Houston Producers Forum President 2004 & 2021

Company News
Written By Tim Murray

Past President Tim Murray - 2004 & 2021

Tim's Life Story and Professional Career

I am from North Louisiana, near Shreveport, and grew up hunting and fishing with my dad and brothers. The entire family was involved in Scouting, and I was the first Eagle Scout in my troop. I mowed yards, sacked groceries, and did other jobs to earn spending money. All six kids attended a Catholic grade school before enrolling in the all-boy Jesuit High School or the all-girl St. Vincent’s Academy. I earned a grant-in-aid scholarship and worked after school and on weekends to defray the tuition cost at Jesuit.

My father was Chief Engineer for Tri State Oil & Tool (acquired by Baker in the late 80’s) and traveled all over the world solving downhole problems for operators. My father attended Texas A&M but didn’t finish his degree during WW II because he had to support his family after his father passed away suddenly. With a dad and grandfather who worked in the oilfield, it was my destiny to follow in their engineering footsteps and the oilfield via Texas A&M. My Dad gave me a choice: enroll at Texas A&M and he’d pay for my freshman year, anywhere else I enrolled I was on my own, and if I enrolled at LSU, he would disown me (his younger brother graduated LSU, a big football rival of Texas A&M). I chose the first year paid to A&M!

I pursued a chemical engineering degree because it offered the most job opportunities and the highest salaries at that time, not realizing it was probably the most difficult undergraduate major on campus. I entered the Cooperative Education Program to earn enough money to fund my education and living expenses. I spent every other semester in the engineering group at a Pennzoil refinery in my hometown, which had the additional benefit of reuniting me with my high school girlfriend.

The most important lesson I learned in the Cooperative Education Program was that refineries were hot, dangerous places where fractions of a percent efficiency improvements were celebrated. The experience convinced me to seek employment opportunities outside of the downstream space, which was a critical decision in my life that I didn’t fully appreciate at that time.

During semesters when I was back in school, I worked part-time jobs to earn money including Mcdonald's and as a party DJ for the student government organization. A party DJ in College Station in the mid-70s was a challenging gig - half the crowd wanted kicker music and the other half disco. The upside to the job was meeting coeds, and one special coed I eventually married! Our first date was the Aggie Bonfire in November 1978 and we were married about 10 years later (it took me many years to woo her!).

The most impactful part time job I had on campus was working in the petroleum research lab researching tertiary oil recovery using carbon dioxide. My experience in oil recovery research and a high GPA in Chemical Engineering is likely what inspired ARCO Oil and Gas Company to hire me in December 1978.

ARCO Oil and Gas Company, 1979-1984 in Midland, Houston, and Dallas

My first year with ARCO was in the Midland District. My first day I was assigned a company car to drive to the town of No Trees for training – I have to admit I thought they were pulling a joke on the new Aggie engineer! In early 1980, I was promoted and relocated to the Houston Offshore District and assumed responsibility for a major property, the Eugene Island Block 175 field about 60 miles offshore Morgan City, Louisiana. This oil field was a piercement salt dome structure that was developed in the 60s but hadn’t had much attention since. With oil prices climbing dramatically into the mid-$30s, I was tasked with preparing a redevelopment program. I led a team that analyzed, proposed, and executed a redevelopment program that was very successful in increasing daily production from 2,500 to over 8,000 BOPD.

At the same time, I was attending the University of Houston to obtain my MBA. It was very difficult juggling classwork and offshore trips in the time before laptops and the internet. Once the rig was demobilized at EI 175, I was promoted to the reservoir staff in the Dallas headquarters. The advantage of a staff job in downtown Dallas was proximity to SMU to continue my MBA degree.

On reservoir staff, I taught reservoir engineering school to the newly hired engineers, managed some software program development for optimizing production, and had oversight of the South Louisiana District. For any AFE exceeding $1 million, I was charged with either supporting the District or convincing senior management to decline it. Since almost everything the Lafayette Office proposed exceeded $1 million, we had frequent interaction. I was known as the corporate seagull – I’d fly in, squawk at them, eat their lunch, dump on them, then fly out.

After completing my MBA, the company encouraged me to consider a new assignment in Anchorage or LA Corporate. As a single man, Anchorage was the least desirable location imaginable and a corporate planning job in LA did not sound appealing. My desire to diversify from engineering led me to seek opportunities elsewhere.

ARCO was a great company to work for and I received extensive technical training plus an opportunity to manage relationships up, down, and across the organization. I made a lot of lifelong friends and worked with some very successful folks. ARCO spawned a lot of successful executives, to name a few: Chuck Davidson and Dave Stover (Noble Energy), Steve Suellentrop (Hunt Oil), Ryan Lance (ConocoPhilips) Greg Pipkin (Barclays), Mike Wiley (Baker Hughes), Randy Breitenbach (Breitburn), and David Habachy (Warburg Pincus).

Wells Fargo, 1984 - 2005 in Dallas, San Francisco, and Houston

I joined Wells Fargo initially as a bank engineer but also was involved in financial analyses for leveraged buyouts. Building LBO spreadsheets on 10 KB floppy disks required a lot of imagination. When Crocker Bank was acquired by Wells Fargo in 1986, I managed the entire portfolio of criticized loans through the precipitous collapse of oil prices that year. Workouts were a great way to learn credit from other people’s mistakes.

In the late 80’s, some of Wells Fargo’s most active clients were the Bass Brothers, Wagner Brown, and Boone Pickens. It was a very interesting and educational experience being exposed to some of the sharpest financial minds in the LBO landscape of the time. I was promoted to manage the Dallas Office in 1990 and in 1993, I was asked to lead the corporate banking group in the San Francisco bank headquarters.

Relocating my family was a big decision but it was an opportunity to rebuild the group and start growing again. My first order of business was to shut down the offices in Atlanta, New York, Chicago, and Los Angeles - again tasked with a job where I didn’t make a lot of friends.

The bank was struggling with souring real estate loans in California and under intense scrutiny from the regulators over the size and performance of the LBO portfolio. Warren Buffet made a sizable investment to bolster the bank’s capital, and that investment was one of the Omaha Oracle’s best ever. The gregarious CEO and Houston native Carl Reichardt stepped down in 1994, and that event started a new chapter in my career.

Paul Hazen was the new CEO and asked me to relocate back to Texas to build out commercial banking offices in the state. Shortly after moving back, Hazen launched a hostile takeover of First Interstate Bank. I moved to Houston to manage the merged energy group; in less than a year, 20 of the 21 officers of the combined group had left. While that sounded like bad news at the time, in fact it was good news because I could hire my own team to move forward.

The Wells Fargo Energy Group became one of the most successful teams in the wholesale bank. Many of my peers wondered how we avoided all the usual hassle that senior management often dealt out – my response was that if you make the bank a lot of money and don’t cause problems, they leave you alone.

One of my proudest accomplishments was starting Wells Fargo Energy Capital (“WFEC”) in 1998 to make mezzanine loans and equity investments. WFEC was very successful incubating relationships with clients who didn’t meet the bank’s lending formula. WFEC is still operating today, and I’m pleased that both my son and daughter worked in that group at some point when they were at the bank. Another proud moment in my Wells Fargo career was when I received an email from our CEO congratulating me (and feeling immense relief) that Wells Fargo had zero exposure to Enron when it failed. One day I’ll frame that email next to my offer letter from Enron that I declined in 1990 and title it “the path not taken”.

Guggenheim Partners, 2005 - 2011 in Houston

After 21 years at Wells Fargo, the regulation and bureaucracy of the banking business was getting worse, not better. I decided to seek another opportunity to build something and opening a Houston office for Guggenheim Partners was the right choice.

I worked for a very bright and successful capitalist, Todd Boehly, whose initial directive was to locate the office anywhere downtown as long as it was connected to the Four Seasons Hotel by air-conditioned walkways. We had a good young team that enjoyed many successes: Craig Fox, Greg Robbins, Jeff Bartlett, Daniel Van Loh, and John Brawley.

One of the largest deals we did was buying the Big Escambia Creek Field in Alabama from Occidental Petroleum, and where I met Todd Stevens during negations. We managed two sour gas plants, drilled four deep Smackover wells, and improved profitability. We bought it for $165 million and 13 months later sold it for $233 million to Eagle Rock Energy, just before oil prices rose to $140 and sulfur prices over $600. I still remind Joe Mills every time I see him that he should be sending me a fifth of whiskey every holiday season!

Our primary business was structuring mezzanine loans and drilling deals, but we were most interested in direct investments similar to our Big Escambia Creek adventure. We teamed up with Tracker Resources and EnCap in an early Bakken venture that was ultimately sold to Hess and made Guggenheim a twofer on our investment in a short period of time. In a few years, we had built a nice franchise for the firm, but it was time for the team to seek a new sponsor to continue growing.

GSO Capital Partners/Blackstone, 2011 – 2014 in Houston

Dwight Scott recruited me to manage the Houston office for GSO since he had recently relocated to the NYC office. Dwight was a very experienced and innovative deal guy, and one of the best managers I ever worked for.

GSO had a world-class platform with multiple investment strategies, a team of masterful investment professionals, and a loyal group of LPs. Besides originating and structuring investment opportunities, my responsibilities included helping raise almost $2 billion in BDC capital and managing some of our largest LP relationships.

GSO was a great firm and almost limitless capital was both a blessing and a curse – we saw most every deal in the market and we rarely had a break in the action. The pressure to put that much capital to work was very demanding on the staff.

As one of the old dogs in the firm, I was known for using colorful language in investment committee meetings. Adding some humor to the video conference meeting with the NYC office made the process more interesting. My staff compiled a list of these “Timisms”:

  • “I’m the Anti-Christ of heavy oil.”

  • On negotiating, “let’s leave a little to the imagination and not give it all up on the first date”

  • At GSO “It’s like having a cute sister - everyone is your friend when you have capital.”

  • “I was up to my behind in gators on Friday”

  • "That dog don't hunt."

  • “Buying acreage is like buying bananas, they do spoil.”

  • “Lending dollars to make dimes.”

  • “Debtquity.” (thinking you’re taking debt risk but actually a whole lot more)

  • “We don't do oil deals in LA, or movie deals in Dallas.” (borrowed from Robert Bass)

  • “People pay you back, assets don't.”

  • “In downstream, you have commodity volatility on both sides, and a potential superfund site in the middle.”

  • “(Tim) I haven't made it that far in the book yet. (Dwight) Tim, it was on the first page...”

  • “You have to give us a little kiss on the equity side.”

  • “He's just a little bit of that absent-minded professor with a little drool on his tie...”

  • “Let’s deep-six that.”

  • “I don’t need a spreadsheet to make an investment decision”

It was a great experience working at GSO and helping build the BDC business, but I was not the “man”. I ran the energy group at Wells Fargo and was the “Guggenman”, but at GSO, Dwight ran the group there. When I was presented with the opportunity at Benefit Street Partners (“BSP”) to build an investment team focused on the energy industry, I didn’t hesitate to accept the new challenge.

Benefit Street Partners, 2014 – 2020 in Houston

I appreciated the fact that BSP had not invested in the industry prior to my arrival and that it would be a learning experience – what they learned was that it was a very volatile industry and they ultimately decided to leave it. Tom Gahan founded and managed BSP, and he is one of the most intelligent financial minds I’ve ever come across. We put together a good team and had a very successful experience with some drillcos.

The most unique large development deal we structured was for a California independent - the structure met the company’s need, survived their bankruptcy, and delivered an attractive return to BSP. While disappointing that BSP decided to exit the oil and gas industry, the firm will prosper because of their excellent talent and strong credit culture.

Bayou City Capital Advisors, 2020 – Present in Houston

Bayou City Capital Advisors is a financial advisory firm I started to provide expert witness, financial advisory, and capital formation services. Our small staff has extensive experience and a broad network in the oil and gas industry, with significant experience in leveraged finance in diversified industries as well.

Active Iron Energy, 2020 – Present in Houston

Active Iron Energy's strategy is to accumulate producing oil and gas assets in a "yieldco" structure. Our acquisition focus is on domestic long-life assets, including situations that have remedial or future development upside when economic returns justify it. Our focus has been almost exclusively on conventional opportunities in the Permian, where our team has deep experience. Raising equity capital has been challenging in this environment, but we remain confident we’ll be successful in our very targeted approach.

Question for the Past President of the Houston Producers Forum

As you've been in a lot of different leadership positions among other organizations, what is the benefit that HPF brings that the others do not offer?

The rotating leadership brings new ideas and new enthusiasm each year. Our mission is to provide a good forum and networking experience. Fresh faces on our Board broaden our speaker network and provide diverse opinions to improve our members’ experiences.

The HPF is one of the largest and most active industry organizations. The speaker lineup for this year is phenomenal! This is one of the best public forums in our industry and it is open to anyone.

"We afford the industry the best opportunity to see some people that many would not get a chance to."

We are a service organization for our membership, so it is on us to bring them quality speakers and provide networking events.

What was your favorite memory at HPF?

In my first tem as President, the measure of success was having more money in the bank account at the end of your term than when you started. The challenge was that the golf tournament was a break-even event historically and the Christmas Party drained the coffers at yearend.

In my first turn as President in 2004, we worked the golf tournament hard, calling law and accounting firms, service companies, investment firms, banks, etc., to obtain sponsorships and encourage registrations. I was very proud that we made a lot of money at the golf tournament that year. Recently we have surpassed that level, likely because sponsoring is easier with $100 oil!

Publications, Memberships, & Board Positions

Bayou City Capital Advisors

Backed by a team of experienced and highly skilled consultants. Our team has a unique combination of financial and technical expertise, knowledge, and connections within the energy industry.

Tim Murray
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