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For the past 41 years Roy Jackson, CEO at Energy OnRamp, has been involved in the oil and gas industry and made a name for himself as a someone who can make and create deals between buyers and sellers.
In today’s episode, we asked Roy what is the key to lasting so long in the industry when it’s such an up and down adventure.
As you hear Roy speak, one gets the feeling that he was born to sell, which explains how he’s made a career out of connecting buyers and sellers in any part of the industry. Beginning at Schlumberger in the 70s, and moving into the oil and gas software space in the 1990s, Roy began to notice that his role in the industry was more than connecting people to solutions.
Solutions were no longer enough. He had to help them make the best decisions for their business if they’re going to survive.
“Energy companies are generating a large amount of data,” Jackson said. “You have these entrepreneurial guys who are getting private equity capital from somewhere, buy assets and then all of a sudden, along with the closing of that deal, they realize they don’t have any assets, and in 60 days we’re going to have to do revenue distribution and joint interest billings.”
These entrepreneurs would have to go hire someone and train them on the basics of the industry, and then everything around setting up that company revolved around regulatory reporting for the state and for setting up revenue distributions, he said.
“I was discovering that people never truly got the system set up correctly years later after running into them and that they never knew how to set up the management and reporting system the way they wanted to,” Jackson said.
Now they were going to throw everything out and start over on a new system.
To expedite or stop businesses from going through the long and excruciating process, he said, he started his new consulting firm Energy OnRamp to help companies take their financial data, get it into a system that works for them and help them understand how to present that data so its “attractive for bank capital, a private investor or whatever it takes to drill and capture the kind of opportunities that come in the energy industry,” Jackson said.
“Our team gives your business the tools within your own system or another system so that you can get the info you need to get the capital you need, and to make better management decisions to manage the multi-million dollar assets.”
As we know in the industry, wells aren’t cheap to drill.
Unconventional well plays cost millions of dollars to operate, displacing many smaller independents from participating. Like what we’re seeing with our own clients in the industry, many operators are selling wells because they are reaching retirement age and there is not generation coming up behind them to take over, so they’re forced to sell.
On the flip side, a lot of wells are either combining with bigger forces to go all in on unconventional plays or picking up conventional wells that larger companies are offloading to support these unconventional drills, and find themselves suddenly with new wells to operate 30-60 days after purchase.
So what makes a company able to stay afloat, even when oil prices skyrocket above $100/bbl or plummet to $9/bbl?
Roy’s answer: “The simple answer is that you just have to stay. I can’t tell you the number off landmen and geologists, that sacked groceries at Wal-Mart when Midland was not near as prosperous, but they’re reaping big-time benefits for being patient. Stay and find a new way to make a living during the slow down period.
“What we’ve been doing in Midland for the past 40 years is to figure out how to stay in the oil and gas business. Oil and gas people are some of the best entrepreneurs. It makes me proud to be in the oil and gas business.”
Connect with Roy Jackson:
Starting his career in “the patch” in 1977, Roy started developing his energy network with tenures at Schlumberger, National Oilwell (Bowen) and Homco International. He has directed the sales and marketing efforts at energy software companies involved in upstream accounting, including Midland Southwest Software (OGAS) and WolfePak.
Mr. Jackson has extensive experience in the acquisitions & divestment of oil and gas assets. Jackson has successfully completed over 200 transactions, totaling over one half billion dollars in oil and gas upstream, midstream and service-related assets. He was the co-founder of Capital Energy Advisors and Simon Energy Advisors. Jackson also was formerly a principal partner at Simplex Energy Solutions in Midland, TX.
Roy is a member of PBPA, ADAM Permian, and SPE. He is also past chairman of FEPA, a Permian focused networking forum for the Energy Industry.
Energy OnRamp consults on accounting, production, and anything bringing data in from the field and anything that is back office related to running an operating, service or midstream company.
Listen to the previous episode: #001: How the Oil and Gas Industry Survives Year After Year
Check out the next episode: #003: How COPAS Transformed Mike Cougevan’s Career