Expert Q&A: RigUp sits down with WoodMac’s R.T. Dukes

Where do we go from here?

As we progress through a volatile 2Q, we’re sitting down with one of the most well regarded E&P analysts on Wall Street to discuss the state of the North American upstream industry.

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RigUp: M&A in the Permian Basin remains a hot topic. This quarter we’re starting to see majors or larger E&Ps like Exxon and Marathon making sizable acquisitions in West Texas. Is this a signal that the consolidation is coming to an end? What do you expect in terms of M&A in 2Q 2017, particularly as it relates to the Permian Basin?

R.T. Dukes: There will be more, but there aren’t a host of companies looking to exit like there were 18 months ago. We’ll continue to see deals, but the next wave of consolidation will happen over a longer period and will be when economies of scale begin to matter. Add up guidance from many of the top operators, and it might be sooner than we think.

RigUp: Wall Street has dramatically increased Capex estimates for the back half of 2017 and into 2018. Based on your basin by basin analysis, is North America going to exceed production expectations for the year and if so, is that bearish for the commodity markets?

R.T. Dukes: That’s dependent on your expectations! With that, we’re on track to surpass the 2015 peak in oil production near the end of 2018. I suspect that probably outpaces what most people thought would happen. Of course, that could all change to be lower or higher if prices decide to settle closer to $40 or $60.

RigUp: Are we in a world now that should be focused on the “Call on Permian” instead of the “Call on OPEC”? Or is that still wishful thinking and posturing?

R.T. Dukes: The Permian is a significant player on the global stage, but it’s not big enough to single handedly suppress prices for a long time. It will create problems in years that demand growth slips or when global supply outperforms. That will cause year to year problems, but in the long-term, it’s not the sole price setter.

RigUp: Given the strength in production growth in West Texas, there’s some scuttlebutt that we’ll run into takeaway capacity issues starting later this year. What are your thoughts?

R.T. Dukes: We definitely could, but the pipes are on the way. We don’t expect any prolonged blowout in prices due to takeaway capacity. The problems are intra-regional and on the other side of those long haul pipes. Many of the major producers plan to produce so much they need to think about who their buyers are and securing demand for their production.

RigUp: Shifting conversation about takeaway capacity to the Northeast, what are your thoughts on basis differentials in the Northeast? How big of an impact is Rover Phase 1 going to have on the market? Do E&Ps adopt an even more aggressive productive behavior thereafter?

R.T. Dukes: It’s not just Rover, but the other pipes that will add Northeast connectivity too. Add all the projects together and the region looks set to have excess capacity for a few years post 2018. As a result, producers are going to realize prices that are much better than what they’ve seen in recent history.

RigUp: For the last 6 months, the industry has been talking about “core natural gas wells” having been drilled and completed already. What’s your opinion there?

R.T. Dukes: We’ve seen high grading to the highest degree over the past couple of years with oil and gas prices seeing cyclical lows. That is changing on the oil side as operators are already stepping out, but there’s still a big inventory of core natural gas wells that have yet to be drilled. Above $3 natural gas, we’ll see more drilling outside of just the Marcellus and Haynesville.

RigUp: RigUp’s marketplace has seen the market visibly tighten for frac for 1Q this year. In some cases, based on geographical and technical requirements, there’s no spot availability until June 2017. What’s your perspective on the medium-term and long-term supply / demand for frac horsepower in North America?

R.T. Dukes: Costs are going up! The jobs are bigger, and we’re going to need more HHP than we had in 2014. Barring a price shock to the downside, we’ve probably seen the lows in completion costs and the name of the game is back to managing those costs. The industry seems to underestimate how big those swings can be, and we’ll need new horsepower sooner than most believe.

RigUp: Could you go into further detail concerning completion design strategies that E&P companies are deploying currently?

R.T. Dukes: Bigger has been better, but we’re starting to see that normalize. We’ve seen diminishing returns in certain areas as operators use more than 1,500-2,000 pounds of proppant per foot. While proppant and completion prices were low, operators had the luxury of pushing the limits. Now that costs are going up, we expect we’ll hear talk of more efficient completions utilizing the right amount of proppant, water, horsepower, etc.

RigUp: Specific to oil and gas technology, what’s the current state of the industry and their willingness to modernize? At RigUp, we’ve been blessed with a strong contingent of supportive and transformational companies that have championed our adoption. But at the same token, we’ve been told by certain operators that the internet just won’t work in oil and gas. What’s your take? Will the technology adopters win?

R.T. Dukes: I’ve seen it my entire career covering oil and gas: “If it ain’t broke, don’t fix it.” We’ll always have companies like that as long as they can capture reasonable margins, but we’re not in a world where anyone expects $5 natural gas or $100 oil. The potential margin just isn’t as big as it was. A lot of people believe we’ve already cracked the code, and everything here will be small gains. The problem with not worrying about small gains today is they add up to big savings over time. Technology is as important as ever, and I suspect those companies that are avoiding tech are much more likely to be the next casualties of the shale revolution.

To learn more about Wood Mackenzie, visit woodmac.com.

To sign up for a RigUp account for free, visit rigup.com.

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.

RigUp’s 2016 Year in Review

We started RigUp over two years ago to build the premier marketplace for oilfield services. Our product began as a mobile app for the field and has grown into the best-in-class procurement, compliance, and vendor management solution for the upstream industry.

We believe that through technology, E&P companies and service providers can connect and execute operations more efficiently and effectively. Proper stewardship means a safer environment and American energy independence. Over 150 E&Ps believe in our mission and goal and we are grateful for their support.

In 2017, we will continue to enhance our product offering to meet the needs of our users – some new features include streamlining the MSA process, eliminating the industry’s outdated “procure-to-pay” workflow, and ensuring 100% environmental and safety compliance across the service provider network. Clients have asked and we’ll continue to deliver. Look out for roll-outs of features that simplify the procurement of integrated services. We’re ready to show off our launch of bundled and packaged solutions utilizing various work scopes within a project.

It’s been a year of hard work for our team but the successes have been well worth it. Here are some highlights from the past year. We look forward to delivering you our very best in 2017 – stay tuned!

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Wall Street Journal      Bloomberg      Austin Business Journal      Redburn

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.

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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.

RigUp helps Operators keep their workforce happy by offering Contractors More Jobs and More Money

RigUp Subcontracting Program Quote

American Resource Development, LLC (Ameredev) is an Austin based E&P company focused on the Permian Basin. Ameredev has successfully leveraged RigUp’s Subcontracting Program as a solution to help build out their oilfield crew to work on drilling, completions and production activities, which include Mud Engineers and Lease Operators.

Ameredev was able to get up and running with the RigUp Subcontracting Program in next to no time, onboarding 17 new contractors in less than a week, with each individual screened and ready to go in 24 hours.

Zach Boyd, Operations Superintendent at Ameredev provided some feedback on his recent experience with RigUp. He explained, “It’s a very simple process onboarding the Contract Personnel.”

Based on a company’s requirements, RigUp can perform background and reference checks, drug and alcohol screenings and the validation of training requirements to meet an organization’s standards. Once complete, contractors are ready to step foot on location and get to work.

Zach added, “RigUp allows ease of operations to assign work and is prompt and straightforward with invoicing.”

In addition to a seamless onboarding process, RigUp offers payroll administration for its subcontractors, including an easy way to log hours online. RigUp’s professional support team is always on-hand to assist both operators and contractors with any industry related challenges.

“The contractors have all been exceptionally pleased to be under the RigUp subcontracting umbrella. I have had very good feedback from the field,” says Zach Boyd.

The high level of satisfaction reported by RigUp’s subcontractors directly correlates to the benefits RigUp provides. By offering the best rates in the industry (substantially less than the standard of 15-20%), contractors take home more of their hard-earned money and receive it on-time, every two weeks. Since signing up to the RigUp program, the independent contractors performing work for Ameredev have realized a combined increase of more than 10% in their net earnings.

RigUp Subcontracting Program

Start leveraging RigUp’s subcontracting solutions for contingent labor today. Whether you’re a an Operator looking to build a team for your next project or an Independent Contractor looking for more work and more money, get in touch with us.

Sign Up as a Contractor consulting@rigup.com | 512-501-5452 x708

Sign Up as an Operator  |  support@rigup.com  | 512-501-5452                                         

The Environment at $30 Oil

When the outside world thinks about the oil & gas industry, they think about the most prominent news stories in the past decade. The industry as a whole is often vilified with little recognition given to the companies who act responsibly.

However, when oil is $30 a barrel, some companies cut costs anyway they can – even if that is in safety and environmental programs.

Environmental responsibility and sustainable operations are at the core of who RigUp is as a company. Our desire is to partner with companies who make EHS a priority in their business. We believe the desire to operate responsibly should be intrinsic to a company and not solely reliant on external pressures.

Our mission is to connect operators with service providers through a common goal: effective, efficient, and safe operations. We seek to maintain a marketplace where the safest and most environmentally conscious companies can thrive. Since the beginning we have strove to build our company on the foundations of responsibility, and better business.

Regardless of the price of oil, our likeminded team is committed to achieving lasting change in one of the world’s largest industries. We are dedicated to a better future.

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Why We’re Here

When we set out to build RigUp, we wanted to build a business and a technology that would catalyze positive impact across a vital industry. We had hundreds of meetings with energy executives, field operations, petroleum engineers, and community groups about the state of the energy industry. A common theme of improving “trust” emerged; trust between the operators and service companies, trust between field operations and finance teams, and most importantly trust between communities and the companies operating in their backyards. RigUp is building technology to restore trust in the energy sector. We’re putting together a team of world-class petroleum and software engineers to solve problems that at one point in time seemed unsolvable.

To meet demand from a growing global middle class, McKinsey estimates that global energy resource productivity will have to increase at a 3.2% per annum rate going forward compared to a 1.7% per annum rate from 1990-2010. With 66% of oilfield workers set to retire in the next 10-15 years, the great men and women working in the energy industry have a large task at hand to meet the world’s energy needs. Improved productivity must come alongside stronger environmental stewardship and safety benchmarks, and modern technology is required to improve upon legacy platforms and processes.

RigUp helps producers and service companies visualize and manage assets on location. Using big data and analytics, we allow industry participants to optimize their assets for safety, efficiency, and higher environmental standards without sacrificing performance and economics. Asset level safety and tracking is key to formulating optimal development plans. Our team has a strong focus to reduce the “idiosyncratic risk” of field operations, and our platform will eliminate lapse time and disputes for service companies. We have partnered with a select group of operators and service companies as we begin testing the first version of our platform, and we look forward to bringing on additional partners in the coming months.

Recently, we closed a $3mn series seed round led by Founders Fund. We are humbled to have Founders Fund on board as our anchor investor. We’re proud to call Austin, Texas home and excited about fostering a great start-up engineering culture.

Here’s to the future, y’all.

– The RigUp Team