According to Webster’s Dictionary, it is “one who organizes, manages, and assumes the risks of a business or enterprise.”
It further defines the characteristics of an entrepreneur as “a person who starts a business and is willing to risk loss in order to make money.” Early connotations of the word implied that it was just a person in business for himself. But by the 20th century, the word “entrepreneur” has come to take on the connotation of a “go-getter” when applied to an independent business owner.
So, what does that have to do with AAPG?
As of September 2024, only 11.1 percent of the AAPG members worked for major oil companies. Those who listed themselves as working for small companies (16.65 percent) and as independents/consultants (16.58 percent) were slightly more than 33 percent, and another 3 percent were “unknown.” It is that 33 percent part that interests me.
My mother told me early in life that every time one door shuts, another opens, and you must have the guts to go through it to find out what is on the other side. With all the merger and acquisition activity announced this last year, I would suspect that there will be some geoscientists who will have the opportunity (not the misfortune) to find that opening door!
How often have we witnessed a few individuals leave companies with some golden parachute go out and pick up a few properties shed by their former company because they were not in the core areas of exploration/development and begin from scratch!? I think this exemplifies the uniqueness of the upstream oil and gas sector and the definition of an entrepreneur. And what does AAPG do to offer these incubators of new companies a path to grow their start-ups? Of course, education comes to mind, and then there is the networking experience – but what about the business side?
The SIPES Model
The Society of Independent Professional Earth Scientists has tapped into this niche group of geoscientists and engineers since 1963. It was formed by nine gentlemen tired of the big companies having all the say in oil and gas sector policy and wanted to make the independent presence known. They were also tired of the bad apples out there and wanted a discreet way of letting fellow members beware of dealing with them. I was fortunate to have one of the original members, Al Wadsworth (No. 6), and Lucius Geer (No. 11) who came in the second crop of members, as clients. Michel Halbouty was a member of the first Board of Directors of the organization. The Division of Professional Affairs was formed in response to the creation of SIPES, and the two organizations have the exact membership requirements, so they reciprocate with one another for membership. The difference between the two organizations is that SIPES members are independent. They cannot be a salaried company employee – unless it is their own! One can be a certified member of DPA and still hold a job.
Many times in the past decades the DPA and SIPES have gotten together to teach a popular seminar on “How to be an Independent.” This outreach is important to those going through the next door in their careers and should be brought back regularly. The rules are changing as we speak with government regulation, new technologies and an ever-changing landscape of opposition to the upstream geoscientist trying to make a living.
This one-day course usually involves an accountant who discusses different accounting measures for various types of corporate entities, and an attorney to discuss consulting contracts and purchase agreements. It covers a bit of the corporate structures and how they are used. Usually, a local independent engineer discusses property purchases and divestitures and the mechanics of operations. A local, well-versed landman discusses leasing contracts and the nuances of leasing or lease banking prospects along with various consulting contracts and confidentiality agreements. Then some successful entrepreneurs will talk about how they got started and encourage those putting their toes in the water for the first time. If invited, I will present on how to find consulting work.
But with a third of our membership being in the small company/independent/consultant category, is AAPG doing enough to address their needs? Do we need to add a “business of the oil and gas business” to our program? Could this translate to CCUS and geothermal as well? I think our goal should be to help those caught in all the mergers and acquisitions frenzy to get through that next door that opens for them and allow them to be an entrepreneur. I see this trend in our membership only increasing as companies acquire other companies to improve their bottom line for stockholders, and those guys/gals with their golden parachutes see their glasses as half full! Last year, the numbers for small companies and independents/consultants in AAPG were only 30.7 percent!
The Menace of Merger Mania
On another note – the M&A activity negatively affects AAPG and its finances. For one, it cuts in half the advertising done in the EXPLORER. The EXPLORER has lost half its advertising revenue in the last eight years. Look at the TGS/PGS merger as an example. Each one used to advertise in EXPLORER and show all their significant seismic data. Now, it is one ad because it is one company. The same holds for Datapages revenue from subscriptions. TGS and PGS each used to have a corporate subscription to Datapages, but with a merger, one subscription gets dropped. The trend is not good. It makes it very challenging to make ends meet.
Remarkably, we might get a new crop of entrepreneurs from this activity. Still, AAPG must be able to re-generate sources of revenue to counter the merger mania that is going on out there.
I would encourage everyone to take advantage of the new “Marketplace” ads in EXPLORER. I think I purchased the first business card ad, but we have plenty of space to place your card or ad! The rates are incredibly reasonable, and you can email Melissa Roberts ([email protected]) to help you get started! It is a great way to get your name out in front of more than 20,000 people!
Another item I am adding to the EXPLORER is a message from each of the members of the Executive Committee. This month you will find a message from the President-elect Brian Horn (see the next page in this issue). I think it is high time that all the members understood what each of the EC does in their jobs and what their opinions for the future of AAPG are in their own words. So, it is time for the EC to emerge from the shadows! I will see who volunteers to write for November!
Next month: Volunteerism and what you can do to help AAPG!
Best,
Deborah