In Episode 26 of The Energy Question, David Blackmon interview Armand Paradis, the founder and CEO of energy technology and intelligence firm ComboCurve.

In just 3 years since its founding, ComboCurve has grown to over 170 employees serving over 250 companies. The company’s goal is to every energy professional’s life easier and more transparent by using and refining data from a broad variety of sources into forecasting tools that enable them to identify and deal with risks before they happen.

Armand is a brilliant and very entertaining guest who brings a wealth of real information to the table.

Enjoy.

The Energy Question Episode 22 – Armand Pradis

David Blackman [00:00:03] And. And hey, welcome to the energy question with David Blackman. I’m your host, David Blackman. And my very special guest today is Armand Paradise, the CEO and founder of Combo Curve, an energy analytics, that analytics firm based in Houston, correct?

Armand Pradis [00:00:26] Yes, sir.

David Blackman [00:00:27] Yeah. Well, thank you so much for doing the show. I really appreciate it. Before we get started with the Q&A about your business, just tell me a little bit about your background and how you came to, you know, have the idea of creating this company.

Armand Pradis [00:00:45] Absolutely. So, David, thank you so much for having me and I really appreciate your time. So, yeah, all my career has been in the energy industry. All my education has been in the energy industry as well. So, um, I graduated from the University of Louisiana and then I started to work for a small operator for five years or so and, and I learned all aspects of running an oil company from studying all the logs and the subsurface and the reservoir and, well, data and all the way to go into the field during the operations and working with the rec hands and the designing drilling and workover programs.

Armand Pradis [00:01:27] So, um, so I did that for roughly five years and, and then I decided to move to Houston and basically working for larger operators and learning how they run in their business. And I started to work for Statoil back then or Equinor right now. This is 2014.

David Blackman [00:01:49] Yeah.

Armand Pradis [00:01:50] So, um, so, and, and then, so I started to work for and Marcellus and Utica. So then we had roughly 3000 wells and operated and non-operated and, and in what I realize is the sheer amount of capital that we are spending every day on the, on the lot of non-op wells and a lot of operated wells. And, and this was happening during the like. This was the only shale boom. So every operators were spending money like crazy just keep drilling.

Armand Pradis [00:02:23] And what I realize is like we are spending capital but we don’t have enough analysis behind it in a lot of cases. And the back then was very justifiable because the operators were learning they had access to a lot of capital and it was good times always roughly 100 and that’s your gas was roughly around four bucks three or four bucks.

Armand Pradis [00:02:50] So they were making money and even immediate cash. Well, wasn’t it was able to pay for itself and make some additional return. And but what I saw was something that is not sustainable in the long run. And a lot of it was due to using a lot of outdated and archaic software.

Armand Pradis [00:03:11] And so running an energy company is very complicated so you’re making very big decisions every day, very expensive decisions, very CapEx, heavy decisions, and that you’re dealing with and a lot of decisions that is not tangible. You drill and well 10,000 feet below the ground dealing with high-pressure environment depleted. Well, interference, fracking, you know, it just it was just complicated.

Armand Pradis [00:03:42] So and that was when I saw those, uh, when I saw those, the way that we were making a lot of these capital decisions, it just gave me an idea that this process needs to be materially improved to make better decisions longer. So yeah, that was the whole idea. That’s why the whole idea behind Comicon started back then.

David Blackman [00:04:03] So tell me, tell me what the concept behind Combo Curve is for our readers, our readers, our viewers. Sorry, I’m used to writing stuff. You know, just tell us what the basic concept behind combo curve is.

Armand Pradis [00:04:19] Combo Curve. So any company, any companies involved in the energy space, they need to figure out how much reserves they have, how much production to have. So an oil company makes oil and gas and they sell oil and gas and that’s how they make money, obviously. So.

Armand Pradis [00:04:37] So to predict how much oil and gas they’re going to produce next month, next year, next year’s next 50 years, and figuring out the cash flow associated with those volumes, you need to do forecasting and economics. So production forecasting and economics.

Armand Pradis [00:04:57] So that’s what Comcast sells at its core. And but it requires a lot of bells and whistles around the to have a comprehensive solution. So so that’s what Combo Curve allows you to do, basically forecasting your oil and gas production and performing detailed economics. And recently we advance to GSI or carbon forecasting as well. Just another way of forecasting and make that integrated with the rest of the forecasting to make a more comprehensive asset valuation.

David Blackman [00:05:31] Yeah. And this is becoming, you know, as, as you say, the the industry itself, as time moves ahead in not just the industry itself, but the whole environment around it with regulations and ESG and energy transition and, you know, all these other considerations, everything is becoming increasingly complex, really almost every day. Every day.

David Blackman [00:05:57] And when you’re running these companies, it becomes so critical, even more important, right, to have up-to-date data, up to up to date analytical tools to to to use that data properly. Right. I mean, I you know, I was just talking with a fellow I knew way back in the 1990 who told me an anecdote about Exxon Mobil down in South Texas.

David Blackman [00:06:25] Another company had drilled a very prolific natural gas well on acreage adjacent to their acreage. And six months went by before Exxon even knew that well had been drilling completed. And the company estimated that that lack of knowledge about that cost them almost a quarter of $1,000,000,000 before they realized what was happening right next door. And so it’s stories like that. I mean, that’s a that’s a real outlier kind of story. But, you know, it’s there’s a thousand anecdotes like that in the oil patch.

Armand Pradis [00:07:02] Absolutely. And, you know, again, every day we’re drilling a sheer number of wells and very expensive wells, and the amount of data only increases exponentially. And however, a lot of software that we’re using to make a lot of financial decisions, it was designed 30, 40 years ago. Right. And they cannot even handle that amount of data. And they are not designed for that detailed analysis.

Armand Pradis [00:07:28] So it just tells you that technology vividly lacks. And like from when I opened up some of those offers and the first day and I figured, man, I might traveling back in time. So this just doesn’t make sense. And I guess it was it was that big of a shock to me that why are we even using this? It just is so difficult.

David Blackman [00:07:52] Yeah,.

Armand Pradis [00:07:52] So, so combo stone. And into this day and age, this is not appropriate to keep using these tools. So especially when you’re making multimillion-dollar, multibillion-dollar decisions and you need to have access to best and top technology to make those decisions.

Armand Pradis [00:08:09] So yeah, I’m 100% and I’m not surprised and this is not a lot of those anecdotes exist every day because of the lack of technology. The technologies are very behind and is very hard evidence. There’s plenty of room to build in the energy space.

David Blackman [00:08:28] Yeah. And your company has grown pretty rapidly, right? I didn’t. I read that you have 170 employees now. Is that is that the number I saw?

[00:08:37] 150 getting we have roughly we have roughly ten or 15 positions open, so we are not too far from under 70. So so yeah, we are officially the fastest growing energy technology company in the world. And there we grew to 250, 450 personnel in just two years and have just released in our product and we released that in May 2020 during the height of the COVID.

Armand Pradis [00:09:04] So and then of yeah, it was the craziest time to release any product and the negative oil prices and everything.

David Blackman [00:09:13] Yeah.

Armand Pradis [00:09:15] Yeah it was tough times but in the course of a. One-half years brought roughly 300 companies using our products. And if some companies from one match up to two companies like Exxon level, so very large. Operator.

Armand Pradis [00:09:30] So we have the full spectrum and, and all types of clients within the energy space and the subsectors like from banks or banks, auditors and operators, mental shops and consultants and all using complex.

David Blackman [00:09:48] That’s amazing. You also have this data integration tool that I’m very interested in learning about. Combo sync.

Armand Pradis [00:09:55] Yeah,.

David Blackman [00:09:56] That and you’re able to build connections into companies like Enverus and IHS and Mongo and Oracle to also integrate data from those platforms into your tool. How does that tell me how that works? Do you have to I mean, I assume you have to have license contracts with all these other companies to be able to do that, right?

Armand Pradis [00:10:20] So when we when we build combo curve, so you started to figured we all need data to run the analysis. So we give the capability of uploading electricity as the upload and. And then we soon realized we need to be able to make that data pipeline more automated. So being able to connect companies data and pull data.

Armand Pradis [00:10:43] And so we build the rest API layer, they call us. So it just enables interacting with Combo Curve through the backend side of the platform. So we build that layer and then and then we realized soon after the maturity of the companies, they have trouble managing that data and then building those connections and that and the figure two, To enable this data transfer, we need to have a data team in-house.

Armand Pradis [00:11:11] So we put a data team together, we put a team of roughly 25 people together. We brought the top experts. So we spent almost a year and a half building a lot of data connections so we can pull data from your internal databases and then bring it in to Combo Curve and run the analysis and send the analysis back to your database.

Armand Pradis [00:11:34] So so yeah, it was a very, very comprehensive big project and we’re constantly improving it, constantly adding more and more data connections. But it’s pretty cool. You know, we had cases that we made a connection happens live and like in 10 minutes. So we were able to send and receive data, which is, which is pretty cool. Like those types of connections before Complicated Thing was taken like months to build sometimes.

David Blackman [00:12:01] Oh my gosh.

Armand Pradis [00:12:02] Yeah. So we made that process a lot more automated.

David Blackman [00:12:06] And this is something obviously that was not even would not have been even possible to do even a decade ago. Right.

Armand Pradis [00:12:15] Yes.

David Blackman [00:12:16] With the yeah. With the amount of data and upload and download speeds, you would have to have to accomplish all this. The advanced technology is really been pretty amazing in this century.

Armand Pradis [00:12:29] Yep. I mean, the advancement in data technologies is just mind-boggling. And, and, and the thing is, like a lot of internal companies, teams, they can literally catch up because.

David Blackman [00:12:43] Right.

Armand Pradis [00:12:44] It was in super fast so. So that’s why we see a lot of companies run into data management issues, you know, So it’s not an easy problem to solve and it’s not going to be easy. Problem solved is only going to get more and more complicated.

David Blackman [00:12:59] Right. So so in with the pace that everything’s advancing for a company like yours, that means you can never stand still. Right. You always have to be evolving your own product offering, right?

Armand Pradis [00:13:12] Absolutely. Like, you know, two years ago, we had 20 developers. Right now we have 75 developers. So and we have to constantly maintain our product, constantly adding features and capabilities again and making oil. You know, it gets easier. So you always dealing with, you know, it easier.

Armand Pradis [00:13:33] So you dealing with a lot more infill drilling and you industry lost more than 50% of its personnel. There are not that many new students going to petroleum measures. And it means the only way they can keep to keep growing your production at the same pace or keep in a flat, you need to have access to the top technologies, you know,.

Armand Pradis [00:13:55] And then also meet new requirements from government around reporting a lot of them requires you to report actual measured data for measuring them. Is the amount of data that is going to be generated is going to go up exponentially because you have so many devices in the field that you need to capture data from.

Armand Pradis [00:14:17] So it’s just a lot of things are for the better, like it forces companies to be more advanced and then looking into their data a lot more carefully and to make better decisions. So yeah.

David Blackman [00:14:31] Yeah. So that brings me to the combo carbon aspect of what you do this greenhouse gas emissions forecasting too. I know, I know. There are a wide range variety of sensors that companies are using now to try to monitor their emissions on each of their well sites and other facilities. And I assume that that combo of carbon enables them to integrate the data created by all of those into a single database, you know, to facilitate the analysis. Correct.

Armand Pradis [00:15:09] Yep. So that is one of the offerings. And again, it will be done through complicated things similar to all the other data that we are capturing for running production, and forecasting economics. We have to capture a lot of data related to emissions so companies can do their emission forecasting combo. So.

David Blackman [00:15:26] Right.

Armand Pradis [00:15:27] So similar to reserve forecasting, we have to do our carbon forecasting, meaning how much emission I have now and how much emission I’m going to have a year from now, two years from now, ten years from now. So, so, so a lot of promises that the companies make to their investors in terms of reducing their emissions and getting to net zero. You have to substantiate those goals with some real analysis.

Armand Pradis [00:15:56] So what Combo Curve allows you to do combo carbon allows you to do is take taking all the data from so many disparate data sources into one nice, clean, unified place integrated with the rest of your data. For example, your production forecasting, the day type curve, a schedule and planning and economic data so you can make more comprehensive decisions. And so and you can substantiate those promises better.

Armand Pradis [00:16:24] So you can run so many scenarios of carbon reduction, the bottoms up. We can build a mockup of your facility diagrams and the network models of your field, and then you can model things like if I change these separated from this type to this type, how is it going to impact my emission from my field.

Armand Pradis [00:16:48] Or if I if I go ahead and instead of flaring gas at these locations and instead of that just capture that methane and just sell it? How’s it going to impact my emissions in five years down the road? And how and what’s the economic impact?

Armand Pradis [00:17:05] And a lot of those cases, the economic impact can be very positive. But complicated is the only tool that integrates the emission forecasting with the economics. And so you can really figure out those scenarios of the it gives you positive economic return and at the same time reducing your emission.

David Blackman [00:17:25] So you talked about the challenges that the industry serving with, you know, sourcing talent these days, kids not majoring in petroleum engineering. Couple questions along that lines. Your company is probably seeing the same challenges.

David Blackman [00:17:42] I mean, you have to have. Scientists, you know, I mean, engineers and geoscientists on your staff too, right. So I assume you’re having seeing the same kinds of challenging challenges that the industry is seeing.

Armand Pradis [00:17:59] Yeah. I mean, the good thing is we hard at a time that nobody were hiring, so we hired in 2020, 20, 21, 2022, and we hired we have staffed up our personnel, you know, for for at least a year. So this year we’re not going to have a ton of hiring left.

Armand Pradis [00:18:17] But and our strategy was we were looking because, you know, we were so pro technology and so and so caring about about the industry. So a lot of people we joined us. They came they came from the industry, their parents that were in the industry.

Armand Pradis [00:18:36] And they took a lot of pride in making the industry better. So so yeah, so for us, honestly, it wasn’t a challenge to get talent even from outside the industry wasn’t, it wasn’t a challenge because our goal is to make energy industry more efficient.

Armand Pradis [00:18:54] So and, and efficiency means and cleaner productions and, and, and more economic like you’re not going to make bad decisions. And bad decision means it means basically, literally that translate to more emission longer and less cleaner fuel for the for the industry in total. So a lot of people who cared about these things joined us to just to help the industry to make better decisions and that produce cheaper and cleaner energy.

David Blackman [00:19:31] So our discussion today, what wait, first second, the second question I had related to workforce. When you see this generation of college students avoiding petroleum engineering, avoiding these oil and gas-specific professions, do you look at that as kind of a missed opportunity for those folks? I mean, I when I look at the landscape facing us, I see the oil and gas industry being around for quite some time in a pretty healthy state, don’t you?

Armand Pradis [00:20:08] Absolutely. Yep.

David Blackman [00:20:10] Yeah. And so it just feels like a missed opportunity to me for these kids.

Armand Pradis [00:20:15] Yeah, I mean, definitely. I mean, but, but and this is, this is the problem, in my opinion. Um, we have a part in it too, as industries. So yeah, strictly energy companies weren’t able to plan very well because of the same issues that I mentioned,.

Armand Pradis [00:20:33] Like at the time that oil price was high. Getting super excited. Let’s go hire a ton of people that go drill a ton of wells. Right. And then, and then the moment the oil price drops by $20 and $10 and let’s go fire 30% of the personnel. So there’s just overall.

David Blackman [00:20:50] Exactly.

Armand Pradis [00:20:51] Not a lot of great planning and that the bad image. You know so and and and so that’s one of the key factors. The other factor is like overall, we haven’t done a good job of marketing ourselves very well. Like, oh my God, a lot of a lot of oil and gas companies do a lot of great initiatives around being just conserving the planet and doing a lot of great things and emission reductions and making sure we’re producing cleaner fuel.

Armand Pradis [00:21:23] Oil and gas in the US is is one of the cleanest oil and gas in the world. So like you mentioned, we need oil and gas for the foreseeable future is a transition or let’s say is expansion in some cases.

Armand Pradis [00:21:37] So, um, we haven’t done a good job of marketing ourselves. We stayed quiet for quite a long time and we still stay quiet. And there is a massive propaganda against oil and gas industry as well. So all these things combined, it means less and less people are willing to go to petroleum majors, which I honestly and if you if you think about is isn’t to me is not a crazy problem because at the end of the day, we can train a lot of engineers to learn how to work in the energy space back in 2000 nineties and a lot of those we had roughly the same issues, but at that time it was because of low commodity environment. It wasn’t because of the all these propaganda was against oil and gas.

Armand Pradis [00:22:26] So back then a lot of chemical partners, chemical engineering department and petrol engine department was in one departmfewerent or mining or they were under mining department. So and so the point is, at the end when you graduate from the school in majority of the engineering major with like six months training, you can be a reservoir engineer, drilling engineer.

Armand Pradis [00:22:48] Fundamentally, we don’t have tremendous amount of difference. And in the schools that teach you a lot of theory anyway, the majority of it, honestly, you don’t even use the day to day stuff anyway. So. So that’s why to me, it’s not a massive, massive problem, but it’s a bigger problem is less tendency to work for oil companies. So yeah, again, oil companies have a solution for it. They offer big salaries.

David Blackman [00:23:16] They do, Yes.

Armand Pradis [00:23:18] So yeah, long run. Long run and long run. I’m it is a challenge, but there are some solutions that can mitigate it. Yeah.

David Blackman [00:23:28] Yeah. You hit on my pet peeve about the industry not doing a good job of marketing itself and, and really telling the good stories that it has to tell. Right. Yeah. It’s just so frustrating to me. You see all these great things that they do and you want to, you want to see them brag about it a little bit and.

Armand Pradis [00:23:47] Yeah.

David Blackman [00:23:47] And then I see last night or night before last, the newest ad that API is running. And honestly, I didn’t even know what it was they were advertising. They’re spending like $80 million on that campaign. It’s just crazy to me. But, you know,.

Armand Pradis [00:24:03] I wanted of us.

David Blackman [00:24:04] Yeah, yeah. And the other point you made about companies, the boom and bust cycle and the layoffs and the hirings and the layoffs and the hirings that just disenchanted so many people with, you know, going back to work in the industry when the time comes. And anyway, anyway.

Armand Pradis [00:24:24] And honestly, David, a lot of those can be mitigated with better planning, you know, so.

David Blackman [00:24:28] Right.

Armand Pradis [00:24:29] And doing more comprehensive analysis, you know, so running more of a probabilistic analysis, running around in ten, 15, 20, 30, 100 scenarios instead of just one deterministic scenario and plan based on that. You know,.

Armand Pradis [00:24:42] So that is to me the core problem. You know, we don’t do a great amount of planning and we making rash decisions and just go hire a bunch of people because oil prices high right six months down the road drops $20 less by 30%. You know, so we have to minimize those decisions.

David Blackman [00:25:03] And that’s that’s what I see companies like you’re the service or the tools that you’re offered. And the things you’re doing with this data is what I see really helping to smooth out the boom and bust cycles because it just makes it easier to do that advanced planning that really in the past, management teams not only didn’t focus on it, but they really didn’t have a firm ability to do it even if they wanted to. Right. In certain circumstances. So.

Armand Pradis [00:25:35] Absolutely. Yeah.

David Blackman [00:25:37] Yeah. Well, listen, man, we are running up against time. These things go so fast. It always feels like we just touch the surface. But I’d like to touch base with you again sometime down the road here, where, you know, at a key point in time for your company. That’s okay.

Armand Pradis [00:25:54] Absolutely. Definitely. David, thank you. Thank you so much for having me on your show. So it was definitely great conversations and definitely looking forward to our future conversations.

David Blackman [00:26:05] Absolutely. Well, thank you so much. It’s been great meeting you and we’ll talk to you again soon. And thanks to everybody for joining us for this episode of The Energy Question. I’m David Blackmon. And that’s all for now.

Link to the Armand Paradis: Here

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