At Landdox, we have a number of really sharp and talented clients, and we wanted to allow some of those clients to share some insights, thoughts, and trade ideas by partnering up for webinar discussions. This is the second in the series, and you might also enjoy our first one about navigating a remote land team and navigating $20 oil.
In this webinar, Brandon Sage and Alli Irwin from Landdox are joined by Heather Powell, co-founder, President and CEO at Ventana Exploration and Production to discuss the path to CEO for land professionals and managing a downturn. We want to thank Heather for taking the time to speak with us.
See below for question and answer excerpts from our most recent webinar.
Brandon Sage: So Heather, you've worked at a variety of companies, all in land focused roles and you've been through a couple different downturns. In 2008, I think you were at SandRidge. In 2015, RKI, Is that right? What did those experiences teach you? What did you learn through those last couple of downturns that have been helpful today as you as we deal with this one current one we're in?
Heather Powell: Yeah, absolutely. Well, taking it a step further, I grew up in Claremore, Oklahoma, and my first job was at Goldie's Patio Grill in Claremore. My first boss, when we were all lazy teenagers, if there wasn’t anybody in the restaurant, we were just kind of loitering and he would always come raging through the restaurant. "If you've got time to lean, you got time to clean." So it's then I hear it in my head all these years later. And it really resonates with some of the different times we've been in. So 2008 was real slow down. SandRidge was in a unique position of where we were a private company and then went public. So the rules and regulations surrounding that, having clean data, and a whole initiative was started, then to go through every lease in the company. Even if you have the most sophisticated, best tools and software. It's only as good as the data you put into it. And we had a lot of misses as we go through things and find a title bust or acreage accounts that were wrong. And so each landman was giving a huge stack of leases piled on our desk, and we were responsible for going through those, doing the lease, analytics work, we populated new sheets, did title diligence to confirm our interests, going through division orders. And then once it was scrubbed and cleaned at that point, it could go back into the new system that we were using. And you can only imagine the looks on all of our faces when that became our only job. But it was incredible. And once it was done, it was amazing what we could do with our information. I learned that 2008 what a pivot table was, we pivoted everything and be lookup. So what you take for granted now that everybody's pretty familiar with those tools, we were just … we were doing lots of Excel classes, we would bring people in to learn how to manipulate our data, and things that everybody's really doing now, we were doing that in 2008 over at SandRidge.
And then when I changed over to RKI, similar situation, we were a very small private company. And there were not people for everything. So we did not have a mailroom. I had to learn how to print labels and send them, certified mail, that type of thing. But we had downturns in that timeframe, too, and cleaning data and we were on dual pass there, we were either going to sell the company or we were going to go public. So scrubbing data and making sure it was clean was important for either of those paths. So we went from managing our thousands of leases and Excel to moving them to a true land software and accounting system, so it's huge, and it was and looking back on both of those experiences. I wouldn't have been able to understand how to even try to tackle that on my own here at Ventana. So although it wasn't the coolest, sexiest work, it was amazing for the company, and all that. So again, you got time to lean you got time to clean. So we're doing a lot of that right now at Ventana. Scrubbing our leases, shut ins, I’m sure there's not a person on the call that hasn't thought about shut ins, but six months ago is a pretty sleepy provision in the lease. And for my team, they're all 30 years old. So they probably haven't been through these bigger downturns or thought about when you would need to shut in a well, when can you shut in a well, that sort of thing. So it's a lot of scrubbing data. We're adding things to Landdox that we weren't tracking before. So we can run reports analytics. So it's time to scrub your data and make sure that things that are important today, you can access and run reports on.
Brandon Sage: You get time to lean you got time to clean. I like that. I gotta say …
Heather Powell: We both have a family with several kids so I don't only use it at Ventana but it also works well at home.
Brandon Sage: That's a great point. I'm gonna start using that. My kids are gonna get tired of hearing that. The other thing was our co founder, Bob would have really had a smile on his face when he heard you talk about pivot tables. There's a special place in his heart for those. Okay, so the next question is when it comes to land, what do CEOs, investors and boards really care about? And how can land professionals tailor their language analysis and presentation style to deliver that message more effectively? So you kind of had a unique circumstance where , you've been on both sides you've been on as a landman, you're the CEO now and so you're dealing with your board regularly, what lessons have you learned and kind of what advice can you give to landmen that are on the call today?
Heather Powell: I think it's a tough thing that for some reason you never really learn about. And every job I've ever been at, there's always been reports that have been requested, you send it up to somebody and then they are going to report on information, you have no idea who's going to use it, you have no idea what they're really trying to get to. So I think it's important now, there are certain things that I never understood until I was at Ventana. And so now I tried to spend a lot of time with the team instead of just saying somebody go pull the expiration report and send it over. Somebody running our missing revenue and accruals report and send it over. We try to spend time talking about what information we need in that report, who is the audience? What are they trying to get to? So instead of sending this 50000-line report to board, what are they trying to get to? So how can you pull that data down with your pivot tables or with some graphs and charts and Power BI, and show them the information they're looking for, even if they have an out specifically for a certain thing, they're probably trying to drill down to certain information. So the more you understand about what somebody is going to do with something, the better prepared you can be. So missing revenues is a big deal, but at Ventana, but I bet it is everywhere. But it wasn't a topic that I ever heard of. Even at RKI as small as it was, we knew a lot of what was going on. And it was important there but it wasn't something I knew about. So here as it seems to be an issue, it was like oh, and we have this revenue that we should be getting. So it's a million dollars from company X, but they haven't sent it. So as we all know, you really need that money in the bank at some point to make things work. So it was a big push here to create these missing revenue reports for land, to put in if we have title problems, or if it's just a matter of the operators not paying, then you've got to calculate interest and figure out exactly what are the missing pieces. So you can figure out who best it is to tackle title issues are best handled by landmen, you've got accounting issues with the company, that would be best handled by accounting. And so really trying to get everybody on the same page of the most important information that we can populate, talking through it and then everyone understanding what the end goal is with this report. So we're not just populating reports, sending them off to the ivory tower and no one really knows what the end goal is.
Brandon Sage: Great. So sounds like when you're working with your team on this stuff, you're actually kind of coaching some of that, or at least trying to implement the right frame of mind for how to think about these things, kind of at the board levels. Is that what I heard?
Heather Powell: Absolutely, and it's everybody's job. So here, there's not anything that's just land's problem or just accounting problem. If we're missing $2 million in revenue, that's a real problem for everybody here. So we should all find what part of that puzzle we'd be best suited to resolve and then tackle it together. But if you don't really understand accruals, or this operator is not paying, you really don't know you have a problem. So I think it's important, and all of us I'm sure if we're honest, have gotten irritated by the 15th requests for a report during a week when you have your own responsibilities until you really understand why does somebody want to see that, like asking a simple question and understanding what the importance of it is, you can probably tailor it better when you send it in and work to find better ways to show the same information depending on who your audience is.
Brandon Sage: Great. Okay, so kind of a similar vein here. If you look at most E&P companies today, it's just the fact of the matter that the majority are run by people with an engineering background or finance background. As a land exec who is a CEO to successfully E&P? What advice do you have for other land professionals that have aspirations to get to the senior in?
Heather Powell: Yeah, I think the best leaders that I know and not just in oil and gas but across all sorts of companies and industries is the leader has a good holistic view of the company and the industry that you're in. So say an engineer is running a company, but they have a really good financial background and understand the dollars and cents of how things work. We're an E&P focused company, and so land is really important for that. But also a lot of time understanding the accounting side, and missing revenue or time value of money. And does it make the most sense to buy 3000 acres in an undeveloped prospect at the lowest price? Or should we pay twice as much and buy right under the drill bit, so understanding some basic economics. And then using the viewpoints from the other groups, so I'm probably not ever going to build our reserve report, but I do understand economics and how to build that out, and see what does make the most sense. I remember debating an issue with one of our board members a couple of years ago, I couldn't understand why he wanted us to take leases that are lower NRI. Because everywhere I've worked, it's like get the most NRI, you can at lease that's how you make the most money. And you pay up for that. Well, you can buy a lower NRI lease at a lower cost, right? And if the lease isn't going to be developed for 12 to 18 months, it's better to have a lower land investment. Even if the NRI is lower when you look at the overall economics of that project. I’ve never seen it put together that way. So after arguing it with him for a little while, a healthy discussion, I go back and look, and I called him back and I was like, this is the most interesting view I've ever taken on buying leases and looking at it, but you're absolutely right. And we really need to shift the land strategy to accommodate this for these areas that aren't going to be developed this year, they're so early on in the leasing phase cycle. So that's how I think you have to understand the financial world, you have to understand the engineering. You have to understand if these three operators are always two times over there AFE doesn't mean it's a bad area, but you have to factor that into your economics and should we really be buying here? Everybody talking to each other and understanding how the business works. If an operator could end up in trouble financially and , with bankruptcies looming and that sort of thing. You really have to understand not just the geology and not just the reservoir engineering, but also what can we feasibly buy in the land department. What are the regulatory issues, and then the health of a company and who the likely operator really will be at the end of the day, from non-op standpoint. So a much more holistic view, and taking an interest in what everybody does is really important.
Brandon Sage: That's great advice and great perspective. So whether you're an engineer or a geologist or finance background, having the more holistic view of the company and understanding how all the pieces fit together sounds like the most important thing I heard from you there.
Heather Powell: Yeah. That way too with respect with what you people do.
Brandon Sage: Absolutely. Yeah. You get a whole new appreciation for reserve report when you when you really get into the weeds on it, right?
Heather Powell: That's right.
Brandon Sage: Okay. Excellent. What are some of the skills that you think are critical for landmen to learn and develop in order to create more value for themselves to kind of keep rising?
Heather Powell: So yeah, I think to expand on the other topic, I think you've got just within lands, you've got division orders, lease analysis, legal, those types of things. And I think, to manage brokerage teams, you have to understand what they do. So I think it's important for all of us to spend some time in the field understanding McLean County title is a whole different animal than Kingfisher. And you may not know that, haven't ever worked in the courthouse, and you can get really irritated with your brokerage teams, if it's taking them three times as long to do title in the claim, if you don't understand that. So I think having an understanding of anyone that you supervise, so whether that's a brokerage land team, or division, order group or lease analysis, going through leases and seeing, having to provision out an entire lease every landman should be capable of doing that and do it on a regular basis. And I really think that that the land departments are going to go back that direction from this place in the whole approach that that big companies have gotten to, I think with condensed companies and condensed teams, we're all going to be responsible for doing a lot more with less than we have in the past. And so I think honing in on those land skills and not feeling like you're above doing certain things, division orders are extremely important knowing that you're being paid at the proper decimal is a big deal, it doesn't seem that glamorous, but at the end of the day, money is the most important part of what we're all doing. And then outside of that, like we were saying, I mean, we need to understand what the geologists does and why he finds this particular area important. I spent a lot of time with Greg, our geologists on why this section is good, but this one is bad. That doesn't make any sense. Closeology tells me as a landman that these both are going to be great. And so it's important to talk to your team and then understanding economics that are projects and the time value of money. How long will it take for this prospect to get developed? And does it really make sense to put this percentage of your budget into this prospect? Or should you lower that and have a better understanding of that, so you're not upset if money is pulled from this area to go to this area? You really need to understand the economics of the projects to really be focused and understand that. And same thing on accounting you got to know the numbers. I've told people for the past two or three years, everybody should know the health financially of their company. If you're cashflow positive, it's something you shouldn't ask your dad how much money he makes. But if you work for a company, whether if it's public, you can go find that information and research it. If it's private, I would hope that your team is willing to talk about it. If not, it may not be the best place to be working.
Brandon Sage: Excellent. Coming out of the this downturn, what do you think the E&P industry looks like? And how do you think land professionals and the in-house land department will need to evolve coming out of this? How do you see that happening?
Heather Powell: I think all of our jobs are getting bigger. I think we all will take on more responsibilities. We've got 10 people here. So clearly everybody does more than just their one thing that they were hired for. I do a lot of IT. I do a lot of HR. I mean, there's a lot of different things that happen, that aren't just AMD related. And so I think it's important to think through that. And I've had people decline jobs because they're like, if I'm applying for a landman job, I'm not willing to do division orders. And I'm certainly not going to be a lease analyst. And that's it put off to me as well. And thinking, Well, that's all of our responsibility, and we all have to pitch in. And then from every operated team I've ever been on, the engineers, the geologists and executives are not thinking through the details this is going to be the best. Well, this is where we need to drill it. You guys work out the details of making it happen. And then you get all the regulatory things that come in. So if you don't understand your state's regulatory rules as a landman, you don't understand if you've got BLM land, you've got protected species. And Wyoming, the weather is a huge issue and you would think the snow ice now that's nothing compared to March when that place starts thawing out, and you cannot get trucks in and out. And so a lot of restrictions lift in March, except you can't get in and out locations because it's like a Florida swamp at that point. So you have to remind your team of that as landmen. So I think it's a lot of different hats that you wear in our business, in the land department. And so understanding the regulatory is such a huge deal and one of my biggest passions of understanding if you can understand the regulatory and how the OCC works for Oklahoma, how you can negotiate PPLAs, and again explaining to your land team of what it means to have the spud notice election for instance, in times like today it's so huge. We don't have to make an election at $20 oil, when the wells probably not going to be drilled until we're back to $40 or $50. It's a whole different economics in those situations. So where are we non concept today, we would elect in six months down the line, never it's a better day. So understanding why, it's so important to have these things. And understanding the regulatory systems and tools that can make things a lot better for your company are huge for landmen today.
Brandon Sage: Excellent. Yeah. And that goes along with some of the other things you mentioned about just making yourself more valuable as a land professional, and being well rounded. That really goes along with kind of our view of what we're trying to build technology to help companies do more with less and be able to not have to be so siloed in your roles and responsibilities. So, again, not trying to make a Landdox commercial, but I had to throw that plug in. Okay, so next question is about technology. So you're seeing all kinds of technology developed. Blockchain, digital, courthouses, online A&D, BDR technology, digital signatures, electronic filing, just to name a few. What technologies do you think are poised to most significantly disrupt the way the land business works today? And your answer cannot be Landdox.
Heather Powell: So I think all of them I think they're all huge. And I think they're all positively disrupting the way we've worked in the land department. So in 2005, I think I was on the road most of the year, either flying to Houston, Dallas, Midland to go to somebody's old conference room with files spread all across the desk. We dug through them. We had checklists, we call out as much information as we could would come back to Oklahoma City analyze that information, then we'd get in our cars and drive back to Houston to pick up those files and bring them back to Oklahoma City, only to spend months and months taking out the papers and putting them in our files away we did at Chesapeake. So today we've spent this entire quarantine our team in a lot of virtual data rooms. And it did not disrupt our business at all, because it was all available to us digitally. We also had at least weekly phone calls with the agents that are marketing these deals to talk through it, because you can't get everything you need out of just looking at the piece of paper. So I don't think any of these are taking away the human aspect, but it has made it in a way that we've cut down costs. We've cut down time, it’s not to drive to Houston to look at bill today. But it's nice that I could pick up the phone and call you after I've gone through. It's like, oh, well, we were missing a well’s statement. Would you mind uploading that? Can you explain this marketing contract. So we still are engaged, and we're still talking to each other. But we're able to still conduct business in a time where we can’t be in the same place, and the amount of time and energy and money that it saves to have these virtual data rooms. And then, we buy the deal. And our team's done its diligence, we can just move those files right over. We worked with Alli on one that that we're looking at right now, and hopefully we'll go from a diligence phase to closing, and then all of our tE&Plates are set up in such a way that all of our diligence was done that we can immediately upload that information into Landdox and into WolfePak all of our different software's here and be able to access it in minutes. Very low cost and done in house with our team. So again, we still need all the humans. But the time that it takes to it will not be a six month process, it'll probably be three days to close implemented.
Brandon Sage: And I think that statement probably just made a lot of people on the call think, Wow, she can't be really mean then three days. This is a process that historically in a lot of other situations takes months or can go beyond a year in some cases. So you're saying that with correct planning and kind of thinking ahead and making sure that as you diligence this stuff, you're doing it in a way that you can really easily bring it into the systems that you use will allow you to get up and running in less than a week. Did I hear that right?
Heather Powell: Yeah, absolutely, absolutely. So it's very different than where it came from. But still, we're doing the same processes. I mean, I use the same checklist that I used in 2005 should make sure you have the right things. And we have our templates set up of how we look at leases and how we would number things and it it's crazy how you can streamline with new technology, and it just makes things better and much more efficient. And then you don't have the six month lag of like, I hope nothing bad happens to any of these wells, and the time it takes from us to close to implement that that's really bad, especially as things are changing so rapidly and the immediate need to evaluate shut ins, or payment provisions or anything like that, federal leases have. It's just crazy the amount of things that can fall through the cracks in that three to six month timeframe that we're able to close that gap.
Brandon Sage: That's phenomenal. That's really awesome. Okay, so along … still kind of thinking about kind of the downturn and what that is gonna mean to the industry, for land professionals that are considering looking at other industries, that kind of thing. What industries and roles do you think that their skills are most transferable to?
Heather Powell: Oh gosh, I think any industry. I think the nice thing and to find some silver lining and all this, I think there are people that aren't happy in their jobs, whether it's an oil and gas or pharmaceuticals or whatever it may be. And so I think a nice thing to be able to do in these changes is take a minute for some self reflection, and I get that there's the whole you have to provide for your family and the stressors that go into it. So it's not as simple as just go on and eat, pray, love situation and find a new awesome job. But if you are in something you don't like, you can take time to think about what you've always wanted to do and use this opportunity to make a switch, or like we're talking about, if you're a landman, and you're very passionate about the industry. I've always been passionate about land. I love it. And so to me, do I want to go switch to banking or do I want to hone in some of these other skills to make me more valuable to the company that has one land position open and 20 of us applying? So I think adding to your skills is good on both sides. So you can't go wrong with adding skills to your repertoire, networking and staying engaged with people in lots of different industries is super important. So I think that's where focus should be at. If you're a landman and you love what you do, how can you go work for, say, a brokerage firm if they've got a big due diligence project, and help out for a few months, you are feeding your family and you may be learning a new state that you haven't worked before. You're doing the Permian and you've always worked Oklahoma. So now some different things you understand Texas regulatory, so now you've just updated your resume while feeding your family. Even if it's less money than you made in your last role. You're adding to your skill sets, you're adding a different basin to your resume is huge. So that's what … I applied for a number of marketing roles in oil and gas company. So I always thought it'd be fascinating to work in gas marketing and didn't get any of those jobs. So I do not have, I only have the one on one level skills there. But I always thought that would be fascinating. And even if I made less money, it would be good on my resume to have worked in one of those groups and it just didn't work out. But I think that's a great thing to do I’ve worked in brokerage firms at different times to learn different states and to understand what the field landmen we're going through to … I’ve settled lots of surface damages. I've negotiated lots of pipeline agreements. And so if you're a senior landman or you've had some land coordinator type title, you may feel like you're overqualified to go and negotiate pipelines. If you haven't done that before. It's really good to go add some of these skill sets, and maybe where the work set today. So I've always found that you learn some really interesting things in times where you do things that are different, whether it's rebuild a land software, or negotiate a pipeline agreement. So I think there are ways to stay in the business if you're committed to it. And maybe there will be less jobs that I think it we also have people aging out and retiring. So you have that whole situation of cyclical, just natural progression here. So I think they're going to be jobs, even though there will probably be less jobs and less companies in the end. I think there's a lot of things for us to do.
Brandon Sage: That's excellent. I'm picking up on a theme here, where I keep hearing different variations of don't be afraid to pick up your hard hat. And kind of how you have gone about your career but also in people that you hire, sounded like I kind of heard you say if somebody comes to me and they've kind of view themselves in a real narrow box and don't feel like maybe they're above doing different things. That's not somebody you want on your team. Right?
Heather Powell: Right. Absolutely. Yeah. And I actually there was a guy I interviewed at one point, and he called me after I was like, this seems like a great company, you guys are doing great things. I am not willing to put in the hours or the time to do this, like I do this one thing. And then I want a career path where I move up. So he was clearly a really good fit for a large company where you move up the hierarchy. Here, everybody's got a job title, but it doesn't really matter because we all do like 100 other things. But nobody's really getting some crazy promotion to say that … there's no other titles and what you came in with. But I always tell everyone you can make the most of what your job is by adding to it and finding weaknesses because every company has some and they all need the solution. So find the weaknesses and be a part of the solution, even if it's outside of what your group is. So I think if you don't have that attitude, it's going to be much tougher in any industry to find a job and to be successful.
Alli Irwin: For land professionals who have worked their way up the food chain, from Tech to analyst to coordinator to manager etc. The traditional advice is to shy away from the more detailed work to secure a management position and work your way up to the C suite. Do you agree or have different advice?
Heather Powell: Yeah, I mean, my whole goal. It was funny to say out loud these days, but was to avoid the manager roles, because you take yourself out of the position where you're doing hands on work in your field. So whether you're the head of engineering or you're the head of land, if you're not actively engaged in negotiating leases, and going through provisions, you can easily I mean, we've all had bosses where you go talk to him, and you're like, that hasn't been an issue for 25 years. So I don't want to go to the 1987 JOA seminar when none of us are using JOA anymore. So I think the most important thing to stay relevant is to stay engaged and to even if you do have the manager title, or the coordinator title, or the CEO title, you have got to stay engaged in what your people are doing, and do some of it too. So I still negotiate at least 50% to 80% of our leases, and I love being a landman and that's how I introduce myself, and that's what I do here. I love closing deals. I love networking with people and business development. So I think being on that side of going into a job and thinking now, I'm at the top of the food chain, and I'm not going to do any of these things, there are people for that. And that is a terrible attitude to have. And then you get into a spot where you're not as hireable in times like today, if you're a land coordinator and you get laid off, and you haven't negotiated a lease in five years, it's going to be hard to get a job as a lab man somewhere else. But if you're a lab coordinator actively engaged in negotiating, you can totally get the landman job or some of the other things like negotiating surface use agreements and that sort of thing to stay relevant. So you have to stay engaged in everyday process of your company for sure.
Brandon Sage: Thank you so much, Heather. You've been really informative and given some great insight. Really, thank you for taking the time to do this. And kind of share some of your experiences. I found it really helpful. I'm sure a lot of people did too.
I won't go completely without any Landdox plugs but in that process that you're describing Heather, basically, you just need to put the data into the spreadsheet tE&Plate that you refer to. And then that could go directly into Landdox, and fill out all the data within your Landdox account.
Heather Powell: Right. Yeah. So we were able to when we have the big shut in projects here, what, two months ago, as these as well started getting shut in, we immediately had all of our leases had to shut in provision flagged. We hadn't gone through and provision them all out. So we we were able to search the ones that did, and then the land team split up the leases amongst themselves and were able to quickly go through, identify exactly what the provision says, and then add that information into Landdox, and it took us days, so a very quick process.
Brandon Sage: And then you've got those flagged where you can run reports on them. You can identify those in seconds, just with a Quick Search. If anyone does want to hear more about Landdox, I would be happy to have a zoom meeting or fire up a call with you, just email email@example.com it will make its way to me.