EnerCom360 Magazine June 2018

June 2018 • Vol. 1 • Issue 2

The Oil & Gas Experts – An EnerCom Inc. Publication

An In-Depth look at – the EU’s New Regulatory Mandate That’s Throwing Up Fences Between the Sellside and Buyside on Both Sides of the Atlantic

Basin Focus Oklahoma’s SCOOP/STACK is Drawing Big Players

Women in Energy

Seven Women. Five Countries. One Company.

GeoPark’s Quality of Leadership Astounds

TECH CORNER Liberty Oilfield Services’ Vision: to Improve the Entire Shale Industry One Innovation P/22 at a Time

ENERCOM ANALYSIS Which Investors are Buying E&Ps Today, and at What Price?

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CONTENTS BASIN FOCUS What do Devon Energy, Newfield Exploration, Cimarex Energy, Continental Resources, Marathon Oil and Chesapeake Energy have in common? They’ve cracked the code to the Anadarko Basin’s alphabet soup.

LETTER FROM THE EDITOR

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MIFID II Singing the asset manager blues: The days of speeddialing the sellside to obtain free research reports and arrange access to management are over—on both sides of the Atlantic.

10

ENERCOM ANALYSIS Funds buying E&Ps have historically been GARP investors, but EnerCom is seeing a significant change that started at the beginning of the downturn—and it’s not reversing.

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WOMEN IN ENERGY South American pure play GeoPark Ltd. is developing oil and gas assets in five countries. Its leadership team consists of 41% women who embody the belief that excellence knows no limits.

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WORLD ENERGY NEWS Global oil stockpiles are dropping, world energy demand is growing, Brent crude is trading near $80 and the U.S. is the world’s largest hydrocarbon producer – what’s next?

It has been an amazing quarter for oil since we published our first issue of EnerCom 360 in February.

A lot of companies in the industry—E&Ps, oilfield service and midstream providers—are riding high on the oil price recovery. Good times are reflected in positive earnings and CapEx budgets being funded from cash flow.

Fueling all this happy news is the fact that West Texas Intermediate crude was selling between $71 and $72 per barrel in May and Brent was bouncing off of $80. Even with a $7-correction, there is only one thing to say: who’d-a thunk it?

For our second issue, we are taking a deeper dive into some of the feature topics that we began to cover last issue.

TECH CORNER Liberty Oilfield Services’ corporate vision has resulted in several service sector innovations that have improved fleet performance and increased well site safety and worker satisfaction. Liberty believes its investment will pay off several times during the next 4-5 years.

Welcome to the second issue of EnerCom 360 – a feature-rich quarterly publication from the oil and gas industry professionals at EnerCom and Oil & Gas 360®

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Look for a data-filled introduction to the SCOOP/STACK in Basin Focus, and take a whirlwind trip to five countries in South America to pick the brains of seven very strong industry leaders who are driving the success of a single E&P company in our Women in Energy feature section.

For our cover story, we provide an in-depth look at MiFID II—the EU’s new regulatory mandate that has erected a wall between the sellside and buyside. MiFID II has muddied the waters on both sides of the Atlantic as to how asset managers can obtain company research and management access. The experts believe that MiFID II is going to permanently change the global landscape for investor relations, research and access.

For a daily dose of news and global developments affecting the upstream oil and gas business and the financial institutions that are providing capital to the industry, please consider subscribing to www.OilandGas360.com while our $1 special trial offer is in force.

Cheers,

Bevo Beaven Editor in Chief

BASIN FOCUS

AN ALPHABET SOUP IN THE MIDDLE OF THE COUNTRY

I

t’s no secret that the Permian Basin totally dominated oil and

2018. The region’s production is projected to grow incrementally in the coming

gas drilling and production growth beginning in 2016. But after

months.

the feeding frenzy ran up Permian acreage prices to all time highs, another play began to get significant attention.

The play is called the SCOOP/STACK and it’s located in

The EIA added the Anadarko Basin to its Drilling Productivity Report in late 2017, noting that two main plays—the SCOOP and STACK—were responsible for most of the new oil and gas production.

Oklahoma, within the Anadarko

An Oklahoma Minerals report

Basin. The Anadarko Basin

in March 2018 describes

includes 24 counties in Oklahoma

the STACK as “essentially

and five counties in Texas.

the old Sooner Trend being re-developed horizontally.

“With breakevens ranging from

There is a ton of up-side

$29–$43/bbl, Oklahoma’s

with stacked pay zones

SCOOP/STACK shale plays are

in the Mississippian aged

living up to their reputation,"

formations,” the publication

McKinsey said in a report about the play.

said. “During 2017, the

The SCOOP play is an acronym

offered in the STACK was

that stands for South Central

$7,000/acre. Not only is

Oklahoma Oil Province. The

that the highest amount

STACK is also an acronym,

offered in the STACK, but

standing for Sooner Trend

it is the highest amount

Anadarko Canadian and

offered in the entire state of

Kingfisher – the names of

Oklahoma.”

counties in Oklahoma underlain by the Cana-Woodford formation.

The STACK is on the north end and the SCOOP is on the south.

According to an EIA report, the Anadarko region accounted for 503,000 barrels of oil per day (BOPD) of oil production and 6.5 billion cubic feet per day (Bcf/d) of natural gas production as of April

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highest bonus payment

Oil companies acquiring leases in the SCOOP/STACK paid on average about $15,000 per acre in 2017.

Some producers have begun to add the name ‘Merge’ to the end of the SCOOP/STACK alphabet soup. They label the ‘Merge’ play as the area between the STACK and SCOOP fields.

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LINN Energy, Inc. (ticker: LNGG) and Citizen Energy II, LLC formed Roan Resources LLC on August 31, 2017 in a $2 billion deal that was focused on the SCOOP/STACK/Merge.

At the time, LINN and Citizen held about 70,000 net acres each. After further acquisitions, Roan Resources LLC has 150,000 total net acres in the SCOOP/STACK/Merge. Roan Resources is a pure play SCOOP/STACK/Merge producer, producing ~40,000 BOEPD at the end of Q1 2018.

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BASIN FOCUS

E&P LEADERS TALK ABOUT THE SCOOP/STACK

GROWTH RATE IS SECOND ONLY TO THE PERMIAN Drilling activity in the SCOOP/STACK is on an upswing. According to Baker Hughes, the rig count in the EIA’s Anadarko region has more than doubled from 30 two years ago to 63 in 2018. The region’s rate of drilling activity increase for 2017 was second only to that of the Permian.

“In 2018, we plan to invest approximately $2.3 billion in our upstream properties with the majority of this capital concentrated on highreturn developments in the economic core of the Delaware and STACK. ... Under this scenario, our capital programs will drive oil production growth of greater than 25% annually in the Delaware and STACK, advancing our total U.S. oil production by around 15% per year over this time period.”

DEVON ENERGY PRESIDENT AND CEO DAVID HAGER

“We estimate our average STACK well and the three-year plan will generate about 1.3 million barrels of oil equivalent and have an average well cost of around $7.9 million… . We're applying lots of historical lessons from our original development plans in SCOOP. Earlier on in SCOOP, we spaced wells at only five to six wells per section. Today, we are actively developing SCOOP with eight to 10 wells per DSU.” NEWFIELD EXPLORATION PRESIDENT AND CEO LEE BOOTHBY

CIMAREX-OKLAHOMA GEOLOGICAL SURVEY WOODFORD SHALE PLAY MAP

CANA-WOODFORD IS THE PRIMARY TARGET The Cana-Woodford is the subsurface zone that operators who are drilling the SCOOP/STACK are mainly targeting. The name for the play came from Canadian County in Oklahoma. In late 2013, operators discovered the opportunities of Meramec formation and shifted to the core areas in Kingfisher and Blaine County.

Different zones within the Cana-Woodford play contain different rock types. In the presentation, the OGS said that siliceous mudrock and clayey, siliceous mudrock typically have higher rates of fracing success. The Upper Woodford (UW), Middle

“We often talk about the Woodford, Sycamore and Springer reservoirs separately in SCOOP. In reality these reservoirs are stacked on top of each other throughout much of SCOOP within a column of rock up to 2,000 feet thick.”

Woodford (MW) and Lower Woodford (LW) benches contain these rock types.

EIA

CONTINENTAL RESOURCES PRESIDENT JACK STARK

“In Oklahoma, we delivered an impressive ninewell STACK volatile oil infill that is exceeding early expectations with the new wells averaging over 1,800 BOE per day IP-30. ... Oklahoma will deliver self-funded growth this year including secondary target delineation and a transition to 80% pad drilling while completing our STACK leasehold requirements by year-end.”

MARATHON OIL CORPORATION PRESIDENT AND CEO LEE TILLMAN

OIL PRODUCTION BY STATE FOR FEB. 2018. | SOURCE: EIA

OKLAHOMA ACHIEVES HIGHEST PRODUCTION IN 37 YEARS Oklahoma’s total crude production surged to its highest level in 37 years in January of 2018, according to the State of Oklahoma Economic Indicators published in March 2018. Oklahoma field production of crude oil for January was at a level of 16,296,000 barrels, up five percent from December 2017. For all of 2017, statewide crude production was at 165,780,000 barrels, up almost eight percent from 2016.

With the SCOOP/STACK/Merge on the rise, Oklahoma could be on track to bump New Mexico out of the No. 3 U.S. producer slot.

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BASIN FOCUS

GEOSCIENCE AND PETROLEUM ENGINEERING UNCOVER VAST RECOVERABLE HYDROCARBONS IN THE SCOOP/STACK RIVALING THAT OF THE PROLIFIC PERMIAN BASIN. - By Katherine Tomberlin and Karthik Revana

The Permian Basin in West Texas snags most of the attention from oil companies and their investors, especially in the last year as prices for oil and gas have been on an upswing. But, it's not the only location where drillers can earn lucrative returns at lower oil prices. In fact, some drillers are finding that the STACK and SCOOP shale plays in Oklahoma are just as good, if not better, than the vaunted Permian. That's why they spent billions of dollars to scoop up land in the region over the past few years, which is starting to pay big dividends by fueling remarkable production growth.

As mentioned earlier STACK is an acronym for Sooner Trend Anadarko Canadian and Kingfisher. It designates the shale formations (the Sooner Trend, which consists of the Meramec and Woodford shale layers), as well as the location of the Anadarko Basin centered in Canadian and Kingfisher counties of Oklahoma. It's one of two hydrocarbon-rich hot spots in the western part of the state along with the SCOOP, or

Figure 1 - Woodford shale fluid production windows

South Central Oklahoma Oil Province, located in the state’s Anadarko Basin. The state is an oil and gas powerhouse ranking 5th in oil production and 3rd in natural gas production in the US. The state is also the home to the Cushing hub, where orders for West Texas Intermediate (WTI) oil futures are settled for the New York Mercantile Exchange.

Collectively, drillers pumped an average 493,000 barrels per day (MMbbl/d) of oil and 6.238 billion cubic feet per day (Bcf/d) of natural gas in March 2018, according to the U.S. Energy Information Administration (EIA).

Deeper formations tend to be hotter, have higher pressure and produce more gas. Higher reservoir permeability (bigger spaces between grains) tends to allow the migration of more viscous (thicker/ heavier) fluids. Organic composition (type of organic material that becomes oil or gas) and thermal history (how hot the reservoir became) determines influences in the viscosity of the resulting hydrocarbons.

The STACK/SCOOP, the Cana Woodford, and the Merge/MASS plays are regions that are geographically determined by operators in Oklahoma, shown in Figure 2(a). The Cana Woodford nomenclature

Ralph E. Davis Associates, an Opportune LLP company, recently

is commonly used to distinguish the core Woodford in the STACK/

conducted a basin study of the Woodford shale in the SCOOP/

SCOOP play from the Woodford in the Ardmore basin to the south

STACK, applying proprietary heat map modeling and other production

and the Woodford in the Arkoma basin to the east.

analyses, to determine precisely how much recoverable hydrocarbon resource potential the shale region holds and how it could affect future production activities.

WOODFORD SHALE PERFORMANCE IN THE STACK/SCOOP The Woodford Shale is a deep marine shale of Devonian age (420-358 million years ago), that produces both gas and oil, depending on the location of wells in the Anadarko Basin. It is a source rock with organic derived porosity and production is primarily driven by matrix porosity

The Merge/MASS play is a more recently derived nomenclature for the area between the STACK and the SCOOP, which can be conceptualized in Figure 3. In a general sense, these terms (STACK/ SCOOP, Merge/MASS, and Cana Woodford) are not tied to geology, well production or well economics.

To properly evaluate the STACK/SCOOP plays, the region needs to be subdivided according to fluid characteristics and well behavior/ performance. Figure 2(b) illustrates the subdivisions determined by Ralph E Davis Associates (RED).

and over-pressure. The influences on production are largely geologic,

The maps shown in Figure 4 are the basis for RED’s regional

namely rock character, organic origin, depth and thermal history.

subdivision of the Woodford formation in the STACK/SCOOP and Merge plays.

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a)

b)

Figure 2 – (a) Overview of STACK/SCOOP Basin, (b) Woodford Subdivsion Areas

In Figure 4 (a), the percent liquids map shows a clear division in character between the eastern and western STACK/SCOOP and the Merge. The warmer colors denote higher liquid concentrations in production. The “holes” near the center of the map display regions of dry gas production.

RED’s Woodford subdivisions were influenced by the well performance estimated using Arps equation-based decline curve analysis. Shown in Figure 4 (b) is the normalized EUR (Estimated Ultimate Recovery) map subdivided and showing distinct pockets of production behavior. It is evident that there are relatively higher Woodford recoveries in the gassier window of the West STACK and the West SCOOP, and as one moves to the east and to the northeast, the Woodford becomes oilier (condensate, oil window) and the recoveries are shown to be lower due to less solution-gas drive and lower bottom-hole pressure.

Cana Field

Merge/MASS

SCOOP

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Figure 3 – Cross Section of Cana Woodford (Per Continental Resources) The normalized EUR map Figure 4 (b) is a better representation of the reservoir’s ability to produce hydrocarbons. The normalized EURs of the Woodford shale show that relatively higher recoveries in the gas and gas condensate windows of the STACK and SCOOP plays are not a result of drilling longer horizontal wells, the shale is intrinsically more productive. These gas wells are prolific producers, but may not have the highest IRR (internal rates of return) because they are generally deeper and, therefore, have higher costs than shallower wells and hydrocarbon liquids command a premium dollar value over gas production in the energy market.

REGISTER NOW THEOILANDGASCONFERENCE.COM ENERCOM360 M A G A Z I N E 7

BASIN FOCUS

LOW

% LIQUIDS

HIGH

EUR

Figure 4 – (a) Woodford Percent Liquids Map, (b) Normalized (Lateral Length) Woodford EURs

Figure 5 - Woodford Permit Activity

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ENERCOM360 M A G A Z I N E

STACK/SCOOP WOODFORD PERMIT ACTIVITY 2015-2018 Permit activity throughout the STACK/SCOOP, specifically the Woodford reservoir, hit a peak in 2015 with 406 permits (See Figure 5). With the drop in oil prices and heavy focus on the Permian, 2016 only showed 204 permits; however, 2017 demonstrated an increase to 375 permits. Through the first month and a half in 2018, the Woodford had 96 permits with 66 rigs running in the area. This trend for 2018 leads us to believe permit activity will reach another peak year in the Woodford if this activity continues.

In Brief CORE LABORATORIES (NYSE: CLB) is an 80-yearold technology driven company that is acutely focused on helping petroleum and natural gas producers boost shareholder returns by offering major improvements in two key areas: reservoir description and production enhancement.

WHITING PETROLEUM (NYSE: WLL) has led the industry for years as one of the top two oil producers in the prolific Bakken/Three Forks light oil play in North Dakota.

Whiting announced in Q3 that it planned for 10% production growth in Q4 2017. The company beat that with production of 127,050 BOEPD Q1.

Figure 6 - Stack/Scoop Permit Activity Heat Map (March 2018)

Figure 6 shows an activity heat map for the STACK/SCOOP in the March 2018.

It is evident that most of the activity in the STACK/SCOOP lies within Kingfisher, Canadian and Grady counties with transacted values up to $8,500/undeveloped acre and $35,000/proved BOE (barrel of oil equivalent). Reported in December 2017, Gulfport Energy’s Winham 7-22H in southern Grady county has a stimulated lateral length of 4,898 feet and a 24-hour initial production rate of 17.3 million-cubic-feet-per-day (MMcf/d) and 701 barrels-oil-per-day(Bo/d). These favorable production results combined with increasing permit activity over time demonstrate an interest by producers in this basin.

YUMA ENERGY (NYSE: YUMA) is a U.S.-based oil and gas company formed in 1983 with a growing position in a relatively unpublicized play within the Permian basin—the San Andres oil play. Yuma's Permian basin acreage position has increased to 3,068 acres (2,685 net acres) in Yoakum County, Texas to horizontally develop the San Andres oil play.

WPX ENERGY

About the Authors: Katherine Tomberlin and Karthik Revana are petroleum engineers for Ralph E. Davis Associates, an Opportune LLP company based in Houston, Texas.

For the latest, in-depth coverage of all things Oil & Gas, visit www.oilandgas360.com.

(NYSE: WPX) has reshaped its holdings through more than $5 billion of transactions and posted double-digit oil volume growth in each of the past four years. WPX has jumped ahead of the other Permian players with its priority to build takeaway capacity.

ENERCOM360 M A G A Z I N E

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HOW A EUROPEAN REGULATION BOMB CALLED MIFID II IS CHANGING GLOBAL EQUITY RESEARCH AND INVESTOR RELATIONS WORLDWIDE Sometimes the prevailing winds can blow the opposite way

It’s normally accepted by science that the winds over the Atlantic Ocean generally travel west to east. University researchers from Canada and the U.S. tested this by launching virtual particles into the winds in North America and “tracing their journey for ten key days leading up to their arrival in Western Europe.”

But sometimes even science goes awry. Case in point: after seven years in the development a 7,000-page book of financial trading and transparency rules went into effect on Jan. 3 of this year in the EU. That was the day that the regulatory winds began to blow from Europe to America.

10 ENERCOM360 M A G A Z I N E

T

he effect is like someone took hold of the Paris end of a 3,828-mile-long table cloth that stretches all the way to New York City and vigorously

shook it up and down.

Bloomberg calls it “MiFID-zilla.”

Officially it is called the Council of the European Union’s Markets in Financial Instruments Directive - or “MiFID II” for short - and its effects are beginning to spread across the planet like a virus.

THE CRUX OF MiFID II At issue is that one of the goals of the EU’s MiFID II is to give investors transparency into the cost of both research and trading commissions by requiring that payments be unbundled.

The practice of bundling payments—trading commissions and research fees tied together— is a common practice in the United States and thus, Europe’s new approach creates a

January 3, 2018 and sellside and buyside consumers

conflict for certain global firms. Essentially the banks have included their research for “free” when clients pay transaction fees and

of research should expect to see similar changes

commissions.

taking hold in North America. In fact brokerage houses

While MiFID has not yet been adopted by the SEC, creating a need for compliance

salespeople and analysts.

are already cutting back on trading desks, sellside

inside this nation’s borders, it is having its effect on the investment and asset

those banks and institutions must comply with the new rules.

U.S. SECURITIES AND EXCHANGE COMMISSIONERS WEIGH IN ON MiFID II

Consequently, MiFID II’s

To issue some degree of certainty while MiFID II

management community in the U.S. How? Because if global banks have European offices that engage in transactions and provide research for European customers,

regulations, which went into effect on January 3, 2018, have caused large global banks and asset managers to rework their worldwide research payment

With the asset management industry continuing to consolidate and operate on a global basis, these changes are expected to resonate worldwide.

and distribution policies. And

Bloomberg

according to many experts, investing institutions across the board will see a global

is implemented across the Atlantic, the Securities and Exchange Commission’s Division of Investment Management and the Division of Trading and Markets or tossed out a lifeline. The two divisions issued a series of no-action letters that addressed research payment provisions in MiFID II, saying the SEC was analyzing the regulations. The SEC essentially handed the U.S.

shift in the way research is sourced and how it is paid for.

financial community 30 months of status quo by creating

WHAT HAPPENS IN EUROPE DOESN’T STAY IN EUROPE

would decide whether rulemaking is necessary for the

The notion to bring more transparency to how fees for research are collected in European securities trading is causing the large global banks and international

a period of review and analysis, during which the SEC U.S. that would be in compliance with MiFID’s research payment rules.

securities firms in Europe, North America and Asia to look at making a global policy

However, one of the five SEC commissioners, Kara M.

shift as to how they handle execution fees, commissions, and the distribution and

Stein, accused the SEC staff of “kicking the can down

payment for research—on a global basis.

the road” in a public statement she issued on October

And changes have already begun.

MiFID’s unbundling of transaction and research fees is not part of U.S. securities regulation yet, but it does seem clear that just because it happened in Europe, doesn’t mean it’s staying in the EU. It officially started its westward journey on

26, 2017: “Questions about transparency and investor protection are central to this conflict. When payments for research and trading are combined, do investors know that they

ENERCOM360 M A G A Z I N E 11

IT’S COMPLICATED are paying for research? Do investors know what they are paying for trading? Do investors know of the potential conflicts of bundled payments?

“The staff’s no-action relief does not adequately address these issues and merely kicks the can down the road. This inaction may be costly to investors and advantage some market participants over others. While a time-limited approach may allow the staff to study the impact of MiFID II, taking over 900 days is simply unreasonable.

“Transparency and disclosure are vital to our capital markets.

Transparency in government process is equally important. It is critical that investors and other market participants have an opportunity to voice their concerns and ideas. I encourage the staff and the Commission to consider timely notice and comment rulemaking in order to reach the best policy outcome in this area,” Stein said in her statement.

That same day, SEC Chairman Jay Clayton issued a press release explaining the commission’s ‘no-action relief’ for MiFID II:

In the U.S., research providers have a particularly sticky problem. The Financial Times points out that U.S. regulations require any institution that sells research for ‘hard’ dollars—as opposed to ‘soft’ dollars in the form of indirect payments such as trading commissions—must register as a financial adviser.

This would unleash additional, very stringent compliance burdens.

The SEC said that its no-action relief “provides a path for market participants to comply with the research requirements of MiFID II in a manner that is consistent with the U.S. federal securities laws.”

What the SEC’s No-Action Relief Does The SEC said its Division of Investment Management issued temporary relief for 30 months from MiFID II's implementation date, under the Investment Advisers Act of 1940.

The commission said this will permit a broker-dealer to receive payments in hard dollars or through MiFID-governed research payment accounts from MiFID-affected clients without being considered an investment adviser.

Clayton said.

In connection with this temporary relief, the staff will continue to monitor and assess the impact of MiFID II's requirements on the research marketplace and affected participants in order to ascertain whether more tailored or different action, including rulemaking, is necessary and appropriate in the public interest.

"Staff's letters take a measured approach in an area where the EU

The SEC Spelled Out Its Stance

"Today's no-action relief was designed with input from a range of market participants to reduce confusion and operational difficulties that might arise in the transition to MiFID II's research provisions,"

has mandated a change in the scope of accepted practice, and

(1) broker-dealers, on a temporary basis, may receive research payments from money managers in hard dollars or from advisory clients' research payment accounts;

accommodate that change without substantially altering the U.S. regulatory approach. These steps should preserve investor access to research in the near term, during which the Commission can

(2) money managers may continue to aggregate orders for mutual funds and other clients; and

assess the need for any further action.

“Cooperation with European authorities, including the European

(3) money managers may continue to rely on an existing safe harbor when paying broker-dealers for research and brokerage.

Commission, has been instrumental to the SEC's efforts, and I welcome the additional guidance the EC published today. We look forward to continued dialogue on this and other important issues."

HERE IS A LOOK AT THE EQUITY RESEARCH LANDSCAPE POST MIFID II

with offices in North America and Europe. “I was told by one bank

Experts who’ve studied MiFID II, including the analysts and investor

institution, the two must put a contract in place that states the

relations consultants at EnerCom, predict that it will spell an end to

relationship and outlines payment for research, corporate access and

the widely available and nearly free research which has traditionally

other terms of the relationship.”

originated from the universe of global investment banks and trading institutions. On both sides of the Atlantic.

that before the sellside can have any communication with a buyside

Vandeford said that looking at a model where the buyside starts paying cash for research and corporate access will fundamentally change

For one thing, EnerCom’s analysts believe it will force a consolidation

the landscape. “The buyside will have to make decisions on what is

of research by reducing the “free” research universe to a relatively small

valuable to them and simply won’t be able to pay for all the research

handful of the largest international banks who can afford to absorb

reports and conversations from numerous sellside institutions that have

costs of providing research to their broad customers.

been bundled with commissions or paid by "soft dollars" up to now.

“For the larger banks, MiFID II is already a very big issue,” said

This will create more competition in the market to provide the research

EnerCom Managing Director Aaron Vandeford. “Communications

and other services tailored to what the buyside wants.”

between the banks (sellside) and investment managers (buyside) in

Vandeford said he expects to see several changes to the “day-to-day

Europe has dropped off considerably due to the MiFID rules.”

life” for investor relations teams and the traditional sellside marketing

Here’s why. Vandeford said he spoke with global investment banks

model as the effects from MiFID II spread globally during the next few years:

12 ENERCOM360 M A G A Z I N E

• Fewer traditional sellside research providers will mean small/mid cap coverage will likely be the first to get cut;

as the price and underlying value falls under scrutiny. This could cause

• More boutiques and industry-specific research firms;

of spending among research providers,” Bloomberg said.

payments for broker research to fall further, accelerating the reallocation

• A different model for corporate access: • Buyside and IR teams will have to take more ownership, • Some buyside firms may set up their own IR teams, • Company IR directors will have to create and actively manage proactive outreach and messaging/marketing programs for their companies to maintain communications and secure meetings with the buyside,

One possibility

Communications between the bank’s sellside and investment managers in Europe has dropped off considerably due to the MiFID rules.

EnerCom Managing Director, Aaron Vandeford

is that asset managers would produce more of their own in-house research.

• Greater use of third-party IR firms like EnerCom.

Another trend would likely be led by industry-specific independent

Once MiFID II takes hold on both sides of the Atlantic, “the days of an

boutiques with the highest quality research product. Research from

IR director at an oil and gas company picking up the phone and asking the 12 banks that cover them to set up meetings with buyside investors

those firms will be attractive to asset managers, especially if the price is right. In other words, the MiFID II research unbundling rules are likely to

will be a thing of the past,” Vandeford said.

benefit the very large and the very small.

A TROUBLESOME TASK

“For the first time, bank and broker-dealer equity research will operate

Bloomberg’s analysts agree that putting a price tag on equity research is “a troublesome task,” and MiFID II reform is likely to have a global impact on research budgeting. This may cause smaller banks, small investment houses and financial institutions to jettison research altogether.

MiFID II could open up competition in what has been a relatively closed provider group. New research providers—good ones with specialty focus—will likely emerge, increasing fund managers’ dwindling choices post MiFID.

as a free-standing profit center, forcing a transformation of the business,” McKinsey said. “The buy side will pay broker-dealers for actionable research that adds investment value, but the demand will fall far short of the mountains of research that banks currently supply ‘for free’.”

Another alternative is the model where investment managers absorb research fees, rather than pass the cost to end-investors, but this practice—a margin-killer—won’t be a popular one. Investment managers will have to track who got research and what fees were paid for it.

“The model for broker research should shift to priced from unpriced, ENERCOM360 M A G A Z I N E 13

IMPLICATIONS OF MIFID II FOR INVESTOR RELATIONS The buyside still expects to have full corporate access to company management. But company IR managers who relied on bank-set roadshows with the buyside will have to find alternative sources of help.

Roadshows organized independently of broker/ dealers and investment banks will grow in importance, according to Bloomberg. IR teams from companies who are no longer well-covered by brokers will need to intensify their outreach efforts to maintain visibility with the investment community, Bloomberg said.

“Achieving access with a speed-dial to the firm’s investment banking side is already a thing of the past in Europe in the post-MiFID era,” Vandeford said.

“Even if a specific bank has the contracts in place with European investment firms to take a management team on a roadshow, the issuing companies will inevitably be missing key investment managers if they are not proactive in their own marketing.”

As research becomes an itemized cost, profits could be sharply reduced for asset managers—by as much as 15 to 20 percent for firms in Europe, according to McKinsey, and EnerCom industry discussions point to those numbers being low. The effect on research operations could be enormous.

Many in the investment community believe that asset managers who are focused on equities will move away from products like single-stock research reports, replacing them instead with greater access to management teams and purchasing comparative metrics from boutique consulting firms.

Corporate access, industry-specific digital products are expected to fill gaps when traditional research is no longer readily available.

EnerCom's consultants can help guide your company's IR and messaging strategy. visit enercominc.com.

14 ENERCOM360 M A G A Z I N E

Financial Times said MiFID II in Europe will affect “every corner of the continent’s financial services system—from banks to brokers, asset managers to pension funds, stock exchange operators to retail investors.”

“For publicly traded energy companies, your cost of capital will go up if you’re not a highly effective marketer using all of the tools available to tell your company’s message,” Vandeford said. “Companies need to zero-in on the right message to the investment community and work to target the message with the right shareholders.

This includes thinking about use of digital platforms and social media as IR tools. Effective marketing takes a lot of time and experience and is something EnerCom has been working with clients on for the past 24 years,” Vandeford said.

Attention North America investment managers and issuer IR teams: the sea-change known as MiFID II is now zooming across the Atlantic on a crash course with the U.S. investment community. Make sure you’re ready.

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(TSE: TVE) is a Canadian oil company with an asset portfolio that is focused in the Cardium and Viking light oil plays in Alberta and Saskatchewan. The company has assembled an extensive lowrisk drilling inventory which offers paybacks of less than 1.5 years and can achieve sustainable growth under low commodity price scenarios.

ENERCOM360 M A G A Z I N E 15

ENERCOM ANALYSIS Long Money Is Looking For More Than Free Cash Flow

O

ur goal at EnerCom is to facilitate access to capital markets for oil and gas companies, and as such we spend a great deal of time looking at investor trends.

Clients are increasingly asking us for help in attracting new investors. And every public company wants to secure larger commitments from the investors they already have, whether that is through inclusion in a passive index or through improving their messaging and stepping up marketing efforts to active investors.

To help our clients better navigate capital markets, EnerCom Analytics examined investor trends in energy going back to late 2013 to see where

Among active investors, certain styles dominate in the oil and gas space.

Historically, most active investors in oil and gas have been: 1. Growth, 2. Growth At A Reasonable Price (Garp), 3. Value, Or 4. Long/Short Hedge Funds.

These four fund types are the largest holders of large, mid and small cap E&P stocks. While some other types may be in the space, like arbitrage, income and momentum, these hold only small slivers of the

money is flowing and what attracts the attention of capital markets.

average E&P, and many fund types show wild changes in holdings from

BEFORE THE PRICE CRASH, GROWTH WAS THE NAME OF THE GAME

One significant overall trend in holdings has been the decline in GARP

Prior to the oil price crash in late 2014, growth was the name of the game.

Before the oil price drop, these funds held some of the largest stakes in

Investors put their money in the hands of companies with plans to increase

E&P firms. In September 2013, GARP funds held 19% of the average

output. They were content to watch production – and their returns – grow.

large cap company, 14% of the average mid cap, and 13% of the

quarter to quarter.

funds since the beginning of the downturn.

average small cap E&P. The upheaval experienced over the last three and a half years quickly changed the priorities of capital providers, however. The crash in oil prices exposed the dangers of over-exposure to commodities and the weakness of balance sheets built on growth at any cost.

This decline has not reversed with the recovery of oil prices.

While average WTI prices have nearly doubled since March 2016, GARP funds have not meaningfully returned to the space. Small cap firms have

Institutional investors pulled out of oil and gas during the downturn as

seen GARP interest decline still further, and GARP holdings of the average

companies looked for ways to adjust to lower prices. Some investors

small cap firm have decreased steadily since.

have returned as efficiencies gained by the industry and steadily improving prices led to improving financial performance. But not everyone is ready to jump back into the industry, EnerCom found, during in its analysis of these trends.

GARP Fund Holdings Source: Company filings, EnerCom Inc.

16 ENERCOM360 M A G A Z I N E

GARP funds have a more neutral view of large and mid cap companies, and have kept their holdings in such firms essentially flat over the past year.

Value Fund Holdings Source: Company filings, EnerCom Inc.

The most recent data available indicates GARP ownership of the average

In September 2013, 20% of the average large cap was held by value

large cap E&P has fallen by 30% since September 2013, while small cap

funds, while such funds held 13% of the average mid cap and 8% of small

ownership is down 42%. Mid-cap firms have seen somewhat less of a

cap firms. This share increased through the next three years, and by March

decline, but GARP fund holdings of the average mid cap are still down

2016 value funds had increased holdings in the average large, mid and

16%.

small cap company by 12%, 41% and 72%, respectively.

VALUE FUNDS ARE COMING BACK TO OIL AND GAS

We expect that value investors will continue to bring capital to the space as

While the downturn brought a decline in GARP sentiment for oil and gas,

improved oil prices further widen valuation gaps between the companies that the markets are taking note of versus those E&Ps that are performing well but aren’t on the radar of more investors.

value funds generally viewed the cycle as an opportunity. Value funds increased holdings of large, mid and small cap companies during the downturn, as falling oil prices pushed stock prices lower.

Large Cap Change in Value Fund Holdings Source: Company filings, EnerCom Inc.

ENERCOM360 M A G A Z I N E 17

Large Cap Change in Growth Fund Holdings Source: Company filings, EnerCom Inc.

In the past, value investors have brought in enough capital to allow companies

Long/short funds make up a smaller share of large cap E&P companies

to reach a point where they become attractive to growth investors as well.

than mid or small cap firms, but these funds still hold approximately 5% of

Growth investors would then bid up prices on some names creating valuation

the average large cap.

gaps for value investors to re-enter the space. So far in this recovery cycle, however, we have not seen buy-in from growth funds.

These funds added to their holdings in early 2015, when oil prices showed

COMPANIES ARE CHANGING THEIR MESSAGE, BUT NOT EVERYONE HAS THE ASSETS TO EXECUTE

the continued decline in oil made many long/short funds sour on large cap

a brief rise, returning to just below $60/bbl for several months. However, E&P companies, and holdings have declined since then. The new emphasis on free cash generation did not reverse this trend, and in fact long/short funds have significantly decreased their holdings of large cap firms since this messaging began, perhaps driven by risk compliance-induced selling.

As EnerCom Analytics noted in a number of our previous reports, investors are increasingly looking at full-cycle returns as their main measure of a company’s strength.

The industry is taking note, too: there is an increasing number of companies messaging to payback periods and free cash flow. Whether or not

44% OF MID CAPS EXPECTED TO GENERATE FREE CASH IN 2018 VS. 86% OF LARGE CAPS

companies have seen a positive response from markets to their changing

While many mid cap companies have similarly emphasized their

message has depended particularly on the size of the company.

potential for free cash generation, only 44% of companies are

The shift to a focus on free cash is noticeable when examining large cap investors. Both value and growth funds have responded. Since a significant number of oil companies began announcing share buybacks and similar

expected to generate free cash in 2018, compared to 86% of large cap firms. Generating free cash requires a large, established production base that not all mid cap companies possess.

programs, value and growth investors have increased their holdings of large

Fund managers, correspondingly, have not significantly responded

caps, reversing previous trends.

to this messaging. While growth and value funds reversed a trend of

Both value and growth funds showed two quarters of solid buy-in to the average large cap firm, reversing three quarters of declining investment from growth investors and five quarters of selloff among value funds.

In the last two quarters growth funds have increased their holdings in the average large cap E&P by 4.0%, while value funds added 8.4% to their holdings. These changes are much smaller than the shifts regularly seen in

selling off large cap companies, mid caps have seen little change in activity.

Growth fund holdings of mid cap E&Ps have been essentially flat, with a very slight negative overall change. While value funds have been buying into mid cap firms, this trend began in Q2 2017, before free cash became a priority.

mid and small cap holdings, but represent the largest two-quarter increase

Long/short fund ownership of mid cap E&P companies mirrored that

in both growth and value holdings of large cap companies since before

of large caps, showing early optimism during the downturn. These

the downturn.

funds increased holdings in Q1 and Q3 2015, but sold out during the

18 ENERCOM360 M A G A Z I N E

Large Cap Change in Long/Short Fund Holdings Source: Company filings, EnerCom Inc.

Small Cap Change in Growth Fund Holdings Source: Company filings, EnerCom Inc.

worst portions of the downturn. Unlike in large cap firms, long/short ownership of mid cap companies has since risen, with a large increase in holdings in Q1 2017. The past few quarters have seen slight increases in long/short holdings, but little major movements.

Few small cap companies have made a concentrated shift to generating free cash, which is understandable as most small cap firms lack the established production base needed to produce significant positive free cash and are at an earlier` stage of their business cycle.

Aside from large investments in 2015 and March 2017, value funds have held essentially flat levels of small cap E&P firms.

SMALL CAP ENERGY COMPANIES: GROWTH CAN BE A SUCCESSFUL PITCH

LONG MONEY IS LOOKING FOR MORE THAN FREE CASH FLOW While oil and gas producers look toward generating free cash flow, investors’ tastes have changed in more systemic ways over the last few years.

Passive investing in the space continues to grow with indexes increasing their share of energy companies at an increasing pace since early 2016, and many institutional investors are now pressing companies for long-term plans around corporate social responsibility (CSR) to understand a potential investment’s ability to retain a social license to operate successfully.

Oil and gas investors are predominately long on the space, but their expectations before they make a potential investment are increasingly complex. For more information regarding trends in energy investing, download EnerCom Analytics' April Energy Industry Data & Trends Report

Instead, small cap companies have found more success with a traditional pitch—growth.

Growth funds have significantly expanded their small cap holdings since the

EnerCom's consultants can help guide your company's IR and messaging strategy. visit enercominc.com.

downturn, buying in large volumes during Q3 2016, Q2 2017 and Q4 2017.

ENERCOM360 M A G A Z I N E 19

GET THE OIL & GAS 360® SPECIAL REPORT

HOW THE PERMIAN BASIN IS CHANGING THE FACE OF GLOBAL OIL EXECUTIVE SUMMARY: A DEEP DIVE INTO THE PERMIAN PHENOMENON Oil prices in the $50 and $60 per barrel range rekindled drilling and

Lilis Energy (NYSE: LLEX – Market Cap: $193 Million), Yuma

production activity in North America’s shale basins. And while all the

Energy (NYSE: YUMA – Market Cap: $25 Million) and energy law

oil producing regions have seen increasing rig counts and a return of

firm Haynes and Boone were interviewed by the Oil & Gas 360®

drilling and completion activity, there is one basin that is eclipsing all the

editorial staff. We are indebted to them for their invaluable insight.

others in just about every way you can measure it.

By almost any measure, the Permian Basin has earned the right to

Many other companies with Permian operations were consulted and referenced in the report after reviewing data from their public

be labeled a phenomenon. In its latest Oil Market Report, the IEA reminded the world that oil production growth in the U.S. is led by the Permian Basin, “where output is expected to double by 2023.”

But what is it that makes the Permian such a special place?

What is so powerful about this one area that lures billions in energy capital and draws operators by the drove?

It started with one question

filings, press releases, company websites, investor presentations and

TABLE OF CONTENTS 2 - 4 5 6 - 8 9 - 23 24 - 44 45 - 63 64 - 73 74 - 77 78 - 85 86 - 93 94 - 106 107

Companies Named or Quoted in the Report Table of Contents Introduction and Background How do you Measure the Permian?

Stacked Pay Drives Permian Growth Who are the Permian Players and How do they Stack Up? How Money Flows in the Permian Basin A Blessing and a Curse: Challenges of the Permian The History of the Permian: Top U.S. Producer for 98 Years Water Usage and Technology Midstream in the Permian: Takeaway is Key So How Does One Define the Value of the Permian Basin?

108 - 129 APPENDIX E&Ps in the Permian Speak Out – the Full OAG360 Interviews

quarterly conference calls. Other sources of data include the U.S. Energy Information Administration, International Energy Agency, the Federal Reserve Bank of Dallas, the Texas Railroad Commission, the State of New Mexico and many others.

The report is not a technical paper, a pure financial analysis, nor a journalistic summary of America’s most talked about energy phenomenon—it is a recipe made up of elements of all three.

The resulting Oil & Gas 360® Special Report, How the Permian

The intent was to be an easy read that provides a deeper look at

Basin is Changing the Face of Global Oil, came out of our attempt

the Permian Basin for anyone who is interested in oil and gas—

to answer a single question: How do you measure the value of the

regardless of whether you are a casual industry observer, a long-term

Permian Basin?

industry insider, an asset manager or investor, or someone who just

The most intriguing insight comes from experts who told us in detail

wants to know more about the Permian.

how they are attacking the basin. Even more telling is their unbridled enthusiasm for the basin itself when they detail their plans for drilling and developing this magic land.

Executives and engineers from Occidental Petroleum (NYSE: OXY – Market Cap: $48.7 Billion), Encana Corp. (NYSE: ECA – Market Cap: $10.6 Billion), WPX Energy (NYSE: WPX – Market Cap: $5.4 Billion), Laredo Petroleum (NYSE: LPI – Market Cap: $2.0 Billion),

20 ENERCOM360 M A G A Z I N E

Our goal was to uncover what makes the Permian unlike anything else in the oil industry.

Order your Copy Here

UPSTREAM MIDSTREAM DOWNSTREAM COMMODITIES, TRADING, LOGISTICS POWER & GAS OILFIELD SERVICES 713.490.5050 www.opportune.com

ENERCOM360 M A G A Z I N E 21

CORNER LIBERTY OILFIELD SERVICES: Oilfield Technology with a PURPOSE

C

ompanies often pursue a spot on the cutting edge of technology as they seek competitive advantages, but it can be

difficult to wear the mantle of a technology leader.

Staying out in front requires constant investment in innovation. That often means being willing to commit scarce resources to new ideas. This can be a difficult proposition in an industry that is already highly capital intensive such as oil and gas, and doubly so when companies are fighting to stay above water as they were during the oil price downturn in 2015 and 2016.

In fact, in the oilfield service sector, many companies cannibalized equipment for parts as both demand and day rates cratered with the decline in E&P activity. Service providers were forced to think about protecting cashflows and many were unable

BUILDING A GENERATIONAL COMPANY “Not every company is willing to make additional upfront investments into their equipment, even if it will pay off several times over in four or five years,” said Liberty’s Director of Assets Roy Aune who manages 850,000 horsepower of equipment for Liberty. “Our strategy has always been to build a generational company.”

Liberty’s approach to building a company for the long-haul has birthed several service sector firsts—innovations that paid off. Included in the list is the Liberty Quiet Fleet which reduces noise levels by more than three-times compared to a conventional frac fleet, making pads safer to work on, improving communication, and reducing noise pollution, which is especially important, when working in populated areas.

to push the

And as Liberty’s Quiet

envelope in terms of

Fleet continues to

developing

gain traction in the

new technologies.

industry, the company

This trend did not engulf the entire industry, however.

Denver-based Liberty Oilfield Services, which began trading on the NYSE under the ticker LBRT in January 2018, chose to continue investing in new opportunities to improve services at the wellsite, even during the downturn.

Liberty regularly makes investments in its equipment to ensure it is the highest quality, and it has found great benefit in exploring new technologies and programs to help improve its own performance as well as the performance of its industry partners.

22 ENERCOM360 M A G A Z I N E

is pursuing further improvements such as advanced pump monitoring equipment and a host of other monitoring devices on its fleets to better understand equipment performance. The idea is to help Liberty understand what’s going on inside its pumps by trending hundreds of parameters and looking for causal relationships when a failure occurs, explained Aune.

Aune believes that augmenting visual inspections and replacing them with instrumentation and algorithms that can detect and report pending failures is an investment that saves money and improves morale. He explained that the periodic inspections prevent damage to fluid ends

but that over-maintenance of the system increases the propensity for

Liberty can calculate pump efficiency and see how changes in variables

human error.

such as boost pressure might improve performance in their equipment.

"Checking the condition of valves and seats is one of the worst jobs in the oilfield," Aune said. “We need these frac professionals to maintain the pumps and we now have the tools to allow them to do it only when required.”

Liberty is currently testing monitoring equipment that it created in

And, the Liberty team can monitor the temperature of a key component and program the equipment to respond to changing values, keeping operations moving forward effectively.

“We are always thinking about how we can get in front of the next failure,” said Aune.

cooperation with Caterpillar and United Engines. The equipment

The possible financial savings with the use of these monitoring systems

delivers this information to the pump operators in real time. Liberty’s

could be substantial, according to the company. But Aune cautioned

new system measures pressures, temperatures, and vibrations which

that “this is about achieving the lowest total cost of ownership and that

indicate cavitation and a host of other factors to ensure properly

cannot be achieved by selecting the low bid for a fleet. At Liberty, we

functioning equipment. The added benefits of this level of insight into

look at the lifetime cost of a fleet.

performance are substantial.

Maintenance data from the equipment uploads to the cloud allowing

“A low bid mindset is often the fastest road to getting a commodity pump that doesn't run well, and results in pumping inefficiencies due

appropriate Liberty

to higher downtime and lower

personnel to see when

throughput. In addition, people

something is materially

don't want to work on poor

wrong with equipment

equipment, and frac crews

or if performance

don't take pride in it.”

is moving out of

IMPROVING THE BIGGER PICTURE WITH TECHNOLOGY

specifications.

Creating the database history helps improve performance moving forward as the company tracks

Through multiple conversations

expected versus

with the company’s

actual performance

management, it is clear Liberty

and finds factors to improve operational efficiencies.

For instance, by measuring liquid moving in and out of the pumps,

is in pursuit of more than the moniker of being a technologically savvy company. Rather, Liberty is driving technological changes in ways that can improve the industry at multiple levels.

AWARD WINNING ANNUAL REPORTS www.enercominc.com

“Liberty is keeping track of the time it takes to conduct the various

Beyond the capital required to replace equipment, there is a heavy human toll associated with maintenance of equipment as well, explained Aune.

“A WHOLE GENERATION OF OILFIELD WORKERS MAY HAVE BETTER HEARING THANKS TO THE WORK WE DID ON THE QUIET FLEET.” Roy Aune, Director of Assets,

Liberty Oilfield Services

“Even on a nice day, maintaining the fluid ends is not a fun job, but in the winter in the Williston Basin, it’s a much harder job.

“If we can take the worst job in frac and make it easier for the guys in the field, that has a real impact on our people. I've had guys who work for other companies tell me that when they see Liberty's equipment in the field, they're proud to be a part of this industry. We want to be the incentive for people to do the right thing—the thing that makes us both better. There are a lot of little ways you do that.

“A whole generation of oilfield workers may have better hearing thanks

services provided around a well in completion,” said Liberty Vice President of Engineering Leen Weijers. “Down to the minute.”

“We rigorously track all activities so we can find ways to better coordinate the work being done on the wellsite. Having that data is powerful. The insights help Liberty allocate resources to minimize its downtime, and help us to work in partnership with our customers and other service providers to safely maximize our pump time. This joint effort has taken our stages-per-crew from 50 to 100 per month in 2013, all the way up to 150 to 200 stages per crew per month now.

“Even though Liberty owns only about 4% of U.S. pressure pumping equipment, we pumped about 8% of all U.S frac jobs in 2017, thanks to improved pumping efficiencies and our focus on throughput," Weijers said.

It is the combination of innovation and a partnership-focused mindset that will continue to drive the future of oilfield services, according to Liberty CEO Chris Wright."

to the work we did on the Quiet Fleet, for example,” said Aune.

THE HAPPY VALLEY

This kind of thinking speaks to Liberty’s willingness to use its technology

Wright and his team frequently discuss the concept of “the Happy

to improve the overall standards in the industry—to create new

Valley,” or the optimal ultimate recovery on a well, on a per-barrel cost

industrywide best practices—not just its own performance.

basis. At a certain point, increasing well costs offers diminishing oil recovery returns. While Liberty could potentially charge more for more

24 ENERCOM360 M A G A Z I N E

complex completions, the company’s goal is to help their customers find the sweet-spot where they receive the most value from their wells.

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“When we recommend something to our partners, they know it’s because we truly believe it’s the right course of action, not because we’ll benefit more if they follow our advice,” said Wright. “We’re working together to make the whole industry better.”

With that mindset, Liberty has developed several completion optimization products to help its partners better understand the outcomes that completion choices have on production.

Liberty’s online FracTrends analyzer helps operators identify the factors most likely to improve a well’s performance. The company

“WHEN WE RECOMMEND SOMETHING TO OUR PARTNERS, THEY KNOW IT'S BECAUSE WE TRULY BELIEVE IT'S THE RIGHT COURSE OF ACTION, NOT BECAUSE WE'LL BENEFIT MORE IF THEY FOLLOW OUR ADVICE. WE'RE WORKING TOGETHER TO MAKE THE WHOLE INDUSTRY BETTER." Chris Wright, CEO,

Liberty Oilfield Services

has extended Wright’s Happy Valley concept into a Fraconomics App that is designed to allow companies to evaluate the costs and production results associated with various completions choices.

“Everyone says they want to be your partner, but not everyone actually does it,” said Wright. “Our partners trust us because we're transparent with them and that trust matters when times are hard like they were during the downturn."

The technologies required to gather the depth of information needed required to offer these types of services take time to develop. But Liberty is a company that is continually looking for avenues to innovate with its partners—not just to improve its own performance, but also to drive the industry’s overall improvement.

"There is no smoke or mirrors; we're just working to build and maintain trust,” Wright said.

128% YEAR OVER YEAR UNIQUE VISITOR GROWTH

122%

YEAR OVER YEAR PAGE VIEW GROWTH

1.5M PAGE VIEWS PAST 12 MONTHS

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ENERCOM360 M A G A Z I N E 25

26 ENERCOM360 M A G A Z I N E

Women IN

ENERGY G

eoPark Limited (NYSE: GPRK) is an independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms representing a diversification of projects in five

countries: Colombia, Peru, Argentina, Brazil, and Chile.

GeoPark is currently ranked the third-largest private oil and gas operator in Colombia and it is the first private oil and gas producer in Chile. It also has a non-operating working interest in one of Brazil’s largest non-associated gas fields. GeoPark’s consolidated oil and gas production was up 28% in Q1 to 32,195 BOEPD, compared to Q1 of 2017. Net production midway through the second quarter stood at 35,000 BOEPD. GeoPark’s production target is to produce 100,000 BOEPD across Latin America.

“Our company is flying into 2018 with continued record growth in the first quarter backed by climbing oil and gas production, multiplying cash generation and a big bottom line. We also added new attractive acreage and a powerful new long-term partner,” GeoPark CEO James F. Park said in the company’s first quarter 2018 press release.

A main contributor to GeoPark’s success over the past decade and a half is its ability to attract and retain an incredibly high pedigree of leaders throughout the company, a large number of whom are women. In fact, 41 percent of the top leadership listed on the company’s management web page are women.

EnerCom 360 interviewed seven of the GeoPark women about how they got to their current leadership positions at GeoPark, what it’s like being a woman in the oil industry and what drives their success.

ENERCOM360 M A G A Z I N E 27

Jim [GeoPark CEO James Park] and I knew

The company itself had created tremendous

the people. I knew the technical guy from

value, and none of it was being reflected in

the field, and I really liked the company. The

the market. So my job was to take that and

wonderful thing about managing a small-cap

to figure out what to do with it, how to create

portfolio is it’s just a bunch of stories. It’s a

some value in the stock, which we’ve been

bunch of stories and people as opposed to

doing, get some liquidity, which we’ve been

large cap, which is just more numbers.

doing, basically, ever since I came into the

I decided that I wanted to be on corporate

company a year and a couple of months ago.

boards because it was a moment in time

So that’s how I got here. I was pretty senior

that women are getting on a lot of corporate

before I came. In my career, I worked for a

boards. So I went and did a training course at

congressman, a senator, I’d worked at the

the Institute of Directors in London, and then I

embassy in London, I’d worked at Treasury

started reaching out to some of my small-cap

Department, I’d worked at the Inter-American

Stacy Steimel SHAREHOLDER VALUE DIRECTOR

Development Bank. I kind of worked all around finance, all the different angles of finance that you could do. And so when I decided to come in, we invented my title, which has been massively, successful, which is shareholder value director, because I didn’t want to be the head of IR. I wanted to really indicate that we were investing in this position and I was here to create value.

Stacy Steimel joined GeoPark in February

companies along the way. Then I wrote Jim

2017 as the Shareholder Value Director.

and said, “I’m doing this Institute of Directors training. Do you need a capital markets

Steimel has more than 20 years' experience

person on your board?” And Jim wrote me

in the financial sector as a fund manager and

back in about five seconds and said, “Not

subsequently as regional CEO for PineBridge

exactly, but I could use you to do something

Investments, ex-AIG Investments in Latin

else.”

America.

Before AIG, Stacy held positions in the U.S. Treasury Department and at the InterAmerican Development Bank. She holds an MBA from the Pontificia Universidad Católica de Chile, an MA in Latin American Studies from the University of Texas at Austin and a BA from the College of William and Mary.

Stacy Steimel: I was a portfolio manager for 20plus years. I ran a Latin America large cap, small cap, and a Latin American consumer fund for AIG and then for PineBridge, and knew GeoPark from investing in my small-cap portfolio.

I had been out to the fields in 2013, so I knew 28 ENERCOM360 M A G A Z I N E

And so investors laugh at it all the time.

They’re like, “Wow, that’s really creative.” But they remember me – that’s for sure.

Oil and gas is always a favorite sector of mine in my portfolios, probably because I was born in Wichita Falls, Texas, which is right in the heart of oil country. And my grandfather

Women IN ENERGY

For the latest, in-depth coverage of all things Oil & Gas, visit www.oilandgas360.com.

A 20-Year Portfolio Manager Brings Institutional Investment Savvy to Latin American E&P and my father were wildcatters, most of my cousins’ husbands are all landmen, and it’s very much a part of my youth and my growing up experience.

Even when I got my first graduate degree at the Institute of Latin American Studies in the University of Texas at Austin I worked for a consultant, and all we did was receive the oil maps and send them over to the Texas Railroad Commission. So I’ve touched the oil and gas industry because of where I came from more than anything else.

But I loved it in my small-cap portfolio because I felt like if you could understand it, if you could understand the technical part sufficiently, you could create tremendous value in your portfolio. That was always my feeling about it.

I’m actually using that a lot in this job because I look at the different portfolios and what their benchmarks are. And I could say, “This works this way, it doesn’t work that way.” I can really try and help them position why they want a company like GeoPark in their portfolio.

EnerCom 360: In the marketing material

that GeoPark puts out, it advertises that its team has a range and breadth of experience that exceeds most companies its size. Why is that important on a corporate level, and then what role does hiring a female workforce play in that?

Stacy Steimel: I think that GeoPark has an uncanny ability to attract quality talent.

Before I came into the company, I used to wonder how they did it. I understand the technical team, so a lot of technical guys in the industry don’t want to work for a big oil company because that’s just very bureaucratic. They want the excitement of working for a smaller company where you’re actually out there in the field looking for the oil.

In terms of women, I would say that GeoPark looks for the best person for the job. It’s just that many of the best people we found for the job happen to be women.

her background, but know that she is a highly motivated, well-connected person. It’s the same thing in Brazil with Livia Valverde. Everybody’s well-connected in the industry.

Colombia tends to be a country that has lots of women in senior management. Since the majority of our operations are in Colombia, we happen to have a lot of women in the field. Actually we have a lot of women all over the place.

I think if you looked at the statistics, Colombia would be the country in Latin America with the highest female participation in the workforce, and certainly, at the senior management level.

I’ve heard Jim say many times in meetings: “We really benefit from the diversity of thought of the women we have in this company.”

EnerCom 360: So what would you tell

other women that are looking to join this industry?

Stacy Steimel: Anytime you have a maleAsk Agustina Wisky about it. She was either the

dominated industry like this, the marginal

number-one or number-two employee of the

value that a female adds to decision-making

company. Talk to Barbara Bruce in Peru. She

is big, because we really do think differently.

had been the president of Hunt Oil’s operation

We approach problems differently. That’s the

in Peru. She has a lot of the same kind of

whole diversity argument.

experience, super specific to what we’re trying – the stage where we are in the Morona Block in Peru. Ask Marcela Vaca Torres more about

EnerCom 360: Any final comments?

Stacy Steimel: I grew up in Texas, so I love cows and oil and risk. That balance of risk and reward is something that I find intensely entertaining. And when you’re an explorer, you’re balancing risk-and-reward decisions all the time.

ENERCOM360 M A G A Z I N E 29

Women IN ENERGY

Marcela Vaca Torres DIRECTOR FOR COLOMBIA

Marcela Vaca Torres has been GeoPark’s

Ecopetrol, ANH, the Colombian Ministry of

Then, in 2003 I was given the opportunity to

Director for Colombia since August 2012.

Mines and Energy, the Colombian Ministry

manage the startup of an oil company, and for

of Environment and other governmental

the first time, I was responsible for the whole

agencies. She was involved in the structuring

operation. I was the first woman in Colombia

of the company’s asset development and

to be president of an oil company.

With a degree in law from Pontificia Universidad Javeriana in Bogotá, Colombia, a Master’s Degree in commercial law from the same university and a LLM from Georgetown University, Marcela Vaca Torres served in the legal departments of a number of companies in Colombia, including Empresa Colombiana de Carbon Ltda (which later merged with INGEOMINAS), and GHK Company Colombia.

sales strategy.

EnerCom 360: Could you give your

background and describe the path that brought you to your current position?

Marcela Vaca Torres: I am lawyer by training, and have worked for over 25 years in the energy sector. I started in the coal

A Former Oil Company President

Prior to joining GeoPark, Vaca served for nine years as the General Manager of Hupecol Group, where she was responsible for supervising all areas of the company as well as managing relationships with

30 ENERCOM360 M A G A Z I N E

business, then alternative energies and for the last 18 years I have been in the oil business.

I started practicing law, and always being fascinated with the business, rapidly acquired

In 2012 I joined GeoPark, as it was starting its operation in Colombia and it has certainly been one of the most challenging and exciting opportunities in my life. I was responsible for putting together a high-performance team, leading a fast-moving operation and learning to manage cultural differences. All of this at the same time that we were finding our own way of doing things and particularly our own way of managing social conflicts in order to allow a smooth drilling campaign. That has not stopped: it has been an amazing

additional responsibilities. I took over most

challenge and quite a fulfilling experience.

of the non-strictly technical areas like the

EnerCom 360: GeoPark advertises that

environmental, social, administrative and human resources departments.

its team “has a range and breadth of expertise that exceeds most companies

[its] size.” Why is it important to have that level of diversity, and what role does hiring a larger-than-average percentage of female employees play into creating that team?

Marcela Vaca Torres: GeoPark indeed has a very talented and diverse team, but I believe putting together this team has had more to do with skills than with gender. Those skills that GeoPark considers important have been found in many courageous women that today are part of our company at every level.

GeoPark encourages women, whether its own professionals or the members of its neighboring communities, to give their best in whatever they do, to challenge themselves into doing things that they never before thought possible, and to always make a positive difference.

EnerCom 360: Oil and gas has been

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

Marcela Vaca Torres: Many areas associated with this industry have been predominantly male until very recently (mainly the technical areas), but it is true today that the business world itself—not only this industry—is shifting into recognizing an advantage in diversity. Even better, companies are actively promoting it.

During the last few years, it has been evident that the participation of women in management positions is increasing, and that careers that were traditionally masculine, are finding more and more female students.

I would love to see many more female geologists and female petroleum engineers,

and I am sure that we will see them in the near future.

EnerCom 360: What would you tell other

women looking to join the industry?

What does it have to offer them?

Marcela Vaca Torres: The oil and gas industry offers a wide range of opportunities to hard working, self-motivated and courageous professionals in a time where old fashioned ideas and paradigms are being challenged. It is an opportunity for all professionals—women included—to find a place to contribute their best. Creativity, flexibility, collaboration, teamworking skills, ethics, community engagement, and above all, honest commitment to your work responsibilities as much as to your personal wellbeing—this is what will make the best professionals for this industry and certainly women are capable of all of this.

ENERCOM360 M A G A Z I N E 31

Women IN ENERGY

Barbara Bruce: I was the eldest child of a

hobby.

As a student of the geological department at

Barbara Bruce: Diversity provides a wider

university, I was given the opportunity to be

angle of analysis. Bringing women into the

a trainee with Occidental Petroleum in Lima.

business has facilitated the understanding of

engineer and a “very entrepreneur” mother.

Since the time I began school, it was very clear that my role was to be more involved in science than arts, although oil painting is my

Barbara Bruce DIRECTOR FOR PERU

Barbara Bruce joined GeoPark as Director

[Editor’s Note: Bruce said that in 1975 she was

for Peru in 2017. She holds a degree in

the only female student in geology].

Geological Engineering from Universidad

EnerCom 360: GeoPark advertises that

its team “has a range and breadth of expertise that exceeds most companies [its] size.” Why is it important to have that level of diversity, and what role does hiring a larger-than-average percentage of female employees play into creating that team?

family with a father who was a petroleum

such issues as pride, culture, uncertainties that might not be considered when only discussing a project from a technical point of view.

EnerCom 360: Oil and gas has been

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

Barbara Bruce: I joined GeoPark in June Being the only woman as a student of the

2017. I was very pleased to see the number

mining and geology faculty during my college

of females working at GeoPark in the different

years in Lima, and not much different when I

business units and operation areas. No longer

was getting a master’s at the Colorado School

is employment for women limited to the soft

of Mines, I was very comfortable working

skills as was the mindset in past years. In fact,

Bruce started her professional career with

around men—in such a harsh environment as

GeoPark has placed three female Directors-

Occidental Petroleum working with the

the trashy oil field!

General Managers for three of its business

Nacional de Ingeniera in Peru, a Master’s Degree in Reservoir Engineering from Colorado School of Mines and an MBA from Adolfo Ibañez University.

waterflood secondary recovery project for Talara oilfields in Peru, the startup of Caño Limon field in Colombia, and the development of the Bhangali and Dhurnal gas fields in Pakistan.

Since then, I have never felt differently for being the only female in most of the later work operation positions I held in overseas posts during the coming years. Eventually I moved from a technical position (as was geology,

She has worked with Petrotech Peruana and

reservoir engineering, planning and related

Hunt Oil (Hunt Oil holds 25.7% of Camisea

areas) into a more management direction—

major gas field in Peru) and took the lead for

holding top management positions in the oil

the construction and start of operation of the

industry before I was 40 years old.

first LNG plant in the southern Pacific coast of America - PeruLNG. Bruce served as president and general manager of Hunt Oil in Peru.

A Former Oil Company President

the importance and high value of women in the oil and gas industry.

EnerCom 360: What would you tell other

women looking to join the industry?

What does it have to offer them?

Barbara Bruce: I started very early in the oil industry. Today, I see no limits for anybody (man or woman) to achieve their goals and

I have led extraordinary projects including the

dreams in the industry. I was very lucky

construction and start-up of the LPG process

because I always had the full support from

unit in Talara-Peru and the first LNG export

my family to do whatever I desired to do, so

terminal south of Lima, Peru LNG. Back to

long I kept my values and always worked with

upstream, I led exploration in highly sensitive

honesty, transparency and most of all, I was

environmental areas and made strategic

humble to learn.

alliances to ensure best practices in preservation of biodiversity, and to secure the commitment and participation of the direct stakeholders.

32 ENERCOM360 M A G A Z I N E

units in three countries. That says a lot about

qualified and motivated to create a different type of company.

In 2008, we decided to create the Department of Human Resources, with the vision of focusing on our employees and their families and thus building the company on the basis of all employees being shareholders and participating in the success of the company. I headed this department for eight years.

Today I am the director of capabilities and

Agustina Wisky DIRECTOR OF CAPABILITIES AND CULTURE

part of the contribution.

EnerCom 360: Oil and gas has been

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

Agustina Wisky: Being committed to diversity, and keeping in mind the shortage of female professionals in the industry, in 2014 we launched a program of university scholarships for women with the objective of offering young women in the regions where GeoPark operates, offering them the possibility of technical careers in the areas of engineering, geosciences, and related fields.

Agustina Wisky, Director of Capabilities and Culture, has worked with GeoPark since the company was founded in November 2002.

culture. The objective is to identify the capabilities needed to develop a company

I believe that as a society we are living in a

that has its vision set in the future. The growth

change of consciousness in regard to the role

that we are having along with preserving and

of women.

Wisky is a public accountant and holds

enriching our culture is what differentiates us

a degree in human resources from the

as a company.

Universidad Austral—IAE. She has 15 years of experience in the oil industry. Before joining GeoPark,Wisky workedat AES Gener and Price water house Coopers.

From the Accounting Department to Director of Capabilities and Culture EnerCom 360: Could you give your

background and describe the path that brought you to your current position?

Agustina Wisky: I was one of the first women to start working at GeoPark in 2002.

I was working in the accounting department.

I helped where help was needed. These were the first steps in my career. At that time, the company started building in Argentina and Chile. It was looking for and attracting the best professionals in the region.

GeoPark is a company with many passionate challenges and so we quickly began to shape a team of excellent professionals, highly

That role is also evolving for women in the oil and gas industry. Today, there is much

When I first started at GeoPark, I was

more participation of women in the industry

pregnant with my first daughter. Today, I am

and more young female professionals are

the mother of five. I have always had many

interested in the oil and gas industry and

opportunities for growth and was able to

developing as career professionals within the

integrate my family life with my career.

industry. But there is still a long road to travel,

EnerCom 360: GeoPark advertises that

its team “has a range and breadth of expertise that exceeds most companies [its] size.” Why is it important to have that level of diversity, and what role does hiring a larger-than-average percentage of female employees play into creating that team?

especially where it comes to the inclusion of more women in technical areas, assignments in the field, and leadership positions.

It’s a thrilling industry that is continuing to evolve, where many opportunities for growth and development in various areas within the industry are being created. And women have a lot to contribute.

Agustina Wisky: We are convinced that, in Latin America, we not only have great reserves of hydrocarbons but we also have the best professionals. Our culture is unique in that it is based on trust and the richness of diversity, with which each member can contribute within their profession, the experiences, the culture of each country and the different generations and gender are all ENERCOM360 M A G A Z I N E 33

Women IN ENERGY

Norma Sánchez Medina SOCIAL & ENVIRONMENTAL MANAGER

Norma Sánchez serves GeoPark as the

I was immersed in the country’s highly

was replying to internal expectations that

company’s Social & Environmental Manager.

complex social and security aspects. Aside

assumed that I would solve all the social

from being my first work experience, I had to

conflicts that were impeding the normal

learn in a rather quick fashion what it meant

development of operations.

Sánchez was awarded the degree of Social Worker at Universidad Industrial de Santander in Colombia and holds a Masters in Corporate Social Responsibility, Accounting and Social Audit from the University of Barcelona.

She has over 24 years’ experience in the oil and gas industry. Before joining GeoPark Sánchez worked at Perenco Colombia Limited, Alange Energy Corp, Glencore, Petrobras and Ecopetrol.

From Practice Student to Social and Environmental Manager

to be inside the oil industry: opportunities, benefits and challenges.

I was testing myself at a vast array of activities

From a historical perspective there was

in the process I gained enough confidence to

existing opposition to oil activities in Colombia

grow and move forward.

as well as exaggerated expectations as to employment and social investments, among

I’ve worked in the field for many years, and

many other aspects.

this taught me the importance of teamwork,

But I began learning the different activities

Instead of dividing us, this made us stronger

around the oil life cycle, starting with seismic

and generated new learning curves for all of

activity, drilling, production, transportation

us. I always counted on the solid support and

and all the particularities that these aspects

backing of my peers and bosses, and their

represented to me; the social fulfilment

credibility and trust.

management and the differential analysis EnerCom 360: Could you talk about how you

of the risks that each activity represented

started in your career and how you landed in

were not the same from an oil engineer’s

your current position?

perspective, or a geologist trying to fulfill his mission, or in my case, from the perspective

Norma Sánchez Medina: I started in the oil

of a social worker who was starting to

industry in Colombia—as a practice student.

comprehend the whole business arc. I

34 ENERCOM360 M A G A Z I N E

in the industry and I was getting accepted and

especially when we faced difficult situations.

At all the companies where I’ve worked I have been respected and appreciated. I felt I couldn’t fail because many women would come came behind me, and I needed to do it well so that I could open the door for all of them.

EnerCom 360: GeoPark advertises that

its team “has a range and breadth of expertise that exceeds most companies [its] size.” Why is it important to have that level of diversity, and what role does hiring a larger-than-average percentage of female employees play in creating that team?

initiatives like the family-work balance, with

we take over new roles and add value to the

more flexible schedules, equity and many

organization.

more initiatives that have contributed to better, bigger and more sustainable organizations.

GeoPark is a company that values people in a very significant way. It recognizes the contribution that individuals make, and

Also, we are given opportunities for professional development on a permanent basis.

I’ve always felt that GeoPark has a real interest in my welfare because they believe in me, confide in me. Being a woman didn’t limit

Norma Sánchez Medina: Looking at it

because of that GeoPark has no reservations

from a globalized context with so many new

or prejudices considering women for

and complex social and political dynamics,

important challenges in their careers and for

big socio-environmental challenges, talent

their inclusion in senior management teams.

growth within the organization.

EnerCom 360: Oil and gas has been

EnerCom 360: What does the oil and

growth and retention, investors who are interested in company’s best practices and look closely at companies’ ethical behavior patterns, it’s not just a matter of a number or percentages anymore.

Women are taking advantage of these opportunities by showing our capacity by

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

successfully developing in the jobs for which

Norma Sánchez Medina: In GeoPark’s

we received training, but also because women

particular case we have been given

have become a fundamental pillar to the

opportunities that were always on the table

construction of the culture of the organization.

for us waiting for us to go after them. They

We have added very valuable viewpoints

encourage us to take them. Not only that,

that have contributed to making progress in

but there’s also pride and recognition when

my opportunities at all; I know I could confide in my team and that nothing can limit my

gas industry offer women who are considering working in the industry?

Norma Sánchez Medina: This industry offers reliability, recognition, equity, leadership opportunities. It's a meeting of knowledge, experience and equality for men and women.

ENERCOM360 M A G A Z I N E 35

Women IN ENERGY I am a lawyer with an MBA in environmental

I believe that the women have been able to

management from FGV - Rio de Janeiro. I

achieve their positions in the workplace in a

started my career as a lawyer for a Norwegian

respectful way, and therefore I hope these

E&P in Brazil in 2002, and during the next

examples will serve to inspire young women

fourteen years I worked as legal counsel for

leaders in the upcoming years.

international E&P companies in Brazil. In May 2013 I joined GeoPark as legal counsel.

In 2016 I was invited to assume the role of Country Manager for GeoPark in Brazil.

EnerCom 360: GeoPark advertises that

its team “has a range and breadth of expertise that exceeds most companies [its] size.” Why is it important to have that level of diversity, and what role does hiring a larger-than-average percentage of female employees play in creating that team?

Livia Valverde COUNTRY MANAGER FOR BRAZIL

Livia Valverde: GeoPark has a unique Livia Valverde joined GeoPark in May 2013 as

culture in which diversity is intrinsic. This

internal counsel. In March 2016 she assumed

diversity is important for creating a more

the country manager position for Brazil.

respectful and enriching environment, since

Valverde has 16 years' experience in the Brazilian legal and regulatory oil and gas sector. Before joining GeoPark Livia worked for international E&P companies Coplex and Panoro Energy. She holds an MBA in Environmental Management from FGV - Fundação Getúlio Vargas - and a post graduate degree in corporate law from IBMEC. Valverde serves as counselor to the ABPIP - Associação Brasileira de Produtores Independentes de Petróleo e Gás, Brazil’s association of independent oil and gas producers.

Oil and Gas is Almost an Addiction

different ways of being and thinking broaden the perspectives of teamwork. I understand that women have a special skill to deal with most possible circumstances.

EnerCom 360: Oil and gas has been

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

Livia Valverde: GeoPark is a clear example that there is growth opportunity for both women and men in all areas. As an example, in the five countries where GeoPark currently operates, three of them—Brazil, Colombia

Livia Valverde: Being a daughter of a geologist, I was literally born and raised in the oil industry environment. Although I had the chance to hear many oil and gas stories and experiences while growing up, my path to my current position happened naturally—without any forced family influence.

36 ENERCOM360 M A G A Z I N E

and Peru—are managed by women.

I believe that the industry will become even more receptive and encouraging to women in the coming years. The diversity of thought and the way of working of women and men has proved to be a perfect balance that achieves better results.

EnerCom 360: What would you tell other

women looking to join the industry?

What does it have to offer them?

Livia Valverde: Although the oil and gas industry’s origins were characterized by employing a majority of male workers, the labor opportunities for women have increased dramatically, not only in the administrative environment but also in the field.

The oil and gas industry is amazing and enchanting. And there are never-ending opportunities for growth. It’s almost an addiction!

Women IN ENERGY way I developed my career in terms of entrepreneurship. I hold a bachelor’s degree in systems, I worked as a Java programmer for 10 years and also I founded a web and mobile software development company. After eight years it was acquired by another company in the same industry. I’m a teacher, curious and I am a nerd, driven by passion and conviction.

What I enjoy the most is traveling, sharing my experience on both sides of a company and learning from my colleagues and students.

EnerCom 360: GeoPark advertises that

its team “has a range and breadth of expertise that exceeds most companies [its] size”. Why is it important to have that level of diversity, and what role does hiring a larger-than-average

Vanesa Cillo

INNOVATION AND TECHNOLOGY DIRECTOR

Vanesa Cillo is a software engineer from

percentage of female employees play into creating that team?

EnerCom 360: Oil and gas has been

a traditionally male industry; how have things changed for women in the industry in your time at GeoPark, and how do you think things will change for women in the industry in the next five years?

Vanesa Cillo: Although I have been working in this sector for a short time, with less than a year at GeoPark, I believe that the ongoing paradigm shift in the technology industry as well as the oil industry represents how workplaces will perform in the coming years.

Based on my professional experience, I have always found the male-female ratio amusing, probably because, for me, being a woman has never hindered or undermined my professional development.

At GeoPark I have found an extraordinary group of people, and we should not be surprised by the number of women working in this company.

EnerCom 360: What would you tell other

women looking to join the industry?

What does it have to offer them?

Vanesa Cillo: I would recommend to all

Argentina who joined GeoPark in 2017 as

Vanesa Cillo: GeoPark is a special company.

Innovation and Technology Director for the

women to always prioritize doing what they

When this project was conceived, beyond

company. Before joining GeoPark, after she

like and what they feel motivated to do. This is

setting financial and operational goals, the

earned a university degree from Palermo

the starting point of any personal and, above

focus was on consolidating a strong culture and

University in Argentina, Cillo worked as a Java

all, work resolution.

creating an engaging atmosphere to provide a

software developer for 10 years and founded

challenging workplace for all employees.

a mobile and web software development

An Extraordinary Group of People

company that was acquired after eight years

This culture is passed on to an extraordinary

in the market.

staff and it is mainly reflected in their human

Specifically in the oil and gas field, I think

values and passion. It is results-oriented and Vanesa Cillo: GeoPark is a company that

it is a good time to join the industry—not

it’s based on ethics and trust. This is the great

attracts outstanding professionals from

only considering the ongoing paradigm shift

driving force that leads the recruitment of

different fields. In order to draw in candidates,

but also because it will open the door to

candidates for work teams at GeoPark.

global development.

motivating workplace and they make us part

Regarding the question about the average

The industry is in full growth, undergoing

of the success of the business.

number of female employees on the payroll...

technical and technological transformation

At GeoPark, the diversity of contributions that I believe what caught GeoPark’s attention was

that will entail several professional challenges

employees make based on their idiosyncrasy,

my nontraditional background of management

and will provide the possibility of developing

education and expertise is given precedence

in the IT area, which was precisely what the

new specializations.

over any other dimension, and this is what

company was searching for to consolidate a

makes us a valuable company.

they have been successful at creating a

The industry has found itself in a time of breaking paradigms with human, innovative

team of top-notch professionals.

Fortunately, our company has a large number In my case, the nontraditional background

and critical thinking as a priority. At

of women in leadership positions, and this

comes from long-standing experience I

GeoPark I found a motivating, inclusive and

reveals the values that GeoPark’s culture

have in technology departments and the

challenging workplace.

stands for.

ENERCOM360 M A G A Z I N E 37

WORLD ENERGY NEWS OIL PRICES RALLY TO $80 IN MAY

U.S. IS THE WORLD’S LARGEST HYDROCARBON PRODUCER

There is a glow on the industry’s face and it’s coming from sustained higher oil prices that have turned the industry around from the dismal

It’s official. U.S. natural gas and petroleum hydrocarbon output

dive it suffered in 2015 and 2016. In May European benchmark Brent

exceed that of Russia or Saudi Arabia, powered by the industry’s

crude oil contracts for July traded in the $79-$80 per barrel range—a

robust recovery from the price downturn. For crude oil alone, the

far cry from the $50 per barrel range which felt almost unattainable two

U.S.A. produced just under 30 million barrels of oil equivalent per day

years ago.

in 2017, which set an all-time record.

The Paris-based International Energy Agency (IEA) released its monthly

In the past ten years, America’s production of oil and gas has grown

Oil Market Report, analyzing the supply and demand situation: global oil

by almost 60%. The shale revolution has powered the most rapid

supply is finally falling to levels below global demand.

growth in U.S. oil and gas output since the 1950s, when the U.S. first began producing natural gas in large volumes. Read the story

In March 2018, OECD stocks declined by 27 million barrels to 2,819 million barrels – 214 million barrels below year-ago levels. This is the

at Oil & Gas 360.

lowest level in three years, the IEA said.

IRAN’S SHORT-LIVED OIL BOOM

Total DOE Crude Oil Inventory

Iran holds the world’s fourth-largest proved crude oil reserves and the

Week Ended May 18, 2018

world’s second-largest natural gas reserves durin, but during the past decade production has been suppressed by a lethal combination of

550,000 5-Yr historical range

international sanctions and underinvestment. According to the EIA,

2017 Actual

525,000

2018 Actual

the imposition of sanctions resulted in a near one million barrels per

5-Yr Average

500,000

Pre-Downturn 5 Year Average

day drop in crude oil and condensate exports in 2012.

Thousand Barrels (MBBL)

475,000

Then the Joint Comprehensive Plan of Action—the Iran nuclear

450,000

deal—lifted some energy related sanctions beginning in late 2015.

425,000

400,000

CRUDE OIL INVENTORY/’000 bbls

375,000

Current: 438,132 Actual Build/(Withdrawal): 5,778 Economist Average Estimate: (2,071) Previous: 432,354

350,000

In the absence of sanctions, according to an EIA report published in April 2018, Iran ranked among the world’s top 10 oil producers and top five natural gas producers. Iran produced almost 4.7 MMBPD of

21-Dec-18

7-Dec-18

23-Nov-18

9-Nov-18

26-Oct-18

12-Oct-18

w w w . e n e r c o m i n c . c o m

28-Sep-18

14-Sep-18

31-Aug-18

17-Aug-18

3-Aug-18

20-Jul-18

6-Jul-18

22-Jun-18

8-Jun-18

25-May-18

11-May-18

27-Apr-18

13-Apr-18

30-Mar-18

16-Mar-18

2-Mar-18

16-Feb-18

natural gas in 2017.

2-Feb-18

300,000

19-Jan-18

petroleum and other liquids in 2017, and an estimated 7.2 Tcf of dry 5-Jan-18

325,000

w w w . o i l a n d g a s 3 6 0 . c o m

But with the U.S. withdrawal from the Iran deal on May 8, 2018, Iran’s production numbers are destined to fall again, even after its

Crude oil prices have risen by nearly 75% since June 2017. But because of rising prices, the IEA lowered its estimate for 2018 global oil demand growth by 40 MBPD (forty thousand barrels per day) to 1.4 MMBPD (1.4 million barrels per day), and the agency has increased its expectations for U.S. oil production growth this year by 120 MBPD. The DOE’s total crude oil inventory has fallen to 432,354 MBBL – down 17% from the 520,772 MBBL that were in storage at this point last year.

Read more about global crude oil inventories at Oil & Gas 360.

oil production had reached ~3.8 MMBOPD in 2017. What was the nuclear deal worth to Iran? The International Monetary Fund said that Iran’s oil and natural gas export revenue was $33.6 billion in 2015-2016 – having decreased nearly 40% from $55.4 billion in 2014-2015.

In the wake of the U.S. withdrawal from the JCPOA, only a few international companies have partnered with Iran considering the renewed sanctions, and the outcome of previously announced projects in the country is up in the air. Read more about Iran’s temporary production jump at Oil & Gas 360.

38 ENERCOM360 M A G A Z I N E

ENERCOM360 M A G A Z I N E 39

40 ENERCOM360 M A G A Z I N E