New Orleans native James Yockey recently moved back to his hometown as an investor in and managing director of EquityMetrix LLC. The company focuses on the intersection of the revenue, land and technology arenas for the upstream industry. Its revenue recovery and records reconciliation services help E&Ps and mineral owners boost their top line and improve their A&D outcomes.

Like many in the oil and gas industry, Yockey is an entrepreneur. Previously, he was a founding member of Gerson Lehrman Group Inc., a pioneer in expert network consulting. During his decade at the firm he focused first on developing an energy and industrials practice, and then on sales and marketing to hedge fund managers.

The software and services EquityMetrix has developed over the past seven years enable a look at the entire population of an energy firm’s properties and commercial transactions, rather than the more typical sample-based approach taken by auditors.

The process then layers in commercial provisions, farmouts, marketing and third-party data to find anomalies, which it then researches and “proves up,” and for which it then collects revenue.

When applied to A&D activities, Yockey likens the process to “staging” a house before putting it on the market. “It allows us to verify what’s in the land system, reconcile it with what’s in the land documents, and get the most value for properties.”

The company’s niche developed out of co-founder and CEO Thomas Agnew’s experience at Accenture, where he saw the need for technology to aid in land, finance and accounting functions. His brother and cofounder, Del Agnew, had been an investment banker and “understood the financial impact and the opportunity to help the industry get this right,” says Yockey.

A CFA charterholder, Yockey graduated from the University of Virginia with a degree in economics. He and his wife, also a New Orleans native, were eager to move back to the city with their family after years in Manhattan.

This spring, Yockey became reacquainted with EquityMetrix’s evolution through one of its board members, and now is leading the 40-person company’s sales and marketing effort. Oil and Gas Investor caught up with him recently between his frequent business trips to Houston.

Investor: What has created this need in the energy industry for revenue recovery?

Yockey: Generally, finance and accounting and land groups within the industry tend to be overworked and under-resourced. They get scaled back during commodity price cycles, and often, they are never rebuilt. Overlay that trend with the demographic challenges faced by the U.S. energy industry, given the vast portion of business and technical talent that’s about to retire, and you can see how it’s a real issue.

Investor: How much revenue goes missing?

Yockey: The energy industry does a good job, and with the best business processes can get it 95% correct—but that missing 5% represents billions of dollars of underpaid revenue annually in the U.S. alone. For a typical E&P, uncovering the underpayments and collecting them can deliver $5- to $10 million of purely profitable revenue.

Investor: Is the industry slow to adopt technology?

Yockey: Somewhat, especially compared to other industries. Shell tapped McKinsey & Co. some time ago to look at adoption rates for new technology and innovation by the oil and gas industry . The adoption curve looks like at step function—extremely low and flat at first, then the whole thing breaks out and you get a rapid uptake by the industry at large. Companies are hesitant to be the first mover. They first want to see a critical mass of well-regarded companies moving forward.

Investor: What role can this data and revenue recovery play in A&D?

Yockey: There’s so much changing of hands in the early stages of production, that’s why the land records reconciliation becomes so important. Companies need to get paid for every aspect of their leases. This is true for both the royalty owners as well as the companies doing the development.

Investor: Where do you hope to take EquityMetrix in the next five years?

Yockey: Today we’re very focused on the upstream—E&Ps and mineral owners. At some point we want to have a value proposition for other sectors. We want to take this track record we’ve generated for a small group of clients over the past five years and provide it to additional smart, well-run companies in the industry. It’s a simple formula—identify the smartest companies in the industry and serve them well.

Investor: How has your hometown changed since Hurricane Katrina?

Yockey: It’s a different place, certainly. But people sometimes focus on the negative, which is unfortunate. New Orleans always had a reputation for being laissez faire and somewhat complacent—what happened in 2005 shook the city awake. There is a level of civic engagement and entrepreneurism now that didn’t exist when I was growing up. It’s business friendly. There’s been a brain gain as people from all over the country have come down to help rebuild the city, with many staying.

—Susan Klann