Oil prices began the year in the mid-$40 range and they continue to trade in that range today. But that price is half of the price a year ago when a barrel of oil was $90. That is welcome news for those of us who use the stuff but the trend ain’t your friend if you are an oil company. Intuitively, it surely can not be the friend of oil services companies either, but what if I told you it has been for at least one oil services company? What if I told you I can point to one such company growing at 20% so far this year even as rig counts have plummeted? No, there’s nothing but black in my coffee.
Back in January I wrote about a San Diego company, GroundMetrics, with a unique electromagnetic technology which allows it to detect not only underground pockets of deposits but to determine what is in those pockets more accurately so a decision to drill or not to drill can be made with greater certainty. Its appeal was increased efficiency and much higher drilling success rates. I headlined the piece; Lower Oil Prices Make Necessity A Mother, Again. Well, guess what? Mom has kept on birthing innovation right out there in the oil and gas fields.
MIT Technology Review noticed and published a piece in June on how innovation is bringing some very big changes, notably in the areas of how the use of big data is impacting practices in the industry. Then there is this highly technical paper presented an annual shale conference in July on the use of new 3D seismic technology to optimize exploration/ drilling practices in the field.
The oil industry is a tough ‘ol coot that just won’t lie down and die. That’s a good thing too because as much as I love green, renewable, birds and butterflies energy (and many of my columns attest to that passion), we are not anywhere near ready to write oil and gas out of the energy mix without some very real and severe repercussions. We are a decade or more from that reality.
And the truth is, as a kid who grew up in Texas in the ’60’s, oil & gas mean money, jobs, and power but you’ve all seen Dallas.
By now you might be asking yourself, what about GroundMetrics? GroundMetrics was just named one of the Ten Most Promising Energy & Clean Technology Companies at the 13th annual Rice Alliance Energy and Clean Technology Forum. This is very big news. If you don’t want to take my word for it, here’s what Rice Alliance managing director, Brad Burke, had to say when announcing the winners of this year’s Energy & Clean Technology Venture awards;
“Over the past 13 years, more than 1,700 companies have presented at Rice Alliance Technology Venture Forums. These companies have raised more than $2.1 billion in funding. This speaks to the quality of the companies and to the robust entrepreneurial ecosystem of investors that has been developed to support these companies. Despite the challenging economic environment over the past several years, good companies have been able to attract investors.”
GroundMetric’s CEO George Eiskamp told me the opportunities that have opened up to the company as a result of the honor have overwhelmed him. Eiskamp says the company is not seeking a new round of funding but it is seeking the chance to present and persuade drilling companies GroundMetrics has something to offer in the way of increased efficiency and lower costs. And far from pulling in its wings, GroundMetrics just made four hires as it pushes into the Texas market.
Drilling is not so much on the menu these days but Eiskamp says they’ve been finding opportunities in enhanced oil recovery where GroundMetrics can help the companies “see” where the fluids they are pumping into the ground are going. The company is also finding opportunity in re-fracking, a process that involves companies going back into older wells and attempting to revive production.
Once upon a time, wildcatters punched a hole in the ground on the hope that oil might be down there. More often than not, it wasn't. Clearly things are a'changing and that is a great thing.
For the record, I do not own any financial interest in GroundMetrics nor do I have any relationship with the company outside of being impressed with their technology and the fact they are able to post double-digit growth in an industry in contraction.
