Adding AI brains to the brawn of oil well pumpjacks

Oil well pumpjacks are, in general, pretty dumb pieces of machinery.

On any given day, about a million of them bob up and down in oil fields across the U.S., pulling crude and sometimes natural gas up from the ground for transport to upstream storage and transfer sites. About the only sliver of intelligence in a pumpjack’s operation are timers that turn the machinery on and off on a pre-set schedule.

And, often, their brawn gives way to clumsy screwups, like a switch that fails to respond to the timers, leaving the pumpjack idle until oil field workers drive out to the boondocks to check on wells and discover the failure.

That’s a significant problem for the industry, which relies on pumpjacks as critical, downstream cogs in a complex, multi-layered industry that’s built to keep oil and gas steadily flowing into domestic and international markets around the clock.

Now, Albuquerque-based startup Telemetry Insight Inc. has developed a way to immediately inject artificial intelligence into pumpjack operations through a remote-monitoring device that tracks the machinery’s motions, or lack of movement, and then turns the data into actionable information for operators to rapidly respond to failures.

The wireless device, dubbed the “Wellwatcher,” sits like an owl on the arm of pumpjacks to record all movement day and night. It then streams that data to Telemetry Insight’s online, 24/7 monitoring system in Albuquerque, where the company provides daily reports to oil field operators with immediate alerts when something goes wrong, said Telemetry Insight founder and CEO Randy Krall.

“Oil wells typically run on timers to start or stop,” Krall told the Journal. “But they often break down from simple, dumb stuff like a busted belt, rats eating the wiring, or a switch left in the wrong position. Now, we can tell operators immediately when that happens to help reduce downtime.”

The company, which launched in April 2022, only began selling its device to operators early this year. But it’s already deployed more than 100 Wellwatchers on pumpjacks run by 15 different customers in six states.

And, by year-end, it expects to have built and deployed ten times that amount as the company steps up Wellwatcher production.

“We’re backloaded with orders now because we only just started manufacturing in quantity,” Krall said. “We’re expecting to sell to about 1,000 sites this year.”

That order backlog bodes well for Telemetry Insight, an early-stage startup that’s still perfecting its technology and assembly-line production.

The company raised $1 million in seed capital from mostly Angel investors since last year, and it’s now preparing to raise a larger round to ramp up output and marketing.

Its early success reflects the novelty of a pumpjack smart device to increase efficiency and oil production at a time when the industry is booming and looking for low-cost ways to reduce oil-well downtime and potentially increase output.

Global consultant Rystad Energy projects the industry will spend $58 billion on “oil-well interventions” worldwide in 2023 to improve efficiency at existing sites instead of drilling new wells. That represents a 20% jump in global spending on oil-well improvement to increase efficiency, reflecting a new surge in such efforts going forward, Rystad said in a July 10 report.

“As oil demand picks up … operators will look to ramp up production from existing fields, and well interventions will be a vital piece of the puzzle,” Rystad supply-chain analyst Jenny Feng said in a statement. “As a quick, efficient and cost-effective method of maximizing existing resources, interventions are going to be a hot topic in the years to come.”

That offers a potentially huge market for Telemetry Insight, Krall said.

“These are solar-powered, wireless devices that take just a few minutes for customers to install on pumpjacks and for us to start monitoring,” Krall said. “You can do it anywhere in the U.S. where you can get a cell connection. Out of about 1 million wells in the U.S. today, we believe at least 250,000 are suitable for our product.”

The IoT revolution

Telemetry Insight’s newfound potential is made possible by today’s explosion in Internet-connected, smart devices, or the “Internet of Things,” whereby technology developers use modern sensors, wireless technology, advanced software programming and more to convert consumer products, machines and industrial processes into artificially-intelligent gadgets and systems that are wired for autonomous operation.

Telemetry Insight’s entire foundation is based on those advances in IoT technology, combined with data analytics.

“We’re an IoT company making a smart device for the oil industry that we ship to customers,” Krall said. “And we’re also a data analytics company where we generate information through remote monitoring of our smart device and then use that data to help operators optimize production.”

Krall — a serial entrepreneur with a background in engineering — is skilled at applying cutting-edge technology to modernize industrial processes, including operations in the oil and gas industry. He launched a company in 2004, Wellkeeper Inc., that offered satellite and web-based monitoring of oil wells to improve efficiency at the facilities where operators manage hydrocarbon storage and transshipment.

That technology helped companies cut costs for on-site inspections and maintenance through real-time tracking of things like oil levels in storage tanks, well pressure, and flow rates through transfer pumps.

At the time, that technology was well received, allowing Wellkeeper to install the system at 1,400 sites in 10 states over a decade before Krall sold the company in 2014.

But the system had significant limitations that reflected pre-IoT constraints. For one thing, the hardware alone cost $10,000, requiring a team of technicians to drive out to remote well sites in fleets of trucks to install it. And, afterward, customers took over their own monitoring operations, meaning Wellkeeper based its business model on one-off sales with no recurring revenue.

In addition, the system did not directly monitor pumpjacks — the critical machinery that actually pulls the hydrocarbons from the ground, Krall said.

As a serial entrepreneur, Krall moved on to new startup projects after selling Wellkeeper, such as co-founding Albuquerque-based Build with Robots in 2017.

But in 2021, given the advances in IoT technology, Krall began tinkering with ways to address the limitations of his previous company. He then built the first pumpjack Wellwatcher prototype in his garage with off-the-shelf parts, and the following year, he launched his new company to further develop the technology and take it to market.

“I wanted to resolve some of the technical and business problems that limited Wellkeeper, so I looked at how to do that with today’s new technology,” Krall said.

Compact device, simple installation

The Wellwatcher itself is a lightweight, portable gadget with high-tech capabilities built in. That includes an inexpensive accelerometer to detect and measure motion, a GPS unit, an SD (smart device) memory card, and an additional mechanism inside to determine if the Wellwatcher itself is functioning properly, said company IoT Director Arjun Bhakta.

It has a solar panel mounted on the outside, and a long-lasting battery to keep running when the sun isn’t shining.

“The battery gets pretty much a full solar charge everyday, so customers can reliably get four or five days of operation even when there is no sun,” Bhakta told the Journal. “That ensures continuous, 24/7 pumpjack monitoring.”

The Wellwatcher team created proprietary software to measure and collate all data transmitted from the Wellwatcher, plus visual dashboards to view the metrics in real time, said Technical Support Specialist Clint Wolf. The system generates daily reports, with immediate alerts sent to customers when something isn’t working right.

“Once the Wellwatcher is mounted on a pumpjack, we monitor what’s happening through the data dashboards,” Wolf told the Journal. “We first check to see if our unit is healthy and reporting right. If so, that means the pumpjack itself has a problem and we contact the owner.”

With 100-plus units now deployed on pumpjacks run by customers in six states, the Wellwatcher team has responded to 15 to 20 incidents per week.

“For every well that’s not working but should be, it means ‘X’ number of dollars lost each day,” Wolf said. “So we continuously monitor the data.”

Enabled by IoT technology, the Wellwatcher system resolves most of the critical limitations of Krall’s previous company by extending monitoring capability to remote pumpjacks, eliminating the huge installation costs associated with Wellkeeper, and creating a recurring-revenue model for Wellwatcher through continuous monitoring services for customers.

“We made this device for easy, simple installation by customers themselves,” Krall said. “We put the device in an envelope and mail it to the customer, who then gives it to individuals who go to pumpjacks to install it. It takes just a few minutes to attach it to the pumpjack, and then we monitor it remotely, creating recurring revenue.”

In addition, although Wellwatcher is focusing on oil-well monitoring now, the device can be modified to track performance on other energy systems, such as wind towers or solar installations, giving the company future markets to pursue.

“It can be used on any energy-related system that creates time-varied data,” Krall said. “That’s why we called the company ‘Telemetry Insight,’ because it’s not just limited to oil-field services.”

IoT specialists trained at CNM

Apart from modern technology, Wellwatcher’s success is enabled through a skilled IoT workforce trained through Central New Mexico Community College’s advanced workforce-development programs. In fact, the company is almost entirely staffed with specialists who graduated from a 10-week, IoT crash course, or “deep dive,” run by CNM Ingenuity, which manages all of CNM’s commercial programs and endeavors.

Telemetry Insight hired seven IoT bootcamp graduates since last year, including IoT Director Bhakta and Technical Support Specialist Wolf. Two of the original hires have since left the company, but the five remaining graduates are now generally running the company’s day-to-day technical operations.

The IoT team members helped perfect the original Wellwatcher prototype into a market-ready device. They built the software monitoring system and data dashboard, and they now manufacture all the Wellwatcher devices in-house at a 2,000-square-foot facility in the Comanche Business Park at Albuquerque’s mid-town industrial zone at Interstate 25 and Comanche.

The specialists built the first run of 100-plus units that’s already been deployed at pumpjacks. But they’ve since upgraded those devices and have now built 100 more of the second-generation Wellwatchers.

“We’re slowly replacing the initial units in the field, and we’re now working on a new batch of 300 of the latest units,” Bhakta said.

Krall also expects to hire two graduates from CNM Ingenuity’s “data science” bootcamp to create new Wellwatcher data analytics services to turn pumpjack-monitoring information into actionable strategies to maximize oil-well output.

“We needed people with a set of skills that’s hard to find, so we hired a lot of CNM bootcamp graduates,” Krall said. “It’s worked out well. CNM’s program is very synergistic.”