Launching a successful oil and gas business can be a challenge during the best of times but starting one up in the past several years has been proven particularly tricky.
Rollercoaster commodity prices, a shift to renewable energy and heightened governmental regulations are among the challenges companies have navigated. Throwing a global health crisis into the mix has only added to the volatility, but shaky times haven’t discouraged ambitious, new companies from starting up and standing out.
Whether they’re tapping into established relationships to succeed or utilizing new technologies in tried-and true basins, new companies are emerging with innovative ideas on how to make the industry more productive, strategic and collaborative.
From family-run operations to longstanding professional partnerships, three growing companies in three thriving basins have shared how they’re navigating challenges, adjusting to evolving standards and remaining competitive.
Leveraging Experiences
Petroleum engineer turned successful executive Don Dotson has big goals for Vencer Energy LLC, the new domestic, upstream startup company he leads, as it grows its presence in the Midland Basin.
“Starting Vencer has been both fun and challenging, as you’d expect when forming a new venture,” Dotson, President and CEO. “Although Vencer is early in its life cycle, our team has a lot of expertise, motivation and confidence that we will succeed at building a sizable, profitable and respected company that provides a best in-class work environment with a rewarding culture for our employees.”
Vencer was launched in July 2020 with backing from Vitol, one of the largest energy and commodities trading firm in the world, with the mission to acquire mature, economically accretive, producing oil and gas assets in key basins. The company’s overall approach is to target scalable, operated assets with long-life reserves and low-base decline rates. Its goal is to generate “exceptional returns” through low-cost undertakings and strategic management.
Vencer executives rapidly mobilized a highly skilled organization in less than four months and have shown tangible results by leveraging their decades of combined experience to position the new company for growth as a largescale, reputable oil and gas enterprise.
In April 2021, Vencer announced its first acquisition to buy Hunt Oil Co.’s Midland Basin assets. The assets encompass 44,000 acres across five Midland Basin counties and daily production reaching about 40,000 boe/d, with plans to expand its Permian Basin presence through strategic business development efforts, exploitation, and an aggressive D&C program.
Dotson elaborated on his key focus areas when developing the organizational structure. “Of most importance, the Vencer team must have a diverse and significant amount of expertise and experience in all facets of the oil and gas space,” he said. “Possessing this, we can draw on our commercial, analytical or data driven and operationally focused approach along with administrative strengths to optimize our operations and successfully execute our projects. Teamwork and collaboration are also essential contributors to success.”
Ben Marshall, head of Americas at Vitol, said the purchase would help establish Vencer as a significant shale producer in the nation.
“We expect U.S. oil to be an important part of global energy balances for years to come, and we believe this is an opportune time for investment into an entry platform in the Americas,” Marshall said in a statement. “Vitol has a long history of investing in quality upstream assets, and we are pleased to add this business to our global portfolio. This acquisition represents an initial step to building a larger, durable platform in the U.S. Lower 48.”
Dotson is banking on the belief in long-term rewards beyond the ongoing COVID-19 pandemic, despite some critics predicting an impending shift toward renewable sources of energy.
Dotson, who’s been working in the oil sector for more than three decades, said demand for oil is likely to grow as economic growth continues. “Many of us who have been through multiple cycles are optimistic as we see the building blocks in place for strong demand while supplies have some uncertainties. Most companies haven’t forgotten the lessons learned during the last downturn and are being strategic and disciplined with their development capital. This is assisting greatly by providing a measured approach to supplies and ensuring the recovery of our industry.”
Dotson began his career as a petroleum engineer at Amoco Production Co. before joining Samson Resources and Samson International, where he transitioned into management.
As the leader of Vencer, he said he’s hopeful to build a company “that is recognized by our investors and industry partners as an organization that creates value through strategic acquisitions, focusing on optimal operational practices and executing accretive capital projects.
“We aspire to be a top tier company in ESG [and] safety and regarded as a partner and employer of choice. We’ve started with exceptional staff, great assets with significant upside and have entered at what we believe is the optimal time in this cyclical business to maximize any basin in the Lower 48.”
He added, “Our company name, Vencer, means to overcome. Although we anticipate there will be bumps in the road, external factors we cannot control and lessons learned, we expect and believe that we’ll achieve success in the oil and gas industry for the benefit of our investors and staff.”
