If You Don’t Understand the Financials, You’re Already Behind.

I spent fifteen years as a petroleum engineer before I ever started building software. Drilling, completion, reservoir, gas management, operations — I lived in all of it. And for most of those years, I thought my job was to make good wells. Get the engineering right. Hit the targets. Move to the next one.

It took me longer than I’d like to admit to realize that none of that mattered if the numbers on the other side of the house didn’t work.

You can drill the best well in the basin. You can nail the completion design. You can squeeze every last barrel out of the curve. But if the project doesn’t make money — if it doesn’t tie back to the balance sheet and the profit statement — you haven’t actually accomplished anything. You’ve just spent someone else’s capital really efficiently.

Claude Thorp said something on Wisdom at the Wellhead that made me nod hard enough to pull a muscle. He said, “If you don’t understand the financial implications of your task, you’re really starting behind an eight ball and don’t know how to work.”

That’s not a finance guy talking down to engineers. That’s a guy who grew up on rigs, got a finance degree because his grandfather told him to have a backup plan, and spent fifty years watching what happens when the technical side and the money side don’t talk to each other.

It’s Not About the Gas Lift

Claude put it plainly. He said it’s not about exactly the right gas lift. It’s not about exactly how you drill a well. It’s about how you do all of that related to your balance sheet and your profit.

That distinction sounds simple, but it changes everything about how you approach your work. Because most engineers I’ve known — myself included, especially early on — think in technical terms first. What’s the optimal design? What’s the best recovery method? What does the data say about this zone? Those are the right questions. But they’re incomplete questions if you stop there.

The complete question is always: does this make the company money? And not just in theory. On the actual balance sheet. In the actual reporting period. Against the actual cost of capital.

Kevin Fischer, my co-host, summed it up in a way that made everybody in the room laugh, because it’s so obviously true: “If we’re not making money, we’ve got a hobby that just costs us money.”

I’ve been in rooms where that joke would land a little too close to home.

Why This Is Personal for Me

One of our mantras at Total Stream is that we tie the technical to the financial. That’s not a marketing line. That’s the reason the company exists.

When I was an engineer, I spent way too much of my time chasing data. Trying to pull production numbers from one system, costs from another, and somehow make them talk to each other in a spreadsheet that was already out of date by the time I finished building it. The technical picture and the financial picture lived in completely different worlds, and the people making decisions were trying to squint across the gap between them.

That’s where bad decisions come from. Not from bad people. Not from bad engineering. From good people making the best call they can with half the picture.

So when I started building software, the whole point was to put those two pictures in the same frame. Give the engineer the financial context. Give the finance team the production context. Let everybody see the same reality at the same time. That’s how you run a business — not by hoping the left hand figures out what the right hand is doing.

Claude’s Grandfather Knew Something

Here’s a detail from Claude’s story that stuck with me. His grandfather told him, “You need to get a degree in something so when this business goes to hell, you can go do something else.” So Claude went to UT Austin and got a finance degree. His father was a geologist. Claude wanted to be a petroleum engineer, but his dad waved him off. So he ended up studying finance, business law, geology, and petroleum engineering — a mix of everything.

And you know what? He told us he’s used that finance degree every single day of his career. Over fifty years later, he’s still using it.

That’s not because finance is more important than engineering. It’s because the people who understand both are the ones who actually know what’s going on. They’re the ones who can sit in a meeting with the operations team and the investors and translate between the two without losing anything in the middle.

I’ve watched engineers stall out in their careers because they couldn’t make that translation. Brilliant people. Great technical minds. But when it came time to explain why a project mattered in terms the board could act on, they went quiet. And the person who got the seat at the table was the one who could connect the well to the spreadsheet.

What This Looks Like on the Ground

I’m not saying every engineer needs an MBA. I’m saying every engineer needs to understand how their work shows up on the other side of the building.

When you recommend a workover, know what it costs and what it returns. When you propose a drilling program, understand how that fits into the capital budget and what it means for the company’s position. When you present a production forecast, know how the finance team is going to use those numbers and what happens downstream if they’re wrong.

This isn’t about becoming someone you’re not. It’s about being the full version of what you already are. The best engineers I’ve ever worked with — the ones who became VPs, who got trusted with the big decisions, who built companies — they all had this in common. They could see the whole picture. Technical and financial.

Wellbore and balance sheet. Barrels and dollars.

Claude’s been doing that for fifty years. I’ve been trying to build software that makes it easier for everybody else to do the same thing. And the operators who get this — who tie their technical work to their financial outcomes — are the ones who are still standing when the cycle turns.

The Bottom Line

If you’re starting behind the eight ball and don’t know it, that’s the most expensive place to be. Because you’ll do good technical work that nobody can justify, and you’ll wonder why the project got killed or why somebody else got the promotion.

Learn the money side. Not because it’s glamorous. Because it’s how the whole thing actually works.

Claude Thorp and Jeff Dyk dig into why the technical and the financial can’t live in separate worlds — and what it costs operators when they do. It’s a conversation grounded in fifty-plus years of combined experience in the field.

Listen to the full episode of Wisdom at the Wellhead.