Today, the oil patch is being digitized. Everyone knows “big data” enables the industry to assess trends and solve problems faster than ever before. Moreover, an increasing amount of the problem-solving is being done in offices rather than in the field. Digitizing the oil patch is seen as the solution to a number of problems oil and gas companies face in meeting the liquid hydrocarbon needs of the globe. Digitization enables the capture of institutional knowledge and its transfer from the older generation of workers nearing retirement to the new, younger generation of employees taking their place.

Oil and gas company CEOs see investment in digitizing their business as a ticket to a more efficient and less-costly operation. In the face of challenging commodity price outlooks, finding ways to reduce operating costs is critical to sustain profitability and even preserve their companies. The pace of this push into the digital energy world is accelerating, both out of necessity and because of digital technology’s successes. As with all technologies, not every product or service will be a success. But, if you are going to succeed in reducing operating costs, giving up sledgehammers for tablets will be necessary. The problem is figuring out which sledgehammers to give up and which tablets to embrace.

When Warren Buffet gave most of his wealth to the Bill and Melinda Gates Foundation, he told them he wanted them to “swing for the fences” in their new endeavors to expand educational opportunities and access to information technology in the U.S. as well as to improve healthcare and reduce extreme poverty worldwide. While Warren Buffet knew novel approaches to these macro issues would “strike out” a lot, he also knew every “hit” would create significant results. So too is it in the oil patch.

An energy private equity fund manager recently explained why his fund was investing in digital solutions for the oil patch. As he explained, it takes $750,000 to $1 million investment in a well to gain a 20% productivity improvement when relying on the sledgehammer method, but only $100,000 to $200,000 with digital tools. His point was that few people appreciate how much of the oil business still relies on manual labor ‒ something his fund’s investments will hopefully change. The heavy labor cost component of the energy business remains large and ripe for being cut.

For this Company Spotlight, we interviewed NatGasHub Founder and CEO, Jay Bhatty, about their efforts to make the natural gas scheduling process much more efficient and secure. NatGasHub is a cloud-based, multi-pipeline natural gas nominations dashboard that aggregates pipeline data from numerous pipeline websites. For more information on NatGasHub, please visit www.natgashub.com.

Background: In October 2016, Jay Bhatty left J.P. Morgan and founded NatGasHub in an effort to provide the natural gas trading industry a more streamlined process of scheduling the physical delivery after a trade is executed. Through his 14 years of commodities trading experience, Jay saw first-hand how much redundancy and human error could be eliminated from the scheduling process. What was taking the schedulers hours to complete should only take a few minutes.

Value Proposition: After traders agree on the price, quantity, and date the natural gas is to be exchanged, it is the schedulers responsibility to coordinate with the counterparty and multiple pipelines to ensure delivery happens accurately. Before NatGasHub, this process involved keeping track of this information manually through spreadsheets and navigating numerous pipeline websites, which is very inefficient, introduces human error, and creates security risks. The following NatGasHub features enable it to significantly improve on these shortfalls:….READ MORE

As anticipated, Enervus acquired RS Energy Group to create one of the largest SaaS and data analytics companies in the energy industry. RS Energy is the latest acquisition of a buy and build strategy by Enverus (portfolio company of Genstar Capital). Prior deals inside the Enverus platform have been Drillinginfo, PLS, 1Derrick, MineralSoft, Midland Map Co., MarketView, DataGenic Group, PRT, Oildex, Cortex, Red Dog Systems, and RigData.

Related Press Release: Enverus and RS Energy Group Combine Forces

Quorum continues to build out its SaaS platform for E&P and midstream companies with the acquisition of EnergyIQ. EnergyIQ specializes in the organization and categorization of well master data. With the acquisition, Quorum estimates it provides software to over 75% of producers in the United States.

Related Press Release: Quorum Software Acquires EnergyIQ

Chevron is taking a secondary approach to reducing carbon emissions ‒ capturing it post-production. Svante has a demonstration plant in Saskatchewan capturing 10,000 tons per year from an industrial natural gas steam boiler and plans to build on this concept for one of Chevron’s California facilities..

The $15 million Series B funding round was led by Cottonwood Venture Partners with additional investment from Mercury Fund and Ambyint’s management team. Ambyint focuses on software solutions to automate and optimize artificial lift operations to increase production.

Energy Technology Musings

Trading Manual for Digital Labor in Today’s Oil Patch