What The Funk?

0:00 Okay, we're back on what the funk. I took a solid Month off, you know family in town holidays. It's hard to find a quiet place in the house I have a Pretty decent sized house. I would say yet

0:14 somehow when there's kids around they just tend to find you and make the most noise Right by you, but you guys can relate to that. So finally found a quiet place in my house Kids are upstairs.

0:26 Hopefully they stay upstairs for a little bit You don't have basements. I think where you live. Right. I know in Houston. They don't. I don't know about Dallas For no no basements in my house the

0:35 water levels too high in the ground. So yeah, no basements here Nice But yeah, very very excited. We've got Casey Patterson and Larry Brazil On this podcast. I think I said both your names,

0:50 right? I'm less concerned about Casey Patterson It's a little bit more straightforward Larry. Did I get your name right? Perfect. Thank you. Awesome. Awesome Two of the guys over at Avineer.

1:02 I guess I would classify it as production technology, production centric technology in oil and gas. That might be underselling what you guys do, since it is kind of also a bit of data management,

1:14 data aggregation, field data capture, dashboards analytics kind of across the board, very much aligned with some of my history as well, both at Seven Lakes and with various other players But

1:26 really excited to have you both on, appreciate your flexibility in doing this one around the holidays. So I'm just going to put the question out to you guys that have put out to everyone. Casey,

1:36 you go first layer, you go second. Who are you guys? Who is Casey Patterson? Oh, that's a, that's a, that's a pretty, that's a pretty zany question to ask right off the bat, Jeremy. I'd say

1:50 I'm just a guy who's, who's a lifelong learner who is, who saw an opportunity here with Avonair. It's, you know, very I have a science background and a desire to make things more efficient and

2:03 that's that's really who I am married I have two boys that are just like feral bobcats most days one's eight one six years old and it's It's they are they encompass most of my life

2:16 And I want to go back a little before we go out of there I want to go back a little bit Casey. So you you were a football player now granny. You're just sitting there in person It's tough to tell I

2:24 I've met people before that are like hi. I thought you were shorter than you are I thought you were taller. I'm guessing you're probably bigger than you come across on camera But but you had big

2:34 aspirations like a lot of you corn fed Texas boys too about probably playing in the NFL And I do believe that you played some football in in college and college for you was a bit of a different

2:45 experience Because you went to West Point. I've always been fascinated with the military Some of my friends from high school ended up going to West Point. Some my neighbors actually as well had a

2:57 few folks on this podcast who have been military folks. So talk a little bit about your experience. Why did you decide to go to West Point? What was that experience like? Because, you know, I'm

3:06 like a traditional Northeast New England college kid, right? For me, liberal arts wanted that kind of basic four-year college education and experience. Always dabbled with the idea of maybe

3:18 looking into the services. But what drew you to West Point and talk a little bit about what it was like and maybe even some of the discipline you learned there that carried in with the rest of your

3:27 life. So that's a really good question. My background going into West Point was really about a 45-minute phone call when I had no other options. And I got an appointment, got into the academy,

3:42 went in as a 6'5, 200-pound tied in, and absolutely got crushed my first year and was determined to win. So over the course of a year, I had a lot of academic probation which method I can do. of

3:57 the gym.

3:59 So, you know, over the over the span of really 15 months, I gained over 100 pounds. Well, yeah, and then just became more of a bulldozer. And at army then, we ran the triple wish or the

4:13 conventional wishbone, I would say that was, that had some flexibility to it. So I was, I kind of grew acclimated to the environment. And in that environment, what I realized is how inefficient

4:25 we are with humans, as humans with our time with resources. And, you know, my, my junior year at West Point, I was injured, the Army deemed me unconventional. I wound up at TCU.

4:38 Got a master's degree in geology, started working at XTO and then all along, what carried with me is this concept of inefficiency. And now, I mean, as, as sitting here in the area now, we have

4:49 a passion for solving problems around inefficiency.

4:54 Nice, nice. So you move back on how long

4:58 I was there almost three years, really four and a half years in the Army, the way the out-processing works, but I was there

5:08 into my junior year when I got hurt, and then after five surgeries, the Army deep to be uncommissionable, I was damaged goods for that point. So my football career was over, and I moved back home

5:21 to Fort Worth and started TCU after a couple years. Awesome. Awesome Let's flip over to you. Who's there? Okay. Who's there? Thank you, Jeremy. I thought I might just, as the seasoned, you

5:35 know, more participant of the founder in at Avenue, I thought I might spend just a couple of minutes just going way back. My father fought in World War II in the Navy and was actually in Tokyo Bay

5:49 when the wars in was signed, and that was in 1945. and he moved back to hometown, which is Parrish, Texas. And this is the point I want to go for the reason I want to bring that up is that the

6:01 hot

6:03 industry of the time was telephones. As hard as I did to believe these days, a long-distance phone call was not a very common thing. A lot of homes didn't have telephones at all. And so he came

6:17 back and went to work for a company that called Southwestern Bell, which became part of ATT And my mother was a

6:26 telephone operator for the same company. They met and

6:31 life happens. They got married. They moved to Odessa, Texas to put in telephones, and that's where I was born. And so I've lived all over Texas, but always Texas. I went to college at Texas AM,

6:42 got a degree in mechanical engineering. And as luck would have it, I graduated in December of 1974 December of 1974 and oil prices were high. as I got eleven job offers all M from oil and gas

6:58 companies and so that started my career into this industry and I've been forever thankful about that that little stroke of luck that I had there and we

7:11 went to work for AmoCo production company I by the way I should have said I'm married also have a wife and I we consider ourselves newlyweds even though we'd been married fifty one years and so we

7:22 have forty four children all of them are married or have children we have nine grandchildren so we've begun to get a nice large family are our holidays were probably just as loud as yours is if I may

7:34 not loud but so after A and M I went to work for AMOCO production company in Houston as a reservoir engineer and that started me down that path and so the through a few other companies along the way

7:47 ended up in fort worth Texas working for E O G resources and reservoir engineering and so After EOG, I had a

7:58 reservoir engineering consulting firm. I met Casey and then off a friendship ensued. And we began to think about business opportunities together. And so that's how we got to have in here. Well,

8:09 long before that, Larry and my wife ran in, I think it was the White Rock or the Dallas Marathon. It was like 24 degrees and rainy and sleedy. And I thought, why are you doing this? And I said,

8:22 who's going with you? She said, well, there's a couple of guys in a guy named Larry Brazil, I thought.

8:28 I'll stay right here at home, and I did. But y'all and then Larry and I formally met, probably 10 years ago or something like that. We worked together. I worked for XTO

8:39 for 10 years, and then I ran an uptrend company being private equity back for another eight after that. And that's how Larry and I met. Larry was a consulting reservoir engineer. He and I share,

8:52 I think, this concept of efficiency. We look at production, we look at operations, and we look at each other and say, You know, there's a better way of doing this. Yes. And that's what's

9:02 forged our friendship now. So this is interesting to me, and I do want to pivot a little bit to Avenue. I don't want to get too far away from the personal stuff 'cause I can tell we could easily

9:11 dive into family and football and phones and all of the formations, funkiness, anything that begins with an F or a pH, right? We can make it work. But interesting to me that you guys, your

9:27 background, XTO and EOG, two of the best and two of the biggest operators. And if you look at Avineer and your website, it's a lot of smaller operators, right? So

9:41 interesting to me. You want to talk a little bit about that? Like, I'm sure what you learned about the large machine-like oil and gas companies. that you worked out for a long time and maybe some

9:52 of the efficiencies or inefficiencies and then try to bring some efficiencies to smaller operators. Has that been like a conscious focus that you guys have had and where did that idea come from?

10:05 Well, for me it has. XTO was a world-class place that gave me a world-class opportunity and I learned tremendously while I was there and what I saw was that there were a few people that worked there,

10:19 not everybody, but a few people could see the problems very quickly and they could work through the workflow and their head very rapidly to make a decision on whether something made sense to do or

10:28 not. Not everybody has that skill set, so part of what Avineers doing is automating the process that these fantastic engineers, like Larry, where you could quickly look at something and see what's

10:40 going on, whether it's problem identification or in economic awareness. So I would say yes, I mean, and I've even told my old XTO A cohort that is I'm trying to to really automate or at least

10:54 personally I'm trying to automate what I didn't even know at the time had extra yo that these wonderful engineers is great engineers could see

11:05 around and to that you know that it'll be when a company just becomes really really large they tend to have their own RT departments and they tend to develop some things in house and so essentially

11:15 one of the ways you think about avenues were functioning other as now T department for the smaller operators that can afford to do this themselves but they they can afford to have us help them with

11:25 their problems yeah the one of the one of the negatives of the shell place too is it really exacerbated the silo problem where people were stuck in one kind of part of engineering or geology or

11:36 whatever their end and there really was no there really was no kind of global versatility so we're automating a lot of that and you know you're it's hard to believe but twenty years ago you know

11:48 having real-time visibility into what's going on was a pretty advanced well now today we have things on our on our phones we have dishwashers we have sprinkler systems that give us much much greater

12:03 technology than than even what oil and gas companies have

12:08 yeah the silo thing is is really something and I think it's gotten a little bit better part of that could be because there's more remote

12:21 resources that were traditionally in the back office and all working together but for me coming from this software space it was actually kind of jarring when I got into oil and gas to see you know my

12:34 first job was selling software to to a accounting land and production and to see accounting make a decision and I'd be like all right cool so I was land gonna go with This tooth is like, Oh, you're

12:44 gonna need to talk to them. We're like a big expensive decision on your accounting software to do they know that you're going with this product and they said I Dunno that's so true Whoa you don't

12:56 talk to him because I'm from the software side it's like you know there there's somebody has an idea and then the developers work on the idea and you see the testers kind of working through there you

13:08 know whether it be agile or waterfall through their sprints and then they're keeping sales in the loop and then when the product releases ready sales goes out and sells it gets market feedback and it

13:19 gets handed over to customer support or what people call now customer success so I didn't experience working in silos and coming from that side and then to sell software to companies that were in very

13:32 very distinct silos areas despite you know for example production accounting I just sort of assumed all right well cool somebody in accounting will make this this decision now you Gotta truck talk to

13:43 production accounting well are you mean isn't that just counting they're like no we don't do applications on our side we're we're Jeb where revenuer where where GL re where We're you know we're not

13:57 production accounting Oh Okay Cool it and I think that we've part of it could have been generational right part of it could have been focus like we just want you to focus on the job that we've

14:08 assigned to you to do

14:11 a part of it's also just freaking crazy and I I do think that the breaking down the silos in terms of what you Guys do is is important like how how do you do that first functionally technically but

14:25 also more importantly culturally cause I think that that is important for you guys to break through if you're going to do business in the oil and gas industry how do you bring these groups together

14:36 or that's a that's another really good question it's a let me back up just for a little bit when Larry and I when we started lighting something around Avenue, you know, there were a lot of problems

14:48 that our industry had. It could be the expense of software. It could be silos. And, you know, we identified probably a dozen things, Jeremy. And then leading up to COVID, COVID was the

15:00 catalyst for a need for a new solution. I mean, we started working remotely now, which exacerbated this problem of silos. I mean, you would have people working from one office to another in a

15:11 corporate space that didn't know exactly what they were doing And I saw that a lot. And so there needed to be something. Even culturally, when we look at the way we used to work, and it got maybe

15:25 a little worse, even though technology got a little bit better, I think communication got a little bit worse. At the same time, you're having commodity prices that are either flat to backward

15:34 dated, and you've got some seasonal uplift. Service costs, people costs are all going up at the same time. So that free cash flow margin or that operated cash flow margin for companies. is this

15:45 your shrinking shrinking said there had to be a new solution on undoing it better so one of the problems is is how do we how do we expand the in the knowledge base spread and one is as we said look

15:59 we're not going to have software that sits on somebody's desktop it's going to be entirely accessible via the web which means that if you can if you want to go to Thailand and if you've got a browser

16:10 and internet access you can see all of your production data secondly I would say is we need to really get to the heart of of why every oil and gas company is here it's not just production management

16:21 it's not expense management it's really cash flow management so the end solution that you need to get to every user really is around cash flow management so so you know and it has to be so long as a

16:35 user has the the rights to see it it needs to be accessible anywhere in the world because that's the way we work now

16:46 Jeremy I'd like to add there that Casey did a really good job there of explaining kind of the philosophy things, but from from a From a different perspective though the silos were created because

16:58 there was individually different softwares that uses their own databases to record certain information And so Avenue did we as just as a forcing function? We're just gonna have one database and

17:09 everything's got to go to one that way It's instantly accessible by anybody in the company who has rights and permissions to see it And so it's all it's all in sequel. It's all ready to go for

17:19 everybody Now we'll talk a little bit more about the technology itself, but but I want to get to the who Who accesses? Avinear who uses your product is it lease operators in the field? Is it

17:32 production formans is the CEO COO CFO or is it? Yes to all of them Like who are the people that are using and getting the most value out of the Avinear product?

17:45 Yeah it's everybody you just described it's everybody from the field personnel who are loading production data daily all the way up to see sweet see if one looks at it and and looks at the historical

17:59 expense data and how it tracks and you might look at cash flow for borrowing base purposes for some for some borrowing covenant CEO OH certainly looking at it to make economic decisions about where to

18:13 go comparing which one of their programs are most economic whether it's in a payout or costs per barrel to add in one of the things that makes us unique as we understand those problems so we help our

18:25 customers navigate through that we we are constantly developing new solutions based on problems that are old and problems that are new so I you know to answer your question is is is is really

18:40 everybody that that touches production Um, since production is revenue and revenue is what supports a company. Uh, we don't do geology, uh, you know, we don't do drilling. We don't do

18:51 completions. Larry and I just figured out that, that, that cash flow management is a challenging enough concept that that's where we work to focus. Yup. Yeah. And, and Larry, I'm, I'm sure

19:03 you may have more to chime in on this, but. You know, I think downturns really, uh, increase the importance of your existing production, right? Cause if you're not able to get the borrowing

19:16 base or spend money to do your. 16 wells that you were planning on drilling this year or this quarter or this month, depending on the size of your company. Well, then you better optimize your

19:26 existing production because it's already flowing, right? So, so I learned this big time, you know, two, I came into the industry in 2007 and my first day on the job. I want to say oil was one

19:38 hundred and thirty eight dollars a barrel and natural gas was about fourteen bucks in MCF and Yeah there was like a quick dip down to like the high thirties or low forties maybe a year later but then

19:49 a shop back up and and oil prices generally stayed between about eighty and one hundred dollars a barrel till around thanksgiving of two thousand and fourteen so it was it was still a it was a really

20:01 good time to sell technology and I think also to be an operator because there was just a lot of room for error there was a lot of margin available and then we hit a pretty significant downturn

20:15 in two thousand and sixteen especially when oil got down at twenty six bucks a barrel natural gases has been a little bit lower for a while now but what I noticed is the focus on cash flow as well as

20:29 efficiency especially related to field productivity around existing production became even more important and that didn't go away if anything we've seen more and more companies with a focus on

20:42 production optimization and efficiency

20:49 and cash flow management free cash flows a term that you hear a lot of so I think that we're we're kind of in an era where there's likely never going to be the same level of money available for new

21:00 drillers it's just not there we used to see companies forming right and left all the time you don't know so companies do have to optimize and become extremely efficient in their production what are

21:11 some of the things that you feel like Avenir does that tie directly to that bottom line is it making recommendations on how to optimize a certain asset field or the individual well is it making

21:27 recommendations around

21:30 artificial lift type and the injection chemical material is it The Focus on Eloi and some of the efficiencies that might not be happening on a route by route basis like what are some of the things to

21:44 get to the nuts and bolts of it that you Guys do to create more free cash flow and optimize production Garson Jeremy and I'd say the the first thing that comes to mind when I heard your Question was

21:55 one of the things that is so important is is under have an award that doesn't sound very important but if we bring visibility to company so if you can easily without a whole lot of effort look at each

22:11 individual whale each m individual property all the properties by groups however you need to slice it nice to get down to the answer and if you can capture the data so that a operating loss cannot be

22:27 cannot hide from me anymore then you will have your best chance at optimal optimizing your cash flow and let me tell you that's more prevalent than than you would think Because a lot of really aren't

22:39 Catholics and even our arts company say in the Permian basin that have units if a capture their production and their revenue at the unit level and not take that production and and expenses all way

22:52 down to the individual level what you down can variably have is wells that are losing money but they're kind of hidden they're kind of invisible and so we make the invisible visible so that then you

23:04 can actually run your business using real data and actually get to the problems that need to be solved is that like your company tagline well it seems to be done I'll say one thing though that you can

23:18 trigger a thought in my mind is that if you back off look at the bigger picture a longer time frame of all feel the the commodity prices just they just go through cycles they just fluctuate they're

23:29 all in there and the companies that release survive over the long term one of the things they are is low cost operators and the ability to be efficient at your operations manager expenses and and

23:42 really make good decisions on on the little things you know and in the world like you know how quickly they've located a well that's off production so that you minimize your downtime all those little

23:54 things that they are all of a sudden kind of add up to make make an efficient operator so then when when times are not so good you survive and when times are are good you then you do really well yet

24:06 how do you reduce your lifting costs to a point of making it sustainable could cause I do remember a pointer in cove at a wall street Journal New York times article something like that that said there

24:15 are only four or five companies that can survive for a long period of time at at at their lifting costs in the twenties alright and there was a crown quest was one of them I think diamond back would

24:28 have been one of and in some of them were just blessed with great acreage and great rock but at the same time there was a focus on efficiency to reduce that lifting cost and make themselves as

24:38 efficient as possible. But what you're referring to is it's math and basically it's, uh, it's the margins. Like, you know, I'm a, I'm a diehard Boston Celtics fan and there's been a little bit

24:50 of backlash, NBA champion, shout out Boston Celtics 18 time chance. Um, they, they shoot a lot of three pointers and it's just, it's sheer math, right? They, they really bludgeon people with

25:03 math Now when they lose, it doesn't look good because they miss a lot of shots, but they win a lot because simply put, if you can shoot 40, you shoot 53 pointers a game, you're making 23 pointers

25:14 a game. You put the other team in a position where they have to then start to adjust the way that they play to keep up with you. And then they're trying to beat you at your own math. And maybe

25:23 that's not how other teams are designed to play. It's frustrating. I think even for some fans of the team and certainly for fans that play against them that it's just 3. or 3. or 3. or 3. or But

25:34 if you look at the margins, they're trying to win on the margins, whereas if their total potential output of possible points is 180, if they make all their shots, versus 155, because they take

25:47 less three pointers, it's just math, right? So I mean, similar concepts apply, I think, in oil and gas, obviously it's much easier to track in basketball because you can see it, right? And

25:58 it's condensed and it's right in front of you. But oil and gas, the focus on the margins too, if you can reduce your cost to drill a well, for your cost to produce a barrel of oil, Right. To45

26:10 to40, 5,

26:13 it doesn't matter if you're only producing a thousand barrels a day, 200 barrels a day, have5 adds up, man. No, it does, you know, it's the inverse of say, the Marcellus and the Marcellus only

26:26 works because the volumes are so big. It's really low margin per molecule, but the volumes are so big. If you're a PDP operator, you have a significant portion of your asset that you were a

26:39 fiduciary for, or you're just trying to maintain it, you really have to pay attention to those margins. So, Avernier was created to help not necessarily to say what should I do, but really to

26:49 answer the second question is, does it make sense? And the does it make sense always has to have an economic outcome, right? It's gotta be positive, and historically, to get to that answer, it

26:60 would take a team of people and some time period over a whole field to evaluate that. Now companies can do that in Avenue every five minutes. And it's, I mean, you're absolutely right. So can you

27:11 get the most out of your world? We're back to that efficiency question is, how do you get the most out of your world? Secondly is, how do you eliminate siloing through redundant software platforms?

27:24 How do you integrate more automated functionality into one platform so you rely less on people are the most expensive part of production, and maybe redundant software platforms. And one of the nice

27:37 things is the company that I was a CEO of in East Texas was the beta customer for Avenue. So every bit of Avenue development was done as a differentiator tool for an upstream company. And then at

27:51 some point I, had to make the decision of which way I went. And I just felt like my passion, and Larry and I talked about this, was really around efficiency How can we help other people break down

28:02 those silos, see things they normally didn't see, and actually come out and win. How can they win in a situation where it just doesn't look winnable? And we can prove it now over and over. And

28:16 what's fun too, is when you get customer data and you say, look, here's your bottom line cashflow as positive, but when you look at your top 13 wells that are losers, you're losing68, 000 a

28:28 month on these If you shut them in, your cash flow is going to go up. right so it's it's counter intuitive thought process that is empowered by rapid analytics of your production data to give you

28:40 visibility

28:43 I love this Stuff I mean you're talking my language right now and and I've told the story in this podcast before but like I said I've done one hundred and seventy two episodes the Odds are if somebody

28:52 heard it they can just fast forward this or they probably just didn't hear it but the year was early two thousand and fifteen and I was talking to actually at the time a prominent natural gas producer

29:03 based in Dallas and I was selling a dashboard this was a a dashboard it wasn't in Spotfire wasn't in and tablo or Powerbi I it was just a custom -built HTML five dashboard that had been implemented at

29:17 another natural gas producer and MLP at the time and basically this was a well profitability dashboard where they were taking accounting data right so actual accounting data from very RP system as a

29:33 pure Inertia Quorum or whatever it was they were taking their field estimate sorry their their field work date writes all of their daily report data and their costs associated with any job that was

29:43 performed then they had their forecasts coming from aires and they had their actual production coming from Marc Pro Count or what whatever they're bored you know Broadview or whatever their system was

29:54 that did their production dailies and also their invoice so you could drill down to the invoice right for every field activity that was there and you could go basically well by well right and and look

30:08 at the profitability of each well like what you're talking about and I had I think initially like ity it we sent out like an email or something and I T caught onto this and they said hey this kind of

30:21 something that our CEO has been asking for let's let's bring him into the room they brought him into the room This is this is over the web mind you so this was like a webex at the time I go to meeting

30:31 or whatever people used in two thousand and fifteen and CEO and I'm walking him through this route and I'm explaining it just sort of how I did to you but then visually showing the product

30:40 demonstration and I he goes this is grey what's the cost I said that for this it's fifty thousand dollars a year and he goes hang on a second and I think he meant a mute but he didn't and he looked

30:55 over at somebody on his team or I envision him and he goes that's one well like if I can get efficiency in this insight into one well and I optimize one well shut and you're unwell or focus more

31:06 attention on one well to increase production open the choke whatever it may be this is worth so he became back and he goes

31:15 it's only fifty thousand I Go I mean I can charge you more if you so desire I am not sure if the street would like that but it's like alright Funny Guy to send me a proposal so got the deal and it

31:29 ultimately worked out well. Now, the challenges, of course, came through the data 'cause the concept is the same as what you guys deal with. It's garbage and garbage out. If the data at the

31:38 source is still not trustworthy or consistent, nobody's gonna care what the dashboard has to say, right? So, yes, I love these conversations. You're definitely speaking my language. What are

31:48 the types of analytics that you guys do? Do you have that level of like well profitability,

31:55 like what are the data types and the key points? And I know you're dying to just pull up your screen. You can't do that. Sorry, Casey, but tell me, like what are the things that you're pointing

32:05 out that visibility into so that companies can be more efficient?

32:12 Well, we do a lot of daily analytics on daily production, looking at pressure trends, production trends, but really how it impacts cash flow So we have a company. load their own internal

32:26 forecasts and then we have an auto decline that Larry created that essentially basically looks at a, it's a constantly evolving forecast that is looking at the differences between the company's

32:40 forecast and actually what auto declines has and what it does is it quantifies those volumes. We're pulling in real-time pricing to tell you, hey, you no longer have to go look and see where you

32:51 spend your time. We do analytics on that We also do your typical reserve analytics, cash flow analytics on where the opportunities are, where you're currently losing money. We do emissions

33:04 analytics. We do monthly variances to forecast. So it's built to be, and our emissions analytics is very similarly to the platform. It's predicated on volumes, but it's really, it really is

33:18 there to tell you what you're leaking in dollars, not volume. So, if you have some sort of repair estimate, you can look and see what the return is. Again, it comes back to, what can I do

33:31 versus what should I do? What makes sense? And everything that you do arguably should make economic sense.

33:39 What do you got, Formula E, I know you got something. Jeremy, you know, many companies have not taken the next step

33:48 and

33:51 made their workflows more efficient. So for the first time in our lives, we have access to a large amount of storage capacity up on the web, up, excuse me, up on the cloud, computing capacity

34:04 that's become really cheap. But if they're still using the same workflows, they always have a having people do a lot of repetitive data, excuse me, repetitive work every day in the workflows It's

34:18 really an improvement in efficiency there that can be. eat pretty easily captured, and the kind of the idea is to throw those tedious workflows over to Avidair, let that crunch the numbers in the

34:30 middle of the night, and you come in the next morning, everybody in the company has access to the answer without waiting on someone to go get to their job and open up Excel or however they do their

34:39 business and to calculate numbers. So anything that can be just purely numbers driven and has to do with oil and gas cash flow estimates, that's the part that we focus on and try to make that part

34:54 easy for everybody. Well, you're really tapping into my oil and gas nerd data part of my brain right now. I could easily go down this rabbit hole for a ways, but a couple of questions, right? So

35:11 Casey, you mentioned taking into account like NIMEX strip pricing, right, which I think is obviously a good idea For whatever reason, it's not something I've seen a ton of if you talk about like

35:22 the true data analytics are reporting dashboards in oil and gas. Why I don't know, do you also take into account if a company has hedges, right? So for their particular view and insight into the

35:34 data, like a look at strip pricing versus their hedge versus the profitability, right? 'Cause their hedge will dictate the profitability and the economics as well. Is that something you guys also

35:47 pull in or is that like a different ballpark? No, it's not a different ballpark, but we just don't do it right now. Typically, Jeremy, we, every bit of our development since the beginning of

35:57 this year has

35:59 been something that's been requested by. Yeah, someone's got to ask you to do it. Yeah, if somebody says, Hey, we want to see, somebody said, Hey, we want to see an NGO

36:10 yield, and then pricing pulled by a Y-grade barrel or individual stream, that's our job, we go do it. We, like Larry said, for the small to mid-sized companies, we become their back office IT.

36:23 It's gonna be a lot more cost-effective for them to pick up something off the shelf like Avenue as opposed to building it themselves. No doubt. So are you a software company or are you a services

36:35 company or is a little bit of both? It's probably 90 software. There's a little bit of services that some of our customers pay for to participate on calls 'cause Larry and I have a deep experience

36:46 in operations and so again, it comes back to asking critical questions that sometimes somebody on the call is not wanting to ask because it's either their reputation, their job. So Larry and I will

36:60 participate on the calls and say, well, how did this happen? How did you get here? Does it make sense to do this? It's asking simple questions, but it's ultimately to get to the right answer.

37:12 There could be risk for some people professionally asking what could be deemed as a question that they already should have answered to you guys that your software could solve. So I get it. And I

37:23 think your answer makes plenty of sense. Should companies be asking to incorporate their hedge pricing? Yeah. Are they? No, they probably do something like that in a spreadsheet and take your day

37:35 as hard. But it's hard. Right, because it's hard. And you see a lot of that. People aren't doing things because they're hard And like Larry said, with near infinite cloud capacity and the way

37:45 our platform works, our job then is to create those solutions. If somebody comes to us and says, hey, we wanna have in your reserved dashboard, we wanna have the ability to lock in a volume and a

37:58 price on hedges and see how that impacts our cash flow. That's our job to go do that. And we do deployments every two weeks on new features So that's, we have a pop line of projects that we're

38:10 always working on. And we've got developers that are, that we pay that are full time with us. So we do deployments every two weeks, that's entirely, I mean, Larry and I typically are gonna know

38:23 the problems or we're going to understand the problem in order to go develop it on behalf of the customers. And the way our database works since it's cloud-based is if one customer asks for it, all

38:34 of our customers get the benefit of it. Right, I mean, that's true SaaS and that's the way it should be So just reinforcing what you're going for here. I want to go way back in my career to the

38:46 first tech sales job I ever had. When I first moved to Boulder, Colorado, 21 years ago, sight unseen, I didn't know really what I wanted to do. I wanted to make some money to at least pay for my

38:57 rent and cell phone at the time. Maybe occasionally be able to afford to, you know, go out to a brewery or something like that once a week, just make it through, eat enough food so that I could

39:08 survive to the next paycheck. But I got a job at a company called Left Hand Networks selling storage area networks that ran over IP. The primary competition at that point was fiber channel, which

39:18 was really expensive. The affordable option at the time was storage area network that ran over IP and for one terabyte of data storage, the cost was20, 000 and

39:32 you had to buy an industrial fan to blow on the box to keep it cool Now you look on your phone and a terabyte

39:42 of data is like299. So just to echo what you're saying, the ability and the access of cloud compute and cloud storage has made it easier to store mass amounts of data and do analysis on it quickly.

39:53 So you're riding the right wave right now. Yeah, one of the other things that we really, I think you asked about it earlier maybe is the architecture of Aveneer is

40:05 deliberate in that it's what we call a microservices. So everything that we see in Avinere, if there's updates in a service, we peel it apart, put it back together and redeploy it. We're not

40:17 rebuilding any of the architecture. It sits on a host framework, so that if there's new features and new products, new charting from some software company in California, we just plug it in and

40:30 then every customer gets a benefit. That way, we don't really, we don't accumulate this concept of technical debt We're always on the architecture, on the code, on the, I mean, we use every bit

40:43 of services we use as Microsoft Azure. And

40:48 so, you know, we're always staying up to date on cybersecurity, on performance, on storage, on all

40:55 of the components of charting inside Avenue.

40:59 Fantastic, yep. It's good to pick a horse and ride it, right? I know there's a lot of AWS and oil and gas, there's a lot of Azure, right? a little bit less Google Cloud.

41:09 Either way, these companies are gonna need to figure out how to power their data centers, which is a whole other conversation that we can get into it at some point, but that time is probably not

41:19 right now. On the emissions side of things, so I don't wanna get too far away from that, 'cause I feel like a lot of, at least funk futures, client base, and just a lot of what I see in the

41:29 industry as far as emerging oil and gas tech is around both the sensor technology, as well as the data, whether it be aggregation, analysis, or regulatory reporting around emissions. What does

41:44 Avineer do around emissions? Obviously, I know it ties in closely to production, especially as we're talking about natural gas, or oil that also spits off gas. But you mentioned emissions, and I

41:54 wanna get too far away from it. How does Avineer deal with emissions? So I'll take that one. You know, there's two types of emissions, even broadly classify them as such, as fugitive and non

42:05 fugitive I'm a fugitive. a mission is something just kind of happens in in life is what it is. But it's the non-fugitive emissions is the one that Avenue is focused on. And those are defined as

42:19 emissions that you almost purposely emit as a as a way of doing your activities. All right. So imagine you've got a well and you've got a need to put chemical down the backside whether there's no

42:34 electricity at the location. What you do is you use a natural gas powered monkey pump and it subs pumps and as it as this normal operation is designed to emit emissions to emit that methane. And so

42:50 what we do is we go out to the each location. We do an inventory all the devices, the tanks, the liquid level controllers, whatever whatever's out there And I'll contact the manufacturer and we'll

43:02 find out exactly how much they admit as a function of how they operate. and then we said then it because now you're back in my Wheelhouse You're You're back to math at this point so I go through and

43:13 take a look at their production and figure out how much their emissions are and because as we've mentioned earlier we're downloading the A W T I NYMEX prices all live in real time then I think we're

43:27 twenty MT delayed but we update a mere five minutes until you've always got real time pricing so I converted an emissions problem into a revenue problem into our R to a revenue question you know how

43:38 much our he admitted he was an AD up in AD buy inventory your emissions like that you're at the end of the month you're ready to go if you have any need for regulatory reporting you've already got the

43:50 volumes but invariably when when you when you show the numbers when people look at the numbers of how much money is being just vented because it's kind of invisible and will make epistle then all of a

44:05 sudden it becomes You know, rather than, you know, everybody getting mad at each other, it's like, okay, well, what would it cost to fix this problem and what would be our payout? And you

44:13 start to begin to have constructive conversations about it. So that's what we find interesting about the way we do emissions. No. Yeah. Bring it back to the math. And I like that. I think that I

44:24 want to see a little bit more of that. I know you guys kind of showed me a high level demo, but anyways, I'm going to shift the conversation a little bit here. I'm going to put you guys in the hot

44:32 seat. Maybe you feel like you've been on the hot seat for the last 44 minutes anyway But I'm putting you on.

44:39 So for both of you, right, and this is something I ask all my guests, what advice would you give to your younger self, knowing what you know now? So the 21 year old Larry Brazil, the 18 year old

44:53 Casey Patterson, you picked the age, the 24 year old, what would you tell them?

45:01 Well, I would say always think like an owner of a company, even though you may be an employee. if you're constantly thinking from the perspective if this was my company if I owned this company if I

45:13 was actually having to be arrived write the expense checks if I was really having to think about things like that I have found that that helps me think more clearly over my whole career is I how do I

45:25 answer a question is like a what really is the right answer as when when you when you think about things just as an employee sometimes you can kind of get off into some tourism thought processes that

45:36 that kind of make sense to you but don't make sense to the whole company and so that that'd be the biggest at Bicester My Allah I love that Nobody's given that answer yet but I I think it's incredibly

45:47 important from a career perspective ownership mindset versus employment status is very different and I think especially at a entrepreneurial small company whether you you have equity or not you have

46:00 to think like an owner and that can sometimes provide an internal challenge where you say well I don't actually own the company so I don't really need to think like an owner and I can think in terms

46:10 of self preservation but ownership mindset is something I look forward look for in in my resources and the ones that demonstrate that are the ones that ultimately do receive equity and ownership in

46:21 the company that it's not given right it's earned and it's something that I've had to learn the hard way myself where I thought I had an ownership mindset but when you boiled it down to it I had an

46:31 employee mindset ah how about you casey what do you think Yeah I would say I'd tell my Younger self to to be patient be curious be humble and then be willing to fail you know I think particularly as a

46:46 young professional I was I was more focused on reputation and and not wanting to fail and I think that you know that I really wouldn't expand my boundaries only because you're risking failure and I

46:58 think that came to you know some expense of soloing myself and Know I think if you're humble and you're willing to ask questions and say ten minutes lighter than everybody else looking at something

47:10 that you saw and being a really good investigator you know I think that that's going to propel you to greatness twenty or thirty years it's hard to see when you're young you know I get it but you know

47:21 if I was sitting here at myself and say look just just be humble be okay with failing and learn how to pick up the pieces and move on and learn from it because if you don't fail typical you're not

47:31 going to learn Yeah yeah like Yeah you Guys bring up the these are these are Great great thoughts and I sort of Wish Man if I could just put my brain or even better yet larry's brain since it's got a

47:46 few more years than mine in in somebody's younger so they don't have to learn by failing just so they can be a little bit more measured and have that level of patience and think like an owner it would

47:58 just save them so much headache and and heartache In the in the short term and especially in the long term but it's learned right experience experiences the best teacher and unfortunately failures

48:08 what teaches us some of our greatest lessons right to more hotseat questions rip what is your favorite restaurant in the DFW area so my wife and I We'd particularly like a a flavor of Mexican food

48:25 that is that you find in New Mexico Dinesh is different than the Tex -Mex though the Mexico we have in Texas was largely flavor by the Jalapenos but in in New Mexico is largely the flavor by the Chile

48:39 and it's really hard find that here we typically what will will y to go to Santa Fe because it's just full of good restaurants you know that serve good Chili Mexican food but there's there's one here

48:51 and in Arlington Texas that we particularly like Carla Benediction and so it's when you drive up to it it's kind of a hole in the wall It doesn't look very good, but they have really good Mexican

49:02 food. And so that's kind of our fight. We hit that at least. We're empty nesters now, so we do a lot of eating out. So that's kind of our regular rotation. It's on feel of a road, and I'll give

49:14 them a shout out for that. Well, Bennett Dickson, Larry came out firing on that one, Casey, I hope you have something good. No chance that Larry has one of the, we have a book of Larryism here.

49:26 One of them that he always says a lot is the only thing that his kitchen makes his reservations.

49:33 I like that.

49:35 Yeah, I would say my favorite restaurant is probably Silver Fox here in town, just right down the road from the office. I mean, it's just, yeah, I've never had anything bad there. I mean, I

49:46 consider myself a hamburger, or a cheeseburger connoisseur, but when I want to take my wife out for something nice, we go to Silver Fox and we've never been let down. It's always impressively.

49:60 would

50:02 love it love it and larry before I forget if you're ever in Denver I'll Take you to la Loma la Loma has the best Green Chile that I've ever had in Colorado get some of that New Mexico influence in its

50:11 food as well a little bit of the Tex -Mex from Texas but because I get that sort of New Mexican Green Chile Centric New Mexican Mexican food when I go to Texas I like to get the Tex -MeX

50:25 Final Question what does Avenir look like in three years five years ten years this is like one hundred million dollar company is this somebody that you're focused on going up market to to bigger

50:38 operators do you do you want to stay kind of lean and mean you know do you want to spread your products into different areas I don't want to put the answers in your mouths but where was this company

50:51 look like in three to five years all Iowa I'll go first I it looks different very different than it does now and And I think that there's a long-term development plan on the horizon. I believe that

51:06 oil and gas operators are gonna continue to have pressure to

51:11 kind of maybe arbitrage their product or

51:16 re-diversify their revenue mix either in from oil and gas in the Bitcoin. So what does it look like? It looks like a solution that tells you, does it make sense to put a Bitcoin miner here? Can

51:27 you imagine an oil and gas screen that shows declining production with increasing renewable electricity along with an electricity strip. So I look at it as becoming kind of an energy management tool,

51:41 an oil and gas energy management tool as we diversify as a society into a larger percentage of renewables as we grow. So I see what continued growth becoming a very, very big private company Don't

51:58 see us going public I see us being a very large private company through acquisition and also through further development of additional products that we already have identified.

52:12 That's something that Casey and I talk about on a regular basis, especially toward the end of the year and you make it plans for 2025. And so our vision is exactly the same. So in case you said it

52:22 very well. Yeah, I think it, go ahead, Casey. But I also think that, you know, what makes Larry and I founders and very good product identifiers and product developers is probably not what

52:34 makes us the best to really explode the total market for Avenue. And so in five years, I would say the executive leadership will still be involved, but the executive leadership is probably gonna be

52:47 somebody else who's younger who understands marketing and sales better than we do.

52:55 I just got

52:57 their sales Guy shut out air Tag I worked with them for our first sales guy that we hired six weeks ago well congratulations on that that is a big step and that's a very important hire I placed a lot

53:08 of those resources I've been that resource right I've succeeded and failed as that person so I I I get it this is really fun Guys and you know I think you're onto some good stuff I think you guys are

53:20 bright I think you've got the requisite drive to to make the company whatever you want to make it and I also think that I'll let you off the hook a little bit here that's a much easier question to

53:28 answer on December thirtieth than it is on July Thirtieth the June Thirtieth when you're like in the middle of the grind right like this actually is the time of year where you can reflect in place a

53:40 little bit of focus on on strategy versus just living and surviving in the tactical so I Wish I had a harder question on that but you Guys were too smooth with it where can people find both the you

53:51 and where can they find your compass I think the number of places at Avenue Dot com A V E n I R R e dot com there's information about Avenue there are products are solutions our customers a little bit

54:04 history about larry and myself individually and then any sort of any sort of contact or demo request information that that a that anybody wants to see

54:15 Avenir Dot com A V E N n I R E N I R R E A V and an I R R E A V E N I R r e Dot com R A V E n I R R e dot com sorry of tortured that that's why I It'd be interesting to hear where this name came from

54:39 we were trying to come up with a single word to describe our company and we went through everything in English everything in Spanish all the words were taken fifty years ago you know and so this for

54:49 the first time I actually understood why Google named their search engine something like Goo Because they needed a word that no one ever used before so they could copyright it so so I saw begin look

54:59 at other languages and then and noticed that there was a word in French called Avenir which means the future and I thought that's exactly what we're trying to create is the future way of running an

55:10 oil and gas operator said that the cast of the spelling out a little little different Magna I get that it may be French but you're speaking my language cause I just slap your daughters on the end of

55:24 it so not not too dissimilar but Yeah I hope the future is bright for you guys happy new Year and thanks coming on what the fuck are you Okay for your Time