35 million barrels that went ‘skim free’. 35 million bbls that were fully paid and accounted for. And, 35 million bbls that were tracked, organized, and reported with little to no intervention on behalf of the admins, engineers, and owners responsible for overseeing these operations.

Instead of pushing paper, manipulating spreadsheets, or fighting some ‘legacy system’, these folks were able to focus on what they do best: Pumping Oil.

For us – well, we feel a great sense of pride and responsibility.

Pride, because we’re bringing cost-effective solutions that make other industry software vendors curse us.

Responsibility, because so many independent operators have entrusted their production to the folks here at GreaseBook.

You see, something very interesting is happening… a surge of new methodology, ideas, human reason, and logic.

And, it’s not coming from the top down (the large, integrated operators), but from the bottom up.

A single pumper shifts from paper to mobile. An admin back at HQ realizes she no longer has to make telephone calls to remind the pumper to ‘get his data in’.

Eventually, engineers and production supervisors start clamoring because they actually have data and graphs that make sense. The band wagon increases in size.

The things that mobile is doing are valuable and positive… it creates proactive pumpers, it alleviates minutiae from the back-office, and keeps engineers and supervisors focused on the task at hand (maximizing oil production & minimizing overhead).

And the best part?

People actually want to use this stuff.

Folks, there is no stopping this groundswell – it’s replacing processes that were forced on the field just a decade ago.

Thanks to mobile technology, independent operators are able to scale every last man hour — and squeeze every last drop of oil — from their operations.

To learn more, please visit www.greasebook.com.

Telemetry. What a joke.

No, wait a minute. Telemetry, I love it.

I am sure we have all been there. If you are a pumper in today’s world of pumping, you should know about telemetry.

For those who don’t know about it,  the systems are computerized measurement systems that a pumper can call or log into on a computer to get information about one of their wells.

Telemetry

The systems, which are all different in what they offer you, can tell a pumper everything from how many MCF of gas a well has produced to static pressure, to accumulated pressure and now, there are even stock tank telemetry systems to tell us how many inches of oil or water the well made.

I have one thing to say about all of it. Watch out when you begin a close relationship with Telemetry. Because Telemetry is not into commitment.

To be sure, it is a great tool. I use it as a basic source of information. But I do not allow it to replace my presence at the wellhead.

Look, I am not the super-pumper of the world. I make mistakes and every so often take shortcuts – for which the oilfield gods promptly smack me down.

Which is why I have learned the hard way; machines made to measure oilfield production, are not perfect. We should see them as a good backup to the pumper, not the pumper being a good backup to the machine.

Recently I was having a conversation with a friend of mine JW, who is a young guy in the oilfield. We were talking about how hard it is to stay in shape when you are working as a pumper.

We all have so many wells and it is easy to literally speed from one well to the next, only getting out long enough to do what you absolutely must. Between that and the fast food or more than likely, quick-stop hot dogs that we consume to get us through the day, we can put on some weight.

“When you run up your tanks to gauge them, simply run up the steps and down them twice,” I said.

He said only this, “We have telemetry.” I’m like, ‘Okay?” He told me that the company he worked for didn’t like them climbing tanks that often. “It’s a safety thing” he said.

Well, I don’t know about all that or how old the telemetry is on his route. But I told him I would gauge more tanks more often.

I have had tanks on which the telemetry was so badly calibrated that it thought it should have 10 feet of oil in it and it only had 3 feet. The bottom line here is, pumpers need to know what’s really in the tank. Because when you go and try to correct this kind of thing after having the wells for a while, leadership kinda narrows their eyes at you and say things like “You’re missing oil?” This is always the beginning of what you know will be a bad week of explaining where 7 feet of oil went.

You get the picture. Verify your telemetry. That’s my message. And, never, but never count on it to hide your misdeeds in the field.

See, the systems, like computerized anything, can tempt us all to roll the dice – take a bet on the computer system. But remember what I said, Telemetry is not your lover. It’s not committed to you. In fact, it’s like having a friend who gossips.

Okay, so here comes my telemetry nightmare story. You knew it was coming, right?

While working for Chaparral Energy, we had telemetry on all of our tanks. We had systems that measured when the oil got to a certain level at our wellhead site tanks on individual wells. This signaled our pumps to go on and kick the oil into a central line, which ostensibly carried it to the central battery.

But of course at the central battery, the only place that oil could go, since that was the end of the production line, was away in a truck. If a tank got too high or was close to overrunning, that’s where telemetry came in and the system would call me on the phone.

Now, most of the time, this system worked. But sometimes, if you didn’t take the time to climb your tank, you had a system that got gummed up by the oil and, yep, you guessed it, there were oil overruns. Not a lot of them, but they happened. The tank had 14 feet in it and the telemetry thought it was only 11 feet.

There were four of us pumpers for the large field we pumped. It was a CO2 and water flood field, which had approximately 150 wellheads, including injection well heads.

We had this huge central battery, where all of the workings of this field took place, including water and CO2 recollection and re-injection. This battery had three 3,000 barrel stock tanks. That is how much oil we were making on this field and all of it flowed freely to those huge tanks. They filled up fast and those tanks were hauled daily and sometimes more. So, if you’re a pumper, you get it. There was a lot of critical activity going on at this central battery.

Now, because that central battery was so intense, we all shared call.

Each of us had 24 hour on-call status in addition to our day job pumping our wells. Call lasted for eight days and you were on call about every three weeks. The whole battery was set up on telemetry and believe me, telemetry knew my phone number.

My phone rang when a compressor went down. My phone rang when an injection pump failed and my phone rang, most importantly, when one of the three 3,000 barrel tanks was about two feet from overrunning. Of all things on that battery that called me, high level alarms were what got me springing out of bed, jumping into my truck and racing down there to avoid an oil spill.

If all goes right, which doesn’t happen often but it can happen, you don’t hear from your phone. When it goes wrong, God help you. You might as well kick back in your pickup seat and just remain at the battery, because your phone is going to be calling you all night. Oh, did I mention, if I failed to answer and respond by punching some numbers into my phone, the system called my boss Chad.

I had been on call for about three of my eight days and things had been quiet. The weather, which always determines how much trouble you will have in the oilfield as a pumper, had been nice that week and there had been no problems for three days.

I was in the fantasy oil bubble.

The thing is, I lived 82 miles from the field where I pumped wells and so when I had call, I stayed over night in a travel trailer I rented in Perryton. But my boyfriend was not happy about my work away and so I decided, late one evening, to make a quick trip to see him to smooth over some of his ruffled feathers over my career choice.

All was good on the trip to Lavern. I saw my boyfriend, calmed him down a little and we talked. I napped for about 30 minutes and began the 82 mile trip back. On the way however, there are low dips in the highway where there is no phone signal and I had missed a call from one of my oil stock tanks that was reporting a high oil level. I was still out by about 45 minutes.

So I’m motoring down the highway right? And my phone rings. It’s Chad. “I just got a call for high level on the tanks at the main battery,” he said. “Are you on it.”

Not wanting to admit what I had done, I said, “Yep. I am on my way.”

I failed to mention that I was on my way and would get there in about one hour. I was just praying that this tank did not overflow. If it did, it would be my job.

Now at that time, I’ve got ol’ Greenie pegged out at like 90 miles per hour. Greenie is an old 1993 Ford F150 and he wasn’t used to such speeds. And once again, I get a call from that system telling me again, in what I swore was an irritated tone, that we are at a high level on that tank and it is likely going to run over any second. It doesn’t say this – I’m ad-libbing. It is a computer voice…but I sense that it hates me now and knows I am a sorry, no-good slacker for a pumper.

I don’t need to mention here that I was in a screeching panic. I called a friend there, John, who lived in Perryton. He had his own private wells and I knew he would probably help me out.

“John,” I hollered when he answered at 3 a.m., which for the record surprised me.  “Help me! Can you run up to the Camrick  (that’s what we called the battery) and change a tank over for me before it overruns?”

He said, “I would Rach, but I am out of town.”

I just hammered down on Ol’ Greenie even harder. I swear I made corners on two wheels, ran over a median in the highway when I was making fast turns, bumped down a dangerously washboardy dirt road and finally pulled in there to the battery.

I was so relieved to see that the oil had not begun dribbling over the top of the tanks. I jumped out and ran like a runaway horse to the back of the tanks where the equalizer valves were, I opened a valve to equalize the nearly full tank with the one next to it.

I sprinted back up to the top of the tank and looked in and low and behold, the thing had a whole three more feet before it would have run over. According to the telemetry that had called me, it was like inches from the top.

In this case, the inaccurate telemetry saved me. Yet, it could have been the other way and I would have been likely fired.

All that to say, telemetry is all good and fine. But there is nothing more important than good old physical presence to verify it. I never tried that stupidity again – I tried some other stupidity, but not that one.

P.S. I did finally come clean about all this to Chad, who by the way was one of the best bosses I ever had in the oil field. He just laughed.

~ Rachael Van Horn aka “Wench with a Wrench”