Merak Projects Ltd. was founded in 1980 by Don Jeffers. The flagship Petroleum Economic Evaluation Program (Peep) was originally developed for DOS in 1985. Merak is an unqualified success story posting revenue growth of 50% over the past 4 years. Around half of US and international oil and gas companies use Merak software while in Canada, penetration is over 90%. 1995 revenues from sales were $5 million growing to $17 million in 1997. Currently, Merak's software falls into three suites
Petroleum Desktop
Value Management (including Peeps)
Field Optimization.
GeoQuest and Merak have already cooperated in client-supported work linking Peep to OilField Manager (OFM) and Finder to WellView. Meanwhile Merak (a privately-held company) was considering an Initial Public Offering (IPO), but was concerned with the valuation and
requirements for expenditure on infrastructure that an IPO would have brought. The current deal (pending board approval), following on the heels of last month's acquisition of Panther, illustrates GeoQuest's new 'buy not build' policy.
fit ‘good’
For Merak, the direct sale to GeoQuest offered a competitive (but undisclosed) evaluation and the needed infrastructure. GeoQuest's Larry Denver told PDM "the fit is generally good between GeoQuest and Merak's software, the Merak acquisition simply adds a comprehensive economics capability. There will however be some rationalization of functional overlap with OFM".
data formats
PDM asked about issues arising from different data formats and databases. Denver does not see a problem - PetroDesk is regarded as a window on data in external databases such as PI/Dwights, Finder will still be the main repository. On the PC versus UNIX debate, Denver acknowledged that more and more of the marketplace is going to the PC - "either on NT or Linux". A survey of 35 GeoQuest clients around the world suggested that they would migrate to NT in the next 3-5 years.
IRO
The Merak software will be central to Schlumberger's Integrated Reservoir Optimization (IRO) strategy originally presented to PDM readers in our report of Thierry Pilenko's address to the Euro '98 Forum in Cannes (see PDM Vol 3 N° 4). Another key element is the increased presence in the COMfor Energy consortium. Merak has been very aggressive in COM-based development and the linkage to SAP in particular is very strong. Denver told PDM that GeoQuest has moved ERP this to top of its priorities and the Merak to SAP links will be leveraged by GeoQuest to leapfrog into the ERP field. Core product development and business operations in Calgary will continue, making the Canadian city a key product development center for GeoQuest. Merak’s 230 employees service 600 companies in over 30 countries. PDM asked if the ‘buy not build’ corporate policy would continue. Denver implied that this was indeed likely and asked us to "Watch this space..".
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