This week on Mining Money, Brandon Davis and Imran Khan of Swan Energy talk about the value of teamwork and resources during times of uncertainty.
Full transcript coming soon.
Jason Spiess: Gentlemen thank you for joining us this week on mining money a place where we like to find pockets of positivity out in the marketplace and past success stories of course that help us navigate through the times of uncertainty like many people are feeling right now so we’ve got Brandon Davis and Imran Khan with a Swan Energy a couple gentlemen that know the investments in and out because they’ve been there done that and that means the good the bad the ugly the ups and the downs because it’s hard to have with the ups without the downs in today’s world and so the two gentlemen Brandon Davis and Imran Khan thank you for joining the program today mining money how you doing doing?
Imran Khan: great thanks for asking jason
Brandon Davis: thank you for doing pretty well myself
Jason Spiess: well thank you for joining us say last week when we talked you guys mentioned your staff a couple times about the the importance of kind of having a good quality staff and some workers and and and really some people to fill in the gaps that sort of thing well for me that was felt this week because i had to do some it work at three in the morning on my website and that really that really got me thinking boy it is really important to have you know a good staff in a deep diverse or that sort of you know a bench if you will in baseball and a good second string quarterback to go that sort of thing so i thought you know what let’s talk about your team a little bit to start this off so talk about Swan Energy what you guys have going over there and why you guys are able to you know do such great investments.
Brandon Davis: For every great investment there’s bad investment, so it goes both ways. But our staff here we we manage about 50 partnerships and then on top of that we manage five companies and each company has its own website just to put in perspective for you so we have 500 percent more problems than you do on just the website front. But yeah it’s it takes a it takes a good staff and it’s not necessarily a large staff it’s just a very competent aggressive hard-working staff and I’ve had it in the past where i’ve had as many as 200 employees. Right now I have in the office under under 20 which we actually get more done than we used to get done with 50 people in the office, so we’ve got great people and that’s not always been the case because as the company grew it changed and I had to change the people to keep up with the changing company and that happens uh to all companies that that are in business for 10, 12, 15 years and grow and constantly are growing. And I guess in the business world you’re either growing or you’re shrinking and I’ve done a little bit of both, right now we’re on a growth plan. We have petroleum engineers, plural, on staff geologists we use on on day rates because it’s just there’s not enough geology in most of the projects we have that really matters because most of us engineering. We have a probably a half a dozen consulting engineers that we work with depending on what projects we’re doing and where they are, and land man and then of course there’s the whole team of land people that are out there if we need them to put them to work on a project. And we’ve done that too at one point our land department was 30 people, so not that that’s big, but it’s not tiny either I mean we were making a lot happen. Spending a lot of money on it and and making making good money with it so those things go and come and that just depends on the market, what’s going on.
Right now the opportunities are in acquisitions of existing wells. Right now that’s where the the money’s at because you’re buying it at almost, well, I say it’s historic uncertainty from the oil and gas side over the last six eight months and we’re able to pick up wells for fractions of what the work cost on them to get to the point we’re buying them. And that’s one thing we’re looking really hard at gas and oil and we’ve made some acquisitions and we’re moving on some work on them but there’s there’s a lot of that out there right now and hopefully by the end of the year we can buy some more.
Imran Khan: I love how Brandon uh brings in and talks about the positives but then the first thing he does is talks about the negatives and I think it’s you know it’s really good to be able to hear that um you know the the the the aspect of the the different sizes of the companies over the years is really critical right um knowing when to pivot is uh is a very important part of business and you know being around for so long I think that’s that’s very that’s been done well right um and and with what he was talking about earlier there’s there’s investments that are made no matter what there’s you know positives negatives that that happen um in general you know if you’ve got a company that only has positive investments there’s something going on over there that that you know that you know i don’t know it’s questionable is what I’m saying um a lot of our deals that that we do um you know we’re drilling well so you know you do the reason why we have all these engineers on staff and the reason why we have folks that are out there looking for deals is for that purpose right you can’t just find even though the markets available out there you know most of the deals that are out there are not like you know kind of like in real estate you have um the MLS and things right in in oil and gas you have different clearing houses and things but most of what we’re looking at are items that are off-market deals right and the way that we do that is through our landman we’ve got different folks that are out there looking at and talking with different companies and get engaging and interest on hey are you guys interested in you know offloading x part of your your your wells or hey you guys have this good land over here would you like to partner to be able to do some some drilling over there with us right so we’re always looking for different projects and you know being involved and pivoting at the right time with the company is very important and i think uh you know i think brandon hit the nail on the head with the the talking about the negatives and the positives with with how you do business first.
Brandon Davis: perspective on that i drilled 50 wells with an operator and of those 50, or 48 of them came in at or under budget two of them were over budget significantly over budget but pretty good percentage over overall and I was very confident in the ability of the company um the next four wells we drilled which uh we owned 80 ownership plus or minus a half of maybe a fraction of a point in um were all for 400 percent over budget and was probably the most painful disastrous bad deal I’ve ever done and it was amplified because how much it cost um so you know it’s there are there are good opportunities and bad opportunities and the point I’m trying to make is if in this business people always want to know what you did in the past and that’s great but the reality is this every project we put together and it’s the same with most companies um has its own its own merits and its own warrants nothing that’s happened prior has anything to do with this project if everything that had been done before I used to I used to say it like this if I had 99 successful wells and I’m drilling number 100 those 99 successes mean nothing if I have 99 dry holes and I’m drilling number 100 which I don’t know how anyone would survive to do that but let’s just say you did number 100 could be the biggest well ever it’s not necessarily going to be a dry hole it doesn’t mean anything and I think a lot of people try to hang onto their track record and but that track record doesn’t mean shit it’s the oil and gas business there is no certainty period and there’s always a lot of risk so you can’t you can’t live and die based on what you’ve done um I know a lot of people do but I just say like if you look across the board the people who everyone said was so consistent and always wins they usually turn out to be crooks and that’s just the facts. So um it’s just this is not reality.
Jason Spiess: I wrote down uh uh negatives exist but they shouldn’t paralyze your investment and momentum because you know you guys have got a lot of passion behind what you do because you’ve got skin in the game. And that’s one thing in my opinion, that’s one of the reasons that you’re on this program is that separates you from the rest is you guys have skin in the game so you’re not just reading something off a computer screen yeah you might get the computer screen reports but you guys are also getting the vibe and the energy and the boots on the ground reports and etc etc. So talk to me a little bit about that passion that skin in the game and the importance behind that and how that does and i guess does it separate you know you from an average average person i think it does.
Brandon Davis: I don’t know what that you know I have so many things going on with myself it’s a rare opportunity that I have the ability just from a cash flow perspective to do deals with other people because I have so much money sunk into mine. But uh from from our our standpoint, if if someone sees a project from us it’s because we bought it it’s not because we want to buy it, or we’re thinking about buying it, or we want them to buy it because we bought it. We put some time in it. We may have put a bunch of money into it depending on the circumstance and now we’ve got it to a point we’re comfortable showing it to other people the project that we’re selling right now. For example we bought six months ago and just got to the point where we were ready to show people the project the other ones that we’re working on right now are 10 year old projects that are just now to the point they’re ready to bring in investors and it’s with a group we’ve we’ve never worked with before and they have so much time and energy into it, we’ve been working with them for four months to get the deal put together.
Full transcript coming soon.
Stories of first deals, intangibles in investing and analysis of paralysis also discussed in the weekly investment segment.
The Crude Life Podcast can be heard every Monday through Thursday with a Week in Review on Friday.
Spread the word. Support the industry. Share the energy.
