Oil and gas is a highly cost competitive sector, with three factors that drive projects: time, people and money.
NL Fisher Supervision and Engineering Ltd approached OH! Media to create a web app for a newly developed product called AFEMAX™. The aim of the app is to achieve maximum project cost reductions for Operators (buyers) and increase service company utilization for Sellers (oilfield services companies), while maintaining core competencies of safety, efficiency and accuracy.
AFEMAX™ is an oil and gas focused reverse-auction service where oilfield services companies can bid for jobs on projects. Operators (buyers) announce a project and pre-approved service companies (sellers) bid on the auction item (or items) that make up the project. If the bids meet the reserve, then the project goes ahead.
The system screens sellers based on qualifications. Buyers specify certain minimum regulatory and insurance requirements that sellers must meet. Sellers are screened and invited to participate in auctions based on their meeting those requirements. This ensures that buyers are only dealing with reputable and vetted vendors.
OH! Media created three unique reverse auction formats for buyers to choose from:
- Open auction - a typical auction format where sellers can bid multiple times and are aware of the lowest bid they are competing with.
- Closed auctions - all bids are sealed and sellers enter a single bid for the project.
- Ranked auctions - sellers are assigned a ranking. So if your bid was the 2nd lowest you only know you are in 2nd place. You do not know the amount of the 1st place bid.
AFEMAX allows buyers to create multiple auctions to satisfy the requirement of a single large project.
An online communication system allows buyers to broadcast messages that contain relevant auction-related information to the sellers.
A live countdown system allows sellers to see a live countdown of the final minutes of an auction. Each auction has a finite timeline, eliminating the delays and confusion often associated with the conventional bidding process.
Depending on the buyer's preferences, the system may even auto-award an auction immediately after an auction finishes.
A popular feature with sellers is that they can set a minimum total for their bid and the system will bid down for them automatically. For example, the program will automatically rebid against other sellers by bidding the current winning total, minus $20. These bids will continue to be placed until either the seller wins the bid or they reach the minimum bid level they are willing to submit.
A Quantity vs Quality graph displays how quickly and efficiently AFEMAX™ works, and how high project costs are driven down within the bidding process. Showing how this is achieved within the one-hour auction timeline.
Buyers and sellers find AFEMAX™ very user-friendly. They can quickly and easily sign up on the Sign Up page by simply filling in their details and sending a text message.
In a cost competitive sector, AFEMAX™ has already made its mark in the oil and gas industry by becoming a tool of choice for buyers and sellers. A constantly updating ticker on the app reflects how much money clients have saved to-date by using AFEMAX™. Impressively, it currently stands at over $19 million in savings and will only increase in time as more companies use the system.