Nick Vandivere, President of Agile Upstream, joins us to talk about the intersection of artificial intelligence and oilfield.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello, Texas. Welcome to Texas Business Radio. We got a great program going. We’re having some fun. This particular segment has got a mixture of all kinds of things. We have a second generation company here. As you know, is you listen to us we love second and third generations. It’s so hard to pull that off. That’s a situation. We have a software company. We’re going to be talking about artificial intelligence. It’s going to be a very interesting segment. I’m Jay Curry, you host. Matt Register, unfortunately, had to step out, but he will be back, and in the meantime, we’re going to have some fun without him. How’s that?
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I have in the studio Nick Vandivere, right?
Nick Vandivere: That is correct.
Jay Curry: Nick is the president and CEO of Agile Upstream, very interesting company with a tremendous story. Nick, thanks for joining us.
Nick Vandivere: Yeah, thanks for having me.
Jay Curry: So, tell us what Agile Upstream is all about. What is that?
Nick Vandivere: Yeah, so Agile Upstream, we’re a software company that leverages some pretty advanced artificial intelligence and machine learning to assist our clients, who are primarily in the oil and gas space to understand, in great detail, the contracts they have entered into or potentially will be entering into. The oil and gas space is interesting in that assets are constantly trading hands, but the data that lives in various systems isn’t always accurate, so there’s a lot of risk that comes with that, and ultimately our clients, and they range from pretty small startup E&P companies to super majors, they use our software to better understand what it is they’re buying or that they have purchased so that they can make better decisions around those assets.
Jay Curry: So, these are very complicated land type contracts, re-leasing really, which makes it even more complex, right?
Nick Vandivere: It is. They can be tremendously complicated. Some are pretty straightforward, but there’s always some pretty hairy … If you think of it sort of from the lessor’s perspective, the folks that own the land, the bigger their acreage and the more people want it, the more leverage they have, right? Which is just like in any other business deal, so we deal with things from the pretty straightforward to the wildly complex. I mean, you think in terms of like this sort of contract could vary from one or two pages to 50 or more, and all points in between, and that’s the sort of thing we see, and our clients see.
Jay Curry: Why do we call this AI, artificial intelligence?
Nick Vandivere: Yeah, so AI, it’s an interesting term, and it’s probably a way over-hyped term, quite honestly, but AI is really sort of a family of different algorithms from machine learning techniques to statistical analysis and other forms of data sciences, and we ultimately use those within our product. It’s not … We don’t ask somebody to do the math, so to speak, but we have some very advanced algorithms that kind of run under the covers of our application to give people magical results, if you will, is sort of the response we get. It’ snot magic. It’s a lot of hard work, and it’s doing pretty complicated things in ways that are understandable to our users is the trick.
Jay Curry: So, before we get to far into this, because I think this is very interesting stuff, I can imagine our listeners are out there going, “Oh, here come the robots, they’re going to take over, artificial intelligence, and all these robotic stuff is going on.” Kind of explain that. That’s not really true, right?
Nick Vandivere: Yeah, no. I mean this is where you kind of insert the Skynet Terminator picture right there, and everybody thinks the robots are going to come take my job. It’s not, there’s a lot of fear around that, right? And, AI is no different, at least in my estimation from any other technology that, as things change, yeah, like the way people work will change, but we think of it in such a way, like you still need a knowledge worker. You need somebody that knows what they’re doing, but if you look at the more mundane tasks that people have to deal with, and you think of a lot of aspects of doing something like reading a contract, these are areas where AI can have a pretty profound impact, and allows somebody not to just work more efficiently, but fundamentally do things, do types of analysis, answer questions that they couldn’t before, right?
If you think of what we do, where an oil and gas company may kind of go scratch the surface on a deal, they can dig a lot deeper, right? They fundamentally have the capability that they wouldn’t have had before, and I think as you think about the application of AI, that’s ultimately what, you’re going to see radiologists that can more effectively interpret the reports that they get. I think you’ll start to see this in time across many industries, but it’s not the sort of thing where a black box, dumb AI, and ultimately because they are programmed to do a thing, can come in and be a substitute for the ingenuity and creativity and resourcefulness of a human being, right? But, it can allow somebody to better leverage their talents.
Jay Curry: So it’s going to give you the ability to be better at what you do, not replace what you do.
Nick Vandivere: I think it is absolutely correct, and it’s an important point.
Jay Curry: So, let’s talk a little bit about this software that you have. It’s primarily for upstream right now, but it can go a lot of places. I could see great potential with it. Very complex land leasing, your software scans and reads the document?
Nick Vandivere: That’s correct.
Jay Curry: And then does what? How’s it help me then?
Nick Vandivere: Yeah, so it scans and reads the document, and can go and look for specific provisions, obligations, risks, you think of the, sort of the hairy, nasty things that can be in a contract, it looks for those things along with the more generic stuff as well. So, we’re very heavy in the E&P space, so upstream oil and gas right now. Ultimately, we’ll move into midstream, so you think pipeline companies as well, and probably into some things like wind and solar, where land is also a part of the equation. Our focus today is really on the oil and gas domain, and cementing our foothold there and having a very deep understanding of what we do in that space before we would pivot outside of that or anything.
Jay Curry: Yeah.
Nick Vandivere: The oil and gas market is huge and it is very, very complex and nuanced, so we enjoy the challenge.
Jay Curry: It doesn’t get simpler when you go to midstream and downstream, so that’s a wonderful …
Nick Vandivere: Not at all.
Jay Curry: … potential for you, too, but …
Nick Vandivere: It does.
Jay Curry: So, you scan this, and then does it go to the attorneys and what it does is loads in other software, like if you’ve got … I mean, these are complicated, so you could have a lease, you’ve got a take or pay, meaning you either got to do it or pay anyway, and that’s going to happen in 48 months, so that sets something in the calendar that updating maybe some financial payments that are in the future, and it’s updating that system, so this thing’s connected to a lot of systems and updating them automatically.
Nick Vandivere: Yeah, so you could work as a salesperson for … I mean, you just described it to a tee, so what we do is oftentimes one part of a larger software ecosystem, where it may feed obligation calendars or it may feed an oil and gas accounting system, and we’re not … We don’t see ourselves as competitive with those systems. We see ourselves as very complementary to other software that our customers run.
Jay Curry: I assume the people who are getting the results are probably lawyers?
Nick Vandivere: So, it can be lawyers. It can be lawyers, analysts, oftentimes it’s business people, it could be a drilling engineer that needs to know a specific thing and needs to be able to answer that question very quickly, so it’s a variety of different folks in different roles.
Jay Curry: Now, I can’t let this end without talking a little bit about what you’ve done, Nick, since you took over. You took over about three years ago?
Nick Vandivere: That’s correct.
Jay Curry: And you’ve really exploded this company. How did you do that, and what kind of best practice could you give our CEO listeners out there about when you got something that’s kind of wobbling a little bit maybe, and you got to turn it around, how you do that?
Nick Vandivere: Yeah, I think one thing we did well was … I took over in 2014, and we continued to invest in new and innovative things, even through that downturn, which is not an easy decision to make, right? The other thing I would say is that the importance of having a strong management team is not to be underestimated. Doing any of this stuff on your own, I think is tremendously difficult, and you look at most successful companies, they don’t. You have a very good core team of people. We have that, and I think we’re at about 40 employees right now, but you look at sort of the importance of the first 50 employees for any high flying companies, and we have, across the board, from our data scientists to our engineers, our software developers, our sales folks, it is a stellar team of people that are all oriented towards working well with each other, and ultimately providing our customers with an exceptional experience in terms of services and our product.
Jay Curry: So you’re recommendation would be hire good people, build a strong management team, get them put together and running together, and then let them go?
Nick Vandivere: Let them make decisions, let them take risks, understand that people are going to fail, and be A-OK with that.
Jay Curry: That’s great.
Nick Vandivere: Yep.
Jay Curry: That’s great. Folks, we’ve been talking to Nick Vandivere, the CEO of Agile Upstream. Nick, this is a great story. Somebody interested in learning more about AI and your particular software, how would they find out more?
Nick Vandivere: Yeah, so our website, agileupstream.com, or they can call us, 281-587-2400, and we’d be happy to help.
Jay Curry: That’s perfect. Thank you, sir. Thank you for coming on. Folks, we got to pay a couple bills, but we’re going to be right back, so don’t go anywhere.
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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.