Below are excerpts from the conversation between Mike Orr, President of Digital Oil & Gas Solutions, Collin McLelland, Co-Founder and CEO of Digital Wildcatters, and Jacob Corley, Co-Founder of Digital Wildcatters, edited for length and clarity.
Collin McLelland: So, tell us about your company and what you do. What’s the company’s name first?
Mike Orr: Our company’s name is Digital Oil and Gas Solutions, and we’re a division of TEAM International. So, the founder is ex-Marathon, ex-Arco, and has been in the business for a long time but spun off and basically started offshore- and nearshore-based technical solutions to help with any kind of development you needed.
They had the intention to get in oil and gas. So, I had had a couple of courting conversations, and then we consummated the deal. But basically, we decided to go after some products in oil and gas, be a little bit different. I spent 25 years on the other side, so I knew what I didn’t like, and I knew how I wanted to be treated. We spent a lot of time working with people that wanted to run as fast as we ran. So, we’ve got a limited set of companies that run like we do, but we’re doing some really cool stuff.
Collin McLelland: You said you spent 25 years on the other side. What is “the other side”? Tell me a little bit about yourself.
Mike Orr: I started out with Williams companies, IT-related roles. Worked both offshore and onshore. I spent some time drilling on an offshore platform, and then most of my experience is upstream in Oklahoma oil and gas. I worked on a pulling unit for my dad and some friends. Learned how to cuss and fight an old patch. Learned things in a doghouse on a drilling rig. But anyway, I’ve been in oil and gas most of my life. As a matter of fact, my family’s still in oil and gas. My dad pumps every morning, and my brother-in-law supervises a bunch of production up in northeast Oklahoma.
Collin McLelland: So, talk about how you got into IT
Mike Orr: I got that started at Williams. Gentlemen there had an IT position and HR of all things. I had an HR background and got into the tech side of it, self-taught. And then have had IT positions mainly focused on disruption, like heavy implementations ERP and field automation things. So, I’ve been very fortunate to be the risk-taker in a corporate that would just step out and do something a little bit different. Because again, you got a big safety net in a corporation, so it’s a lot easier to fail.
We have done a lot of digital transformation in the last five-six years that not only has saved the company a bunch of money but proved to be a big differentiator for disaster recovery, like the flood here in Houston. In fact, the cloud-based company was not impacted. And even if a hurricane came through and took out data centers, we wouldn’t have had those issues.
Then I wanted to do something around the product side to meet the small to medium guys, and that’s where we are heavily focused. But we keep getting drawn into some pretty disruptive companies that are doing things a bit different in oil and gas because they’ve got to survive. And as we’ve found, there are only a couple of ways to survive in today’s world, and that’s to be either ahead in technology or have a hell of a war chest at a bank.
Jacob Corley: So, are you a software development shop or a consulting firm? Or, are you pushing products that you’ve built?
Mike Orr: We cover all three areas, and the great thing about TEAM is our nearshore development. We’ve got a delivery center in Medellin, Columbia, and it’s fantastic for this part of the world because it’s central time, so I’m not up at two or three in the morning.
Collin McLelland: It’s the same time zone, so you don’t deal with typical offshore problems with that. So, it’s really beneficial.
Mike Orr: And you know we’ve got East Coast time all the way, and we’re doing some mountain time now as well. So, you know, it works really advantageous. And then, the crossover in the middle of the night for us is either in Ukraine or Poland as we’ve got delivery centers there. And then the other thing we’re looking at is should we move into Ho Chi Minh and cover the Asia time zone with delivery for both Malaysia and some of those other places that we’ve got some connections to.
Collin McLelland: So, you guys are doing a lot of international work right now. I’m assuming so if you’re looking at opening up shops.
Mike Orr: We are entertaining international work. So, we are looking at those, but we’re pretty picky with whom we work with. Because again, if you’re looking for just a vendor, that’s probably not us. We want a partner more than anything else, and we spent a lot of time with those relationships and getting to know the company. Sometimes better than they know themselves. Sometimes because we’re so data-centric.
Collin McLelland: So, are you guys focusing mainly on upstream companies, or is it all?
Mike Orr: We do it all. But upstream is easy right now because it’s where most of the growth is. We’re focused pretty heavily on this side because that’s where we’re finding the most disruption.
Collin McLelland: And when you look at these upstream companies, what does the engagement with you guys look like? If you’re doing all three in terms of development, consulting, and pushing products, then I’m sure you have a bunch of small and mid-sized players. So, what do you guys look at when you’re going into an E&P company, for example?
Mike Orr: You’re right. It’s really all three. But to your point, it’s specific to what pain they have at the time. What is the largest problem that you’re trying to solve? Now everybody knows that data is the end of the world. And what I mean by that is most companies are tech companies these days, but they just don’t know it.
One of the things that we do and that differentiates us right now is the following: you come up and say: “Hey, I’ve got no surveillance on a pump jack or a tank battery or stripper wells up in Oklahoma.” You engage us and we actually show up. My guys show up, install our sensors, edge devices, communications, and we give you a front end to see what your tubing casing pressure tank volumes are, flow, compression—those types of things. And we do that for a couple of bucks a day, turn-key, no capital upfront. We just do that.
Collin McLelland: Wow. You can use that for sure.
Mike Orr: And a lot of people say: “How are you able to do that?” Well, I’m an operator, so I know what it’s like to be on the other side. And if I’m asking you to give up a couple of dollars a day for surveillance to actually know something where you actually have to drive and to know it now, it might be worth it if oil’s up around 60. It may not be worth it at 20, as an example. So, you need to balance that value proposition.
Then we got a field data capture application (FDCA) that feeds into and gives you all your volumes, tanks, gauging, tickets, and other inspections. In fact, all the things that are regulatory-related. So, we feed that in, and then we’ll actually give you some reporting on the backend through our data insights telling you exactly how your production is going, how much flutter you produce, and how much gas you produce, etc. So, we cover it end-to-end, but people are in a very different spot from where they’re at on their journey. And we try, do a really hard job, and do a really good job even as hard as meeting them where they’re at. Since a 20-wells person doesn’t need what a 2,000-wells person does.
Jacob Corley: I feel like that’s a huge underserved market. Especially in my days of pushing software to operators, I found most of the opportunity was with the companies that really didn’t have IT departments. They were the companies that had just grown to the point where it was still lots of engineers, geologists, and landmen. But they never really were able to take the time or necessarily had people on staff that had the expertise to digitize their operations. So, then you’re not dealing with the mumbo jumbo of having to go through IT and all their various requirements and stuff. Usually, they can take you down this road, and it never goes anywhere, right? And so, I feel like there are so many E&P’s that are a couple hundred or a couple thousand wells, producing a few barrels a day here and there, but now they’re starting to get to be a larger operation.
Mike Orr: Yes, and the other thing too is they know they can operate smart. One of the things that I always laugh at or actually cringe at is as follows: you go into a lot of these software companies that are: “We’re going to take out 50 of your pumper or tinder pool. We’re just going to knock that right off the top because that software and hardware that we’re installing on these wells can grease saddle bearings, tighten up stuffing box, and go pull a well.” And it just doesn’t work.
What we actually come in with is: “Hey, look, if you’ve got labor savings, that’s kind of on you. But there’s probably a whole bunch of work that your guys would love to get to if they weren’t making their milk routes.” And there is a whole bunch of work out there. You could probably optimize your field, getting your motors tuned to be exactly on a stroke to maintain the fluid that you need to maintain to keep this thing pumping optimally. That’s where you get into the value differentiation—don’t take out the labor but optimize the labor. Make them more efficient. So, we’re going to tell you something where you don’t know something today.
So, that’s our claim to fame. With these carbon credits, greenhouse gas, flaring, and all that kind of stuff, that’s really going to matter from a data stream in the very near future. Whether we agree with it or not, it’s where it’s headed.
Collin McLelland: Yes, I just had a great podcast yesterday on ESG data and how it’s being standardized across industries. And it’s happening.
Mike Orr: Without a doubt, and it’s either you’re going to do it, or you can get it done to you. So, we actually prefer to be at some of the forefronts of that. So, compressor vibration—why is that important? It tells you when the thing’s on and off, so you can report your fuel usage based on when it’s on versus if you don’t know. The government agency doesn’t trust anybody. That thing ran 24 hours a day, seven days a week for the last 365. So, here’s your carbon credit tax to pay, and it’s such a pain.
So, we think there’s a massive opportunity to come in and do a very light kit on that cellular satellite. We don’t even need your radios. I mean, we’re now pulling the tech forward, where even five years ago, it was cost-prohibitive, and that’s now gone. If I can do that for two dollars and fifty cents a day, or pick whatever time frame you want it in, and you just multiply that by two dollars and fifty cents a day, so now it’s more cost-efficient because the clouds change the game with that infrastructure since it’s consumption-based.
Jacob Corley: Yes, it’s so much cheaper. And are there any SCADA sensors for safe flaring?
Mike Orr: Yes, and there’s a lot of conversation right now on flaring and even if you can measure what you put back in line. So that’s something we’re pretty heavily focused on as well, which is how you optimize or how you play by the new rules.
Collin McLelland: And if we talk about these smaller operators, are they looking for technological solutions that can help them, or is it still kind of a mixed bag?
Mike Orr: It’s very much a mixed bag. I mean, my dad was not there, and he is now. And the reason is that he can go fix what’s most important, knowing that everything else is where it’s supposed to be. Moreover, we do some trend lines and help with things like that. From the perspective of: “All right, this well’s produced 40 barrels of water this week, 40 last week, and the week before. You’re probably pretty good now. We’ll tell you the strap factor and the top of the tank. And if we know that it’s going to fill up next Thursday, we need to let the hauler know on Monday to show up on Tuesday and either haul it to injection or disposal site.” Those are the types of things that are now just a given. The older generation is still a little bit tough because even these well whispers can pull up and hear a motor and go: “Hey, we’re a little bit of light on fluid.” It’s like, all right, I don’t know the technology that’s going to do that.
Jacob Corley: That sounds like a whole piece of content in itself—the well whispers.
Mike Orr: That’s exactly right. And it’s amazing what happens when you kind of blend technology with that well whispering—that’s actually the panacea. Because we’ve got some operations up in Appalachia with a really large producer up there. Their guys can tell you what that well should or shouldn’t be doing. And then, if you can tune that with technology, you can get the best of both worlds. Because technology’s not going to do what those guys do, but they can’t do what technology does either. And those are the guys we really like working with.
Collin McLelland: That’s a labor-intensive job.
Mike Orr: Well, think about it when you guys had your production. Each one of those wells has, I call it a persona, each one of those wells operates differently. So, what we’re looking for and what we’ve got a platform to do is we treat each one of those wells as its own persona. So, we can optimize chemicals; we can optimize when it’s on or off. If it’s an intermittent well, we can turn it on and off based on data, not based on gut or based on the next time I’m actually going to be out there.
So, everybody’s like well, the reservoir is only so big. Absolutely, but that reservoir will be here long after we’re gone. So why in the world wouldn’t you want to produce as much out of that as you can while you own it? So again, it’s a value proposition of using data, technology, and then some common sense and some oil sense to basically create algorithms that optimize your production. It doesn’t matter if it’s a barrel a day or a hundred barrels a day. It’s the same thing.
Jacob Corley: Are you seeing a bunch of new grads or younger guys, say in their 20s? It’s not a huge pool of people that want to go out and chase stripper wells or drill new wells. But are you seeing any younger guys getting in?
Mike Orr: Yes, and we’re actually drawn to those guys, for sure. We like their attitude and the ‘go figure it out’ kind of stuff. Moreover, today anybody with a credit card can rent technology. For example, you can go to Azure, AWS, or Google. Pick any of those three and get basically any tool you’ll ever want on a credit card.
What we’re trying to do now is get some of that legacy oil knowledge into these younger guys with more of a tech background. Combine both of those and let them go. Get out of the way. And it’s been interesting, especially these patrols, these PEs coming out of these schools. They’re still learning from five-ten years ago where things were at. You go even to look at some of the latest frac technology that’s out there. Then you go look at some of the stuff that cold-born those guys are doing. That didn’t exist three years ago.
Jacob Corley: Is anybody actually putting legit surveillance in terms of like cameras? I mean that technology has come so far with the ring and nest and various like home things.
Mike Orr: They’re trying to.
Jacob Corley: So, I’d imagine that the B2B kind of technology will be improving too.
Mike Orr: I actually think that’s going to be the next evolution of this edge compute. We’ve got enough edge computing out there to run just about any algorithm that we need on the wellhead. But the video is a bit different, right? So, I think where we’re focused on is working with some partners that can give us infrared motion detection, those types of things, but make it actionable.
Collin McLelland: But if you’re someone like us—a small operation middle of Oklahoma with no cell phone service—what are your options? And that’s the barrier for us because we spent a lot of time thinking about how we can automate this. We talked about having a little drone out there in a garage that came out, surveyed the lease, compressed it into a gif, and then transmitted it back to us so that we could see it.
Mike Orr: We had this idea about three years ago. But again, to your point, it is still cost-prohibitive to do that on this small to medium end. I think drones have their place. I won’t ever say that because I think that technology will evolve. But I don’t know how a drone flying over a midstream segment with a 20 mile an hour wind can tell you where gas is leaking at.
So, there should be some evolution of how that technology works. Some predictive that says: “Hey, if the wind’s blowing 20 miles an hour out of this direction, it’s probably in this segment, etc.” I still think that has a way to go. I do think surveillance on the video side is going to be the next thing, but I think it’s going to have to be with a different tech stack than what we have today. It’s just not friendly in telecommunications right now.
Jacob Corley: Before we wrap up, I got one more question. What are your thoughts on using gas to power generators to mine Bitcoin or anything else?
Mike Orr: If it’s trapped gas, why wouldn’t you? If you believe in America and our capitalistic society of making money where you can make it and being innovative around it, that’s about as innovative as it gets. That’s using a resource that’s available—it’s there. There’s no infrastructure to put in other than a lead line into the generator. Why wouldn’t you do that?
Now, we could go down a bigger rabbit hole about this whole Bitcoin thing and what’s the life cycle on that. Right now, it looks pretty good. But I’m all for it if somebody’s innovative enough to come up with that solution on trap gas. Fantastic. That’s a resource that doesn’t have to be generated some other way.
Collin McLelland: Appreciate you coming on the show.
Jacob Corley: Enjoying the conversation.
Mike Orr: Likewise, gentlemen. It’s been a pleasure, for sure. Thanks!
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