Problem

A major challenge in the operation of oil and gas wells is the ability to monitor the operating conditions and health of pumping equipment without the need for prohibitively expensive equipment or daily inspections. Methane leaks are difficult to pinpoint and are responsible for the emission of billions of tons of CO2 equivalent every year in the US alone. Given the high cost and complexity inherent in the existing field automation and monitoring options, most producers have been stuck with very manual processes. Similarly, even though larger producers typically have some level of field automation and monitoring, these implementations are typically incomplete both in terms of what is measured and what percentage of wells are actually instrumented, very expensive to implement, and based on legacy technology. What this all means is most active wells are materially under-optimized, leading to increased costs, reduced production, and oversized emissions.

What the Company Does

Acoustic Wells has developed a patent-pending, acoustic-based control method that is capable of precisely determining down-hole conditions and finding leaks using a simple and affordable surface sensor. Acoustic Wells simple plug-and-play hardware processes the data at the edge and seamlessly connects to their cloud platform using long range IoT networks. (Internet of Things: An IoT network refers to a collection of interconnected devices that communicate with other devices without the need for human involvement). Artificial intelligence algorithms automatically monitor the pump operation and optimizes the production by adjusting the pumping rate, while also predicting potential critical failures of the system and while reducing the amount of unwanted methane pumped by as much as 70 percent.

The Market

In the U.S. alone, there are nearly 1 million active oil and gas wells. At $100/month on average per well, that equates to a total annual recurring revenue opportunity of $1.2 billion and a total real potential value impact of more than $4 billion. Given the pricing and complexity around legacy control and monitoring solutions such as industrial SCADA solutions offered by Weatherford, GE, Siemens, Halliburton, and others, most wells have little instrumentation. Acoustic Wells plans to change that by offering an easy-to-use, easy-to-install system that provides actionable, up-to-date information in a more streamlined and understandable format. By minimizing install costs and complexity while providing more precise and usable data, Acoustic Wells believes it can bring cutting edge automation and optimization technology to producers of all sizes, improving their profitability while also helping minimize their carbon footprints. While there are some newer solutions in the space, none offer the combination of usability, affordability and technical sophistication that the Acoustic Wells solution offers.

Revenue Model

Acoustic Wells plans to use an SaaS model on a monthly, per well basis. (Software as a service (SaaS) is a cloud-based software delivery model in which the cloud provider develops and maintains cloud application software, provides automatic software updates, and makes software available to its customers via the internet on a pay-as-you-go basis. The cloud provider manages all the hardware, middleware, application software, and security. So SaaS customers can dramatically lower costs; deploy, scale, and upgrade business solutions more quickly than maintaining on-premises systems and software; and predict total cost of ownership with greater accuracy.) Hardware sales will be managed upfront at cost or cost-plus basis, so they will not be a crucial driver of profitability for the business.

Traction

Acoustic Wells have a signed letter of intent and two MSAs for customers representing approximately 1,000 wells. (MSA stands for Measurement System Analysis. It is the application of ensuring that your organizations inspection, measuring and test equipment provides reliable and relevant measurement data. MSA is how to determine error quantity present in a measurement system). They are currently in the process of signing up additional agreements for paid pilot testing programs.

Founding Team Background

Acoustic Wells is led by CEO Sebastian Mannai, COO Charles-Henri Clerget, CTO Louis Creteur, and CDO Eric Zhang. This team is highly cross-functional, consisting of several Ph.Ds and postdocs in Mathematics and Aerospace engineering, computer scientists and a former energy banker and private equity associate from Texas. The team is an alumni of MIT Sandbox, MIT Delta V, MassChallenge, NSF I-Corps and current members of Alchemist, Creative Destruction Lab, and Endless Frontier Lab accelerator cohorts. The team also won the MIT $100K 2019 competition and Clean Tech Open NE.

What They Need Help With

Acoustic Wells is looking for more potential customers and anyone who might have more industry connections. Additionally, the team is looking to close their initial $1.5MM pre-seed SAFE raise by the end of the year. Last but not least, the team is looking for excellent engineers in computer science and micro-electronics.

While part of the business model is defined clearly by the above case history, some is not yet defined as clearly. Complete a business model canvas that will describe all nine parts of the business model for Acoustic Wells.

1. Describe the value proposition.
2. Define the key customer segments.
3. What kinds of relationships do they need to maintain with customers?
4. What distribution channels do they need to maintain?
5. Describe the revenue stream(s).
6. What key activities do they need to accomplish?
7. What are their key resources and competencies?
8. Which partnerships do they need to develop?
9. What do you think their cost structure should be?