Brett Chell, President of Cold Bore Technology, Discusses the Impact of COVID-19 on the Alberta Economy and the Oil and Gas Industry

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[00:00] SPEAKER_00: It's Calgary's podcast on the Canada's podcast network.
[00:06] SPEAKER_00: Hello, this is Mario Toniguzi coming to you today with Calgary's podcast, a member of Canada's
[00:12] SPEAKER_00: podcast network, where we talk to the entrepreneurs who are making it happen in Calgary, Alberta,
[00:17] SPEAKER_00: so you can listen, discover, and engage.
[00:21] SPEAKER_00: Today's guest is Brett Chal, president of Cold War Technology in Calgary.
[00:27] SPEAKER_00: Thanks for joining us today, Brett.
[00:29] SPEAKER_00: Thanks Mario, appreciate it.
[00:31] SPEAKER_00: All right, let's start with simple question.
[00:33] SPEAKER_00: Brett, tell me what Cold War is and what you guys do.
[00:37] SPEAKER_01: Yeah, sure.
[00:39] SPEAKER_01: So for all our oil and gas people out there, this will be a pretty straightforward one.
[00:43] SPEAKER_01: For everybody else, we'll keep it to a high level so we don't lose anybody or put them to sleep.
[00:49] SPEAKER_01: But essentially we're a software, hardware, development company based in Calgary.
[00:54] SPEAKER_01: And we provide the world's first electronic completions recorder.
[00:58] SPEAKER_01: There's some local success stories that everyone might be familiar with company called Pace On.
[01:03] SPEAKER_01: They're a billion dollar plus company that built the electronic drilling recorder 20 years ago.
[01:09] SPEAKER_01: And so from a really high level perspective, it's just a computer that tracks the whole drilling process
[01:14] SPEAKER_01: and gives all relevant information in real time to the the driller and then databases the rest.
[01:19] SPEAKER_01: In completions or fracking, as it's more affectionately known, it's quite a bit more complicated process.
[01:25] SPEAKER_01: There's five or six different companies kind of tripping over each other.
[01:29] SPEAKER_01: Multiple wells happening and everybody's using their own systems right now with different formats,
[01:33] SPEAKER_01: different time stamps and everything's kind of a mess.
[01:36] SPEAKER_01: And that leads to a problem for the operator.
[01:39] SPEAKER_01: So we developed the centralized operating system or the central nervous system, if you will,
[01:44] SPEAKER_01: that is operator focused that plugs everybody else in on location and gives the operator one universal look at their entire operation.
[01:52] SPEAKER_00: Okay, tell me when you started the company and maybe a little history of why you started this.
[01:59] SPEAKER_01: Good question.
[02:02] SPEAKER_00: So we start with self.
[02:04] SPEAKER_01: Yeah, yeah, why I started now, you're retrospective.
[02:07] SPEAKER_01: Hindsight is 20 20 and through a triple recession pandemic.
[02:10] SPEAKER_01: It's a good question.
[02:12] SPEAKER_01: Yeah, we started in 2014, this company specifically.
[02:16] SPEAKER_01: I'm also partners and another advanced automation drilling company that is partnered with Haliburton.
[02:21] SPEAKER_01: We started a few companies around that time.
[02:24] SPEAKER_01: But this one specifically 2014, we started it because I initially had spent a lot of 10 years on the drilling side of things.
[02:33] SPEAKER_01: And drilling was way, way more advanced and way more automated because it had been around longer and seen more cycles.
[02:39] SPEAKER_01: When we went and had a look at completions of fracking, there was a lot of holes in that market.
[02:44] SPEAKER_01: A lot of analog process is still happening and just it was right with opportunity.
[02:49] SPEAKER_01: At that time, we didn't know what the future would hold.
[02:52] SPEAKER_01: So oil field services was still a great place to be lucky for us.
[02:57] SPEAKER_01: We have work technology focused company.
[02:59] SPEAKER_01: So even through the triple recession pandemic, it has the initial knee jerk downfalls.
[03:04] SPEAKER_01: But the pushed automation and technology has actually worked in our favor and now, especially with a remote system like ours is
[03:12] SPEAKER_01: really pushing people out direction.
[03:14] SPEAKER_01: So we just saw a whole that was carried over from the drilling side and our experience and we decided to go after it.
[03:20] SPEAKER_01: And here we are.
[03:22] SPEAKER_00: Okay.
[03:23] SPEAKER_00: So tell me just a little bit about your vision for this company and for the business.
[03:28] SPEAKER_00: So where do you see it in the next few years?
[03:32] SPEAKER_01: Yeah.
[03:33] SPEAKER_01: So I hate to be an entrepreneur and say we got big, big expectations for this because that's what every entrepreneur thinks.
[03:40] SPEAKER_01: If you really logically step back and look at this, the size of the opportunity and the need for a product like this in the market in completions is huge.
[03:49] SPEAKER_01: Complitions is the most expensive part of the operation and completing a wealth of from drilling completed to production.
[03:55] SPEAKER_01: Fracking is the most expensive and it's the most fragmented right now.
[03:59] SPEAKER_01: And there's the least amount of automation in there.
[04:02] SPEAKER_01: Us being the system that connects, you know, our clients first are the operators.
[04:06] SPEAKER_01: But second are the service companies like Halibut and Sumberger, NOV, all these guys.
[04:10] SPEAKER_01: Right.
[04:10] SPEAKER_01: So we have the shells, the exons, the parisies that all start, they say, Hey, we're going to use this.
[04:15] SPEAKER_01: And then the service companies want access to the same screens because a rise in time lifts all ships.
[04:21] SPEAKER_01: I have really big expectations for this worth worth.
[04:24] SPEAKER_01: We're thinking a, you know, pay sounds of billion and a half dollar company.
[04:28] SPEAKER_01: We are the analogy, but in drill it in completions, which is four or five times the cost of what the solution that they're providing.
[04:36] SPEAKER_01: So, you know, I don't know if that translates directly to four or five times evaluation.
[04:39] SPEAKER_01: There's a lot of metrics that have to go into being successful like Pace on is, but they're really high expectations for this in next couple of years, especially with what's happened.
[04:49] SPEAKER_01: You know, this is a remote operating system and everyone needs remote access also.
[04:54] SPEAKER_00: You know, you mentioned a couple of times.
[04:56] SPEAKER_00: Obviously, there are the recessions and COVID and Calgary is an Alberta is also hit.
[05:03] SPEAKER_00: Obviously with the oil price collapsing.
[05:06] SPEAKER_00: How do you survive through all this stuff and continue on?
[05:10] SPEAKER_01: I my, my analogy is kind of like, it's kind of like running a marathon in a hailstorm.
[05:16] SPEAKER_01: Carefully, carefully, right?
[05:18] SPEAKER_01: We're tiptoeing through the tulips.
[05:20] SPEAKER_01: So we're fortunate, you know, being a technology company, we're, we're non commoditized.
[05:24] SPEAKER_01: And I think that's the really hard part to survive right now is if you're a commoditized company, you have equipment that everyone else has or something like that.
[05:32] SPEAKER_01: And it's just a race to the bottom.
[05:34] SPEAKER_01: Then you're fighting the commodity price, you're fighting the pandemic, you're fighting the recessions.
[05:38] SPEAKER_01: And now you're fighting, you know, yourself with a race to the bottom.
[05:41] SPEAKER_01: Yeah.
[05:41] SPEAKER_01: So I feel very fortunate.
[05:43] SPEAKER_01: I don't want to cast too much shadow on this because either other people that have a lot harder than me right now.
[05:48] SPEAKER_01: We have obviously had our own struggles because we're a small company that was scaling fast.
[05:53] SPEAKER_01: You know, our clients are the biggest companies in the world.
[05:55] SPEAKER_01: Shell, X on, all these guys.
[05:57] SPEAKER_01: So we're trying to meet demands, which means we were out putting a ton of capital written for all this happened.
[06:03] SPEAKER_01: And we needed to see our revenue growth, maintain the same pace as our expenditures in that critical phase of growth so that we didn't hit a speed bump that caused us to fall apart.
[06:13] SPEAKER_01: Yeah.
[06:14] SPEAKER_01: Enter the pandemic.
[06:16] SPEAKER_01: And that exact thing happens where revenue just drops off.
[06:19] SPEAKER_01: And so we're not immune to it.
[06:21] SPEAKER_01: But you know, it's all about just being creative, sticking and moving.
[06:26] SPEAKER_01: We've maintained all of our employees luckily, maintained our salaries for them.
[06:30] SPEAKER_01: And we're just finding, you know, you go to the gas producers when this happens.
[06:35] SPEAKER_01: They've got more business happening and kind of shifts back and forth.
[06:37] SPEAKER_01: So you just have to be really valuable and kind of be quick.
[06:41] SPEAKER_01: Okay.
[06:42] SPEAKER_01: What do you like about being an entrepreneur?
[06:45] SPEAKER_01: Oh, it's kind of cliche, but everything.
[06:46] SPEAKER_01: I mean, I even like the hard parts of it, to be honest.
[06:49] SPEAKER_01: It's some days it feels like you don't like it.
[06:52] SPEAKER_01: And it just is a little too much.
[06:53] SPEAKER_01: But I like everything about it.
[06:55] SPEAKER_01: Basically, I'm on employable is what it comes down to.
[06:58] Speaker UNKNOWN: Yeah.
[06:59] SPEAKER_01: So the only choice I had was to start my own companies because I'm just too all over the place and completely unemployable.
[07:05] SPEAKER_01: So I like the freedom of being able to work on a million different things at once within one company and have, you know, be the guy who's in charge of money,
[07:13] SPEAKER_01: raise an in aviation and creation and software development and product development touch everything.
[07:19] SPEAKER_01: And unless you're own in your own business, you're going to get put into one of those places to go do.
[07:24] SPEAKER_01: And for me, that's a challenge.
[07:26] SPEAKER_01: So I really like the freedom to be able to kind of oversee everything work on a lot of things, have your own hours.
[07:33] SPEAKER_01: Obviously, there's been macro challenges the last five years in oil and gas services.
[07:39] SPEAKER_01: But you know, I wouldn't trade it for anything to be honest.
[07:42] SPEAKER_00: Okay.
[07:43] SPEAKER_00: Do you recall any piece of advice, the best piece of advice you may have received from somebody about being an opera trainer and about being a business owner?
[07:53] SPEAKER_00: Absolutely.
[07:54] SPEAKER_01: So I meant to remind was my uncle Cameron and he's very successful business guy here in town.
[08:01] SPEAKER_01: He lives in California now.
[08:03] SPEAKER_01: He taught me the in the notes of early stage step financing and private equity.
[08:07] SPEAKER_01: And that's kind of where I learned how to finance my own businesses.
[08:10] SPEAKER_01: And when we first started, I remember him telling me, he sat down probably 12 years ago and he said,
[08:14] SPEAKER_01: look, it doesn't matter if you want to make wooden spoons or build rocket ships to go to Mars.
[08:20] SPEAKER_01: If you can't finance it, it's not going to, you're not going to be doing either.
[08:24] SPEAKER_01: So as an entrepreneur, we tend to focus on, oh, here's my product.
[08:28] SPEAKER_01: Here's my gizmo.
[08:29] SPEAKER_01: I can't wait to get this out.
[08:30] SPEAKER_01: And they don't take the time to get educated on the capital markets.
[08:33] SPEAKER_01: And so you either have a really tough time getting that initial capital or you have a really tough time financing that second stage.
[08:39] SPEAKER_01: That A round and you fall down there and lose your company or when you're successful and you get to the IPO or whatever you're doing,
[08:46] SPEAKER_01: you have the company stolen from you at that point because you just weren't, you don't understand how convertibles work.
[08:51] SPEAKER_01: You don't understand how the debt guys want to operate and you end up running into trouble where you couldn't make a payment back and you didn't see that coming.
[08:58] SPEAKER_01: So that was the most important information or the most important advice I ever got was to learn at a base level at least how the capital markets work and don't focus so much on just your product.
[09:07] SPEAKER_00: Well, I'm glad you mentioned your uncle because I actually was going to ask you that question off camera because I met Cameron several years ago,
[09:16] SPEAKER_00: through other stuff that I was doing in business and writing for business stories.
[09:22] SPEAKER_00: And it's interesting that you mentioned him because I want to ask you about the entrepreneurial spirit in Calgary.
[09:29] SPEAKER_00: Is it a conducive place to be an entrepreneur?
[09:34] SPEAKER_01: Man, when you ask an entrepreneur that question, you're going to get a biased answer.
[09:37] SPEAKER_01: It's like, we'll do it anywhere.
[09:39] SPEAKER_01: Yeah, has it been easy here?
[09:40] SPEAKER_01: I don't think so.
[09:41] SPEAKER_01: I think Calgary is trying to rebrand itself right now as like a tech hub.
[09:46] SPEAKER_01: I don't think it's going as well as everybody would hope it would go.
[09:49] SPEAKER_01: We don't have a lot of federal and provincial support.
[09:52] SPEAKER_01: There's a lot of spirit in Calgary.
[09:54] SPEAKER_01: So the entrepreneurial spirit is alive and well.
[09:57] SPEAKER_01: People want to do it here, but there's not a ton of support and the biggest restriction
[10:02] SPEAKER_01: is not so much a provincial one or a city one is a federal one.
[10:07] SPEAKER_01: We just don't have the financial support or access to capital markets here to really accelerate a lot of these businesses.
[10:14] SPEAKER_01: It's just a struggle.
[10:15] SPEAKER_01: And if you get down to the States and you go try one down there or ever involved in a US company,
[10:21] SPEAKER_01: maybe you, the light bulb goes off.
[10:23] SPEAKER_01: You're like, what was I ever doing in Canada?
[10:25] SPEAKER_01: What a struggle.
[10:27] SPEAKER_01: So, you know, I think Calgary's got a lot of spirit.
[10:29] SPEAKER_01: I think they got a way is to go in terms of supporting that and actually putting stuff in place to help foster the growth.
[10:37] SPEAKER_00: Everybody struggles with this.
[10:39] SPEAKER_00: Anybody that's working or as a business owner struggles with that.
[10:44] SPEAKER_00: Hold on, quote, work, life balance.
[10:47] SPEAKER_00: How do you deal with that?
[10:49] SPEAKER_00: And what do you think you're at in that and juggling those two?
[10:54] SPEAKER_00: I think I'm pretty good.
[10:56] SPEAKER_01: I mean, this is a good like to say, you know, Cam.
[10:58] SPEAKER_01: He, his passion is work legitimately.
[11:02] SPEAKER_01: I have passions like, you know, other passions, snowmobiling and art and all these things outdoors.
[11:07] SPEAKER_01: I love being in the mountains.
[11:08] SPEAKER_01: So I have a, it's pretty easy for me.
[11:10] SPEAKER_01: I work hard and it's usually 14, 13, 14 hours a day when I'm here.
[11:15] SPEAKER_01: But that's just because, you know, you just, that's what it takes.
[11:17] SPEAKER_01: You're just getting it done on the weekends, though.
[11:19] SPEAKER_01: I, you know, I'm watching my email to see if there's any emergencies I need to deal with,
[11:23] SPEAKER_01: but the switch goes off and I'm out of here.
[11:25] SPEAKER_01: Like I usually am in the mountains and revel soak or golden on the weekends.
[11:28] SPEAKER_01: And that's just a recharge for me.
[11:31] SPEAKER_01: And I'm 10 times more productive because of it.
[11:33] SPEAKER_01: So I think it's, I think it's great.
[11:35] SPEAKER_01: I mean, getting to do call your own schedule, as long as you're disciplined enough to realize
[11:41] SPEAKER_01: that working 24, 7 for me, anyway, is not the answer.
[11:45] SPEAKER_01: I'd be way less productive.
[11:47] SPEAKER_01: And to go do it, just to, you got to realize that it's, Monday is going to be there.
[11:51] SPEAKER_01: You know, your company is not, nothing's going to make a huge difference.
[11:54] SPEAKER_01: If you get these 10 other documents out by Sunday night or Monday morning.
[11:58] SPEAKER_01: So I just look at it that way.
[12:00] SPEAKER_01: Cam, he'll go 24 hours a day.
[12:02] SPEAKER_01: That's just the way he is.
[12:03] SPEAKER_00: So do you find that in whatever interests you have or passions you have that
[12:09] SPEAKER_00: sometimes you, you get ideas for the business while while doing those thinking on the creative level?
[12:15] SPEAKER_01: You know what?
[12:16] SPEAKER_01: It does.
[12:17] SPEAKER_01: Whenever, whenever you get your mind out of the critical thinking phase of just being siloed
[12:22] SPEAKER_01: and you're looking down that same tube all the time, for sure, it may not be that, you know,
[12:27] SPEAKER_01: going mountain biking or sledding directly translates into, oh, I thought of a great idea
[12:31] SPEAKER_01: because of the mountain biking, but because you're doing something where you're just
[12:35] SPEAKER_01: your subconscious is operating and you're just kind of having fun, it allows your critical
[12:39] SPEAKER_01: brain to step aside for a while.
[12:41] SPEAKER_01: And you'll end up having ideas because of it.
[12:44] SPEAKER_01: It's like artists, right?
[12:45] SPEAKER_01: I'm an art, I'm a professional artist as well.
[12:47] SPEAKER_01: This is why I can give this analogy.
[12:48] SPEAKER_01: But my best ideas for my paintings and my drawings and everything I want to create always come
[12:53] SPEAKER_01: in the half hour before sleep because that's where your mind is starting to shut off.
[12:58] SPEAKER_01: You're daily, I need to think about this test, that test, that test, and you're just kind of
[13:02] SPEAKER_01: coasting and your brain is going into the subconscious.
[13:04] SPEAKER_01: And that's where you start, you're like, oh, I'm writing notes at midnight or 12, 13
[13:08] SPEAKER_01: in the morning.
[13:08] SPEAKER_01: I should paint this.
[13:09] SPEAKER_01: I should paint that.
[13:10] SPEAKER_01: So I think it's very similar.
[13:11] SPEAKER_00: Okay.
[13:12] SPEAKER_00: Cool.
[13:13] SPEAKER_00: Everybody's these days seem to have a bucket list, a personal bus bucket list.
[13:18] SPEAKER_00: What would be on top of yours right now?
[13:21] SPEAKER_00: That's a good question.
[13:22] SPEAKER_01: I've had a lot of stuff owning a race team is the top of top of mine.
[13:26] SPEAKER_01: A super trapezo Lamborghini Rooks team.
[13:29] SPEAKER_01: I'm a big car nut.
[13:31] SPEAKER_01: Wow.
[13:31] SPEAKER_01: Love racing cars.
[13:32] SPEAKER_01: So that's my goal right now.
[13:34] SPEAKER_01: That's the top bucket list.
[13:35] SPEAKER_00: Oh, wow.
[13:36] SPEAKER_00: Have you ever been to Italy and visited the Ferrari factory?
[13:42] SPEAKER_01: I have not been to Modena.
[13:43] SPEAKER_01: I would love to.
[13:44] SPEAKER_01: As soon as we're opened up again, I think that that's got to be on my list.
[13:47] SPEAKER_01: I've never been to Santa Aguittat to see the Lamborghini dealer or the Ferrari one,
[13:51] SPEAKER_01: but that's definitely on my list.
[13:53] SPEAKER_00: Speaking of travel over the years, what has been your favorite place that you've visited?
[14:00] SPEAKER_01: Dubai, for sure.
[14:01] SPEAKER_01: Oh, wow.
[14:02] SPEAKER_01: I've been to Oman and Saudi and Dubai and stuff like that.
[14:06] SPEAKER_01: UK is always really cool.
[14:08] SPEAKER_01: Everything in Europe is so much older.
[14:10] SPEAKER_01: I mean, you find yourself walking around looking at a convenience store that's from that's 500 years old.
[14:15] SPEAKER_01: And you're just amazed by the architecture of a 7-Eleven.
[14:17] SPEAKER_01: So I really like the UK for that.
[14:19] SPEAKER_01: But Dubai is just, it's another level.
[14:21] SPEAKER_01: It's a home, different world.
[14:22] SPEAKER_01: It just kind of blows your mind when you're there.
[14:24] SPEAKER_01: What was it?
[14:25] SPEAKER_01: What was or what is it about Dubai?
[14:28] SPEAKER_01: Everything is just not how it's supposed to be.
[14:31] SPEAKER_01: You're not supposed to have grass all over the desert.
[14:33] SPEAKER_01: You're not supposed to have a ski hill there.
[14:34] SPEAKER_01: The buildings aren't supposed to be that tall.
[14:36] SPEAKER_01: You know, there's not supposed to be whole islands that are fake.
[14:39] SPEAKER_01: Like, you know what I mean?
[14:40] SPEAKER_01: It's kind of like, it gives you this really,
[14:42] SPEAKER_01: this kind of like perplexing mental situation to deal with too.
[14:47] SPEAKER_01: Because you look at all that and you're amazed.
[14:49] SPEAKER_01: The biggest mall in the world with a fish tank that has like actual major sharks in it and everything.
[14:54] SPEAKER_01: But it's like, it's kind of cool.
[14:56] SPEAKER_01: But at the same time, it's just so over the top and excessive.
[14:59] SPEAKER_01: And you think of all the cost and energy that would go in to keep something that going.
[15:03] SPEAKER_01: It almost gives you this like impending sense of, you know,
[15:07] SPEAKER_01: doom as a civilization.
[15:08] SPEAKER_01: We're like, we're just doing everything because we can without any real rationalization of,
[15:13] SPEAKER_01: is this what we should be doing?
[15:15] SPEAKER_00: You know, I guess in Dubai too, that they just get things done, right?
[15:20] SPEAKER_01: Yeah.
[15:20] SPEAKER_01: If they dream it, they do it.
[15:22] SPEAKER_01: I mean, that might change now.
[15:23] SPEAKER_01: I mean, we got a different world where even the UAE is going to have to pull the strings in a little bit.
[15:28] SPEAKER_01: Yeah, it's an incredible place, though.
[15:30] SPEAKER_01: I mean, it really, really incredible.
[15:32] SPEAKER_00: Okay, speaking of travel, I'm going to present a scenario to you and just want to get your response to it.
[15:38] SPEAKER_00: Okay.
[15:39] SPEAKER_00: So we're going to take you to a tropical island in the middle of the ocean somewhere.
[15:45] SPEAKER_00: And that does not have any internet, no other technology,
[15:50] SPEAKER_00: except for this one phone booth that sits there.
[15:53] SPEAKER_00: Couple of questions.
[15:54] SPEAKER_00: How long do you think it would take you to pick up that phone and call us and say,
[15:59] SPEAKER_00: get me back home.
[16:01] SPEAKER_00: And the second question is, what do you think you'd be doing while you were there on that island?
[16:08] SPEAKER_01: Honestly, it sounds great, but it would be a couple days.
[16:12] SPEAKER_01: Max.
[16:13] SPEAKER_01: Yeah.
[16:14] SPEAKER_01: I mean, I like a beach and going to really beautiful places.
[16:16] SPEAKER_01: I've gone to a bunch of really nice places and it's usually day two when I'm sitting on the beach and I'm going,
[16:23] SPEAKER_01: okay, we need something to do here.
[16:25] SPEAKER_01: So yeah, I mean, it would be a couple of days.
[16:29] SPEAKER_01: And for the two days that I was there, I would be nice to out in plug.
[16:32] SPEAKER_01: Just unplug it and relax and do nothing.
[16:35] SPEAKER_01: Hang out on the beach and swim.
[16:36] SPEAKER_01: I love being in the water.
[16:37] SPEAKER_01: But then after that, it would maybe be two days and I'd have to come get picked up.
[16:41] SPEAKER_00: Okay. Great.
[16:42] SPEAKER_00: Thanks, Sam, for bread for being our guest on Calgary's podcast.
[16:46] SPEAKER_00: Yeah, my pleasure. Thank you.
[16:48] SPEAKER_00: Thanks for taking the time today to listen to Calgary's podcast on Canada's podcast network.
[16:55] SPEAKER_00: We hope you enjoyed the show today.
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[17:09] SPEAKER_00: You can also check out what other entrepreneurs are doing across the country.
[17:14] SPEAKER_00: See you next time.