Aug. 2018 – TechVibe Radio from Pittsburgh Technology council sat down with Andrea Passman, VP of engineering and development, CNX, and Kerry McQuone, Chief Marketing Officer, GrayMatter for this Q&A.
CNX and GrayMatter are co-innovating to use predictive analytics to find new efficiencies and increase productivity in CNX’s natural gas drilling operations in the Appalachian Basin.
Kerry: I think it’s a Pittsburgers-for-Pittsburghers story.
Andrea: At school, at CMU, actually. Being a petroleum engineer by background, I was going to CMU about two years ago to just get more up to speed. In the petroleum industry, we’ve been building neural nets and using machine learning and using advanced algorithms for quite some time. But the language has changed quite a bit. In the evolution of R and Python and those skills we see people coming in the door with those skills, but as a VP for a group I really wanted to fundamentally understand how do we leverage this technology?
I went back to CMU to try to learn about that, thank you Carnegie Mellon for helping me out, and that’s where I met Jim (Gillespie, CEO and founder of GrayMatter). He was one of the people in the class that brought another level to my knowledge and learning. I just reached out to him and said how do we take this to the next level? That’s when he told me about some other projects he had done in oil and gas, and then we had some specific case studies that we were looking at and that’s how he got involved.
Andrea: In terms of where we are with GrayMatter, what happens is every time a well goes down and it’s not producing an McF, 1,000 cubic feet of gas coming out of the ground, that means we’re not making any money, which is what we’re in the business to do.
And so we wanted to be able to predict before a well shut in. When a well shuts in the valve closes and no more gas comes out of the ground. And it can shut in for a myriad of reasons, operationally. The system is very complex out there.
What we did was we worked with their data scientists to try to understand and choose the algorithms that would let us predict when that occurred. And we were targeting within 50 percent of predicting when wells actually go down before they do, which is worth millions of millions of dollars to us a year…. It’s a significant change in our business model, and then that has allowed us to start stepping out of the box even more, and saying where else in our business can we now predict?
When you’re performing a frack job you can overpressure and the ground or the reservoir won’t take any more of that fluid. And at that point, you’re shut down again. And every time that happens, that’s $150,000 to us. It can happen a couple times within a year. And a lot of times it’s just human error, watching the nuances in the data.
And so working with companies like GrayMatter that can do those predictive analytics and help us prevent that from happening can help save us that $150,000 every time.
The other great thing about GrayMatter is they’re working with us to teach our own people how to utilize this technology and enable it.
Kerry: It turns the operators into analysts because they’re able to see everything on big dashboards. Instead of an email going to the team, they can see it themselves live – it breaks through the whole chain of command. It opens the door for everyone. And that’s what empowers those people to make better decisions and say, if we fix it this way maybe I could think of a new strategy. It helps them feel like they’re part of the decision.
Andrea: It’s proactive instead of reactive. Now instead of watching money go out the door, you’re preventing it from ever happening.
Kerry: That’ s a really big part of it. And if your operators become analysts then everybody moves up the chain and all of a sudden this money that you’re saving can fund innovation.
Andrea: Being an Alaskan, and with my grandfather having leases in the Cook Inlet, I did want to go into oil and gas. Colorado School of Mines recruited me from Alaska and from there I worked in Venezuela, I’ve worked in Malaysia, I’ve worked in South America multiple times, all over the U.S.
Eventually I found myself going back for an MBA and really around 10 years ago is when the data thing started really happening with unconventionals and shales. And so I joined CNX, formerly CONSOL, 4 ½ years ago to really help transform the company and really drive us toward that new technology. My job has really been to be a change agent to drive us toward that new Pittsburgh and really recreate CNX in this startup era.
We’ve joked about unicorns, but we’re building unicorns. We want engineers that are petroleum engineers, mechanical engineers and geologists that understand finance and what that means to the business and then the third key is that data piece. You would be amazed at the number of young professionals that are coming in already with R and Python skills. I know my alma mater, Colorado School of Mines, they integrate data analytics into the regular engineering program, just like CMU. It’s amazing.
Andrea: So we are just graduating eight young engineers out of our rotation program. They have been taught how to use R-Solver, some of them have some basic Python skills. We have seven petroleum engineers and a chemical engineer graduating from that program. They’re now looking for their first jobs inside the company. Most of them have been placed. We’re very excited about them.
And then we’ll start another program and we’re starting to actively recruit for that program again. And that program will kick off in the spring of 2019. On the website, people can go and apply for the program when it opens up. And we have a number of open positions always, but when it comes to an analytics background, that’s like a key-up.
Kerry: GrayMatter is hiring also. We’re expanding with an acquisition in Denver, so we’re all over the country and Canada as well, but we’re expanding here rapidly.
Kerry: It’s part of the same thing. We’re about what’s moving the world right now, which is this tech-energy combination. Tech and manufacturing, tech and water, everyone wants to be a startup in their own company and you can do it. We’re here to tell you, you can do it with a project – start with a small piece and then it grows into a whole new enterprise.
Andrea: And it’s great to have a local partner.
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