Vegas wears me out, but I’ll push through if there’s a bunch of O&G software/data talk!

Michael Hirsch and I made a trip to Quorum’s annual Qnections conference this year – they are arguably the biggest O&G software company in the world with 35+ products and over 1500 customers.  Pay attention to the 800 lb gorilla! A few big-picture takeaways:

• The end of the Thoma Bravo era
• Future focus areas are getting clearer
• Document extraction capabilities are coming soon

Thoma Bravo Takes a Bow

If you haven’t been paying attention, Quorum is a dramatically different company today than it was when Thoma Bravo bought it from Silver Lake in 2018.  Thoma Bravo executed a string of M&A transactions – Aucerna, Energy Components, OGsys, WellEZ, Flow-Cal, Landdox, Dynamic Docs, and probably more I’ve forgotten about.  They consolidated OGsys, Landdox, Field Insights, and WellEZ into the On Demand Suite (On Demand Accounting, On Demand Land, etc.) as cloud-focused SaaS applications covering most of the major E&P disciplines.  They hired a ton of people, including teams in India and Colombia.

It’s a pretty unbelievable set of changes in such a short time, absolutely unprecedented within the O&G software market.  What was arguably a “product-led consulting” company with a handful of niche apps, is now a global software company with 1700 employees and ~$150mm of EBITDA/yr.  All of that culminates with the sale to Francisco Partners announced last month, for a rumored $2.4B (including debt).

In hindsight, Thoma Bravo’s vision was clear.  Buy a bunch of tools that cover a wide range of workflows inside the E&P and midstream space, then cross-sell the hell out of them.  They ramped up the software development staff (and presumably budget), did a bunch of renaming/rebranding, and started down a long path towards building out integration features between those tools.  This isn’t the first time someone’s pursued that path (P2, Pak, Enverus, etc.), but the scale and scope of Thoma Bravo’s push was at a whole different level.

My big question here: what does Francisco Partners have in mind under their new ownership (which hasn’t closed yet)?  The press release was pretty generic, but the zdSCADA acquisition coming right on the heels of Francisco’s announcement gives a hint that Quorum may not be done with the roll-up strategy.  How many more technology segments within the E&P and Midstream space can they get into?  They have a tool (often more than one!) occupying each of the slots in our Big Six and most of the ones in the Distant Dozen.  What’s next?

Clarity for the Tech Stack

It’s increasingly clear that Quorum doesn’t love all 35+ of its babies (aka products) equally, and it’s more and more obvious which of their products are getting the biggest stash on Christmas morning (aka software development budget).  This is rational of course: lots of their applications have both a legacy on-prem version as well as a newer cloud version – generally, the newer cloud versions are getting more focus.  Consolidating their efforts on the apps that are most likely to make their clients happy is win-win for everyone (except the diehards clinging to dated systems that refuse to upgrade).

The On Demand Suite is getting a lot of attention as they build out interdisciplinary integrations and a shared document management system (more on that later).  Systems with big large-cap installed bases like My Quorum Accounting, QLS, FLOWCAL, TIPS, and QPTM were all mentioned several times last week.  Who’s getting left out?  Qnections didn’t have a single presentation on any of OGsql, Quorum Reserves (fka petroLook), energyIQ, and more.  Check out the agenda yourself, and draw your own conclusions…

Real-deal Document Extraction?

There were lots of new feature rollouts and roadmap presentations for various products this week, but by far, the talk of the show from an E&P perspective was a document extraction tool Quorum is working on for Dynamic Docs (with help from Microsoft’s Azure AI Document Intelligence).  The current workflow is focused on lease data extraction – header info, provisions, etc.  Their ambition is clearly much larger.  They envision a document classification and extraction toolkit that plugs into several disciplines – Land, Accounting, Operations, etc.

Quorum certainly isn’t alone in these efforts – using LLM’s for structured data extraction is happening all over the place, and non-LLM approaches have been used by vendors like Grooper, M-Files, and ThoughtTrace for many years.  But the ability to integrate the extracted results directly into a system of record like ODL or ODA is something those other vendors could only do at arm’s length.  An embedded, simplified workflow could substantially improve adoption rates of those approaches.

Maybe the craziest thing I heard about this is that they basically built the Minimum Viable Product in a week-long hackathon.  Barriers to entry and development cycle times for software are collapsing.  Sales cycles and actual customer adoption remain……painfully slow!

Wrap-up

One final observation – if you’ve never seen a couple hundred O&G software nerds dancing like fools in an honest-to-God NIGHTCLUB at 8:30pm on a Thursday, I don’t think there’s anything that can really prepare you for that experience.  Pictures not included to protect the guilty.

Did you go?  What did we get wrong or right?  Give us a shout if you want to talk more about it!