Experience, A Great Teacher

Independents to Share Insights

In need of some how-to-find-it examples from some experts who know?

Need a big dose of inspiration to aid in your search for oil and gas?

The DPA thought so, which is why it is sponsoring a forum aimed at providing some practical and motivational talks for explorers of all experiences.

"The Independents -- Case Histories in Success," will be offered from 8-9:45 a.m. on Monday, June 20, at the AAPG Annual Convention in Calgary.

Oil industry luminaries such as Paramount Resources founder Clayton Riddell, Suncor's Roger Smith and independent Ray Thomasson (an AAPG past president) will present the big picture of their respective business models.

"The idea behind this was to bring in active leadership with superb credentials who can give insight, which is what we all look for and want to hear," said Steve Veal, forum co-chair. "To learn from their experience is a great thing."

"The participants each have a different model for approaching exploration," said forum co-chair George Eynon. "We wanted to put these types of models in front of the members -- we wanted to have case studies of the genre, if you will."

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In need of some how-to-find-it examples from some experts who know?

Need a big dose of inspiration to aid in your search for oil and gas?

The DPA thought so, which is why it is sponsoring a forum aimed at providing some practical and motivational talks for explorers of all experiences.

"The Independents -- Case Histories in Success," will be offered from 8-9:45 a.m. on Monday, June 20, at the AAPG Annual Convention in Calgary.

Oil industry luminaries such as Paramount Resources founder Clayton Riddell, Suncor's Roger Smith and independent Ray Thomasson (an AAPG past president) will present the big picture of their respective business models.

"The idea behind this was to bring in active leadership with superb credentials who can give insight, which is what we all look for and want to hear," said Steve Veal, forum co-chair. "To learn from their experience is a great thing."

"The participants each have a different model for approaching exploration," said forum co-chair George Eynon. "We wanted to put these types of models in front of the members -- we wanted to have case studies of the genre, if you will."

These success stories and how they came to be can provide roadmap material for audience members to use in structuring new companies or enhancing existing ones, no matter how small.

Finding What Others Missed

Program participant Clayton Riddell, now-chairman of Paramount Resources, is the recipient of the 2004 AAPG Outstanding Explorer award. The native Canadian formerly served as president of the Canadian Society of Petroleum Geologists and recently was made an honorary Doctor of Science at the University of Manitoba, where he earned the bachelor's degree in geology prior to beginning his career.

Riddell's initial employment in the industry was with the California Standard Co., where he engaged in exploration geology in northern Canada, spending many summers mapping surface geology in the field during the decade of the 1960s.

But his entrepreneurial spirit eventually took charge, prompting Riddell to strike out on his own in 1969 to do a stint as a consultant. A couple of years later, he set up shop as Paramount Oil & Gas, which become Paramount Resources Ltd. in 1978.

Today, 27 years after Paramount debuted as a public company, Riddell is included in the Rich 100 list of Canadian Business, where he segued into Canada's exclusive billionaire club this past year.

Despite this heady achievement, the unassuming Riddell remains as much a regular Joe as when he first started out, according to friends and associates.

The play that made Paramount successful was the very shallow Devonian biostrome sub-crop play in northeastern Alberta, Riddell noted.

"We found several hundreds of billions of cubic feet of natural gas in the late '70s and '80s," he said, "and that created the initial value and allowed us to get into other exploration plays. That was the first and the most important (step) to our success."

Even though Riddell zeroed in on "the big one" early on, success didn't happen overnight. Indeed, copious amounts of time, money, frustration and ingenuity were required to turn the play into the company-maker it became.

"Clayton built a substantial-size company starting off as a consulting geologist working a particular area, then coming up with a concept and following through," Eynon said. "He took something overlooked by a lot of people and had the vision to turn it into a commercial entity down the road -- but it took a lot of patience and skill."

No Nuisance Zone

The target of interest, the Grosmont formation, was at the time thought to be a marginal resource -- low pressured, underpressured shallow gas. But it was widespread, according to Eynon.

"When Clayton was beginning to amass acreage and put it together, it was thought to be almost uneconomic," Eynon said. "But he put it together in such a way in terms of scale and developed economies of scale -- and in the process developed skills in operating and developing costs -- that he turned it into a commercial venture."

Because of the combo of underpressure and high reservoir permeability, the Grosmont had long been labeled a nuisance zone, where lost circulation was the norm when the drill bit tapped in with a water-based mud system.

To circumvent this problem and produce the abundant natural gas resource, Riddell and his staff at Paramount fine-tuned the application of air-drilling technology in low permeability gas reservoirs. The technology now is commonly used in shallow gas drilling.

Just like any company that's been around so long, Paramount has been forced to deal with the up-and-down cycles indigenous to the industry. Riddell's innate optimism no doubt figured prominently in carrying on unscathed, no matter the business climate at the time.

"The industry has been good to me in the down cycles as well as the up cycles," he said. "Things seem to move forward even in the down times; you can do certain things you can't do in the up cycles."

Riding High

Despite the nose-to-the grindstone effort it took to build the still-growing, thriving company, Riddell does not subscribe to all-work and no-play. Indeed, he has a number of intriguing investments/hobbies:

  • His estate near Calgary is home to a number of thoroughbred horses -- a far cry from the days when the then-fledgling geologist/explorationist sometimes did field work on horseback.
  • In a show of support for the "home team," Riddell owns a stake in the Calgary Flames hockey team, which he wryly noted is not playing this year because of a lockout.
  • Part ownership in four restaurants adds additional spice to this entrepreneur's lifestyle.

But hobbies, no matter how upscale, pale in comparison to building a successful company, starting with a blank canvas.

"Paramount does the full cycle," Riddell noted. "We do exploration and development, and we built our own pipeline and gas plants and do our own marketing.

"We built it from two people to several hundred and managed to move into frontiers," he said. "I'm proud that for 27 years we've kept it together, carried it on and kept material ownership in the company, too."

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