In this month’s miscellany of truncated articles, if there’s a theme, it’s the idea of seeing things from a fresh angle. These are the full versions of the “Drilling Deeper” news items that appeared as abbreviated versions in the print edition of PBOG’s October 2015 issue.
Schlumberger Acquires Cameron
Schlumberger Limited (NYSE: SLB) and Cameron (NYSE: CAM) announced in late August their definitive merger agreement by which the companies will combine in a stock and cash transaction. The boards of directors of both companies unanimously approved the agreement. Under the terms of the agreement, Cameron shareholders will receive 0.716 shares of Schlumberger common stock and a cash payment of $14.44 in exchange for each Cameron share.
Based on the closing stock prices of both companies on August 25, 2015, the agreement places a value of $66.36 per Cameron share, representing a 37.0 percent premium to Cameron’s 20-day volume weighted average price of $48.45 per share, and a 56.3 percent premium to Cameron’s most recent closing stock price of $42.47 per share. Upon closing, Cameron shareholders will own approximately 10 percent of Schlumberger’s outstanding shares of common stock.
Schlumberger expects to realize pretax synergies of approximately $300 million and $600 million in the first and second year, respectively. Initially, the synergies are primarily related to reducing operating costs, streamlining supply chains, and improving manufacturing processes, with a growing component of revenue synergies in the second year and beyond. Schlumberger also expects the combination to be accretive to earnings per share by the end of the first year after closing.
The transaction combines two complementary technology portfolios into a “pore-to-pipeline” products and services offering to the global oil and gas industry. On a pro forma basis, the combined company had revenues of $59 billion in 2014.
Paal Kibsgaard, Chairman and CEO of Schlumberger remarked, “This agreement with Cameron opens new and broader opportunities for Schlumberger. At our investor conference in June 2014, we highlighted how the E&P industry must transform to deliver increased performance at a time of range-bound commodity prices. With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency, which our customers increasingly demand, will outperform the market.
“We believe that the next technical breakthrough [in this industry] will be achieved through integration of Schlumberger’s reservoir and well technologies with Cameron’s leadership in surface, drilling, processing and flow control technologies. Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance.
“In addition, we will achieve significant efficiency gains through lowering operating costs, streamlining supply chains, and improving manufacturing processes while leveraging the Schlumberger transformation platform. We look forward to welcoming the talented employees of Cameron and are pleased that they will be joining the Schlumberger team as our fourth product group.”
Jack Moore, Chairman and CEO of Cameron, added, “This exciting transaction builds on our successful partnership with Schlumberger on OneSubsea and will position Cameron for its next phase of growth. For our shareholders, this combination provides significant value, while also enabling them to own a meaningful share of Schlumberger. Together, we will create a premier oilfield equipment and service company with an integrated and expanded platform to drive accelerated growth.
“By bringing together Cameron and Schlumberger, we will be uniting two great companies with successful track records, performance and value creation. We look forward to working closely with Schlumberger to achieve a seamless post-closing integration and long term value for all of our stakeholders.”
The transaction is subject to Cameron shareholders’ approval, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter of 2016.
Goldman, Sachs and Co. is acting as financial advisor, and Baker Botts LLP and Gibson Dunn and Crutcher LLP are serving as legal counsel, to Schlumberger. Credit Suisse is acting as financial advisor and Cravath, Swaine and Moore LLP is serving as legal counsel to Cameron.
Lesser Prairie-Chicken Not So Lesser
An abundance of spring rainfall, along with ongoing efforts associated with the Lesser Prairie-Chicken Range-Wide Conservation Plan, has helped increase the lesser prairie-chicken population approximately 25 percent from 2014 to 2015, according to results from a recent range-wide aerial survey.
Increases were observed in three of four of the bird’s ecoregions across five states—Colorado, Kansas, New Mexico, Oklahoma and Texas. The Sand Sage Prairie Region of southeast Colorado showed the biggest gain—approximately 75 percent from a year ago. The Mixed Grass Prairie Region of the northeast Panhandle of Texas, northwest Oklahoma, and south central Kansas saw an approximately 30 percent increase, and the Shortgrass Prairie Region of northwest Kansas population grew by about 27 percent.
“An overall 25 percent increase in the lesser prairie-chicken population across its five-state range is welcome news,” said Ross Melinchuk, chairman of WAFWA’s Lesser Prairie-Chicken Initiative Council. “This year’s increase, on the heels of last year’s 20 percent increase, is evidence of the species’ ability to rapidly recover from downturns as a result of drought and poor range conditions. With continued improvement in nesting and brood-rearing habitat associated with more abundant rainfall and private landowner actions to conserve and restore their habitat, we are optimistic the species will recover to historic population levels.”
The only ecoregion with a continued downward population trend is the shinnery oak ecoregion of eastern New Mexico and western Texas. This ecoregion is recovering from a prolonged period of drought. Recent roadside surveys indicate lesser prairie-chickens in this area are starting to respond to late 2014-early 2015 rainfall.
“We’re confident that with continued moisture and drought relief, next year’s shinnery oak populations should continue to recover,” said Bill Van Pelt, grassland coordinator for the Western Association of Fish and Wildlife Agencies (WAFWA). The nonprofit group is coordinating efforts established under the Lesser Prairie-Chicken Range-wide Conservation Plan, an initiative to engage private landowners and industry to conserve the birds’ habitat and minimize impacts to the species. To date, about 180 oil, gas, wind, electric, and pipeline companies have enrolled industry partners have about 11 million acres across the five states, and have committed some $46 million in enrollment and mitigation fees to pay for mitigation actions. Enrollment fees are deposited with WAFWA and administered to fund conservation efforts by private landowners to benefit the lesser prairie-chicken in the five-state region. Meanwhile, landowners across the range have agreed to conserve nearly 100,000 acres of habitat through 10-year and permanent conservation agreements.
Companies, landowners, farmers, and ranchers may still enroll in the range-wide plan and receive regulatory assurances that their operations can continue under an accompanying certificate of participation. Participating companies pay enrollment fees, allowing them to continue operations under certain restrictions while providing funds to conserve prairie-chicken habitat.
The lesser prairie-chicken was listed as threatened under the Endangered Species Act in May 2014. The final listing rule allowed private industry to develop and impact habitat if enrolled and participating in WAFWA’s range-wide plan, and it also provided various options that landowners can use to receive similar coverage. The range-wide plan provides incentives for landowners and industry to protect and restore habitat, which is important because they control much of the bird’s range.
Organized in 1922, the WAFWA represents 23 states and Canadian provinces, from Alaska to Texas and Saskatchewan to Hawaii—an area covering nearly 3.7 million square miles of some of North America’s most wild and scenic country, inhabited by over 1,500 premier wildlife species.
More information, including the range-wide plan, is available on the WAFWA website at wafwa.org.
GLO Out to End “Sue and Settle”
Texas Land Commissioner George P. Bush has joined forces with land commissioners from Wisconsin to Hawaii to stop environmentalists from taking advantage of American taxpayers. “The Endangered Species Act was designed to preserve biodiversity, not enrich trial lawyers and political activists,” said Bush. “So we’ve joined with our Western allies to put an end to ‘sue and settle’ and force the Obama administration to be up front with the American people. It’s time to prioritize scientific assessments in conservation when dealing with property rights and our national security.”
The Western States Land Commissioners Association, or WSLCA, met this summer at its annual conference in Moab, Utah. The group unanimously approved a resolution, brought to the meeting by Commissioner Bush, which calls out “sue and settle” and calls on Congress to reform the Endangered Species Act to end the questionable practice. The resolution also calls on the U.S. Fish and Wildlife Service and the National Marine Fisheries Service to take local and state data on wildlife into account before listing a species as endangered. Under a little-reported provision of the Endangered Species Act, environmental groups sue the federal government to get a species put on the endangered list. The government often settles the lawsuits, and then pays the groups’ legal expenses. The result of this arrangement is that species get listed as endangered with little to no scientific data to justify it, and the green groups rake in more green in the form of taxpayer dollars.
“Sue and settle” has also led to a flood of litigation, with some 120 species currently under review. The green groups’ tactic, known as “sue and settle,” lines environmental groups’ pockets by looting the national treasury.
Additionally, when a species gets placed on the endangered list, its habitat can become severely limited or ruled out from use and development, reducing property values and in the case of Ft. Hood, Texas, harming military training. In a statement issued in July, for instance, Ft. Hood commander Lieutenant General Sean MacFarland noted that listing the golden-cheeked warbler as endangered has hindered base operations, and de-listing the bird would benefit training. Ft. Hood, located in Central Texas, is the stateside hub of the global war against terrorism.
“If the Endangered Species Act was used as intended, we would utilize it to preserve species and we would celebrate when one gets taken off the endangered list,” Commissioner Bush added. “Some in the media seem to believe that having a species removed from the list is terrible, but it’s really a victory for ranchers, farmers and conservationists. It means that the animal is thriving.”
WSLCA stretches from Wisconsin in the north to Louisiana in the south, and across the American west including California, Alaska and Hawaii. The full resolution may be examined here: http://www.glo.texas.gov/wslca/pdf/resolutions/WSLCA-Resolution-2015-03-ESA.pdf.
New “Swing” Producer That Sets Global Oil Prices?
The emergence of shale technology, particularly in the United States, is dramatically challenging the conventional rules of the global oil markets, says Olivier Appert, President of the World Energy Council French Committee. Shale could become be the new “swing” producer in setting the price of oil on global markets. Says Appert: “For the last 40 years, OPEC has been the major player in setting global oil prices because of its location within OPEC Countries, most specifically in the Middle East. It has been the ‘swing’ producer, increasing its production when markets are tight, and reducing quotas when there is over-supply. However, in the last few years, with the advent of non-conventional shale oil and gas production in the United States, the dynamics of the global market could be about to dramatically change.”
Every two years, oil production in the US has increased by 2 millions of barrels per day, the equivalent of Norway because of increased shale supplies. As a result oil supplies are surpassing demand by one or two millions of barrels per day.
Against this background, OPEC held meetings in November 2014 and June 2015 where it decided to maintain its level of production in order to keep its market share, which has led to the price of oil dropping by 50%. However, despite a significant reduction of investments by oil companies, production in the US has remained almost stable thanks to an important reduction of costs due to an increased efficiency in the production process. It is against this background that, much to the surprise of many observers, that shale production has not fallen significantly.
“The question that these new market dynamics raises is ‘Are we entering a new paradigm of the oil market?’” says Appert. “Up to the seventies the market was dominated by the famous ‘Seven Sisters,’ the well – known most important International Oil Companies.
After the oil shock in 1973, OPEC took a leadership position, but today when we look ahead, it is possible to see that OPEC will no longer hold a dominant position.
“With the role of shale producers in the US becoming more predominant, they may become the ‘Swing’ producers in setting global market prices.”
What Success Looks Like
By Nathan Jamail
Success can be defined in a number of ways. If you look up the definition, you will find several that you may agree with: the accomplishment of one’s goals; the attainment of wealth, position, honors; or achieving your goals. All of these definitions are correct—and none of them are. When it comes to success, there isn’t a set in stone definition for two reasons:
It depends on whom you ask
- It is ever-changing
In order to “obtain” success, you need to know what success looks like for you. Without having your personal definition of success, how do you know what to shoot for? When you fail to clearly define success, all goals and activities remain fuzzy and unclear—making them more difficult and in some cases impossible to achieve.
John Langcuster, a vice president with a Fortune 500 insurance company who leads hundreds of people in daily operations, feels that “Success is achieved by having a great leader. One who knows how to recruit, practice on a regular basis, execute, and, most importantly, achieve results. Both the leader and team rely on a ‘teamwork’ approach with a very strong belief system that a goal can be achieved. Also, consistent behavior breeds success.”
Ken Smith, Vice President with Georgia Pacific, states, “Success in the professional world is when you build a winning culture. Without having the right culture, strategies break down or lose every time. As I once heard, ‘Culture eats strategy for breakfast.’”
If the question, “What does success look like?” were posed to you, right now, what would your answer be? Would it look like a cookie-cutter definition from a dictionary? Would it look similar to these successful executives? What factors contribute to your answer? Work? Family? Personal? All of the above?
One way to look at success is to wake up in the morning feeling inspired and excited and to go to bed feeling content and grateful. Your definition of success might not change daily, but the sense of achieving success can change as fast as the weather in Texas. A bad day, a good morning or a great phone call can take you from one side of success to the other. With that being said, much like happiness, success is a state of mind more than a destination. It may look different for many people and may differ in achievement based on personal or business definition, but to achieve your desired success there are 3 key principals that you must implement:
1. Cultural Laws
Like Ken Smith says—“Culture eats strategy for breakfast.”
A person must have cultural or personal laws that support their goals. The word law is important because we must view all behaviors and beliefs that contradict our definition of success as breaking the law. The greatest enemy of achieving success is allowing those that don’t agree or support that belief to break the cultural laws. Many times these infractions are small in action and have a very limited immediate consequence, but make no mistake: although the consequences are not immediate, they are immense and can be devastating to the achievement of success.
2. A clear understanding of success
There are two key aspects of achieving success. First, a person must be able to understand their vision of success so they can share it with others to inspire like-minded individuals to stay the course. Once it is visualized or communicated, a game plan must be implemented and given to everyone involved that contains key activities with measurable results. This is the difference from making a New Year’s Resolution to lose weight and a dedicated decision to live a more active and healthier life. One is a decision that has commitments, beliefs and key actions, while the other is an empty goal that is based purely on a short-term desire.
3. A desire and never-ending commitment to achieve it
The majority of society desires success, but very few are willing to do what it takes. Achieving great success in life or business will require great sacrifice, constant focus, humility to learn, and confidence to challenge. In many cases, a sense of blind optimism is required when dealing with seemingly insurmountable obstacles. No matter if one’s success is being a great husband, or wife, or boss, or employee, it requires great sacrifice and a selfless mindset. Achieving success is realized when a group of people are so committed and passionate about achieving their goals that no obstacle or situation can stop them. No matter what, win or lose, they stay committed to achieving their defined success. They have the desire that can outlast any resistance.
Success can be described as when a person’s purpose is aligned with their actions. In business as in life, one must remain positive while in search of success, and understand that once one level of success is reached, it is not the end, rather is the starting point for the next great achievement. At the end of the day, success is what one person makes it—what one believes. The level of achieving that success is determined by what one does to earn it. No matter the definition, everyone can agree that success is earned and not given!
ABOUT THE AUTHOR
Nathan Jamail, president of the Jamail Development Group, and author of the best-selling Playbook Series, is a motivational speaker, entrepreneur and corporate coach. As a former Executive Director, life insurance sales professional, and owner of several small businesses, Nathan travels the country helping individuals and organizations achieve maximum success. Nathan has worked with thousands of leaders in creating a coaching culture. Get your copy of Nathan Jamail’s most recent book released by Penguin Publishers, “The Leadership Playbook” at www.NathanJamail.com.
Unleash Innovation, Improve Work Culture
Investing in people yields exponential results. Getting your people to contribute more to your organization while simultaneously establishing stronger talent retention must cost a pretty penny, right? Not really, says corporate coach Maxine Attong. “You don’t necessarily need to add expensive new ingredients to the stew, you just have to know how to use your ingredients better,” she says. “A talented chef—or, in this case, corporate or organizational leader—knows how to let an ingredient speak for itself, perhaps with just a touch of seasoning, or guidance.”
What is the guidance—competition or incentives such as bonuses? Not exactly. “Most employees want to have more input,” says Attong, a certified facilitator and author of Lead Your Team to Win: Achieve Optimal Performance By Providing A Safe Space For Employees (MaxineAttong.com). “However, personal issues, fear of being laughed at, or anxiety of not getting credit can stymie contributions from a leader’s staff.”
If a leader can engender a real sense of trust, the organization will benefit both from the individual and the team’s ingenuity. A reliable way of establishing a trusting climate is to make team members feel safe, says Attong, who offers five steps for doing so.
• Share responsibility; practice “I” statements: With openness, encourage interaction by having team members and leaders enforce the rules and monitor the use of common space. When members break the rules, the team discusses the problems and decides on the sanctions and steps necessary to assist the member in following the rules next time. Speakers are discouraged from using the word “you.” Instead, they use “I.” This simple yet effective practice encourages personal culpability and discourages blame.
• Consistency: Teams need to consistently follow the agreed-upon rules as they set the boundaries and the tone for relationships. Following the rules makes the behavior in the space predictable, which limits uncertainty and increases feelings of safety. Consistent application of the rules helps the team to increase trust as behavior becomes prescriptive and members know more or less what will happen in the room and how they will be treated.
• Judgment: The members must feel that they are not being judged. If someone says that an idea is bad, the speaker will shut down and feel embarrassed. In the future that speaker will hesitate to give ideas, since he feels his ideas may not be good enough for the team. Less confident team members may refrain from presenting ideas if they are uncertain of the quality of the ideas. However, many ideas that may seem strange or unorthodox at first can wind up being some of the best.
• Good intentions: Not all team members are effective communicators so it may be difficult for some people to frame and cogently express their thoughts.
“I assume all team members have good intentions and want a positive outcome,” Attong says. “Even though what I am hearing may be contrary to that assumption, I hold on to the thought so that I am able to fully understand what the member is saying before I react.”
When listening this way, the leader delays having a reaction and has time to assess the situation before responding. When the leader has emotionally detached from the situation, he can then ask questions to clarify the situation.
• Norming: By this point, team members seem to embrace each other and there is a spirit of togetherness. Do not be fooled by this. This doesn’t mean that your team has normed—that each team member makes decisions that advance the goals of the team. It means that the safe space concept has allowed them to see each other in a more neutral light and accept each other’s strengths and weaknesses. While the space may act as an accelerator or catalyst for the team to norm, it is not magic. It does not mean that whatever problems existed within the team before have miraculously disappeared. The leader still needs to pay attention and check the team temperature. Regular team meetings and team building sessions should still be conducted.
About Maxine Attong
Maxine Attong (www.MaxineAttong.com) has been leading small and large teams for the past two decades–both in organizational settings and in her private coaching and facilitation practice. She has helped organizations come to consensus, overcome the perils of ineffective leadership, redesign processes to suit changing environments, and manage the internal chaos inherent in strategy implementation. She has been trained as a Gestalt Organizational Development practitioner, a Certified Evidence-Based Coach, a Certified Professional Facilitator, a Certified Management Accountant and is a former Quality Manager. Attong is a graduate of the University of the West Indies, and divides her time between the Caribbean and the United States. Her latest book is Lead Your Team to Win: Achieve Optimal Performance By Providing A Safe Space For Employees.
How O&G Holds a “Silver Lining”
Mark F. Butler, founder and president of Gulfstar Corporation, believes there is no shortage of oil after all. Petroleum, which is the life-blood of many economies, continues to experience depressed pricing. Adding to that, the United States is sending so much manufacturing to China, and in turn China devalues its currency. Then add in the 17 trillion dollars of our national debt, and Butler feels the United States may have a problem.
“However, there is a silver lining for those part of or investing in a transportation company,” says Butler. “This is an amazing time of prosperity and unexpected windfall. The profit margins must be very exciting to the management of these companies, and I believe these managers will seize this opportunity and pay down debt and investor obligations, strengthening the already impressive balance sheets. Maybe later in the year someone with astute mathematical clairvoyance could secure the companies’ future by hedging their oil requirements, taking advantage of the current depressed pricing. A major U.S. airline did just that years ago and in turn enjoyed phenomenal prosperity for many years.”
“Now the dark cloud,” continues Butler. “If you are in the oil and gas business there are currently many challenges, unless your firm is adequately capitalized for the long term and even that may not be enough. For example, if your cost to produce is $63.00 and the market price is $42.00, it is just a matter of time for the end to come as an industry wiping out billions of dollars in capital.”
Mark F. Butler is the founder and president of Gulfstar Corporation in Cheyenne, Wyo. This company was organized as an oil and gas investment firm in June of 2007. Also, Butler has 32 years experience in the securities industry as a stockbroker, and later as a financial advisor. His interest is to build this brand into a major investment firm specializing in restructuring, capital formation and acquisitions with both domestic and international clientele. Contact Mark F. Butler at 888-980-9902.
A Balanced Life Is A Better Life
Life sometimes can seem off-kilter as responsibilities mount and people plow all their physical and mental resources into what seems to be the most pressing crisis of the moment.
But Lumbie Mlambo says that’s a good time to take a step back. Everyone has the potential to shine in life’s darkest moments, but the key to achieving goals and an overall better existence is to maintain a balance so that one aspect of your life isn’t consumed by another.
While some people might say balance in life is an impossible goal, she disagrees and says when each of us find our equilibrium, we become more productive and a greater asset to our communities.
“There’s balance in everything we do, be it walking, talking, eating, sleeping, working or spending time with family,” says Mlambo, editor of Equanimity Magazine (www.equanimitymag.com), an online publication that features inspiring stories of life and success.
“For example, look at how we try to deal with our work-life situation. We balance our workload so that we can still make room for other activities, to spend more time with our spouses or our children. We do that because we understand how important it is.”
She offers these reasons for why living a balanced life is essential.
• The health factor. Staying balanced is a key to a healthier and successful life. Both mental health and physical health benefit from this balance, and as a result, so do our overall lives. “When we’re healthy, we’re able to care for ourselves and others in our community,” Mlambo says.
• The empathy factor. When we find balance in life, we can better understand the importance of helping the underprivileged, says Mlambo, who grew up in a rural area in Zimbabwe. You begin to realize that someday you could be in their situation, which makes you a more empathetic person. “Your economic situation is like your health,” she says. “Nothing is guaranteed.”
• The role-model factor. Sharing our stories–whether it’s a tale of success or even a tale of failure–is important because others can learn from us or be inspired by us as they too strive for a balanced life. “When you tell your story, it empowers, motivates and encourages people to not give up on their dreams and goals,” Mlambo says. “Maybe you think your story is just not that interesting or important. But for someone out there, it may be the spark that ignites them to great things.”
Mlambo always strove to find balance in her life. But she became even more passionate about it after she suffered a stroke in 2001 that left her partially paralyzed. She since has recovered, but says the event had a profound impact on her and she will always consider herself a stroke patient.
“Before the stroke, I thought my life was balanced in a way,” she says. “I mean, I ate healthy foods. I exercised seven days a week. But it was not balanced in the way I wanted. I had been too focused on myself. I realized that life was not just about me, but about others.”
Finding balance in life isn’t just a feel-good concept, Mlambo says. As people achieve balance, they realize they have the potential to rise above their circumstances. They can become more productive in their communities and that is good for everyone.
“Staying proactive and shifting the way we think can even help the economy to grow and can help create more jobs,” she says.
Certainly, maintaining a balanced life may be tougher than ever because technology allows work–emails, text messages, telephone calls–to intrude on others’ “off” hours. But that’s just all the more reason to make a concerted effort to strive for balance, Mlambo says.
She says it’s become popular in some circles to argue that a balanced life is a myth and can’t be achieved. But regardless of their views, she says, most people seem to be trying to bring balance to their lives, even if they don’t think of it that way.
“We eat healthy to stay balanced, we get enough sleep or rest to avoid stress, we juggle our daily activities to stay balanced,” Mlambo says. “To be successful in anything we do, we must have some sort of balance.”
About Lumbie Mlambo
Lumbie Mlambo is editor of Equanimity Magazine (www.equanimitymag.com), a lifestyle publication that shares the stories of “real people and their search to lead better lives.” She also has a background in project management, computer/software engineering and business analysis. She holds an associate degree in computer science from Indiana University South Bend and a bachelor’s degree in computer science and mathematics from Texas Woman’s University. She is multilingual, speaking English, Zulu, Ndebele, and French.