When Tom Rozak was growing up in Redwater, an oilpatch town north of Edmonton, he wondered what he was going to do for a living.

Larry MacDougal, Business Edge
RXO directors Dean Strashok (left) and Tom Rozak use software for fractures.

The clues were right in front of him — but he didn’t see them.

“Literally, there were pumpjacks across the street from us,” said Rozak, 40, the president of RXO Energy Inc. “Even though there were pumpjacks all around us, I never gave it a second thought to be a geologist.”

The idea came to him while he was an undergraduate student at the University of Alberta, when he thought he was on his way to becoming an engineer. One day, Rozak ran into a friend and asked him what he was going to do for a career. His friend planned to become a geologist.

“I just thought it was the silliest thing in the world,” said Rozak. “People give you money to look at rocks. When I took my first geology course, it was like one of those things where the lights go on.”

Rozak graduated with an honours geology degree in 1988 but, despite his love for the science of the earth, oil prices were low and career opportunities limited. So, he started a commercial food-equipment manufacturing business, always dreaming that he would, one day, run his own oil and gas exploration company.

Eventually, he sold the equipment company and started studying for his masters in geology at the University of B.C. But he became frustrated as he tried to find his niche, because the oil industry’s value chain was firmly in place and he couldn’t see where he would fit in.

Rozak knew that methane — in other words, natural gas that’s used to heat your home and operate other equipment — is harvested from coal.

“If there’s no coal, there’s no methane,” he said.

While pursuing his master’s, he discovered that methane accumulates in coalbed fractures. But so does water.

The deeper the fractures, he figured, the deeper the methane deposit. More water, he reasoned, equalled more methane.

According to Rozak, geologists have used a simple, environmentally friendly method to pump water out of well sites for years. The effect is like shaking up a can of pop, opening the tab and forcing the liquid out through a natural vacuum effect.

Realizing that Alberta is rich in coal, Rozak figured that, surely, there must be a way to mine more methane.

But how would he find the fractures?

Like the pumpjacks in Redwater, the clues were right in front of him. They’re the squiggly lines on well test readouts.

About 300,000 wells have been drilled in Western Canada, targeting conventional oil- and gas-bearing rock formations that lie below coal-bearing zones. Many of these wells have data on the coal zones, because you have to drill through the coal zones to get to the underlying conventional oil and gas.

For decades, well operators have conducted drill tests for oil, water and contaminants that determine a well’s potential value. A readout is, essentially, an electrocardiograph that displays a well’s vital signs.

By passing an electrical current through a well site, operators can determine whether there’s water. And, remember, where there’s water there’s methane. When there’s a large supply of water, the squiggly lines rise like a rapid heartbeat.

Rozak discovered that, like the boy who didn’t immediately see his future calling, exploration companies have overlooked the obvious — for decades.

“(The testing) produced all the data anyway, but nobody paid any attention to it,” said Rozak.

Rozak confirmed his findings by conducting tests for the Alberta Geological Survey and at wells in the U.S., where coalbed fracture mining is more common.

He has now developed software that analyses the readout numbers and pinpoints fracture locations. He believes that his findings — and his software — could drastically change the exploration playing field, by helping to reduce huge exploration dollars that companies spend — often only to come up empty.

“(The software) should find an area where there is fractures,” said Rozak. “But it will also tell you where there isn’t. From an explorational perspective, that’s important.”

To capitalize on his findings, Rozak launched RXO Energy with eight partners, including Dean Strashok, by profession both a lawyer and a geologist. Rozak is finishing his master’s as he builds the company, which he plans to take public, but he shouldn’t have to worry about accessing capital. Rozak said RXO has just completed a “land deal” with Magin Energy, a mid-size gas company, to mine methane somewhere in central Alberta.

The RXO-Magin well site is expected to produce gas by September. “What we’re doing is taking the technology and pushing,” said Rozak. “We’re pushing it in a different area than people have thought of going.”

Like a guy who once lived in Redwater.