A great interview with the VP of Deepwater Projects for LLOG Exploration, the leading private independent oil and gas company.
Hear what he credits their amazing success rates to, how deep they are exploring, how they address talent restraints, the opportunities for younger people in the industry and his biggest career lesson learned. To learn more please visit their site at http://www.llog.com.
Transcript of Session –
Mark: Hey, folks. Let’s learn something new about the oil and gas industry.
It’s a great show today. We have Rick Fowler with LLOG Exploration with us. He’s the VP of Deepwater Development.
Hey, Rick. How’s your day going?
Rick: It’s going great. Very busy day.
Mark: All right. So we’ll be taking some of your time. We’re going to ask you a couple of quick questions ‘cause we actually love your business model. So, one of the first things I want you to talk about is tell me just a little bit about LLOG?
Rick: Sure. LLOG is a private company. We’ve been around since 1977. Right now, the vast majority of our work is in deepwater, about 90% of our investment. We have developed 17 deepwater fields to date and our biggest field thus far is Who Dat which is currently producing 38,000 barrels a day and 60 million cubic feet today.
And then, we’re currently developing the Delta House Floating Production System which will be installed later this year and come on production next year.
Mark: You know this is incredible numbers for a small independent deepwater operator. I want to ask you something. You are obviously a David among a multiple of Goliaths, what is your secret to actually being this successful in deepwater when you compete with those big guys?
Rick: We started on the Shell and we’re very successful. We decided to go deeper because of that success. We have a tremendous exploration success rate, our exploration success rate is actually 70% which is about double industry average. We decided we could take that same geologic technology – geophysical technology and use it in deeper water. And we began moving in deeper water in the early 2000’s and we’ve been very active since then.
Yes, we are a smaller company in terms of staff, but we are very well-funded and so we are able to have capital budgets between half a billion and a billion dollars a year as we continue to develop. We actually right now have four deepwater rigs under contract including two new builds which is very exciting time for us.
Mark: Yeah, it is very exciting. So how deep you are exploring now?
Rick: We are currently drilling well with a partner that’s 34,000-foot, we do have leases up to 8,000-foot water depth. That being said, I don’t think our goal is to drill deeper or drill in deeper water, it’s more what reserves what field is going to produce that will generate the most cash flow.
Mark: Okay. So, I often talk about talent being a constrained in oil and gas industry. What are your thoughts are on that?
Rick: Talent is very definitely constrained now. I think it will continue to grow to worsen over time. Most of our staff has around thirty years of experience and most of our staff had pretty big experience with majors. As we continue to age in five or ten years, a lot of those people are going to reach retirement age and we have made a concerted effort at LLOG to hire younger staff, less experienced and then get them mentored with some of the more experienced people so we can move forward and not have a hitch as people do tend to get older. But, yeah, I do think it’s going to continue to be a challenge to hire qualified people and I expect that trend to continue in the future.
Mark: Okay. So, a lot of younger people have really a bad misconception of the oil and gas industry. What do you think the opportunities are for the younger generation in oil and gas?
Rick: There’s a lot of opportunities, you know certainly the engineering and geology – geophysical, there’s tremendous opportunities there for new assignments. You know from my standpoint, I think the industry needs to go out and attract, you know, start earlier with middle school kids high school kids, get them interested in Math and Science and in the industry as well and then continue to develop them.
I do work with API. We spend over fifty in our — the Delta section maybe and we spent 50% of our funds on education. We do try to reach middle school kids high school kids and we do about 20,000 a year in scholarships to college age candidates.
Mark: Yes. You and I have that in common. I’m on the Houston chapter of API and a lot of our money goes to the same programs to help underprivileged kids or young kids get into oil and gas industry. If you’re not a member of the API, join.
All right. So, here’s a big question. When you think about your career, what’s the biggest lesson you learn in your career about business?
Rick: That’s a great question. I think a lot of people in the industry tend to focus on very short term – what does the production report look like today, what does the drilling report look like today. I think throughout my career, I have been wanting more to look on the horizon what’s coming and I equate it to – I taught my daughters how to drive not too long ago and they tend to be looking right in front of the car five feet away and I said, “You need to be looking way out there, it’s much easier to adjust your car and avoid an incident looking way out in horizon. If you’ll get something right in front of you, it’s almost too late to change anything.”
Now obviously, we need people in our company looking at what’s going on that specific day, but I do encourage people to take a longer term focus. Aside from that, I would also suggest that just maintaining a consistent level performance of delivering more than your customers expect day in day out will make you more value throughout your organization and make you more value to your company.
Mark: That’s a great advice. Sir, I just want to thank you for the slice of your time. I know your calendar is booked solid. And my viewership is actually is going to thank you as well. We get to see inside of the world that we normally don’t get to see inside of.
So, thank you very much.
Rick: Thank you, Mark. I appreciate it.
Mark: All right, folks I hope this helps. We will see you next time.