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Welcome to Conventionally Uncouth with Reed Goodman. The show that gives the mic to the men and women who’ve been drilling, pumping, producing, and wildcatting for decades, long before shale. This show catalogs knowledge, shares stories, and reminds us: there was a life before shale. And there will be one after. Stories straight from the oilfield, real insights, lessons learned, and (probably) a healthy pour of whiskey.
0:00 I can't believe that it's finally me and you just us and your friends Steve.
0:10 Good morning, Yoshi. Morning. Thanks for coming in. Thanks for having me. Yeah, and from Midland. Yes. Cool, very cool. So,
0:20 conventionally on Koothe, you've spent a little bit of time in the unconventional world. Correct. But with some of your background, which I'll have you go into here in a second, you ended up
0:31 managing a bunch of conventional is just by proxy from some of the assets you all had. Is that correct? That is correct. Yeah, yeah So I'd really like to dig in today, some of the differences
0:42 between the two and the analogies you use from one to the other as you've developed some of the conventional, or developed the conventional resources in an unconventional way. Okay. But before we
0:53 dive into that, why don't you kind of give us a brief
0:57 background where you've been, what you're into, that sort of stuff. Sure, Yoshi Pradan, I go by Yoshi. Yoga Shri is my full name so you can call me either or. like to call myself a shalenio
1:10 because I'm a millennial, but all my
1:14 experience has been in unconventional 10 years, all in the Permian, primarily lived in Midland for about eight years, grew up in Houston. I've worked for a number of companies throughout the
1:26 Permian, and a lot of my work has been in reservoir and production engineering. And then over the past few years, you naturally get into data science and data analytics and all things data related.
1:40 And I like to add that to my repertoire as well, when it comes to some of the work that I do. You know, been in the corporate space for about over 10 years now, and most recently, I went off to
1:54 do something on my own and joined a startup company as well. So I'm taking on the entrepreneurial space You know, a lot of people have told me I'm very entrepreneurial, and I'm the last one to it,
2:04 usually when people tell you, sometimes you're the last one to admit it or to realize it yourself. So I came to that realization more recently and wanted to take that path. Yeah. And now I'm here.
2:17 Yeah, that's exciting. I'm glad you've had that support from other folks, seeing that in you and it sounds like they've supported you a little bit to help you make that jump and go out there and do
2:28 that. So that's really awesome. What's the name of
2:32 your company you've started? Sure, so the company I started is a consulting firm. It's called Iron Lady Energy Advisors. Okay And really, the vision is to make it a consulting firm, a global
2:44 consulting firm that supports all types of energy. So it's not just upstream oil and gas, but also wind, solar, geothermal, you name it. And then right now, it's gonna be a one woman show with
2:57 particular an upstream oil and gas where I lean into my experiences and reservoir production engineering and then data science and data analytics. Okay, very cool Yeah, so upstream.
3:10 oil and gas.
3:13 So you went to college. Yes. Have a degree in petroleum engineering. Correct. Okay. And that was kind of, you know, being a Shell lineal, which I also very heavily identify with, right?
3:28 That was kind of maybe a transition time for the industry. They were from what I understand, which I didn't go to college. Well, went to college. Okay. And I got a master's degree in duck
3:41 hunting and fly fishing. Nice.
3:45 But they never gave me, you know, the sheepskin, the piece of paper for that degree. But I definitely keep that in the drawer. And it's helped me sales wise and oil and gas quite a bit. But from
3:57 what I understand,
4:00 you know, from like a petroleum engineering side and engineering in general of oil and gas, we were in this transition phase while you were in college. We were starting to try to move into and
4:10 understand how to develop like what they did in the Barnett into all these other reservoirs. And so I'd love to hear kind of what you were taught, like the rule of thumb and the way we looked at
4:24 things and how we treated the data that we had, 'cause you know in a conventional space, you don't have 10, 000 data points to go tweak this reservoir You might get one or two or three good shots,
4:38 you know, at going into some of these different,
4:42 these different pockets, you know, this, hitting this reef, you know, or hitting a high, you know, where they have a four-way closure and getting into that reservoir and tweaking it. And so
4:53 the thought process of how to develop those versus how we develop unconventional, you know, can be so wildly different And so I'd love to hear like kind of. what you were taught and then how when
5:10 you got into those first kind of unconventionals, you were like, man, this isn't really maybe what was in the class. It wasn't what was in the textbook. We had to adapt and change, you know. So
5:22 yeah, I guess the question is like, y'all didn't have any case studies at that time in college, really. Like in your courses, y'all didn't, I mean, tell me what did y'all have a class on?
5:37 I guess there's some large fields out there in the world, right? But did y'all have a class on
5:43 developing those large fields and how we look at the data from them and the reservoir side and or was this all just kind of, you got in there and you're like, well, I'm gonna draw this little piece
5:54 and this little piece and I've got to figure out how to put it together and make it work, you know, in a new oil field.
6:03 Okay, well, yeah. I was taught a lot on conventional reservoirs in university. I mean, the idea is that, yeah, the majority of the world's fields are conventional. So you'll learn, I was
6:19 exposed to a lot of conventional reservoir engineering. But you hit the nail on the head that when I graduated and when I started working out in the Permian, the focus was on unconventional,
6:29 horizontal, well drilling. The geometry is different The way you look at these unconventional reservoirs is a little bit different because in conventional reservoirs, those particular zones are
6:39 known to be as source rock or in layman's terms, yeah, they're the rock that allows them, that ends up having the organic molecules migrate up to the actual reservoir, the actual rock that stores
6:57 the oil. And that ends up being a reservoir Now in Unconvention Reservoir, it's the Source Rock. that is actually the reservoir, the idea for unconventional reservoir. So it's changing your
7:10 mindset to where, instead of avoiding those zones, where that we're hard to penetrate 'cause they're shale, they're tight, and you don't use typical conventional completion means like gravel pack
7:21 or sand pack or anything like that, you, or even a typical acid job, you end up having to use hydraulic fracturing and a completely different geometry. I can go on and on and nerd out about this,
7:33 but I will limit that conversation to further on in this, in this, in, you know, in this chat. But yes, you, that first shift in mindset is the source rock is the reservoir. The zones that you
7:48 used to avoid in the conventional log that we were taught to avoid that you wouldn't calculate hydrocarbon from, that's the zone that you're actually gonna have to target. Another thing you have to
7:58 think about in unconventional versus conventional reservoirs and I actually made a YouTube video on this on. what, how shale anneals are supposed to look at can unconventional reservoirs from a
8:09 conventional lens. Okay. So it's, it's how we forecast our wells too. In unconventional reservoirs, there's a long period where the well just keeps flowing and it's called a transient period or,
8:27 or it's, it's an unstable period. Basically, you're just getting a lot of fluid out of the, out of the rock, out of the source rock because it's the source rock. However, in conventional
8:38 reservoirs, that is a shorter period. So the way we forecast those wells, the techniques that we used to forecast those wells are going to be a little bit different. Yeah. So that's the best way
8:49 to say it. But yeah, it was definitely a mindset shift that, here's everything you learned in school, and this is going to be 80 of the world's fields And now, oh, by the way, this is going to
9:02 be something completely different. Yeah. And you have to turn petroleum engineering over its head. But the truth is, you still need to understand conventional reservoirs because there are some
9:12 techniques that we learned in conventional reservoirs, such as the math, such as the geometry. And it's still the same. To some extent, you just have to shift your mindset a little bit in
9:23 unconventional reservoirs. It's like taking a test where your professor tells you the exact way to solve a problem And then on the test, the professor gives you the answer and tells you to derive it.
9:35 So that's the best analogy to say between conventional and conventional reservoirs. Yeah, and your
9:43 loose definition of conventional versus unconventional is largely based on deliverability, how tight. It sounds like how tight the rock is, if it's going to deliver to us And then maybe a little
9:57 bit of caveat there on -
10:02 you kind of alluded to self-sourcing oil or whatnot, but I don't wanna put words in your mouth. How would you, if you had to give me like a 30 second elevator pitch of what's a conventional or
10:13 what's an unconventional? Where would you start there? Oh man, so when I was taught in schools, there's like, there's so many ways to describe unconventional reservoirs, but the most
10:27 conventional way to describe unconventional reservoirs and with the difference between unconventional and conventional, a conventional reservoir is where the reservoir does not have the source liquid,
10:41 is not the source liquid. Unconventional reservoirs, the reservoir is where the liquid is sourced from. Okay, interesting, interesting. So
10:51 that's kind of more of a textbook answer. Correct. Yeah, we've debated this a little bit already. Yeah So, and
10:59 you know, in my.
11:02 and my layman mindset, right?
11:05 It's always been, well, if we go horizontal and we start, you know, having the hydraulic fracture and I guess
11:13 that is a recipe that was derived from what it takes to be successful there. But that's not actually the definition. So I like that. I like, you know, trying to understand there. So one of the
11:26 burning questions I've had, knowing that you're gonna come in and talk to me, has been,
11:34 let's take the Wolfberry for example. Got it. Right? Pretty well known. You probably did a lot of work in it. Yes. Okay. So we drilled it vertically and fracked it and made some great wells,
11:47 okay? And maybe on 80 acre spacing or 40 acre spacing. And then we came in and drilled it horizontally and fracked it in multiple stages How do we translate? Um.
12:04 Say you have a unit, right? 1, 280 acres, you know, a two-mile lateral opportunity. Stick with me here, right? And you could drill,
12:18 you could drill 32 vertical wells in that 1, 280 acres, okay? And if each well was 100, 000 barrel well, you've got 32, 32 million barrels of recoverable Okay, does that directly translate into
12:38 well, if we drill four vertical or four horizontal wells and plug and perf and hydraulically fracture, do we still end up with about 32 million? It's just more cost effective? Or are we normally
12:51 more effective at draining the reservoir and we might end up with 35 or 4 million barrels? Like how do we translate that vertical drainage area into a horizontal drainage area. That's a really great
13:05 question. And a lot of it is a difference in geometry. So when you have vertical wells and when you frack them conventionally or when you complete them conventionally in the Wolfberry, for example,
13:19 things you have to take into account is the geometry, how you're gonna drain that reservoir. It's kind of radial. It's like a cylinder when you think about it. So you're thinking about 32
13:30 different circles or 32 different cylinders that are being fracked. Now, horizontally, you're thinking about boxes. You're thinking about rectangular prisms. Okay. So you're drilling four of
13:43 those two mile or four mile in this case, rectangular prisms. And the other thing you have to take into account is where the fracks you're gonna go. Okay. So when you frack a horizontal well,
13:57 there's been a lot of studies done in that most of the fractures will go upward. So when you complete the well, when you frack the well, it goes upward. So there's like a rectangular prism above
14:07 and a little bit below when you have a conventional reservoir, you don't have that much of that height. It depends on that vertical permeability, especially when you're fracking a conventional well
14:22 in an unconventional zone, like if you're fracking a shale zone, there's a vertical permethere's a horizontal permeability component to it, which willthe fracks will go outward. So what Horizontal
14:34 wells end up doing for you is that the tubethe horizontal is already, you know, is already going along that horizontal permeability. It's just that completing that vertical permeability to enhance
14:47 that vertical permeability is where it becomes a lot more effective So theoretically, you can get the same 32 million barrels, baking it more cost-effective by drilling an8 million well. a two mile
15:02 or well, as opposed to probably, I don't know, 3 million for a horizontal well, and times that by 32. Yeah, yeah. Versus for horizontal wells, and that's8 million each. So that's a third of
15:16 the cost for getting the same kind of recovery. Yeah, interesting, okay. And so we can
15:26 expect a similar recovery. Or even more Or even more sometimes. Especially if we understand the geomechanics of that rock. Which way the stresses are, and we can drill a little bit more a long,
15:41 or I guess you're normally going perpendicular to the stress. So what you're trying to do. Oh, fun. And I know you're making - Sorry, Tien did like that. I love the geomechanics. So the
15:52 geomechanics is it is perpendicular
15:59 to your minimum horizontal stress. to your minimum stress, to your S3. Okay, to our minimum stress. Yeah. 'Cause then when we frack out, we want that rock to break basically as easily as
16:10 possible. Mm-hmm. Okay, so that we can lengthen those fracture networks. Yeah, interesting, okay. And when we're vertical, we don't have, we don't have control over that nearly as much,
16:22 right? Not as much. But kinda just going where it goes. And my brain started going off on this
16:30 idea of like, which now we start to get into a mix of the conventional and the unconventional. And I've talked about it probably way too much on here, but this laminated sand that I'm chasing has
16:42 all these little lenses, right? And when we, when we frack it vertically, it's hard to connect all those lenses, right? So
16:53 now you got me wondering that if I come in and like drill a little short radius lateral in the bottom, propagation would possibly be able to shoot through all of those,
17:04 and maybe drain more effectively all of that reservoir, which, you know, we have conventional and unconventional reservoirs, but y'all spent a lot of time now drilling the conventional reservoirs,
17:19 and we're still calling them unconventional wells, right,
17:24 because we're using some unconventional techniques.
17:29 But, so, not just reservoir side, you've done a bit in the production side. Correct. Yeah. A lot of legacy wells, vertical wells,
17:41 and were you heavily involved in taking care of any of those, like, kind of on a day-to-day, writing workover procedures and AFEs and Right. I was in charge of, well, when I first started out in
17:57 the Permian, I worked for. a midsize operator, and I was a worksite supervisor or like, you know, those consultants. That would, I would first shadow the consultant and then I would go on my
18:09 own watching those rod pump wells. But yeah, I would follow the workovers and I would manage how those wells that were down, how we can get them back to production. Yeah, what cool experience as
18:23 an engineer to get to go spend the time in the field and not just be thrown straight into an office That way you like really understand when you're writing. So
18:33 I grew up, my family as a compressor company, I grew up wrenching on stuff. And we always made jokes about, you know, the engineers that designed some of these compressor skids have never turned
18:43 a wrench. It's like they put a bolt somewhere and you just can't get, like there's not enough physical space to get your arm and a wrench back there to hold that bolt. And so being in the field,
18:55 you know, you get some of that knowledge of like, how do we fit everything on location? Correct. How are we going to put these things together and tear them down and, and, you know, where the
19:05 fallacies are there on what's possible, you know, in the real world. You definitely learn how precious time is. Yeah. Because when you come to the field, you realize how every minute, every
19:16 hour is really important when you run that equipment. Like, for example, when you have a BOP on location, you used it for a certain period of time, but when you love that BOP out, when you don't
19:25 need that BOP anymore or bullet preventer anymore for that workover rig, you have to go call that company to immediately go get that BOP to like pick it up. And you can't just leave it out on
19:36 location for, you know, until the job is done. Yeah. So I realized the importance of a minute. You you learn how how the how the dollar bills can go away. in a matter of minutes and seconds.
19:50 Yeah, you don't just move it over to the side and let them come pick it up when they're ready 'cause they'll leave it out there for a month and just continue to bill you. Yeah, exactly. And I
19:59 remembered having to put that into some of our, some of our well logging, when I say well logging, I'm not exactly saying about logs. I'm talking about like, you know, putting in those daily
20:09 reports into the software, so. Yeah. Yeah. I remember doing that. Yeah, changing that mindset for some efficiency. Correct. Yeah, I love it. Which is a conventional operator. You know,
20:22 it's interesting to watch some of the money that gets spent at the really big operators. And I've spent a lot of time on the server side, so I get to sit in the truck and watch quite a bit. And
20:34 just the waste that can happen, which is really interesting because at the same time, being a large company like that, you know, like Exxon or Shell or Oxy, they have,
20:47 protocols in place that in the end up saving them money, even though there's all these little things that I was like, man, if I was working this well, you know, I would definitely not be paying
20:56 for that. And I'd definitely not be paying for that. So it's kind of fun to try to work out the synergies in your mind on how those big boys move so slow, a lot of times, but still they're, they
21:07 have their way of being efficient and making money. But yeah, so on the conventional wells versus the unconventional wells. Did you see a lot of difference in the way we treat downholed tools?
21:23 Or is it pretty well what you were using to work with your unconventional wells? You were using the same tools downholed in your unconventionals? You had to use something a little bit different in
21:35 your unconventionals versus your conventional wells. Obviously, the magnitude of your downholed tools, when I say it's like the size of your downholed tools
21:44 The geometry of your downhole tools are a little bit different. The depth set, which you're going to be using some of your downhole tools are going to be a little bit different depending on how far
21:52 you want to go into the lateral or how far you want to go into the dog leg severity versus your conventional versus your conventional tools. There's a lot more functionality when it comes to the
22:03 downhole tools because when I say downhole tools and unconventional reservoirs, because it does set yourself up for further dog leg severity, but still, you still have to take into account some of
22:14 your pump jewelry in order to make sure that you're not creating any compromise in your reliability of those tools. Yeah. So like a packer at 70, 80 degrees starts to become like a real problem.
22:28 Right. Can become a problem. Yeah. Yeah. And, you know, fishing clearance is always,
22:37 I've seen always been like a big issue, you like running these big ESPs and not having enough room to fish them back out.
22:45 or getting those Packers stuck down there and just, you know, trying to get weight onto them at 70, 80 degrees, if you do have to fish or something like
22:55 that. Right. So, I saw that there wasn't a whole lot of, from my experience on the tool side, it didn't seem like there was a whole lot of development. Like we still use a lot of arrow set
23:08 Packers. Like the AS1X is like the number one, right? And it was a great packer back in the '80s and the '90s. And not a whole lot has changed on
23:22 it. How do you feel about like,
23:26 where are they just good tools to start with, or did they not keep up with the transition? That is a really interesting question. I think a lot of it has to do with,
23:38 I don't, I mean, this is my hot take on it My hot take is that usually the innovation. especially in down hole, hasn't been happening until you hit a problem with it. Yeah. And I think, and
23:52 there's also a cost associated with it. Like it may have been more expensive in the 80s in the 90s. Yeah. And now we have learned how to make it a lot cheaper, a lot more convenient. Yeah. So,
24:02 and then you also have a mindset from personnel on location that have done the same way, the same thing for 30, 40 years. So they were there in the 80s when they were out roused about in Yeah. And
24:15 now they're out being the field supervisor and they'd still lean on to the same tool and not evolving with the, with, or ask
24:26 the question of potential innovation. That's all on them. I'm just saying that there's a combination of not needing that innovation only because it worked so long. Oh, there's a familiarity of
24:38 people knowing that downhill tool for a long period of time So there was just never a need to. change it, they never saw anything broken. So why fix it? Yeah. Yeah, even if there's possibly a
24:54 better way out there, that change can be hard. And
24:60 I beat my head against the wall so many times where I'm like, man, I've got something better for you. And people are like, no, what we're doing is working. Like we're not gonna make any changes
25:09 right now. And that was always hard for me to understand, right? And of course I wasn't on the operator side And I wasn't an engineer. So that's part of why I was curious on like, you know, from
25:21 that side, I guess it's a risk reward ratio, right? It's like, we have one in a hundred fail. We don't wanna try a hundred of these new one and it ends up being 10 out of a hundred fail. So
25:40 yeah. We've, I've developed a lot of tools that I thought were just gonna be like the next big thing. Okay. And I developed this ESP catcher. Okay.
25:52 When did I start that, 2021? And I thought it was gonna be like, the bee's knees and it was super simple, it was gonna work great. And we put about a hundred of them down whole and they all did
26:04 their job. And we go to pull them out and they've all come out so far. None of them had to be like milled and plucked. Oh, good But often you have to go in with like a bumper sub or an oil jar to
26:18 like pop it out. And so like it worked, but it didn't quite work well enough. But it was hard to get people to adapt, right? And look at something new and fit for purpose. Right.
26:39 And I think we do a lot of that in present day oil field
26:44 In some ways, we want stuff fit for purpose, like
26:48 our big data, right? On the frack side, like, and on the completion side, you're always looking at all this data and how can we make it a, if we can get half a percent better, you know, like
26:59 that's a big step change for us. And then by the time you like trickle all the way down to like production,
27:08 I saw that a lot of companies just, the Wells kind of what they are, what they are, you know, baseline production is what it is. I don't know what your experience has been on the production side,
27:18 but
27:21 like optimization kind of gets,
27:24 you know, maybe we optimize a little bit, maybe we don't, we've got a guy for that. And that guy's like, oh yeah, I go check on the Wells every day. I mean, what
27:35 was your experience? You've been at several different companies now is part of that company mindset. That's a great question. It depends on, yeah, it does depend on the company. It depends on
27:46 who you talk to at the company. Okay. And it depends on like the company's objectives and where they are in their development lifecycle. So if you've got a company that has a ton of unexploited
27:56 acreage, the most of the focus is gonna be on that Kepic spend, rather than the Hopic spend. Okay. Hopic spend is where the optimization happens. Kepic spend is where you just drill and complete
28:07 a new horizontal well So all this unexploited acreage, there's a mindset of doing it right the first time. So when the well is first constructed and the well is first completed and the well is first
28:18 produced, do it right the first time. We'll worry about the optics later. Gotcha. Now there's been a transition. I'm not gonna say the Permian's been tapped out. I think the Permian in terms of
28:28 economic, so my hot, another hot take I got is, in terms of economic barrels, the Permian basin has been tapped out. Okay. Until we find the other zones, other shallower zones. that we can
28:41 drill and complete a lot more efficiently, a lot more, a lot cheaper and a lot better, then your Permian is never gonna be tapped up that way. But I think in terms of economic barrels, well,
28:56 like if you're still talking Wolfberry, it's almost, it's almost found. Yeah. So we have an idea of how to drill, complete those wells and be really efficient at it Now,
29:09 from my experience, when those economic zones are being tapped out, that's when the conversation shifts to instead of production, okay, we want production, but now what's the cash flow look like?
29:23 So that's where OPEX becomes really important. Operation expenditure becomes really important. That's when optimization becomes a priority. That's when there's conversations about, okay, well,
29:35 okay, we've had this rod pump, the downtime of this is like 10.
29:40 percent. What are we doing with our route pump wells? How many guides are we putting on those rods? How
29:47 deep within the doggo severity are those wells like there? Do we actually construct the wells to where they end up? And I call them spaghetti wells. Where is it? We just reached a point of no
29:58 return. So optimization is a priority. It just depends on what zone you're talking about, which company you're talking to and where they are in their development lifecycle, because I've worked for
30:10 companies where there was a lot of unexploited acreage when I came back out into the Permian in 2018. So I didn't tell you this apart in my history. In 2016, I went back to Houston in 2018. I came
30:20 back to Midland to Midland. And then I worked for a company that had a lot of unexploited acreage. So the focus was on drilling, completing and development and protecting the fort before other
30:32 operators start drilling and producing the wells that were right next to you and you start having depletion. operators where in the Midland Basin, like most recently, yeah, in the Midland Basin,
30:44 a lot of that acreage has been tapped out. It's the economic barrels or the proven zones, and the conversation has been about optics and production optimization. How do we take care of those rod
30:58 pump wells? How do we improve our chemical program or reduce the cost of our chemical? So, yeah, there's definitely been conversations, especially from a cash flow from a cash flow perspective,
31:08 because it aggregates. Yeah, yeah, quick, especially when you have 10, 000, 15, 000 wells in a company, 20, 000 wells in a company, and it's mind-boggling where a dollar a barrel can make
31:20 such a big difference.
31:23 It's interesting that more companies, well, and I think you're right, right, they kept their production up by just drilling more and adding to the well count
31:37 as opposed to
31:40 I'll have to go look it up, like 99 sure that Exxon wrote a study on their wells and they were tubing them up from the start. Instead of flowing up casing, they would tube them up with two and
31:54 seven eighths and they would kind of manage that pressure in the Midland Basin. In their IPs,
32:01 they didn't have to hit the same kind of IPs that some of these small companies do to keep their investors happy They're kind of their own bank to a large extent and so they would have lower IPs and
32:16 they would manage the pressure on these wells but at 720 days, they had 10 to 15 more cumulative production because they handled those wells just a little bit better and they had that forethought and
32:28 that mindset to look at total asset value instead of just this really hard NPV focus of like we've got to get our money back as quick as possible and roll it into the next one, right? And I know
32:44 there's been a lot of discussion lately about if unconventional
32:51 Is really profitable right because we've spent so long like dumping this money back in there to keep the engine going And I don't know how you feel about that if you think it is or you think it isn't
33:04 There's been a lot of money dumped into it, but I would love to hear You know is it profitable? That's a great question There are a lot of Speculation when it comes to unconventional reservoirs.
33:19 There's been so many news articles on How Unconventionals are not producing the expected recovery that people say that they are going to. there's a lot of speculation on, well, yeah, six months is
33:42 enough for me to figure out the ultimate recovery for this well, should it produce 30 years? So is six months an indicator? So there's the questioning of whether if unconventional wells are
33:56 profitable, comes from the questioning of the techniques of how we have predicted unconventional wells And if I say it's profitable, yeah, it's profitable, because I've done studies where I've
34:10 seen long-term production of those wells and how close they are to the expected recovery and
34:19 whether if the returns are there, the returns are there. The question ends up becoming, are they as profitable as we say they are? And
34:31 my hot take on that is, while it does depend on the company, I think there's definitely some room for improvement to figure out if they are as profitable as we say that they are. I do think that
34:45 there may have been some under-promises and over-promises and under-deliversed, but I also know that there have been some under-promises and over-deliversed. I like to think in statistics in terms
34:55 of there's a regression to the mean. Okay. So if we took every single company and all their wells and figured out what their expected returns were going to be in for IRR or a rate of return, I
35:13 would say that
35:16 the average rate of return was met. Okay. Yeah. The expected value of it was met. Yeah. But there's a large distribution of where people fall on that. On that. On that. Yeah. So it depends on
35:30 what set you're really pulling from Correct. These guys out here just trying to prove up acreage not watching AFEs and just, you know, proving that there's oil there so that they can flip it to
35:41 somebody else kind of thing. Correct. Might have had a very different
35:46 outcome. Right. Versus somebody slowly developing and trying to maximize their total return
35:56 and their EURs on that. And so do you see that like, did we
36:02 miss forecasts like the initially and we're having to always go back and tune those or Wells not performing at the end of their type curves where we thought that they should be performing. Like, you
36:17 know, 'cause we give all this focus on six months, 12 months, 24 months 'cause that's where we get, especially in an unconventional, that's where we get the most of that value back. But what are
36:28 these Wells doing on the tail end? And I know that, you know, oil fields in general, you know,
36:36 Let's stick with Exxon. We'll pick on them a lot today. Exxon will come in and drill this field and develop it, and then they hand it down to some mid-size, and he hands it down to some small
36:47 operator, and they split it up to a bunch of different mom and pops, right? And so now I've got 40 wells out of this Exxon field that was drilled in the 70s, right? And I'm dealing with
36:57 everything that they did back then. And all these unconventionals are going to go the same way, right? They're going to end up with the mom and pops, and I'm going to end up managing some
37:07 Eagleford wells, you know? So that this later in life, the end of this life cycle of a well, are
37:18 we underperforming? Are we about where we thought we, you know, maybe should be? And in the perming, you've got wells now that are 15 years old, you know, it really was kicking off in 2013,
37:32 2014. You know, what do you see? kind of on the tail end of those wells. I think we've also evolved a lot in how it technically in how we are able to prolong those life of the wells, whether it's
37:46 earlier life or later life. I can tell you that in 2014, the way the wells were completed, and I can say this because I was married at a pump jack and that particular well was like a 2015, 2016
37:59 well. Okay. So I know, I know the completion intensity for that particular well, nowhere near compared to the completion intensities that we're doing today. Gotcha. Even in the Permian. Even in
38:13 the Permian. That issue. Yeah. So are we performing based on type curve? Are we performing based on, and that's a blanketed, honestly that's a blanketed question because it really does depend on
38:27 the well and it depends on the asset, it depends on the company There are so many depend, there are so many disclaimers to that question. I honestly, my hot take on this is I have another hot take.
38:37 So my hot take on this is that I don't think we will ever truly know how the well will perform. I don't think we will ever truly know that. I think we have a good idea of how well we can get back if
38:50 we can get it back. I always, I'm the type of person that likes ranges of here's your low case, here's your high case, and we're gonna be somewhere in the middle But if we do something more
39:04 deterministic, like, for example, you're going to get this number, you're almost all the time you're going to get it wrong. And I think there's a common mistake of trying to be very deterministic
39:14 because that's kind of what we're pressured to share to the streets. Right. That we're going to have to be deterministic. So there's going to be, there has to be caveats when we are deterministic.
39:24 Like this is an expected value. Yeah, we're going to get there. Yeah, they want a number that they can bank on. Yes, they want a number they can bank on. Yeah Yeah, which is always hard. Um,
39:36 but like, so going back to like your school days,
39:40 I've got a couple of wells in a field where there's only a couple of wells in the field. And I've not done enough engineering on it to say that there's a type curve for those wells. Um, but, you
39:52 know, and I broke out in 2013. Um, so kind of the same timeframe of like every well, and I was in artificial lift, every well has a type curve And when we're trying to get back onto the type
40:05 curve, what y'all learned in school, the y'all type curve, a bunch of the conventional reservoirs and wells as well. Correct. There were two ways to do the type curve. So
40:16 I'm smiling right now because I know that there, I know that Dr. John Lee from Texas AM University is going to be really mad at me when I say type curve, when I really mean type well curve, okay,
40:28 because there's, I just want to clarify that there's two definitions for the type curve. because there's an industry definition of it. The type well curve is, you know, take all the average of
40:36 the wells and do the type curve. That's what you're talking about. Now, the type curve that I'm thinking about and I'm smiling about so much is like an analytical solution to a diffusivity equation.
40:47 And I'm not gonna go into details for that. But what I'm saying is in conventional reservoirs sense, that is where we lived in. We did a lot of math to figure out a type curve based on a tank model
41:03 based on a pressure regime, marrying pressure in production. Now in industry terms, a type well curve, there's a lot of picking analogs based on geology, based on the reservoir. And empirically,
41:22 you try to map out the curve and the forecast. We did that in school, but not to the extent of the. pressure transient analysis, the technical type curve. Okay. So, yes, we did that in
41:38 conventional reservoirs, but because conventional reservoirs have so much more functionality on how to understand what the recovery is going to be. And by functionality, you mean like different
41:47 types. Different types. Okay. Different types. Yeah. So the analog is one of them, but that is not the only thing we bank on. Yeah. There's volumetrics, there's like, okay, based on the
41:56 logs, here is your acre spacing, and you do the OIP equation, original oil and place equation. Then, so, and then you do volumetrics. So, or that's the volumetrics. Yeah. So there's analogs
42:09 and, and volumetrics there's then there's also the whole pressure transient analysis, type curve analysis. So conventional reservoirs, we just did a lot more, because we knew a lot more, and
42:19 there were just many more fields to get a better understanding of. Yeah. So that's a long way of saying is yes, but that wasn't it. That wasn't the only thing we did. Gotcha different than what
42:28 I'm used to seeing and somebody just throwing up on a board. Six months worth of production, and then they've got this line extrapolated out, and they're like, well, we've fallen off of that, so
42:36 we need to change artificial lift to get back up to that line. Correct, a lot of line. That's not really kind of how it was. No. Back in the day. No, I mean, yeah, that still was back in the
42:47 day. You could project that curve. Yeah, you could project that curve, yeah. Okay,
42:52 and a lot of that factor, I guess,
42:56 it came from
42:59 understanding the drive of the reservoir, and the deliverability based on permeability, porosity, and how, like, if it was depletion drive, if it was gas solution drive, was the gas gonna start
43:15 breaking out and helping us here, and going through, like, kind of those different mechanisms to move the oil through the rock, or the hydrocarbons in general through the rock. Correct. Okay,
43:26 yeah, 'cause it's funny
43:30 There's like napkin math engineering. Yes. That a lot of the mom and pops use, a lot of the independence use. And then there's like, I'm gonna call it real engineering, but there's like very
43:42 nuanced, in-depth, equation-heavy engineering. Right. Right, and I'm used to a lot of this napkin math engineering of like, let's get close. So I'll give you an example yesterday, and you
43:54 might find this very funny Tomorrow, I'm
44:01 pitching an oil company on investing in a new drill prospect that I've got, right? So yesterday, I was talking to the geologists that initially had this idea. I mean, he and I have been working
44:14 through this and getting everything, and we've got the lease on the land, and now we're ready to go sell it to a couple of different oil companies and South Texas, let them take their piece And so
44:26 we took the 11 wells in the field. And we averaged the pay out and said there was eight foot of net pay across these 11 wells. And they cumed 975, 000 barrels.
44:42 And we just
44:44 ran the numbers down and said, well,
44:49 based on that, each well is produced, 89, 000 barrels of oil. And so this new well that we're going to drill, we believe it'll have closer to 20 foot of net pay But we stuck with the eight, we
45:00 wanted to undershoot, right? So we said, you know, if we drain 40 acres, and it's eight feet of net pay, and they each make 89, 000 barrels, that's about 215 barrels per acre foot. And so
45:12 then this new well, we're just going to say that it's going to make 215 barrels per acre foot, right? And just like kind of, to me, that's the napkin math I'm used to doing. That's a pretty good
45:25 guess. But I don't know that I would call that engineering. Right, like we're using these analogs, we understand a little bit of the permeability and the porosity, but we're not using that
45:35 heavily to tie into what this new well should deliver. Right.
45:44 Right, and so as an engineer that spends a lot of time in the reservoir space, does that frustrate you? Does that make your head hurt when people just kind of like, yeah, it's gonna be pretty
45:56 close to this And now being as like an advisor, right? And having Iron Lady, and if somebody brought you that, you know, maybe like, man, there's a lot more work that needs to be done here.
46:09 Are you comfortable sometimes in these conventional spaces being like, you know, that's probably close enough for those guys.
46:17 You're asking the wrong person. Okay. No, no, no, no, no, no. You're asking the wrong person because had you asked me five, 10 years ago, I would have been the type of person
46:27 be okay with the napkin math, but at the same time have a ton of questions about how legit is that napkin math? As a shillennial in working in unconventional reservoirs and after interfacing with a
46:41 lot of management throughout my career, I do think the napkin math is important. I think it's a way to demonstrate some level of sniff test and some level of instinct, but you need it in
46:51 combination with the engineering work. Okay. I don't think you need the napkin math to make a
46:59 multi-million dollar decision. I think the napkin math is really meant to legitimize and just write that signature on the AFE or put that PE stamp. And the reason why I smile a little bit when I
47:12 think of it does napkin math drive me crazy, it will only drive me crazy if there isn't engineering work associated with it. There was a reason why 215 came up to begin with There was a reason why
47:24 975, 000 came up to begin with. It came up to begin with because the previous engineering work was done or because the experiment has been done. The napkin math ends up evolving only because you
47:36 learned how to develop that instinct. So my question when it comes to the 215, if you can be a mile away and that's 215 and if we are going to talk about in conventional sense, are we at the depot
47:50 center of that particular reservoir? Are we at the pinch out? If we're at the pinch out, maybe 8 million per acre foot or 8 per acre foot is actually the right answer in the lower estimate. Maybe
48:01 it's okay to stand back. Well, I wouldn't say that, but maybe it's okay to take a more conservative estimate. But I'm going to say that I think napkin math is okay. I think management math is
48:11 okay. But I think a lot of it has to do with where you're going to apply it. I think that napkin math was because it was a combination of years of experience to develop an instinct. Yeah, I love
48:23 that because like this geologist, he's.
48:28 81, 82, something like that. And, and as we're chasing this channel sand up, right? And these, some of these oils cumed 20, 000, one of them cumed 200, 000, depending on where they were in
48:39 that channel and where that, how thick that pay was. You know, just like you alluded to is, is how much are you in the deficit or of that? And he's like, man, there's a fault up here. And I'm
48:50 like, so, you know, we did the math in that sense and we've got some analogs here and we're like, well, we're gonna drill till we hit that fault. We don't know exactly where that is. We think
49:02 there's eight wells here, you know, but we don't know until we do the science project. Correct.
49:11 And there's still a lot of science projects going on, but in a very different sense in the unconventional world. Right. It seems to me that y'all don't really drill dry holes anymore. Y'all drill
49:25 economic dry holes Right, y'all drill stuff that's. marginally economic or slightly uneconomic, but you don't drill, say we're not gonna set pipe on this, right? Right.
49:39 Because the exploration isn't necessarily there in that way.
49:46 It's kind of changed into the exploration thought process is not, are we gonna complete this well? How are we gonna most efficiently complete this well? Right. Right. In that, that's changing
50:03 chemicals, changing prop? Ah! 'Cause everybody's like matter, ask it. Does Perf Orientation really ahead love this question already. Okay. Go I me this, is Perf Orientation? Sorry., I tell
50:06 and loading, changing, got this gun that's gonna shoot straight up and I'm
50:23 like, dude, we're pumping like, five million barrels per stage.
50:30 If it goes this way and comes around, or if it goes that way and comes like, does it really matter? Oh my gosh, I'm laughing so much because I've been in projects so much where we talked about
50:40 perf orientation. We've talked about,
50:45 we've talked about whether like, is it 60 degrees? Is it 90 degrees? Is it 180? Is it zero? Because all the wells are just gonna go up, are all the products, all the fracks are just gonna go up
50:58 I don't have an exact answer because every company has a different way of what makes it tick for them, what makes it work for them. I will say that I'm glad the work has been done to understand perf
51:09 orientation. I will also say that it is a little bit difficult to understand the contribution of the perf orientation 'cause there's so much going on with it. Or if one person tweaks one thing with
51:21 the perf orientation, Well, this is also part of another science project where we're gonna pump a lot more barrels of water and things like that. So is it the sand? Is it the water? Is it the
51:31 perforantation? What is it? Tell me. Or were we just in good rock? Or were we in just good rock? So I'm not saying that perforant, you should knock out on perforantation because there's also a
51:39 lot of few good companies that do a good job in terms of trying to identify how the perforantation is impacted, like how you, I like to say uniformity index with fiber optics, but how well did
51:54 those perfs clean out to get really good, really good production? So I do think perforantation matters to an extent, but I will also say that there
52:08 is a way to overwork the problem. I think there's a way to reverse engineer it when you know that the majority of the fracks go upward, I don't think that you need a 180 degree perforantation I do
52:18 think you definitely need a perforantation.
52:23 But there is also, but this is a 3D problem. So you're gonna have to get a better understanding of your permeability or your logs in different spaces to truly defy, that perforation is gonna be an
52:36 issue or not. Yeah, there's like a close enough answer. Yeah, there's a close enough answer too. And that one, where there's so many other nuances that like, okay, yeah, it's one of those
52:47 things that like I've really been, I don't know, thinking about a lot lately Like, does this really matter that we're at zero degrees, you know, when we're pounding the heck out of
52:59 it. But I did think the other day, I was like, well, if we're at 180 degrees, it's gonna sand off. Anyways, we're gonna bring much of the sand back into the well, and then we're gonna have
53:08 like inflow issues, 'cause we're gonna clog that, that perf back up, right, with Phil. So I was thinking about that. I don't even know why I was thinking about that. I'm not drilling or
53:19 completing the horizontal wells There's a series of studies on purple orientation. Yeah. So you're instinct, again, you're instinct based on some of the science work that you have seen, you've
53:28 developed the instinct. So you're asking the right questions. Yeah, yeah. I have a hard time with that. I ask a lot of questions that maybe are, I don't know, often I think they're dumb
53:43 questions. I'm like, I'm just gonna ask them because I don't know, but I feel like it's important
53:50 Well, chances are, I don't think it's a dumb question and I can guarantee you that there's other people that have asked the same question. Yeah, yeah, and we've brought so much this is the way we
54:00 do it, you know, and like you said earlier, we have guys with 30 and 40 and 50 years of experience as drillers, as,
54:12 you know, frack hands or completion engineers or work over consultants and they wanna bring those into a new world And all that experience is good. when we're willing to take it and use it as
54:25 experience and not use it as
54:30 a crutch is not the right word, but use it as a blockade to do something different or better. Right. But that's,
54:41 you know, we're here to kind of catalog some of those old thoughts, right? So that we can move them forward and do better and not forget them
54:50 And so
54:52 when you think conventional. Yes. When you think conventional wells, the ones you've managed, the ones you studied back in the day, the analogs you've used to do your current work.
55:08 This question might take you a second 'cause I'm putting you on the spot. But are there like some lessons that you've learned there that you think really need to be put into. the bank for somebody
55:21 to hear, and particularly in the last six months, I don't know if it's because I'm looking for it. It's kind of like you don't notice a car until you buy a car and they're like, Oh man, these are
55:32 everywhere. Everybody's driving in one of these. But in the last six months, it seems like I've seen a lot of people leave or get laid off or just start their own thing And most of those guys,
55:49 it's hard to raise200 million to go buy and drill a bunch of unconventionals. A lot of those guys are buying and revamping these old conventional wells.
55:59 So with that said, your time, is there anything you think they ought to know? Or do you have any pointers of, Hey, watch out for this, orI've seen these things go wrong or go right that you
56:12 think we ought to put down here for folks to think about is they they move into those older well-bores? That's a great question. I do think it's a cycle. I think it's a cycle that there was a
56:24 certain way we've drilled and completed on conventional wells, then we had a mindset shift on geometry and we had a mindset shift on economics and we drilled unconventional wells. And now based on
56:37 what we've learned in unconventional wells, I guess the essence of your question is like, is there anything that we can learn to revamp those conventional wells? And I think a lot of it has to do
56:50 with, is there a way to improve the recovery of those conventional wells as we first drill it compared to a couple of cycles back where the conventional wells as the bees knees? I do think that we
57:07 could use some of the way we look at data in conventional wells to get a better understanding. of the second cycle of the conventional wells. I think it's the way we look at the data. I'm not sure
57:23 if it's the tech. I mean,
57:26 I do believe that the technology that was used to look at unconventional reservoirs was also using conventional reservoirs because again, your clientele is going to be a lot of people that have
57:36 conventional reservoirs as well. The question is, do you want to invest the money into that same kind of technology and conventional reservoirs
57:44 as compared to an unconventional reservoir? So my take on that, my hot take on that, another hot take is, it's a thing, is that I think it's
57:57 the way we look at the data. I think there's a smarter way of looking at a conventional data to revamp these conventional wells. I think there is a smarter way of whether, yeah, I think it's a
58:12 smarter way of looking at the data. We have more advanced analytics techniques, I think there are different proxy metals we can use in conventional reservoirs. In fact, I've talked to multiple,
58:22 multiple technology companies that are using hybrid. They're using artificial intelligence on conventional reservoirs. And the fact that we're using artificial intelligence to get a better
58:32 understanding of how future conventional reservoirs are going to perform, I think is a really beautiful thing. Yeah. So my take is
58:43 that my hot take on this is, I do believe that it's not on the technology that is used to like what to do better and what to watch out for for these conventional reservoirs. I think it's the way we
58:55 look at the data.
58:57 You said something, proxy metals. Models. Models. Yeah. And then she said proxy metals. No, no, no, no, no. And it's like, oh, I'm not familiar with this. Proxy models, yeah. Cool.
59:09 And that's just looking at offset wells. Right. And how we modeled those out or a faster way to. a faster way to understand
59:19 the physics, but without doing the whole rig of a role of. Yeah, yeah, that's interesting. Instead of coming in with a TI 84 calculator and a pencil and a notepad, we can now upload,
59:35 I didn't even think about that. I can now upload my sidewall course in 10 years worth of production and my known oil composition probably into somebody's AI model somewhere and they can be like, oh,
59:51 bro, you're like, you're definitely not hitting where you need to be. There's a whole lot left there. Or they could say like, oh, yeah, you're doing pretty good draining that well. I never
59:60 even thought about that. Like taking those, the data that I have right now
1:00:06 and just feeding it into and it can run those heavy engineering those heavy engineering calculations for me.
1:00:16 I have to look into that, I'm gonna check into that. That's pretty cool. If you have any recommendations. Sure. On who can do something like that. Or if somebody else has some recommendations.
1:00:27 Oh, I can, I mean, I don't know if it's a shameless plug, but there's just several technology companies that I've been speaking with, like Reza or mine. Okay. It's a startup that they've been
1:00:36 doing a lot of hybrid models, generative AI and reservoir stimulation. So, and most of their clientele has been a conventional reservoir, so. Reza? Reza or mine Mine. Yes. Like reservoir
1:00:47 mining. Yeah, reservoir mining, reservoir mining, reservoir mining. Okay, yeah, yeah. I might have to give it those guys and see if we can feed some of my data in and see what it spits out and
1:00:55 be. Sure. Yep. And then I'm sure you can, there's gotta be some programs out there too that can couple that with whatever seismic data you may have over the area to help you understand the
1:01:06 reservoir better as well. Right. And
1:01:10 I know it's probably like, guys are working at these big oil companies But like, I don't have access to all of the cool software and all that stuff. So I'm just doing what I can with what I have
1:01:22 where I'm at. You know what I mean? And
1:01:27 I love that. And the
1:01:30 AI is going to trickle down to us little guys. At some point, it's going to be, you know, affordable and available in a way that we can use it to be better as well. Well, absolutely. I mean,
1:01:41 you know, you asked the question previously before on
1:01:46 looking at later life of the wells and looking at downtime and do people care about the AWPEX. Yeah. I mean, I currently joined a startup company where I'm a chief growth officer for
1:01:58 AWPEX AI. And that's what we're looking at as far as downtime analysis and like making sure that there's real-time failure detection and things like that too. So yeah, it's definitely coming
1:02:07 towards the mid-size and lower - or smaller operators Yeah, yeah, less downtime Um.
1:02:16 probably some predictive failure stuff in there as well, you know that's so I told you earlier that my family has a compression company and they do really well at it because
1:02:29 you know there's a lot of electric compression out there now but some of the units that we run at that compression company are ones that my grandpa built at his first compression company in the 80s
1:02:40 right and we've bought them back and we've updated a little bit here and there but like we kind of stick in our lane and we know really well what we're doing you know and we have we've kind of
1:02:50 standardized the fleet and that sort of thing and I was I was showing some cool technology on that recently that like now we can in the big company's been doing this for a number of years but like you
1:03:04 can remotely monitor the volts going to a spark plug on a compressor and know when a spark plug is gonna fail before it And then you can do a preemptive PM instead of having 12 or 18 hours of downtime
1:03:21 between when it goes down, when the pumper shows up and when the call out goes out. Right. And you know on 50 MCFs a day, like 18 hours of downtime something, but if you've got a five, six, 700
1:03:34 MCF a day well, that really starts to add up. Exactly. Yeah, that's cool stuff
1:03:43 I need to get more into that. Right. I had a well go down this weekend that shouldn't have gone down. I was just dumb.
1:03:55 I don't think you're dumb. Yeah, I,
1:03:59 yeah, I just rebuilt it. I just rebuilt that motor maybe five months ago. Okay. And there's an oil breather cap. Okay. It comes on and off, or you know, a positive crankcase ventilation.
1:04:14 technical term. And we went to Alaska for 10 days, and that cap came off while we were gone. And I had a guy checking on the whale for me, making sure nothing was leaking, everything was running,
1:04:24 everything was good. But he's not, you know, I'm, I'm the bumper, I'm the mechanic. He was just a friend checking on it for me. So we didn't want any environmental disasters or anything like
1:04:33 that. So I guess he didn't notice that cap came off and it just ran straight out of oil, you know, that little puff of air, free and mist of oil with it. And
1:04:45 I got home and he was like, yeah, I went down on Thursday. I got home Sunday night and I drove out there and I looked at it and I was like, well, so I went to try to turn over and it was locked
1:04:53 solid and I opened it up and there was no oil in it. I was like, so we'll see how much that cost me when all the parts come in next week. But some remote monitoring would have been would have been
1:05:07 nice to have on that. Oh, yeah, we can definitely talk about that. And do you all do that too? We do that as well. I'll shoot. Come on, I've been looking at this
1:05:18 company called Amplify. Okay. I don't know if you've heard of them. I've been looking at having them put some remote monitoring on our stuff, but historically cost was just too high for me. I was
1:05:30 like, I can't put1, 000 a month into a system and
1:05:50 then the data and everything to get it all tied in. And I can't put10, 000 or15, 000 of upfront hardware into it either Like I need some cheap sensors and I needed, you know, I'd spend100 a month,
1:05:50 you know, to have the remote.
1:05:52 But yeah. Or you can have someone just tell you when it's gonna happen too. Well, I mean, I still gotta put them in the monitoring equipment out there. Put them on your equipment but then have
1:06:03 someone tell you, like, when something's gonna happen. Yeah, they could call me or send me a text message or if I had like an app go to my phone where I could be like, oh, oil's loaded. I
1:06:11 definitely need to get out there, you know? A lot of these wells that I have are spread out and they're low producers and,
1:06:19 you know, you're not gonna run over tanks. You know, like we're not really worried about that. I've got, actually I've got 1200 barrels of tankage on a five barrel a day well. Oh, really? Like
1:06:31 it's gonna take a while. Wow. To run that one over. Yeah. You know, but yeah, to have some of that, some of that monitoring would be nice 'cause like I go buy two or three times a week, make
1:06:42 sure everything looks good, so. Let's talk about that when we get all there. For sure. That'd be really cool. I'd love to see what you'll have and kind of learn, you know, I'm starting to see
1:06:53 the value of that. As I've been running around chasing my tail and trying to keep everything online and I'm really starting to understand the value from two ways. One, uptime. Right. Right, that
1:07:06 like I need to be every day that I'm down on a five barrel a day well, you know?
1:07:13 right now, 250 a day after expenses and royalties and everything like that, losing250 a day. And that well has to continue to sit down 'cause
1:07:25 I don't have the parts for it. I had to order the parts. And that could have been preventative, right? I could have seen the issue and had it shut in and then ordered the parts that day and spent
1:07:35 a lot less time and money jacking with it. Or had the dude just pour some more oil in and throw it at home, you know? I'm starting to see the value in that. I'm also starting to see the value in
1:07:46 my time. Oh, absolutely. Right, 'cause I went fishing with my kid this weekend and I don't want to go work on a well. My six-year-old needs me to invest in him. 'Cause he's going to remember
1:07:59 that. That's right, that's right. And we brought home some catfish, I like this. Wonderful. It's good, but yeah, we'll definitely. Yeah, for sure. Yeah, and I bore all these people with
1:08:09 that. Oh, of course but we'll jump into it afterwards.
1:08:16 Yeah. So where are you going? You said, you know, you want to be global with Iron Lady. I mean, tell me like a little bit more about what your vision is for that. That's a great question. My
1:08:30 vision with Iron Lady,
1:08:33 the energy transition has been the hot topic over the past few years, more recently And the way I've been seeing is there's a lot of global consulting firms that are focused on one type of energy.
1:08:49 But there hasn't been a global consulting firm that talks about a portfolio management of all types of energy that can support banks, that can support larger operators, that can support entities
1:09:01 that care about different types of energy, or all different types of energy in an ecosystem So, my vision with it is, I want to start out with, like I said, I want to start out with My expertise
1:09:13 in upstream oil and gas lean into my experiences of being able to manage like half a billion dollars worth of projects and generate a range of returns that are about 50 on average and that's pretty
1:09:25 good for unconventional wealth. So if I can come, if I can prove the economics and prove that, you know, I've been successful in projects in the past and I can be that extra hand in getting from
1:09:40 data to insight really quickly, we can expand that globally to conventional reservoirs in mature fields in India. There are lots of conventional reservoirs all over the world and apply that
1:09:53 expertise of what we learned in unconventional in the data analytic space in there too. Why India? Oh, I thought about India because there's a lot of mature oil fields there. I used to work for
1:10:04 university lands, for example, and
1:10:10 there's a similar model there can be universities employing interns from for Indian students. And there's a lot of remote operations in India for mature oil fields that is just hard to get to. I
1:10:25 didn't realize they made much less oil. Yeah, they know India makes quite a bit of oil, but a lot of it has to
1:10:31 be the technology. So I chose India as an example. I just said that. Yeah, sorry, I just said that. No, no, no, that's fine. I just said that because there's a lot of mature oil fields in
1:10:39 India and then there's innovation or there's
1:10:43 an opportunity for innovation to try to exploit those remote areas in
1:10:50 oil and gas production. And if we could add education to the mix, you can add work experience to the mix for many Indian students who are going to universities throughout the country and studying
1:11:03 petroleum engineering. They reach out to me all the time, like, can I get a job? Well, we can have a similar model where - They're university students that are helping produce oil and gas in the
1:11:13 UTA and M system. Why not have it done in India as well? Yeah. Which are fields in conventional reservoirs. Yeah, that's such an interesting thought. Jake Corley had gone to Alaska. Yeah. And
1:11:25 was talking about, you know, why are we not drilling more natural gas in Alaska, right? And, and through that, not only are we developing this natural, this natural resource that gives us, you
1:11:37 know, energy security for our country, right? One, but also all of the fringe benefits that come with having an economy, a thriving economy somewhere. So he went on that trip three, four, five
1:11:52 weeks ago. Last week, we went to Alaska from my parents' 40th anniversary and spent several days up there. And I met this guy that's a missionary and we were talking about some of his time like in
1:12:03 the bush up there working at different villages And, and. He's like, man, there's just no industry, period. They don't have anything to do to generate money. Like they're just kind of doing
1:12:18 this subsistence thing. And that's it, right? And it's hard to get out of poverty when you don't have anywhere that you can go to generate income. And then you're in this impoverished mindset
1:12:32 which, you know, a poverty mindset a lot of times if somebody is trying to better themselves, other people are like, why do you think you're better than us? Like you think you're cooler than us
1:12:41 and like it's a well documented. My mom worked in a lot of
1:12:47 schools where poverty was a problem. She was an educator for, I don't know, 40 years. I have to check that number a long time and did a lot of classes on this sort of thing. And you know, that
1:13:00 mindset is really like, they don't, a lot of times the other people in poverty don't want you to get out. 'cause it's like, I don't know if it's a base jealousy thing, but it's like, oh, you
1:13:09 think you're better than us trying to empower yourself, right? And so, but if we could bring it to these communities, I'm not only would it add, you know, opportunity for education, it adds
1:13:24 economic basis, it pools everybody out there. Yeah. Up.
1:13:30 I love that idea of like, we have it, we have the resource there, let's go use it Right.
1:13:37 Yeah. And then I got to see it, you know, he was talking about that and it's a world away 'cause it's in Alaska, right? And we're here in Texas where we get to drive our big fancy new trucks all
1:13:48 the time and go out to eat it, you know, really high-end restaurants and the company pays for it 'cause they're a customer and, you know, we've got like such a, we've got a really spoiled view on
1:13:59 a lot of things, right? Right We're so blessed, we're so blessed that we don't often Um, take account, right how blessed we are. So, um, yeah, and we could bring that to the world. Right.
1:14:13 Who are we to tell those people not to use going on a real long, winded spiel here. Sorry. Um, but who are we to tell those people not to use coal, not to use natural gas because it's not as
1:14:25 environmentally friendly, right? Um, and, and so I love that idea. And
1:14:34 there's another long spiel there about natural gas being, yeah, environmentally friendly, right? Being a low carbon, um, what I would consider a low carbon energy source. Right. Um, so that's
1:14:48 really cool. I love that vision that you would be able to take it, um, you know, around the world and help, um, that shows your heart that it's not just about, um, you know, it wasn't, I
1:15:00 want to grow this and sell it and make a million dollars and go live on a yacht.
1:15:07 You are immediately into, I wanna take this and go help people and help communities and lift folks up. That's really cool. Thank you. I very much appreciate that. I appreciate that too, thank
1:15:19 you. That says a lot about who a person is, where their first instinct is with what they wanna do. You know, and I think often I'm on that, the other side of that coin, where I'm like, Man, I
1:15:30 wanna build this 'cause I wanna get richand I wanna have all this stuff. Right And
1:15:35 so I love your heart there, that's really awesome. How can we
1:15:40 help you get there? That's a great question. I think the way to help me get there is if you have problems in data centers, if you have problems in your development, if you wanna look at something
1:15:53 differently, based on my track record of being able to manage half a billion dollars worth of projects and get an average of a 50 rate of return per project, I think that is something that you may
1:16:07 want to consider of like I could be that sounding war. A lot of it is not just only spreading the word, but a lot of it is identifying how can we explore the problem space together in your company?
1:16:20 How can we explore and relating to OPEX AI? How can we explore integrating your operations, especially with the advent of MA? There's so much MA happening in the oil and gas space How can we
1:16:34 integrate your remote operations? Yeah. So if you know of any companies that are having those problems, let me reach out to me. I'm more than happy to start a conversation and explore that problem
1:16:48 space. Yeah, when we post this on collide, I'll have you -
1:16:52 you can respond there. I'll tag you. I don't know. All that digital stuff. Digital stuff. I keep getting called a boomer around here because they're They're all like so computer savvy. And I'm
1:17:02 like, guys, I need to post this link. I can somebody send me the link so that I can post it, you know? That's funny.
1:17:09 But yeah, we'll definitely do that so people can reach out and see some of that.
1:17:18 That's really cool. I wanna.
1:17:22 Yeah, we're gonna look into this remote operation stuff. For sure Trying to
1:17:28 get some AI in our stuff. I would be interested to see, like on the, and I've done so much work on it already, this new drill. Done so much work to get where we're at. I would love to see if we
1:17:42 could just feed the data in and like how quickly it could get to where I am. Oh yeah, I definitely test that. Yeah. You know, and see, 'cause man, if you could go from generating
1:17:56 three or four prospects a year, to generating 10 or 12 prospects a year. like that's exponential gain. Right. You know, that's pretty cool.
1:18:06 Now, could you manage 10 or 12 prospects a year? I don't know, you know, as a one-man shop, you know, you have to hire people to start, you know, depending on how fast you want to grow, but
1:18:18 that would be
1:18:20 fun to see what it could do. There on the AI side. Yeah, artificial lift was my first love and still fascinates me. I'm learning this whole rod pump side, started in gas lift, and then did some
1:18:33 ESP stuff, which, I don't know, ESPs are kind of, eh, no,
1:18:39 I don't like ESPs. No, I don't like ESPs, they're expensive. But they move a lot of fluid. And there's too many experts out there. Too many experts. But no way more than me, I'm a little
1:18:52 intimidated by ESPs. Let me put it that way. Oh, that's fine, we can help you gain that trust. Yeah, yeah, I shouldn't.
1:18:60 I haven't spent a whole lot of time working on them. I know, I know them. So I worked at the company for a while. There was an ESP company and got to learn some pump curves and do a couple of tear
1:19:11 downs and things like that. But
1:19:15 some of these guys out there, particularly, well, you probably know a couple of them at SPE. And man, they're thinking about stuff in a way that I just don't understand 'cause I haven't spent a
1:19:25 whole lot of time around it
1:19:28 But the technology and what we can do with an ESP now versus what we did 20 years ago is wild.
1:19:38 Like the amount of free gas we can eat, right? And just,
1:19:47 I don't know. I know enough to be fascinated by it. And I know enough to be,
1:19:53 to know that there's a lot I don't know Okay. Put it that way. And that's okay. You know, it's a timely at this recording. I'm gonna make that shameless plug to the ESP symposium that's held by
1:20:05 in Houston. Yes. It's August 25th, August 29th. So, good for you to check that out. It'll be in Galveston this year? It'll be in Galveston this year. Yeah, they do it every other year, right?
1:20:14 Correct. Yeah, 'cause I was there in 23. I
1:20:20 was there in 23. Pete had just bought my tool company. Right. And
1:20:27 that was a good time And I enjoyed going around and seeing a bunch of people and I was still pushing that ESP catcher, I was telling you about that we have to break it up at the oil jars. I'll be
1:20:37 there again this year because I got a different ESP catcher. Nice. Which is funny like the optimization and the operating side. It's amazing how siloed we can get in oil and gas, right? So like
1:20:51 the operating side of an ESP is, you know what I was just talking about but like kind of Um. scares me a little bit. I know that I don't know enough to like try to be
1:21:04 optimizing that for anybody or making any recommendations on how they should be handling that equipment. You
1:21:14 know, from a computer side.
1:21:17 But the physical side of like downhole separators, an
1:21:23 ESP catcher, that sort of stuff, I know really well, right? Because I've spent a lot of time talking and developing. And so we get like really siloed and it's funny when people outside of oil and
1:21:35 gas, you know, start to ask you questions about one thing or another, or you ask other people in oil and gas, you're like, well, you ought to know ESPs. You know, it's like, well, I've
1:21:46 designed four different ESP catchers, but I can't tell you if you should speed up or slow down that thing or what's going on with you know, XYZ. So we get real siloed in a lot of that stuff. but
1:21:58 I'll be there for an ESPN catcher. We currently have it at, actually I've probably never told people that I do some work for target completions. Nice. And I
1:22:11 get to do like
1:22:13 RD designing new tools, get it out there to people. And a lot of the time I spend there is
1:22:23 meeting with oil companies directly 'Cause like I said, getting siloed, we often don't get the message from the oil company to the service company to the manufacturer very well, for the
1:22:38 manufacturer to make the needed changes or to develop the new tools that would work better. Just like that telephone disconnect between the two. And so my time there, I've been spending a lot of
1:22:52 time meeting with oil companies directly and figuring out where their pain points. So as a manufacturer, we can do a little better and support their service companies, you know, we don't sell
1:23:02 direct But we can support the service companies say hey, we designed this new tool We'll go meet
1:23:10 With y'all when there's a failure, you know, we'll go to chevron or ex honor shell and meet with y'all Or or alongside of y'all with them to help understand the problems so we can make them a little
1:23:23 bit better, right?
1:23:26 And so yeah, I've been spending a lot of time doing that lately, so I'll be down there for that So we've got a cool ESP catcher. That's uh, it's a yo-yo set ESP catcher so like you said spaghetti
1:23:39 wells earlier and to me as spaghetti well is when we like drill down and kick out and back build and then Come into our course on it's like we've got all this inclination and all these different ways
1:23:53 and now as a tool hand on location. I'm like, how do I get torque? Yeah, 10, 000 feet down this tubing, you know, to a, a packer that's been there for two years, getting all corroded and
1:24:07 gummed up and everything. It's just a mess. Yeah. You know, we've got all this going on. And so I've got all this pipe friction and that just doesn't, it doesn't work. So we developed an ESP
1:24:17 catcher that is a, it's just a yo-yo J. So like you set down on it and you pick up and you go into tension and you set down, and you go into compression. And if you pick up again, it's free to
1:24:30 move up whole. And if you set down again, it's free to move down whole. So you've got all of your range of motion. You know, you're tensioning your impression and then you can set it and unset it
1:24:39 as many times as you want to go up and down whole and put it where you want. Does it have a force limit? Yeah, 200, 000 pounds is what we consider the catch force. And
1:24:51 that's a,
1:24:54 engineers, I tell you,
1:24:57 this and have a safety factor there and 200, 000 pounds the published limit. Okay. It's probably closer to 350 or 380. If you really want to go forward. I mean, you know, like they say towing
1:25:10 capacity on a truck is 10, 000 pounds, but it's really a recommendation. Okay. You know, 15 if you take it slow. Okay.
1:25:20 Yeah, so there's that. And then we also developed a tubing anchor with that same yo-yo J where we can, we don't have to get any torque down and you can go set it down in your highly deviated wells
1:25:33 and just pull it out when you're ready. Nice. Yeah, that keeps my brain going in and helps me, even though I'm not on the service side anymore and helps me try to kind of stay in the know what's
1:25:46 going on by being able to watch and meet with these oil companies and keep up my shill Yep. 'Cause.
1:25:57 you very quickly. Well, it changes so fast. Yes, it does. Right. If you take a year off, you're like, man, what does everybody do in these days? Yeah. You know, it's like, well, it's
1:26:07 only been a year. So what does everybody do in these days? What are y'all doing different? Whose frag plug is hot right now? You know?
1:26:15 And whose frag plug is still in business right now? You know, that kind of stuff just changes so fast. So,
1:26:23 yeah. Yeah. Sorry to just take the mic and go on a spiel. No worries. Yeah.
1:26:31 Let's see. What did we not cover that you wanted to cover today? I think we covered everything that we needed you. Everything we needed to? Exactly. You have any bits of technical expertise that
1:26:44 we didn't get into? I can talk a lot about technical right now, but it would. So, I've been an adjunct professor for about a year now. So I've been teaching petroleum data analytics. We can talk
1:27:01 about all the data analytics if you want to, but I've also picked up two other adjunct teaching positions, one at TCU for energy finance as a teaching assistant. Okay. And then the other one is a
1:27:13 petroleum fundamentals professor, adjunct professor at ATPB's business school. Okay. Yeah, I can go either way. I can go any direction at this point. I want to get into both of those You want to
1:27:26 get into both of those? Yeah, yeah, petroleum fundamentals. Okay.
1:27:34 Breakdown, what are the fundamentals of petroleum? Like, like where do you even, how is that?
1:27:43 That's such a broad. It is broad. It's like, is that, is that generation of hydrocarbons? How they're generated, where they're stored, How we recover them?
1:27:57 That is, yeah, that's exactly it. It's, where does oil come, like what is oil? Okay. Where does oil come from? Yeah. What does it take to make a good reservoir to produce that oil? Okay.
1:28:08 How do you explore a drill complete, produce blah, blah, blah. Yeah, it's kind of like energy 101. Energy 101. Or oil and gas 101. Correct. And there's a lot that goes with it because every
1:28:20 subdiscipline has its own thing too, like drilling engineering. Yeah. Production engineering, yeah So they're learning a 30, 000 foot overview of petroleum engineering in the business school.
1:28:31 Okay. At UTPB. Okay, at the business school. So they need to understand it so that they can have enough knowledge to be like, Oh, this doesn't pass this NIF test. Correct. This doesn't quite
1:28:45 lined up with what I heard in class. Let me ask some more questions. Right. So if they were to ever get into energy investment banking And they were given an Okay. I wouldn't say package, but if
1:28:58 they were given an investment opportunity for a total asset value for a particular acreage, they would do that back of the napkin. They would have the capabilities to do the back of the napkin math
1:29:09 to see if it makes sense to make the. Yeah. Yeah. And be like, oh, this is pretty close. So, yeah, you gave me some inspiration to probably teach them a little bit of resource economics too.
1:29:18 Yeah. Yeah. Okay. Resource economics. No, like the economics. Okay. Oil and gas. Yeah. So whatever they learned in their accounting classes and whatnot They can kind of tie it together. Have
1:29:29 we used this? Correct. Yeah. Yeah. And it's amazing how much there is to know in that, right? And I make a ton of assumptions in my operating company. And I, you know, a lot of times it's not
1:29:43 worth the time to go track down the exact answer on the assumption gets me close enough, but we have to make a ton of assumptions
1:29:51 at a small company in particular, but just because there are so many different. portions to know when it comes to,
1:30:02 you know, OpEx, when it comes to royalty, like what royalty you're getting in calculus and zone one eighth or all or all one quarter. Right. Makes a huge difference. Today's the, today's the
1:30:14 20th. Today's the 21st. 21st. Yep. So I got paid for my oil last month. And on the drive in, I was looking at what I got paid on a couple of them. And I was like, that doesn't add up. Yeah.
1:30:25 And then I had to go back and I was like, Oh, that's a quarter royalty on that property. Yeah. I was like, Dad, come on. You know, who signed that lease? Yeah. You'll beat that guy over the
1:30:34 head.
1:30:37 Yeah. Okay. And then the other two. The other one is energy finance at TCU. Yeah. And that's, um, that's oil and gas focused, or is that looking at all energy? It's looking at all types of
1:30:51 energy, um,
1:30:55 energy generation. No, it's more of like there's geothermal energy, wind, solar, and then there's oil and gas. So it's gonna be a case study-based course where you have different Harvard case
1:31:07 studies on geothermal energy, hydrogen, wind, solar, different kinds of firms that are focusing on those different types of energies. And then there is a, well, not oil and gas, MBA component
1:31:20 to it. Like, okay, well, this is a hydrogen-based company or a firm that's talking about blue hydrogen, but the main outcome of that learning is going to be about accounting. So like this firm
1:31:32 focusing on investments, there was some goodwill with based on MMA. How do you read a balance sheet? So something like that. Gotcha. Or the geothermal company, for example, is talking about
1:31:44 applying oil and gas techniques into extracting geothermal energy. The operations management behind all that. Okay. So operations management would be the theme So that. There's an MBA component,
1:31:58 is an MBA concentration component to each of the cases, but the case is, the subject of those cases is energy. Gotcha, gotcha. Okay, I like it. Yeah, 'cause all energy is good energy. Right,
1:32:11 it just depends on how much you need, how much of it you need. Yeah, yeah. That's really, I should probably take that class.
1:32:18 Can always audit it. We were looking at, what's that, to audit a class? I think, well, I know at UTPB, you could just reach out to the dean or reach out to the professor, and they just give me
1:32:29 a form and I just sign it. That means I can go sit in all the class. You can sit on the class, I'll remote. But I don't really like get credit for it, which is fine because I'm not trying to be
1:32:36 real. You're just trying to learn. Well, that's really cool. I'm gonna have to start looking into that kind of stuff. You've given me, I'm gonna have to write down all this stuff that I need to
1:32:45 go. Well, it's recorded. Good point, I'll play it back. Yeah. Get my checklist of things that I need to go check into. Exactly
1:32:55 Yeah, we've got a well that has no pipeline access that we need to start mining Bitcoin on,
1:33:04 making some energy out of.
1:33:09 There's 60 BCF in the reservoir,
1:33:13 and it's made 23 BCF. Okay. So it's got quite a bit left. Right. But it was drilled in the '70s. Okay And it's kind of hairy on, you know,
1:33:26 I think well bore integrity is there. The guys that built it did a pretty good job. It's 10, 000 feet. They ran a three string design and put a lot of seam in in it. So I think it's pretty good.
1:33:38 But, anyhow, we just took it over with the intent of either putting it back on production to a pipeline, which I'm now realizing is wildly expensive right now to tie into it an existing pipeline is
1:33:51 like pretty expensive.
1:33:55 or mine Bitcoin out of it.
1:33:58 And so I've got to start, I went down that rabbit hole and I've got to start going down that rabbit hole again. And both of those are just purely economic decisions on which one and how. And
1:34:12 understanding like the
1:34:15 ramifications of each
1:34:19 as far as like deliverability goes, right? So if I don't own the Bitcoin miners and the well goes down and I'm not delivering energy to those Bitcoin miners, now we've got like a legal case that I
1:34:33 need to understand in developing those energy. So I could really use some classes like this. To look at the economic sides and how to work through those contracts and whatnot. And like I was just
1:34:45 saying a minute ago, there's like so many little caveats that you need to know just a little bit of everything about. Right.
1:34:55 You don't need to know and you just wing it. Everything goes well.
1:35:01 I guess that would be the true wild catter spirit, wouldn't it? Right. And just hope that it all sorts out in the end. Yep.
1:35:09 That's cool. So you're teaching three classes now. Right. Oh no, two classes. Two classes, cool. And
1:35:17 you got your MBA? Yes. Where at? Chicago Booth. Okay, okay. In Chicago, I guess. In Chicago, yeah. Yeah, very cool And your husband has his MBA. Yes, he has his energy MBA from TCU. Wow,
1:35:28 y'all are just a well-studied family there. I love it, I love it. A lot of learning, and it sounds like a lot of knowledge that's being applied to the field really well. Right. So, yeah,
1:35:46 that's all.
1:35:53 of the energy finance, I'm not gonna bore these people. I've got some questions with you for energy finance. Okay. Like how we view, well maybe they wanna know, but like how we view some of
1:36:02 these things. And I had a guy, I gave him the brief pitch on a well I wanted to drill. And
1:36:12 he was like, well, does it pay itself back in 12 months? This is conventional well. So does it pay itself back in 12 months? I was like, well, I wanna say yes, right? But I ran my numbers
1:36:25 conservatively. Yes. So my answer ended up being, I don't, you don't really know, it's a wildcat, right? Based on the conservative numbers I ran, it's gonna be 18 months. He's like, well, I
1:36:38 don't invest in anything that's less, it's not, I don't invest in anything that doesn't have a 12 month or less payout. Pay out, yeah. Unconventional wells. And maybe that's like an old rule of
1:36:49 thumb. Okay where people get that from. kind of sounded like it was from him. And
1:36:58 there's got to be some like standardization. Yeah. That I don't know or understand yet about like how conservative, like I get to make that determination being just like a small independent, right?
1:37:13 But like, there's got to be standardization on what you report, right? There's going to be rules around that. There's a lot of rules from the SEC on what you report Okay. So, I mean, I won't go
1:37:24 into the SEC rules for SOCS compliance, but I will talk about there are some guidelines
1:37:32 and SP monographs. So, for example, if you talk about statistics again, like P10, P50, P90, oil and gas industry likes to, like the rest of the industry likes to say P10 is your best well,
1:37:43 P50 is your expected, you're not expected, but your median well, P90 is like one of your worst was. Okay. So. There's a P10, P50, P90 in your decision tree or your decision analysis when it
1:37:58 comes to running your economics. Okay. And your rule of thumb could be that your worst well is your P90 well, you're one of your lower end is your P90 well, and your higher end is your P10 well.
1:38:12 Okay. So you're right about the standardization though, because a lot of people may not be abide by geostatistics. But
1:38:26 a lot of people also don't wanna bank on one number either. Yeah.
1:38:31 Yeah, that's where I was having a hard time with them. I'm like, well, yeah, if it goes the way I want, like we'll pay this well off in five months. That wasn't the, you know, I can't sleep
1:38:39 at night if I give them that answer.
1:38:43 So I was like, yeah, very conservatively, like very reasonably, like if the sand is there, it will be 18 months or less Yeah.
1:38:53 And I guess that goes into, you know, some like ethics questions of how you wanna present stuff, where you're ethically comfortable presenting stuff. But there's gotta be some, and I'm sure
1:39:02 that's part of some of that is like, how do we standardize these and where is the normalization of them, what's, I'm gonna say like what's legal and what's not,
1:39:14 you know, how far we can take that out I saw a package of whales that we ended up bidding on that
1:39:25 they had taken their economics and
1:39:31 they had tied, it was a water drive reservoir, right? So we know when a water drive reservoir as oil goes down, as we get later in the decline curve, as oil goes down, water is gonna go up,
1:39:44 right? And so our cost of disposing and handling that water Increases. Increases, okay? Will they tide their op-x to. they're oil. And so then it's like, well, they say that OpEx is going to
1:39:57 shrink. OpEx per barrel goes down, but yeah. But then we've got all this water to handle. To dispose, yeah. And so it put like their PV 10 valuation was like 15 million. And when we ran an MPHD
1:40:10 win, it was like 3 million, you know, because we know all of this costs on the back end. I was like, huh. And of course, it's private transaction. Yeah. You know, it's not a publicly traded
1:40:21 company. Yeah. You got to watch out for some of those things, but it's, it's like, it's just,
1:40:27 it's frustrating. People try to get away with that kind of stuff. And I think it just depends on how you want to, like what metric is the right metric for you that that suits for like benchmarking
1:40:39 purposes. So yeah, yeah, OpEx for BOE.
1:40:45 It is a metric, is also even a conservative metric when I think about it because you're not putting the water barrels into the. into the denominator either. Yeah, yeah. Especially in a water
1:40:59 drive as a water. Water drive as a water. Right, that's gonna change a whole lot.
1:41:04 Speaking of water, West Texas. Yeah. Water. Okay. Disposal.
1:41:14 Tell me what's going on out there.
1:41:17 I can't talk much about it. Okay
1:41:21 We're out of pore space. We're not. We're not out of pore space. No, we're not out of pore space. To dispose the water into. Yeah, to dispose the water into, we're not out of pore space. The
1:41:32 question is how contained is that reservoir that you're as you're injecting into? Okay. Yeah. And it's moving into other reservoirs. It's moving into other reservoirs. There's not a good seal
1:41:42 around where we're injecting. Or there could be an overinjection. Okay. So overinjection then either breaks the seal
1:41:51 We're getting cross-flow around old well-bores that were not isolated well. Correct. Yeah. How do you deal with that? There's so many old well-bores out there. There's a reactive way to do it.
1:42:02 Okay. And then there's a proactive way to do it. The reactive way to do it is, yeah, when every time you see a problem with a quote-unquote isolated well-bore, you, you know, do your cement job
1:42:12 on that. Yeah. Do your remedial cement job on that. There's a casing or tubing remediation program that a company that I used to work for would do that would proactively identify which wells will
1:42:25 have problems depending on how far away they are from the SWD or the newly drilled SWD. And then they would actively pump the, they actively do their cement jobs and you would have problems with
1:42:39 those compromise well-bores. Gotcha. So they'll go evaluate, we've got this SWD going in, We'll take a three mile radius. in every conventional well bore around there, every old well bore that's
1:42:53 around there that doesn't have what we deem the right integrity. Yeah. We're gonna go
1:42:60 shoot holes and pump some in on the backside to try to isolate that disposal zone. Correct. And
1:43:09 that money is on that operating company. It has nothing to do with the guy drilling in the software disposal. It depends, if it's third party, if you're doing a third party for saltwater disposal
1:43:18 or you own the SWD Yeah, it depends. Yeah, if you own the SWD, then like it makes sense. Yeah. But if somebody is putting in like a commercial SWD that's taking water from everybody, you just
1:43:28 gotta deal with the ramifications of what happens. Well, when you know what that SWD's gonna be placed there, and you predict how many barrels of water are gonna be contributed to that isolated
1:43:40 well bore that's compromised, you can do some modeling to get a better understanding of like, which wells that you need to do your, of a mediation program on. Right, but like what I'm saying is
1:43:49 financially. Yeah. You've got to go spend that money. Yeah, you've got to spend the money to do it. Yeah, yeah, it has nothing to do with like it's, 'cause it's a
1:43:59 cost to operate, right? That you're going to have to do some of that, particularly in West Texas right now with what I want to call the subsurface cesspool that is the Permian at the moment. But
1:44:09 like
1:44:12 you don't get any other than averting a crisis Like you don't add any value to your asset by doing that, right? So that's a hard one to want to get everybody on board to go. What happens with
1:44:28 non-operated wells or not non-operated wells? I want to say abandoned wells or orphan wells. Yeah, orphan wells are wells that people are shut in, not really doing anything with. It may not
1:44:42 technically be orphaned yet, There is an operator of record, but nobody's touched it in 15 years. They're definitely not gonna spend the money. What's happening with those wells? Well,
1:44:52 there are actions that are being taken that if there are wells that have not been paid attention to for a number of years, but there is some case and pressure that's shown on there or the
1:45:03 intermediate needs to be, like there needs something needs to be isolated or plugged and abandoned appropriately, then the operator of record will be the ones that will take care of that. But what
1:45:16 if there's a, sorry, I'm gonna go down this rabbit hole. Okay. What if there's a well? Okay. That the operator of record is MIA. Okay. It's in the middle of your contiguous acreage, right?
1:45:29 Or it's a shallower well, and you're operating at 10, 000 feet, and it's up here at, you know, 6, 000 feet
1:45:40 You're
1:45:42 kind of liable, like you. or you're operating this zone, this is where West Texas like really throws me off. 'Cause like everywhere that I have a lease, I pretty well have all depths and a
1:45:54 surface agreement. All with me, right? If y'all are operating this zone down here, you've gotta have a surface agreement to be in there drilling and doing it. And if this well is leaking on the
1:46:06 surface, does that become your responsibility? It shouldn't be. It shouldn't be. But you have an a surface agreement with that landowner to operate out there Yeah.
1:46:17 It's just like a - Sounds like a new business idea. Where's the business opportunity in that? Well, you get paid to do the work. Oh. Yeah. Approach somebody like Exxon and say, Hey, we'll
1:46:29 monitor these wells that aren't yours. And when need be, we will put in some integrity. And get some intern roused abouts to do some work. Yeah. It's a PA work. Yeah, you like abouts know,
1:46:40 roused Intern. cool be that'd,
1:46:45 students from university that are like, I need some field experience. I didn't get a chance at my career fair to get an internship opportunity. Gotcha. Get some freshmen out there and show them
1:46:53 what the whole field's like. Yeah, that's right. Have them out there, thread and pipe and. Yeah, they'll learn a lot. Yeah, that's true. That's true. Yeah, that's just a fascinating.
1:47:07 The way people operate on top of each other out there is really fascinating to me
1:47:13 And the
1:47:17 having a good legal team.
1:47:20 I guess like really comes into play. And trying to understand all of your obligations. As
1:47:28 a reservoir engineer, you probably didn't have to deal with that much. But as a production engineer, I'm sure that was a weekly meeting about what we're doing out here. Yeah, there's always a
1:47:39 morning meeting, operations meeting on what's been done Yeah, and what your obligations are. the lease. Yeah, if it's HBP, you got to keep that thing well running and it's on COP, your
1:47:49 cessation on production, clause of 60 days. Yeah. Yeah. Yeah. Crazy. Crazy, crazy. And a lot of those you want to hold the acreage until you get to drill them. Yeah. So like those wells may
1:47:60 be so far from economics, but you've got to keep them producing a commercial quantity. Yes. Just so that you can keep the acreage until you're ready to drill it. Correct Yeah. Yeah. That's crazy.
1:48:15 It's crazy to me.
1:48:18 But it's big business, right? And big business has a different mindset than we do as small operators. And then I do as a small operator. Yeah, definitely scalability makes a difference. Yeah.
1:48:31 Yeah. That's pretty cool. Well, um, appreciate you coming on. Thank you. Yeah. We got some stuff to go check out for sure learned a little bit. Yeah. You have any questions for me? I don't.
1:48:43 I know, I think we've exhausted every topic that we can think of. Cool, sounds good.
1:48:50 After I research on these questions, I'm gonna have you back on. Okay. And I'm gonna get you a couple more deep dives in here,
1:49:01 particularly in the reservoir side. For sure. I have so many questions
1:49:09 on the reservoir side as far as like
1:49:12 fracas, RVs, clay content, chemicals,
1:49:19 for wells and ideas that I have that I wanna drill in an unconventional manner.
1:49:27 Maybe that's not even for this show 'cause we're trying to focus on some conventional stuff, but I've got a bunch of questions there and I'll let you prep for that one. Oh, I'm gonna prep for that
1:49:34 one too. Yeah. Then you can hit me with some SPE papers Yeah, yeah, I'm gonna write them all down. The other thing I was thinking about is this, that is. probably a shameless plug for Collide
1:49:44 in doing the, I don't know what the show is called, but it's them asking the dumb questions. So I think that might be a great opportunity for that, episode two. Yeah, is that energy 101? I
1:49:56 think it's energy 101. Yeah, cool. Good for those guys putting it back on. Yeah. Another building a whole library there. And that's the whole point of Collide, right? So we can share these
1:50:05 ideas and this experience on like a deeper technical level and it not be just a bunch of people trying to sell a bunch of people's stuff. No. You know, it's,
1:50:17 I think it's frowned upon to sell anything there. Well, I think a lot of it has to do with the intent. Yeah. Like, you're always selling something. Let's be real. If you work for an operator,
1:50:29 you are selling your idea to your manager. Yeah. And if you work for a service company, yeah, it's a lot more straightforward. You're selling something to get business. But you're always selling
1:50:38 something The truth is, it's like, it's the intent. the trust that you have in relationships really matter in order to get something out of it. So for people that trust you and whatnot, I have a
1:50:50 bunch of people in that myself, so yeah. Cool, well, thank you, I appreciate it. Thank you.