One of the macro trends driving change in the energy industry is the increasing importance and acceptance of information technology. As part of Prism Group’s mission to help clients transform change into competitive advantage, we thought it would be fitting to focus on a handful of the many Denver area companies that are at the forefront of this trend.
You may not have recognized it yet, but the second wave of oil and gas innovation is upon us, and the Denver area has quietly emerged as an important center of the information technology revolution in the oil patch.
The Denver area has quietly emerged as an important center of the information technology revolution in the oil patch.
The first wave of technical innovation made its impact in 2006, as horizontal drilling coupled with multi-stage hydraulic fracture stimulation became widely adopted as the method for developing unconventional resource plays. The ensuing “shale revolution” made the United States the world’s largest crude oil producer in 2014, fortuitously reversing a decades-long slide of declining domestic production and rising imports.
If the first wave of innovation was largely a revolution in tools, techniques and hardware, then this second wave is digital, and the Denver area is at its epicenter. Just recently, Bloomberg published an article highlighting how America’s best and brightest technology workers are gravitating to Boulder, Colorado and surrounding areas.
Combined with Denver’s established oil and gas community, software engineers are finding opportunities to collaborate with petroleum engineers and geologists to develop new solutions for drilling, completing and producing oil and gas wells.
Importantly, Colorado’s thriving venture capital community is helping jump-start many second-wave tech firms. Capital sources familiar with the value proposition of information technology to oil and gas companies, like Free Radical Ventures and Altira Group, are helping energy tech entrepreneurs reach commercial success.
Ironically, the down cycle has been a driving factor in the adoption of technology-based solutions in the oil industry
Ironically, the down cycle has been a driving factor in the adoption of technology-based solutions in the oil industry. When oil prices were high it was relatively easy to generate a return, and there was little incentive to “fix what wasn’t broken,” as operators scrambled to drill as many wells as quickly as possible. In the low price environment faced by the industry since summer 2014, however, there is a strong incentive to try new methods and ideas for reducing risk, improving efficiency and maximizing productivity, all of which improve profitability and returns.
Here are some examples of Denver area companies that leading the way:
FractureID is using the science of sound, what they call Drillbit Geomechanics to help operators place frac stages more precisely, improving recoveries and reducing wasted time, materials and cost.
PetroDE has combined cloud-based computing with innovative data processing to bring all of a company’s disparate databases together onto one platform, helping business development executives, landmen, engineers and exploration geologists and others work as a team to identify new opportunities in a fraction of the time it used to take.
Earth Index is a software company helping oil and gas companies and investors reduce risk and make more profitable drilling decisions using leading-edge decision and data science.
Ubiterra is pioneering its ZoneVu technology solution, which provides operators an integrated 3D visualization of the subsurface environment, including seismic, and is accessible using a web browser to multiple users and connects to the drill rig for real-time updates. Basically, you can watch the progress of your well in 3D as it drills, from your laptop.
Leading operators have discovered information technology can help them drill better wells, improve recoveries, discover new opportunities faster, make more precise production forecasts and get a handle on the vast amount of data that is now available to them.
With more than 20 technology companies in the Denver area focused on the energy sector, we expect the momentum to continue with more startups bringing innovative tech solutions to the energy industry.
All we can say is, “Bravo!”