Journey Into The Oil And Gas Industry

Machine-generated transcript of “Journey Into The Oil And Gas Industry”. Paragraph breaks mark a change of speaker. Click a timestamp to play from that point.

0:02 This is Under Pressure. Compressor Talk by Midwest Compressor. Strategies, systems, and stories from the compressor world. With your host, David Abshire. And now, on to the show.

0:20 Good afternoon. This is David Abshire with Jeff Wells on the Under Pressure Podcast. Welcome this afternoon, Jeff, for taking time out of your busy schedule to hop on the show with us.

0:31 Thank you. I appreciate that. I appreciate you having me.

0:34 Absolutely. Well, we're definitely excited to have you on this afternoon. So, Jeff, can you start by walking us through your background and how you first got into the oil and gas business?

0:42 So, as you can see from my shirt, I went to Texas AM, studied petroleum engineering. Now, and as far as how I got into petroleum engineering, a little bit of a circuitous path there. I I knew I wanted to do something in the realm of engineering or, you know, science. Those were the types of things I was into in high school, and actually entered as a chemical engineer. And after a couple of semesters, I just really wasn't feeling it. And um, you know, there was a professor in the petroleum department, and he was actually handwriting letters, because this was back in the days when people wrote letters, basically trying to get people to go into petroleum engineering. And, you know, while while I will say my dad's a geologist, so I certainly had exposure to the industry, but at the same time, it wasn't just like, oh, I want to do what he's doing, but I had a lot of exposure and and um, you know, information about the industry. You know, I just again I was kind of struggling with what major to go into. And so finally I said, well, gosh, petrolly, I'll give it a try. And, you know, within that first semester or two, those classes, things just began to to click all at once. It's like my grades got better because I was more interested in the subjects. I could see more application right away. And, you know, I just found it an i uh a fascinating business. And so um, you know, that that led me to to stick with that degree. Ultimately got out and uh took my first job out in Midland, Texas, as a lot of people do.

2:05 Nice, nice. So, of course, Texas AM has a great program, petroleum engineering program. I've had several folks on the podcast uh that's went to school there and definitely bragged on the petroleum program, and of course, too, the SPE that's heavily involved down there as well. So, which is great to hear and just getting to hear from everybody's perspective about the connections and the relationships they made while they was going to Texas A and in the program, so which was really, really cool to hear. And of course, too, I have tons of friends that's went and been part of that program, and you know, they definitely have nothing but positive stories to talk about from you know being able to go through that program at a young age. So that's cool.

2:46 I think, you know, one other thing I would say just about the the program itself that that I probably didn't even appreciate at the time. For one thing, I was in the program at a time when enrollment was very low, and so there were only about 40 of us in my particular class. And so you really, in terms of like b forging relationships in college for a school the size of Texas AM, I know it's really unusual. Um, and you know, to this day, you know, you pretty much know all of where all of your classmates are and what they're doing, and and it's been very easy to to keep up with them. But the other thing is the professors, you know, these are guys that when they say literally wrote the books, you know, I'm taking classes from from guys like uh Dr. Blassengame and Dr. Wahberger and and uh Dr. McCain and uh you know, like everybody that's a petroleum engineer has uh McCain's uh petroleum fluids c uh book, more or less, and and uh these other guys' books. And so um I'm not sure I appreciated that totally at the time, but you know, I mean, uh really, I mean, I was getting a uh world-class uh education from the experts.

3:47 Absolutely, absolutely. Well, Jeff, what what part of the business have you spent most of your career in?

3:52 So I'd say this back half, you know, easily the the last 15 plus have been um on the reservoir engineering and more asset management side, you know, in terms of field development and and preparing uh for you know kind of field well drilling programs, things of that nature. I I did start my career on the operation side like like is typical of a lot of folks, but uh I I gravitated towards reservoir engineering and that's that's where I think I I kind of found the sweet spot.

4:22 Nice, nice, that's awesome. So what's your current role and what's your day-to-day look like now?

4:27 Yeah, so I'm uh currently I would say the reservoir engineer uh for a small private company, you know. So the the only other petroleum engineer in the company is is actually the uh the owner or owner's son of it's a family based business. And so, you know, and he's more or less involved in a lot of things. They they actually do things beyond oil and gas, and so they're in there in other industries as well. And so, you know, in terms of just like the day-to-day reservoir valuation, it's it's just me. And uh we've got a lot of interests in different assets. We do operate in in a couple of different areas, but we also have a lot of non-operated interests, and so it's um it's very interesting because um I I think you know, so many of the folks today that are I'd say are involved in shale plays is probably the predominant thing, and we do, you know, ha have involvement there, but you know, I'm also involved in you know conventional vertical wells and you know, fractured plays, and uh, you know, so I just I kind of get to see a variety of different different assets.

5:31 Yeah, absolutely. Well, what what kind of projects are you actively working on right now?

5:36 So we've got one play that's uh up in the Rockies and it's a it's a tight sand play and uh it fractured reservoir and it's it's very unusual. I mean, for even you know, uh when I I kind of feel like sometimes that you know I've seen a l all these different types of plays. I've worked at a lot of different basins, but this is a very unusual one because of the behavior of the wells. There um you can see a lot of communication over long distances that's that's quite unusual. A lot of gas in place up and down the column, and you know, trying to understand well, how much are you really connecting and how much you're that are connecting in a vertical sense and how much are you connecting in a horizontal sense you know is has been really interesting. Um, and and we've started developing that with horizontal wells, like like has become more common in a lot of plays.

6:23 Absolutely. Yeah, and Colorado is its own animal, of course, too. What I've seen on from the experience I've had as well, I I think you're exactly right. There's a lot of interesting things that I've learned spending on locations in Colorado. And you just are I'm usually pretty surprised uh with the gas that comes out of the ground up there and what it's like and how light it is or just what it can do. It's it's been some head scratchers, and I've spent many days on locations up there going, What how how is this happening? And nowhere else in the United States this happens, but in Colorado it happens.

6:57 Right, right. I think this is my third tour uh working Colorado and and uh each each experience has been pretty different. And uh, you know, Colorado is one of those areas where especially the area that that we're working now where, you know, you've got a lot of sensitive environmental considerations that that you know you you've got a lot of federal acreage and you know you've got probably a few a few more regulations than maybe you do in some other operating areas, and and that's okay because it's you know there's there's some good reasons behind that and trying to minimize disturbance of surface and things like that, you know, water considerations. So it's does bring add another layer of operational complexity beyond just, hey, we need to get a drilling rig in and and drill some wells.

7:41 Yeah, I always tell everybody uh it's it takes a certain skill state to operate and in the state of Colorado. Uh, you know, like you mentioned, all the regulations and rules and permits that you have to get that in other states in the United States you don't have to get, and we're used to just blowing and going. Once you get into Colorado, they're like, oh, hold on, you gotta have a permit for this, a permit for this, a permit for this. And uh of course, too, it it kind of slows us down on the operation side, but it's I definitely understand it as well. Um so you've seen the industry evolve from early unconventionals to today's shells development. So what changes stand out to you the most?

8:16 You know, really, it's just it's been amazing to watch how technology has pushed things forward in ways that, you know, along the way people would say, oh, we'll never be able to do that, oh, we'll never be able to do that. And and you know, I can remember when, you know, people first started drilling horizontally in in some of the plays I was involved with. And so it's like if we could just get out to 3,000 feet and you know, we're gonna do, you know, three or five frack stages, you know, and and you know, now you you talk about people drilling two or three mile laterals, and you know, it's not uncommon to talk about 50 frack stages or or you know, 75 frack stages, and you know, just the ability to to push that out and and you know, with it just be able to recover more and more because the you know, the reservoirs that we tend to find, they don't get any easier. And so we've got to keep pushing the technology along the way to to figure out how to get it out of the ground.

9:09 Absolutely. Yeah, technology's definitely helped us. I I know when I got in the business 20 years ago to where we're at today, it's a completely different industry almost, as far as what the technology you can use to determine, you know, what priorities you start your day with and where your focus is throughout your day, and especially your big money makers, right? Where in the past, uh, you know, nothing was monitored remotely and now everything's remotely monitored and you know, everybody's looking at their SCADA, and we know, of course, every day where to go and where to start our day and what our focus is. Uh and of course too, uh just like you said with the technology and and all the different things that you can do downhole, of course, and just everything that goes along with it, it's huge that you know, kind of where we're at today, it definitely sets us apart from other countries as well. So what I always like to tell people, you you hear how other people in other, you know, parts of the world operate their production, and you know, definitely the US is one of the most advanced for sure.

10:07 Right. Yeah, and you're right, that the technology definitely not just on the downhole, but in the office, like you say. I mean, the the software capabilities, you know, we're able to do things that uh you know, there was a time when the computing power, you know, it's like, oh, we could only have one guy that's running a certain piece of software and it was incredibly expensive, and you know, you had a lot of really particular expertise, and you know, you know, a lot of that software has become a lot more commercially available at a lower cost, and and uh I'm doing more high-tech things now, and along with that, the analysis methods are even changing. Oxy came out with uh an analysis technique called pressure normalized rate, and it's just another way to forecast wells beyond the traditional decline curve analysis that that people are used to. And um, you know, it started picking up uh in in popularity pretty quickly, and the software companies weren't far behind to say, hey, we need to, you know, include this this analysis method and roll it right out. And so other things like that are are just rapidly changing. It's it's just it's nice to have a lot more tools in your toolkit when you're you know trying to do the the type of work that I'm doing.

11:13 Absolutely. Absolutely. So one of the what's different for you in your opinion about being a reservoir engineer at a small operator versus a major operator?

11:24 You know, I think one of the biggest things is I I realize I don't really have anyone to bounce things off of. You know, and and you know, I've worked for you know a major and I've worked for some some large independents. And so, you know, typically you could, you know, walk down the hall and say, hey, man, I'm looking at this well and I can't figure out what's going on. And, you know, hey, just l let's let's talk through what's going on. Sometimes, you know, just to be able to kind of talk up talk about things, you know, out loud, then then solutions and ideas will will come to you. And so in this case, you know, with some of the things I've been working on lately, I'm just sitting there going, man, I um I don't even know who to reach out to at this point because I mean I've got lots of you know, friends and network and things like that. But at the same time, you know, a lot of the the mentors that I had along the way, well, those guys have now retired and and kind of moved on. You know, it seems like now we kind of everyone works in this leaner and meaner uh, you know, where everyone's busy, no one seems like they can get away for even lunch or whatever. And, you know, I I did have to reach out to a good friend of mine here recently and said, man, I just need to talk you through this well I'm looking at and what I'm seeing and the things I'm I'm struggling with. And um, you know, it was just funny how I you know I just realized, gosh, I've I've I've missed a little bit of that that camaraderie and being able to have those kind of discussions and and just talk through things.

12:47 Absolutely. Well, you bring up a good point. That's one thing for sure. In my younger days, I worked for a larger company and always having, like you said, people to bounce ideas off of and communicate with. And you know, sometimes just kind of, you know, just being able to communicate and kind of just probably try to talk through different scenarios that you're gonna run into on the day-to-day, it definitely helps. And I completely understand uh being a smaller company, of course, like us, like I generally reach out to folks I know that works with different sizes of equipment, different size horsepower, and run scenarios through them and you know, bounce things off because it's just the the camaraderie part's really, you know, one of the things that with the smaller company versus the bigger company and the bigger companies, of course, too, uh, you know, there's it's sometimes the schedule's a little bit easier to, you know, work through. So um so one of the questions I had for you today was when you evaluate new acreage or plays, what are the first things you personally look for?

13:46 Usually what we'll do, so if it's if it's a new play or idea that maybe one of the geologists I work with uh has generated, um you know, they'll they'll take me through the idea, you know, and then um, you know, I'll go right to the public data sources. So that'll be like in my case, I'm using, you know, inverse uh you know, Prism, um, you know, and other times people use IHS, but those public data software you know applications that are pulling down from the state websites, you know, that's where you know I'll immediately go and grab all those wells in the area if it's if it's an area that's been drilled, or or you know, if if not, you know, a lot of times he you know he's going to a new area and he's like, well, you know, yes, there are wells drilled, but not in the formation of interest. So then you know you're stepping out further and going, okay, well, I need to step back and we need to try to find uh an analog field that that's hopefully not too terribly far away, but you know, pull all that public data down and and then you know it's a matter of starting to slice and dice it, you know, looking at, you know, the production performance of the wells, trying to, you know, normalize if it's a p horizontal play, you're trying to normalize for lateral length and for completion style things of that nature. And so, you know, really you're looking for, you know, those types of production, I'd say I'd I guess I would probably just refer to that as, you know, looking at the producing characteristics of the wells, but also, you know, we'll step back and and talk more about the area of things such as the source, you know, is this an area where, you know, we think it there's, you know, either the the reservoir is the source or or is the source nearby? Um, you know, some of the things in terms of like trapping mechanism that you kind of get back to the I'd say, you know, probably the old school methods of evaluation where people are saying, hey, do you have a source? Do you have a trap? Do you have a seal? You know, thing things of that qu uh that nature. And so uh, you know, we'll usually start there.

15:46 Absolutely. Well, I completely agree. And I think too, one of the things I've seen, especially with technology these days, it's a lot more easy as accessible to get that information than what it was, you know, 20 years ago, or everything now uh you can use, of course, AI technology too to just drop, you know, uh names in the wells and you know be able to find, you know, history. And it's scary uh, you know, how fast you can get it at your fingertips.

16:14 Right. That's a good point because I I have begun to to use more AI and uh and the way I try to use it is more just like you say, that's like, hey, I I want to look at Hainesville shale players. And so what I'll do is I'll say, hey, go pull all the stats on you know, Hainesville shale players in this area. I want to know about, you know, things like lateral links and completion techniques and things like that. And the AI is actually pretty d good at doing that kind of web scraping to come back and say, okay, well, you know, here's you know, here's these five uh, you know, are the top operators, and you know, okay, here's here's the typical lateral length, and you know, here's the typical, say, profit loading, things of that nature. And and um, you know, and so it's great to just have all the have a kind of robot assistants go out and pull that stuff and put it in a spreadsheet. Then, you know, then you have to to make sure your brain's still engaged because uh, you know, one of the last times I did that, that you know, you immediately you see something that sticks out and it's going, well, that doesn't that doesn't feel right, and then you go, oh, it's because you know, when this AI, you know, was going to pull some sli you know, investor slide deck, it slipped in a Marcellus well with a bunch of Hainesville wells. And so, you know, thing things didn't didn't tie out. And so, you know, that's where you just can't blindly use these tools. But but at the same time, I mean it's great to have that, like I say, kind of running in the background doing the kind of stuff that that used to. I would just, you know, go to website A, website B, website C. And then, like you say, I mean, just the ability to more easily pull mass production data down. You know, now I can pull a thousand wells production data, load it in the software I use, and have it all make a first pass of decline curve analysis that then I'm going back and just kind of tweaking and QCing, whereas before I was like every single one of them like pick the IP, try to pull the decline to make it match. And you know, you're doing that. And so I mean, it's just tremendously powerful how technology's helped us in those ways.

18:10 Yeah, absolutely. So, Jeff, from your perspective, what is the one misconception students or early career engineers have about reservoir engineering?

18:20 You know, probably it it could be that, you know, just that reminder that we're not dealing with a lot of direct measurements. And by that I mean, you know, there's not that often that we're, you know, going downhole and actually taking a bottom hole pressure measurement, or that we're taking some kind of measurement of permeability or things like that. You know, almost everything we do, you know, is calculated. It's it's inferred from you know tiny pieces of data scattered everywhere, and you know, and all and all that, um, all those calculations themselves, there's all sorts of assumptions that are banked in uh are baked into them to to simplify things in such a way that we can, you know, actually analyze it. And so, you know, I think it's and and I tr I try to to communicate to that fol to folks all the time that it's like every time I say, you know, reservoir pressure is 5,000 uh PSI, well, it's somewhere in that neighborhood. And um, and here's all the assumptions that go into that and why I believe that's a pretty good estimate. You know, I just I I know a lot of times, you know, I I've seen people in the past give presentations and it's like, well, the the pressure is five thousand one hundred and eighty-four. The the EUR on this well is, you know, nineteen thousand five hundred and sixty one, and it's like, you know, we're just not really that good. You know, it's kind of like or they'll say the rate of return, the rate of return on this project's gonna be 33.7. Yeah. It's like, no, it's it's probably somewhere between 20 and 40 if we're even that good.

19:53 Yeah, yeah, exactly. Exactly.

19:55 So I think it's just kind of understanding a little bit more the the big picture uh you know aspects. Because I mean it's it's uncomfortable that it's like, hey, we're dealing with a lot of of indirect calculations and measurements, but but you know, we're certainly able to pull what we need from that and that type of work and analysis.

20:12 Absolutely. So what advice would you give to students who want to build a long-term career in oil and gas today?

20:19 You know, I'll tell you something that that I've found, and it probably transcends our industry, it's probably for a for a whole lot of industries, but especially for a person coming with a technical background, like an engineer or whatever, I think you know, we get so caught up in the technical aspects, you know, what what I tell people is, you know, it's it's more important to be a good communicator than it is to be uh, you know, an outstanding engineer. Because you know, if you can't communicate the bottom line, if you can't, you know, translate the technical work into uh, you know, a business justification and do it in a way where you know the decision makers can understand it, that's the the most important thing. And I I think I've seen it so many times in my career, even by very you know senior individuals, but you know, they they produce a 25 or 30 um you know side PowerPoint, and they want to take everyone through all the work that they've done and and they want everyone to understand, you know, um, you know, well, this is how I calculated this, and this is the method I used. And and I mean it makes perfect sense to me as an engineer, but when you've got decision makers who, you know, have 10 minutes and they're thinking about 15 different things, you know, what you've got to be able to do is distill that down to like three slides. Yeah. And, you know, here's my recommendation, here's what we're seeing, happy to answer questions about how we got there. But um, you know, it it it is amazing how the ability to communicate, I think, simply and in a clear way, and and and some of that, you know, and I I I don't mean to give a podcast on on PowerPoint, but again. Just having, you know, a few bullet points on your slide, having things that are easily if you can't read them, then you know, that your people get lost because you've got, you know, a a huge paragraph in like 10 size f uh font. Um you know, you you just gotta be able to deliver that message quickly. And and I had a a really good manager one day, what he said uh was he said, you know, if you've got like a 15 slide PowerPoint that you're giving your direct, you know, line technical manager, well then when that rolls up to the VP or next level, that probably ought to be about five slides. And then if you're gonna show something to you know the executives, it needs to be like two or three because again, they just don't they they've got too much going on, you know, they just need the you know, give me the high level. A lot of them are engineers and they may ask you what you did or how you got there, but but but again, you've just got to be able to communicate uh you know succinctly and effectively.

22:56 Yeah, absolutely. Well it's it's funny you say that, Jeff, because I've had several folks come on here and we've asked very similar questions, and that's been one of the things that gets repeated is the communication aspect of it. So I think you hit the nail on the head uh, you know, just being able to communicate effectively, whether it be to, of course, people internally or people externally, on you know, what you're doing and how you're doing it and how you're getting the conclusions that you're coming up with. I think that's so important in our industry, especially is the communication aspect because there is so many moving pieces with the oil and gas business. Of course, as you know, uh I was talking to somebody the other day and we was talking about the prices, right? So obviously in the oil and gas industry, our prices drop from, you know, $100 a barrel to $50 a barrel overnight, but we still have to operate and be, you know, profitable, right? So, you know, just talking about all the moving pieces, of course, with tariffs and all the different things that our industry faces and just being able to navigate through that through that and be profitable. And of course, that's where folks like you uh get to come in and you know help folks make the decisions and make educated decisions to know if oil drops to fifty dollars a barrel, we're still gonna be able to produce this well, right? And and stay uh profitable. Uh definitely, definitely sounds like you've had a great career in the industry, and I definitely appreciate you coming on today. Uh, but I do have to have one more question. Uh of course, this is not oil and gas related. I noticed you have a beautiful rack of electric uh guitars behind you. So you're gonna have to talk to us a little bit about your hobby looks like there.

24:31 Right, right. Uh yeah, I I'm surprised you didn't say, hey, is that a virtual background or is that real? That is real. It look, yeah. So, you know, we have one of my problems is I probably have a few too many hobbies, but but one of them is definitely music and and playing music. And so that's something that I I started in high school and you know, if have managed to to hang on to all these years. And, you know, it's it's it's a lot of fun, you know. I've got friends that we can get together and and play and and uh I I play a lot for for some churches as well these days. And so yeah, that's definitely something I I enjoy doing. I I definitely am a lover of of music and and uh playing music.

25:12 Absolutely. Well, that's so cool. I tell you what, I just I'm one of those folks, I can't play an instrument to save my life, but I definitely have the utmost respect to anybody that has that skill set because I love live music. And that's one of the things, you know, growing up, you know, anytime, any venue that ever has live music, like generally, you know, whether it be for dinner or a concert or or wherever, like that's where I want to go because it's just there's something about music and what it does for the soul. And of course, you know, it just relaxes the soul, and it's it's one of the coolest things. And I I definitely appreciate you sharing that about yourself because that's that's something that I always like to ask, is you know, try to get a little bit of personal information like that as well, so which is cool. Well, Jeff, I I definitely appreciate you coming on today. One of the things that uh we do for all the podcast guests is we send out uh Midwest compressor uh hats, uh we put a box together, our ladies do in the office, and they send it out, of course, uh, for being on the show today. And it's just a token of our appreciation for you coming on. So I wanted to tell you thank you again for coming on, and just when you get a chance, if you can just shoot me an email with your mailing address, and I'll get the girls to get you a box shipped out and look forward to seeing you soon, buddy. Uh and uh when we get ready to put the podcast on live, they'll uh send it out to you and give you a notification and everything.

26:29 Thank you. Yeah, I really appreciate it. Absolutely.

26:32 Absolutely. Well, Jeff, you have a great weekend, buddy, and uh I'll talk to you soon. Thank you so much.

26:37 Okay, thank you too.

26:42 This has been another great episode of Under Pressure Compressor Talk by Midwest Compressor with your host, David Abshire. Until next time, keep pumping.