I’d like to wrap up this series with my perspective on the power of forging strong technology partnerships in the energy sector. If you’ve been following along, you’ll know that my story so far at Agave (a Yates Petroleum subsidiary) has centered around plant accounting. I’ve provided hard-earned lessons on the importance of thinking outside the status quo, embracing change with new solutions, knowing the difference between consulting and technology providers, and why some software solutions force users to work in Excel.
My accounting journey at Agave extended beyond natural gas processing to other parts of the midstream value chain. We were every bit as complex as ExxonMobil, just on a smaller scale as we gathered, transported, processed, stored, and took oil and gas to market across the US. Agave’s business needs constantly evolved, underscoring the need for accounting systems to catch up to our growth.
One day at Yates we suddenly found ourselves with 70,000 barrels of crude stuck in the field that couldn’t be moved to market. So, we pivoted and got into the crude hauling business then started buying third party stock. We needed a field ticketing solution and rather than bolting on a piece of technology to our operation, we tried something a little different. We had started in-plant processing and had a strong relationship with our technology provider. It’s one thing to find a solution that works perfectly out of the box, but sometimes you need a solution that may not exist or work the way you want. So, that technology provider built us a crude oil ticketing solution, and like their plant accounting, it was perfectly aligned to our business needs.
That’s where the technology partnership took off, delivering increasing value over the years.
Next, we hit a big growth phase and started building plants while running CapEx and AFEs in Excel. We called our technology provider and they built us an AFE management solution. next was financial accounting and forecasting. We knew that the systems our technology partner was building contained all the data, so it was going to be simple to build our forecasting on their platform. But right then Yates decided to sell Agave, however, the software developer went on to build a great forecasting solution. And even there, our technology partner was an essential ingredient in helping us build up Agave into a best-in-class midstream company, operate efficiently with a lean team, and position the company for acquisition.
There is real power in partnership. Find a technology partner to run your energy back office who has equal parts the right technology (modern software products but also the ability to pivot their technology to adapt to the market) and customer commitment. With that kind of power behind your operation your team gets to focus on the core business – liberated from cumbersome solutions and legacy software vendors who only want to monetize everything you do – while entrusting your technology needs to a partner who is solely focused on innovation. It’s a winning combination. And the results accrue over the years in the form of accelerated business performance, lower technology costs, and the ability to achieve more with a lean team. And that’s something you can take to the bank whether you’re in midstream or upstream.
|Kevin Throneberry is a Certified Public Accountant with 30 years of accounting and information technology experience including auditing of various industries and 13 years accounting and management with a midstream oil and gas company. Co-leader of Section 355 Tax-Free Spin of the company reducing tax liability by 150 million dollars. He recently secured one of the top three multiples for mid-stream sales and mergers. Kevin has extensive knowledge and skillset in W Energy Software mid-stream products, TIPS Gas Processing, QCM Contract Management, PGAS Gas Measurement, and IBM Cognos.