We have a friend who fixes old clocks. She married the shop’s owner, so now we know two people who fix old clocks. They are horologists, a term I learned listening to the podcast, “S-Town”. I can’t imagine how she tames the wizardry inside these machines. She can explain the process, I can watch the process, I can pay for the process, but I can’t duplicate the process. And I know for sure that I can’t do the process.

Recently, a prospective new client in New York asked us the question, “How do you do what you do?”

We are at our core a market research firm. There are entire college degree programs in market research – sampling people’s opinions to derive an answer or a trend or a preference. Here’s the math that tells you how many people (“n”) you’ve got to interview in order to get a good idea what a population (“P”) of people is thinking or doing:


If you have a large population of people and you want to be pretty confident how that population will vote (or buy breakfast cereal or rent beer), you’ve got to get good interviews from about 1,000 people.

In the oilfield, however, it isn’t possible to get a statistically valid sample of drilling engineers or production managers or supply chain specialists or CFOs. This is because the work of a drilling engineer in the Permian will be remarkably different from a drilling engineer in the North Sea.  Their objective – to drill a hole – may be the same, but how they do it will be quite different.  Therefore, this population of drilling engineers must be segmented into far smaller population.  For example, just drilling engineers working in the Norwegian waters of the North Sea or drilling engineers working in the Delaware Basin, but not the Midland Basin. That is a small population.  So small that standard sampling techniques don’t work.  For the oilfield, throw out the math and the sampling and the statistics.

So how do we do what we do? How do we figure out that Schlumberger’s wireline revenues in 2017 were $3.9 billion or that the artificial lift market in 2018 will be $9.1 billion or the Williston Basin’s water market is $1.4 billion this year or that the world’s 4th largest cementer is C&J?
Here’s some of the things we do:

  1. Read every quarterly report of every public oilfield service company in the world
  2. Talk with thousands of people working in the upstream oil industry each year
  3. Count cars in the parking lots of every oilfield service company we see
  4. Review the public filings of every oil company drilling wells in the US
  5. Peer review (and revise) every bit of analysis we write
  6. Visit every sand mine, factory, drilling rig, frac job, rail siding, pipe yard we are allowed in
  7. Conduct in-depth conversations with every investor studying the upstream oil and gas industry
  8. Monitor LinkedIn (because it is amazing what people say)
  9. Read every newspaper in every small oilfield city
  10. Review the non-industry speeches of oilfield executives (they let down their guard)

Plus, never betray a confidence, never discuss material, non-public information, and never be too proud to admit a number is wrong.

In the end, what we publish is our opinion, but an opinion informed by lots of hard work, lots of digging. It’s built on 53 years of getting better and better at reading data and people, at refining our algorithms and growing databases. It’s never clockwork, but it is a lot of cogs turning at once.