How Chemicals Prevent Billion Dollar Well Failures
0:00 Welcome back to Energy 101. Today, we have Brandon all the way from Colorado. He's with flat iron chemicals, shot out flat irons of beautiful. Love Colorado, love North Dakota, love Houston.
0:12 We're going to talk about all three places. And most importantly, we're going to talk about chemicals. Chemicals are a huge industry that is incorporated in oil and gas in several ways. And we're
0:24 going to finally learn about it today Brandon, how are chemicals involved in oil and gas? I mean, I could say energy in general, but that sounds like a laundry list. So let's maybe just get niche
0:37 right into it. Yeah. So chemicals are literally everything. Like for a while, I was a little self-conscious about having chemicals in the name of our company because people read that and don't
0:47 know about chemicals. They're like, oh, that's a chemical guy. Stay away, but literally they're everything Like the big thing during COVID was hand sanitizer. Well, that's chemical. I mean,
0:58 literally everything that we do. Cleaning hospitals, you know, all these different types of sanitation things are all chemicals. So chemicals are important in every industry, but especially in
1:08 the oil and gas industry. I mean, they basically increase production on wells. They optimize completions on wells. They help drilling, you know, they, FRs and stuff like that help you pump more
1:22 fluid and more propant. They clean up your wells They increase the fluidity of your, you know, piping, reduce downtime, save a tremendous amount of money, you know, from a workover rig
1:40 standpoint and doing maintenance on your well. It's kind of cheap insurance, as we like to call it. So they are of utmost importance. I mean, they say that in 2032, the oil, the oil and gas
1:54 chemical industry will be a hundred billion dollar industry. That's why. And that's worldwide, but. I mean, that's a pretty significant number. So it just kind of shows the importance of it.
2:05 And I think that in the last few years, people have really emphasized even more so the importance of the chemical industry, which is why, I mean, production is gonna increase, you know, fivefold
2:16 in the next five years. But people are like, well, we wanna optimize our production on our wells. And so let's spend a little bit more money on our chemical program to allow us to, again,
2:28 produce more, lower expenses, increase runtime, all these different things. Damn, so it's literally the unsung hero. I mean, throw it in there with just water, sand, like literally essential,
2:41 right? Yeah, I mean, in my personal opinion, it's one of the most important things about your well production. I mean, you talk to any production engineer, and
2:53 although when you're negotiating pricing in a contract with them. They don't put a strong of an emphasis on it because they're business people too, right? But it's seldom that you find a producer
3:08 that doesn't have any chemical program or a significant robust chemical program. A lot of companies in 2020 actually, just with one oil dropped below0 a barrel.
3:21 They try to eliminate their chemical program completely because they're like, This is a significant cost and we need to do everything that we can to maintain these wells and keep on producing and not
3:32 bury our company. They quickly found out that that was a little bit of a slippery slope.
3:41 Now there's even stronger emphasis on their chemical program. That's really cool. I have a bunch of questions, but before we get into that, how did you get into chemicals? Yeah.
3:54 Random story. So basically, I was in construction for the majority of my life started working at a young age and my uncle owned a construction company. So worked for him. We did, I mean,
4:07 finished basements and remodeled bathrooms and kitchens and pop tops and did some custom home building. And as my uncle was a GC for this investor that was basically investing into these custom homes,
4:25 I had worked for my uncle and met this guy Ed A back
4:30 through my uncle and Ed, sorry, my uncle and I went to Ed's cabin in Nebraska to do some tile work. And I've known Ed and known about his success in the oil and gas industry. And I'm like, sure,
4:43 that sounds great. Kind of a working vacation. We were going to lay tile during the day and then, you know, have fun, play pool and, you know, have a couple drinks at night. I'm like, that
4:52 sounds this guy's brain and see how we got to where he is.
4:59 So we went out there, did tile, and over the weekend, this guy, Ed, was asking me a bunch of questions. I'm like, what is this guy's deal? Like, I get that he wants to get to know me and he's
5:09 being friendly. And this guy's like,
5:13 do I have to submit a blood sample here? Like, what's this guy? What's this guy's deal? Well, anyways, at the end of the weekend, he's like, so we're starting another oil and gas company And
5:21 we're looking for a kind of young motivated guy with a good head on his shoulders and his teachable. And you seem like he fit the bill. Would you like to move to North Dakota, leave everything
5:33 behind and help us start this company? And I versus like North Dakota, that sounds intriguing, you know, minus 50 degrees in the winter and leave everything behind that I knew in Colorado And then
5:49 I was like, well, this guy, you know, he was a senior. vice president at a company called Western Gas Resources. And Western Gas was a very successful company. They sold for several billion
6:01 dollars. Amazing. I'm like, this is kind of an opportunity of a lifetime. Like the construction thing, I like it. You know, I like working with my hands and that sort of thing, but I don't own
6:14 the company and like what's the next step for me? What's the opportunity?
6:20 So about six months later, I moved to Williston, North Dakota, and literally like dove head first. Have you seen Williston before you moved? No. I've never been to Williston, but I've just
6:35 heard it's
6:37 nothing. Don't talk shit about ND right now. No, it's like, is it kind of the same as Midland? I mean, yeah, but the outskirts is beautiful, like the bad lands, the geography and the
6:49 landscape is why I have visited personally as like a tourist. You went to Willison? You fly into Willison usually, or a Dickinson or Minot, or Dickinson. I mean, there's a number of different
7:01 airports in there. I flew into Dickinson. We've mentioned a block in a few times, and I haven't yet said this, but I think it was Dickinson. And the airport is like super tiny. And when you get
7:12 your luggage, like a checked bag, you go up to like just like a corner of a room, and it's like a conveyor belt that's the size of this table. And it just goes from here to there. And then
7:23 there's a little drape window right there that they shove the suitcases through, and it's just they're just outside the planes right there. It's like plane outside shoving your luggage right here.
7:33 And that's your baggage claim. And I was like, this is so charming. Yeah, it's so cute. So Williston has stepped their game up They actually have a new airport to come with for. different gates,
7:46 so yeah, big time. You actually have like, what's the tunnel thing that you walk down to get on the airplane versus like walking outside in the blue string cold and like walking on those blowing
7:60 sideways and you're not playing that way. So they're coming up in the game. How old were you at this time that you moved? So I was 20, I was about 30
8:16 I was about 30, 31, I think, 2013. So at that time actually, and your audience probably knows that's familiar with the
8:22 Bakken, that was like the, it was coming over the hump of like the big oil boom up there. So I'm driving up there and I literally see people staying in tents on the side of the road. And I'm not
8:38 kidding. Like left everything behind because they knew that there was an opportunity in the old. that they'd never would have, you know, grown up on the farm or the ranch that they, you know,
8:48 whatever. That's literally the spindle top story. It was wild. It gives me chills. Yeah. I mean, just like imagine, I mean, you think of, you know, like people coming over from my family
8:60 from Scotland and my grandpa essentially did that same thing. Like grew up working in a mine, started working in the mine when he was 12 years old. His dad ran the mine and he was like, I need a
9:11 better life for my family He had gotten married at that time and he had my mom, which was, well, when he first came over, I think my mom was just born and he's like, I have a family now, I need
9:25 to support them. Came over here, basically built a new life from Scotland. My mom was one years old when my grandmother and mom came over here. My grandma tells a story quick and not to go on a
9:39 tangent here. She was so upset and so terrified, had a one year old daughter going in a brand new country, didn't have any idea what they were gonna do. And she is from Scotland, so she likes tea,
9:53 and she didn't have any American money. And so she can buy a cup of tea. And so this nice lady, this janitor lady at the airport in New York offered her whatever sense to buy a cup of tea. And
10:06 she's like, I feel so comfortable now because this person that didn't know me from Adam just offered me this money to buy this cup of tea. So anyways, yeah, just left everything behind to start a
10:18 new life for the family. It's pretty inspiring. Super inspiring. So, yeah. Do you think that kind of helped make your decision?
10:30 I didn't really realize what was going on when I first got up there. But in the first few months, I really realized that, this is a great opportunity for me that I wouldn't have had in the past.
10:42 But at that time, I was literally like, just being force fed information to try to learn as much as I could in a short amount of time, to have some sort of impact and provide value to the to the
10:55 guy that didn't really know me all that well and gave me an opportunity. So yeah, yeah, I'd like to kind of dive into
11:07 you're diving into a new industry. Where did you go about like learning everything? Like, how did you learn about chemicals? How did you learn the importance of like, how did you kind of, where
11:18 did you turn? So this guy, Ed A back that I mentioned, I mean, he's, he's just knows a lot about a lot, especially in the industry. He had been in the industry at that point for, you know, 40
11:34 years. And so he was definitely a strong mentor of mine that taught me a lot about what we were specifically doing, which was treating water-flood wells at the time. But the internet is a powerful
11:48 tool, right? I mean, a lot of the guys that were up there were going to the bars and partying and all this stuff because they had had more money than they ever thought they would ever have.
11:60 Me, I worked during the day, went home, basically got on my phone or on my laptop and studied as much as I possibly could. I actually met a rancher out there that ended up becoming friends with.
12:15 I bought a horse from him and trained to the horse when I was up there and that's what I did. I worked during the day, I studied, and then I trained my horse. Were you running the company? No,
12:26 so I started as a field technician. So literally like bottom rung, you know, learn as much as you can and the more you learn, the more opportunity will give you a type of thing. And obviously
12:40 that was dependent on how the company grew and the different opportunities that presented it themselves.
12:47 So yeah, just literally like tried to be a sponge and soak in as much as I possibly could. That's awesome. I love the, it's like so humble. It's like a new town, you have a horse.
13:01 And then like you got the job because like a guy like literally saw you and was like, you try and care, you're hired. Like it sounds like something like you'd hear decades ago and not like nothing
13:13 new age. Just like tried and true, traditional, I love that. Yeah, I mean, forever grateful for the opportunity. It's been tremendous. I mean, this industry as you guys know, you met a lot
13:22 of people is a huge industry but it seems so small because everyone knows everybody We've had meetings here in Houston over the last couple of days.
13:35 One of my technical sales engineers is going into these labs and it's like, we used to work together, you know, five years ago or 10 years ago. I mean, it's just incredible how like tight knit
13:47 community is. A lot of people look out for each other and again, are willing to take you under their wing and teach you and, you know, there's not a whole lot of industries, at least that I'm
13:57 familiar with that are like that So definitely fortunate to be in the industry and been presented the opportunities that we have. I agree. I think everyone's always willing to help out and it's
14:08 really cool. This mentor guy, his name is Ed. Yep. Is
14:28 he still around? Yep. We're going to have to get this guy on. He sounds like a Bob Barba type, you know? Yeah. Like he said 40 years. It's probably more now at this point, right? Yeah. I
14:29 honestly don't know how long he's been in the industry But actually Ed's story is incredible as well.
14:32 Northern Alberta, somewhere Northern Canada, of course. No electricity,
14:38 you know, they farmed and, you know, raised crops and I think that's cows and
14:47 just, when people say they grew up with no electricity, it's like, I just can't imagine, you know, like we're so fortunate with everything that we have all the amenities and it's like, you
14:59 literally didn't have running water or electricity. Like, I don't know how to imagine wife without Wi-Fi. Yeah. So electricity. But yeah, Ed's an incredible guy, very well known and well
15:12 respected in the industry. Mostly on the midstream side, you know, I think Ed's built 50 gas plants in his career or something like that all over. And yeah, he's a
15:27 kind of guy that is very, very respected, very successful. but you would never know. He drove like this 2007 Chevy pickup for the first basically 10 years that I knew him. And this thing was like
15:44 just, it had 400 plus thousand miles on it. I think it has almost 500, 000 now, just as humble as the day's long and willing to teach anything that you're willing to learn. So yeah, great guy.
15:59 Is he connected to flat irons? Yep, yep. So he's one of the investment in the investment group. He's the managing director for Flatirons Field Services, which is our parent company. So under
16:12 Flatirons Field Services, we have a gas plant up in Williston. We have a Flatirons midstream. And then we have like, so we do gas gathering, gas processing and gas lift. And then the chemicals
16:28 group, which is, kind of random that was thrown in the mix, but our investors had some assets in North Dakota and needed solutions. They were ineffectively treating the
16:43 frackwater, so introducing bacteria and souring the wells. They were flaring a lot of the gas that was coming from these wells because they didn't have an adequate gathering and processing system
16:58 And so the investors kind of got together and said, we need solutions for these problems. And that's kind of the foundation that Flatarans was built off of as providing solutions to our customers
17:10 that they may either have not realized was as big of a problem as it is, or didn't realize that there was different solutions out there that were a little bit out of the box and not what the
17:27 traditional oil-filled chemical companies Yeah, let's break down some of these specific things, flat-earns and just the industry as a whole, the chemical industry, how they participate and how
17:40 they solve these solutions. So just kind of list through some of these issues and go into more detail about what chemicals is actually doing. Can I ask a very like high-level question, do you
17:51 mostly only do chemicals in upstream or is it midstream as well? So we do production chemicals and treatments and then we do frack chemicals as well. Okay. Yeah. So if we go like in a timeline
18:03 from upstream, which is the first thing, getting out the ground to midstream, which is refining and going down a pipe. So I can maybe start with like more upstream solutions to midstream. Yeah.
18:15 So I mean, there's dozens of chemicals involved in each process, right? And it depends on the basin, it depends on your well conditions, it depends on what type of artificial lift you're running.
18:27 So on the frackside, which the, the frack designs are evolving so rapidly. It's, you know, what we were selling five years ago is completely obsolete. And so if you're not constantly reinventing
18:41 the wheel, if you will, and keeping up with, you know, staying ahead of the curve, then you'll get left behind. So, I mean, a lot
18:54 of, they were using like crosslink fracks, gilled fracks back five years ago And then new technology came with like they were using friction reducers, so they can pump higher rates of water,
19:05 basically. And then they came up with HVFRs, high
19:11 viscosity friction reducers. So that eliminated the need for the guar chemicals, the gelled chemicals, because they can increase the viscosity in that frack fluid with one product that is mandatory
19:25 anyways from a friction and reducer standpoint Mm.
19:29 So, I mean, biocides to effectively treat the frack water, so you're not introducing any sort of contamination into your wells. I mean, they've got scale inhibitors, they've got corrosion
19:41 inhibitors, they've got surfactants,
19:45 you know, demulsifiers, and again, just kind of depends on the well and the area, and is it an oil-rich well, or is it a gas play? So those are kind of the main ones from a kind of completion
20:00 chemical standpoint, and then when the wells turned over to production, they've got just a whole gamut of different chemicals for different reasons, you know, obviously biocides to eliminate the
20:12 bacteria that may be in the well, or if they're doing like a desalination treatment and injecting fresh water into the well to clear up some of the deposits, then, you know, you want to treat that
20:27 water before it's injected. down hole, scale inhibitors, because just think of like your cap water. If it's hard water as they call it, and on the sink, you've got like white and orange deposits,
20:44 that's technically called scale. And so the same thing happens down hole with that produced water. So you want to inject a chemical that can basically clear up those deposits and keep your well from
20:57 flowing cleanly. I
21:02 mean, they've got corrosion is a big issue. CO2 is a big driver of corrosion. And so they've got corrosion inhibitors. A lot of them like establish a film and protect the wall of your of your
21:15 piping or production tubing. We just did that. We just had a podcast with that Okay. Yeah. I just a whole number of different types of products. How does bacteria affect the well? Yeah, let's
21:28 like. you know, let's do the sort of hands and be like, okay, this is in, this is out, you know, like we're picturing a well, it's like, you know, there's casing, there's pipe, how are
21:38 things going in and like, or, you know, like, if it's all clean and drilled out, how is things contaminating, you know? Yep, so, so from a biocide standpoint,
21:51 in many cases, there's bacteria that's present in the actual formation, okay? So, what bacteria does is it can sour the well. It can actually create hydrogen sulfide H-less, okay? Oh, I didn't
22:04 know that. Bacteria can also be a big driver of corrosion. Yeah, I'm sure you're a corrosion guy mentioned that as well. So, from a biocide standpoint, whether you're using, you know,
22:20 there's many different types of biocides on the market right now, but you basically wanna eliminate bacteria to. prevent any major damage to the well or corrosion issues. Or, you know, if the
22:34 well is
22:36 sour, as they call it, and has an H2S present, you can get docked on your gas if you're trying to sell it to the market.
22:47 The byproduct can gum up your gas processing system. So like we use H2S scavengers upstream of our gas plant, because if it gets into our system, then it fouls up sensors and meters and just a
23:05 whole number of different things. We run gas compressors, and so for using gas to run those compressors, and there's H2S in that gas that presents a number of issues. A lot of like the gas
23:23 market has a certain spec that you can't exceed. from an H2S standpoint. And so you have to basically eliminate or remove the H2S before you can even sell it to the market.
23:37 Yeah, does that answer your question? Yeah, I didn't know that. That's very interesting. I never thought bacteria like, I've never heard that, that in causes H2S or any issues in them all. So
23:48 that's really, really interesting. So like if the oil and gas is like deep down in its own pocket, it's uncontaminated It's been there for millions of years, like perfectly fine, right? So there
24:01 can be some contamination. They call it, we call it spores. Okay, spores are basically a very robust, strong type of bacteria, I guess you could say. And those spores are very resilient. I
24:15 mean, they find bacteria in spore form in like the deepest depths of the ocean And so they're pretty robust from. There's a lot of people that don't believe that spores can survive in that high
24:32 pressure, high temperature environment, but there's a lot of data, a lot of papers that basically prove otherwise. A new word unlocked. I have not heard that in reference to oil and gas before.
24:49 So is like drilling and like breaching through all that rock exposing and making things react and bacteria come to life essentially, or like literally pushing it into the oil? Like, like, how are
25:02 things actually getting contaminated? If let's say there is like just like precious oil, like a sit-and-air untouched pure, how are we drilling? When we're drilling, it becomes contaminated. It
25:14 doesn't necessarily just like become contaminated unless you have an ineffective biocide from your frack water that you're using in your frack, frack fluid. If that isn't properly treated and that
25:31 has bacteria present in that frack water, then you're introducing that bacteria into your formation during that frack process, right? So,
25:43 we call cheap biocides like the dump and pray method. Like you don't really know if it's gonna work, but you're just kind of checking the box and saying that you pumped a biocide because that's what
25:56 you were told to do.
25:60 And it's not really effective because the frack process is so fast and you're pumping water at such a high rate, then a lot of the cheaper biocides like bleach, I'll throw that one under the bus,
26:15 doesn't have enough residence time in that water to actually remove the bacteria or kill those bugs.
26:24 you don't have enough residence time, then you're injecting that bacteria into your well and that can sour the formation, which has happened in wells like, or formations like the Madison up in
26:34 North Dakota.
26:36 Very sour and it wasn't always sour. So something happened in the process that soured that formation. Yeah, basically I'm looking for like an analogy. And the one I'm thinking of is like surgery,
26:49 like you use a scalpel and then like an enclosed sanitizer, everything is like perfect, right? Like the gloves, the hands, the people doing it. When everything's just like pure, ready to go.
26:59 And like there's essentially a way people are like getting a knife from the kitchen and pouring some vodka on it and like, oh, this is good enough, right? I mean, is that a relatively close? So
27:10 here's a good analogy of like how you disrupt that bacteria and make it more predominant in the well when it was just kind of sitting there not causing any problems like, um,
27:23 heard of you guys. of fish
27:27 like if you're walking in a stream and you have your waiters on and you step on a rock and that water before you stepped on that rock was super clear. You know, just because underneath that rock,
27:39 no one had stepped on it. It hadn't been disrupted, but you step on that rock and a big kind of ploof of dirt or mud or anything underneath that rock gets kicked up. That's similar to what probably
27:54 happens when you're actually disrupting that rock during the drilling and completion process. All right. Yeah. So is that your analogy? Yeah, of course. So we're, you know, we talk about going
28:07 into ground and out the ground. What other next steps and still, if we're still in the upstream sector, do chemicals have involvement with. So that's more or less what it. part of the upstream
28:22 site. Well, I'll go back to the high viscous fluid. Okay, so now, especially they're pumping such high rates of propane sand, that when they pump that in there and jam that sand into those
28:36 fractures that they've completed during the wire line process, you wanna prop open those fractures, right? So you pump a bunch of sand in there to help prop open that fracture That way, when the
28:50 weight of the earth literally sets back down, there's still some porosity in that rock through that sand. So when they turn that well on the production, it produces more oil and gas. So the high
29:07 viscosity, the
29:10 thick fluid helps to keep those, that prop into in place for long enough to where the pressure of the earth sits back down those fractures and it's still. propped open. And then when they, after a
29:25 certain period of time, we have a product called liquid gel breaker. And so you basically reduce the viscosity then of that gel. That way when you turn the well on to production, there's not a
29:40 bunch of thick fluid that's impeding the production coming from your well. So it's kind of like a middleman Kind of like a middleman, but just holds that propant in place for long enough so the
29:53 propant can do its job. Do you all provide propants as well, or is it like is a propant company working with you all?
30:02 And like they have to hire multiple service companies to. Yeah, so like the pressure pumping companies typically sources the various products separately. So like we never really work with a propant
30:12 company per se directly
30:16 That sand is a very big piece of the puzzle. um, honestly, probably more important than chemicals in some ways. So after you've completed the well, you, um, you basically drill out the plugs
30:32 and turn the well onto production, which by the way, you probably have heard that that's the most dangerous part of this, this whole process. Because you can imagine that well is sitting under
30:44 pressure for long after it's been fracked, that it's sitting under so much pressure and that production is basically looking for an exit, um, that that process is quite dangerous. Do they have to
31:00 open it slowly or like, how do you kind of mitigate the kick? They've, they've got valve valve systems and stuff like that. Yeah. So like, if you were to, if you were to be sitting by a well
31:14 that they were turning on the production and you see the flare stack that's right there. you know exactly when they turn that well under production because that flare stack just goes crazy. Oh, yep.
31:26 So the well is producing now. And after a period of time, it basically has a natural pressure that allows that well to naturally produce for a period of time because again, it's been sitting under
31:39 that natural pressure. Then you turn it over into artificial lift. So depending on what type of artificial lift you use, determines what type of chemical and how you introduce the chemical to the
31:52 well.
31:54 So like I said, biocides are very common, scale inhibitors, corrosion inhibitors, a lot of surfactants,
32:04 H-Wes scavengers,
32:08 halide inhibitors, which is like the salt that's in the produced water
32:16 Again, gums up the well, especially in North Dakota. they call it supersaturated, that produced water, just a tremendous amount of salt that's in that produced water. So then you got to clear up
32:30 the salt. So yeah, lots of different chemicals in that process.
32:37 We have data that
32:39 shows that we've allowed the production tubing to be in a well for three plus years And that allows that well to produce over three years versus having to work over the well, replace the production
32:55 tubing, the wells offline for a period of time. So you're not producing it and not getting any money from the production. The work over rig costs a lot of money. The new production tubing that you
33:08 put in the well costs a lot of money. So an insurance chemical program allows you to extend the life of the well, basically. This is not simple stuff to explain ever. There's a lot that
33:24 goes into it. Yeah, of course. It's a pretty important step, so. All right, let's get out of the weeds here 'cause there's just so much vocabulary to pick up on. Like, you just name something
33:35 and I'm like, that's an episode we can just do right there. I know, me too. But let's move on to like midstream stuff, perhaps. Which, I don't even know how to like transition, literally like,
33:48 they collect, an option you collect all this oil, where's it go, and it's batteries? Barrows. Um. Bittoral barrels? So yeah, basically it goes into like surface storage tanks, 400 barrel
34:02 upright tanks that, so the production comes out of the well and it goes into a tree-der. That tree-der basically separates the produced water from the oil, from the gas. Gas comes off the top,
34:16 Oil comes off the middle and water comes off. bottom goes into either storage tanks that are on the individual well site or into a gas gathering system, like I mentioned, which is part of what we
34:30 do on the midstream side, which full disclosure. I'm not, I don't do a whole lot on midstream side. So I can explain it on a, on a very
34:40 midstream for dummies level. Yeah, but that's about it. So yeah, it's fine. I never, I never realized like I can't even like picture the steps after, you know, and I've seen this stuff in
34:50 person too. When I'm like, I can, I'm looking at it. I don't really know what I'm looking at. But yeah, why don't you give us that midstream for dummies chemicals 101. Okay. So we talked about
35:03 HS. We talked about corrosion inhibitors and scale inhibitors. So
35:05 it's not uncommon that
35:11 when the production
35:15 those three phases of production, gas, oil, and water go into that treater, there's not a complete clean
35:24 break or separation of those three phases, right? So in the gas phase, a lot of time, there's some entrained water in that gas phase, okay? We talked about water as a big driver of corrosion,
35:39 water has that scale tendency, you know, total dissolved solids present. And so even in the gas gathering system, there's H2S problems, there's scale problems, there's corrosion problems,
35:52 because there's a little bit of water in there, right? So you need to address those problems with chemicals to combat that specific issue. So H2S scavengers is a good example. Yeah, we've never
36:05 talked about that on a show, so why don't you break down what scavengers are in general because I just pictured like these little machines that eat poison. So, they break the H2S molecule, so
36:17 hydrogen and sulfide, right? So there's left, hydrogen just goes in the gas phase and that's not a problem. The sulfide has to settle out somewhere. So when you, when that gas production goes
36:33 into the gas plant, I think it's called the first stage separator that basically
36:41 separates again some of the water that's gone. That's part of that gathering system. And then anything that's entrained in that water, maybe some total dissolved solids, maybe the sulfide that's
36:57 been separated from your H2S scavenging process
37:04 And so that's basically what an H2S scavenger does. It removes the H2S.
37:12 allows you to sell your gas to the market, basically. Cool. Yeah, yeah, not a whole lot to it other than other than that. Is there a way to keep the hydrogen? I think the hydrogen stays in that
37:28 gas phase. And how is it captured? I think it just goes - That's highly valuable. I think it just goes through the gas processing system Like I think there's 30 some types of different gases that
37:44 are processed in a gas plant to at least like up in the Bakken. So there's light ends, there's natural gas liquids that like the propanes and butanes and stuff like that. And then again, lots of
38:01 other light end types of gases that go into a downstream part of the
38:04 part of the
38:11 after we separate the gases and our gas plant, the light ends go into a pipeline that basically get taken to market and used for various purposes. All right. I feel like we need someone on about a
38:25 gas plant 'cause that's fascinating how different gases just can go different places. Yeah, and again, that is so far from my area of expertise, I probably have already said something that's wrong,
38:38 so.
38:40 Yeah, it's a lot, I mean, all that oil and gas wants to be underground, and we take it out, and it's like, all right, here you go, you want some of this, and then it's like. Yeah. Salt,
38:52 chemicals, bacteria, it's like, fuck you.
38:56 And we've slowly just been checking the list of how to fix all these things, and what are some unsolved things, or what are some things that we're hoping to see to make this step even easier?
39:09 getting the stuff out the ground for 100 years and we're still trying to check all these boxes. So, I mean, there's constant evolution in the industry, right? Like I talked about frack fluids,
39:21 frack designs.
39:23 From a logistic standpoint, I think there's a lot of things being done right now that are just different than what's traditionally being done, like the products that are actually hauled to and
39:34 delivered to the frack site. PropNet is a good example They're actually like
39:39 piping sand to the frack site versus like trucking it in, and like the sandboxes that you probably see going up and down the road all the time.
39:53 Yeah, I mean, there's
39:57 lots of opportunity to become more efficient, more productive, safer, and cheaper, and that will never change. Like, uh, the, the, the,
40:09 It's a constant like
40:13 evolution. Learning process, yeah. Like what we're doing right now, I'll give you a quick sales pitch. Not a sales pitch, but a teaser on a project that we're working on. Of course. So just
40:26 accessing effective oil and gas chemicals, the traditional process, the current process is, as a producer sends out an RFP to the various chemical companies and says, okay, here's our wells,
40:40 here's the number of wells, there's a type of artificial lift, here's the production profile, here's the issues that we may experience, and so we need chemicals to help combat these issues, and
40:50 this is on the production chemical side. That process takes several months. It's like a ton of resources, production engineers and those engineers, managers, and the chemical companies and the
41:05 chemists and the scientists and all these different people involved in. trying to provide an effective solution for that producer and their wells.
41:17 And it's just a very robust, expensive process that takes a long time.
41:24 I think the average turnover time of chemical service is two providers to three years. So imagine all those resources every two to three years and all that money that's being spent 'Cause what
41:39 happens is I'll probably get some flack for saying this, but the salesperson comes in, the chemical salesperson
41:49 and says, oh, we've got the best chemicals out there. We're gonna solve all your problems. We've got the best service. And
41:54 then
41:56 in the honeymoon phase, as we call it, the first six months, they do a great job. And then the service starts to die off. And then the producer's like, well, what happened here? We were
42:07 promised the world and, you know, we're we're not receiving what we were promised. And so they enter into the same process in another two to three years. And so we're developing a process that
42:22 gives producers access to effective chemicals and providing enough data that the producer can make the decision from a number of different chemical manufacturers, chemical distributors, to basically
42:39 try to circumvent that process or give the producer the option to circumvent that standard process, save some money, reallocate their resources to something else like producing their wells more
42:52 efficiently
42:55 and letting the chemicals sell themselves rather than the fancy salesperson that tries to sweep them off their feet So there's different ways kind of logistically and giving people access to what
43:09 they're looking for. I feel like that is a great use case for AI. Mm,
43:17 there it is. There may or may not be some of that integrated into this process. That's amazing, I love it. Yeah, I think that's super helpful. If you're not constantly innovating, you're gonna
43:31 get just bulldozed over in this industry, which is kinda scary because there's a lot of smart people in this industry A lot of good engineers that have a lot of really good ideas and all those
43:44 engineers need is someone to try out what they've developed or what they've invented or whatever
43:51 and actually prove out the concept in the field. In our space, we call it bench testing only does so much. You need actual field trials of getting that chemicals down into the well and then
44:04 measuring the performance of those chemicals because saying something on a bench in a perfect environment just isn't realistic in this industry. I mean, you know, when you're talking in North
44:16 Dakota on the surface, it's minus 50 degrees. And then that chemistry gets down into the well, that's, you know, 250 degrees. And it's like, you have to do the testing to cover all of those
44:31 basis to know that you have a good strong chemical. So, a
44:37 lot of smart people. And if you're not finding ways to be better and faster and more efficient, you're not gonna last very long. That pretty much applies to anything. Yeah, yep, exactly. All
44:50 right, well, that wraps up our chemistry jargon. But let's finish up with, you know, why you're here. You're in Houston right now, you're from Colorado, you spend time in North Dakota as well.
45:04 What are you doing here in Houston? and what's work like in Denver offsite. Yeah, so I'm attending this podcast called Collide. Have you heard of it? It's pretty well known. No, so we kind of
45:17 are restructuring our business. So we're doing a lot of vertical integration. We're kind of leveraging our skill sets and in different areas that we know we can excel at or we've learned to excel at
45:29 over the years, the last 13 years in business. And so we're revisiting how we source good, effective chemicals and how we collaborate with chemical manufacturers or RD companies or scientists or
45:43 the specialists that
45:47 maybe have a chemical that works in a different industry that can work very well in this industry. They just have never considered it. And so
45:58 we built our company off of partnerships and longstanding relationships, right? So we're looking to do that.
46:08 moving forward as well. And so we're meeting with a lot of folks that have really good ideas and may not have an avenue to take those products or that idea to the market.
46:23 So lots of those types of meetings this week. But, you know, we're also kind of strengthening some relationships with some existing groups that we've worked with for a very long time and had a
46:35 mutually beneficial relationship with and finding ways to team up and, you know, develop that strength and numbers kind of approach, right? The one plus one equals three model.
46:50 Because we've got customers that
46:54 we think that we've built a strong enough reputation with and strong enough foundation of the company that we can expand on that and team up with people that we. have used as a vendor standpoint,
47:08 but it's like, let's team up. Why do we need to be a completely separate entity? Let's team up here and tackle the market more aggressively and go in, stack hands to these companies and say,
47:22 We're now one unit, you
47:25 really like what we're doing separately, but now we're together and we can be even stronger to provide more solutions for you and be more effective and strengthen the relationship that we've built
47:36 over the years. So from a high level, that's what we're doing this week in Houston and it's been a great trip. I think that there's a lot of openness to the collaboration stuff because the
47:51 competition is so great that it's like, if you don't team up with some of the groups that you've worked with and
48:01 work together on some things that you might both separately. not be as strong, but together you'll win. And we're winners. I love that mindset. Yeah, no, that's awesome. Oh, yeah. And now
48:12 you're back in Colorado. How many years has it been? Been like a while there. Since I've been back in Colorado. Yeah, so I moved back in like late 2015. So I was in Williston for about two years.
48:26 Oh, that was a, yeah. The sales pitch to get me to go up there was like, yeah, six months, probably be able to move back to Colorado and just like everything, it's not quite what you originally
48:38 planned and you kind of adapt and improvise. And yeah,
48:43 so two years later, I was back in Colorado, which is where I'm from, grew up in Morrison, right by Red Rocks and love Colorado for the most part. It's changed quite a bit, just like Houston
48:54 probably has, but we've got a little slice of heaven with some horse property and a few acres and stuff that allows us to feel like we're not. in the hustle and bustle quite as much when we get back
49:08 home, so. That's nice. I think that'll do it. Yeah, thank you so much for coming. Yeah, absolutely, thanks for coming on.
