Latest / Silicon & Shale Podcast / Off, Manual, Auto: AI Gets a Hand on the Setpoint

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Off, Manual, Auto: AI Gets a Hand on the Setpoint · Silicon & Shale Podcast

0:00
SPEAKER_00: There's a sentence from a press release this week I haven't been able to shake.
0:03
SPEAKER_01: Uh-oh.
0:03
SPEAKER_01: He's been thinking again.
0:05
SPEAKER_00: The wells that need attention most are the ones nobody has looked at in a year.
0:09
SPEAKER_01: That's not a press release.
0:10
SPEAKER_01: That's a confession from half the gas wells in America.
0:13
SPEAKER_00: It's Ryan Laley, Chief Product Officer at Pack Energy out of Frisco, Texas.
0:17
SPEAKER_00: October 1st, they launched something called OnPing Plunger.
0:20
SPEAKER_00: It's AI that tunes plunger lift wells.
0:22
SPEAKER_00: And the part that got me isn't the AI.
0:24
SPEAKER_00: It's that the product has three settings.
0:26
SPEAKER_00: Off.
0:27
SPEAKER_00: Manual.
0:28
SPEAKER_00: Auto.
0:29
SPEAKER_01: Off, it looks and changes nothing.
0:31
SPEAKER_01: Manual, it recommends and a human approves.
0:34
SPEAKER_01: Auto, it makes the changes itself.
0:36
SPEAKER_01: Inside, limits the operator already set.
0:38
SPEAKER_00: That's the argument of the whole year in three words.
0:40
SPEAKER_00: Not whether the AI is smart.
0:42
SPEAKER_00: Who lets it touch the set point?
0:43
SPEAKER_01: And this week, a lot of people in our business moved that switch.
0:46
SPEAKER_01: Or announced they were going to.
0:48
SPEAKER_01: Which, as we'll discuss at some length, is not the same thing.
0:51
SPEAKER_00: Welcome to Silicon & Shale.
0:52
SPEAKER_00: Episode 18, week of October 5th, 2026.
0:54
SPEAKER_00: I'm Derek.
0:56
SPEAKER_01: I'm Packer.
0:56
SPEAKER_01: Oil patch meets the algorithm.
0:58
SPEAKER_01: And yes, two episodes this week.
0:59
SPEAKER_01: We owed you one from last week, so this is the second.
1:01
SPEAKER_00: The other one this week is gas to power for data centers.
1:04
SPEAKER_00: This one is different plumbing.
1:05
SPEAKER_00: No megawatts today.
1:07
SPEAKER_00: This is AI walking out of the pilot slide and into the controller,
1:10
SPEAKER_00: the maintenance shop, the research desk, and the back office.
1:12
SPEAKER_01: The lineup.
1:13
SPEAKER_01: Pack Energy's Plunger Optimizer, October 1st.
1:17
SPEAKER_01: AIQ, the AI company that counts ADNASI as its largest customer and shareholder.
1:21
SPEAKER_01: Talking to Semaphore the same day about a new operating system called Genesis.
1:25
SPEAKER_01: And a refinery in Egypt piloting an agent that predicts equipment failures,
1:28
SPEAKER_01: reported October 6th.
1:30
SPEAKER_00: Then the desk side.
1:32
SPEAKER_00: Wood McKenzie putting its research inside Microsoft Copilot announced October 5th.
1:36
SPEAKER_00: Microsoft's own documentation saying those Copilot connectors start getting
1:39
SPEAKER_00: the ability to write, update, and delete in early October.
1:43
SPEAKER_00: And Expand Energy,
1:44
SPEAKER_00: the big gas producer,
1:45
SPEAKER_00: picking ThoughtWorks to take AI beyond isolated pilots, also October 5th.
1:49
SPEAKER_01: Every source is linked in the show notes.
1:51
SPEAKER_01: Where something isn't disclosed, we'll tell you it isn't.
1:53
SPEAKER_00: Here's the frame for the hour.
1:55
SPEAKER_00: Well, the 20-some minutes.
1:57
SPEAKER_00: Think of a ladder.
1:58
SPEAKER_00: Bottom rung, the AI reads.
1:59
SPEAKER_00: It finds things, summarizes things.
2:01
SPEAKER_00: Middle rung, it recommends and a person signs.
2:03
SPEAKER_00: Top rung, it acts.
2:04
SPEAKER_00: It changes a number on a live system.
2:06
SPEAKER_01: And every story this week sits on a different rung.
2:09
SPEAKER_01: That's the useful part.
2:10
SPEAKER_01: You can't really argue about AI and oil and gas in general.
2:13
SPEAKER_01: You can argue about a specific rung on a specific system with a specific person on the hook.
2:17
SPEAKER_00: Start at the wellhead.
2:18
SPEAKER_00: Plunger lift quickly for the land and finance folks.
2:21
SPEAKER_00: This is general background, not from anybody's release.
2:23
SPEAKER_01: And how long you shut in when you open, how long you let it flow after the plunger shows up?
2:27
SPEAKER_01: Those are settings.
2:28
SPEAKER_01: Settings somebody picked.
2:29
SPEAKER_01: Maybe years ago.
2:52
SPEAKER_01: Maybe off a rule of thumb.
2:54
SPEAKER_01: Maybe back when it was a completely different well.
2:56
SPEAKER_00: Pack Energy's release calls Plunger Lift one of the cheapest ways
2:58
SPEAKER_00: to keep aging gas wells producing,
3:00
SPEAKER_00: and then says,
3:01
SPEAKER_00: the returns depend on expertise no operator can spread across every well.
3:04
SPEAKER_00: Wells get set once and left alone,
3:06
SPEAKER_00: giving up production month after month while nobody sees it happen.
3:09
SPEAKER_01: I don't love a lot of press release pros.
3:11
SPEAKER_01: That paragraph is true in every field office I've ever heard about.
3:14
SPEAKER_00: What the product does,
3:15
SPEAKER_00: in their words,
3:16
SPEAKER_00: POC AI learns each well's best historical runs,
3:19
SPEAKER_00: continuously compares actual performance against expected,
3:23
SPEAKER_00: and tunes set points inside the operator's existing automation and safety limits
3:26
SPEAKER_00: or flags the well for a human to review.
3:28
SPEAKER_01: Three knobs named,
3:30
SPEAKER_01: tubing differential,
3:30
SPEAKER_01: afterflow timing,
3:31
SPEAKER_01: pressure thresholds,
3:32
SPEAKER_01: plus something they call drift detection,
3:34
SPEAKER_01: which flags wells wandering away from their normal pattern.
3:38
SPEAKER_00: They say it's SCADA agnostic,
3:40
SPEAKER_00: four systems that meet their polling and real-time access requirements.
3:44
SPEAKER_00: And for wells still on old non-digital controllers,
3:46
SPEAKER_00: they've got a digital controller called Lumberjack to bring those wells into scope.
3:50
SPEAKER_01: So step zero is, can your SCADA even talk fast enough?
3:53
SPEAKER_01: That's not an AI question.
3:54
SPEAKER_01: That's a radio, a battery, and somebody with a truck.
3:57
SPEAKER_00: Now the numbers, because the numbers are the headline.
4:00
SPEAKER_00: First paragraph of the release,
4:02
SPEAKER_00: operators running already well-optimized wells have seen revenue improvements of 3.5
4:05
SPEAKER_00: to 7%.
4:07
SPEAKER_00: On wells set conservatively and left alone, improvements have reached 30%.
4:11
SPEAKER_01: Up to 30 on the poster.
4:12
SPEAKER_01: Three and a half to seven on the wells, somebody's already watching.
4:15
SPEAKER_00: And to be fair to Pack Energy, they printed both numbers.
4:18
SPEAKER_00: In the first paragraph, plenty of vendors would have printed one.
4:21
SPEAKER_01: Now, what's not in there?
4:22
SPEAKER_01: How many wells?
4:23
SPEAKER_01: Which operators?
4:24
SPEAKER_01: Which basins?
4:25
SPEAKER_01: Over what time period?
4:27
SPEAKER_01: What the add-on costs?
4:28
SPEAKER_01: None of it's disclosed.
4:30
SPEAKER_01: They've got a live webinar on October 29th that promises, quote, field results.
4:34
SPEAKER_01: That's where we'd go looking.
4:35
SPEAKER_00: One more reading note.
4:37
SPEAKER_00: The first paragraph says revenue improvement.
4:39
SPEAKER_00: The tagline says up to 30% more production.
4:42
SPEAKER_00: Revenue and production aren't the same thing.
4:45
SPEAKER_00: Revenue moves with price.
4:46
SPEAKER_00: Production doesn't care what the strip did this week.
4:48
SPEAKER_00: It's probably shorthand.
4:49
SPEAKER_00: But if you're signing anything, ask which one they actually measured.
4:52
SPEAKER_01: Okay.
4:53
SPEAKER_01: Confession time.
4:54
SPEAKER_01: And this one's mine.
4:55
SPEAKER_00: Go.
4:56
SPEAKER_01: For years,
4:56
SPEAKER_01: any time a vendor deck said up to some big percentage,
4:59
SPEAKER_01: I'd repeat the big number in the next meeting.
5:01
SPEAKER_01: Out loud.
5:02
SPEAKER_01: With confidence.
5:03
SPEAKER_01: I never once read the sentence after it.
5:05
SPEAKER_00: You were quoting the ceiling like it was the floor.
5:07
SPEAKER_00: I was.
5:08
SPEAKER_00: Okay, that's on the record.
5:10
SPEAKER_00: Now let's actually use the smaller number.
5:12
SPEAKER_00: Our math, illustrative only, not pack energies.
5:14
SPEAKER_00: Say a plunger well brings in $100,000 of revenue a year.
5:18
SPEAKER_00: 5% of that is $5,000.
5:19
SPEAKER_00: On one well, that's a nice dinner and a new set of tires.
5:22
SPEAKER_00: Across a thousand plunger wells, it's $5 million a year and nobody drilled anything.
5:26
SPEAKER_01: Our arithmetic, their range, and your well is your well.
5:29
SPEAKER_00: And that's the honest case for this stuff.
5:31
SPEAKER_00: Not the 30, the boring five on wells you already own without hiring anyone.
5:35
SPEAKER_01: Which brings us to the switch.
5:37
SPEAKER_01: Off.
5:38
SPEAKER_01: Manual auto.
5:39
SPEAKER_01: I want to stay here a minute because I think it's the most practical idea of the whole week.
5:42
SPEAKER_00: Stay as long as you want.
5:44
SPEAKER_01: Off mode, in their description, surfaces opportunities and changes nothing.
5:48
SPEAKER_01: That's a free audit.
5:50
SPEAKER_01: You get a list of wells the system thinks are leaving gas behind and nobody's touched a valve.
5:54
SPEAKER_01: Manual.
5:55
SPEAKER_01: Recommends changes for approval.
5:57
SPEAKER_01: Somebody in the field office clicks yes or no.
5:59
SPEAKER_01: Auto.
6:00
SPEAKER_01: Applies governed adjustments within established safety limits.
6:03
SPEAKER_00: Governed by limits the operator already set,
6:05
SPEAKER_00: which means the AI is exactly as safe as the limits somebody typed in,
6:08
SPEAKER_00: maybe a long time ago.
6:10
SPEAKER_01: Probably the same week somebody set that plunger and got called off to the next fire.
6:13
SPEAKER_00: Not a knock on anybody.
6:14
SPEAKER_00: There are more wells than ours, but my read.
6:17
SPEAKER_00: Auto is only as good as the last time someone re-read the limits.
6:20
SPEAKER_00: That's a management of change conversation, not a software toggle.
6:23
SPEAKER_01: And here's what I like.
6:24
SPEAKER_01: The product is built so you can earn your way up the ladder.
6:27
SPEAKER_01: Start an off.
6:28
SPEAKER_01: Compare what it suggests against what your best lease operator would do.
6:31
SPEAKER_01: Move a field to manual.
6:32
SPEAKER_01: Then auto on the boring wells.
6:34
SPEAKER_01: That's how trust actually gets built in this business.
6:36
SPEAKER_01: One well at a time.
6:37
SPEAKER_00: One more thing I'd ask, our read.
6:39
SPEAKER_00: The system learns from each well's best historical runs.
6:42
SPEAKER_00: If the well changed,
6:43
SPEAKER_00: new line pressure,
6:44
SPEAKER_00: a neighbor's frack,
6:44
SPEAKER_00: a compressor swap,
6:46
SPEAKER_00: the best run from two years ago might be teaching it the wrong lesson.
6:49
SPEAKER_01: Which is, I think, what the drift detection is for.
6:51
SPEAKER_01: Flag the well that stopped acting like itself.
6:53
SPEAKER_01: But that's a good question for the October 29th webinar.
6:56
SPEAKER_01: How does it know the history went stale?
6:58
SPEAKER_00: And midstream, since you'll be listening.
7:00
SPEAKER_00: Plunger wells live and die by line pressure.
7:02
SPEAKER_00: If the gathering system swings,
7:03
SPEAKER_00: an optimizer tuning against yesterday's pressure could chase its tail.
7:06
SPEAKER_00: Again, our read.
7:07
SPEAKER_00: Ask how it handles that.
7:09
SPEAKER_01: So that's where we are.
7:10
SPEAKER_01: Artificial lift, run by artificial intelligence.
7:13
SPEAKER_00: Artificial all the way down?
7:15
SPEAKER_01: I felt that one in the tubing.
7:16
SPEAKER_01: Moving on.
7:17
SPEAKER_00: Same ladder, other side of the world.
7:19
SPEAKER_00: Semaphore,
7:20
SPEAKER_00: October 1st,
7:21
SPEAKER_00: reporter Kelsey Warner, AIQ,
7:23
SPEAKER_00: the AI company that counts ADNOC,
7:25
SPEAKER_00: the Abu Dhabi oil giant, as its largest customer and shareholder.
7:29
SPEAKER_01: The context Semaphore gives.
7:31
SPEAKER_01: They call the Iran war a proving ground for Adnok's bet on AI.
7:34
SPEAKER_01: AIQ's CEO,
7:35
SPEAKER_01: Dennis Joel,
7:36
SPEAKER_01: told them the tools were offering real-time insight into drilling,
7:39
SPEAKER_01: production, and facilities even before the conflict.
7:42
SPEAKER_01: We'll leave the war right there.
7:43
SPEAKER_01: It's not our beat and nothing about it is funny.
7:45
SPEAKER_00: The news is something called Genesis.
7:47
SPEAKER_00: Semaphore's description, an operating system AIQ is piloting to pitch to energy companies.
7:52
SPEAKER_00: It aims to run large-scale agentic AI across upstream and downstream operations
7:56
SPEAKER_00: without relying on any single AI model provider.
7:58
SPEAKER_01: Model agnostic.
8:00
SPEAKER_01: If one AI company raises its prices or has a rough quarter,
8:03
SPEAKER_01: you swap the engine underneath and keep the skid.
8:05
SPEAKER_00: Which, our read, is exactly how an operator thinks about any vendor.
8:08
SPEAKER_00: Don't marry the compressor packager.
8:10
SPEAKER_00: Same instinct.
8:11
SPEAKER_01: Were there testing per semaphore?
8:13
SPEAKER_01: Kuwait, India, Malaysia, Vietnam.
8:16
SPEAKER_01: And their chief technology officer says a pilot in Egypt predicted
8:18
SPEAKER_01: a pump failure 45 days in advance.
8:21
SPEAKER_00: 45 days, one pump, one pilot.
8:24
SPEAKER_00: That's an anecdote attributed to the company,
8:25
SPEAKER_00: not a study,
8:26
SPEAKER_00: but it's a very specific anecdote and I'll take specific over vague any day.
8:30
SPEAKER_01: Growth plans, same piece, first hire in the UK.
8:33
SPEAKER_01: Weighing other locations, Houston among them, and 100 potential acquisition targets identified.
8:38
SPEAKER_00: 100 acquisition targets, one UK hire.
8:41
SPEAKER_01: Pairing noted.
8:42
SPEAKER_01: Now, RoboWell, which is the rung that matters to us.
8:45
SPEAKER_01: This part is from AIQ's own product page, so it's the vendor talking.
8:49
SPEAKER_01: RoboWell is set up to eliminate the need for the operations personnel
8:52
SPEAKER_01: to constantly monitor and adjust the well-operating variables.
8:55
SPEAKER_00: That's the top rung, closed loop.
8:58
SPEAKER_00: And it says it does that while trying to minimize gas lift consumption
9:00
SPEAKER_00: and staying inside constraints.
9:02
SPEAKER_00: Minimum bottom hole pressure, maximum flowline pressure, maximum allowable annulus pressure.
9:07
SPEAKER_00: They list physics-based models that run every minute,
9:10
SPEAKER_00: and machine learning virtual meters that estimate rates without
9:12
SPEAKER_00: a physical flow meter.
9:13
SPEAKER_01: And the scoreboard from their page?
9:15
SPEAKER_01: Deployed across 500-plus wells, resulting in increase of production by 5%.
9:19
SPEAKER_01: And it cuts well movement by up to 50%.
9:21
SPEAKER_00: 5%, same neighborhood as PacEnergy's tuned well number.
9:25
SPEAKER_01: That's what I'd underline this week.
9:27
SPEAKER_01: Two vendors.
9:28
SPEAKER_01: Plunger lift on one side, gas lift on the other, going by how each page describes itself.
9:32
SPEAKER_01: Two continents.
9:34
SPEAKER_01: When they talk about wells,
9:35
SPEAKER_01: somebody actually runs well, the number lands somewhere around 5, not 30.
9:39
SPEAKER_00: Our observation setting two vendor claims side by side,
9:42
SPEAKER_00: not a study,
9:42
SPEAKER_00: but it's a decent smell test for the next deck that walks through your door.
9:45
SPEAKER_01: Third story, middle rung, a refinery.
9:48
SPEAKER_01: Enterprise Am, October 6th, reporting on a forum the day before.
9:52
SPEAKER_01: The Egyptian refining company is piloting an AI agent that predicts equipment failures.
9:56
SPEAKER_00: And the reason is stated in dollars.
9:58
SPEAKER_00: Ahmed Haikal,
9:59
SPEAKER_00: founder and chairman of Kala Holdings,
10:01
SPEAKER_00: Every day that refinery is offline costs $5 million in lost income.
10:05
SPEAKER_00: A restart takes seven days, so a single outage costs $35 million.
10:09
SPEAKER_00: His line, we don't have the luxury of doing it wrong.
10:12
SPEAKER_01: What the agent does, per their head of digital transformation, Rami Harfush.
10:17
SPEAKER_01: It's trained to recognize healthy and unhealthy signatures of the machinery.
10:21
SPEAKER_01: Watches pressure, temperature, vibration, flow.
10:24
SPEAKER_01: Looks for the patterns that came before past failures.
10:27
SPEAKER_00: Then it builds the maintenance case on its own,
10:29
SPEAKER_00: past work orders,
10:30
SPEAKER_00: root cause failure analysis reports,
10:32
SPEAKER_00: checks whether the spare parts are in stock and what the lead times are
10:34
SPEAKER_00: if they aren't.
10:35
SPEAKER_01: And then, the important sentence.
10:37
SPEAKER_01: The package goes to ERC's maintenance and reliability engineers,
10:40
SPEAKER_01: who validate it and schedule the outage before the equipment fails.
10:43
SPEAKER_00: So the agent does the paperwork, a human makes the call.
10:46
SPEAKER_00: That's the middle rung,
10:47
SPEAKER_00: and honestly that's where I'd want a refinery to live for a good long while.
10:50
SPEAKER_01: Agreed.
10:51
SPEAKER_01: And the boring part is the valuable part.
10:53
SPEAKER_01: Anybody who's lived through a turnaround knows, is the part on the shelf, is half the battle.
10:57
SPEAKER_00: Same report, one more example from the same group.
11:00
SPEAKER_00: At ASEC Automation,
11:01
SPEAKER_00: part of Kala's ASEC holding,
11:02
SPEAKER_00: the CTO,
11:03
SPEAKER_00: Ahmed Imam,
11:04
SPEAKER_00: said an energy management system reads SCADA data from cement plants
11:07
SPEAKER_00: and recommends set points for the grinding area.
11:09
SPEAKER_00: Grinding, he said, eats about 40% of a plant's power.
11:12
SPEAKER_01: Recommends, not sets.
11:14
SPEAKER_01: Different industry, same rung.
11:16
SPEAKER_01: Read the plant, suggest the number, let a person turn the knob.
11:19
SPEAKER_00: Same forum, same chairman, the other side of it.
11:21
SPEAKER_00: He said cybersecurity is the risk that worries him most.
11:24
SPEAKER_00: Said three recent attacks saw oil and gas companies pay out huge sums of money
11:28
SPEAKER_00: to unlock their data.
11:30
SPEAKER_00: No company names, no details.
11:31
SPEAKER_01: Hang on to that one.
11:32
SPEAKER_01: It comes back when we get to the button that says auto.
11:35
SPEAKER_00: Now the desk.
11:36
SPEAKER_00: Landman and analysts, this is your part.
11:38
SPEAKER_00: Wood McKenzie, October 5th.
11:40
SPEAKER_00: Their research data and analytics, available directly inside Microsoft Copilot.
11:44
SPEAKER_01: Built on something called MCP, Model Context Protocol.
11:48
SPEAKER_00: Plain English.
11:49
SPEAKER_01: It's a standard plug.
11:50
SPEAKER_01: Think of a common thread on a fitting.
11:51
SPEAKER_01: Any AI assistant that speaks MCP can make up to any data source that speaks MCP.
11:56
SPEAKER_01: Wood Mackenzie's words.
11:58
SPEAKER_01: An open standard that enables AI environments to dynamically discover
12:01
SPEAKER_01: and use external intelligence.
12:02
SPEAKER_00: So instead of logging into a portal,
12:04
SPEAKER_00: exporting a spreadsheet,
12:05
SPEAKER_00: cleaning it and pasting it into your deck,
12:07
SPEAKER_00: you ask Copilot a question and it pulls their material in.
12:10
SPEAKER_01: Who gets it?
12:10
SPEAKER_01: Customers with a relevant Wood Mackenzie subscription and Microsoft Co-Pilot standard or higher.
12:15
SPEAKER_01: Live from October 1st.
12:17
SPEAKER_01: More data sets and models phased in as additional data sets and models become MCP ready.
12:22
SPEAKER_01: And more connectors to other AI tools through the rest of 2026 and into early 2027.
12:27
SPEAKER_00: Their chief product and technology officer, Bernardo Rodriguez.
12:30
SPEAKER_00: AI is becoming the primary environment where analysis is done,
12:33
SPEAKER_00: decisions are prepared, and strategies are tested.
12:35
SPEAKER_01: Big claim, and it's their claim.
12:38
SPEAKER_01: But watch where they're putting the research, not in a portal you have to visit.
12:41
SPEAKER_01: In the chat window, you already have open.
12:43
SPEAKER_00: And one detail from Microsoft's side that matters for anybody nervous about their data.
12:47
SPEAKER_00: These federated connectors fetch live.
12:50
SPEAKER_00: Microsoft's page says they don't copy or index the outside data into Microsoft 365,
12:55
SPEAKER_00: and they use each user's own identity and permissions.
12:57
SPEAKER_01: So, I'll read,
12:58
SPEAKER_01: if you can't see a dataset in the Wood Mackenzie portal,
13:00
SPEAKER_01: you shouldn't be able to see it through Copilot either.
13:03
SPEAKER_01: Same fence, different gate.
13:05
SPEAKER_00: And they're not alone in there.
13:06
SPEAKER_00: Microsoft's own connector gallery lists Ask Reistad and S&P Global Energy
13:10
SPEAKER_00: among its data analytics connectors.
13:12
SPEAKER_00: So the research shops are racing to live inside the same box.
13:15
SPEAKER_00: Are read on why whoever's in the box gets asked first.
13:18
SPEAKER_01: This one's the bottom rung.
13:19
SPEAKER_01: Read only.
13:20
SPEAKER_01: Ask a question.
13:22
SPEAKER_01: Get research.
13:23
SPEAKER_01: Nobody's changing anything.
13:24
SPEAKER_00: Yet.
13:25
SPEAKER_01: Yet.
13:26
SPEAKER_01: Because here's the quiet document of the week.
13:28
SPEAKER_01: Microsoft's own page on these federated connectors.
13:31
SPEAKER_01: Quote, support for write, update, and delete actions begins rolling out in early October, 2026.
13:37
SPEAKER_00: So the same plug that pulls research in can,
13:39
SPEAKER_00: where the connector offers the tools, push changes out.
13:41
SPEAKER_00: Create a record, update a record, delete one.
13:44
SPEAKER_01: In fairness, they've thought about it.
13:46
SPEAKER_01: Write actions need the user's approval.
13:48
SPEAKER_01: You get a little card.
13:49
SPEAKER_01: Allow once.
13:50
SPEAKER_01: Allow for conversation.
13:51
SPEAKER_01: Always allow.
13:52
SPEAKER_01: Or cancel.
13:54
SPEAKER_01: Always allow.
13:54
SPEAKER_01: Two words.
13:55
SPEAKER_01: You see it too.
13:55
SPEAKER_01: Our read.
14:14
SPEAKER_01: If your company runs land records,
14:16
SPEAKER_01: division orders,
14:16
SPEAKER_01: or contracts in a system that ever gets one of these connectors,
14:19
SPEAKER_01: somebody,
14:20
SPEAKER_01: and it could easily be one of us, is going to click Always Allow late on a Friday.
14:25
SPEAKER_01: And the AI will do exactly what it's allowed to do, with that person's permissions.
14:29
SPEAKER_00: Which, for some folks in our audience, include the power to change who gets paid.
14:33
SPEAKER_01: That's not in Microsoft's documentation.
14:35
SPEAKER_01: That's us, thinking about where these plugs might land.
14:37
SPEAKER_01: Nobody has announced a division order connector that we've seen.
14:40
SPEAKER_00: Give me the other side.
14:41
SPEAKER_00: You like this stuff.
14:42
SPEAKER_01: I do.
14:43
SPEAKER_01: The default is needs approval.
14:44
SPEAKER_01: And if a publisher adds a new write tool or changes one, it resets to needs approval.
14:49
SPEAKER_01: That's a better default than a lot of
14:50
SPEAKER_01: the spreadsheet macros running around land departments right now.
14:53
SPEAKER_01: And on the read side,
14:54
SPEAKER_01: if an analyst can stop exporting and reconciling spreadsheets,
14:57
SPEAKER_01: that's hours back every single week.
14:59
SPEAKER_00: Fair.
14:59
SPEAKER_00: Good defaults.
15:00
SPEAKER_00: I'm worried about people, not defaults.
15:02
SPEAKER_01: You're always worried about people.
15:04
SPEAKER_00: People are the ones with the mouse.
15:05
SPEAKER_01: Last story.
15:06
SPEAKER_01: Biggest company, least specific announcement.
15:09
SPEAKER_01: Expand Energy, October 5th.
15:11
SPEAKER_01: The release came from ThoughtWorks, the consultancy out of Chicago.
15:14
SPEAKER_01: Expand's own boilerplate calls it North America's largest natural gas producer.
15:18
SPEAKER_01: ThoughtWorks says largest independent.
15:20
SPEAKER_00: The deal.
15:21
SPEAKER_00: Expand selected ThoughtWorks as its strategic partner to design and build
15:25
SPEAKER_00: an enterprise-wide AI capability, multi-phase, three work streams.
15:29
SPEAKER_00: One, AI strategy in picking the high-value uses.
15:32
SPEAKER_00: Two, foundations, data, platform, governance.
15:34
SPEAKER_00: Three, build and deploy one high-priority AI solution,
15:38
SPEAKER_00: set up an operating model, and train their people.
15:40
SPEAKER_01: The goal,
15:41
SPEAKER_01: in the release,
15:42
SPEAKER_01: move beyond isolated pilots toward a coordinated enterprise-scale approach
15:45
SPEAKER_01: and deploy a production solution by the end of 2026.
15:48
SPEAKER_00: So, paper next to steel announced an enterprise-wide AI capability running today
15:53
SPEAKER_00: of vendor selection and a date.
15:55
SPEAKER_01: That's not a knock.
15:56
SPEAKER_01: That's what week one looks like.
15:57
SPEAKER_01: And the date is the useful part.
15:59
SPEAKER_01: End of 2026 is less than three months out.
16:01
SPEAKER_00: Josh Vietz expands executive vice president and chief operating officer.
16:06
SPEAKER_00: AI has the potential to create value across multiple areas of our business,
16:09
SPEAKER_00: but realizing that value requires more than individual projects.
16:13
SPEAKER_01: Which is the most chief operating officer sentence ever written, and I mean that kindly.
16:17
SPEAKER_01: It's coming from the operations chief, not the press office.
16:19
SPEAKER_01: That tells you something about who owns it.
16:21
SPEAKER_00: What's not disclosed?
16:22
SPEAKER_00: Which use case goes first, whether it's in the field, in marketing, or in the back office?
16:27
SPEAKER_00: Cost, term.
16:28
SPEAKER_00: The release says the business spans exploration
16:30
SPEAKER_00: and production plus energy marketing, and that's as specific as it gets.
16:34
SPEAKER_01: ThoughtWorks side, quote,
16:35
SPEAKER_01: organizations want to move from isolated AI experiments to agentic AI
16:39
SPEAKER_01: that delivers business value.
16:41
SPEAKER_01: They also say they run strategy and delivery together from the start,
16:43
SPEAKER_01: with early proof of concept work that tells you about data readiness,
16:47
SPEAKER_01: integration requirements, adoption challenges.
16:49
SPEAKER_00: Data readiness.
16:50
SPEAKER_00: That phrase is carrying a lot of pipe.
16:52
SPEAKER_01: Which makes it a good spot for a voice from another show.
16:55
SPEAKER_01: Upstream Oil & Gas, Episode 360, published September 30th.
16:58
SPEAKER_01: Host Elena Melkert,
17:00
SPEAKER_01: guest Claudia Molina,
17:01
SPEAKER_01: founder of Seguyen, talking about what this industry is sitting on.
17:04
SPEAKER_00: What did she say?
17:05
SPEAKER_01: Quote, right now we have legacy data that we haven't touched.
17:08
SPEAKER_01: It's just there.
17:09
SPEAKER_01: We have piles and piles and piles that we have inherited.
17:12
SPEAKER_00: Piles and piles and piles.
17:14
SPEAKER_00: Every acquisition in this business comes with a data room in a basement.
17:17
SPEAKER_01: And every story this week runs on that pile.
17:20
SPEAKER_01: The plunger optimizer learns from each well's best historical runs if the history's clean.
17:24
SPEAKER_01: The refinery agent learns from past failures and work orders if somebody wrote them down.
17:28
SPEAKER_01: Co-pilot pulls research.
17:30
SPEAKER_01: Fine.
17:31
SPEAKER_01: But the right side will touch your own records.
17:33
SPEAKER_01: As clean or as messy as they are.
17:34
SPEAKER_00: So, ladder recap.
17:36
SPEAKER_00: Wood Mackenzie and Co-pilot,
17:37
SPEAKER_00: bottom rung,
17:38
SPEAKER_00: it reads,
17:39
SPEAKER_00: the refinery agent and Pack Energy's manual mode,
17:41
SPEAKER_00: middle rung, it recommends, and a human signs.
17:44
SPEAKER_00: Pack Energy's auto and AIQ's robo-well, top rung, they act inside limits.
17:48
SPEAKER_00: Microsoft just bolted a top rung onto the desk side, and expand is building its ladder.
17:53
SPEAKER_01: Clean.
17:53
SPEAKER_01: Now let's make it practical.
17:55
SPEAKER_01: Who should do what?
17:56
SPEAKER_00: Operators first.
17:57
SPEAKER_00: If you run plunger wells, you don't need anybody's AI to get started.
18:00
SPEAKER_00: You need a list of which wells nobody's touched in a year.
18:03
SPEAKER_00: That list is your business case.
18:04
SPEAKER_00: And if a vendor offers an off mode, take the free audit before you take the sales pitch.
18:08
SPEAKER_01: Before anything goes to auto, three questions.
18:11
SPEAKER_01: Who reviewed the safety limits and when?
18:13
SPEAKER_01: Who gets the alert when the system changes the set point?
18:15
SPEAKER_01: And who can turn it off from a truck at two in the morning?
18:17
SPEAKER_01: If nobody can answer the third one, you're not ready for auto.
18:20
SPEAKER_00: And a fourth, our read, not in any release.
18:23
SPEAKER_00: When auto changes a set point and something goes sideways, whose name is on it?
18:27
SPEAKER_00: The vendors?
18:28
SPEAKER_00: The engineer who approved the limits?
18:29
SPEAKER_00: Get that in writing before the first well flips.
18:32
SPEAKER_01: Nobody we read this week addressed that.
18:34
SPEAKER_01: Which isn't a scandal.
18:35
SPEAKER_01: It's just the question nobody puts in a launch announcement.
18:37
SPEAKER_00: Production engineers.
18:39
SPEAKER_00: Ask every vendor for the boring number, the tuned well number.
18:41
SPEAKER_00: If all they've got is up to, ask how many wells it's based on and over how long.
18:46
SPEAKER_00: PAC Energy says its October 29th webinar will show field results.
18:49
SPEAKER_00: That's your room to ask.
18:51
SPEAKER_01: Land and back office.
18:53
SPEAKER_01: The co-pilot right actions are a policy decision, not an IT ticket.
18:56
SPEAKER_01: Our suggestion, decide now which systems never get always allow.
19:00
SPEAKER_01: Division orders, revenue distribution, anything that moves money or touches title.
19:05
SPEAKER_01: Write it down before somebody clicks.
19:06
SPEAKER_00: Royalty and mineral owners, general point, our read, not for many of these releases.
19:11
SPEAKER_00: If optimization makes a well produce more gas,
19:14
SPEAKER_00: the royalty owners on that well generally share in that production
19:16
SPEAKER_00: under their lease terms.
19:17
SPEAKER_00: Nobody has to sign anything new.
19:19
SPEAKER_00: But if you watch check stubs on old gas wells,
19:21
SPEAKER_00: a bump might show up and nobody's going to send you a letter explaining why.
19:24
SPEAKER_01: And a fair caution.
19:25
SPEAKER_01: A bump might be price, not volume.
19:27
SPEAKER_01: Same revenue versus production point from earlier.
19:30
SPEAKER_00: Security, folks, and this matters more than it sounds.
19:32
SPEAKER_00: Every rung up the ladder means more connections between the field,
19:34
SPEAKER_00: the office, and somebody's cloud.
19:36
SPEAKER_00: The refinery chairman's biggest worry was attackers holding data for ransom.
19:40
SPEAKER_00: An auto mode that can write set points,
19:42
SPEAKER_00: our read, deserves the same review you'd give any new remote access into the field.
19:46
SPEAKER_01: Now push back on yourself.
19:47
SPEAKER_01: You've been the skeptic the whole episode.
19:49
SPEAKER_00: Fine.
19:49
SPEAKER_00: Case for going faster.
19:51
SPEAKER_00: The 5% is real money and it's sitting there now.
19:54
SPEAKER_00: Every month a plunger well runs on a stale setting that gas isn't coming back and
19:58
SPEAKER_00: the field doesn't have enough experienced hands to watch every well.
20:01
SPEAKER_00: Pack Energy's line is more wells than well experts to watch them.
20:04
SPEAKER_00: That's not marketing.
20:05
SPEAKER_00: That's the job market.
20:06
SPEAKER_00: So waiting costs
20:07
SPEAKER_01: something too?
20:08
SPEAKER_00: Waiting costs something.
20:09
SPEAKER_00: I just want people walking up the ladder not jumping to the top rung.
20:12
SPEAKER_01: What to watch?
20:14
SPEAKER_01: One.
20:15
SPEAKER_01: Pack Energy's October 29th webinar.
20:17
SPEAKER_01: Field results and how wells get qualified.
20:20
SPEAKER_01: 2.
20:20
SPEAKER_01: How Microsoft's right actions actually show up and which connectors
20:23
SPEAKER_01: in your own company's tenant get them.
20:25
SPEAKER_01: 3.
20:26
SPEAKER_01: Wood McKenzie's next connectors,
20:27
SPEAKER_01: which they say come through the rest of this year and into early next.
20:30
SPEAKER_00: 4.
20:31
SPEAKER_00: Expands production solution by the end of 2026 and whether they ever say what it does.
20:36
SPEAKER_00: 5.
20:36
SPEAKER_00: Whether AIQ actually plants a flag in Houston.
20:39
SPEAKER_00: If it does, the robo-well pitch shows up in our backyard.
20:43
SPEAKER_01: Ask,
20:47
SPEAKER_01: what's your
20:50
SPEAKER_00: number on wells that are already tuned?
20:52
SPEAKER_00: How many wells is that based on?
20:53
SPEAKER_00: Over how long?
20:55
SPEAKER_00: Does it work with my SCADA polling or do I need new controllers?
20:58
SPEAKER_00: Can I run it in off mode for a month first?
21:00
SPEAKER_00: And who owns the data afterward?
21:01
SPEAKER_01: Get real answers to all of that.
21:03
SPEAKER_01: You're having a real conversation.
21:05
SPEAKER_01: Get the 30% slide again.
21:06
SPEAKER_01: You're on a sales call.
21:08
SPEAKER_01: Second scenario, you run a land department.
21:10
SPEAKER_01: IT tells you Copilot can now update records in one of your systems.
21:14
SPEAKER_00: Ask which systems and which actions.
21:16
SPEAKER_00: Who's allowed to pick always allow?
21:18
SPEAKER_00: Is there an audit log and does anybody actually read it?
21:21
SPEAKER_00: Can anything that touches payments stay on approve every time?
21:24
SPEAKER_00: Then write the answers down where the next person can find them.
21:26
SPEAKER_01: That's the news.
21:28
SPEAKER_01: Now, the part of the show that's allowed to be a little dumber.
21:30
SPEAKER_00: Messiest industry artifacts of the week.
21:32
SPEAKER_00: Rated in plungers.
21:33
SPEAKER_00: Five plungers.
21:34
SPEAKER_00: Arrives on time.
21:35
SPEAKER_00: Every cycle.
21:36
SPEAKER_00: Item one.
21:39
SPEAKER_01: A press release whose first paragraph says revenue and whose tagline says production.
21:45
SPEAKER_01: Same 30%, two different nouns.
21:47
SPEAKER_01: Real credit for printing the small number up front.
21:50
SPEAKER_01: Three plungers.
21:51
SPEAKER_01: Doct one for the noun swap.
21:53
SPEAKER_00: Item two.
21:54
SPEAKER_00: This engagement creates the operational backbone required
21:56
SPEAKER_00: to scale agentic AI directly into business operations.
21:59
SPEAKER_00: That's a real sentence.
22:01
SPEAKER_00: I tried to count the nouns.
22:02
SPEAKER_00: The nouns won.
22:03
SPEAKER_01: In fairness, it's week one and they put a date on it.
22:06
SPEAKER_01: Two plungers.
22:07
SPEAKER_01: Expected arrival, end of 2026.
22:09
SPEAKER_00: Item three.
22:10
SPEAKER_00: The approval card.
22:11
SPEAKER_00: Allow once.
22:12
SPEAKER_00: Allow for conversation.
22:13
SPEAKER_00: Always allow.
22:13
SPEAKER_00: Three buttons.
22:14
SPEAKER_00: And one of them is basically this whole episode.
22:16
SPEAKER_01: That one's not even messy.
22:17
SPEAKER_01: It's well designed.
22:18
SPEAKER_01: It's just honest about what people are going to do.
22:20
SPEAKER_01: Four plungers.
22:21
SPEAKER_01: The fifth one goes to whoever never clicks always allow.
22:24
SPEAKER_00: Nobody gets five this week.
22:26
SPEAKER_01: News was the latter.
22:27
SPEAKER_01: Read.
22:28
SPEAKER_01: Recommend.
22:29
SPEAKER_01: Act.
22:30
SPEAKER_01: The closer was plungers.
22:31
SPEAKER_01: Credits.
22:32
SPEAKER_00: Silicon and Shale, a practical conversation where the oil patch meets the algorithm.
22:37
SPEAKER_00: Siliconandshale at geemail.com.
22:39
SPEAKER_00: Every source we cited is linked in the show notes.
22:41
SPEAKER_00: Pack Energy,
22:42
SPEAKER_00: Semaphore and AIQ,
22:43
SPEAKER_00: Enterprise AM,
22:44
SPEAKER_00: Wood McKenzie,
22:45
SPEAKER_00: Microsoft's documentation, ThoughtWorks, and the Upstream Oil and Gas podcast.
22:49
SPEAKER_01: If Pack Energy's field results on October 29th
22:51
SPEAKER_01: or Expand's first production solution change anything we said today,
22:54
SPEAKER_01: we'll come back and say so.
22:56
SPEAKER_00: One small ask.
22:57
SPEAKER_00: If this episode helped you tell a ceiling number from a floor number,
23:00
SPEAKER_00: a rating or a short review wherever you listen,
23:02
SPEAKER_00: helps other folks in the patch find the show.
23:04
SPEAKER_00: Once is plenty.
23:05
SPEAKER_01: And to every plunger well that got set in some other decade and left alone,
23:08
SPEAKER_01: we can't promise it'll be an AI that finally comes to check on you.
23:11
SPEAKER_01: But somebody's reading your arrival times now.
23:13
SPEAKER_01: Act natural.