A great interview with the president of AAPL (American Association of Professional Landmen) Marc Strahn, shot at NAPE 2015. To learn more about AAPL click here.
Mark: Hey, folks let’s learn something new about the oil and gas industry.
All right. We have a series of three interviews that we shot at NAPE and you may go, “Mark, what is NAPE?” Well, NAPE stands for North American Prospect Expo and it’s one of our favorite shows of the year. There’s actually a bunch of them going throughout the year, but this one is actually the one that was in August 19th to 20th in Houston of 2015.
Now, the reason that we love NAPE, it’s the only show we know where deals are actually done on the floor. It is a show for upstream oil and gas, operators, and landmen, but it’s also a great place to learn about what’s going on in the industry. So, if you have an interest in the oil and gas industry or upstream or operators, you need to make plans to go to NAPE. We go every year, it’s a great show, so hopefully these three interviews help to get a feel for what’s going on. Enjoy.
Mark: Hey, folks it’s Wednesday afternoon, we’re still here at NAPE and we got a great guest, we have Marc Strahn here with American Association of Professional Landmen. How are you doing, Marc?
Marc: I’m doing really well. How are you today?
Mark: Awesome. And, we’re going to show, it’s really great to see so many people in the oil and gas industry with the positive attitude here today. And, Marc, we’re going to talk a little bit about landmen because landmen on the part of the industry a lot of my audience don’t really understand. So, kind of at a high level, what does a landman do?
Marc: A landman is kind of if you didn’t have anything else you would say it’s kind of the eyes and ears of the oil and gas company in the field. They are the ones who basically research the title in the courthouses, they find out who owns the mineral rights and then the oil and gas companies if they want to acquire leases and do other things like that, we’ll send landmen out. And they’re the people that meet with the land owner and they negotiate the leases and they put together the deals and after a well is producing or something else is done long in that particular line, then they’re the ones that will negotiate road agreements and pipelines and do all the other types of things.
Mark: So, they’re literally the first boots on the ground?
Marc: Yeah. Yeah. And it is literally where most of the corporate giants are. You know in office, you very rarely see an Exxon or a Chevron landman in the field, they’ll contract with landman and they’ll do that. And usually you use local talent in the region that you’re working.
Mark: So, right now, we’re in a bit of a low crude environment, I know that impacts you organization. Can we talk a little bit about what do you think the sentiment is of with the people out there and just the way they’re thinking about this low crude environment?
Marc: Well, you always have the problem and, yes, we are seeing a little bit of a change right now, there’s a downward trend in the market. But, in the long run of the way things are you look to try and find ways to improve upon that. I mean landmen are directly affected by the amount of activity that’s going on. So, if you cut the drilling rigs in half, you probably need half as many landmen doing the work that you’re doing.
And so, the way that you want to be positioned yourself in a downward trending market is to make yourself standout and be better than the guy that you’re competing against because that’s what’s, you know, that’s what’s going to guarantee your next job.
Mark: Yes. So, if you’re a landman and if you’re – if business is slowing down, what you’re saying is you need to spend some time working on yourself, education or networking that source of NAPE?
Marc: NAPE’s a great environment, very few people realized that NAPE was set up in a downward trending market. It was to put people who had deals together with people who had money and who are looking for projects and so, it’s a perfect environment for NAPE along that particular sense.
Mark: So, that’s a fascinating story. So, NAPE was started in a downward market – oil market, right?
Mark: And so, it just grown since then?
Marc: Yeah. We’ve started off with, you know, I think in 1993 was when we had the very first one and, you know, now we’re up to the winter NAPE in February, we’ll have probably in the 20,000 range – 15,000 to 20,000 range of people. And, well, between the three different NAPEs that we do now throughout the year, we’ll have about 25,000 people will come, so it’s very it’s the largest project expo in the country.
Mark: That is cool that many people in one place. And the thing I love about NAPE, everybody that comes here is either here to buy something or sell something. So, the vibe on the show floor is just vibrant. It’s like that right now.
So, one of the things that we talk a lot about with our audience is something called The Great Crew Change where you have a predominantly older generation that are in the industry now and then there’s a gap and then there’s a younger generation coming in, and you’re saying you’re seeing the exact same thing with your membership?
Marc: Yeah, we did. An interesting story, we had in 2004, we had about 11.000 members of the association. In 2014, ten years later we had 22,000 members of the association. The difference was in 2004, we had the average experience level of 15 to 17 years. In 2014, the average experience level is 5 to 7.
So, what’s happening is the people who have been here for a long time are retiring and getting out of the business and we’re replacing them with all the nice, you know, the new young guys that are coming in, but they haven’t see any of these downturns and so, they’re, you know, a lot more afraid of what’s happening in the market. If you’ve been doing it the 35 years that I’ve been doing it now, we’ve seen ups and downs, you know, many, many times.
Mark: Yeah. It’s a cyclic market no matter what, it always comes back, I promise.
So, if there’s some young people out there wondering about, you know, exactly what landmen do, what’s the future look like, what would a career look like, could they reach out to your organization?
Marc: Oh, by all means. Yeah, we are the national organization, the American Association of Professional Landmen. I’m their annual president this year. But, we have an office in Fort Worth and even if you’re here at NAPE or anywhere else, you can go online to Landman.org and it will set you up and show you, give you a lot of the history. And if you’re interested in getting into it, you should.
The other thing too is if you are a landman out there now and you’re saying, oh, you know, gee, do I spend that hundred bucks to keep my membership or anything, I want to strongly encourage you to keep doing that because you need to be more involved, you need to be more educated, you need to have more social context in this type of a market than to pull yourself back. And if you pull yourself back, you’re going to get out of the flow too quickly and you want to be able to compete with the guy that’s standing next to you.
Mark: Yeah. And folks, we’ll put a link in the show notes so you don’t have to write it down. Well, Marc, thank you so much for your time.
Marc: You bet, anytime.
Mark: Folks, I hope this helped. We will see you next time.