Tuesday, 16 August 2016

Innovation Downunder

We all know the ‘born in a garage’ stories of the Silicon Valley start-ups like HP and Apple but in Australia, it starts in a shed.

In the early 2000s, Matt Lamont was working as a geophysicist at BHP Petroleum and as Associate Professor of Geophysics at Curtin University in Perth. Keen to start his own geophysics software business Matt saw in PhD student, Troy Thompson, a potential partner with a brilliant mind that could ‘do anything’.

Matt organised for Troy to take a position with BHP’s Houston office to learn as much as he could about quantitative interpretation. This is the process of inverting seismic data to a quantitatively useful property such as porosity or "hydrocarbon bearing rock". In late 2003, Matt left BHP and Downunder GeoSolutions (DUG) was born.

Processing seismic data is incredibly compute intensive, requiring banks of computers to perform parallel computations on terabytes of data. Matt and Troy set up their computers in a shed, which they first had to build in Matt’s backyard in Perth.

They immediately encountered an overheating problem with their massed PC computers. The solution was to stack the PCs on their sides, fit the shed roof with an array of exhaust fans sourced from the local hardware store and drape a curtain from the window to direct outside air up through the PCs to cool them. After about three months, the processor boards started turning green from the humid air and within a year they fell apart but the first DUG supercomputer had done its job.

The company struggled to make money in the early years, surviving on grants and piecemeal consulting projects but in 2006, Matt and Troy had an opportunity to apply their quantitative interpretation technique to a data set from the Kimberley region of Western Australia for US oil and gas company Apache. Three dry holes had been drilled in the license block and Apache had an obligation to drill one more well before they could relinquish the license.

DUG took on the job with more bravado than proven capability and after six months of processing, produced the world's first hydrocarbon probability volume. The DUG interpretation showed why the initial wells were dry and Apache used DUG’s results to drill the first discovery well and a further eighteen successful wells. Julimar gas field is the result. This success launched the company, allowing Matt and Troy to invest in new supercomputers, expand their seismic processing capability and take on new customers.

Today, the company has well and truly outgrown the shed. It operates a network of massive supercomputers in London, Houston, Kuala Lumpur, Jakarta and Perth each cooled with DUG-patented oil cooling baths and servicing the seismic processing needs of oil and gas companies all over the world.
Company: Downunder Geosolutions
Source: Matt Lamont and Troy Thompson discussions with Mike Adams and Sue Findlay
Story Type: Company Creation
Labels: Innovation; Start-Up
For Story Students:
The Setting: Early 2000s in Perth, Western Australia
The Complications: Struggling to succeed as a company
The Turning Point: A successful interpretation that discovered a gas field
The Resolution: DUG operates supercomputers in Perth, Houston, London, Kuala Lumpur and Jakarta serving oil and gas companies all over the world.
The Point of the Story:
How to use this Story:  Used by DUG customer facing staff and a great example of a company creation story

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