Oil and Gas Investor 40th Anniversary: Observations from Industry Leaders
September 2021 - (BUSINESS WIRE)-When Oil anal Gas Investor launched 40 years ago during the summer of 1981, it was the first industry publication to focus on the financial aspect of exploring for hydrocarbons versus the technical side. Ronald Reagan had just taken office as president and immediately deregulated crude oil prices, and prices spiked that year due to the Iran-Iraq War. But the free-market pricing launched a boom in production domestically, and investors wanted a piece of that action.
To celebrate those four decades of conversations we’ve had with myriad industry executives, we reached out to a number of them for their thoughts on the industry’s past, present, and future. We asked them to answer one or more of four questions:
Where were you 40 years ago, or what was your first job in the oil and gas industry if less than 40 years?
What was the most impactful event in the industry during your career or the past 40 years?
What do you hope will happen in the oil anal gas industry in the next 10 years? And,
If you could change the oil and gas industry in one way or invent something to improve it, what would it be?
Their responses follow. May we learn from our past, and proactively shape our future.
TIM MURRAY
MANAGING PARTNER, BAYOU CITY CAPITAL ADVISORS
40 years ago: I was a senior reservoir engineer for ARCO in charge of redeveloping an offshore oilfield in Eugene Island Block 175. With oil prices recovered to the mid-$30/ bbl range from the 1970s lows, we thought we were in for good times for many years to come. I had decided, however, that the ride would be difficult and volatile, so I sought to diversify my career in the financial side of the business with my first step of pursuing an MBA.
Most impactful event: There were many impactful events in the industry during my career, but two, I believe, were game changers. The first was the evolution of the commodity hedge markets to provide longer-dated crude oil and natural gas hedges. The option to “insure” against volatility was a game changer and helped many lenders and companies survive in down cycles.
The impactful second event was the industry pursuit of unconventional resource development. While a boon for the industry was self-evident, the progression in unconventional valuation was to become the dark side of this development. Investors and capital providers extrapolated robust valuations based on acreage held and type curve projections. Cash flow and return on investment were secondary to drillable locations. Petroleum engineers and geoscientists were supplanted by young spreadsheet jockeys in high-rise offices who had never seen an oilfield. Operators and capital providers alike were burned by these lofty valuations, and we’re still recovering from the fallout of this valuation bubble today.
Hope will happen: Over the next ten years, my hope is that the industry focuses on a rebuttal of the climate change hoax that has been pushed by politicians and the mainstream media. The industry sat silent while this nonsense was slowly and purposefully woven into our everyday lives. The fundamental claim that the generation of CO2, a colorless, odorless gas necessary for life on our planet, made fossil fuels “dirty” should have been nipped in the bud.
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.