Brett Chell doesn’t fit the stereotypical oil executive mold but he has made his way from working on the oil rigs to building and running his own.
The young entrepreneur from Calgary, Canada, is one of a new breed of movers and shakers in the legacy world of oil and gas. The cofounder of two high growth oil and gas tech firms, Cold Bore Technology and Raptor Rig, he has already raised over $65 million of funding.
Chell hails from a family of entrepreneurs; everyone from his grandparents down to his parents, aunts and uncles, all started and ran their own respective businesses. When he finished high school he followed his brother-in-law into the oil patch and started working on oilrigs with the intention of earning enough money to come back and start his own business. His plan was to spend a year or so out there but by the time he left, the better part of half a decade had gone by.
He says: “I loved the guys I worked with and the sense of accomplishment that comes with such a physically demanding job but it’s a mental strain marathon being away as much as the job demands.”
However if he was to fulfill his ambition to build his own businesses he needed to get to grips with the financial side of things and it was a piece of advice from one of his uncles that resonated him. “He told me, ‘It doesn’t matter if you want to install cameras on the space station or start a company selling wooden spoons. If you don’t know how to finance it, you won’t be doing either’,” says Chell.
This prompted his move into tech and early stage financing and in 2009 he left the oil and gas industry to join a team of entrepreneurs in the technology space, focusing on building and financing a number tech startups with the fields of space, financial tech and retail.
Five years later, he founded his first business Cold Bore Technology, digitizing fracking operations through the use of sensors and industrial IoT networks. It was launched to fill what Chell saw as a huge hole in the market in terms of a specific drilling technology. However, this was late in 2014, and it wasn’t long before he was facing the worst downturn in the industry’s history.
“It was enormously challenging surviving for the next few years. Most of the core partners quit, we lost board members and no one really expected us to survive past early 2015,” he says. But he stuck with it and his tenaciousness paid off. Today Cold Bore Technology works for some of the world’s largest oil and gas companies.
His second startup was Raptor Rig, building the first fully automated drilling rigs that require no on site teams to operate and reduce drilling costs by 30%. To get that venture off the ground he reconnected with the guys who had hired him in field 10 years earlier and had a track record of designing and commercializing new and innovative drilling rigs. It was a risky venture that involved taking financial narratives typically used on technology companies and applying them to the capital heavy world of rig building and operating.
“In the early stages we bootstrapped all our ventures then we moved to step financing with private investors over a few different rounds to get where we are now,” says Chell.
His business partners at Raptor Rig had strong contacts within the industry and once the initial capital was raised they brought large amounts of funding to the table from past strategic partners. Chell secured an early large investment for Raptor Rig from Halliburton, establishing another strong partnership in the company’s early stages. To date he has raised over $65 million in funding and plans to raise a further $30 million to $60 million this year to fund the construction on new Raptor Rigs.
Both companies are still relatively small; each has fewer than 100 employees and contractors, but both are in high growth stages and set to grow rapidly throughout 2019 and 2020, and both are now becoming profitable. Cold Bore is expected to achieve $5 million in revenues this year and Raptor Rig $9 million, figures that are expected to more than double in the following year.
While the double recession drastically extended their original financial projections, Chell says it has ultimately has worked to their advantage. Because most small startup companies that didn’t have strong cash flow were wiped out in the last few years and large companies lacked the capital to invest in experimental technologies, Chell’s businesses are well out in front and working hard to capitalize on this position.
“The current climate demands performance enhancing technologies like those we’ve developed through Cold Bore and Raptor Rig, so this is obviously a great time to have solutions like ours,” he says. “Right now we’re focused on building the shareholder value we always believed we could and completing the comeback.”