Chuck Yates Got A Job

00;00;00;02 - 00;00;17;18
Unknown
All right, dude, I forgot where we were recording this morning. I wore a black shirt. And if you look at the camera, see how it kind of makes me look like just a floating head. Yeah, it's, you know, green screen. I need I need to get the green up here. The, to the debt. Yeah. Don't don't slouch.

00;00;17;21 - 00;00;41;20
Unknown
All right. What do you want? Me? You got a picture? We got. So we're big. We're we're, We started. Oh, sorry, I screwed up. Oh, now we're going to start over. Now. Nice. You're more than welcome. Come join us. Go. All right. Yeah. Like I said, Annie is my keeper. He is the keeper. Yeah. I don't know if that's really good or really bad.

00;00;41;20 - 00;01;05;24
Unknown
I could see it going either way. Time will tell. I'm sure he's a good dude, so. All right. My mom watches this podcast. Okay? Mom's really sharp. Valedictorian of her high school class. Rice graduate. Know nothing about oil and gas. Tell mom who the heck you are and what you do. Hi, mom, I'm D.J. Snyder. Sally. Sally. Hi, Sally, I'm D.J. Snyder.

00;01;05;27 - 00;01;35;27
Unknown
I started a small production services company, Downhole Tools in oil and gas. My background was drilling and completions for 11 years, and then, in the downturn of 14. Right. We saw downturn of 2008, 2009, 2014, 2015, and then in 2015, it was like, what's the next technology? I'm a petroleum engineer, went to Montana Tech, so it was really like looking for what was next.

00;01;35;27 - 00;01;57;25
Unknown
I like technology and then it was like drilling had their heyday in the early 2000 s horizontal drilling. Let's drill it longer. And then it was fracking. It was like, let's frack the well more and more, more dissolvable frac plugs, but and more and more sand. Slick water. Yeah. Fine. Mesh sand. Yeah, yeah. Dissolvable plugs, shorter dissolvable plugs.

00;01;58;00 - 00;02;24;04
Unknown
And that had kind of stagnated. Right. Those, those technologies that had established more players came into those markets. And then it was like the downturn and then oil price in drilling rigs and completion. Frac crews follow oil price very closely. So it was like how can we how can I go into a more stable job or environment? And so it was looking towards production.

00;02;24;06 - 00;02;47;16
Unknown
It's like once we're done fracking these wells, we're going to be producing them for 30 years plus. Right? Right. So is are there any new technologies out there that would be cool or interesting or that I could go dive into? And so it was just cold calling startups. Oh, nice. The so let me throw something at you. I'm going to say this is a statement, but you beat it up.

00;02;47;16 - 00;03;12;12
Unknown
Take it anywhere you want to view it as a question. Disagree? Whatever. One of the things I always say about oil and gas technology is it's been around forever. I mean, I always joke that what did John Wilkes Booth do before he shot Abraham Lincoln? He was a fracker. He was literally throwing dynamite down the holes, blasting it up because it would increase oil production.

00;03;12;14 - 00;03;33;10
Unknown
So a lot of this stuff has been out. I mean, we drilled the first horizontal well offshore, I think, you know, like in 1939. So a lot of this is sitting there, you've got tools out in the, the woodshed behind your house. How much of what you're doing is going and finding a tool there and then figuring out how to use it?

00;03;33;17 - 00;03;56;13
Unknown
I think that's exactly it is. We've been drilling wells for 150, 200 years. We've been producing them for that that long. It's like the little nuances, what's changed. And the big change was you went from vertical well and you could put your pump below the reservoir to we're drilling these horizontal wells and now we've got to stick our pump 400ft above the reservoir.

00;03;56;16 - 00;04;17;26
Unknown
And then we went from a single stage frac of 50,000 pounds to 20 million pounds plus. And so those like again, on paper it's the same thing. It's just like a larger and larger volume. So the production you can still see from surface, it's a rod pump or a tiny is peer, it's a gas lift. But the wells produce quite a bit different than they used to in a vertical sense.

00;04;17;28 - 00;04;37;27
Unknown
So it was really I knew nothing about production. It's like dig in to what are the differences, what are what are the impacts, and then are there any problems to solve. And so having that that production system 400ft above the reservoir adds a lot of hydrostatic, a lot of back pressure. You know, you you have a curve now.

00;04;37;27 - 00;04;57;05
Unknown
So that kind of churns up the gas and the liquid. And you now have to produce it by a pump. And pumps don't like sand and they don't like gas. Gas is compressible so a pump doesn't work. And so again like those are very small differences. And if you can say okay well we can still produce it but it does impact the efficiency of the system.

00;04;57;08 - 00;05;27;04
Unknown
So it was those little changes that like say okay can we dig into that. So you know back at Kane we Mike and I really lasered in on let's do early stage assets. Let's go drill the first horizontal well in a county. Let's go do the first slick water frack in a field. That type stuff. And it felt like kind of half of our efforts were figuring out those completions and how to make a, well, work.

00;05;27;07 - 00;05;53;29
Unknown
But then we spent the other half of our time going through the left of, okay, do we use the jet pumps and the jet pumps go for this long? And then we put on a rod pump. But what does that cost us? How long? And it was this massive kind of algorithm or, you know, quantitative equation of what works best because the rod pump would be limited, but then they'd run forever.

00;05;53;29 - 00;06;24;06
Unknown
Right? And what does that curve look like versus the jet pump that would blow out in 3 or 4 months. But you move five times the volumes. And so yeah, it we you know, I remember one board meeting we were and this was a crack in the back and producer. And there dudes are like my brothers love Bruce and Brad and I was in business with them for, gosh, 11, 12 years at Kane and now we're selling them software these days.

00;06;24;06 - 00;06;53;11
Unknown
So anyway, really close to those guys. But I remember after one of those board meetings, I go, goddammit, shouldn't we just hire a bunch of plumbers to go figure this out? Yeah. And so, so in terms of in terms of your business, how does that actually work? Are you you're you're you're almost a consultant in a way to companies or are you implementing what the companies say?

00;06;53;11 - 00;07;12;03
Unknown
All of the above. How does that work? We make physical widgets, downhole tools. And so they're they're unique to us. But like you said, it's hey, you know, things have been around for a couple hundred years. We've been producing these wells for a couple hundred years. So we take existing technologies and then tweak them. We we tear it apart.

00;07;12;08 - 00;07;31;16
Unknown
Our philosophies, the aggregation of marginal gains. So it's like tour de France or F1 where, you know, you look at a system, you take it apart into individual components like the guys bikes are, are heavy. Let's make them lighter. Let's make them more aerodynamic. Let's fill the tires to the right tire pressure. So make sure the guys get enough sleep.

00;07;31;16 - 00;07;58;03
Unknown
Let's make sure they eat right. And then we put that system back together and it's 25% better. And then F1 and and marginal gains are all about heating up the tires. And we're going to change this little airfoil. And so it's always tweaking and iterating. Whereas like you know you're an established company. You say hey it's it's good enough like it's good enough or is we want to say, hey, I think you're still leaving room, like you're still leaving oil downhole.

00;07;58;03 - 00;08;32;18
Unknown
How can we make that system more efficient? And really, that's kind of our our objective is just taking these existing systems, knowing that, hey, we've got more gas and more sand and those are the biggest issues is gas and sand. And how do we get rid of the gas and how do we prevent that sand from from it wearing down these pumps, how universal is a product you build and sitting here is a is a I think a fairly educated oil and gas guy, but definitely not an engineer.

00;08;32;18 - 00;09;01;04
Unknown
Definitely never run operations. When I asked that question, I literally could see on one end of the spectrum you saying I literally build tools for single fields. I also could see you telling me, no, these tools I build can go into any well, in America, and again, it's like sitting on the edge of my seat. I have no idea what you're going to tell me.

00;09;01;04 - 00;09;26;22
Unknown
Right? I, I don't think it's a one size fits all. Everything. Even engineers have different preferences. If you're a, you know, what is your objective? Am I private equity? Am I going to turn it and sell it in a few years? So I want to increase my production? Or am I in this for the long haul? So even our approach talking to an engineer as an engineer, trying to understand what their goals and objectives are, because sometimes it's I want as much production out of as I can.

00;09;26;22 - 00;09;42;24
Unknown
So we lean towards this type of a setup and maybe it's more expensive, but they're going to get more out of it, whereas a conservative engineer is going to say, hey, I want to just do something cost effective. Let me get the well back up. And so it wasn't, and again, this goes back to building a business.

00;09;42;24 - 00;09;57;27
Unknown
It's not. Hey, I have one really good idea. And and I'm going to go out, raise a bunch of money, and then we're going to try to just blow it up. It's it's just slow over time. Hey, I like this tool. And then not every well is different. You have seven inch seven and 5/8, five and a half.

00;09;57;27 - 00;10;21;22
Unknown
So you've got to be able to to adjust. And then hey, maybe GLR gas liquid ratio is more over here in the BOC. And then it is in the wolf camp. So like it can't be a one size fits all, which some companies try to do. So over time we've built up maybe 12 or 13 different systems, completely different systems, and then in three or 4 or 5 different sizes.

00;10;21;24 - 00;10;50;19
Unknown
So it's taken a long time to get to that point. But it I don't believe in like that one size fits all. So it's hard to say like this. This is it. Yeah. No, that's that's interesting. Gear engagement with clients wind up being almost dynamic in nature. You put in the system, we toggle it for and tweak it for 3 to 6 months, and potentially a year later, we're yanking it out and replacing it with a different one.

00;10;50;19 - 00;11;18;23
Unknown
Is that. Yeah, it's it's a conversation and it's never a hey, this is this is the end all be all ultimate production system. It's hey, we think in this stage of the lives, well, this is maybe what we recommend. And, you know, here's your rewards and here's potential risks. And then the nice thing about production is instead of, like, drilling and completions, you know, you have to drill a hundred wells to get a statistically significant result is, you know, the wells been producing 100 barrels a day.

00;11;18;23 - 00;11;37;24
Unknown
It goes down a week later, it's back up with your equipment, and now it's at 120 barrels a day. Right. And you can go, hey, you know, all we did was tweak this type of what we call a bottom hole assembly. And we can pretty key in, like, what we think happened and why we think we saw that improvement.

00;11;37;26 - 00;11;56;14
Unknown
Again. 20 barrels a day isn't super sexy for, like, an ExxonMobil, but for, a more on par, like. That's great. Well, and I will say with an X on mobile, if you do it on a thousand wells and that's it. Yeah. The scope that we want to bring it is have we start with what we can do.

00;11;56;14 - 00;12;18;11
Unknown
And then as we grow we build a bigger team. We get more run history, we grow. And then you can prove out, hey, we did it over and we've, we've done it's a 50 well field. And then hey we just hit 3500 runs. So we've now got some type of scale behind us. And now we're, you know, hiring and growing engineering and sales and we've we reinvested and built a bigger facility last year.

00;12;18;11 - 00;12;36;01
Unknown
So like we're, we're trying to just not to get over our skis essentially. Yeah. But it takes a long time like a start ups a ten year story. Right. Instead of like, you know, you see online and you go, hey, that's like two years old. And really it's like the guys have been working on it for ten years before that.

00;12;36;03 - 00;13;00;09
Unknown
I know every entrepreneur that started a company, you know, is an overnight success and you're like, yeah, for the last 15 years. Yeah, you're going through it. Yeah. They that's cool. So, you said something there that I'm going to call you out, for, for saying a piece of heresy here. Yeah, but I think we're brothers in arms on this.

00;13;00;12 - 00;13;25;19
Unknown
I actually think you should be watching your wells. And you should have a running metric of at what, percent is my, well, producing versus what it should be producing. So, you know, if I think it should be doing 100 barrels a day and it's doing 30, I feel like we should take that week to go get it back to 100.

00;13;25;22 - 00;13;45;09
Unknown
But oh my God, you would think I'm trying to like kidnap babies to get you to just shut it in a well and fix it. It's like no one in the industry will shut in a while to make it better. If it's producing. Yeah, yeah, I everybody's so busy. Everybody's got so much going on. We don't have time for that.

00;13;45;13 - 00;14;15;22
Unknown
I mean, welcome to the services. But it's, it's trying to relay that back and say, hey, we can we could potentially do better, but it's the there's just so much going on. And then it was, you know, in in the 20 tens, in 2015 that was big data. Big data is going to solve these problems. And it's hey, at the end of all of those big data things, it was, hey, we can say with pretty good certain in the next month this well is going to fail.

00;14;15;24 - 00;14;34;00
Unknown
So you should go preemptively pull that. Well, because it's going to fail. Well, the operator's going to say, I'm not going to do that preemptively. I'm just going to let it fail. Yeah. And so that's the again, I this is more in your background than it is on mine, the, the capital. And everything is spent on drilling and completions.

00;14;34;00 - 00;14;53;27
Unknown
And then you have a large value asset after that, but you still have to produce it for the next 30 years. So I see a lot of value in that production side and and increasing that. Whereas like all the, all the capital, everything is spent on drilling, which is that's where the sexiness is. Production is like the afterthought.

00;14;54;00 - 00;15;19;22
Unknown
But like to your point, if you can increase base production 20%, that's your your company value that you're lending like, but it adds a lot more value. And I think it's very much overlooked. And and I always took it a step further to of to your point, it's, it's the tail. And if we can make the tail better we have more PV.

00;15;19;24 - 00;15;47;24
Unknown
But also if you're selling locations, it's based on the existing wells and analogy and always said, look, if we make this world 10% better production in the tail, that may not matter. Cash flow wise, but imagine 10% more EU are on each location we're selling. Because I know we went through a period there where we just sold every asset at three times cash flow.

00;15;47;24 - 00;16;13;14
Unknown
But you look at some of the transactions happening today, people are paying for locations again. And and so I've always said, you know, what what what what decline curve and reserve profile are they going to put on that location? It's the 100 wells I've already drilled. So make those hundred wells as as good as possible. Yeah, but I think there's again, just a broader industry sense.

00;16;13;14 - 00;16;38;10
Unknown
There's such a disconnect from production completions drilling to reservoir to upper management. Right. And I think I and I and big data can put that together in a consumable fashion. Right. It's not there yet. But that's maybe the promises. Hey, we actually go in and we produce these wells and we have good relationships with the clients and the production engineers, and we see they have to go redo the decline curves.

00;16;38;10 - 00;16;57;06
Unknown
The reservoir engineers look at them every year. And hey, this one had quite a bit of uplift. They have to redo that decline curve. So like there's value in that. There's tangible value in that. It's just how do you relay that back in the food chain or to upper management. And again it's just not as sexy as hey, I just put on a 5000 barrels a day.

00;16;57;06 - 00;17;22;24
Unknown
Well, yeah. You know, I think the, the promise of AI is actually creating a unified source of data within the company because right now it's siloed up right land has their data production as their data. The C-suite literally calls people tell me what the hell's going on here. Yeah. And they have to wait two weeks to get a report of some sort.

00;17;22;26 - 00;17;51;07
Unknown
Or, you know, maybe they have some dashboards, you know, but, at the end of the day, being able to create that unified source of data is what we believe an AI native company is. And the thing that people are sleeping on and I can't harp on enough is if the C-suite can literally just go to a chat interface and say, tell me what that well did yesterday, production wise, tell me what that field did.

00;17;51;09 - 00;18;19;29
Unknown
Yeah. Oh, you know, I'm going to go meet with one of my, my, midstream company. How many volumes did I send them last? You know, the transparency down in the organization, as scary as that is to the VP of operations or the production manager over a field, I actually think it's ultimately going to be a good thing because equal parts someone's looking over your shoulder, equal parts you're able to educate, hey, here's what we did.

00;18;19;29 - 00;18;43;09
Unknown
We we increased this 10% and we spent $200,000 to do it. That paid off in 47 days. I think, I think you're going to have the tools to be able to do that, to. All right. So we do a second heresy. So this is where all of us does a pumper really have to go by a. Well, every day now?

00;18;43;11 - 00;19;03;29
Unknown
No. It's habit. Thanks I know yeah I think those efficiencies. Right. Like when I look at it like it's efficiencies, how can I be more efficient with my day, with my time, how can I make whatever carry further. And I think that's one of them is you don't need to. You have this route, but that route doesn't necessarily need to be that route.

00;19;03;29 - 00;19;21;23
Unknown
But that's what's been beaten into us is, hey, I need to do this or hey, I need to use this tool right? It's it's like, let's look at it from a different lens, take a step back. What's the bigger picture. And and again, like going back to our business specifically is it used to be a taxi or a tubing anchor catch.

00;19;21;23 - 00;19;42;05
Unknown
So it holds the pipe and then it's a gas separator. And the two would never intermingle. And and we want to look at it as a whole. Assembly. So you take a step back. What does this wellbore profile look like. What is the production look like. What are the last couple problems that the world has had? And can we combine all of that to make it a like a all encompassing system?

00;19;42;07 - 00;20;05;22
Unknown
And it's not just a hey, I picked this track because it's it's historical, it's a legacy tool. And this, this company I know has this and it's calculates to this separation capacity, whereas, hey, it's a higher GLR. So there's going to be more gas up the annulus and like a bigger picture instead of just individual components. That's an assembly and not individual components.

00;20;05;24 - 00;20;34;28
Unknown
And so again as small as that is and and and maybe Sally. Yeah maybe Sally can understand that. Yeah. We've just been this is just been beaten into us. It's this, it's this is this instead of, hey, let's just look at it holistically. What do we think is best for the well, and here's the reasons why. And I think, you know, that's part of our spiel on the AI front, is having that one source of data, that one source of record, that one golden truth, whatever you want to call it.

00;20;35;01 - 00;21;02;02
Unknown
And being able to look at it holistically. I mean, because at the end of the day, you you incentivize your driller to grow in under so many days. Right? Well, if he's coming down and veers off immediately, the fastest way is to to jog left, get right back there and all. You're not going to be able to lift that in seven years.

00;21;02;05 - 00;21;24;01
Unknown
Yeah. And in the, the somebody's having access to all the data over the life of these wells can actually design the incentive of, hey, you're going to run over two days in drilling. That's going to cost us an extra bit of X, but come back, throw us a clean hole so we can lift it in seven years. Yeah.

00;21;24;02 - 00;21;47;08
Unknown
You know, I mean, that would be the goal. Not quite there yet. But again, I think like we we will hopefully trend to do better. Yeah. And that's the objective again. Well and when you have all the data in one spot you can start analyzing that. Yeah. You know and and I want to be very careful how I say this because everybody's cloud compute bill is way too high.

00;21;47;08 - 00;22;12;25
Unknown
And I get that. But at the end of the day, storing this data really is costless. I mean, you can buy hard drives, as many hard drives as you want and store all your data. Right. And what I it gives you the ability to is access that data and go through 20 million pieces of data and extract what you want in.

00;22;12;27 - 00;22;35;11
Unknown
These tokens are going to go up in price and it's going to get more expensive, but in effect it's costless to to do that. And so being able to have all that data in one spot and somebody sit on top of it to your point and view it holistically of, okay, what do we need to do? You'll totally redesign workflows, incentives.

00;22;35;11 - 00;22;57;17
Unknown
And because it's going to be the life for the well, and to your point, everybody's going to have a different definition of the life for a while and what we want out of it. You know, Exxon's going to look at it different than, Chuck Yates. Well, company and stuff. So yeah. All right. Give me some crazy type things potentially you guys have done.

00;22;57;20 - 00;23;20;21
Unknown
This is where you take your victory lap. So give me the, give me the cool stories of of stuff you've done, for clients that you like to brag about to, we're not much for bragging. We just work. That's it. You know, it happens gradually, like starting in 2020 and Covid not knowing what to do.

00;23;20;21 - 00;23;42;22
Unknown
And then, coming out with the system and then coming out with a couple systems and growing clients in different areas. North Dakota was a big success, right? It was a hyper focusing on one area and saying, hey, if we can do it here, we can branch out to the mid con, to South Texas, to West Texas, the Balkans corrosive.

00;23;42;22 - 00;24;04;27
Unknown
It's deep. It's a lot of gas. It's a lot of sand. So it was can we put together a system that can work. And it's not just a one time but like is it repeatable. And we were able to do that we call it Fat Man. 239 so we have fun with, our nomenclature. The company's name is Vanover.

00;24;05;00 - 00;24;34;21
Unknown
We have Fatman, then, man, little boy, and gadget were first four tools. Nice. Then we name. My blog is Old Man Coffee, so I'm kind of right there. Right on it. Yeah. But I think it's so small. Small wins. It's not like, it's it's not a. Hey, we we hit a home run here, and this, well, went from and we actually have had Wells go from like 100 to 400 or 500 barrels a day and gas to go from like 100 M to a million or 400 to 2 million.

00;24;34;21 - 00;24;56;02
Unknown
And like, again, I used to throw those out there to like, production engineer working in West Texas. That's nothing but to like, a you or me if we own that. Well, like, I just want 1 or 2 of those wells and I'll be okay. So be back, baby. Yeah, yeah, I mean, I'm underselling it, but but we do that pretty consistently now, so.

00;24;56;05 - 00;25;18;02
Unknown
So, working with clients and this is kind of the finance bro coming out of me, are you able to capture data and show ROI ies and months of payback and and stuff like that? Or do you rely on your client to do that internally? So we we try to work closely with them and they actually feed us some of that information back.

00;25;18;02 - 00;25;34;13
Unknown
But again, welcome to the services. If you take that and you try to sell it to the next client, then they I mean, they've been sold that a thousand times, right? So we try to sell it based on what we know. Hey the tools are strong. They're going to last. Hey, we can show them the uplift in this area.

00;25;34;15 - 00;26;04;20
Unknown
But in reality, like, if we started with a hey, we we're going to increase your production X amount. They're going to kick you out of their office because they think you're just another salesman. Oh, interesting. Yeah. Now I'm kind of finding that out, selling stuff that you've got to make it there, right? Yeah. Yeah. And, and I always take, whenever I hear, like, push back on sales and salesmen, it's like it's a profession and and operators can't do what they do without service companies.

00;26;04;26 - 00;26;32;23
Unknown
Right? It's an ecosystem. Right. And if that's broken, then what happens? Then? They start going vertical and they integrating service companies into their own company, which I don't know if we're there yet, but they need to treat. And I wish every operator had the chance of working at a service company, because I think if the table was reversed and they were working at a service company, they'd give the service company a little more of their time, or they'd answer the phone or they'd call them back.

00;26;32;23 - 00;26;49;02
Unknown
But as a sales professional, you go, hey, you know what? What are your challenges? And if there's a fit that maybe they can dig into that, or maybe they take some objections. But if there's not a fit as a sales professional, they should kind of go away or, hey, I'm gonna follow up in six months. Is that okay?

00;26;49;04 - 00;27;10;05
Unknown
And said the operator just shuts the wall down and goes, man, I'm so busy and I get 100 of these calls a day. And like, but there is a balance between that and, I mean, I, I never and I guess I did understand I'm, saying that incorrectly, but the whole Hatfield and McCoy type relationship between. Hey, man, I got a little leverage.

00;27;10;05 - 00;27;36;22
Unknown
I might come beat you over the head. Oh, now you have leverage. Got. I remember begging for for Riggs at one point and just. Yeah. I'm not going to call you back. You didn't call me back. It is. Yeah, there's there's probably something to be done for that. I the last old man coffee blog I, I wrote, the opening line is, I thought my ex-wife hated me until I became an energy software salesman, because it's just.

00;27;36;24 - 00;27;54;25
Unknown
Yeah, software is kind of the same way. It's just, you know, people I know really well. I mean, somebody I was on the board of and, like, consider one of my dearest friends. I go and start talking like, are you going to screw me? Are you just going to jack up the price? I'm like, whoa, whoa, whoa, when have I ever acted like that?

00;27;54;25 - 00;28;25;00
Unknown
But it's yeah, it's true. The, there's there's definitely there's probably definitely something in the industry could do with more collaboration and hopefully to some degree, having more consistent information will help in that. Yeah. You know, so, so people are out there, they're thinking this is kind of cool. The the stuff you're doing. Who do you want a phone call from?

00;28;25;02 - 00;28;46;16
Unknown
I mean, it sounds like oil and gas operators. Are there certain sizes, certain base and certain people in the organization. Yeah. So our our again growing the company was 100% balk. And last year we wanted to put an emphasis on West Texas. Right. It's the gorilla in the country. But it's also a place you go to get lost.

00;28;46;16 - 00;29;13;02
Unknown
So until we got scale we didn't even want to touch West Texas. So now we would love calls from West Texas operators. We deal a lot with production engineers, field supervisors like people out in the field doing the day to day operations. That's that's kind of our clients and that's who we go after. And and how much are and and and the answer is going to be it depends.

00;29;13;02 - 00;29;40;04
Unknown
So just give me a wide range. Again never haven't been an ops guy. But what's like the cheapest system you sell. What's the most expensive system and kind of variations in between. Yeah, I mean, you, you can go on like a plunger lift lower volume, $2,500 system up to like a fully kitted out ESP production system for 30 plus grand.

00;29;40;04 - 00;30;03;10
Unknown
So it's it's a range and right. It's all taking existing technologies and improving on them. We're not throwing out like an existing kind of set. Set a price is we're justifying the cost based on materials based on some engineering based on complexity machine. It's not hey, we just came out with this wild widget and we want to capture the value the operator's capturing.

00;30;03;10 - 00;30;26;21
Unknown
It's two different philosophies. We've seen working with startups or working with new technologies is hey, this this increases production 10%. As a service company, I want to get the value out of that. It's going to be $100,000 because that 10% uplift justifies it. Whereas the other side is, hey, I know cost of materials, I know cost to engineering, I know cost to the machine and my overhead.

00;30;26;21 - 00;30;45;19
Unknown
And that's kind of the approach we take. So again, two different again, coming into business as an engineer. Like it's just learning on the fly. But that's that's our approach is hey we know what our costs are. We know what kind of margin we want. We'll take that instead of, hey, we know we can increase production. So we want that value.

00;30;45;22 - 00;31;11;17
Unknown
You know, everybody, as I'm learning in software, everybody in software has always tried to do value based pricing. If we create this and no one's been ever able to do it. I mean, I'm kind of a finance pro at heart, so I'm probably going to die trying to do this. And you're right, it's it's kind of at some point you can go in and say, hey, let's create a contract based on what the are.

00;31;11;20 - 00;31;37;27
Unknown
You know, you're spending $200,000 a year right now, doing your regulatory filings. If I automate that for a $50,000 piece of software, get a four ROI can can we price it that way? No. Just tell me the price. Yeah. I'm an oil and gas guy. Yeah, tell me the price. I've. I've thrown it out a few times, but nobody's taken me up on it and say, hey, I'll give you the tool for free and I'll take a portion of the uplift.

00;31;38;00 - 00;31;58;26
Unknown
Yeah. And as soon as they go. Well, no, I was just I was just kind of kidding. I was just yeah. Our money. Our money is where our mouth is, right? We stand behind the tools. It's they're solid products. Yeah. We, we've got one guy right now. We're talking to that potential. He's just going to come incubate within collide.

00;31;58;26 - 00;32;24;18
Unknown
Basically, we're going to give him his own Azure instance, or you give him all his tools and stuff, and he's going to go build his, AI native oil and gas company infrastructure. Just we're going to do that. And we know this guy well enough that we'll do it on the fly and we'll cut the deal afterwards. I mean, we all agree we need to get something for that, and I'm ready to take it over.

00;32;24;18 - 00;32;49;01
Unknown
I'd just give me an hour. I'd give me a a slug of your company. Yeah. You know, because I kind of want to go to Silicon Valley when we raise money and say, look at the shit we do in the oil and gas business, you know? Yeah, we've got we've got another deal where we we created some mapping technology for, a group of land pros because they basically wanted to be able to go in and look.

00;32;49;01 - 00;33;17;19
Unknown
And they have a theory of their certain kind of wells holding things, that they shouldn't be holding with. And they can find that on the map. Then they go get the underlying leases and bust the leases and stuff. And we in effect, did that for them for a cash payment that was really cheap. And, but they've promised us as they bust leases and stuff, they're going to give us something so overrides or payments as they sell those things off.

00;33;17;19 - 00;33;45;00
Unknown
So if we have any luck with that, I'll, I'll share the model with you. But I'm not holding my breath. Yeah. That's the dream. That is that is the dream. So give me give me kind of 1 or 2 sort of lessons learned today that you probably didn't expect or appreciate when you were starting the company. Well, give me give me the hard knocks type thing.

00;33;45;00 - 00;34;07;12
Unknown
You've learned being an entrepreneur guy. You go through stages, right? It's the startup stage of it's it's you and a couple guys and you grind really hard and then it's a you, you have to branch out like one degree of separation. So you go, you're still probably 1090 nines and some w-2s. And then now you're offering benefits. And so those those are lessons for again an engineer.

00;34;07;13 - 00;34;28;23
Unknown
Right. And as an engineer starting a company like you don't know any of that. And then operating in different states. Right. So then once you operate in the different state sales certificate, you have to file taxes every single month from that point forward. So, you know, we operate in Louisiana, Kansas, Oklahoma, Texas, Wyoming, Colorado, North Dakota, like those we all did ourselves.

00;34;28;24 - 00;34;51;16
Unknown
And now we have to or forever forward file sales tax monthly. And if you don't do that then you're penalized on it. So it goes into 401 KS of safe harbor matching. And like again you get there and all of that stuff is kind of besides our widget making. Right. So like that's that's just one. And then as facilities as you grow like that's another thing.

00;34;51;16 - 00;35;18;19
Unknown
And as you it's the rule of three. Like you grow three times then all your systems in place break. So you have to redo your system. So what works in Excel no longer works in Excel. And you hire like a GAAP accounting firm to handle ERP and payroll. And it's just it's been it's been a lot of everything that's that's well said because people always say, oh, I want to be an investor.

00;35;18;22 - 00;35;42;15
Unknown
And I told people time and time again, I was not an investor. Kane. I ran a money management firm. Yeah. You know, I had a PNL, I had HR issues, I had, you know, structuring issues. I had legal issues. I had compliance issues and all that. The actual time I said, there you go. Should we invest $25 million here was relatively small?

00;35;42;15 - 00;36;03;23
Unknown
Yeah, unfortunately. And, yeah. No, that's another hope to ise, you know, automate all that crap. Okay. So agents do that stuff I don't think people will ever go away. So that always yeah it'll it always be present. It may be a little bit easier to manage but 1 a.m. am I hope for AI because I agree with you.

00;36;03;23 - 00;36;26;08
Unknown
I think I think the way to think about a job is it's a series of task and so the series of tasks are going to change going forward. You know, there's not going to be I mean, think about it. Back when the computer came out and you had word processing, you used to literally have rooms of people that would type documents.

00;36;26;10 - 00;36;47;29
Unknown
And if you made a mistake on that document typing it, you had to start over. Yeah. Word processing change that. I mean, I you're too young to remember this, but I swear to you, this is a true thing. When email first came out, people would print out an email on paper, take it to the boss, the boss would mark up a response and somebody else would go type the email back.

00;36;48;03 - 00;37;22;08
Unknown
I don't know anybody that doesn't respond to their own email dictated. It's not read. Yes. Yeah, yeah. I mean, I was maybe 17, 18. I got one of those dictated but not read. Yeah, yeah. And then after that point I think it changed. Yeah. And so tasks are going to change. And the hope is with AI is the mundane finding information copying pasting repetitive non value add stuff like regulatory filings compliance filings, things that truly aren't about making a better widget.

00;37;22;10 - 00;37;45;10
Unknown
The hope is you automate that so you can go make better widgets. Yeah. You know that's that's what I think the, the real hope is I like physical widgets out in the field. It's very hands on. I don't think at any point you're going to move away from having to be out in the field. Yeah. Whereas I think a lot of the emphasis now is how do we digitize and how do we how do we become more efficient with our information.

00;37;45;10 - 00;38;16;18
Unknown
But I don't think I don't think you ever remove a pumper. I don't think you'll ever get rid of downhole widgets and downhole pumps. It's not sexy, right? But I think that is something that, again, is completely overlooked. I agree with you that there will always be people in the field. I do think sooner rather than later, robots and self-driving cars are going to go to Wells, and what's going to happen is they're going to handle the what I'll call day to day.

00;38;16;20 - 00;38;35;00
Unknown
And they're and you're going to send drones over the wells and stuff like that, and you're going to have sensors and a lot of telemetry all that. And we're going to get to a world where Pumper Bob's going to get the agent saying, hey, you need to get out to this. Well, to figure out what's going on. Yeah.

00;38;35;00 - 00;38;59;16
Unknown
And so Pumper Bob's going to do that. Pumper Bob's going to go, you know, I mean, I honestly think the the Tesla driving car is going to pull up to the well and a lawn mower is going to come out the back and, and mow the grass. So, so BP was trialing it was augmented reality glasses where they would have their pumper or their supervisor go out there and wear glasses, and the engineer would be on the other line.

00;38;59;17 - 00;39;23;16
Unknown
Yeah. And he would be looking at what was going on. And it's not too far of a step to see. We just automate that with a robot or a drone. But again, I still think you you have liquid that needs to be lifted to surface and you have to have some means to do that. So industry, I think for the last by six plus years there hasn't been in the investment in the tool widgets side.

00;39;23;16 - 00;39;46;07
Unknown
You don't see the startups like us like you just don't. Yeah. And it's been a we lost half our people and went broke in 2020 you know. So yeah. But I think it's again one of those under-invested areas that like there is as an operator, there should be an emphasis put on it as a service company. Like there's no money invested in R&D anymore.

00;39;46;10 - 00;40;14;15
Unknown
Yeah, but there's room on the table for us to increase production and just to do better. Yeah, but what do I know now? Yeah, I will say, you know, just sitting there as a board member, you know, I've been on 100 boards, right. And the, the things that work for the board to say yes to is calculating that ROI.

00;40;14;15 - 00;40;41;00
Unknown
Yeah. So cost me x. Here's the being able to say here's the production uplift. Here's the wedge. Here's where it hit. Pay out those things. Those things get yeses. And if you walk in without those things the board's usually telling the management team we'll go figure that out. Yeah. You know because ultimately at the end of the day, it's got to come down to money.

00;40;41;00 - 00;41;03;23
Unknown
But what do you think if if you go, I've got a $15,000 widget that integrates into your already existing operations. It's it's no more risky. And it's actually only maybe a $5,000 incremental investment, but you get 100 extra barrels or you get a 10 or 20. The payouts in days. Yeah, right. And then you go, why didn't we do this sooner?

00;41;03;23 - 00;41;38;04
Unknown
Or why haven't you done this, or why wasn't there any interest in it? And and then that's the sire. Well, why not at all? Because I was so busy. I was doing my job. I was like, I didn't have any time to optimize that. This other side. This goes back to the the information thing. And I'm glad you brought this up, is right now because information's siloed up and it's kind of big picture and all that ops guy is literally graded by cost per month.

00;41;38;06 - 00;42;06;16
Unknown
And one of the best CEOs I had at Kane, one of his brilliance. And we're actually I'm actually trying to get him to create agents to do all this. But one of his brilliance is he literally created an income statement cash flow statement and balance sheet per well. And he gave that to his pumpers and he had metrics like return on equity, etc..

00;42;06;23 - 00;42;35;20
Unknown
So the pumper can make that call. The pumper could go, hey man, I spent 20 grand on chemicals this month, but I'm seeing production up 12 barrels a day and calculating up, and he would see the calculation and it would and they would track pay back on that stuff. So it actually freed that guy up because the problem you've got, talking to the ops manager is one total line item of you can only spend X.

00;42;35;20 - 00;43;01;00
Unknown
Yeah. And not how do you make me more money with our allies and so hopefully what happens is the more progressive companies get that way where literally by well you're starting to look optimize. How do we do that I mean we we can tell you know, you walk into a, an engineer's office or a go to a presentation and the either the conversation is, what kind of value do I think I can get out of it?

00;43;01;00 - 00;43;18;14
Unknown
Or just what is the cost, right? If the cost is more than what it was, then we're we're negating that. But if you talk to a CEO, it's never he's never looking for the cheapest thing. Yeah. What what that what can I get value out of. What's going to add value to the company. It's not what's the cheapest gas separator I can get.

00;43;18;17 - 00;43;48;14
Unknown
Right. And that's like kind of keying in on that. You can kind of tell where your efforts should be spent. Yeah. No, that's, that's interesting. We're the way we're seeing that on AI software. Kind of the bifurcation on it is when somebody is like, okay, can you optimize my regulatory filings? Oh, you can that's good, blah, blah, blah.

00;43;48;17 - 00;44;15;28
Unknown
Let's stop there. Show me an off the piece software, off the shelf software that does this. Those are your people that are basically saying if it costs the same as the other one, the people that say, oh, I'm going to have one unified source of data. Oh, I'm going to build a deep brain within my company. Oh, I'm going to be able to fundamentally change workflows because agents will work 24 seven my workflows currently design because I want to go home at five.

00;44;15;28 - 00;44;35;04
Unknown
I want to go on vacation for two weeks. I don't kick in to I have three cups of coffee in the morning. Right? Yeah. So so yeah, that's that's kind of so when I get somebody buying into the whole we're going to build a deep brain here in 18 months and be a game changer. Those are your value guys.

00;44;35;04 - 00;44;53;18
Unknown
Yes. Yeah. Those are the guys you want to hang out with. Yeah, exactly. Yeah. We, I think we've gotten to the point, where those are the folks we're hanging out with. Instead of I said the other day, I've stopped begging for business. You know, now I'm being a little picky and choosy. Yeah. So how do folks get Ahold of you?

00;44;53;21 - 00;45;19;07
Unknown
Phone, email. We've, we got a website. We got LinkedIn. What is that website? What is that? LinkedIn the brought us. And then LinkedIn is Vanover. Van and Eva are cool. Yeah. Awesome. Well, dude, I appreciate you coming on and nerding out with me because, like I said, I was always finance bro. They wouldn't let me anywhere near the field.

00;45;19;10 - 00;45;22;20
Unknown
So any chance I get to talk about this stuff, I love it. Yeah.