An interview with MicroSeismic CFO Rick Luke

Surface and downhole microseismic technology has been widely accepted by geologists and geophysicists for the value of describing the fracture network in a way that allows operators to improve production and reduce costs. The next step in our technology advancement is to move from descriptive services (telling operators what happened with the frack) to prescriptive services (helping operators with what steps to take to optimize the frack before and during completion).

Currently, microseismic technology is only used on about 5% of the wells fracked in North America and significantly less internationally. We believe microseismic monitoring should be used by operators on every frack job to eliminate non-productive stages, optimize well and stage spacing, estimate ultimate recovery of hydrocarbons, and increase ROI. We are tapping into the additional 95% of the market by reaching operators that are focused on improving decline curves and delivering excellent value to investors. MicroSeismic will be strengthening its completions evaluation services for prescriptive recommendations both organically and via acquisitions.

OGFJ: Who are your customers and how do your products help them?

Luke: MicroSeismic works for E&P companies worldwide and has completed projects in 18 countries, and while the majority of that is North America, our international footprint is growing. Our technology provides operators data on what has actually happened during a frack stage, rather than a theoretical model. With this data and engineering analysis provided by our completions evaluation team, operators can improve production and reduce costs by optimizing well and stage spacing, eliminating non-productive stages, avoiding faults, and better understanding EUR early in the life of a well.

OGFJ: What will the cutbacks in exploration and production already announced by many US companies mean for the company?

Luke: Cutbacks in exploration and production will require US companies to be more focused on cost control and efficiency of operations. We believe this is actually an opportunity for MicroSeismic to demonstrate our value proposition to E&P companies.

OGFJ: Are there plans for new products? How will that help the company going forward?

Luke: We are a technology company and are continually working on new products and services. We recently entered into the downhole microseismic business with a differentiated offering that provides more accurate results to operators. In addition, many of our customers are using this low price environment to focus on re-fracturing already completed wells. We have introduced a service specifically for monitoring re-fracks that allows clients to understand, in real-time, when they have begun to fracture new rock vs. re-stimulating rock that was fractured during the first completion.

OGFJ: Is the current environment challenging for companies like MicroSeismic that are vendors to the industry?

Luke: Everyone in the industry is challenged with the drop in oil price, but our technology continues to be commercially viable for operators. The current economic outlook creates opportunity for technology companies like MicroSeismic to step up and demonstrate our ability to increase efficiency for our customers. With the drop in oil price, new technologies have an even larger part to play in finding lower cost solutions and production efficiencies to the industry, and we believe that MicroSeismic is at the forefront of making that happen.

OGFJ: Thank you for your time.