Strengthening Business Acumen

The Division of Professional Affairs has been busy in the first half of 2019. This month marks the beginning of the 2019/2020 fiscal year and my term as president of the DPA. Before I introduce the incoming Executive Board of the DPA I would like to acknowledge the accomplishments of Mark Gallagher’s presidency and the people that made it happen.

The DPA’s charge is deepening and expanding geoscience professionalism. We achieve this directive in many ways, one being the strengthening of our business acumen. This was Mark’s focus as president of the DPA. It started with the Money Makers Business Forum in Oklahoma City last April and followed up with the four DPA-sponsored sessions at this year’s Annual Convention and Exhibition in San Antonio: Discovery Thinking Forum, Opportunity Valuation, Deals and Investment Decisions and Financing. Although some of these topics are not often associated from geology, they are what allow us to pursue our geologic passion. If you desire to be an oil and gas entrepreneur (or it has been thrust upon you), these sessions offered important information and personal perspectives about how to be successful (i.e., make money) in that business. After all, the majority of the wells drilled are by these entrepreneurs.

Finally, a big thank you to Deb Sacrey, who was speaker at the well-attended DPA luncheon. Despite being served turkey meatloaf from a tube, she gave an exceptional presentation about her varied career highlighting the of the ups and downs of her life in the oil patch: Reinvention.

Please log in to read the full article

The Division of Professional Affairs has been busy in the first half of 2019. This month marks the beginning of the 2019/2020 fiscal year and my term as president of the DPA. Before I introduce the incoming Executive Board of the DPA I would like to acknowledge the accomplishments of Mark Gallagher’s presidency and the people that made it happen.

The DPA’s charge is deepening and expanding geoscience professionalism. We achieve this directive in many ways, one being the strengthening of our business acumen. This was Mark’s focus as president of the DPA. It started with the Money Makers Business Forum in Oklahoma City last April and followed up with the four DPA-sponsored sessions at this year’s Annual Convention and Exhibition in San Antonio: Discovery Thinking Forum, Opportunity Valuation, Deals and Investment Decisions and Financing. Although some of these topics are not often associated from geology, they are what allow us to pursue our geologic passion. If you desire to be an oil and gas entrepreneur (or it has been thrust upon you), these sessions offered important information and personal perspectives about how to be successful (i.e., make money) in that business. After all, the majority of the wells drilled are by these entrepreneurs.

Finally, a big thank you to Deb Sacrey, who was speaker at the well-attended DPA luncheon. Despite being served turkey meatloaf from a tube, she gave an exceptional presentation about her varied career highlighting the of the ups and downs of her life in the oil patch: Reinvention.

Money Makers Business Forum

The Money Makers Business Forum in Oklahoma City was a resounding success with 23 presentations and 150 attendees. Thank you, Joel Alberts, Rick Fritz and Jason Hamilton. This would not have happened without your efforts. Fifteen of the presentations were videoed and are available on the DPA webpage at www.AAPG.org/resources/videos/dpa. You must login to the AAPG website to view these videos. There are seven covering private equity: how to attract it and how to use it. There are five videos discussing ways to assess risk, grow value and monetize an asset. Finally, four focus on improving production through innovative technology.

Discovery Thinking

Discovery Thinking Forum at the San Antonio ACE was inspiring as always. I never tire from hearing about discoveries! Thank you, Charles Sternbach, for your early vision and continued leadership on this very important session. It started with the world class discoveries by ExxonMobil in Guyana. They described how they settled on exploring offshore Guyana and emphasized the importance of strong geoscience fundamentals along with the need for patience and resilience to be successful. This was followed by what could be described as a motivational speech about the first successful exploration in Belize and what can be achieved with perseverance. Both talks emphasized the role of the oil industry in improving the economic lives of the citizens in the countries where they did business. The next was a fascinating talk on the Delaware Basin and how the Wolfberry/Wolfbone developed in that basin.

The take home message was that by sharing production improving completion techniques with other operators in the play, they increased the value of their acreage position as well as that of others. Who would have guessed the adage “a rising tide raises all boats” would bring added value to oil assets?

The last presentation was by Tecpetrol S.A. on the discovery of the Vaca Muerta shale play in Argentina. The Vaca Muerta formation was well known in outcrop. They pointed out that after the shale play success in the United States, their company began to look for a shale that met what they defined as the six critical elements needed to have the potential for a new resource play. Three years later, they made their first shale discovery. The drilling began with vertical wells because the Vaca Muerta was very thick. However, five years later, with the introduction of horizontal drilling, Tecpetrol was able to greatly increase production and move into what they called full factory mode.

Other DPA Sessions

The final three sessions – Opportunity Valuation, Deals and Investment Decisions and Financing – were primarily an expansion of many of the topics covered in the Money Makers Forum. I would like to give a big thank you to the session chairs: E. G. Hathon and D. C. Zweidler, R. C. Shoup and H. Manueco and L. T. Billingsley and A. Sandlin, respectively.

The Opportunity Valuation session covered subjects from “the bias you bring when evaluating a property” to “pitfalls in production forecasting” and a presentation showing that wildcat conventional exploration in frontier basins was a viable business model. What a great message!

The Deals and Investment Decisions session showed us how to go from generating a play concept to the acreage capture of that idea along with the importance of above ground risk assessment. It explained the importance of understanding exploration contracts to be successful along with how to improve financial success through continued portfolio optimization.

The last session, Financing, had talks about the challenges of being an entrepreneur, how to access private equity money, how to build a viable company using private equity money and how to do non-operated underwriting. This was where the most numbers, tables and graphs were shown, important information not often seen at ACE.

Acknowledgments

I would like to say thank you to the outgoing executive board members: Mark Gallagher (president), Meredith Faber (VP) and Peggy Williams (secretary). The new incoming DPA Board consists of Steve Goolsby (VP), Margo Liss (secretary) and Meredith Faber (president-elect). Mike Rains will be continuing as the editor of the DPA quarterly publication The Correlator. I look forward to working with the incoming board on another exciting year.

Finally, we also now have the DPA Heritage of the Petroleum Volume 1 and 2 loaded on the DPA web page where they can be downloaded at www.AAPG.org/divisions/dpa/resources/currentpage/1crwrcfucutscbvbfzws.

You may also be interested in ...