By Mark Christian | Monday, October 18, 2021, 1:41 p.m. CST
Revenue is the life-blood of every business enterprise and is generated by three separate, but related processes; marketing, business development, and sales. Although related, each serves an entirely different purpose. When the three are properly executed, companies prosper. If only one of these processes is out of balance, or missing, companies begin to die.
Most oilfield services (OFS) companies view marketing, business development, and sales as the same, or interchangeable roles. If asked, employees who have one of these titles on their business card usually cannot explain the differences between the three roles, and this is a problem.
How can an organization prosper if the team responsible for generating prosperity doesn't understand their job? When business is good, this shortcoming isn't immediately apparent. However, when a boom market goes bust, it’s immediately obvious which companies suffer from this lack of organization and knowledge.
When you hear executives using phrases like “pricing headwinds”, “excess capacity”, or “flat, but transitory revenue growth”, it means revenues and profits are falling fast. Sometimes they even blame Mother Nature. “Unusually harsh weather” and “storm-related slowdowns” are C-suite speak for not selling enough last month.
Successful companies have qualified personnel managing their marketing, business development, and sales efforts. Smaller companies don’t need stand-alone departments or separate employees for each function, but they do need an employee that understands each role and is capable of blending them into a strategy that results in revenue growth.
I‘ve performed all three of these roles during my career. Business development captured my interest and has been my focus for 25 years. During that time, I’ve developed internal and external business development strategies. External bus dev is the creation of long-term value by capturing opportunities from customers, markets, and relationships. Internal bus dev is the creation of long-term value by linking market opportunities with underutilized assets, people, and operational strengths within your company.
Companies need to ensure their marketing, business development, and sales organizations are operating as a cohesive group that is successfully growing revenue. If they are not, the long term costs to the company could be devastating.
September 2021 turned out to be a really big month for O&G M&A.
Reuters is breaking another big O&G story this week by announcing ConocoPhillips (NYSE:COP) is offering for sale properties in West Texas that extend into New Mexico. All of the assets are located within the Central Basin Platform (CBP) and Northern Shelf formations which spread across West Texas and New Mexico. The fields were described as "legacy" which is oilman speak for "conventional". Since COP has drilled horizontals in that area, we won't know for sure until an official press release is issued.
Conoco just unloaded $9.5 billion in cash on its SHELL Permian acquisition, so its not surprising to see the company clean up its portfolio and generate a bit of cash in the process. The company said earlier this week that it is planning to divest as much as $5 billion in assets by 2023, with a focus on less productive parts of its Permian portfolio and some acreage in Alaska.
Initial bid proposals are due on 13 October for both areas, which are said to produce a combined total of about 13,000 boe per day.
The EIA said on Tuesday that oil inventories at Cushing, Oklahoma have dropped 42% since the beginning of 2021. Current tank utilization at Cushing is only 43%, which is slightly lower than levels in 2018.
The Cushing storage hub is the crude oil delivery point for the NYMEX West Texas Intermediate (WTI) crude oil futures contract and is home to 14% of U.S. commercial tank and underground crude oil working storage capacity.
In June of this year, 1.3 million barrels per day were being drawn from national stockpiles. Total withdrawals for June were 35 million barrels, a new record for the largest decline in U.S. crude stocks in history, according to the Strategic Petroleum Reserve (SPR).
Based on the 5 year average, crude stocks are 26% lower than normal and are continuing to decline as U.S. E&P's focus on improving profitability, not production growth. Until U.S. producers return a substantial number of rigs to the field, natural production declines will continue to push domestic production lower and prices higher.
According to Oilprice.com, crude withdrawals at Cushing are "consistent with withdrawals from inventories elsewhere in the world which generally indicate that consumption exceeds production."
The current inventory at Cushing totaled 32.9 million barrels as of 10 September 2021.
According to Barrons journalist, Avi Salzman, Pioneer Natural Resources (NYSE: PXD) has sold 20,000 acres in West Texas to Laredo Petroleum (NYSE: LPI).
Laredo announced the deal on Sunday and stated payment terms were 70% cash and 30% in Laredo stock. The announcement comes just days after Reuters reported that Pioneer put its entire Delaware Basin position on the market for $2 Billion dollars.
Analysts are predicting that M&A activity may spike in the coming weeks as $70 crude prices have made small and midsized assets more attractive to operators in need of additional reserves to extend their production runways.
The Barron's article named the following companies as potential parties to M&A activity expected to be announced before the end of the year: "ConocoPhillips (COP), Devon Energy (DVN), Earthstone Energy (ESTE), Marathon Oil (MRO), Northern Oil & Gas (NOG), SilverBow Resources (SBOW), Southwestern Energy (SWN), and Whiting Petroleum (WLL)."
2010 - 2019: How the U.S oilfield transformed from a laggard to global leader in less than a decade.
A Decade in Which Fracking Rocked the Oil World
Source: Wall Street Journal - By Rebecca Elliott and Luis Santiago Dec. 17, 2019 8:00 pm ET
Shale drillers made the U.S. the globe’s top producer of oil and natural gas, but the boom is showing cracks as the decade ends
Ten years ago, the U.S. ranked third in global oil production, trailing Saudi Arabia and Russia.
A decade later, it leads the world in oil as well as natural-gas output, having more than doubled the amount of crude it pumps while raising gas production by roughly two-thirds, according to federal data.
There is a simple reason for the surge: fracking. Horizontal drilling and hydraulic fracturing techniques spurred a historic U.S. production boom during the decade that has driven down consumer prices, buoyed the national economy and reshaped geopolitics.
Though some of these methods had existed for years, they were successfully applied to dense rock formations only about two decades ago as technologies improved, allowing companies to unlock vast amounts of oil and gas.
End of an Era: Devon Energy exits the Barnett Shale, first major discoveries in America's Shale Revolution.
By ADAM WILMOTH
Published: Sun, December 22, 2019 1:07 AM Updated: Sun, December 22, 2019 1:33 AM
When Devon Energy Corp. executives this week agreed to sell the company's Barnett Shale properties for $770 million, the move capped a transformation for Devon and reflects on dramatic changes in the oil and natural gas industry.
The Barnett is the home of the first successful, wide-scale natural gas development of shale rock, a move that transformed the oil and natural gas industry and led to shifts in global geopolitics.
It also led to rapid growth at Devon, which now is housed in Oklahoma's tallest skyscraper.
Texas oilman George Mitchell first developed the Barnett field. Mitchell developed the hydraulic fracturing processes that made it possible to economically produce the the vast volumes of natural gas trapped under and just northwest of Fort Worth. But he didn't have the cash to develop it properly.
Produced water pipelines are growing in the SCOOP, Merge and STACK, water conference attendees learned
By Jerry Bohnen | Oklahoma Energy Today | 12/13/2018
Produced water pipeline systems are continuing to grow in Oklahoma's SCOOP, Merge and STACK plays along with the numbers of wells being drilled and completed.
Oklahoma Energy Today | November 27, 2018
Two Monday morning earthquakes in southern Oklahoma are a puzzle to the oil and gas workers at the State Corporation Commission. Plus, continued quakes around the Bridge Creek Community have them scrambling as they continued to get complaints from area residents.
Oil & Gas companies Lose $1 trillion dollars in 40 days. (Can you say 'Vol-a-til-i-ty' boys and girls?)
Oklahoma Energy Today | November 20, 2018
Now might be an appropriate time for Mr. Rogers to explain exactly what volatility means - and to reassure all the children who have parents working in the oil and gas sector - that it is perfectly OK if Daddy threw up in his trash can last week...
Those tumbling oil prices of the past 40 days have resulted in a $1 trillion loss by the oil and gas sector.
Crude prices in New York commodity markets slid more than 25 percent during the 40-days when prices began falling in early October. Last week ended with a re cord 12th straight day of oil price declines.
Prices went from a peak of $76 a barrel to less than $56. As a result, energy stocks included in the S and P 500 Index shed nearly $240 billion in value during the 40-day period.
Devon among major energy companies pledging $100 million in aid to New Mexico and Texas to ease oil boom problems
OKLAHOMA ENERGY TODAY | November 20, 2018
Oklahoma City’s Devon Energy is one of 17 major companies exploring in the Permian Basin to offer $100 million in aid to Texas and New Mexico because of challenges caused by the oil boom in the two states.
Dave Hager, chairman of Devon Energy was one of those who signed a letter creating the Permian Strategic Partnership which is pledging the $100 million to ease problems of health care, education and civic infrastructure.
By Mark Christian on 11/03/2018, 4:10 CDT - Major shareholders controlling Newfield Exploration decided to sell the company to Canada's Encana Corporation for $5.5 billion in equity and $2.2 billion of assumed debt, a deal worth $7.7 billion dollars.
Since 2013, Encana has been divesting its Canadian and U.S. shale gas assets in favor of more profitable shale oil production. The company is one of the top 10 oil producers in Texas where it produces about 100,000 bpd and continues to focus on production assets in the Permian Basin and Eagle Ford.
The Oklahoman | by Jack Money | Aug 18, 2018
CUSHING — Operators of the massive oil storage terminal here have done a great job of eliminating a storage bottleneck to keep its product moving.
In April 2017, the terminal was holding about 69.4 million barrels of oil — an all-time high in records kept since 2004 on its storage by the U.S. Energy Information Administration.
Ellen M. Gilmer, E&E News reporter Energywire: Monday, July 30, 2018
A Pennsylvania court made oil and gas lawyers sweat in April when it ruled that drillers could be trespassing when hydraulic fracturing sends cracks through the ground next door.
The ruling could severely cramp the industry's style, leaving companies on the hook for the value of nearby natural gas that seeps across invisible property lines and rises up a production well.
The court was unpersuaded that fracking should fall under the "rule of capture," a long-standing legal doctrine famously portrayed in the movie "There Will Be Blood."
Patterson UTI, Crescent Consulting, & Skyline Direction Drilling cited by OSHA in rig fire that killed 5 workers in Oklahoma.
Source: KFOR-TV AND K. QUERRY at 4:30 P.M. 08/01/2018
QUINTON, Okla. – Three companies have been cited in connection to a drilling rig explosion that killed five men earlier this year.
In January, five men were killed after a drilling rig exploded outside of Quinton, Oklahoma. Authorities say there were 22 workers on the well site, which was being drilled by Houston-based Patterson-UTI Energy, at the time of the explosion.
Officials identified the victims as 35-year-old Josh Ray, 29-year-old Matthew Smith, 26-year-old Cody Risk, 60-year-old Parker Waldridge and 55-year-old Roger Cunningham.