With a flurry of activity, both friendly and less-so, Basin operations are slowly but increasingly beginning to resemble the booming Basin we are used to.
Energy is Priority for American Voters
API President and CEO Jack Gerard highlighted the importance of American energy ahead of the first presidential debate. Gerard’s full remarks, as prepared for delivery, from the Sept. 26 press conference call are available on API’s website.
“When it comes to securing America, the United States’ status as the world’s leading oil and natural gas producer is a game-changer. With steady U.S. supply adding stability to world markets, the influence of less stable regions on fuel costs is diminished.
“Voters identify the economy and jobs as their top election concern, and the American energy revolution’s role in economic growth should ensure that it’s a focus in tonight’s discussion. Last year American drivers saved, on average, over $550 on transportation fuel costs, along with significant savings on home heating and electricity costs. When lower product costs and other savings are factored in, Americans households have an extra $1,337 per year in the bank due to shale energy production. Those are major savings that have a real impact for family budgets.
“Our nation’s leadership on these critical issues happened largely through American ingenuity, American innovation, and free markets. If the President’s 2008 campaign message was ‘Yes, we can,’ America’s oil and natural gas industry in 2016 can say ‘Yes, we did.’ Not only is the United States the largest producer of oil and natural gas in the world, we are leading the world in reducing carbon emissions—which are at 20-year lows.
“Whatever the outcome [of the debate], the American people have already cast their ballot for energy. Seventy-seven percent of voters support increased production of U.S. oil and natural gas. Eighty-two percent support increased infrastructure development, which keeps affordable energy moving to homes and businesses, and could generate $1.14 trillion in capital investments and support as many as 1.15 million jobs.”
API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 650 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 30 million Americans.
Craddick on Permian Importance
Railroad Commissioner Christi Craddick spoke in September to the West Texas Geological Society at its annual fall symposium in Midland. Commussioner Craddick highlighted the past, present, and future importance of the Permian Basin to the Texas energy industry. The technical group meets annually to discuss research, studies, geological analysis and developing technologies in the region that will further the development of one of the country’s most significant oil and gas basins.
“The Permian Basin’s current and potential production, for Texas and our nation, is truly invaluable,” Craddick said. “This oil rich region enables us to meet our domestic energy demands with reliable, affordable energy for consumers. Without a doubt, the Permian Basin is responsible for catapulting the U.S. into the role of the world’s top oil producer, providing us greater national security by reducing our reliance on imported sources of oil. Essential to this success is the skilled workforce and vast technical expertise of the West Texas Geological society and the region’s industry members.”
Christi Craddick was elected statewide by the people of Texas in November 2012 to serve a six-year term as Texas Railroad Commissioner. A native of Midland, Christi is an attorney specializing in oil and gas, water, tax issues, electric deregulation, and environmental policy. To learn more, visit www.rrc.texas.gov.
Habit Formation and O&G
By Luca Passaleva, Oil & Gas Commercial Director, GE’s Marine Solutions
As human beings, we are creatures of habit. We quickly adapt to routines and like things a certain way, ordering our favorite dishes off the menu to avoid disappointment for example.
The same can perhaps be said of the oil and gas industry. We know this is a cyclical industry with peaks and troughs. For the past two years, we have been stuck in the trough part of the cycle, as oil prices have gone through a period of volatility. Still, at every level of an organization, we all need to focus on what we can control. Only then can we navigate through this challenging time and emerge stronger. As an industry, we need to increase efficiency while maintaining safety and keeping costs under control.
The current state of play of industry regulation
Great steps have been made through advances in technology and the introduction of digital industrial solutions, however the potential to improve productivity further remains vast.
One challenge that equipment manufacturers face in the oil and gas industry is the differing engineering standards and product specifications of end users. Each operator on the market has its own customized standards by which it works.
Embracing manufacturing standardization, particularly during a down-cycle period—such as the one we’re in now—would lead to higher-quality products, better productivity, increased reliability, shorter delivery time and most importantly, lower costs.
A lack of industry-wide standardization means that a large amount of time and money is spent tailoring solutions to each customer’s specific requirements. For example, the aviation industry has benefited heavily from industry-wide standardization—it is regulated in such a way that all manufacturers must comply with centralized FAA standards. This means that when an aircraft manufacturer purchases an engine, they know they’re getting a product that meets industry-wide regulations.
Simplifying and standardizing the oil and gas industry
Operators, OEMs and partners are looking at new ways to achieve a unified goal—keeping costs under control, mitigating risks and injecting speed and efficiency in the industry for the long term. From innovative commercial models to closer partnerships and new collaborative frameworks from the early stages of a project life cycle, there is a lot going on in this sector.
Designing and implementing manufacturing standards would further benefit both end users and providers alike, bringing a number of advantages, such as:
- Enhanced operational excellence—manufacturers would have a part to play in the safety, production, and usage of products, making for a more streamlined operation, with the common aim of operational excellence.
- Consistency and repeatability—the largest cost-reduction opportunities exist where we can make strategic inputs, reusing parts and redefining standards and designs to build business relevance, flexibility, and agility. Strategic inputs are where we deliver real value and leverage collaboration to make fundamental process changes.
- Shorter production cycle and on-time delivery—standardization would result in productivity gains, therefore enabling operators and suppliers working to establish more accurate timeframes for delivery and installations. Standardization would drive further collaboration, support, and build better relationships between operators and suppliers.
The low oil price environment has put pressure on the industry to drive down cost. Now is the time for the industry to come together, agree on standards and simplify the way we work. If that were to happen, we could all benefit during a future upturn in the oil price.
If you wish to continue this conversation, please visit the online community Tech Talks.
Mastering the Mastermind
By Elizabeth McCormick
The mastermind concept came from an admirer of industrialist Andrew Carnegie. Napoleon Hill described the idea in his 1937 book, Think and Grow Rich, but the mastermind plan adapts to many forms of business networking, not just entrepreneurs, as originally foreseen. The principles of a mastermind group can apply to any employee or workplace group aimed at continuous improvement and personal development.
A mastermind is a group of individuals devoted to mutual support, a sort of mentorship-in-the-round, where each member plays both the role of mentor and mentee. The focus is on enabling the success of others, while in turn drawing on the resources of the group for oneself. As Hill saw the concept, he applied it to business owners who were otherwise on their own. This remains a very effective application for broadening knowledge and experience horizons.
Applied to the workplace, the mastermind structure suits groups of supervisors or department heads, those facing similar challenges yet with differing circumstances. The philosophy of the mastermind suggests a new approach to group dynamics over traditional workplace units. However, for those devoted to gaining a competitive edge, membership in an effective mastermind provides a fast track to success.
Why Should I Join? What Can I Really Expect to Gain?
This is the critical question, isn’t it? The “what’s in it for me” factor. While that might seem cynical, there really isn’t a point in being involved if you don’t feel you can gain from the experience. That’s obvious. But the point on which many such groups falter is not the taking, but the giving. Before you look at how to invest in a mastermind, look at four distinct takeaways an effective alliance can offer.
- Community: The most effective masterminds bring together people with both like and unlike backgrounds. Each member is after increased success, for example, but comes from a different industry. That’s the model behind the typical business club mastermind. The group is connected by a desire to progress, but not undermined by direct competition. The key factor is, however, a new and diverse community that wouldn’t exist otherwise. It’s a community of intent, not chance, with members invited in for the strengths they can offer as much as for the benefits they can receive.
- Collaboration: Being the captain of a small business enterprise can be a lonely position. It’s all on you. If you’re an entrepreneur by nature, you’ll relish that feeling most of the time, but everyone is human—we are all social creatures—so there are times you don’t want to be the lone wolf. Managers and supervisors sometimes face similar isolation. When everyone is looking to you to run the show with confidence and authority, to whom do you turn to express doubt or bounce ideas? When you can’t show weakness before clients and staff, a mastermind collective presents a safe sounding board for expressing concerns, doubts, and options, while providing input, feedback, and advice.
- Consolidation: Networking is generally accepted as a key to business growth, yet processes required from typical networking opportunities are often uncomfortable and consequently many of us don’t do them well. It’s “first date” syndrome—there’s not enough time to relax and be yourself. A mastermind alliance checks that in a couple ways. First, everyone is there by strategic invitation. Next, everyone around you is interested in your success as well as their own, for the good of the mastermind group. Opportunities to build effective cross-promotions don’t have to develop on the fly, in a couple hours. When you connect with a network partner on a deeper level, you’re closer to their network now too, in a way a business card exchange just can’t match.
- Continued Motivation: Inspiration and motivation may be the two biggest takeaways a mastermind has to offer. There are probably other sources for the new information you’re learning through your mastermind group. Consider the mastermind concept itself came from Hill’s book. But to get really excited about an idea, direction or plan that’s then reinforced a week later at the next meeting of your alliance, that is something intangible yet so essential to your personal and business growth. Think of it as an inspirational pep pill, keeping you nourished, nurtured, and invigorated on a regular basis.
Enjoy the Campaign
No matter if you are joining or starting your own group, whether you succeed or fail, there are experiences to gain and lessons to absorb. The clichés have all been used, and they are all true: enjoy the ride, it’s the journey, not the destination, and so on. Each mastermind can be enriching, even if it’s not what you were expecting or doesn’t achieve what you want. One of the most valuable parts of the process is that you’re opening yourself up as a person, to other people, and other experiences. Ultimately, while a mastermind is a group experience, you will find the rewards are deeply personal. Good luck on your adventure!
About the Author:
Elizabeth McCormick is a keynote speaker, author, and authority on leadership. A former U.S. Army Black Hawk Pilot, she is the best-selling author of her personal development book, “The P.I.L.O.T. Method; the 5 Elemental Truths to Leading Yourself in Life.” Elizabeth teaches real life, easy to apply strategies to boost your employees’ confidence in the vision of your organization and their own leadership abilities. For more information, visit: www.YourInspirationalSpeaker.com.
Government Asked to Uphold Law on DAP
API President and CEO Jack Gerard and North America’s Building Trades Unions President Sean McGarvey, on Sept. 13, highlighted the benefits of increased energy infrastructure and discussed recent administration actions surrounding the Dakota Access Pipeline and the potential impacts on the rule of law, American workers, and American consumers.
“Infrastructure plays a critical role in maintaining and growing America’s energy renaissance and it’s important that our energy infrastructure is able to meet the needs of consumers and our growing economy,” said Gerard. “With the Dakota Access Pipeline, the administration’s recent attempts to change the rules, in the middle of the game, set a dangerous precedent for our country that could threaten all other infrastructure projects like bridges, roads, and electricity transmission. Moving forward, it’s critical that the rule of law is followed as the need for new energy infrastructure grows.”
“We are deeply disturbed by the unprecedented action taken by President Obama to supersede the decision of a federal court judge and halt the lawful construction of the Dakota Access Pipeline project. Union members have been relying on these excellent, family-supporting middle class jobs with family health care, pensions, and good wages for over six months,” said McGarvey. “The administration’s attempts to shut down construction of the Dakota Access Pipeline show that it is putting politics ahead of the rule of law. We fear that President Obama has now set a dangerous precedent where political considerations can now thwart or delay every single infrastructure project moving forward.”
API represents all facets of the oil and natural gas industry, which supports millions of U.S. jobs and 8 percent of the U.S. economy. API’s more than 650 members include large integrated companies in all sectors of oil and gas. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 30 million Americans.
Templar Energy Finalizes Restructuring
Templar Energy LLC and its affiliates (“Templar” or the “Company”) announced, on Sept. 21, that it has closed a comprehensive restructuring transaction on a fully consensual out-of-court basis, having obtained consent from 100 percent of each of its second lien lenders, equity holders and first lien RBL lenders. The transaction results in the extinguishment of $1.45 billion in second lien debt, a new equity investment of $365 million, and an amended RBL credit facility with a $600 million borrowing base.
Pursuant to the restructuring, second lien lenders received approximately $133 million in cash and 45% of the equity in reorganized Templar (after dilution) and were eligible to participate in a fully-backstopped rights offering of participating preferred equity in reorganized Templar. In total, the Company raised $365 million in cash in the form of new participating preferred equity (which includes $145 million from certain legacy equity holders) the proceeds of which were used to fund the cash consideration to each second lien debtholder, significantly pay down Templar’s RBL facility further adding to the Company’s liquidity, pay transaction costs and expenses, and fund the Company’s go-forward business plan.
A Game Plan for Closing the Deal
By Joe Curcillo
You walk out the door thanking the potential client for their time, and tell them that you will stop back in later in the year to review their needs. You leave upbeat and happy, but you did not get the deal.
You poured your heart and soul into the close, but you were rejected. Well, you know you weren’t actually rejected, so you remind yourself: tomorrow is another day.
The biggest fear that people experience is the fear of rejection. Many times, that is what stands in the way of your ability to ask for the sale or close the deal. Unfortunately, the sales pitch is the combined fear of losing a deal and a fear of public speaking wrapped into one intimidating experience. In order to overcome the fear, there are three things you must remember.
- Be mentally prepared for the closing.
- Remain adaptable during the close.
- Be sure the timing is under your control.
Mental preparation begins when you realize that you cannot close every deal. It is a numbers game. The old adage, “you win some you lose some” is very true in the sales arena. As you go forth and try to acquire new clients, you are going to kiss a lot of frogs before you find your prince or princess. The only option you have is to prepare for these momentary defeats as you progress.
If you start with a firm foundation, it will build your confidence and it will lead to a higher closing rate. Your foundation is all of the information that you acquire and organize as you begin the entire sales pitch. Closing the deal is not something you can do unless all of your ducks are in a row. You have to know your product or service inside out, and you have to know all of the weaknesses that need to be addressed during the entire sales pitch. Not everyone is going to be as excited about doing business with you as you are with them. Knowing that, it is important that you understand the necessity of creating the excitement as you go through your presentation.
- Have you given them enough evidence to support a conclusion that they cannot live without your service or product?
- Have you addressed all the potential challenges so that your widget stands alone as a necessary component in the client’s arsenal?
- Have you completed all of the prior necessary steps in your selling process?
Ultimately, when you stand up to close the deal, you must know that you have given them sufficient information that they can reach a conclusion in your favor before you ask them to do so. Therefore, your closing pitch or argument must be outlined to encompass all of the highlights of your presentation. The highlights are the reminders and triggers that will allow them to make a conclusion on their own. No one wants to be forced into a decision, nor does anyone want to feel that a decision was made for them. It should be your goal to feed your prospect enough information through the presentation itself so that when you highlight the information in the closing, the path is clear. When you’re making your final pitch—and you watch heads shake in acquiescence—it’s comforting to know that you’ve done your job. As a result, ever so often they will say yes even before you ask; and that is when you know you have done well. Just do not expect it every time or you will be disappointed.
Be adaptable in your presentation. Adaptability is your ability to relate to the prospect or prospects. Being able to communicate and be understood while keeping both your integrity and objectives intact. The last thing you want to do is sound like a con man. A con man is always ready for what’s in it for them. They will talk circles and bring it back to their own needs and wants. A good closer knows how to keep the focus on the prospect and answer their wants and needs. You have to be able to identify with the prospect, and they must be able to identify with you.
- Maintain consistency in your actions and speech so that the true you will shine through.
- Address all of the highlights of your product or service to remind them of your effort to answer their questions.
- Anticipate their challenges and address them truthfully and honestly with the agility of a prizefighter in the boxing ring.
Timing is everything. Make sure your prospect is ready to close before you ask. It is essential that you paid attention to the reaction of those in the room throughout your presentation. Whether it is one person or several, you must be sure that they’re comfortable with what you are selling. You must make sure they’re comfortable with you. Your ability to anticipate and address their questions will give you a feel for their comfort level and their readiness to give you a yes.
Sometimes, a trial close is the best option. For instance, you may turn the question or question or mission on them to see if they understand the importance of your product. Or, you may ask them if they see how their business will be advanced with the use of your service. Whether they hesitate or acquiesce will let you know whether you’re ready to move forward with an ask, or if it is necessary for you to provide more information before doing so.
Consider whether you have addressed all of the areas of objection in your closing.
- Have you established trust?
- Have you financially qualified your prospect to be sure they can afford your service?
- Have you provided them all of the positive information they need?
- Have you provided them a comfort level so that they’re ready to make a positive change to their business?
Get the YES! In the end, you can only win if they win. You want to create a win-win situation. Most prospects don’t truly care whether or not you win.
As long as they trust you and believe in your product or service, they will be in a better position to determine whether or not their business can be enhanced by your request for the sale. Have you convinced them that you have their best interest at heart, that your interest is sincere,, and that you understand enough about their business that when you tell them they need you, they can’t help but say “yes”?”