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SOCIETY OF INDEPENDENT PROFESSIONAL EARTH SCIENTISTS

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Hunters and Gatherers

Jory A. Pacht

 A long-time friend and SIPES member Steve Getz explained to me several years ago that there are two types of people in the oil business – Hunters and Gatherers.  Gatherers are the guys who work for the majors and large independents.  It is not a bad life. A good friend of mine and I both got our PhD’s at Ohio State back in 1980.  He went to Exxon and I went to ARCO.  Thirty plus years later he is still at Exxon. Although he doesn’t share his personal financial data with me, I suspect that he is making well over $200,000 a year.  Add in a seven-figure 401K, six weeks of vacation per year, lifetime health insurance and I’d say he’s doing pretty darn well.  He never has to worry about oil and gas prices, new oil and gas taxes, or the fact that the casing collapsed on his ten BCF well after producing only two BCF and returning it to production is not going to be cheap.  He knows that he is going to make exactly the same amount of money this week as he made last week.

I took a somewhat different pathway.  After 8.5 years in big oil, I realized it just “wasn’t my thing”.  In 1988 I gave my two-week’s notice to my manager.  Since I resigned, instead of getting laid-off, I didn’t get a package.  I didn’t get career counseling.  I didn’t even get a goodbye kiss. Instead, I got 24 hours to pack up my office and get the heck out of Dodge. But I left with no regrets.  I had five levels of management through to the V.P. and that wasn’t the environment for me.  I guess I was never very good with a scythe.

Sure do like that spear though!!!  I’m a hunter.  So are you.  As Jim Bob Moffet stated; “It is in our DNA”.  SIPES is all about the independent, which means it, is all about the hunter.  Being a hunter means we are presented with opportunities that a gatherer can only dream about.  It also means that we are presented with risks that few gatherers would ever feel comfortable with.  All those things that my buddy at Exxon doesn’t have to worry about – we do have to worry about. My buddy at Exxon is a research scientist. He is a specialist in sedimentology and stratigraphy – one of the best in the world. We can’t be specialists. In fact we can’t even just be scientists. We have to be businessmen, lawyers, and landmen as well as geologists, geophysicists, and engineers.  In order to be good hunters, we need to know something about every facet of the oil and gas business.

So when I took the job a program chairman for SIPES, I recognized that it was going to be very different from every other volunteer position I had held with other organizations in which I was responsible for lining up speakers.  In those previous positions, with AAPG, GCS, SEPM and even as Continuing Education Chairman for SIPES, my job was to find speakers to give geologic and geophysical talks. But that’s only part of my job as Program Chairman for the SIPES Luncheon Meetings.  I am lining up talks for hunters.  That means I can’t just limit it to science.

In fact three out of the next four talks won’t be geology, geophysics or engineering talks.

In April, Wayne Penello of Risked Revenue Energy Associates will be presenting a talk on hedging for the small independent.  If your income stream is at all dependent on oil or gas prices, then this is a talk you have to attend!  In 2008 the average wellhead price for natural gas for the year was $7.96/MCF. It commonly sold for over$10.00/MCF.  It was hard to walk down an aisle at NAPE without out getting accidently slapped by guys and gals that were high-fiving each other.  It was a grand time.  Fast forward to today. Gas prices are pretty soft and I think a lot of independents wish they had locked in those high prices. Hedging is not just for the gatherers. Hunters can and should do it, too.

In May Ursula Hammes of the Texas Bureau of Economic Geology will be presenting a talk about the sedimentology and petrophysical characteristics of the Haynesville and Bossier shales in East Texas and Northwest Louisiana.  I once attended a talk on the Marcellus Shale and asked the question: How do you identify the sweet spots?  I was told that you don’t have to – It’s all the same.  Well, if you believe that, there is a guy on the Internet you need to contact who wants to give you 30 million dollars.  There is a lot more to shale plays than horizontal drilling, hydraulic fracturing and easy money.  We are just now beginning to learn some of the fundamental rock properties and depositional facies that control hydrocarbon generation, primary porosity and fracture susceptibility.  Trust me on this - It’s not all the same!

In June, Dave Rensink, AAPG President Elect, will talk about the role of AAPG for the Independent. This will be a joint HGS/GSH/SIPES talk. The oil business has changed greatly since the time when most of us worked for a few large companies and Dave will talk about the changes in AAPG in response to our changing demographics.  Most importantly, he will talk about what AAPG is doing to serve the needs of both gatherers and hunters.

In July, David Patton of Locke Lorde Bissell and Liddell will talk about oil and gas contracts. This will also be our ethics talk. For better or for worse, we geologists, geophysicists and engineers tend to be an open, honest, and trusting group.  That’s a good thing…. as long as we recognize that not everyone in business shares that ethic.  Most that have been in the oil and gas business for any length of time have a horror story to tell about somebody getting taken.  In order to be a good hunter you need to know how to trust…but verify.

SIPES work is volunteer work. We do it to give back to the business that has been very good to us and maybe, just maybe, for an attaboy or two.  My goal is to have someone pat me on the back and say: “Jory; that was a great hunting talk!”