Posted by Matt Register

Kashikar Sedhendu, CEO of Reveal Energy Services walks us through the interpretation of pressure data from frac wells in order to improve future wells.

Please excuse any typos in this hasty transcript.


Matt Register: Welcome back to the show, Texas Business Radio. Texasbusinessradio.com is a website. Go there, see the entire broadcast in beautiful high definition video. Give us a call, 844-814-8144, is our 24 hour call in line. That means call in now, call in a little later, call in at 3 o’clock in the morning. I really don’t have an opinion on it. We’re gonna get the experts on here to get those questions answered.
We have a … I’m looking forward to this segment. You know, we’ve been talking about Big Data and data analytics, and what you can do with data streams coming off some of your equipment. We have an oil field company that takes streams of data off of a frac well and has figured out a way to save their customers, multiple times the money …

Jay Curry: Crazy. Yeah.

Matt Register: on making that well more efficient, making sure that they maximize the production out of it, right?

Kashikar Sedhendu: Correct.

Matt Register: I’m your host, Matt Register. Jay Curry is the one sitting over there in the co-host chair. What do you think about this, man?

Jay Curry: I’m excited about this one because I’ve heard a lot and I’ve met several companies that are spinoffs of larger companies where … Oil and gas are particularly good at this, where they will develop a technology and then they’ll spin it off. They can make a lot of money by doing that, but you end up with a nightmare to manage. What Kash has got to tell us on how … I mean, the growth is astronomical.

Matt Register: Right.

Jay Curry: This is gonna be fun to hear how he handles.

Matt Register: Yep. Kash, Kashikar, who is the CEO of Reveal Energy Services, in the studio. Kash, welcome to the show.

Kashikar Sedhendu: Thank you. Glad to be here.

Matt Register: Reveal Energy Services, what do you do?

Kashikar Sedhendu: We take pressure data from wells that are close to the wells that have been fractured, use that data to understand what’s happening with those fractures, so the oil and gas companies can improve those fractures, reduce their cost, and get more production for the same dollars they are spending.

Matt Register: So you’re not taking pressure off the well being fracked, you’re taking pressure off a nearby well, correct?

Kashikar Sedhendu: Correct. That is correct.

Matt Register: You now have a data stream of pressures coming off of there. Really, what you guys do, and what the technology was that [inaudible 00:02:23] produced that ended up spinning off that technology, is the analytics of that data, correct?

Kashikar Sedhendu: Correct.

Matt Register: Walk me through that.

Kashikar Sedhendu: There are two parts to the analytics, right? First is, like you said correctly, we get deeper pressure data from the offset well, not the well that’s being fracked. That data comes streaming to our offices and to our systems. We take that data and then we do a lot of mathematical modeling of what’s causing that pressure in that offset well. And from that modeling, we can quantify the size and shape of the fractures that are being created.
We can do that very quickly. By understanding how that pressure is related to the fractured geometry, the operators then can take that and do two things. One is, in a short order, make some changes to the completion design. They can change the amount of fluid they’re pumping, the [inaudible 00:03:13] their pumping.

Matt Register: Sure.

Kashikar Sedhendu: More importantly, when they collect this data on a larger number of wells, they can then feed that into large data analytics, and really get insight into what’s causing or how they can increase the production, while keeping their costs in check.

Matt Register: They can also use that as predictive modeling for future wells in the same vicinity. Is that accurate?

Kashikar Sedhendu: Absolutely. That’s the power of the data analytics, right? This becomes an important input into data analytics to improve their predictability, not just the production, but also the completion designs or the completion types they want to use, and that will maximize their production.

Matt Register: You’ve handed the data, you’ve handed the analytics off to your customer. What do they do with that data? They’re attempting to lower costs on the fracking itself. They’re attempting to maximize production. Is that accurate? What else are they doing with that data? How does this save them money by having this information?

Kashikar Sedhendu: There are a couple of different ways they can save money. First is, understanding in the short period of time what, some of the completion parameters that they can change. Do they need to pump more fluid, less fluid, increase the stage land, as we call it? That has a direct impact on the cost of each well being produced or each well being completed. The other part is, as they feed this data into the analytics, then they are able to improve what they’re going to do in the future. They can be proactive in the changes of the designs that they want to implement in the future and get more production, and also reduce the cost of their future development. There’s a short term impact and a long term impact that helps it.

Matt Register: Well, you know, it’s interesting. We were talking during a break and the scale of savings for the customer, right, exceeds the cost of the day. Anytime we’re talking about measuring something, right, there’s always a trade off between the value of the information versus the cost of measuring. Right?

Kashikar Sedhendu: Correct.

Matt Register: The trade off here is not even close, right? I mean, the savings for the customer is multiple times of that. How big is that savings?

Kashikar Sedhendu: Absolutely. You hit the nail on the head here, right? The key here is, what’s the value of the operator of … They don’t acquire data for the sake of acquiring data.

Matt Register: Sure.

Kashikar Sedhendu: We expect that the value that we can provide and the decision that they can drive will give them 10, 20, 100X return on the investment they’re making. We achieve that in two ways. One is, we have reduced the cost of our services by a factor of 10 compared to what they had done in the past. We have already reduced the cost of our services 10X, compared to Legacy services. We can provide as much a better value then what we’re getting. They’re now able to get 50 or 100 times return on their investment.

Matt Register: Well, what was that older technology? Your technology is doing something that already existed in the market, but doing it in a different way, and doing it in a way that is, a 10th of the price. What was the old way of gathering this information?

Kashikar Sedhendu: Sure, there are a couple of different ways of acquiring data. One of the more popular one was, [inaudible 00:06:16], where you use some sensors to acquire additional data. People have used fiber optics, where they install fiber optics inside [inaudible 00:06:23]. They’ve done some [inaudible 00:06:25] to understand what’s going on. These are all techniques that industry has used in the past, and with our pressure based system, we are significantly cheaper and give, as good, if not better answers of what they had been getting from Legacy technologies.

Matt Register: The other technologies were pricey. Anytime you have a pricey service like that, the rate of usage right, of the end customer actually getting these things done on the wells, was pretty low, correct?

Kashikar Sedhendu: Correct. Correct. As a matter of fact, several companies have done the studies. Generally, what we’ve found is, less than five percent, it’s more like three or four percent of the wells actually have some of this diagnostic data collected, because of the inherent costs of the service. By reducing the cost by a factor of five and 10, we can now spread that on 10 times as many wells, and really understand what’s driving the production.

Matt Register: Have you found customers are using you on 10 times more wells than they were using with the other technology?

Kashikar Sedhendu: Yeah, actually starting to see customers, who are moving from acquiring on a few wells, to acquiring on most of the wells, right? They are starting to collect data, if not 100% of the, if not 100% of the wells on a significant portion of the wells that they are fracturing and using that to help them with them longterm decisions.

Matt Register: You know Jay, this is interesting stuff. I mean, we talked about big data before. We’ve talked about the [crosstalk 00:07:48] use of some of this stuff. This is an industrial use of data, that is, I think only going to grow, as more and more information is available. There’s gonna be more opportunities to make some very smart decisions by being able to analyze all of this data.

Jay Curry: Yeah. It’s a huge pie, I mean huge. You talk about big data. Big data is not just huge data, it’s also speed. In the old days, it would take months to get an answer. Now, you can get it very, very quickly. I mean, the impact of big data is one of the big trends in the entire world.

Kashikar Sedhendu: Absolutely. You hit the nail.

Jay Curry: You’re right on the edge of it. The beauty of it is, you’re not having to do a lot of additional work. You’re collecting data. It’s already there.

Kashikar Sedhendu: Correct.

Matt Register: Yeah, a lot of times, this data already exists, especially on the actual well being fracked. I mean, they’re taking all that data anyway, right?

Kashikar Sedhendu: Right. Right.

Matt Register: Kash, really quickly and we only have about a minute left, but I wanna talk to you a little bit, because you are running a very fast scaling business right?

Kashikar Sedhendu: Correct.

Matt Register: I mean, you opened 18 months ago and all of a sudden, you’re on track to do significant growth. How do you manage growth in an economy like this?

Kashikar Sedhendu: Sure. It’s a tough problem. I mean, we have grown five times within the last 18 months. There are a couple of different ways we manage growth. One is, being very paranoid and very methodical in how we hire recruit people, so we can maintain the culture of going forward.

Matt Register: Sure.

Kashikar Sedhendu: Second is really being paranoid about delivering the right quality of results to our customers in respect to how quickly we grow. As long as we keep focus on the quality of data, we can deliver to our customers and then deflect that through the equality of people we hire. We hope to continue to be able to scale up and [crosstalk 00:09:36] the value.

Matt Register: I’ll tell you what, my hats off to you because, a startup does not look like a 20, 30 million dollar company. You guys are reaching there, very quickly. This is not an easy task. Most people don’t get it right.

Jay Curry: Big time.

Matt Register: By all measure, you guys probably … You guys are getting it right. Kash, Kashikar, CEO of Reveal Energy Services. Thank you very much for joining us. What’s the website if somebody wants to learn more?

Kashikar Sedhendu: Www.reveal-energy.com.

Matt Register: Reveal-energy.com. We’re gonna have a link right there from Texas Business Radio. We’re out of time. We’re gonna go pay some of our own bills. We’ll be back right after this with a whole lot more Texas Business Radio. Don’t go anywhere.

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About the Author
Matt Register

Matt Register

In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.

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