How RigUp is Silencing Skeptics with Industry-Leading, High-Efficiency Tech

Technology in oil and gas is a bit of a paradox.

While the industry is often stereotyped as change-averse or traditional and slow moving, it would be misleading not to acknowledge how much has changed in recent years. New seismic mapping technologies, horizontal drilling, fracking, robotics, and even solar technologies have all vastly altered the landscape of the energy industry.

The same factors that typically drive innovation — non-productive time, competition, and new capabilities in other industries — are all more present than ever before in oil and gas. In fact, new technology coupled with lower oil prices have exposed non-productive time in certain outdated, old-school business practices.

  • Pressure to drive down costs are increasing. Inefficiencies can’t hide under profits anymore.
  • Engineering operations have outpaced internal administrative systems
  • There’s not really a “shortage of labor”. Systems are outdated and the process is broken.

In an industry with volatile prices and unpredictable external factors driving supply and demand, cost management is crucial.

RigUp’s focus is managing labor market costs and providing scalability for exploration and production (E&P) companies, and oil and gas services companies.

Historically, the oil and gas labor market was fragmented, getting crews together was expensive and time-consuming, and variable labor costs were increasingly appearing as a top 10 category spend.  

Traditionally, E&P and services companies hired consulting firms and boutique agencies to manage contingent labor, e.g. contractors. These consulting firms would call around, looking for individual contractors when they needed to stand up a crew. Dispatching services were chained to a slow, time-consuming and expensive process.

The slow-cycle pain points became especially clear when shale took off. Frac jobs are often planned and started within a matter of weeks. Efficient labor sourcing and placement is a requirement.

Our current workforce inefficiencies scenario is reminiscent of the pre-Uber ridesharing market, or the vacation rental market before Airbnb.

Contractors and buyers are currently being forced into disparate agreements because the market is fragmented and often limited to who has executed the Master Service Agreement and who is on the Approved Vendor List. By aggregating oilfield service providers into one platform, RigUp helps facilitate a streamlined process for the industry – work with whoever, whenever.

RigUp’s marketplace increase transaction efficiencies for both buyers and sellers. On average, RigUp saves operators about 25% on variable labor costs, and we can help operators source and scale up to 3x faster than traditional methods. By using our industry-tested technology to place independent contractors, get them properly vetted, and get them on location faster, our users no longer need to dedicate precious time and money on outdated and error-prone human resourcing departments and consulting firms.

Contractor Compliance

RigUp sets a standard protocol for contractor compliance, making it safer to manage labor while maintaining a scalable flexibility.

Individual contractors are properly vetted on client specifications, and our proprietary platform tracks these requirements. Additionally, RigUp’s growing community provides social proof, similar to LinkedIn endorsements or Uber driver ratings.

On the flip side, contractors can make more money (they save a substantial amount from lower insurance costs), and they get paid faster.

We’re now the largest provider of these services to the market. Our next goal is to deliver an even better experience for both buyer and seller. The energy industry is at a tipping point, and RigUp is leading that push forward.

To learn more about how RigUp can help your company source and scale labor more efficiently, please visit RigUp.com.

Watch: RigUp CEO Xuan Yong talks with Houston energy investment firm Tudor, Pickering, Holt & Co.

Houston Energy Investment Firm Tudor, Pickering, Holt & Co. Host RigUp for CEO Luncheon Series

A few weeks ago, RigUp CEO, Xuan Yong, was invited to Houston to sit alongside Tudor, Pickering & Holt’s CEO Maynard Holt for their CEO Luncheon Series. 

Through market research reports and consistent early insights, Maynard Holt has helped position the firm to be a major thought leader in energy finance sector.

Check out Xuan and Maynard discuss how pushing tech energy has led RigUp to become the largest provider of contingent labor in the lower 48.

RigUp empowers the men and women who power this world.

If this applies to you, visit RigUp.com to learn how we can help.

Oilfield Consulting Firm Transparency : Take Rate vs Billing Rate

We often find that contractors and consultants are NOT fully aware of the ‘take rate’ that they are being charged by their oilfield consulting firm, nor the benefits (if any) they are receiving in return.

While there are plenty of reputable oilfield consulting firms, there are also many questionable ones.  These non-transparent firms have created an environment where hard working people are consistently taken advantage of.  An informed contractor is the best contractor.  So, whether or not RigUp is the best option for you right now, make sure you are asking the right questions, and making an informed decision.

What is my Take Rate?

We define ‘take rate’ as the difference between how much an oilfield consulting firm invoices to their client (gross billable rate), and the amount the firm pays the contractor (net pay). Very simply, if a consultant’s gross billable rate is $1,000 per day, and the consultant takes home $900, then the ‘take rate’ is 10%.

RigUp offers the lowest take rates in the industry, on average 10% lower than competition.  You will take home an extra $30,000 per year

What is my Billing Rate?

Discovering your billable rate should be as easy as asking your oilfield consulting firm. However, RigUp has learned it’s not always as simple as that. And without your billable rate, it can be difficult to calculate what you’re actually being charged. RigUp has come across multiple cases of firms lying to consultants about their billable rate, making the consultant believe they had a lower take rate than they were actually receiving.  In one such case, we found a consultant that believed he was at 5% for almost a year before discovering a firm had actually been pocketing 17%.

The best way to actually confirm your billable rate is to see a signed invoice from the client.  It shouldn’t be a tough ask, but as you can imagine, sometimes firms don’t want to provide this.

At RigUp, we are happy to offer billable rate verification at any time.  What we bill and what you receive is 100% transparent.  As an independent business owner, this is your right.

About RigUp

RigUp empowers the men and women of oil and gas, leveraging software to provide the best experience in the industry. RigUp gives service providers exactly what they deserve.  The lowest rates, the guaranteed fastest pay, best in class insurance and benefit options, easy to use mobile and desktop app, and the friendliest 24/7 support team in the world. With a customer satisfaction score 55% above the industry average, having RigUp as an oilfield consulting firm option sells itself to contractors. To learn more about RigUp’s consulting program visit rigup.com/contractors.

“Collapsing Costs: Curing Procurement” by Rob West, Redburn

In November 2016, Redburn released a report “Collapsing Costs: Curing Procurement” written by Rob West on the need for cost reduction in the oil and gas economy, emphasizing opportunities in procurement. The research discusses cost reductions available through the use of digital platforms and highlights achievements of E&P companies, including BP, that use RigUp.

We’ve summarized the article, but please download the full report at the end of this post.

 Today’s Procurement Challenges:

  • The average Major manages relationships with 100,000+ suppliers.
  • Many oil industry buyers don’t have access to their suppliers’ financial reports or HSE records.
  • The size and complexity of the industry has resulted in an uncompetitive model of excessive sub-contracting.

Curing Procurement:

Digital procurement platforms are changing the oil and gas industry. RigUp connects 17,000 U.S. contractors with 150 E&Ps and raises bids-per-award from 2.3 to 7.1. Cost savings reach 30%, middlemen are dis-intermediated, and nimble E&Ps can run 20-30x smaller procurement teams than Majors.

BP is the only Super-Major using RigUp at this time. Contractor usage is down 30% since 2012. Conversely, Shell forces suppliers to pay a $1,700 – $3,285 fee to access its own bespoke pre-qualification system—it has half the supplier numbers of peers, yet the highest headcount in procurement.

Benefits of procuring via digital platforms, such as RigUp: 

Greater Reach. More bids can be surveyed in a shorter amount of time.

blog_redburn_002Contract Cost Savings. One E&P, Three Rivers, saved 30% on an Authorization for Expenditure (AFE) for a drilling program with savings on wellhead and cementing equipment as high as 44%.

Unbundling removes unnecessary layers of oil service margins.

Time savings: In another case study, E&P Ameredev onboarded 17 contractors in less than one week, with under 24-hours screening time per contractor.

Blog_Redburn_AvgProcurementCounts

G&A Savings. Major independents have 100-200 people dedicated to US unconventional purchasing, where smaller companies are running comparable rig crews with 4-5 people.

Benchmarking potential. Anonymized cost data is available for benchmarking from the RigUp platform.

Download the full report HERE.

And visit www.rigup.com and sign up for a free account.

RigUp’s 3-point check that verifies the bid, field tickets, and invoice

At RigUp, we’re building product features that streamline purchasing and payment for both E&P companies and service companies. We help engineers spend more time on what they were hired to do and less time on paperwork, invoice verification and other time consuming administrative tasks. We help service providers find new opportunities to win business and get paid faster for their work so they can grow in any commodity environment.

 E&P companies should be able to work with any vendor that meets their quality standards without worrying about the arduous MSA processes.

When you schedule a job with a service company through RigUp, we take care of confirming an existing MSA. If there isn’t one, the service company can utilize our MSA and custom-built insurance solution to ensure 100% coverage. The service company’s bid is used to check the accuracy of the field ticket and invoice. No more guessing as to what the job was actually supposed to cost.

Service companies have the ability to push updates, change requests, and signed field tickets to your job dashboard in real time, allowing you to track the job as it happens. Once the invoice is ready for submission, service companies can submit it through our simple and intuitive invoice submission portal. We verify the invoice against both the field ticket and the bid to ensure accuracy of cost and scope.

We call this our 3-point check: bid, field ticket, and invoice all in alignment before it reaches your desk. You’ll receive an invoice submission with a cover sheet outlining our verification, our guarantee to you that you’re paying exactly what you should and not a penny more.

blog_3pt_verificationService companies, if the only thing holding you back from winning work is lack of an MSA or failure to meet the ever-increasing general liability insurance requirements, we can help.

RigUp can get you on location with an E&P company. Once the job is done, you have the option to expedite payment in the event you don’t want to wait for the E&P’s invoice cycle. We offer various options to get you paid quickly (as quickly as 3 business days) so you can stop worrying about outstanding invoices and focus on growing your business.

We believe in a fair and transparent market where the best companies are free to do business in an efficient and safe manner. Our new job scheduling functionality is just another step towards that goal. If you work at an E&P company and want to learn more about how we can save you time and money, get in touch with us. If you’re a service company that has lost work due to lack of an MSA or insurance coverage, contact us to find out how RigUp can get you covered and back to work.

Email support@rigup.com or call 512-501-5452.

You can sign up for a free account today at www.rigup.com.

Bidding & Procurement Using RigUp – 5 Ways Cabot and Silver Creek Succeed

In the last year, we have made significant improvements to our product to enhance usability for engineers, procurement professionals, and compliance managers within our online marketplace. RigUp has earned praise as “the best-in-class bidding & procurement solution for oil and gas.” While still keeping true to our core mission (helping operators and service companies connect more efficiently), we have listened intently to all user feedback, and continue to perfect and mold the platform to meet the needs of our ever growing user base.

To illuminate some of the changes that have taken place over the past year, RigUp turned to a few of our early adopters, Cabot and Silver Creek to analyze the impact. In our analysis, jobs were compared only if their work scope, location, and job requirements were identical from last year to this year.

Quote_Cabot Oil & Gast Corporation

Bidding & Procurement quote

As RigUp introduced more powerful bidding and procurement features such as bid templates, E&Ps and service companies alike have benefitted. For example, both E&P companies showed a significant increase in the number of unique service companies who submitted bids to win the work. Silver Creek had a 27% increase in submissions and Cabot saw well over double the amount of bid submissions over the span of one year. In addition, both E&Ps showed significant improvement in bid submission rates.

Bidding & Procurement Improvements

Despite WTI crude prices increasing 33%+ during the same time frame, Cabot saw costs savings ranging from 14% to 32% on RFQ’s year over year for identical job work scopes. These requests included coiled tubing unit packages, isolation tool work (well intervention), wireline pressure control equipment, coiled tubing motor and mill packages, and workover rig jobs.

Cost Savings Improvements

Silver Creek also saw cost savings of 9% on the same jobs over a similar year duration. The jobs being compared in Silver Creek’s analysis involve completion systems and well intervention by means of running new tubing on all wells with a liner hanger, liner-top packer, and toe-sleeve to test the liner prior to fracturing operations.


5 ways Silver Creek and Cabot leveraged RigUp to improve efficiency & reduce costs:

  1. Sourced more and new vendors through Open Market Bidding.
  2. Tapped into the power of RigUp Bid Templates to allow for apples to apples comparisons.
  3. Took advantage of RigUp’s permission settings and messaging functionality to make it easier for the technical owner and the purchaser to execute an RFQ much faster while maintaining security and transparency.  
  4. Utilized RFQ Reports which allowed for streamlined analysis of multiple bids – allowing Cabot and Silver Creek both to bid to more vendors.
  5. Awarding work and assigning call positions provided a clear call-out structure for their company men in the field.

To learn more about RigUp and sign up for FREE, visit rigup.com or give us a call at 512-501-5452.

5 Key Takeaways from the 2016 Wharton Energy Conference

 

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RigUp attended the Wharton Energy Conference in late October 2016, and we noted a few key insights that will undoubtedly follow the industry into 2017.

RigUp’s CEO and Co-Founder, Xuan Yong led an Upstream Panel that included David Keyte, Founder of Caerus Oil & Gas; James Obulaney, Vice President at Denham Capital; Vidisha Prasad, Managing Director of Guggenheim Securities’ Energy Investment Group;  Jerry Schretter, Managing Director and Co-Head of Upstream at Citi; Tom Tyree, Co-Founder, President, and CFO of Vantage.

A few questions from this panel included: What opportunities exist for mergers and acquisitions in the Upstream space? What assets are economic at $40 a barrel? When do non-core areas of U.S. shale gas come back to play? What’s the outlook for International shale, deepwater, oil sands? What are the ramifications for spending deferral in E&P?

Here are our 5 Key TakeAways from the Wharton Energy Conference: 

#1) The current down cycle has separated winners from losers. Independent E&Ps with quality acreage alongside best in class technologies have grown stronger. While culturally backwards E&Ps have become weaker.

#2) Super major oil companies are valued at a discount relative to leading independents (even in lower commodity prices).

This had made it extremely hard for super-majors to act as consolidators in the down-cycle. Leading independents have used their premium valuations in the public market to capitalize on further acquisitions strengthening their positions.

#3) Leading management teams in “shale” will be statistically driven.

No one drills “dry-holes” anymore. Binary outcomes made winners and losers in a “conventional” E&P world historically. Winners and losers are now made by running leaner and more sophisticated with operating leverage built into an E&P company’s business model.

#4) More distributed teams operating closer to the field. Where as Houston, Texas has historically been the center of E&P headquarters, we are observing a resurgence of E&Ps locating key engineering managers to locales closer to the asset base. Pittsburgh, Denver, and Midland are becoming more relevant than ever.

#5) L48 and North America in general are becoming the swing producer of hydro-carbons. It’s more than just energy independence, it’s energy prowess in the global world.

In summary, it should be no secret that the next up cycle will be dominated by a new class of nimble and sophisticated independent E&Ps.

RigUp can help E&Ps keep up and outpace their competition. Sign up for FREE today!

Questions? Comments? Contact lindsey@rigup.com or visit www.rigup.com to learn more.

Consultants make more by contracting through RigUp

Oil and gas contractors have historically been represented by consulting firms that collect resumes and bring them to the offices of the E&P. Through RigUp, the oilfield’s online marketplace, oilfield consultants can now complete a single application within minutes that presents their experience to even more E&Ps.

RigUp’s operator network spans over 150+ E&P companies. These E&Ps utilize RigUp’s bidding and procurement platform to find various oilfield services, some of which they will subcontract through RigUp. RigUp subcontracts work to consultants with day rate and work acceptance agreements all occurring on the online platform. 

Utilizing its best in class technology and a premier insurance program, RigUp can subcontract at rates of 5-10%, which are significantly less than the traditional industry average (typically ranging from 15% to 25%). For example, an independent Mud Engineer at Parsley increased his day rate that ultimately saved him tens of thousands of dollars.

Quote Copy

Oilfield consultants who have switched to securing work through RigUp have made an additional $170,000 in annualized earnings given RigUp’s industry leading take rates.

The platform goes even further by supplying a compliance and labor manager tool for the E&P. RigUp’s Labor Manager provides an automated compliance platform that allows E&Ps to successfully onboard and manage their consultants seamlessly. Each consultant is personally screened and ready to go within a single business day. RigUp allows for real-time HSE monitoring of the contingent labor workforce, all available at the operator’s fingertips.

Select oilfield consultants for the job

Specify Training Requirements

RigUp has created a platform that allows oilfield consultants to showcase their experience in the industry directly to the E&P company. That said, RigUp has changed the dynamic between E&Ps and consultants for the better. Consultants are exposed to additional work opportunities while E&Ps can select the best workforce for any project at hand.

If you’re an E&P interested in hiring labor through RigUp’s marketplace, or if you’re a Oilfield Consultant looking for more work opportunities and better pay, get in touch with us today.

512-501-5452 | consulting@rigup.com | rigup.com

Open Market Bids allowed Jones Energy and The McDaniel Company to connect and prosper

In July 2016, RigUp introduced the option for E&P’s signed on to the platform to place Open Market Bids. Every time an Open Market Bid is created, the bid is posted automatically to Service Companies’ dashboards. An email is also sent out weekly to the user base that the bid applies to, inviting them to bid on the work.

For the first time ever, Service Companies can search for new jobs in real time and bid on work for Operators they may have never previously had access to. RigUp listened to what Service Companies had been asking for, and we took their feedback seriously. We are always aiming to provide the highest level of service and ease of use to our users.

“When we added Open Market Bids to our online marketplace, we thought it would gain traction quickly with both E&P’s and Service Companies. The feature not only adds another layer of connection to the bidding process, but is an obvious positive for Service Companies because they can now bid on and win more jobs than ever before.” Tyler Myracle, Director of Product, RigUp

Jones Energy quickly took advantage of this new feature and put out an RFQ for Plugging and Abandonments in the Panhandle / Oklahoma region. Through Open Market Bidding, they received pricing from nine vendors. The McDaniel Company was one of the companies awarded, and neither party had worked with one another previously. Through RigUp and Open Market Bids, service providers can find new clients and develop new relationships.

According to Jones Energy, an E&P company in the U.S. Mid-Continent, their approach to doing business is “traditional and strategic, and their methodology is contemporary and forward-thinking. They are never afraid to look at things different and try new ideas.”

RigUp was ultimately an obvious win-win solution for both Jones Energy and The McDaniel Company.

Open Market Bid Quote

“We awarded work to two companies and one of them was The McDaniel Company, a completely new vendor for us. Austin McDaniel was incredibly thorough with his quotes and is great at follow-ups.”

Jennifer added,It’s nice to have more than one dependable company to work with on these projects, and using RigUp helped us find The McDaniel Company.”

In a much similar scenario, The McDaniel Company has been using RigUp for about six months now, and one of the first projects they were awarded through the platform was the opportunity to work for Jones Energy.

Open Market Bid Quote

The McDaniel Company serves over 150 clients ranging from small independents to many major oil & gas companies. Operators across a six state territory, including Texas, New Mexico, Oklahoma, and Louisiana, utilize McDaniel’s P&A services. The McDaniel Company is also active in the Oil County Tubular Goods (OCTG) distribution & sales business specializing in used reconditioned & inspected tubulars.

“Why are we in the business? To save our clients time, money and provide them with the assurance that any job which we perform will be carried out in a reliable, safe and hardworking manner,” says Austin McDaniel.

In just a few short months, open market bidding has become a go-to for many Operators when placing bids, and Service Companies have been quick to react and adopt the feature. The Open Market Bid stats speak for themselves.

Open Market Bid Stats

Are you an E&P Company? Start utilizing Open Market Bidding on RigUp today. Click HERE to log-in.

Some of the quickest and easiest products to bid out include casing, tubing, and plug and abandonments. If you need help, contact us, and we’ll get you in touch with one of our Petroleum Engineers.

Are you a Service Company? Visit your RigUp dashboard to find new jobs that have been posted to the Open Market. Click HERE to log-in.

Questions? Call us at 512-501-5452 or email us at support@rigup.com.