Recorded May 17, 2022
At Hart Energy’s DUG Permian Conference, Catalyst COO Seth Moore joins host Brian Walzel and panel partner, Megan Pearl, Director of Technology for Locus Bio-Energy Solutions, to discuss the technological advances of VortexPrime™, the impacts of innovation on ESG and the evolving trends across they are seeing in the energy industry.
Watch the video here:
Seth Moore, Catalyst Energy Services at 9:43
Relevant links:
Seth Moore
https://www.linkedin.com/in/seth-r-moore-1b02908/
Megan Pearl:
https://www.linkedin.com/in/megan-pearl-0b2ba88a/
Brian Walzel:
https://www.linkedin.com/in/brianwalzel/
Transcription:
Brian Walzel:
Closing out the day, we’ll hear from two service companies about some of the latest trends in technologies seen on the frac site. Joining us here is Dr. Megan Pearl, Director of Technology for Locus Bio-Energy Solutions, and Seth Moore, Chief Operating Officer for Catalyst Energy Services. So please welcome our panelists and thank you. And first up here, this is Megan Pearl.
Megan Pearl:
Hi everyone. Thanks for sticking around. I know that it’s late in the day and some of y’all have had a really long day here. This is my first time up here and you all, I can barely see you. It’s so bright. So I think there are a few of you in the audience.
Megan Pearl:
I’m going to take a few minutes today to talk about some of our industry challenges we’re facing in an increased need for domestic oil production, a growing energy demand and new SCC guidelines and regulations related to decarbonization and carbon emissions reporting. Now it’s no secret that increased production is going to be heavily driven by Texas operators in the Permian Eagle Ford. And although ESG has been all the rage for the past three to four years, the Russian invasion has made energy security a top priority, but to quote Mark Carney in a recent interview he had with the financial times, the climate doesn’t care where emissions come from, so to slow down or lose this momentum, this ESG momentum that we’ve been gaining and building in the last couple of years, would essentially be to lose all of the progress that we’ve made so far to start over. Which means that we need to find ways today that we can increase production in a more environmentally conscious manner. And one of those ways is to opt for environmentally friendly chemical solutions like Locus Bio-Energies, biosurfactant based treatments. We use sustainable, renewable, domestically sourced, raw materials, like canola oil and sugar in a carbon neutral fermentation process to create naturally occurring biosurfactants. Now, in case you lost count of all of the buzz phrases, I was able to squeeze into that single sentence. It was five.
Megan Pearl:
At Locus Bio-Energy Solutions, we have seen an average of over 40% increase in production. And this is over 300 case studies that represent both conventional and unconventional, sandstone to carbonate, and shales in the Permian, New Mexico and the Bakken. We believe that with our chemical solutions, we can help you get more out of your new and existing assets and extend the life of your current assets. Now, if I were a professor, this is where I would stop and wait for someone in the class to say, but how, and if I were a salesman, I would prompt you by saying, but how you ask. But, I’m a scientist, so I’m just going to tell you. So we know that there are primarily two ways to get increased production, drill a new well or breathe new life into an existing well, so let’s look at an example of drilling a new well. A 50 stage Permian frac would take about 100,000 gallons of diesel, lots of trucks, lots of days, lots of CO2 emissions.
Megan Pearl:
And if you are really eager to offset your carbon footprint from completing this single well, you would have to plant 390 acres of trees. I’ll say that one more time, 390 acres of trees. So I hope you really like planting trees, or you got a lot of friends. Now let’s compare this to a restimulation with one of Locus Bio-Energy biosurfactant based treatments. In this particular scenario, we’re looking at one truck at the well site, just long enough to deliver the chemical. This greatly reduces your carbon footprint. And now you can, you can offset your carbon footprint by maybe a corporate team building event one afternoon, planting trees together, but what’s more than reducing your carbon footprint is you’re also greatly reducing your water consumption by taking this approach. In fact, you’re using less than 2% of the water to apply our chemical solution to revive an existing well and compared to completing a new well.
Megan Pearl:
So let’s recap, smaller carbon footprint, less water usage, less fuel, fewer trucks, fewer people, less time. Well, gosh, this is sounding like an awful good solution, right? It sounds like it’s a right step for environmental and budgetary compliance. But remember the objective is getting more oil. So, do Locus Bio-Energy biosurfactant based treatments actually help you get more oil? I’m going to review two case studies. But as I mentioned, we have over 300 and myself or one of my colleagues would love to talk to you about some of our products and some of our additional case studies. Our first case study is Wolfcamp A Frac in the Delaware Basin. And on this trial, we applied .5 gpt of one of our biosurfactant based treatments from our sustained product line. And the operator chose an analog on the same pad for this particular comparison. This analog well was treated with an industry leading premium microemulsion. If we compare the cumulative production after 12 months, we see that the locus treated well has 28% more oil produced and 34% more gas produced compared to the analog well. Why does this matter? It’s important because we treated our well at one third the dosage rate of a premium product with a premium price tag. So with, with our products, you’re getting more for less.
Megan Pearl:
The second case study is also in the Delaware Basin, but this is at Bone Springs Well and the application was slightly different for this job. We used one of our biosurfactant based products from our stem line, and it was applied in an EOR rigless intervention, bullhead treatment. The pre-treatment daily production value was at 25 barrels a day. 100 days post-treatment we increased that to 54 barrels per day, and that is a 116% increase in oil production in that first 100 days. What’s interesting is that in the first 30 days of flowback, this particular operator saw big paraffin slugs, high density fluids and other solids coming out of the reservoir. And so we refer to this first 30 days as a reservoir cleanup period. And this is evidence of the multifunctional nature of our biosurfactant based treatments. Yes, they are surfactants.
Megan Pearl:
And so they contain all of the functionalities that you would expect out of a surfactant, but they also inherently have the ability to dissolve organic deposits down hole, like paraffins, asphaltenes and scale. So you’re getting two chemical functionalities with one delivery package. Now the operator was actually very pleased with these results and chose to treat two additional wells on this four well pad. And so if you look at the figure in the bottom corner, we actually can compare the full lease production over 16 months. And of those four wells three that were treated with our product after 16 months, we still see an increase of 28%, um, over the forecasted values. And you can see there that that decline, right, we have permanently changed that decline reign. So I want to keep it short and simple because I know you all have been here for a long time, and if you didn’t tune out to me already, or if you missed everything that I, I just said, then please remember this green chemistry used to mean high cost and low performance, but those days are gone at Locus Bio-Energy. We actually deliver high performance, multifunctional, economical products that help operators get more oil and meet their ESG goals. I know that we’re going to, we’ve got one more talk. And so after this, we’re going to go to the Q & A session, but Locus is also sponsoring a lounge area where I saw they already moved the refreshments to so you can find us there after all of this. Thank you.
Brian Walzel:
Hey, thank you, Megan. Next we have Seth Moore, Chief Operating Officer for Catalyst Energy Services.
Seth Moore:
Thank you. I know we’re in the final stages and I’m the person standing between happy hours. So we’ll run through a few things, we’re going to talk a little bit about Catalyst, but a lot about our technology. We’ve got some exciting technology that has a lot of implications for ESG, but just as important about saving money on the daily operations. You mentioned the 90 plus thousand gallons for fracking 50 stages. And we’re going to talk about that a little bit. So my partners – shout out to them, Mr. Bobby Chapman and, and Mike Morgan – we started Catalyst four years ago, been a, been a great experience and we got to see the highs and the lows, uh, prior to COVID and now we’re coming out of it strong. So it’s been, it’s been a great experience. Over a hundred years of experience between the three of us.
Seth Moore:
So we’re a new company relatively speaking, but we’ve got a lot of history with some of the large companies and small companies, several startups, and a long history in the pressure pumping. We started off Catalyst, safety first, making sure that from a DNA perspective we laid a foundation to become API Q2 certified from day one. That’s a long process, especially for a small company, but it’s produced a lot of great results so far. Our safety record has been excellent. I’m always scared to mention that, but the guys do a great job guys and gals that we have, and we built this company to be a technology company with the idea that we’ll talk about, the results of in a minute, but we started off with that in mind. Some of the challenges today that frac companies experience are, you know, the formulas of balancing, you know, CAPEX and, and OPEX, and, and really returns to investors.
Seth Moore:
And what we saw in the last few years was ESG pop into that. And our CEO likes to say that what we’re doing now, checks all the boxes. And we’re excited about, about that, what that means. So what we did is we took an aero-derivative, military-grade turbine, and we designed this in-house ourself. And we connected that through a drive train, and we power a quintuplex pump with that. We built our own controls, our own air filtration. We built the units inhouse. We kind of ripped a page out of our past with a, a big red company that did that. And we thought, well, we can do that. We’re small. It allows us to control this patent pending IP, and it allows us to manage the supply chain better. So that’s what we’ve done. And it’s called VortexPrime™. Real cool name, I’m sure some of you may have heard of it. We have a little quick video.
Seth Moore:
The exciting part about VortexPrime™ is it’s no longer conceptual. We have these units in the field. We went through a lengthy field trial process, and we’re commercial with this technology since February. One of the things you hear today with several of the speakers is that less is more. And when we started the conceptual design for VortexPrime™, we looked at the current frac environment. And how do we impact that formula? How do we change something meaningful? And one of the things was can we shrink the number of units? Well, the frac campaign requires a certain amount of horsepower. So if you’re gonna do that, you’ve gotta densify your horsepower. And we were able to do that. We replaced a 20,000 pound engine with a 1200 pound engine that makes twice as much power that allows us to shrink the number of units because it’s lighter and smaller – we can shrink the footprint of each unit individually and make them more agile and more mobile. When you do that, you need less people. Somebody asked me today said, what’s your, what’s your biggest you know, bottleneck on growth at the moment. And of course everybody here, supply chain and long lead time items, but honestly, it’s people. So if we can go to location with less people and require less people, uh, there’s an advantage to that, less waste. A conventional fleet is some of you may know, requires thousands and thousands of gallons of fluids, of both oils and lubricants and coolants that this VortexPrime requires quarts of something in the neighboring of 97 plus percent waste stream reduction. It’s off the scale. We had to check the formulas. We didn’t believe them when we put it in, but it’s just, it’s just that impactful, fewer trips, less pieces of equipment to move, you know, better stewards of the environment where we are. So less trips through school zones, less wear and tear on roads. So really happy with that. This shows a depiction of kind of a conventional location with maybe 20 pumps versus eight of the VortexPrime™, a significant reduction. Someone asked me today, well, what about some of the other basins? We’re a Permian based company. It’s where we started and it’s where we are. And we said, absolutely. If you’re on the side of, of the mountain somewhere, you’re fracing in someone’s neighborhood, this is technology that’s ideally suited for that.
Seth Moore:
I spoke a little bit about the emissions and waste, and there’s the cost of buying all those fluids and transporting those fluids and changing those fluids. There’s also the environmental side of having to dispose of them and recycle them and make trips to get them to their, their final place of disposal or recycling. So that’s a big advantage, the 40% lower emissions we’re replacing today. This technology can replace significant amounts of liquid fuel when compared to conventional technology. And it’s significant, better emissions savings on burning natural gas versus burning the diesel. We’re looking at replacing maybe 14, 15,000 gallons a day of liquid fuels with this technology.
Seth Moore:
Real quick setup time, you’re moving eight. We think we can move a full fleet of these in 12 hours, maybe less, maybe eight hours. So that’s a pretty big impact compared to a conventional fleet today. We’re able to shut down, go to complete shut down and start back up and go to complete horsepower in under five minutes, we’ve done it in under four. That means we don’t have to idle our engines. We don’t have a four hour bake period. We’re able to start these and stop these at will. And that has a significant impact not only on operating cost and engine life, but also emissions. Our safety director likes to say, we make a lot fewer connections. One of the most dangerous things that we do aside from driving is rigging up. It can be dangerous in terms of back sprains and twisted knees and finger injuries. And we have a lot less of that to do so there’s that advantage. We’re a young company, but since inception, we’ve, we’ve racked up a pretty good history. These statistics, anytime you publish them, you always risk them being a little bit dated. And these certainly are, but we’ve been around and, and we’ve got a great organization for this exciting technology.
Seth Moore:
I ran through this. I know we’re at the end of the day, and I didn’t want to hold you guys any longer. I will be glad to answer questions at the end in the question area. Um, thank you so much. Thank you, Hart and Brian, thank you guys for having us here and look forward to talking to anyone afterwards.
Brian Walzel:
Thank you, Seth. We do have a few minutes for Q & A here on stage. If you like join us here. Thank you again for that presentation. One of the things that you had talked about, Megan was the two challenges that operators face needing to increase production, but also applying with new ESG rules, SEC possible changes. How do operators do both?
Megan Pearl:
Yeah, so I think that the natural instinct is to just make something new, right? People like new shiny things. But there’s a lot of old assets that maybe you don’t pay attention to anymore that have been on the decline and that they’re not very impressive anymore. And so we like to take the approach that we can revive those old assets by applying our chemical solutions. And again, that has a lot smaller carbon footprint than completing a new well, but also our chemical solutions are sort of ESG friendly as well. So you’re getting more bang for your buck. You’re achieving more from a budgetary standpoint. And also from an ESG standpoint.
Brian Walzel:
I see. And Seth, last week we talked during the Catalyst webinar and got to know the company a bit and about the technology and some of the questions during that webinar from the attendees, a lot of those were about horsepower. So that’s something that’s front of mind for a lot of people. First, how does Catalyst’s system compare to traditional fleets in terms of horsepower? Additionally what are some of those pressure pumping trends that you’re seeing at the frac site right now.
Seth Moore:
There’s name plate horsepower, and then there’s actual horsepower. So they’re not always aligned. What we’re doing with VortexPrime™ is we’re able to get really close to and up to equal to that name plate horsepower, which helps us utilize less units. I think the trend you’re gonna continue to see is a switch from liquid fuels to some amount of natural gas. It’s better all around. There’s a savings. There’s the first “E” of ESG, right? The economics of it that typically have to occur. Um, I think you’re gonna continue to see that trend. I think more and more companies are buying into that and into how do you get away from burning liquid fuels.
Brian Walzel:
And Megan, with producers looking to control expenses even in an environment with higher oil prices, enhancing production on existing rules really has become paramount. How are strategies like wellbore remediation and paraffin control, which I believe you mentioned, really helping to increase production?
Megan Pearl:
Yeah. And I think in the case study that I showed in one of our trials where the first 30 days we refer to as sort of a reservoir cleanup phase, what we see there is that in, we saw an initial increase in production, followed by a decline. And that was when we were sort of cleaning out the wellbore, after that we saw an enhancement of an already enhanced production. And so I think that it’s really important to think about the situation downhole and what is impeding your oil from actually flowing to the surface. Right. And so the more that you can sort of care and tend to, and maintain the quality of your reservoir downhole, the more oil you’re gonna get out. Okay.
Brian Walzel:
And Seth, thinking about the frac job itself, what trends are you seeing in terms of lateral length, the number of stages and stage spacing, has industry sort of landed on the right recipe or is it continuing to be the more, the bigger, the better?
Seth Moore:
I think we’ve seen across the spectrum of operators, you see a wide degree of philosophy on what’s better. We come in and we rig up and we do our thing, and oftentimes we don’t hear, we don’t have the great data, like, like you do to look at trends over time. I’d love to see that. I think that, we are seeing more sand per foot. We’re seeing that trend, it seems to be there. I listened to one of the presentations earlier this morning and we’re, we’re not seeing quite as long laterals. Maybe we’re seeing those kind of cut in the middle, they’re not short, not long. Maybe the middle ground is better. I’m unsure how to quantify that really, but I think that’s what we’ve seen maybe kind of across the board is an overarching theme.
Brian Walzel:
Last question here for the, both of you, we’ll get everyone off here to the happy hour. In your view, and Megan, I’ll start with you, what are some trends or technologies or applications that you think people should be on lookout for, perhaps even outside of some of the products you’re offering. What’s on the horizon that might not be widely applied yet?
Megan Pearl:
Yeah, so we are rapidly developing additional product lines that we’re very, very excited about. So of course we have your traditional reservoir treatments like surfactants. Then as we mentioned, paraffin dissolvers and asphaltine dissolvers, but we also have some, some salt water disposal injectivity aids that we’re working on. And I think that that’s a really new, exciting, area that we really need to focus on. You know, there’s a lot of water that is produced per well, and it’s all gotta go somewhere. And so if we can help you get more water into each disposal well, then I think that that’s a win for everybody.
Brian Walzel:
Yeah. And final thoughts on, on emerging technologies from your perspective.
Seth Moore:
Yeah. I think we’re, we’re really just getting started. We’ve got things on the drawing board as well. If you look at fuel consumption on a frac location, about 93% of that goes to hydraulic horsepower to put sand in the ground that other 7%, we’re looking at that, how do we replace that with natural gas? How do we, um, you know, what technologies can we create that go after that final 7%? So that’s what we’re focusing on – constant innovation – and you know, trying to get liquids out.
Brian Walzel:
Okay. Well that concludes our conversation here with Seth Moore of Catalyst and Megan of Locus Bio-Energy Solutions. So I wanna thank both of you for your time and your insight.
About Catalyst Energy Services
Catalyst Energy Services started with the idea that technology is the key to the future. We take the stewardship of preserving our world’s resources seriously and are dedicated to constantly innovating our sector of the energy industry to achieve cleaner, safer, and optimized production. Built by an accomplished executive team with over 100 years of hands-on experience in the field, engineering, and business management, we are an emerging stimulation service company specializing in hydraulic fracturing treatment.
