[Editor's note: The following is an abbreviated version of this article. For the full version click here. This story has been updated to correct the members on Cold Bore’s board of directors.]

The brothers behind Rice Energy recently closed on their first investment in a fracking software company they believe will revolutionize the industry.

The Rice brothers—Daniel, Toby and Derek—emerged earlier this year with the launch of Rice Investment Group (RIG), a $200 million multi-strategy fund focused on all facets of the oil and gas sector.

Through RIG, the Rice brothers plan to target investments of $1 million to $40 million across the upstream, midstream, oilfield service and energy technology sectors, focusing on companies that are “electrifying the oil field.”

“Said another way, we are looking for companies that can capture data from disconnected operations in the field to empower data-driven decisions on things that matter,” Toby Rice told Hart Energy.

Rice, who sources and evaluates investment opportunities for RIG, said he believes the group’s latest investment—Cold Bore Technology Inc.—is one of those companies and will play a leading role in transforming the industry.

Cold Bore is a Calgary, Alberta-based developer of fracturing optimization software cofounded by Brett Chell, the company’s president who Rice dubbed a “shalennial”—an oil and gas entrepreneur from the millennial generation.

Chell and his partners at Cold Bore have developed SmartPAD, the first industrial Internet of Things (IoT) based electronic completions recorder and remote frack operating system. The technology, currently being implemented by several big-name oil and gas players, digitizes well completions to streamline and track operations and, as a result, increase efficiencies.

Rice believes the Cold Bore technology sets the table for hands-free wellhead operations, reducing human error and labor costs while improving field safety by removing frack personnel from high-pressure zones.

“Cold Bore has created something that we as an operator in our past days would have used and that’s a big factor in our investment strategy in the energy tech space,” he said.

Rice and his brothers, who themselves can be considered shalennials, started Rice Energy while still in their mid-20s and quickly grew the company from a family-owned operation into a billion-dollar enterprise in the span of a decade.

The brothers eventually sold Rice Energy to EQT Corp. (NYSE: EQT) for $8.2 billion in what was the most expensive U.S. shale merger of 2017. At the time of the sale, Rice Energy was producing and gathering more than 2 billion cubic feet per day of gas from a 250,000 net acre Appalachian Basin position in the core of the Marcellus and Utica shale plays.

Chell said SmartPAD essentially replaces a lot of manual work, such as tracking operations by hand and paper, for operators and service companies.

“They themselves try to track their workflow as the operator and then they have five or six service companies out there trying to do the same thing—all separate datasets that are critical to that operation,” he said. “And all of that is mailed in separately and manually in different formats. And no one is tracking the workflow except what notes are put in a notepad. So, you can imagine what kind of a database that produces—just a disaster.”

The first way SmartPAD tackles this particular issue is through the operating system by digitizing the wellhead. This way companies can start tracking operational activity in the field, using wellhead valve position and pressure sensors.

SmartPAD will also act as a remote conduit that consolidates all other service companies data on location and brings that back to head office all in one place, which Chell said is valuable to the industry.

Next is implementation of the SmartPAD dual handshake, which is the software-driven reconciliation process. The final stage of implementing SmartPAD in the field, Chell said, is the actual automated contract through blockchain. He said Cold Bore will work closely with EnergyBlock Services to provide blockchain-based smart contracts that will be able to track the data that Cold Bore gathers automatically in the field.

“The real benefit of a system like this is moving from that generalized data, subjective data capture to granular, automated analytics and reporting that are generated by the system,” Chell said.

Cold Bore’s management team is comprised of cofounders Chell and Blair Layton and operations manager Nicolai Pacurari. As part of the RIG investment, Toby Rice will join the Cold Bore’s board of directors, which consists of Layton as well as Murray Smith, Gregg Sedun and Glen Hawker.

Zelos Capital Ltd. was Cold Bore’s exclusive financial adviser for the RIG investment, and Clark Wilson LLP was the company’s legal adviser. Blake, Cassels & Graydon LLP provided legal advice to RIG with respect to the financing.

Emily Patsy can be reached at epatsy@hartenergy.com.