The Manfred James Group has built its business – and its success – by cutting red tape
For other businesses, government regulation is a problem to be dealt with
by Alix Kemp
Photograph John Gaucher
For the Manfred James Group, an oil and gas consulting company based in Calgary, new regulations in the energy sector have been anything but. In 2008, Berni Brunsch and Mark Proud saw an opportunity in helping companies meet their measurement and reporting obligations and decided to go into business together. The two launched the company with just a few clients from their independent contractor days, but in 2009, the Energy Resources Conservation Board (ERCB) introduced a new audit program. When the new directive came into effect a year later, the phone at their office started ringing as the companies affected by it realized they hadn’t done enough to prepare.
Brunsch, the CFO and director of audit and inspection services at Manfred James, says some companies do see new regulations as a nuisance. “But for the most part,” he says, “what we have found is that how you manage your compliance aspects tends to drive you, whether it’s into the ditch or up to a successful road.” Getting businesses on the right path is what Manfred James does. In the year after the ERCB’s Directive 76 came into effect, its revenues nearly quadrupled, from $352,800 in 2010 to $1,314,000 in 2011. Manfred James now invoices between 30 and 50 businesses per month, from small mom-and-pop operations all the way up to giants like Shell Canada and Petrobank. And most of that work is unsolicited, says Proud, the company’s CEO and director of operational risk management. Around 75 per cent of their clients come to them by word of mouth.
That rapid expansion brought some challenges, Proud says. “We essentially decided a long time ago we weren’t going to advise clients unless we actually knew what was on the ground.” That means sending staff out to every facility and well site, which takes time and requires manpower. In September 2010, Manfred James was still a two-person operation, but it’s since grown to nine employees and a handful of contractors. Despite growing their workforce, Proud and Brunsch suspected more business might be coming their way, so the company branched into software development to create the tools to help them keep up.
In 2011, they produced PIDE Piper, a drag-and-drop application that simplifies the creation of measurement schematics, a process that used to take several weeks of drafts. PIDE Piper brings that down to a couple of days and allows the bulk of the work to be done in the field and uploaded remotely. Initially, Proud says, it was intended as an internal utility to help them keep up, but the developers soon encouraged them to license and sell it as a service application. In 2012 they did just that, and again their timing was nearly perfect. Last September, the ERCB announced a new directive requiring producers to provide schematics for some 45,000 facilities and 150,000 wells by September 2014. “We now had a product that was going to help them do that with tremendous cost savings and efficiencies,” says Proud. “By putting technology in the hands of their existing staffing complement, we’re able to knock off probably 75 or 85 per cent of the costs associated with that type of activity.” And with Piper’s release in late 2012, the phone has started ringing again with people wanting to purchase the software.
The company has also expanded to begin training companies to do their own data capture and reporting, and it recently spun out an engineering service division, Manfred James Engineering. With the steady growth they’ve had as a result of the ERCB’s new regulations, Brunsch says they can now choose the people they work with. “Many of the clients we work with, we go out and test drive them … We’ve been really disciplined as far as wanting to associate ourselves with companies that are able to execute [on] the advice that we provide.”
Making the Rules
Before 2009, the ERCB operated a substantive audit program, sending staff to inspect facilities across the province and ensure they were in line with regulations. But as the oil and gas sector grew, it became increasingly difficult to send inspectors to every one of the province’s 600-odd oil and gas producers. So they introduced Directive 76, establishing the Enhanced Production Audit Program (EPAP). The new program put the onus on producers to inspect their own facilities and assess their compliance with measurement and reporting standards.