In this episode of Executive Connect, Melissa Aarskaug sits down with Mark Elliott of Summit Ventures and operator Nathan Calvin for a grounded conversation on what separates real execution from boardroom theory. They break down why good geology matters, how bad operators destroy strong assets, and why capital discipline can make or break an otherwise promising deal. Nathan shares what it means to be asset-driven, how experienced operators find value in overlooked fields, and why patience often beats greed in the oil patch.

If you want a clearer picture of how oil and gas deals are really evaluated, where the risks actually are, and what smart operators do differently, this episode is worth your time.

Chapters

(00:00) Why capital discipline matters most

(00:31) Mark introduces Nathan Calvin

(03:08) What separates operators from strategists

(05:40) How to spot teams early

(07:34) Why rock has different personalities

(11:09) Geology, engineering, and repeatable performance

(15:56) How operators cut corners

(19:27) What makes assets underperform

(21:47) Building and scaling energy companies

(24:16) Evaluating opportunities the right way

(26:35) How great operators find hidden value

(33:37) Lessons from business beyond oil

(42:33) Balancing growth and downside risk

(48:13) Doing hard things early

(50:22) Building a culture that confronts problems

(54:47) Final lessons on oil and gas opportunity

Speaker 1

(0:00) But it’s very easy to get over your skis in oil and gas in particular, but I’ve seen this, this is translated in every other company that I’ve been a part of. (0:09) If you’re not watching that capital account, you’re operating capital, you get into a bind real quick. (0:16) And especially with oil and gas, you know, you sell a load of oil and oftentimes it’s not until the next month that you receive the check from the marketing company that purchased the oil.

(0:27) The prior month after that, that’s when you send it out to your investors.

Speaker 3

(0:31) Welcome to the Executive Connect podcast. (0:34) Today, I’m joined by Mark Elliott, CEO of Summit Ventures and Nate Calvin. (0:39) Mark, would you mind sharing a little bit about Nate?

Speaker 2

(0:44) Yeah, absolutely. (0:45) Melissa, thanks for having us again today. (0:48) Let me just kind of tee up a thought process as I introduce Nate.

(0:52) You know that we recently had published a magazine on oil and grass direct investments. (0:59) And really it’s a definitive blueprint of insider knowledge for high net worth individuals on how to do direct investments with oil and gas. (1:09) And part of this talks about geology, right?

(1:12) Because geology really shows the profitability of a project long before an operator or a landman gets involved before a bit is ever put into the ground, right? (1:24) But a bad operator will screw up good rock, right? (1:28) And so let me just kind of give you a case in point story with this.

(1:33) Nate had brought us a project a couple years ago that was down in South Texas. (1:37) It was a seven and a half mile pipeline that was attached to a gas well. (1:43) And it had produced over a billion cubic feet of gas in the last 10 years.

(1:47) And the pipeline started to pop some pinhole leaks. (1:52) And we were able to acquire this property below market due to the challenges. (1:57) But this is really where a great operator comes in, right?

(2:00) And good land work comes in. (2:02) And so we were able to repair this pipeline, which was really old, right? (2:07) We replaced sections of the pipe.

(2:10) But in order to prevent old pipe from breaking again, this was the brilliance of Nate. (2:15) That gas was coming out of this ground at 800 PSI. (2:20) And that’s what was blowing holes in this old pipeline.

(2:23) So Nate rented a compressor for $1,800 a month. (2:26) And he ran that gas into the compressor at 800 PSI and had it come out of the other side of the compressor at 50 PSI. (2:34) And so when you look at this, we have an investment that in December, while gas prices were high, we made 25% of the entire investment in a single month, right?

(2:45) It was phenomenal. (2:47) And that’s what a good operator does. (2:49) So formally, let me introduce Nate Calvin, landman, real live Billy Bob Thornton, but just a whole lot better looking.

(2:57) Nate, say hi to everybody.

Speaker 1

(2:58) Hey, hello. (2:59) Thank you, Mark, for the introduction. (3:01) I do appreciate that.

(3:03) And anytime I’m compared to Billy Bob Thornton, it’s a good day.

Speaker 3

(3:08) Well, thank you so much for being here today, Nate. (3:11) And I know you’re known for turning plans into safe, efficient field results. (3:18) So talk to us a little bit about what separates operators who execute from those who just strategize.

Speaker 1

(3:26) Well, that’s a great question, because there’s so many oil companies and operators out there. (3:35) And there really is the differentiating factor is those who sit in a boardroom and plan and strategize. (3:43) And then those who actually execute.

(3:47) For me, in my experience, one of the biggest factors is living in understanding reality quickly. (3:55) And I know that may sound maybe a little fundamental or rudimentary, but it’s very easy as a businessman, as an entrepreneur, and even an investor to be overly optimistic, right? (4:08) I’m about to drill a well, and I think this, oh, this well could come in.

(4:12) How many times have you heard that? (4:13) This well could come in at 100,000 barrels a day. (4:17) We’re going to make, this is the biggest well that anybody’s ever produced from ever.

(4:20) And you operate with a very overly optimistic sentiment sometimes. (4:27) And then on the flip side, you could be overly pessimistic. (4:29) You could never risk anything.

(4:31) You could never actually invest in well. (4:34) And so understanding the reality of what you’re dealing with, of the asset quickly, I think is what separates you from being able to just sit in a boardroom and create a strategy and then actually execute. (4:51) And so, and part of that too is when you understand what you’re working with, what you’re dealing with, you’re operating it within this reality.

(4:59) You’re not swaying, overly pessimistic, overly optimistic. (5:02) You’re able to really come up with a plan that works. (5:06) And that’s what eventually gets you beyond just a boardroom strategy to executing something that is repeatable.

(5:15) And that is also pressure tested for lack of a better word, but you’re able to pressure test this strategy and this plan and execute it.

Speaker 3

(5:24) Ready to lead smarter and invest wiser? (5:27) On the Executive Connect podcast, we unpack executive strategies for wealth and influence. (5:34) Hit the subscribe button now.

(5:36) Don’t just watch, act. (5:38) No, I really agree. (5:39) I love that you mentioned that.

(5:40) And I think it’s interesting of the teams that win and execute and the teams that struggle, very different people, very different teams. (5:53) So from your perspective, how early can you tell whether a team is going to execute or struggle as they move forward in these projects?

Speaker 1

(6:02) That’s a great question as well. (6:04) You can tell pretty quick because like Mark said a second ago, you can’t replace good rock. (6:13) And then you also, if you have good rock and you don’t have a great operator, you can mess up a project or an asset really quick.

(6:23) So you can tell right away when you start the process of building out your, working through your deal flow and building out a potential prospect that you can invest in or a field or a new drill or a redevelopment plan. (6:38) You can tell, I think you can tell pretty early if there’s an inflated sense of optimism. (6:44) Just the second that somebody looks at something and they think, oh, we’ve got nothing but clear skies.

(6:53) I really think that what’s the old phrase, hope for the best, prepare for the worst and expect to land somewhere in between. (7:01) I think that that rings true. (7:03) And you can tell at the beginning of any meeting, any strategy session, I can’t tell you how many consultants and teams that I’ve worked with within the first 10 minutes, I feel like I can tell, okay, I’m dealing with an extreme optimist here, or, hey, this is a very low risk, extreme pessimist here.

(7:23) Let’s see, where does this pessimism come from? (7:28) Where does this optimism come from? (7:30) But you can tell pretty quick.

Speaker 2

(7:34) Nate, on the backside of that, I think it would be interesting to explore, people don’t understand that ROC has personalities. (7:43) And as you look at these teams, expertise becomes regionally based when you look at these different oil and gas basins. (7:51) And maybe you could explain that to everybody, Nate, and really what’s going on underneath the ground and how things act differently in different parts of the country.

Speaker 1

(8:00) Absolutely, Mark. (8:01) So a term that Mark and I throw back and forth all the time when we are building out projects and considering deal flow is that we initially start the process by going, we need to be asset driven. (8:16) And that sets you apart as an operator if you’re asset driven, because the reality is in most companies, most businesses, and this translates across multitudes of industries, it is not a one size fits all type of strategy.

(8:32) When you’re asset driven, if I’m going to the Permian Basin, and I know that there’s the ROC in the Permian Basin is a limestone, there’s bugs and there’s caverns, it’s not as permeable, it’s not as porous, you have to acidize, stimulate, frack this ROC. (8:52) How I would approach a Permian Basin asset is completely different and sometimes opposite of how I would approach a Gulf Coast basin asset. (9:00) And so if we’re not asset driven, if we don’t look at the ROC, look at the area, look at the service companies, look at what’s available to us around us, if we approach this with a one size fits all type of team or operation, you can absolutely misinterpret the personality of the ROC, which I love how you said that Mark, you can completely misread what is happening downhole.

(9:24) And you can approach this in a way that you may have a great ROC, but like Mark said, you have a horrible operator, and you completely messed up this opportunity and this investment. (9:34) And I’ve also seen it in other industries where you’ve got a Harvard MBA grad that built out the KPIs and the metrics that you’re supposed to meet and a private equity company or another company might demand that you meet these particular KPIs, which those KPIs may not consider the personality or the differences in the basins or the ROCs. (10:03) And so having an opportunity to invest and partner with an operator that has that flexibility and that’s asset driven, I think is one of the best opportunities in oil and gas, because now we’re able to really, truly focus and hone in on how to pursue this particular asset in the capacity that it needs to be pursued.

Speaker 2

(10:28) Absolutely. (10:28) And for people that are trying to figure out how to invest in oil and gas, listen for this term asset driven. (10:34) It’s very selfish.

(10:36) And let me tell you why, because every deal that Nate’s doing, his own money is in it. (10:42) Every deal we’re doing, someone is investing in this. (10:45) A lot of companies out there, they’re getting carried, they’re getting promote in a deal for putting it together, not for putting their money in it.

(10:55) And so really, when you look at asset driven, it’s because we want to make the next best decision and be able to wring that profit out of the transaction by leveraging what needs to be done, not what’s being mandated at a corporate level.

Speaker 3

(11:09) No, and that’s a great explanation. (11:13) As you were talking Nate, it reminded me when I was fresh out of school as a civil engineer, I had all the education and I knew how to do things on paper really, really, really well. (11:25) But then when I get to the field on one of my first bridge projects, I thought I knew what I was doing with the dirt and the ground.

(11:35) And I learned quickly and was schooled really quickly how to look for things. (11:39) It’s a very special person that can understand that, who has had experience and has seen many different types of rock and formation. (11:49) So as it pertains to upstream oil and gas, how does sound geology and engineering excellence translate into a repeatable performance for people that are looking to invest in these type of drills?

Speaker 1

(12:06) Yeah, so I mean, everything really starts with the geology. (12:12) If you have a particular basin or let’s just say it was a neglected asset by a large company that you know there’s lots of behind pipe pay and potential, you have to start with the rock. (12:32) You have to start with the geology.

(12:35) And then from there, like Mark had mentioned earlier, a good operator or a bad operator can mess up good rock, but a good operator can’t create good rock. (12:49) It’s either there or it’s not. (12:51) And that needs to be the initial governing factor of pursuing an oil and gas endeavor or investment.

(13:01) And so for the investor out there, it’s just some basic or baseline geological study, information, understanding the geography, the basins, the lithology. (13:16) Starting there is a big part or a big component, and that’s where obviously that’s where we have to start. (13:25) And once you’ve identified or noticed that the geology looks good, your engineering then at that point is what allows you to now access that rock in a efficient and safe and most importantly, well maybe not most importantly, but they’re all important, but economically sound capacity.

(13:46) And like we talked about too with being asset driven, it’s a term we throw around quite a bit. (13:53) We probably wear that term out, Mark, to be honest. (13:58) But it really is such a guiding, governing methodology to how we approach our deal flow and investments.

(14:09) Because again, if we look at this particular asset and we understand that this lithology is hard limestone that’s not permeable or porous, or this lithology that we’re engaging now has lots of permeability and porosity, but it’s an over-pressurized formation, then obviously we are anticipating certain risks there. (14:31) There’s a lot that goes into this process before we get to the engineering. (14:37) So with that being said, I mean it starts with the geology.

(14:41) Sound engineering then helps subsequently to that for us to access that geology. (14:48) But ultimately, again, we have to approach it from an asset driven approach. (14:56) That’s the only way to translate repeatable performance because it’s, like I said, it’s basin by basin.

Speaker 3

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(15:41) To learn more and get a free white paper, oil and gas demystified, just visit www.summitven.com forward slash executive connect. (15:56) And I want to piggyback a little bit off what you were mentioning, Mark, is talking a little bit about when you have your own money in something, you treat things very different and how you work with it. (16:11) And I correlate it to everything in life.

(16:15) If you’re buying your own car, you’re going to treat that car different than if someone gave you a free car. (16:19) And so the question is, how do most operators most often cut corners and what are the consequences of cutting those corners?

Speaker 1

(16:31) That’s a great question. (16:32) Mark, do you want to jump on that?

Speaker 2

(16:34) You know, talk about when people get greedy and they try to get all the gas or oil they can get out of the ground and talk about chokes and just the longevity of a little bit over a long time.

Speaker 1

(16:48) Well, you know, so the asset that we were talking about earlier in Victoria that was connected to a seven and a half mile pipeline, I was part of Foundation Oil Company, eventually took over Foundation, ran it as the president, sold it, sold Foundation Oil Company at the end of 2022. (17:08) We drilled that well and it was one of my favorite assets to the point where even with this new oil and gas company, we kept that well. (17:19) But that well was drilled 16 years ago and it’s still producing the same capacity that it was 16 years ago.

(17:27) It doesn’t make any water. (17:29) It has no corrosion. (17:31) The lease operating expenses are extremely low.

(17:34) And we ended up acquiring that pipeline because we outlasted every operator in the area. (17:41) Every operator had to end up plugging their wells, which in turn ended up giving us that portion of the pipeline so that we now could access the sales point, which was another larger company that owned that sales point. (17:56) And what happened there is as an operator, I know that if I get greedy, if I want to produce a little bit more, I can open this well up as open as I can get it full throttle, open the choke up, and I could produce triple what I’m producing right now.

(18:13) But the reality is we choked that well back and we’ve had that well on the original choke since we drilled it in 2010. (18:22) And we haven’t lifted the choke since the entire time. (18:27) Now, like Mark mentioned, we could get greedy, but what ends up happening is when you open that choke up on these wells, you make a little bit more production.

(18:37) But when you make a little bit more production, you also bring in that water. (18:42) And when you bring in water, oftentimes it pushes the oil and gas back in your formation, and they call it watering out or coning in. (18:50) So if you cone that water in, now all of a sudden, instead of accessing 80% of your reservoir, you accessed only 20% of your reservoir, the well coned in or watered out, and then you have to shut it in and plug it.

(19:03) And so we’ve had this asset for 16 years. (19:07) And there was actually, there were several operators near us that drilled similar wells for the exact same reason, the exact same geology, just in terms of their operations. (19:20) They got greedy, watered those wells out.

(19:23) And in six months later, they plugged the well and now we own all the pipeline.

Speaker 3

(19:27) To piggyback off that, so talk to me a little bit about what differentiates the high performing assets from the underperforming ones in the area, like kind of piggybacking off what you were just mentioning.

Speaker 1

(19:40) Yeah, so there’s several factors there. (19:44) So you could have a high performing asset, but you have a greedy operator that did not operate well. (19:55) For instance, opened the choke up, didn’t monitor the well, didn’t understand the formation.

(20:00) For instance, some formations don’t like water from other formations. (20:06) For instance, if I drill a well and I’m using a water-based mud and I say I use fresh water to circulate out this well as I’m drilling it, all of a sudden you get formations like the Wilcox Formation in the Gulf Coast Basin. (20:19) All of a sudden that fresh water swells that formation and you may have a great looking asset like we talked about, but all of a sudden you swell that formation and now you have a dry hole.

(20:29) And so there’s an aspect where you may have a great asset and you have a poor engineering and a poor operator, so you either open the choke up or you don’t understand the formation. (20:41) You’re not asset driven, so you didn’t pursue this particular endeavor in such a capacity that made sense for that particular asset. (20:49) And I see that all the time.

(20:51) That happens all the time. (20:52) There’s some potential instances where a log or a prospect could look good on paper, and then you go into that particular asset and you realize it just didn’t produce like we thought it would. (21:08) But again, that falls on the due diligence of the operator to understand your proximity production, to understand other wells in the area.

(21:16) Are there different ways that you could stimulate this well that would cause production to enhance that other operators have done or haven’t done? (21:25) And so really a lot of it depends on the due diligence prior to, like I keep saying the term asset driven, but the due diligence prior to engaging that asset, which will really be the ultimately the defining factor as to how well this asset produces.

Speaker 3

(21:47) Yeah, that’s great. (21:49) Now let’s talk about these interesting companies here and how you build. (21:54) And so you’ve been involved with Foundation Oil Company, Black Belt Operating, and now Titan Operating.

(22:00) What’s the through line and how you build and grow businesses?

Speaker 1

(22:07) Yeah, so I have been blessed to own and operate, buy, build, scale multiple companies. (22:17) I have the entrepreneurial bug and I can’t shake it. (22:24) But really, honestly, the through line, the biggest thing has just been having a very close watch on our capital account.

(22:34) And again, that may sound rudimentary and fundamental, but it’s very easy to get over your skis in oil and gas in particular. (22:43) But I’ve seen this, this is translated in every other company that I’ve been a part of. (22:47) If you’re not watching that capital account, you’re operating capital, you get into a bind real quick.

(22:54) And especially with oil and gas, you sell a load of oil. (22:58) And oftentimes it’s not until the next month that you receive the check from the marketing company that purchased the oil. (23:05) And then the prior month after that, that’s when you send it out to your investors.

(23:09) So you’re always operating in, you’re, you’re paying expenses ahead of time and anticipating that your revenue is coming subsequently. (23:18) And if you’re not, if you’re sitting there assuming without a close watch that you have enough capital to, to dive into this new work over, we’re going to go acidize this, this well, we’re going to do a squeeze job and we’re drilling two or three more wells. (23:35) It’s very easy to get a false sense or a false view of the capital that you’re actually working with.

(23:40) And I’ve seen that with several operators where they got over there, they got ahead of their skis and all of a sudden, a couple, a couple of bad work overs in, they didn’t have the backup capital to keep the doors open. (23:55) And they had to shut in these wells. (23:56) They had to sell them short, sell them in a way.

(23:59) And, you know, they were no longer operating as a result. (24:03) So really that, that discipline with capital, understanding that capital account is the lifeblood of your company. (24:09) It was, is the biggest, the biggest thing that I’ve seen in oil and gas that translated to all the other companies I was working with.

Speaker 3

(24:16) Now, how do you evaluate whether opportunities align with your operating philosophy?

Speaker 1

(24:22) That, that is a great question. (24:24) That is a fantastic question. (24:26) So there, you know, there is a, there’s a process for sure.

(24:32) Again, if we are asset driven, if we, we are operating under a core thesis that our goal is to pursue conventional wells that have mature life, that have low decline trends. (24:49) And if that’s the capacity that we’re operating under, it’s very easy for us to, to analyze deal flow or work or potential projects or work overs. (25:00) And notice that those particular projects check the right boxes and they make sense for us.

(25:05) And again, we’ve had, we’ve had situations, Mark and I, where we’ve gone, gone on a project and we attempted, we tested a few different zones and then we had to say, Hey, we’re going to press pause. (25:19) We’re going to step back and we’re going to, we’re going to do a little bit more research, analyze some, some formations in the area, talk to some proximity operators, analyze the proximity production. (25:30) What I don’t want to do, or what we don’t want to do is, is keep throwing good money after bad.

(25:36) You know, if you’ve spent some money and you’re working through this project, there’s nothing wrong with stepping back and pressing pause and saying, recalibrating and refocusing and, and analyzing, saying it, what’s the best next step for us as a company? (25:50) And what is the best use of this, our, our money and this investor’s money. (25:55) And in turn, it ended up, it ends up always working out to where we, we step back, we recalibrate, we find out, Oh, here’s the best next step.

(26:05) Here’s the best allocation of our money and creates a scenario where in a way that money that we’re now deploying is educated money. (26:15) We we’ve learned a lot from this process. (26:18) We’ve learned a lot about this asset, and now we’re reinvesting back into this particular asset, such capacity that we not only have we learned about this whole, this area, but now we’ve, we have a successful endeavor and then we can repeat that system over and over again.

Speaker 2

(26:35) You know, Nate, going a little deeper on that. (26:39) When you’re looking for these projects, not only do they line up with, with, with, with your thesis, right. (26:44) With, with what you’re looking for in a deal, but how do you find it?

(26:48) I mean, we’ve drilled millions and millions and millions of holes all through America and, and all the big prominent fields have been leased up or have been through Exxon’s or Shell’s hands. (26:59) Like, like, like how do you pick through all that and, and, and find an asset, kind of, kind of share your thesis and, and what’s going on there. (27:08) People would love to understand that.

Speaker 1

(27:09) Well, it’s, you know, the best, the best way to, the best way to find an apple is an apple tree. (27:15) And the best way to find oil is an oil field. (27:17) And, you know, there’s some, there’s some wildcatters out there.

(27:20) We’ve all seen the movies where you, you go out and poke a hole in the ground and just randomly find oil. (27:27) But unfortunately life is not a movie. (27:29) And the reality is like we talked about the first question you asked me living in this living, understanding reality.

(27:36) You’re not overly optimistic, not overly risk adverse or pessimistic living in reality. (27:42) The reality is the best place to find oil is an oil field. (27:46) And one thing that Mark and I have, have done and seen quite a bit of success from is, is pursuing neglected assets from majors and mid-majors that have bypass zones that may not have fit their thesis at the time.

(28:01) And as a, as a smaller operator, I can, I can cut off X by 20% just by being leaner right away, as soon as I purchased this asset. (28:10) And then I come in and I can well, typically that’s already drilled, or I can drill wells within that particular field because I know the seismic and the geology is already there. (28:20) And we can come in and take a neglected distressed asset and make it profitable, turn it around three to five X and three to five years.

Speaker 2

(28:30) So, you know, what, what, what’s interesting is, is that when you really peel back a timeline of what happened in oil, right? (28:37) And you take all these, these areas, we do a lot of work out East Texas and East Texas produces a lot of 200 barrel a day wells. (28:45) Well, at some point in time, these big oil companies dropped their picks and shovels and ran to the Permian.

(28:50) Why? (28:51) Because in the Permian, these wells could produce a thousand or 2000 barrels a day. (28:55) So, so people are getting five X, 10 X, the production for the same equipment and the same human capital that made all the sense in the world.

(29:04) But what did they leave behind? (29:05) They left behind these pockets of 40, 60, $80 million worth of oil on the ground. (29:12) So what this really allows us to do is not to be in the wildcatting business with everybody else.

(29:17) We’re going into proven producing fields, that Apple field and Nate’s example, right? (29:22) And, and these were drilled with old technology. (29:24) Nate just finished up an acquisition for us of 320 acres out in East Texas.

(29:30) And, and, and it was an old British petroleum field, right? (29:34) They, they ran. (29:35) What did they leave behind?

(29:37) Well, man, they left behind the field that there was a well that was drilled in 1962, that’s still producing oil. (29:43) So I think we can check the box that we got oil there, right? (29:46) That’s half the battle, right?

(29:48) And, and then you find somebody who’s asset driven that has their own money in the deal. (29:53) And things now start to line up, right? (29:55) That, that, that’s a good path to follow into an opportunity.

(29:59) But, but that’s really what’s behind it. (30:01) These people left and it wasn’t bad decisions, but can they ever go back and drill two wells, eight wells at a time? (30:07) That’s just physically not economically feasible for these big companies to come back and do it.

(30:13) So if we really correlate this to, to real estate, think about the big REITs, right? (30:20) And the REITs are up there doing these huge, huge projects. (30:23) And down at the bottom, you have the mom and pops that are doing deals and you got private equity in the middle.

(30:29) Well, an oil and gas ESG, right? (30:32) Has pushed all that capital out of the market. (30:35) If we go back six, seven years ago, there was 95 billion in dry powder.

(30:40) But because there was a direction to go, gosh, oil’s dirty. (30:44) Although it produces our clothes, our shirts, my eyeglasses, you know, MRI machines, right? (30:50) You can’t have anything without hydrocarbons, right?

(30:53) And, and, and so really, that’s really the exciting part. (30:57) And, and, and all this is just such opportunity to, to pull this resource out of the ground and, and, and be able to turn it to cash and what becomes a very tax efficient manner.

Speaker 1

(31:09) Well, and, and Mark, if you don’t mind, piggybacking off that it’s, it’s, you know, some of the process of demystifying oil and gas investing is, is demystifying the opportunity. (31:21) You know, people like a lot of times it’s just, it comes across like oil and gas is this insanely risky shot in the dark. (31:32) Whereas, you know, so much of what we’re doing is, is looking at a particular company or a business, let’s say it’s a, it’s a large major or mid-major and they hire, they hire a new engineer, fresh out of college, that engineers, you know, he’s, let’s say he or she just got married.

(31:49) They got, they have a baby on the way. (31:51) They want to protect their job. (31:53) Do you know what they’re not going to do?

(31:54) They’re not going to take any risks. (31:56) They’re not going to try that new zone. (31:58) Or if they’re, they drill a well and you, you find multiple pay intervals, you’re going to access what you think is the best pay interval, but you’re not going to take any risks subsequent to that.

(32:07) And I don’t think a lot of people realize it’s like, like you said, there’s, you find oil in an oil field and there’s these massive oil fields that have been discovered with large companies and, and tons of tech dollars that have been pumped into it. (32:21) And there are just bypass neglected assets left everywhere from a 24 year old engineer that didn’t want to risk that other zone. (32:29) But guess what happens when a smaller operator comes in, cuts off X by 20% because I don’t have that same overhead.

(32:36) And I, instead of drilling a million dollar well for $50,000, I said, Oh, cast iron bridge plug. (32:43) I move up and I perforate a new zone. (32:44) So now all of a sudden there really is no risk.

(32:48) There’s very little risk. (32:49) I have a drilled well in an oil field that was already producing oil with a log that I can look at the resistivity. (32:58) I can look at the permeability and porosity.

(33:00) I can look at the gamma. (33:01) I can look at the SP. (33:02) I can see if there’s an RWA spike.

(33:04) I can read all of these, these, uh, all these indicators within this well and say, Oh yeah, for $50,000, all of a sudden we can make a $400,000 well. (33:15) And so, like I said, you know, that’s a, that’s a great case scenario, but in a lot of these neglected bypass assets, if you walk into it, asset driven, you’re protective over your capital account. (33:28) Um, it’s, it’s really, it’s the opportunity is there.

(33:32) It’s not as shot in the dark, you know, Hollywood risky as you think it is.

Speaker 3

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(34:11) Learn more at Texas freedom fund dot executive connect podcast.com energy opportunity and Texas grit working for your portfolio. (34:24) Yeah. (34:25) I think that’s a good analogy too, to correlate it back to one, one person’s risk is another person’s reward.

(34:34) And so switching gears, you’re a little bit on you here. (34:37) Now, most of, you know, you’re studied petroleum engineering, you’ve built other businesses outside of oil and gas from martial arts to pest control, to medical transport. (34:50) That’s quite a various different set of businesses.

(34:54) So what are things talk to me a little bit about what’s carried over, whether it’s martial arts or oil or bugs, what’s the carry through with all of these?

Speaker 1

(35:05) Yeah. (35:06) When you say it like that, it does sound, it does, it does sound eclectic. (35:11) You know, life, life is a life is such a zigzag.

(35:15) I think one of my favorite Steve jobs, Steve job quotes or speeches, but I think he was doing the graduation speech for it’s one of the Ivy leagues, maybe Stanford, or it, it, at one point he was talking about the life of an entrepreneur. (35:30) And he said, you know, life is life is such a zigzag. (35:34) And the reality is that while opportunities and deal flow and life seems like it zigs and zags, the, the lessons that you learn in the basic fundamentals of business are all kind of the same from business to business.

(35:50) Now looks a little different. (35:52) There’s different people. (35:53) The way I handled a bug tech is a little different than I handle a rough neck.

(35:59) But the, the, the concept stays the same that I, I respect both of them. (36:05) I want to pay well because they’re, you know, they’re an asset to my company. (36:09) I want to take close watch over my capital account.

(36:13) Like we said, I don’t want to get above my ski or beyond my skis to where (36:17) we we’ve over leveraged, but at the same time, you, you, you also have to take risks and, (36:23) you know, that in there, we calculated mitigated risks, you know, and I think, (36:28) I think some of the core discipline consistency, all of these core principles that we strive for (36:35) in business all the time, translate across, across the industry. (36:41) And I know Mark, Mark, I were talking the other day and I, I, we were talking about just, you know, what kind of, kind of people we want to be, what kind of men we want to be, what kind of businessmen we want to be.

(36:54) And I had mentioned to him, it’s like, you know, one goal I have this, this may sound overly simplistic, but one goal I have is to just not do a bad habit two days in a row. (37:04) Like that’s my goal. (37:05) If I, one day, let’s say, you know, I could have gotten a little bit more work done.

(37:10) Let’s say maybe I slept in a little too late this day, or let’s, you know, my goal being, I don’t want that to happen two days in a row. (37:18) And we, we sat and talked about that for a while at a, at a conference table. (37:21) And, you know, I started thinking about it a little bit more.

(37:24) And it’s really, it just, it just really boils down to showing up and being consistent and disciplined and doing hard things early. (37:32) And just in doing that every day, even if you’re bored or tired of it. (37:37) And so many businesses also, they don’t make it because you have this high energy entrepreneur, which I’m guilty of this.

(37:46) I’ve had to learn this. (37:47) You have this high energy entrepreneur that has all these ideas and implementation. (37:51) I can, I can solve anything and I can fix this.

(37:54) And then, or then you get bored of it. (37:57) You want to move on to the next thing. (37:58) And then the reality is doing the hard things early and staying disciplined and, and consistently just showing up and problem solving and handling life as it, as it comes as, and especially in the oil field, those have all been, those have all been huge things that I feel like have translated across every industry.

Speaker 3

(38:19) And I love what you said. (38:21) I think I’m seeing a lot of this lately is the companies that pour into their people. (38:27) And you, you said this right at the beginning, pay their people well, regardless if they’re a bug tech or whatever, if you treat your people, right, they’re going to treat your customers.

(38:38) Right. (38:38) If you don’t treat people, right, they’re going to treat your customers the way you treat them. (38:43) Cause it comes from the top.

(38:45) And so I love that you said that. (38:46) And you know, it, it made me, it, you know, I, I, I’m sitting here thinking, I’m like, okay, I’m not a bug person, but it, you know, that just keeps popping into my head. (38:58) So let’s talk a little bit about what these industries taught you that energy did not teach you.

Speaker 1

(39:06) Oh, that’s, that’s a great question as well. (39:11) You know, I, within, within oil and gas, there is a level of excitement. (39:20) There’s a level of riskiness.

(39:23) There’s a, I mean, you’ve seen, you’ve seen Billy Bob Thornton on land, man. (39:27) And you watch it, you watch a typical day in the life of Billy Bob and you think, man, and to be honest, there’s several scenes in that show that I was like, oh, that’s happened to me. (39:38) I’ve been there.

(39:39) I’ve seen that. (39:39) That’s absolutely, there is, there is, there are aspects where the energy world, there are things that happen on a day-to-day basis that I don’t, I don’t think happened in any other industry. (39:51) And that is part of it.

(39:53) There’s things that I have. (39:55) So I’m, I’m kind of reverse answering your question. (39:57) You asked what things have I learned from there?

(39:59) I can just tell you that in the industry, in the energy industry, there’s a lot of things you can’t unsee, you know, and there’s a lot of things that do happen that story I could tell you, you know, we could sit there for, for hours and I could tell you story after story, after story that that’s just not going to happen with my, my bug tech. (40:17) You know, now I will say, yeah, there was some times where, you know, muffin, the Chihuahua got out and bit one of my, my texts on the, on the ankle, but that was about as bad as it got. (40:30) And but so, you know, there’s the only other thing I think I could say that was different is in a lot of these other companies, whether it was, we bought built and sold a gym or pest control company.

(40:45) Some of these, some of these service companies where you’re focused on a particular customer versus just versus an investor or just an oil and gas asset. (40:55) And when you’re focused on customer service, I think that is a, that’s a completely different animal that it’s a whole another challenge in, in and of itself that you had kind of mentioned earlier as well, where now, instead of this, this oil field is the customer is the asset. (41:12) And now I’m pursuing, I’m trying to understand the customer the same way I want to understand the geology of a field.

(41:18) I want to understand how it works, how they work, what, what do they need? (41:22) How do I cultivate this? (41:24) How do I make this successful?

(41:26) What solution am I providing to them? (41:30) And so I just, I think it’s similar, but it’s, it’s definitely very different than, than you know, going out and drilling a well and trying to produce. (41:39) And also one more thing that just that popped in my head as well, I will say from the fundraising standpoint, oil and gas, oil and gas has an excitement to it.

(41:49) And so sometimes when you’re, you’re raising funds to start a new company, whether it’s non-emergency medical transporter, but you know, I, I, it’s a little bit, it’s a little bit more, I would say challenging on the fundraising standpoint, because oil and gas does have such a reputation.

Speaker 3

(42:06) Yeah. (42:07) And I, I think about, as you’re talking about Landman, I’m like, God, I wonder what my, my call would be to my husband. (42:16) What is my song when I phone him?

(42:20) Am I the wicked witch of the West? (42:22) Hopefully that is not my ring when I call my husband. (42:25) I know it’s not for his, for his, you know so that’s what I learned when I first started watching that.

(42:33) But now you’ve had delivered multiple exits and strong investor returns. (42:39) How do you balance growth with protecting the downside risk?

Speaker 1

(42:45) You know, that’s, that’s a great question. (42:47) So, you know, planning, planning for the worst, like we, like we mentioned earlier is, is important. (42:54) We can’t, we can’t operate in a capacity where we’re overly optimistic.

(43:00) And so I’m operating under the, under the mindset that, you know, we could have another COVID, we could, there could be a pandemic, we could have, you know, a downturn in, in oil prices, or we could have a, a lawsuit from a pest control treatment, something like that. (43:22) So planning, planning for the worst never hurts. (43:26) I mean, you’re, it puts you in a situation where you are ready for essentially, and in most cases, the inevitable.

(43:34) I would say also understanding your focus and your thesis. (43:38) It’s one thing Mark and I have talked about a lot in terms of even just the, the science of scaling, scaling a business or scaling a production or an asset, understand or understanding your focus and your thesis and not straying from that. (43:52) Almost putting blinders on to an extent because, you know, shiny new flashy things can pop up left and right.

(43:59) And you, you have to stay disciplined enough to focus on that, but also, and this is really the challenge, I think, in oil and gas, but also across the board for any executive or entrepreneur, while you’re trying to stay focused on your thesis, you also want multiple ways to win, create multiple ways to win. (44:18) And so there’s an, there’s a, there’s an avenue there. (44:22) And something I am still learning to this day and working hard to get better at is working on a solidified single focus, but providing multiple ways to win within that single focus.

Speaker 3

(44:36) Impressive. (44:36) I like that. (44:37) Have you, have you been successful with that?

Speaker 1

(44:40) Yes. (44:40) So yes. (44:41) So in particular, so the, the one of the newest endeavors that I’ve been working on is a non-emergency transport company called Reliant Rides.

(44:50) And it, it provides, it’s a B2B contract driven company that provides wheelchair van and, and stretcher van services to mostly the veterans, veterans hospitals and nursing home facilities. (45:04) With that company in particular, the, the focus and what we’ve pitched to our investors is that, you know, we are providing this particular service. (45:12) It is a contract, it is wheelchair van services.

(45:16) However, what ended up happening is in an attempt to secure some of these government contracts, like, like with the VA, for instance which allows us, allows me to not have to, you know, chase insurance and chase Medicare and Medicaid. (45:30) So I’m, I’m securing these government contracts. (45:32) What ended up also happening was we started looking into other government contracts within the cities that we’re deploying our initial soft launch.

(45:41) And we were able to find out that we could, we could offer in the world of transportation, shuttle services to workforce initiatives. (45:49) So in particular, let’s say Memphis, there’s, there, there’s a plethora of workforce initiatives happening in that city right now because there, a lot of people are pouring money into the city to try to help, help with some of the poverty, help with the low employment rates. (46:04) And what ended up happening now is there’s government contracts left and right coming in for transportation.

(46:10) And it allowed us, it allowed us to focus on our central thesis, which was providing non-emergency transport, but it’s just another way to win within that central thesis. (46:22) And that, you know, that it’s very tempting for me to show, oh, can we also offer EMT? (46:27) Can we also offer, so can I, what if we bought helicopters and did life flight?

(46:32) You know, it’s very tempting to try to procure different assets or different types of funding or different types of involvement there, but, but ultimately we really had to rein in and focus on this, this central thesis and, and it ended up working out really well for us. (46:53) And it’s also, we’ve, in addition, seen it work very well in oil and gas. (46:58) And one of those, you know, the well we talked about in Victoria, you know, there was, there were several low decline, conventional, semi-shallow assets that were, were low risk that we started to pursue and we’ve had success with.

(47:16) And, you know, while that’s happening, I’ve just got constant deal flow and conversations within the industry assets coming across my desk left and right. (47:26) And it is so tempting to say, oh yeah, we’re pursuing this one drill or this one field over here, but this asset just came across my desk and it looks exciting. (47:35) It looks great, but it does not fit what we’re trying to do.

(47:38) And, you know, it’s just one of the hardest things that I’ve had to learn is just learning how to say no.

Speaker 3

(47:45) It’s a full sentence.

Speaker 1

(47:48) It’s just learning to say no, just, just going, this isn’t fit our thesis right now. (47:53) It doesn’t fit our strategy. (47:54) And I need to dedicate, you know, my bandwidth and my time to, to the success of this particular project, man, sometimes that, that other field looks good, but you know, I just have to, I got to leave something for Billy Bob.

(48:09) I can’t take all the assets.

Speaker 2

(48:11) Something shiny.

Speaker 1

(48:12) Yeah, exactly.

Speaker 3

(48:13) And now that’s what you talk about doing the hard things early mindset. (48:17) What does that look like in your day to day?

Speaker 1

(48:21) You know, some of that is learning to say no, like we talked about it’s harder, it’s harder than you think, or at least harder for me. (48:31) It’s taken me quite a while to learn that having tough conversations with, with your team is, is very important. (48:43) In particular, just the time that I’ve worked with, with Mark, I’ve learned, I’ve learned quite a bit.

(48:50) Just Mark is a seasoned entrepreneur and investor, and we’ve worked together for quite a while now. (48:59) And we’ve had some hard conversations. (49:01) In fact, probably one of my favorite conversations him and I ever had that was extremely influential for me was him.

(49:08) He, he got onto me one day on a Zoom call and spoke some truth to me. (49:12) And I’m sure that was uncomfortable for him, but as a result, it turned into incredible growth for us as a company and, and for me as an individual. (49:21) So I think having some of these tough conversations, another big one too, is fixed, spending the time and effort fixing the process and not just looking for a workaround.

(49:33) That’s a big one. (49:35) And, you know, in really, really saying, if we want repeatable repeatable process, it would be so easy for me to just, Oh, well, let’s do it this way. (49:45) Or let’s, let’s find the easy way or the, the, the work around in this particular capacity, but you have, you have to spend that hard time right then working on that, solving that problem and fixing that process.

(49:57) Because then it really does create a scenario. (49:59) Like you did the hard things early and now things are easier after that, because you have a well-developed process as a result.

Speaker 3

(50:07) I love that. (50:08) Amen to that, Mark, getting on the call and giving them a piece of your mind. (50:12) I appreciate leaders that can do that.

(50:15) And it is a skill. (50:17) And so let’s ask Mark a question. (50:22) How do leaders build cultures that confront issues directly like you did with Nate?

Speaker 2

(50:29) You know, first, so I don’t come off looking like a jerk. (50:33) It’s always from a position of love, right? (50:36) Love you tons, Nate.

(50:37) Thank you. (50:37) You’re incredible. (50:39) But, but, but I think Brene Brown said it best healthy conflict, build strong teams.

Speaker 1

(50:45) Yes.

Speaker 2

(50:46) And, and you, you know, when you look at these patterns in life, if, if you learn how to lead and build a strong family, that’s the fundamentals for business. (50:58) You can’t build big business without being able to build a strong family. (51:01) It’s the same skillset.

(51:03) And, and if you’re not having quick, sometimes hard, right? (51:08) And they’re not hard conversations, right? (51:11) They’re hard until you’ve done them enough that you’re like, listen, my job is that I’ve just got to put a little conflict in here.

(51:18) But that conflict is for this positive outcome for, for, for growth, for streamlining, for, for alignment. (51:24) Right. (51:25) And, and core values are so overlooked.

(51:29) Right. (51:30) And, and, and, but really this is a skill that goes back to, to a family. (51:34) You establish core values in a family.

(51:37) Why? (51:38) Because we all run by them when we understand them. (51:40) Right.

(51:41) It’s about generational growth. (51:43) Right. (51:44) And, and, and so when you look at, at core values, if you can hire reward, fire, and coach around core values, right.

(51:53) That, that, that’s what creates culture. (51:55) Right. (51:56) And I think we’ve talked about this before, Melissa culture eats strategy for breakfast, but, but, but so many people are quick to get out of the door and start to build without putting the deep thought around it.

(52:08) And, and, and, and truly culture is as much as I want to say, here’s the core values of this company. (52:15) Well, that’s cute on a marketing brochure, but until you get that executive team in the door and you’ve built them, let’s go back to the family analogy. (52:25) Well, son, you’re the product of your five closest friends.

(52:29) Well, your core values are the product of your executive team. (52:33) Right. (52:33) So, so as you figure out what those are and you set the bar and you go, okay, here’s where the executive team is.

(52:40) Now you measure the rest of the company. (52:42) Are they above or below that bar? (52:45) Right.

(52:45) Do they get it? (52:46) Do they want it? (52:47) And do they have the capacity?

(52:48) And, and when you’re constantly measuring people up, not once a quarter, you’re constantly measuring people. (52:55) You’re looking at this, you’re having these conversations in your mind and that’s where coaching comes from. (53:01) Right.

(53:01) So, so might be received as hard or as conflict, but at the end of the day, man, I want you to be super successful. (53:09) The only way that I can make you super successful is that I’m 25 steps ahead of you. (53:14) And I know how to fix your next five, but you gotta be willing.

(53:19) And so it becomes a conversation. (53:20) People have to be open to it. (53:21) They have to want to grow.

Speaker 1

(53:22) And I was going to add to that more. (53:24) I feel like Mark does a great job of this, but it’s, it’s approaching these situations as a coach, not a critic. (53:30) Like you said, you’re not critique, you’re not critical, overly critical.

(53:34) Um, you, when you sit down and say, and you’re coaching somebody through something that comes across totally different. (53:39) But I think that’s, that’s how you, that’s, that’s how you grow. (53:43) You know, you have to do this.

(53:44) Yeah.

Speaker 2

(53:45) And I’ll give you the other side of the coin. (53:47) I’m brushing my teeth in the morning, bitching in the mirror.

Speaker 1

(53:50) Right.

Speaker 2

(53:51) And so I’m getting, I’m getting all the bad out so I can be, you know, that guy that everybody needs me to be. (53:57) But, but you’ve got human nature in you. (53:59) And that, that’s just that high emotional intelligence intellect, uh, which I try to strive to get better at all the time.

(54:06) Right. (54:06) You go back and see the 30 year old me, you’d get a different story. (54:10) Mm-hmm.

Speaker 3

(54:11) Yeah. (54:12) And you know, we’re all humans just try to do a good job, right? (54:15) I think it’s understanding that we’re all humans.

(54:18) We make mistakes, we have bad days, we don’t get the sleep. (54:21) And so the human side of the business, no matter which businesses trumps a lot of other things. (54:27) And so just treating people, you know, the way they want it, the way we want to be treated and in hearing them out is really a wonderful way to be.

(54:36) And so I appreciate you both sharing all your insights, Nate, I want to turn it over to you for any final thoughts. (54:42) And then Mark, I’ll let you close us out for any of yours.

Speaker 1

(54:47) Well, thank you, Melissa, for, for having us. (54:50) It was, it was, uh, you know, it was, it’s fun to talk about business. (54:54) It’s fun to talk about entrepreneurship and oil and gas.

(54:59) I, you know, if I could sum this up in any way, I would, I would say that there really is, um, there really is still a lot of opportunity in oil and gas. (55:11) And I think within this opportunity, um, I want to work hard to try to, uh, demystify the risk of this, of these assets. (55:24) And a huge part of that is, you know, obviously I could talk about being asset driven, but helping, helping investors understand that there’s, there is a, there’s not a shortage of oil.

(55:37) There is not a shortage of opportunity. (55:39) And this, for the most part, it’s really not a extremely risky play in any capacity. (55:46) And so, you know, I, I think with good geology, good engineering, great operator, um, there’s, there’s the possibility and potential for a lifelong family generational wealth still to be had with these assets that are, that are in our country.

Speaker 2

(56:09) Absolutely. (56:10) Uh, well, well, well said great, great insight, Nate. (56:13) You know, um, I, I hate to drag us down, but I’d love to talk about Billy Bob Thornton some more, right.

(56:18) And, and land man, Melissa, I think we ought to have a Nate on for a show and have like a real, not real, like, uh, people really get beat up by car team cartels. (56:28) You know, when they’re on the Mexican border and, and, and like, you know, what’s been Hollywood and what’s real. (56:33) I bet you a lot of people want to know that.

(56:35) I would love that.

Speaker 3

(56:36) Um, man, there was bringing, bringing your dad in, uh, for, uh, uh, physical therapy in the pool with, uh, a local professional dancer instead of a local professional doctor.

Speaker 2

(56:48) Yeah. (56:49) Yeah. (56:49) Yeah.

(56:50) Yeah. (56:51) Yeah, absolutely. (56:52) I I’ll, I’ll, I’ll leave that one there.

(56:56) Uh, you know, less Brown, um, had this statement that I used to make and it always stuck with me. (57:02) And, and he said, you don’t know what you don’t know, because if you knew what you didn’t know, you would know because to know and not to do is not to know. (57:12) I see partners, not ours and investors with an oil and gas getting in bad deals, losing money, getting their clock clean.

(57:23) Cause generally not one in a hundred knows what they’re doing. (57:26) And, and, and they get in there and they see these presentations and everything is always up into the right. (57:32) And it is a emotional decision, not something that’s based on understanding or education.

(57:40) This is the very reason that, that we wrote this white paper, oil and gas direct investments demystified because we got sick of seeing this out here. (57:51) You don’t ever have to do an oil and gas project. (57:53) You don’t ever have to partner with us, but if you were looking at oil and gas opportunities, please be our guest, allow us to enrich your life because the information in this report will not only make you millions, but more importantly, it will keep you from losing millions because you will understand the risk.

(58:12) You will understand the operator. (58:13) You will understand structures and you’ll be taught the four pillars of generational wealth creation within oil and gas. (58:21) Our gift to you, Melissa is going to give you guys a QR code and, and, and, and download it.

(58:27) We’ll always here to answer questions. (58:31) Literally no strings attached our gift, but if you do need help, reach out to us, right? (58:36) We we’d love to show you some of the things that we’re working on.

(58:39) They’re amazing. (58:40) And you’d get to work right next to to Nate as he pulls profits out of the ground for you.

Speaker 3

(58:46) That’s great. (58:46) What a great way to finish us today. (58:48) Thank you both for being here.

(58:50) That’s the executive connect podcast.