Crude Logic
This is a podcast that highlights all things oil and gas! We talk to industry leaders, service-providers, and anyone who works within this industry. The two hosts have over 40 years combined experience in the industry.
Crude Logic
AI Data Centers & Why is Ghosting Salespeople is the Industry Norm?
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Join us as we explore the future of the oil and gas industry, market updates, and the impact of AI data centers, with insights from industry veterans Tim and Tabor.
Chapters
00:00 Introduction and Setup
02:57 Who We Are: Backgrounds in Oil and Gas
12:21 Market Update: Current Trends and Insights
17:15 Efficiency in Drilling: The Role of Technology
22:06 U Laterals: Innovations and Challenges
23:08 Navigating Technical Difficulties
24:41 Morning Routines and Sustainability
26:36 Market Updates and Oil Prices
31:26 The Impact of AI Data Centers
42:41 Challenges in Oil Field Sales
Key Topics
Market update and crude oil prices
Impact of AI data centers on energy industry
Rig count and drilling efficiency
Future industry trends and innovations
Challenges in water and natural gas supply
Why ghosting salespeople is the industry norm.
What industry will be the next big customer for oil and gas? We're going to explain. Today is Monday, June 29th, and this is crude logic.
SPEAKER_00We build this land with busting. This is crude logic. Welcome to the show.
SPEAKER_02Let's talk about who we are and why we're doing this. Let's take this first episode to kind of explain just a little bit about who we are. This will be the first and probably the only time that we do this. Okay, let's just tell everybody a little bit about who we are. I'll start with me. My name is Tim Ford. I spent 16 years in the Army. After getting out of the Army, I joined this wonderful thing we call the oil field. And my first job was an MWD. I realized real quick that I didn't really like being an MWD. And even furthermore, I didn't like how MWDs were treated on location. So I became a directional driller. And even faster than that, I became a directional drilling coordinator, which introduced this whole new level of learning and trying to manage all this stuff. Learned a great deal. I've been in the industry for around 16 years.
SPEAKER_01I got my start uh in the oil and gas industry in 2007. Worked my way up at uh Halliburton Sperry drilling, was there for 12 years, did pretty much everything from directional up to uh mid-con country manager is what they call it. It's just a regional manager, essentially. Left there, did a little bit of a stint at a tech uh firm, and then uh had a family oil business that we ran in South Texas for a couple of years.
SPEAKER_02When I got in the oil field, I was working in a bank, and my manager said, I don't know how to take this, but I was a mortgage banker, and he came to me, my boss, and said, Have you ever thought about the oil field? And I thought, oh, uh, my boss is giving me career direction. Yeah, maybe I should be. But uh he said, I don't know. I th I just heard there's a lot of money in it, and you were in the army and it it might fit. Baker Hughes was my first uh interview, and he I he hooked me up with this guy, and I called the guy, and the guy said, Yeah, just go up, tell so-and-so. I wish I could remember his name now. I worked for him on a rig at for XTO, and uh, I can't remember his name right off the top of my head. But anyway, I go and sit down with him and he says, pushes to what I know now is a well plan. At the time, I'm this ex-Army guy who happened to land in a mortgage banking job who's now being told he should go work in the oil field. So I look at this uh diagram and I said, I don't know. You know, it looks like looks like some sort of chart or something. And he said, Well, go over here and talk to this guy. We need MWDs. So uh, you know, I I quickly was disqualified from being a DD right out of the gate. So that's who we are. What we hope to bring to this, we try to avoid the word podcast because we want to be much more than a podcast, and let's be honest, those the word podcast is kind of overplayed. When I hear the word podcast, I start to think boring. We want to be a show for everybody out there. We want to do something different than these other oil and gas podcasts or shows are doing. We want to highlight not just the CEOs, not just the people that manage the day-to-day operation. We want to talk to the people that keep this whole sucker going. We want to be able to highlight the people. Now, we don't want to ignore CEOs and all that stuff. I mean, hey, they they give the jobs, they keep everything going so we can all make money, right? But we want to do something just a little different. Hopefully, we're gonna be entertaining. Hopefully, we're gonna make this little 15-20 minutes of your day just be a little bit brighter, maybe funnier. Maybe we bring hopefully some valuable information. Let's get a market update, Tabor.
SPEAKER_01Yeah.
SPEAKER_02Okay.
SPEAKER_01All right, three things on the radar this morning. First, the Strait of Hormuz stays center stage. A fresh ship attack rattled markets midweek, even as tanker traffic kept moving, sending crude on a round trip. Pair that with the U.S. Treasury Department's 60-day sanctions waiver, letting Iran sell barrels again, and you are in a tug of war between the supply fear and the supply relief that's been jerking West Texas all around all week. Second, the EIA's latest short-term outlook projects the energy demand will dip in 2026 before recovering in 2027. Uh, West Texas settled at $70.07. That's up a dollar and twenty-one on the day. That's plus one point two percent. Brent uh came in at about 73.31, up 1.83%. So a little bit better there. Uh both benchmarks bouncing back and forth after getting knocked around earlier in the week when the Hermuz traffic recovered and oversupply fears crept back in. A fresh ship attack in the strait spooked traders enough to reverse the sell-off. And anybody watching crude this month knows exactly what the rodeo looks like. Long story short, on the day, uh everything sucks. Oil and gas is the same that it always is. It's about $70 on uh West Texas, about $71 on Brent. Uh Henry Hub gas prices are pretty close to three. And the uh rig counts at 551, where it's been pretty steady for about a year now.
SPEAKER_02We are drilling so much more and so much faster. It's drill baby drill. So that doesn't add up to $500 and some on rigs. You mean there should be more rigs? Yeah, it seems like there should be more rigs. I mean, if we're drill baby drilled, then why isn't there a thousand rigs going? Is it because oil prices are oil prices slowing that down? I think it's because we're getting much more efficient. So we don't need as many rigs to do the work that we used to. I mean, obviously, back in the day we did straight hole stuff, and you look at old pictures of you know, Texas and Oklahoma and things like that, and it's just like a rig every five feet. So obviously we've gotten better and more efficient, but are you saying that with fewer rigs we can produce more? And that's why there's fewer rigs?
SPEAKER_01Yeah, much more. So last year, Diamondback did a study, I guess a study. They do one every year, you know, keep track of it. But essentially, Diamondback did a um I would, I guess, a 33% increase in productivity or 33% reduction in the equipment used to do it. But basically they dropped um or held the rig count that they had and produced 33% more. Um in the year before that, I think they dropped 33% of the rigs and held flat for what they what they predicted they'd be able to produce. So they're doing it with you know two-thirds of what they used to do. They're producing the same amount of oil as far as personnel and and rigs used and things like that. So that's kind of the thing with the whole AI deal that um is a is a problem, not a problem, but a problem for people in the industry is that slowly the the um AI you know helping improve here and there, and you know as well as I do, like you you you make a few seconds faster on a rig floor connection, then your you know, overall time on your well is is significantly slower. So with all these little minor improvements here and there across the board, it's just they're getting more than that.
SPEAKER_02Do you think that the biggest jobs are do you think the biggest uh development is these U-laterals?
SPEAKER_01Yeah, maybe. I don't know. There's I've talked to a few engineers who think that it's not gonna be able to be produced as efficiently um, you know, with the hydrostatic pressure of the of the well bore. The ones they brought online are producing fine, but some of the engineers that I've talked to um here locally in the Permian anyway, uh, think that the there's some sort of imbalance with the hydrostatic pressure, and and I don't I don't really understand exactly what their concern is.
SPEAKER_02So they are experiencing problems then with with the with the U lateral.
SPEAKER_01They have really experienced any problems. There, these I think from my experience so far, the engineers who have concerns about it have been proven wrong. That's not my l uh area of expertise by any means. I can drill the well, but I have no idea what any of that's probably why my production companies think it's all done with rotary steerable, right?
SPEAKER_02It's I mean, like they're doing all these U-laterals with rotary steerable.
SPEAKER_01Yeah, we've done um at our company, we've done we've done it with conventional motors, but yeah, the majority of it is done with rotary steerable for sure.
SPEAKER_02You'd have to have a really clean well bore if you're drilling a U-lateral with. I mean, I'm I of course you need a clean well bore, but what I'm saying is with uh a rotary steerable, that's obviously a lot more uh programmed and you're gonna get more uh cleaner wellbore. Things can go really wrong in trying to drill just a normal curve and lateral with a conventional assembly.
SPEAKER_01I mean, really, the only time they're using the conventional assemblies is when they go in and they start with a rotary steerable and then it fails for some reason and they're coming out and you know, they they don't drill the whole well with it. They'll just drill the curve section or the turn section if they're in the U-turn part of the well. Um, which by the way, I don't know if you know this or not, but uh Shell coined or trademarked the term U-turn. So you can't they're calling them all these weird things, you know, some of them are calling them J hooks and some of them are calling, you know, turnabouts.
SPEAKER_02So that's the only thing, because I knew about this. I knew that Shell had uh, you know, basically trying to make other people pay them to drill a a U-turn. So if we have a guest on sometime that maybe can you know speak more eloquently about all the deep financial numbers, that's great. If you're looking for a financial show, that's this is not it, guys. We want to we want to talk about some things. We want to uh really kind of talk about the the the good things, the bad things, the ugly things, but it's also important that we cover the numbers and blah, blah, blah. So we we we definitely are going to be covering that. Guys, this is a a new show. So it's it's kind of like uh making an adjustment on the fly when drilling. You know, we're we're trying to figure it out too. This show will get better, so anything you don't like about it right now, honestly, give us feedback because probably won't be on the show tomorrow anyway. All right, yeah. We we want to make sure that we get you guys involved. We want to know what what the what you guys are thinking, what's happened out there, all the all the crazy stories you know. So we're gonna get into this. This is going to be a daily show where our hope is that you will get in to your vehicle or get on the rig floor or just sitting in the in the trailer on location or whatever and taking 15 or 20 minutes to maybe start your day off right, hear a funny story, uh, you know, whatever. Because the bottom line is that you guys are the knuckle breakers. You're the one out there making this stuff happen for the rest of us. And we both know that because we've been in the field ourselves, and uh we just want to make sure that we have a good show for you guys. So bear with us. It's going to get better. This is show number one. So give us a little bit of grace, but we will get better. So now that my little spill's over there, what I would like to talk about is these AI data centers. And I think this is a little bit something that you know about, but AI data centers are going to need a surge of a lot of energy-related things, particularly natural gas. So as these data centers come online, they're going to need to be able to power themselves. They're gonna, I mean, there's there's all kinds of controversy and things surrounded there's a lot of areas that are upset because these data centers are getting built. I don't have any being built in my neighborhood. So it doesn't really affect me right now. But from a standpoint of a national concern, I get why people are concerned. There's a lot of rumors about water usage and how much water it's gonna take, and it's gonna pull water supplies from communities where these data centers are. And then on top of that, it's gonna need a ton of natural gas to keep these data centers going. So, what does that do for the consumer?
SPEAKER_01On the natural gas prices, I think eventually they've been kind of behind where they should be for years, though. I think the natural gas prices are gonna come up and we we're burning off, you know, flaring most of it in in the Permian steel. So, I mean, I say most of it, I don't know how much percentage-wise we're actually flaring, but if you drive around out here, you can see flares everywhere. So um, I think that it may go up, it may just start getting piped into pipelines more so than it is, and then uh eventually the the price will go up, I think. As as far as the uh the water situation goes, I mean, it was definitely a major concern in the beginning, especially. I mean, there's a lot of data centers that are being built out here in the Permian, um, which I'll kind of get to that in just a second, why I think that is, but um water, you know, here is already scarce. So having um having the data centers be built out here from a water perspective initially was really concerning, but now they've got these closed loop systems where they've got this chemical that they mix in the water, makes the water like non-conductive. I'm not sure exactly how it works, but I mean they submerge all these machines in in water. So once the water is there, it's kind of part of a closed loop system. It has to be, you know, increased from the city.
SPEAKER_02But there's been a lot of stories that that have been on the news about that, you know, and of course, hey, well, I'm the last person to trust the news, right? But there has been stories that are saying, like, you know, I I saw a story of a data center somewhere in Texas where it's kind of rural, and then some people, some some houses that were nearby, it was rural, so it wasn't like a big community, but there were houses nearby that suddenly their water wells were not, they had no water, they couldn't flush their toilets, they couldn't use their sinks or whatever. So I don't know when that's right.
SPEAKER_01I don't think that has to do with the I don't know, man. Like I feel like we get pumped full of fear by the media uh day in and day out for yeah across every spectrum. So I see uh I saw just this weekend an article about the uh reservoir, I can't remember the name of it, but the biggest reservoir in America that kind of runs right down the center of America is apparently drying up. I mean, I don't know where these people lived, but there's a there's a bunch of areas in West Texas where that um it it's uh almost like a mountainous area underground where this cavern or this aquifer is. And so some areas are drying up right now.
SPEAKER_02I mean, like there's there's several places in West Texas that are like not waiting for because of data centers or just drying up because of the natural formation?
SPEAKER_01Just drying up from the natural formation and all of us using it. I mean, as you know, humanity expands, we're all drinking it. But I mean, the the earth is 70% water. There's not running out of water isn't, I don't think, a thing. Um, I mean, they're always saying uh running out of clean water is probably a thing, but we're getting better.
SPEAKER_02Um, I don't know if you've ever read Well, it's it's a thing here in Colorado.
SPEAKER_01Yeah, well, that's there's constant draft here. Yeah, they're just they've probably it's kind of like California and Colorado now. They've diverted all of the all of the natural rivers into aquifers and trying to avoid a special turtle or whatever, and you know, yeah. But anyway, um on the waterfront, not the waterfront property. I mean, they'll they'll come up with new technologies and and desalinization is a thing. We got an entire ocean, 70% of the planet's water. You know, it's a cyclical thing. It rains, uh, the water replenishes. It's I don't I think that people who are telling you we're running out of water and water is a major concern either have something to gain from keeping you in fear or they own green companies.
SPEAKER_02We are proud and happy to announce today's sponsor for the Crewed Logic Show. Today's sponsor is Pumpjack Apparel. Pumpjack Apparel is Permium based and Permium Proud. These folks do embroidery, custom swag, and their own clothing line right there in the Permium Basin. You want your crew logoed up on location and looking like a real outfit instead of an outfit of mismatched freebies? That's pumpjack. Caps, polos, company stores, one off runs, they'll knock it out. So if you want to support a local shop that actually understands the oil field, you can find pumpjack apparel at www.pumpjackapparel.com. These data centers are popping up all over the place. It seems to me like they're going to have to, at some point, with all these data centers popping up, can the current supply of natural gas, and I know here in our country, in this continent, we have an abundance of natural gas. So I'm not one of these people, oh, we're gonna run out. But it does have a market effect. So if if they are putting up all these data centers, it seems to me like they should probably or would probably accelerate nuclear power. Yeah, they're gonna have to. So if they do nuclear power, then what happens to the oil and gas industry? They're gonna need both, man.
SPEAKER_01And I mean, they're gonna need both. Well, of course they are, yeah. From a power consumption standpoint, and because it's funny, you know, I mean, we've worked in this business long enough, we both know this, but the Googles and the Amazons and all these tech giants of the world, they've never helped oil and gas at all. You can't get an app made, you can't get uh any kind of software, and they're all they all say it's because they're you know, they're going green and oil and gas is killing the planet or whatever. But now they're building these data centers, all of that's changed, and all of a sudden they're best friends with us because we, you know, when we move on to location, we'll clear five acres in four hours, we'll get caliche pad poured. I mean, in a in a day, we take five acres from you know desert land to a road built to it and a caliche pad and ready to drill a well. And the next day we move the rig on, we set it set that up in eight hours, we start drilling a well, we drill it in seven to eight days. I mean, we're extremely efficient at what we do.
SPEAKER_02They're going in, building a community basically, uh in the middle of nowhere with nothing, and then moving. So it makes sense to me why they would get with oil and gas production companies and things like that. How do you see it working out with these data centers? Not from, you know, we we come from really the upstream side. That's that's really where we have been in our oil field careers. I've never personally worked midstream, I've not worked downstream, but how how do we think that this is going to affect midstream and downstream capabilities as far as if the demand? I mean, I guess the oil field always meets the demand, but right now are these companies gearing up for these data centers that are going to, you know, especially like in the downstream side and all that, because we've had problems in our country with refineries, the lack of refineries and things like that. Do they start bringing more refineries online?
SPEAKER_01I think uh on the refineries, I've heard that there are plans, uh, but those take years for them to build. I think that that that's one of the slower processes um in the industry building a new refinery.
SPEAKER_02Um, but they're Yeah, you got to build all the lines and all that stuff.
SPEAKER_01Yeah, yeah. And there's all kinds of safety measures and features and stuff they got to put in there that but on the um data centers themselves. I mean, they've already started contracting uh oil and gas companies to help build uh the facilities and clear the land and and uh they're using a lot of our um construction companies to to build the buildings and put the ACs on them and uh wire them, all of that stuff. Um and they're uh getting kind of creative with like how they're powering these. A lot of them are are some of I talked to a guy the other day who is an oil and gas executive and he's invested in this construction company. Well, it's his construction company, he's investing money in his construction company to gather methane from cow farms, so they're building like certain types of buildings that the cows can all stay inside of and fart in, basically, yeah, and keep the methane to burn it for power for these things.
SPEAKER_02I've known a couple of company men that could probably supply some uh yeah, quite a bit of energy. Yeah, he could probably replace five or ten cows. That's that's that's all I'm saying. Yeah, I think we've all worked with that guy. Some of you have worked with that guy. Um, so okay, so those really the the the AI data centers, uh, this is going to be a topic that is gonna continue to come up. Uh, hopefully we can speak more intelligently about it in the future. But though that is the quote normal story for the day, and more to come on that. So I want to talk about some things that are annoying in the oil field. We're gonna do this uh as a normal segment on this show. Uh hopefully in the future we can get people engaged with us and commenting, or maybe we'll have some live phone calls or phone calls in general. Maybe, maybe they won't be live, but we're going to hopefully be able to have these conversations and find out what you're thinking out there. So the thing that I know bothers you that definitely bothered me whenever I was in sales is the infamous ghosting. And what I don't understand about all the oil field decision makers is why can't you guys just give a direct answer? Screw you, I don't want to use your gear or your service. I don't care what you have, and I never want to speak to you again. Yeah. But no.
SPEAKER_01I've actually had a couple of guys say that in the last year, like not as direct, but pretty much like, hey man, just want to shoot you straight. You're wasting your time, like, we're never going to use. Your services or whatever. And well, that's that's true. And a soul killer. Well, yeah, but I I actually prefer that. You know, like if there's uh it's the guys who who say, you know, yeah, come on by me. Like they'll see you at a at an event or something, and like, yeah, man, just give me a shot Monday, we'll get together. And you call them Monday and they're like, Oh, dude, yeah, it was good seeing you this weekend. Like, let's get together Thursday. And then you show up at their office on Thursday and they're like, Oh man, I've I don't know what I was thinking. I'm in Houston. And you're like, What? You're in Houston. You knew on Monday you were going to Houston when you told them your Thursday, you know.
SPEAKER_02Well, I prefer those guys just being the direct guys, as opposed to, hey, yeah, thanks for that amazing hunting excursion. Yeah, it was awesome and it changed my life. By the way, we're never using you, so thanks.
SPEAKER_01We went with your competitor.
SPEAKER_02Yeah, exactly. By the way, they didn't do anything, and their service isn't better than yours. We just don't like you.
SPEAKER_01Yeah, that's exactly the yes. You can definitely tell you've lived that, but yeah, I'm experiencing that regularly.
SPEAKER_02So I I want I want to do a call to action here. If you are or have ever been an oil field sales rep, we want you to comment on our page. You can email us at what's that email?
SPEAKER_01Info at crudelogic.show. Info at crude logic.show.
SPEAKER_02If you guys have an experience or a funny story, something that we can talk about, if you're willing to come on and talk about it yourself, let's let's have that conversation too. Regardless of whether or not this is our show and that we're doing this show, we really want it to be about you guys and not about us. So if we can get feedback from you and you can let us know what you've experienced and some of these funny anecdotes, or maybe you can offer some advice to other salespeople. It would be good to know what you think. So if you've ever been, or I don't care, if you've known a salesperson, if if there's a salesperson that's done something annoying that, you know, hey, you're never going to talk to this guy because he's so annoying. And we know there's plenty of those out there. I might have been one. Who knows? We want to get this to be more of a conversation. Interact with us and let's let's have fun with this. So um, you know, we we know that there are a lot of people out there that uh have been stood up, have been ghosted by these companies. And, you know, hey, I get it. You guys are busy, you drilling managers, drilling engineers, CEOs. You're busy. And there's not just one sales guy calling on you, and we get it.
SPEAKER_01But you always see that guy like at the you know, at the at the event on the weekend or the golf course or whatever, and they're oh man, I'm just so I've been meaning to call you back. I'm so tied up. I'm like, well, what are you doing right now? I'm your neighbor, dude. Yeah, I know what you're doing. Walking into your house at two in the afternoon, but yeah.
SPEAKER_02Like, you know, when I was calling you, I was actually in HEB watching you in the poultry section. I saw you ignore my call. I know you're at your kids' soccer game for like four hours. Maybe we can do something revolutionary here and change the industry when it comes to some of these annoying things. We're going to be talking about other topics coming up in our daily episodes that we think or hope resonate with the rest of you. And we want you guys to call in, get involved, tell us what it is. We want to share the story because we know that there are plenty of stories to be told in the oil field.
SPEAKER_01So we should have a segment about that, like just you know, near misses or like we've all got we've all got stories, crazy things we've seen.
SPEAKER_02Maybe we should make near hits. I've never understood the near misses. A near miss is a good thing, a near hit is a bad thing. Why do we use the term near miss? Yeah, that's a good point. I don't know. Like, oh my God, I was driving through that light and that car nearly hit me. If I say the same story and say, you know, I went through that intersection and that car nearly missed me. Oh, well, cool. That's a stupid story. What happened? Nothing. So, anyway, that's my opinion. That's that's one of my uh pet peeves amongst the list of pet peeves. Why are they called near misses? Maybe you guys can tell us, let us know. Get involved, dammit, get involved. Okay, so that is the conclusion of today's episode. Hang with us for a few episodes. If if you totally hate it, fine, we get it. We're not for everybody, we don't taste good all the time. But we're hoping that you will stick around, give us a chance. Well, until next time, guys, stay safe, keep drilling, and remember, it's only logic if it's crude logic. We'll see you next time.
SPEAKER_00Storm comes up, another twelve. Ain't nobody gonna do it themselves. We feel it. We built this land with busting doubles and call it.