Official: Energy industry not for the faint of heart
fwbusinesspress.com
BY JOHN-LAURENT TRONCHE
August 03, 2009
The oil and gas industry is one of exhilarating highs and dismal lows, and, as evident by the most recent economic downturn, the two sometimes can be no more than a few months apart.
But that fact doesn’t discourage many people with an entrepreneurial spirit from pursuing a career in the oil and gas industry, maybe hoping to strike it big, like the wildcatters of old.
“I think [the downturn] made them more excited about it because there is a chance to make a fortune if you’re entrepreneurial in spirit,” said Texas Christian University’s Ken Morgan, director of the Energy Institute. “I think a lot of our students aren’t just looking for the traditional niche in the industry but new opportunities because of the energy needs we’ve got coming.”
The energy industry employs more than 350,000 U.S. residents. The people working in the industry know the difficulties both long term and short term, Morgan said.
“It boils down to the personalities that do well in this business,” Morgan said. “You can look at any job area … some people like merry-go-rounds and some like rollercoasters. If your personality can take the highs and lows, that can be really exciting.”
The Energy Institute has seen a dramatic increase in student interest since its inception in 2007. Currently, there are 180 students who have chosen energy as their minor, and Morgan expects that number to top 200 by December. Comparatively, last summer there were about 70 students.
“The number went up, it did not level out,” Morgan said. “They still have a feeling opportunity is out there or going to be there.”
Additionally, there are more than 300 student-members of the TCU Energy Club, a 16-month-old group designed to help students interact with industry professionals. This illustrates the ongoing interest in energy as a career path.
“I think we have a lot of youngsters who think when it’s going up they can contribute a lot. When it’s going down, they’re optimistic,” Morgan said. “It can always bounce back.”
Dick Lowe, 81, is an energy industry veteran, having worked in oil and gas fields since 1951. He’s the first to admit that he’s “gone broke” three times and been rich four times. He doesn’t plan on going broke a fourth time. (“One thing about being broke is it will motivate the hell out of you,” he said.)
So what inspires Lowe and others like him to work in an industry that often hinges so strongly on speculation and the possibility of recoverable reserves?
“It’s probably greed,” he said frankly. “It’s like a treasure hunt, you’re trying to find oil fields and gas fields, at least that’s how it used to be. Now there are a lot of price predators, speculating on what the prices are going to be.”
Dick Lowe and long-time friend Hunter Enis are equal partners in Four Sevens Resources Co.; during the explosive, initial Barnett Shale growth the duo orchestrated several deals that netted the company about $1 billion.
“The way I always played it was to look for oil and gas, find as big a field as you could and make money,” he said. “If you do that you’re not too worried about price variances. You just try to find something big and if it’s big enough it’s probably economical.”
Since the economy turned south, industries nationwide have been hit hard. The energy industry is no exception. Natural gas prices dropped from a summer 2008 peak of $14 per million British thermal units to about $3.50 per MMBtu – about 75 percent. (Many industry analysts say gas at less than between $5 per MMBtu and $6 per MMBtu makes unconventional shale plays uneconomical.)
Land services companies have gone from employing many to being staffed by just a few. The courthouse, once bustling with dozens upon dozens of landmen all clambering for records, now is relatively calm.
A steady stream of bankruptcies has hit the industry since the economy stalled, and credit dried up. For example, in the past year: Houston-based natural gas explorer CDX Gas LLC, with assets in the Barnett Shale, Marcellus Shale, Arkoma Basin and elsewhere; Gulf of Mexico oil and gas firm Energy Partners Ltd.; San Antonio-based TXCO Resources Inc., which had been working on a shale gas play in southwest Texas; Barnett Shale pioneer Hallwood Energy LP; and fuel retailer Flying J Inc.
But there are positives.
New, alternative energy resources increasingly are gaining interest, Morgan said. That fact, along with the abundance of domestic natural gas, further solidifies an energy career as a strong choice.
Also, those wild rides – gas at $14 per MMBtu followed months later by gas at less than $4 per MMBtu – could be a thing of the past if the U.S. focuses on what many see as a new opportunity: using natural gas as a transportation fuel.
“If the country wants to, we can stabilize a bit by creating new markets and controlling the gas we’ve got here,” Morgan said.
In the mean time, he encourages his students to stay focused, and, with regard to industry career fairs or educational seminars, “beg, borrow and steal your way in so you show the companies you’re still dedicated to learning something about the business.”
Every guest speaker at the Energy Institute has addressed the economic woes currently facing the country and energy industry. There is a similarity between them all, Morgan said: “Especially the oil and gas industry, they’re always optimists.”
As for Lowe, he insists he’d do it all over again knowing what he does after almost six decades in the industry.
“Oh yea, I love the business,” he said. “It’s fun. Treasure hunts are fun and that’s the way I always played with it.” |
