When asked what his crystal ball sees for the future of the oil and gas industry in the Permian Basin, Jarrett Vick laughed and replied, “I have lived in West Texas long enough to know better than to buy a crystal ball. In the time I have been in the business, I have seen oil go up to $140 a barrel and down to $30 a barrel in a month.”
Despite the volatility of the oil and gas industry, Vick, chief executive officer of Permian Crude Transport (PCT), successfully entered the fray when he and partner Alex Hale started their business in 2007.
From its humble beginnings when it began with seven trucks, Permian Crude Transport has charted a remarkable success story over just five short years. It now has 50 trucks and approximately 70 employees (mostly drivers), operating in three of the country’s booming plays. It hauls 20,000 to 25,000 barrels of crude oil a day in the Permian Basin and Eagle Ford Shale in South Texas and moves another 5,000 barrels a day through the Enbridge pipeline in the Bakken Shale in North Dakota.
Vick, however, admitted he never dreamed he would some day be running a crude oil hauling and marketing business.
“You can make all the plans you want, but you have got to be up to the plate and swinging the bat when the opportunity comes,” he stated.
Vick, who said he grew up in Alpine and married a Midland girl, first went to Texas Tech with plans to become a petroleum engineer.
“One day my advisor called me in,” Vick recalled, “and said, ‘We have eight seniors and we are busting our butt to find a job for half of them. If you go next door to chemical engineering, you can finish last in your class and get a job making $53,000 a year.’ So I marched over to the chemical engineering department. But growing up in Alpine, I had no idea was a chemical engineer did.”
He ended up transferring to the University of Texas-Arlington for his junior and senior year, however, to complete his undergraduate degree and then earned an MBA in finance and accounting from Texas Christian University.
Vick’s first job after receiving his degree was with noted accounting firm Price Waterhouse Coopers.
“I didn’t want to be an accountant,” he emphasized. “I wanted to be in the oil and gas business. But I handled a number of oil- and gas-related businesses such as Patterson Drilling and Harbison-Fischer during my time with Price Waterhouse. It was a lot of fun.”
Vick then moved to Midland to become a land man, but “anyone with accounting on their resume ends up becoming an accountant.”
That is when Vick and Hale, who also has an accounting background, saw an opportunity to move crude oil, bought seven trucks, and started Permian Crude Transport.
The year 2009 was “a little scary,” as Vick admitted.
“I got to see what it felt like to write personal checks to cover payroll,” he said. “But in 2010 things started picking up. By 2011, we had seen a lot of growth and had to hire more back office help. We also realized the need to get into the first purchasing, or marketing, end of the business.”
So not only is Permian Crude Transport hauling crude oil, but, as Vick says, they are also dealing with operators, helping them to find ways to market their crude oil. He noted that his company not only sells directly to refiners but also to other companies such as Shell, Enterprise, or Occidental. PCT’s crude oil could end up at the hub in Cushing, Okla., where companies can trade it for barrels of crude oil closer to where it is needed, according to Vick.
Obviously, Midland-based Permian Crude Transport has benefited greatly from the growth of the Wolfberry play in the heart of the Basin, but Vick also credited some of the company’s success to the emerging Bone Spring play in the Delaware Basin in far West Texas and southeastern New Mexico. PCT was the first crude oil marketer to set up shop in Pecos.
“We made a conscious effort to maintain a yard and trucks in Pecos, even when things got tough in 2009,” he emphasizes. “Our first customers were out there. I watched wells come in making 1,500 to 2,000 barrels a day. I had spent time in the Bakken and the D-J [Denver-Julesburg] Basin [in northern Colorado] where wells came in making those numbers and then quickly declined. It was intriguing that here [in the Delaware Basin] they hold up.”
Vick also credited much of his company’s success to hiring good people.
“We found some great employees,” he claimed. “Marketing is a whole different world from trucking. We hired Mike Barton, whose focus for most of his career had been on working with smaller operators. He increased the first purchasing side of our business. I think the key is realizing you can’t do everything. The key is finding the right people and letting them do what they do best.”
Vick is “good with people,” according to one of his peers, Randy Gieselman, who is vice president of business development at Advantage Pipelines.
“He’s friendly,” Gieselman said. “People like him. When he tells somebody he will do something, he does it.”
And Vick has a good partner as well, according to Gieselman. “Alex Hale is a fine man also, and has the same qualities. He is a man of his word, too. They are both very bright young men. Both have accounting backgrounds, so they understand the numbers, and they understand what it takes to be successful, which they have been.
“Three years ago they were struggling and today they are covered up with business and growing. It’s also been a matter of being in the right place at the right time.”
With all the oil that’s been found within 50 miles of Midland, the area is not sufficiently served by pipelines to get all the crude to refineries. In that regard, PCT has been well poised to fill in the gap.
“The boom has been very, very advantageous to them,” Gieselman said. “It takes time to get pipelines into the ground. With drilling activity the way it is, there is no way the pipelines can keep up. If you have just completed a $4 million or $5 million well, you can’t just wait six months or a year to start selling your product. And so trucking, in this part of the world, is a major way to move oil.”
Another of Vick’s peers—Kip Agar, Jr., a partner in OGX Resources—described his friend as someone who “never met a stranger.”
“He’s one of those guys who makes everybody feel at home,” Agar said. “He’s also one of the most optimistic guys I have ever known. He is always looking for the silver lining, whatever the issue may be. He is a good businessman, in that way.”
Vick himself identified OGX, along with Legacy, as some of PCT’s first customers.
“The big boys [with offices in Houston] wouldn’t touch us [as a new crude oil marketer],” he continued. “Then Concho Resources gave us a chance. Of course, they have become one of the big boys. They let us prove we could handle it.”
And now, from the Wolfberry and Bone Spring plays in the Permian Basin to the Eagle Ford Shale in South Texas and the Bakken Shale in North Dakota, Permian Crude Transport—in just five short years—is well positioned in three of the hottest crude oil plays in the country.