Persistence is Essential, Never Give Up
It is May and summer is upon us once again. Take advantage of the weather and get in a little golf or bike riding now! In July you won’t want to get out of the pool! The AAPG Convention is past and we are already planning the 2011 AAPG Convention. As I am sure you are aware, the 2011 AAPG Convention is in Houston, hosted by none other than the HGS … in other words you! We are going to need a lot of volunteers to pull this off. To find out what you can do please contact Linda Sternbach at firstname.lastname@example.org or our volunteer coordinator Sue Pritchett at email@example.com. They will be able to get you in the right group.
The March 17th MMS lease sale proved yet again that the rumors of the death of exploration in the Gulf of Mexico have been greatly exaggerated. In the Central GOM Lease Sale 213, 642 bids were received on 468 leases, an increase of 34% over the 2009 Central GOM Sale. The sale had 949 million dollars in high bids. The GOM has no shortage of exploration potential. In fact, the geologists in the companies I have talked to stated that the real problem was not that they had no prospects to bid upon but that they had too many for the amount of money their company had allotted. This resulted in extremely high-grading of prospects. Indeed some of the better prospects were dropped out of fear that they couldn’t bid enough to get them. One company even said they cut back on all exploration and lease sale funds because they had such tremendous exploration success in 2009. That’s right, they said they had so much success they no longer have money for exploration. The truth is that many companies pared back their lease budgets this year for any number of reasons. We geologists all know how extremely short-sighted that is. Unfortunately most companies are not run by geologists. Companies are always boasting they are going to “Grow through the drill bit”. It is a catchy phrase: the bankers and stockholders love it; it looks great in print, and makes the CEO sound bold. Unfortunately, like the “think outside the box” expression I mentioned a few months ago, they don’t really mean it. ”Growing through the drill bit” means upfront expenditures for things like…oh, I don’t know… leases, maybe? These expenditures may never bear fruit and therefore have an element of risk associated with them. It seems fairly straightforward that you can’t grow through the drill bit if, to mix metaphors a bit, you don’t step up to the plate and obtain leases upon which to drill. Perhaps they know a way around that, but I can’t imagine what it is. There again, I am just a geologist trying to find oil and gas.
Many geologists, who present prospects only to have them turned down, quite often for non-geologic reasons, may feel a bit discouraged. That is understandable. The trick is not to give up. We have to look at ourselves as Columbus trying to find the ‘New World’. His biggest struggle was not in the voyage but in trying to find political and financial backing (sound familiar?). He had to convince the people in power that his idea had merit and that the potential reward far outweighed the risk of failure. In other words he had a great P-10! Still it took him seven long years and presenting to no less than six monarchs to obtain the backing of a government. He had already lined up investor backing to defray more than 50% of the cost. While he may not have discovered a new route to Asia, one could hardly call his voyage a failure. The point is, he didn’t give up. I once had a prospect that I presented for four years straight only to have it turned down every time. That company was purchased by another oil company (shocking, I know) who turned it down as well. I changed companies and finally got a taker! It had taken over six years and three different companies but I had my prospect. Fortunately for me the well came in and I received royalties for the next ten years. Perseverance, along with thick skin, is absolutely essential for exploration geologists. We must “endeavor to persevere”! Companies may not always listen to your arguments; in fact they may turn down the majority of your prospects. But that does not mean they are bad prospects. Quite often it means that the company is trying to spread out its risk or finances or adhere to some big five-year plan conceived by people who wouldn’t know a rock if it fell on their heads. Don’t give up.
Endeavor to persevere.
There is an old saying that you can lead a horse to water but you can’t make him drink. I would add that if you keep leading the same horse to the water and he won’t drink, you either have to find a different pond he will drink from... or get a new horse. Happy Hunting!
From the President- May 2010
Persistence is Essential, Never Give Up