GeoGulf 2023, the annual convention for the 13 member organizations of the Gulf Coast Association of Geologic Societies, successfully attracted an interested audience primarily by providing an excellent petroleum geoscience technical program, associated learning and engagement opportunities, including field trips, courses and social activities. Thank you to the general chair Charles Sternbach, technical chairs Linda Sternbach and Andy Pepper, sponsorship chair Jeff Lund and other committee members, session chairs, volunteers and presenters.
One of the last sessions during the final afternoon slightly differed from the excellent geoscience technical program by its focus instead on entrepreneurship. The room was packed and the audience stayed for an extra 20 minutes or so after the program was scheduled to end to hear from the panel, share their questions and participate in the discussions. Thank you to all who attended and presented.
What is an Entrepreneur?
The session opened by defining whom or what an “entrepreneur” is. Entrepreneurs initiate new, novel organizations matching a business strategy (opportunity or multiple opportunities) with funding, as illustrated by figure 1. Potential strategies are outlined on the x-axis, and funding options on the y-axis. On the x-axis, the possible strategies are shown as lower risk/return on the left, increasing to the right from purchase of proven-developed-producing assets to exploration and prospect generation on the right with multiple options in-between. The y-axis starts with self-sourced funding on the top to increased funding size options but with a potential loss of control moving to public financing at the base.
A goal of the session was to touch on each of the boxes in the matrix during individual presentations and a panel discussion at the end of the session.
Research on entrepreneurs identifies six critical cognitive processes or shared traits for entrepreneurial success.
First is the priming of opportunity recognition. This is having alertness and awareness of opportunity, market inefficiencies and novel ideas through better personal and professional networks, higher social and business positions, high aspirations, high intrinsic motivation, high achievement standards and a desire for autonomy.
The second is heuristic-based logic and processes. These include having better prototypes or models, quick response to opportunity, more explicit parameters, business focus on cash flow, speed to revenue, risk management, stress tolerance, dynamic skills and dynamic situational management.
Third is strategic cognition and causal rationality. This is strategic thinking and understanding relationships and interactions of strategy and action.
Fourth is experience. Experienced entrepreneurs focus more on business aspects and results; inexperienced entrepreneurs often become too involved with the novelty of their concepts, products or strategies.
Fifth is cognitive responses to desired outcomes, opportunity development, funding and realistic expectations.
Finally, the active formation of an innovative organization focuses on wealth and value creation.
Panelists
The five panelists – Walter Light, Barry Rava, Deborah Sacrey, Dick Stoneburner and myself – have transitioned from geoscience employees to oil and gas industry entrepreneurs. We were asked to address our transition into entrepreneurship, strategic business strategies, funding choices and timelines. Each path was different, led to various approaches to obtain success, used different funding sources and had different timelines. Most strategies were long-term, and the path to success was over a decade or several decades and strategically changed as opportunities were provided or recognized. Success occurred over similar, longer-term timeframes. None were overnight success stories; each had a plan or strategy and was action-oriented toward those plans and strategies.
Walter Light developed Thunder Exploration, Inc. from inception to an independent exploration and production company over 42 years. Light emphasized his education, the learning opportunities he had at each stage during his career and, most significantly, his network of mentors who taught him the discipline of work, professional and business skills, including operation and administration skills, and regional- to prospect-specific focus, other geologic and geophysical detailed and thorough knowledge, building to a portfolio of projects and investments to grow and de-risk his business.
Barry Rava built Icarus Oil and Gas, Inc. and explained the importance of understanding and strategically utilizing the business cycles of our industry and cycles of exploration. Icarus looks to business cycles to influence when to accelerate or slow down these strategies to optimally navigate within these patterns. Rava also de-risked and managed his portfolio by operating multiple projects at different stages of development at all times. These included projects at the stages of idea, data collection, mapping and interpretation, buying leases, forming a deal structure, selling, drilling, developing the assets and selling.
I established Riverford Exploration, LLC with a 20-year strategy. I de-risked my entry into business by remaining employed and initially building through low-risk PDP acquisition. I did not consider participation in exploration and higher-risk projects during the first 10 years as I developed cash flow. After a decade, I included high-return but higher-risk participation at low-participation percentages to manage the organizational portfolio, avoid risking cash flow or the organization with the potential failure of any single project. Project-specific criteria focus on business strategies with known or discoverable geologic and production risks. These criteria lead to opportunity recognition and participation in projects in multiple basins rather than a single play or basin.
Deborah Sacrey has successfully re-invented herself and her consulting practice, Auburn Energy, to meet the changing environment and technology shifts in the upstream oil and gas industry. Sacrey had many challenges and overcame hurdles, especially early in her career, through diligence, flexibility and creativity, using and developing many different skills, strategically engaging her network and mentors, and ultimately staying at the leading edge of geophysical interpretation. Her geophysical consulting practice was created first with Kingdom software, and she is now using machine learning technology with Paradise software. One of Sacrey’s mentors is the innovator of these technologies, and she is the most recognized and proficient early adopter providing consulting services to independent oil and gas companies worldwide. Sacrey has developed a unique niche as a consultant utilizing technologies before the rest of the industry has adapted. This has allowed her to build demand for her services, which is enhanced by increasing the technical and financial success of others.
Dick Stoneburner provided insights from his more-than-20 years of working with and for private equity and insights from 30 years of his career. Stoneburner has successfully worked in teams developing larger organizations utilizing funding farther down the y-axis and touching many cells in the matrix of figure 1. During transitions, some team members were the same from organization to organization; new team members were often added with skills to accomplish the goals of new entrepreneurial firms. Stoneburner remained flexible and cooperative in diversifying his sponsor pool, pivoting when the opportunity presented itself, trusting his technical work even when it was a higher risk, and always being ready to sell. After working in operating companies, he moved without interruption into Pine Brook, a private-equity investment provider utilizing his geologic and network skills to combine technical teams, opportunity and funding. He is optimistic about the future for petroleum geologists in providing future energy, upstream entrepreneurial opportunities and the return of private equity to quality projects, teams and organizations.
Lessons from the Panel
The entrepreneurs touched many of the opportunity and funding boxes in the matrix in figure 1. As outlined in defining who or what an entrepreneur is, what we learned from the entrepreneur panel was that this group had many different strategic models, were quick to respond to opportunity, had clear parameters, were focused on business success (cash flow and revenue), managed risk and uncertainty, had stress tolerance, had or developed needed dynamic skills, displayed active situational management, developed desired outcomes with funding, are flexible to changes and are action-oriented.
Entrepreneurial success is often not quick and sometimes uncertain, but it occurred over a decade or more with planning over those long-term timeframes. Technical excellence is essential. So is being cooperative, developing personal and professional networks and mentors, mentoring others and working with others on internal teams and in organizational partnerships for successful shared outcomes.
We hope that the entrepreneurial session during GeoGulf2023, this summary and similar events can assist others in understanding and becoming successful entrepreneurs.