Section Members,
This month has been extremely topsy-turvy for oil prices, but we still seem to have lead times for equipment, the Bakken appears to be picking up, and the Permian is still crazy. I’m unaware of what else is happening out there, but we are certainly experiencing interesting times for the industry. Times are also interesting outside of our industry. Our city, country, and world are changing at a very rapid pace. We must be experiencing change much like previous industrial revolutions. During these times, the world got smaller, political systems changed, and cultures shifted to adapt to changing life conditions. Early industrial changes brought about powerful machinery, new methods of manufacturing and agriculture to meet the rising demands of growing populations.
When it comes to cultural changes, consider the widespread use of petroleum distillates as fuel. Almost immediately, personal motorized vehicles became fashionable. Whether that was a Model T or an early Harley-Davidson, the world became enamored with internal combustion engines and how to creatively design around them for utility, style, or performance. Those involved in government and regulatory bodies had to figure out how to deal with this new phenomenon. Traffic lights, circles, rules and licensing all became necessary. Ultimately, regulators figured out that fuel could be taxed.
Whether you agree or disagree on the philosophy of taxes, it’s at least interesting to look at some of the differences in gasoline taxes around the world (just OECD countries). Ranking No. 1 in highest tax per gallon is the Netherlands at US$3.36/gallon
[1]. We’re ranked 2
nd lowest with an average of US$0.56/gallon (just below Mexico who has no tax on gasoline). Those who have imposed these taxes are to some degree, sticking their necks out there, staking their reputations (whether good or bad) on their actions. They have skin in the game.
“Skin in the game” is more than merely volunteering at something. I’ll define having skin in the game as staking personal reputation, fortune, or worth on the outcome of an organization, cause or idea (I made that up, so feel free to challenge that as I’m staking the reputation of this letter on that definition). Being that tied to something can easily be demonstrated by religious leaders, political leaders, activists, and entrepreneurs. But what about other facets of life? What about local government and parent-teacher organizations? Does volunteering at an animal shelter count? What about the one time you volunteered at a marathon finish line and swore running the marathon would have been easier?
Having skin in the game must be assumed, taken and persevered. Whether your skin in the game is in government and public service, volunteer organizations, or a religious organization doesn’t matter as much as actually having skin in the game.
Those who fill volunteer roles, regardless of import, size or stature of the position, know that giving your time can be a lot of work. Many of them have skin in the game. Sometimes your best effort is met with nothing but negativity and criticism. I think those of us who have volunteered with SPE generally have gotten some recognition or thanks from members, but this isn’t case in every organization.
Every Dallas SPE committee or board of directors I have been involved with has nothing but dedicated people. Especially now, those who are new are gung-ho to start something great, and those who have been around for a few years persevere against the lack of novelty and continue to excel. By my definition, they all have skin in the game.
With all that said, make sure to acknowledge those who have put their skin into the SPE Dallas game by attending one (or all) of the many fun and exciting events coming up this month.
As always, contact me at any time with questions or suggestions you may have. (972) 673-2000 or colin.beasley@denbury.com
Sincerely,
Colin Beasley
[1] (OECD Consumption Tax Trends, 2018)
Section Members,
The last couple of months have been challenging and rewarding. I have found that as I put myself into challenging scenarios, I become more and more comfortable in them. For example, speaking in front of people typically has been a challenge for me, regardless of the size of the audience. Now, I have become much more comfortable doing so. Another scenario I am much more comfortable in is speaking to strangers.
Strangers, by definition are people who I am not acquainted with. As I get to know them, they are no longer strangers. While this may seem overly simple and arbitrary, most of this world are still strangers to me. Most of the world wouldn’t help me in any way, merely because I am a stranger. Selfishly, I would prefer help should I need it. As I mentioned in my first newsletter, jobs seem to come from acquaintances more so than close friends. If that is true, then I could benefit greatly by speaking to strangers and developing more acquaintances for when the day comes that I seek employment. As utilitarian as this may seem, the truth is that we don’t overcome our weaknesses by leaving them guarded and unexposed. Speaking to strangers was a weakness of mine.
Now, speaking to strangers is second nature. Every bashful Uber driver, cashier, and clerk dread the day I show up. They’ll be asked about their day, where they’re from, and what their thoughts are on some benign topic. I’ll admit I don’t talk to everyone, but I am much better than I was before. Speaking to strangers has given me the opportunity to write all of this to you. Speaking to strangers has given me the confidence to share this one, seemingly odd weakness of mine with all of you. As odd of a topic as this may be, I have a reason for writing about it.
Dallas Section membership has dropped with the downturn, naturally. I think we all expect this, but clearly something is different since 2017, not 2016, is the lowest membership we’ve had.
The trend of students seems to be dropping off as well, but that’s also expected given oil prices over the last few years. Companies have either become more efficient and have not hired people back as they’ve grown, or we (SPE) are becoming less relevant to professionals. There has been some growth between 2017 and 2018, but we fully expect a pretty flat year for 2019. Layoffs, although still happening, seem to be less prevalent than years past. Whatever the cause, we have not been able to clearly identify it.
About 30 of you responded to the survey we sent out last year, several of which I’m guessing were on the board of directors. I don’t know who the responders are, but thank you for your much-needed input. Ultimately, I think I’m guilty of not talking to those of you I don’t know. As much as I talk to strangers in innocuous situations, I haven’t done a very good job of talking to strangers in important situations. I’m going to make an intentional effort to do so in the coming events. If you feel nervous about that, find solace in your odds of 1/1600 in the section or 1/100 for some of the larger events.
Had I attended all the July events and spoken to strangers, your odds of having a delightful conversation with me would have been as follows:
|
Event
|
Odds of Delightful Conversation
|
|
YP/Intern tour at the Weatherford Sucker Rod Plant on July 12
|
1/20*
|
|
Estimating Molecular Weight Compositions with Gas Chromatograph and Hydrocarbon Dew Point on July 17
|
1/47*
|
|
Study Group: Prescriptive Analytics for Completion Optimization in Unconventional Resources on July 24
|
1/51*
|
*assumes my conversation is “delightful”
Since those opportunities are hypothetical, here are the upcoming events where we may have a chance to talk:
- Networking event at British Beverage Company on August 15, graciously sponsored by Premier Pressure Pumping.
- Private Equity Perspectives on Energy Landscapes on August 21 at Brookhaven College.
- Dallas Federal Reserve Oil Market Outlook Through 2020 on August 28 at Brookhaven College.
July, 2019
Section Members,
Happy Independence Day! Thank you all for being a part of SPE. Without members, this is all for naught. I appreciate all of you, and if you ever have an idea or something you would like to share with me, please feel free to contact me directly.
As time goes on, I have learned that everyone is a student and everyone is a teacher. Regardless of age, experience, IQ or background, there’s always something to learn and always someone to teach. I’ve noticed this recently with my mentor, who has had a very different career path than mine. Even with our differences, I have learned a lot about working with people, how to approach problems, and different resources that are available for me to use. Similarly, I have run into scenarios where I can share knowledge with someone much more experienced than me. I think this extremely important for our industry: there’s a large population older than 55 who have mastered the oilfield technologies young people have yet to learn, and similarly a large tech-savvy population under the age of 35. This can be seen in global SPE membership from a 2016 SPE membership review:
Figure 1 SPE Professional Membership in 2006 and 2016. Source:(Parshall, 2017)
Both groups have an opportunity to be a student and teacher. The 55+ age group needs to pass down their knowledge to the younger people so that our institutional knowledge doesn’t disappear. The younger generation needs to keep the older generation up to date on advances in software and an ever-evolving tech space. Just like advocating for our industry, teaching and learning must be approached from a place of humility. Arrogance and pretentiousness only hinder the passing of knowledge. I know that I am guilty of assuming I know a specific topic, then I find out I know very little about it. My arrogance has definitely reduced my learning potential in many things, and I hope one day to remediate that.
Based on the people I know; this will not be an issue. Some may retire later than anticipated, or come out of retirement to consult 10-20 hours per week. Given Dr. Roberto F. Aguilera’s outlook on oil prices over the next 20 years, I may find myself on the other end of this problem. By then I will hopefully have remembered lessons learned through our current predicament, remained a student and a teacher, and apply them to weather that storm.
June was a very fun month for SPE events. The golf tournament, which is older than me, celebrated its 36th birthday on June 3rd. If you’ve never played in it, I will personally attest that you do not need any sort of golf skill to have a good time. Make sure you thank the golf committee; they spend a lot of time putting on an amazing event every year.
On June 19th, our last Distinguished Lecturer of the season, Dr. Roberto F. Aguilera, came and gave a talk on the price performance of oil. Fascinating and eye-opening.
Also on June 19th, the YP group hosted a networking event at Bishop Cidercade. What’s more fun than cider and arcade games? There were close to 40 attendees.
Lastly, the annual Summer Seminar, “Learning Through Success and Failures: A Collection of Completion Case Histories” was held on June 26th. Please make sure to thank Pragnya, Tami, Danny and any other volunteers you came across. This is a big event for us and requires a lot of work.
If you ordered a shirt, please come to our meetings to pick up your shirt!
Please share photos! We are going to start posting more event photos on the website, so please email any you would like to share to dallas.spe.photos@gmail.com. Remember, they cannot be candid photographs (for privacy reasons).
References
Parshall, J. (2017, June 29). After Years, 'Big Crew Change' Has Passed, But Learning, Training Challenges Remain. Journal of Petroleum Technology, 69(7).
June, 2019
Section Members,
So far, 2019 has been another interesting year in the oil industry. We’ve seen oil prices climb over 40%, major acquisitions, and still, layoffs and early retirement packages. Many companies will come and go, especially in the Dallas market. Even with rising oil prices and general knowledge of how oil makes the world go ‘round, there are still those out there who see our industry as antiquated and soon to be obsolete.
We seem to be portrayed as selfish, greedy, money-grubbing fools who want nothing more than to earn a buck at the expense of the rest of the world. We are seen as the character from the Simpsons, Mr. Burns. My experience, much like many of yours, has been quite the opposite. Many of the people I work with genuinely care about my well-being. They are kind, pleasant, people who work diligently to provide for their families. Many people I know have been laid off, and their next employment opportunity seems to come from an acquaintance. We are all extremely fortunate to work in such a business, which is why I would encourage everyone to advocate for our industry. We have a lot to be proud of:
- Oil was the original Greenpeace. Prior to petroleum production, whales were the primary source of lamp fuel. As the less foul-smelling oil from sperm whales became more expensive due to stressed fisheries, petroleum swiftly became a viable product. Sperm whales still exist today.
- Oil has prevented entire forests from being completely harvested for fuel.
- The oil industry has operated in some of the harshest environments known to man. From the cold, high-pressure depths of the ocean, to operating in SAGD environments, we have developed technology to handle almost any environment in the world. Some of these environments are harsher than space.
- Taxes from production have funded schools, roads, and various public works. That revenue would not exist without our industry.
- We still a people-driven industry. People willing to stick their necks out are the ones that continue to drive technological advancements, which allow us to work in a plethora of environments.
- We provide safe, low-cost medical equipment to the world. Prior to plastics, vaccinations were given from reusable syringes. Plastics allow safe intubation, sterile blood transfer, and cool stickers for kids after their check-ups.
For all these reasons, I ask that when someone outside of the industry you know decides to bring up fracing, you approach them with an advocacy mindset. Be kind and calm, and remind them how they got to Hawaii for their honeymoon, what their iPhones are made of, and why Legos even exist. Never assume ill intent if it can be explained with ignorance.
Last Month
We had Luis Mendoza-Natividad discuss Decision Quality in Field Development Strategies in the general monthly meeting on May 15th.
The Study Group featured Kevin Wutherich, who spoke about stage-specific diverter strategies using lateral heterogeneity.
If you were one of the lucky ones, you pre-ordered your t-shirt. Thanks for everyone that supported that effort.
My second favorite SPE event, Casino Night, was held on May 3rd. I heard it was a lot of fun, as per usual.
Looking Forward:
My favorite SPE event, the Annual Golf Tournament, will be happening on the 3rd. I’m looking forward to seeing everyone out there.
Our last Distinguished Lecturer of the season will be speaking about the Exceptional Price Performance of Oil, make sure to register. For more information on the Distinguished Lecturer Program, click here.
The YPs will have a networking event at Bishop Cidercade, that will be graciously sponsored by Schlumberger.
There will not be a Study Group meeting this month. Instead, we will be holding our annual Summer Seminar. This year we’ll be learning about completion case histories through successes and failures.
Make sure to follow us on LinkedIn, where all our events (and more) are posted: https://www.linkedin.com/company/spe-dallas/.
Thanks to the early adopters of our advertising campaign, SPL and Axis Energy Services. For those that would still like to advertise, contact Joseph Fu: joseph.fu@pxd.com
If you have any ideas, comments, concerns or would like someone to talk to, feel free to contact me. My email is colin.beasley@denbury.com.
Sincerely,
Colin Beasley