White, Yellow, Pink-Really?

By Rob Ratchinsky

We are all now responsible when it comes to cost control for our operation, or are we? The get r done, approve how much costs later mentality, has both blessed and plagued the oil industry since inception. Nobody seemed to blink during $100+ oil as AFE’s out ran their budget constraints in double-digit fashion and yet the science of drilling and completing unconventional wells reaped major benefits. So, in hindsight, and for many industry experts and business owners who closed their door over the past few years, I pose the question. While we bottom out in this seemingly everlasting dip, will we collectively take advantage of digital tools and process controls that have somehow been ignored by our industry for decades? I believe the answer could finally be a resounding YES, as we look wide-eyed into the promise of the next boom.

Top three reasons that producers, service companies and contractors will adopt industry-changing digital products.

Efficiencies
Transparency
Process Improvement

The millennials may be a lot of things, but one thing that you can credit this generation with is finding ways to get the same job done with as minimal effort as possible. Their dedication to work-life balance dictates their decision making as new leaders in our industry. The generational gap between these new leaders and their now retired managers, forced or not, may actually spur the implementation of new software solutions and digital platforms. Therefore, many of the professionals considered veterans of the oilfield will be forced to adopt this new digital landscape or remain on the sidelines. Whether you consider yourself a producer, operator or contractor, let’s take a closer look at the movement of cash within our billion dollar workflows.

Shedding Light on an Archaic System

“This is the third time I have driven out to a location to get my #### ticket signed” If you can’t relate to that quote, then read no further. The simple fact that our industry invoices through a carbon copy, pink, yellow, and white system would and should be embarrassing. When I shed light on our archaic system of checks and balances with those outside of the energy space, they look at me dumbfounded. I don’t blame them. The average mid-sized operator onshore in the US contracts thousands of vendors ranging from a welder who operates out of his living room to the Haliburton’s of the world. Yet even with billions of dollars changing hands we scribble out illegible notes on tiny pieces of paper and stuff them in coffee cans in the hopes we will get paid net 30.

Leading to a Digital Oilfield

Now for the good news. The race has begun, led by software start-ups based in Houston, Denver and Austin driving us straight into a digital oilfield. Their plan is to create accountability, transparency and efficiency while speeding up the flow of capital. Seems novel, right? The decades-old movement dubbed “software start-ups” has finally found its way, and perhaps from Austin, into our industry and shows no signs of slowing. The digital transformation of the energy industry has begun and if you plan to stay relevant and competitive make sure you take meetings with those who may be wearing a hoodie and sneakers. They could be on to something. If not, you can still take solace in the fact that the coffee can be stuffed with your livelihood probably survived that North Dakota blizzard or Oklahoma tornado.