Mentoring the next Generation of Oil and Gas | Guest: Ed Lafehr | Episode #1

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Harrison (00:01.646)
All right, Ed, well, thanks for thanks for hopping on the call. It's fun to kind of reconnect this way. You are based out of Denver, Colorado, and I'm coming from Salt Lake City, Utah. A little bit of background on why we're doing this podcast today. We wanted to, Ed's been a good friend of mine and our family for a long time, and so we wanted to go through and just kind of share.

me being younger in the oil and gas industry, it's fun to talk to Ed and just kind of get his perspective on the macro economics of the oil and gas industry and what he's seeing, but also just like from a younger generation standpoint, how he would think about getting involved in the industry. And I think that's like the main goal of today's podcast is just to kind of walk through and get Ed's perspective from someone who's more seasoned than the industry.

to someone who's a lot younger and more, a lot greener in the industry like I am. A little bit of background. So Ed and I, we both grew up in Golden, Colorado. So we both grew up on Lookout Mountain, just west of Denver. And then we both went to Golden High School. Ed, what year did you graduate from Golden High School?

Ed (01:14.529)
Well, we were at very different times. I graduated in 1977 from Golden High School.

Harrison (01:20.28)
Okay, and then I graduated in 2017. So I think when we were at the conference for ENERCOM, I think it was you, me, and then the CEO of Chevron were the three people who were Golden High School grads, if I remember correctly.

Ed (01:35.273)
Mike Worth, he was a year younger than I was. Good athlete and very smart and he's done well.

Harrison (01:40.912)
Yep. Were you in the same class as him?

Ed (01:46.177)
No, no, he was a year younger. So he would have been, as I was going out, he was becoming a senior at Golden High. And he went to the University of Colorado. I went off to Utah. Neither one of us went to the School of Mines initially, but he's had a lot of exposure there over the years. And of course, I went there with your dad in 1991, 1992 to get a master's degree. So right in Golden.

Harrison (01:57.07)
Yeah.

Harrison (02:11.333)
And that's when you met my dad originally, right? That was out when you guys were both at Mines.

Ed (02:13.909)
Yes.

Yeah, he was a mobile employee and I was an Amoco guy, both downtown Denver, but we never knew each other in downtown Denver. We've met each other in 1990 when we started at the Colorado School of Mines and the master's program for mineral economics.

Harrison (02:32.034)
Were you in that same program then? The mineral economics program? Okay.

Ed (02:34.079)
Same program, two years. Every other Friday and Saturday, and we had a good time too. We managed to become really good friends and not just talking about business and school.

Harrison (02:47.664)
Did you guys go to any of the Mines football games back in the day? I know they've had a really good run the last couple of I know a couple of my friends from high school are currently on the team. Did you guys ever go?

Ed (02:56.661)
Mines was so bad back in the day. They hadn't found that needle in the haystack, a really smart engineer who was also a good athlete. But somehow over the last 10 years, yeah, they really pulled around. I enjoy going to the games now.

Harrison (03:11.026)
Yeah, yeah, because the stadium is like 45 minutes up the road from where you guys are at,

Ed (03:14.847)
Yeah, it's quite an upgraded stadium they have in Golden now.

Harrison (03:18.927)
Yeah, yeah, I played my high school homecoming football games we played there. So that was always like the highlight of the year. We weren't very good, but that was like...

Ed (03:25.695)
And that was probably okay. Back in the, I guess in the 80s, it would have been half mud and half grass and no uniformity to the field, awful conditions and everybody hated to play there, including Golden High School.

Harrison (03:34.255)
Yeah.

Harrison (03:38.225)
That's funny. That's hilarious. Did you, did your high school, when you were at Golden, did you guys have your homecoming game there too? Okay, okay. That's hilarious. And then I wanna touch a little bit more. you, when you.

Ed (03:49.461)
Yes, yes.

Harrison (03:57.681)
met my dad at Mines. He was at Mobile and he was just starting his career getting started on the exploration side as like a land man and kind of starting his own exploration company. And then you, you kind of took a different route than he did. You kind of went into, I don't know if I'd call it corporate America, but like the big, big players in the space. Could you talk a little bit more about that and kind of that experience?

Ed (04:15.292)
Yeah. Well, we were, yeah, the commonality there is we were both very frustrated with what our companies were doing. We were basically exiting the acreage positions and a lot of the production assets and exploration assets that we held in the Rocky Mountains, the mid continent and all the way across the U S. So he was frustrated at the point where he left mobile in about 1990, about the time he entered the program.

Harrison (04:43.059)
Yeah.

Ed (04:43.091)
And he was convinced he could make smarter plays and do, you know, make better moves on his own. So he became an entrepreneur around the time he was taking the program with me. And I was so frustrated that I didn't, it's hard to demand anything at a big company, but I was really positioning myself to move from the technical integration of subsurface development and drilling.

over to Amoco Corporate in Chicago, where I could see the inner workings of the corporate planning and economics. How are we making decisions in those days? So that's what I ended up doing, going to Chicago into really into the corporate center.

Harrison (05:26.163)
And is that when you met your wife Stephanie, was it in Chicago or was it before that?

Ed (05:30.493)
I met her in Denver downtown. She was also in the energy space working for Total in the downstream. And we met in downtown Denver and we were married and went to Chicago together.

Harrison (05:38.163)
Okay.

Harrison (05:42.643)
Okay, fun. So that was at Amaco and then you transitioned to BP after Amaco, right?

Ed (05:50.067)
Yeah, I had a good run at Amoco after Chicago. You get involved in strategy, you meet all the senior executives, and I was asked to become a resource development manager in Trinidad and Tobago, and that was fantastic. That was with Amoco. And then Amoco was bought out by BP, or Merge, the merger of equals in 1999, where Lord Brown, the head of BP, really initiated the global super major.

Harrison (06:02.568)
And that was at the Amico or that was with BP? That was at the so you're in, okay.

Ed (06:18.921)
And he merged with Amaco and then Arco and then Castrol and created a very, very large and successful company for a few years until BP ultimately, seeded to some problems and issues in the culture and the safety and operations. But, but yeah, that's what happened is when I was in Trinidad and Tobago, the blue waters of the Caribbean, enjoying life with two kids and a very happy wife.

Harrison (06:42.441)
Yeah.

Ed (06:45.963)
BP came in and said, how would you like to go to Alaska? And Stephanie, my wife, one day, one night, said, Ed, my god, what have you done? What have you done wrong? Such that, you know, and this is January. So we're going to Alaska in January from Trinidad to Bego. Anyway, that's a whole situation unto itself.

Harrison (06:50.005)
Huh.

Harrison (06:58.762)
Yeah. Yeah.

Harrison (07:12.193)
Well, I remember Stephanie telling a story of like when you guys were up in Alaska, just like how like everybody like relied on each other, like in like the neighborhood, like everyone was just because it likes at times you could be like so isolated up there that like your neighbors, like they were always just there and like you could always just like walk into their house or something along those lines. It was just like a very tight knit community.

Ed (07:33.297)
Yeah, well, that was true of Alaska specifically, which is not an expat location per se, but it's true of all the expat locations as well. Trinidad and Tobago, we had a ready-made culture of expats integrated with nationals of the country. And it made for a, you you're welcomed in immediately. And that happened in Alaska too.

And we were in a great neighborhood. Our kids were young, so it's easy to meet, you know, the usual thing where you're meeting the parents of your children at school. So we had a lot of that in Alaska, but it was a tough move. In fact, in the winter when we were asked to go, Stephanie said, Ed, why don't you go? I'm going to stay here for a couple of months. Then I'm going to go to Denver.

Harrison (08:06.625)
Right.

Ed (08:18.577)
and let the kids they were five and three years old, I guess. You know, let's I'm going to go to Denver and we'll live with my mom and dad for a little bit. And then during spring, if you really, really like it, then I'll come up and join you. So that's what happened.

Harrison (08:32.46)
Whoa, is that what you guys ultimately did as well?

Ed (08:36.127)
Yeah, I went up there alone and got started. It helped me ramp up and it was a tough winter. Did a little bit of skiing, but nothing like when the family showed up, you know, it was a tough move going in, but that was one of our most favorite locations of all because of the skiing, the hiking, the fishing, all the things we love to do in Colorado were even more grand and majestic in Alaska.

Harrison (08:53.272)
That's interesting.

Harrison (09:05.064)
And then after you went to Alaska, that when you were in London for a time after that? Is that right?

Ed (09:13.215)
Yeah, well, let's finish up with Alaska first because during the merger, that was not a good time in New Orleans. was a great time to consolidate companies because we were all trading poorly and it was down at, you know, $10 oil. But I walked into 30 % layoffs. So we were picking up the pieces. We were trying to cut costs. We were getting innovative and figuring out how can we drill for less money.

Harrison (09:15.958)
Yeah, yeah.

Harrison (09:28.442)
Uh-huh.

Ed (09:41.821)
We innovated horizontal drilling up in Alaska at that time in a little bit heavier and more viscous oil. So we opened up a new formation. We had to get really innovative. It was really tough and every third door had shut. So I was the guy coming in from Amaco and it didn't feel that welcoming at the time because there were so many colleagues and friends who were laid off during that year. It really was $10 oil.

Harrison (10:04.13)
Right, right.

Ed (10:11.329)
for about six months. And then we started coming out of it in the early 2000s. We had a good run of it in Alaska and I met one of my strongest mentors, I think in my career, Mark Bly, who became my chairman at Bay Texas when I became CEO in Calgary. he and I had a lot of fun developing new oil prospects out on the Western part of the.

part of the North slope of Alaska. So it was really exciting, but that was five years in. And then we went to Scotland after that. I did a little project in London, but we ultimately, the family moved to Scotland. And again, it was, I would call that tough times, a bit of a cyclical business, right? And we'll talk about that more. You have to have quite a lot of what I would call embracing change.

and cultural affinity to go to these places in really tough times. And there's certain things, a certain formula that I developed over the years, but a lot of people do this and it's not easy, but it's very rewarding because you tend to pull through that cycle. And then you have good times as well as bad times. And everybody can really win if you stick it out through those hard times.

Harrison (11:32.047)
And what's interesting is you talk about like the price fluctuations. So that's something I've always heard about this industry is just how often, like it can be so feast or famine in terms of depending on like what prices are doing and, and how have you, how like, how have you seen that?

throughout your career and it feels like you were always able to navigate the highs and the lows of the industry as you kind of moved around and I'd be curious kind of your thoughts on like how why you were able to do that and how you stayed in the industry for so long.

Ed (12:05.173)
Well, it took me a while to realize this Harrison, but I think the greatest value is created in the downturns, not in the up cycles. And what I mean by that is it's an easier time to double down and, you know, get, if you're really committed to something and you think it's the right thing to do, whether you're an entrepreneur in this, in a corporate setting, you, you can get better pricing on all your products. can set up.

Harrison (12:14.973)
Uh-huh.

Ed (12:35.531)
for a phase of development that's going to look really good coming out of that cycle because you know it's a cycle. And it creates billionaires, but it also creates a lot of jobs and creates a lot of fun. And the other thing that's tied to that is panic is the mother of invention. So that's exactly what we were doing in Alaska. We were trying to figure out, OK, how do we get innovative at $10 oil or in the North Sea? How do you get innovative when that's

The price of oil takes a dip. Same thing and right up to the pandemic. Those people who exited energy during the pandemic were not only very wrong, they lost their shorts. Whereas you could have bought Baytex at 30 to 50 cents a share and it went to seven to $9. Right? So there are some big, big winning that investors that people that stay in their seats, people who own

Harrison (13:26.267)
Yeah.

Ed (13:35.187)
a piece of the action can make out of the downturns. It's easier to buy during the downturns, I think. You got to keep a war chest available, whether you're a corporate, an entrepreneur, or just in your personal finances. You always have to keep a little bit of a war chest so that you can chase some of these great opportunities in the opportunistic times.

Harrison (13:57.031)
Well, it makes me think of Warren Buffett how he always talks about like be greedy when others are fearful and fearful when others are greedy. And I mean, like if you think about like 2020, like if you would have bought EMP stocks during that time period, the right ones, like you would be, you would have absolutely crushed it. And so I think that, right.

Ed (14:18.485)
Yeah, and there were people doing that, not just the Baytex is one example, but there were many other examples of companies really across the world that could have been bought at a fraction of what their, you know, a baseline oil price, gas price scenario would take those stocks to without any, you know, any radical new or improved technologies or new bets on prospects.

Harrison (14:46.513)
Yep, know that.

Ed (14:46.719)
So it was a fairly low risk gamble to go in. The gamble is there's maybe a one out of a hundred chance that some of these companies could have gone bankrupt and some did, but it was probably, would say more like one out of a hundred. And you don't have to be a great analyst to figure out which ones are gonna not make it and which are those who are gonna go on, gonna do just fine.

Harrison (15:01.852)
Yeah.

Harrison (15:11.675)
And thinking about Baytaks, like...

We can come back to this later if you want, but since you brought it up, I think there is some value in kind of talking about like when you came to Baytex, kind of what was it like when you got there and what did you feel like were the main strategic changes you made to help drive that stock price and to drive value to shareholders? And I just kind of be curious about like if you were like looking back, giving a summary, like what your main takeaways from that would be.

Ed (15:37.014)
Yeah.

Ed (15:40.735)
Well, it was interesting. just came out of Taka. So that's, spent four years there and the first questions they asked me when I came in as president of North America before I get to Baytex, because it's the same question that was asked to the Baytex shareholders to me when I came into the job is the shareholders who are Abu Dhabi, they owned Taka a hundred percent asked me.

Harrison (16:04.581)
Huh.

Ed (16:07.227)
When are we going to stop recycling all of our cashflow into the business? When can we see a dividend and a proper shareholder return on this business? So I spent the first six months and we figured out how to flip that into a shareholder return business. And then coming into Baytex, first question I had from investors is, right now Ed, great that you've joined Baytex, but it's actually an uninvestable story. You have too much debt.

You're not paying any shareholder returns. And when are we going to see a time when Baytex returns to its dividend strategy or a growth strategy, but they didn't really even want capital appreciation. They wanted a dividend or buybacks or a real strategic return. you know, so Baytex was a story with a lot of debt. When I came in in 2016, oil prices had plummeted.

Harrison (16:50.758)
Yeah.

Harrison (17:01.829)
huh.

Ed (17:06.177)
into the $20 range in the first quarter of 2016. And I showed up in the second quarter of 2016 when we were coming out of that. And I thought, you know, why not take this on? It's not as much of a fixer-upper, if you want to call it that, as TACA was in terms of fixing governance, fixing capital allocation, fixing the, you know, trying to improve the culture and make it a credible operator. That was what we were doing.

Harrison (17:13.18)
Yep.

Ed (17:35.101)
At Taka and we did all of those things and it was, it was a great run, but at Baytex, all of those things were in place. It was a great team, a great set of assets, but we were offering no return to shareholders. was no story. So we had to create something more. We spent a lot more time with the board on strategy, mergers, acquisitions, and we executed one. We had to deleverage the company. So this had to be a strong balance sheet company that we leveraged with that we.

that we merged with. We had to figure out ways of extracting more out of our existing acreage base. Batex had a huge acreage spread, especially in Canada, both in Alberta and Saskatchewan. And we ultimately, in 2020, landed a new asset, but right under our nose, up in one of our core areas, and then made a major discovery on that acreage.

about a year later and then put it into development. By the time I retired, we were at 15,000 barrels a day in that asset, one asset. So the exploration discovery, the combination of things drove our share price. It was deleveraging. So we fixed the balance sheet pretty much fully from six times debt to cash flow to less than one times debt to cash flow. We also had a massive exploration discovery.

which is the most accretive kind of thing you can do as an energy company. And we had a tailwind of oil price coming, rebounding out of the downturn. So it's one of these cycles, but a couple other little catalysts on top of the cycle, and then instead of giving you a 2X return, can give you a 10X return or something much bigger.

Harrison (19:19.078)
Yep.

Harrison (19:30.509)
And when you talk about, so you said, if I heard you correctly, you paid down the debt, it was a six X and you took it down to one X, was that right? And with that, did you use the money from the new discovery to pay down that debt? What did you do to facilitate paying down that debt?

Ed (19:38.922)
Yeah. Yeah.

Ed (19:49.035)
Well, the first way to move from six times debt to cash flow down to three is that we merged with this company, Raging River Exploration, a good size successful company with a really clean balance sheet. you, you know, it was, it was more about the deleveraging than anything else. We brought these two companies together where Baytax effectively bought them and we took their debt along with it, but it was such low debt relative to their production and cash flow.

and light oil that we ended up benefiting and dropping our debt to our leverage ratio, if you will, you know, in half, all in one go.

Harrison (20:29.936)
Uh-huh.

Ed (20:31.465)
So then we've thought, okay, we're in the game and we need to continue driving organically and flip this to a free cashflow machine and hold production relatively flat or grow it a little bit. And so we put out a new five-year plan that showed we could do this. We had some buying on the five-year plan because we had credibility delivering quarter on quarter results.

So we started paying down debt. So by the pandemic, we were in decent shape. So that would have been 2019 and then 2020 hit and oil price went to zero. It went to zero for a day or negative, I think for one day, which is absurd. And the media flipped back and we were on the rebound and we had those catalysts. So

Harrison (21:06.304)
huh.

Harrison (21:10.182)
Yep.

Harrison (21:18.192)
Yeah.

Ed (21:24.563)
Our debt was really paid down by about 2021 or 2022.

Harrison (21:30.139)
What was that experience like? Because I remember prices being negative during COVID. I just remember thinking to myself, holy cow, like this can't, like A, like this can't last, but B, it was scary for that time. Like if you're in the industry, you're like, holy crap.

Ed (21:44.193)
Yeah.

Yeah, it was real scary, real scary. And I remember coming in in 2016 and had a town hall, which I then repeated over and over because our share price suffered pretty badly through this period. And, you know, I, my comment to everyone was, I know you're all owner. We love to have ownership of our shares right down to the front lines of the company. So they all own shares.

Harrison (21:59.665)
Yeah.

Ed (22:13.405)
Some may not have owned that many shares, but they were owners. And my advice to them was don't pay attention to the share price. It's too cyclical. We'll have our day in the sun. They were unlike me. None of the officers could sell their shares, but the employees, it was part of their compensation package. So they could buy and sell. And my advice was don't pay attention to the share price right now. It's too volatile. There are things happening in the world.

that are really bad short term for energy, but they're going to be really good for energy longer term. And they hung in there and, and you know, they're also fearing for their jobs and everything, but we were able to retain our staff through the downturn and we brought all that oil and gas that was shut in back on production. So people were scared. I think they were owners, but

Harrison (22:48.007)
Yep.

Harrison (23:01.831)
Yep.

Ed (23:04.615)
leadership communication was everything and we were doing almost everything virtually through the pandemic because we couldn't, if you thought the U.S. was shut down, Canada was quite claustrophobic in the sense of, you know, we were all working from home and there was no hybrid for a long period of time and the government was monitoring what we were doing and so it was quite onerous on our freedoms.

Harrison (23:11.208)
Yep.

Harrison (23:22.579)
Yeah.

Harrison (23:32.618)
Yeah, it was a weird time.

Ed (23:32.835)
as a leadership, but what we did is we flipped to a virtual setting and we ramped up our communication.

Harrison (23:39.528)
Yeah.

Yeah, I remember one of things that stood out to me at that time, and this was a little bit of a tangent, but you were talking about how the government was so involved and it just like it, stateside, it varied so much just depending on what state you were in too. Like if you were in California, it felt like you couldn't walk on the street, like people would walk 10 feet away from you versus if you're in Utah, was like very much different. And the reason I bring that up is you talk about how that affected

your guys like working from home and that that process and I'm curious like what was the main driver for you guys as you guys were coming out of the pandemic like what when things kind of start to normalize for you at Batex and when did you guys kind of start on that up curve that you guys saw in the stock price?

Ed (24:29.387)
Yeah, well, one of the things we wanted to do because we were, you know, we were onto something with this new technology, the virtual meetings, the virtual collaboration, we wanted to create a hybrid working culture that would remain beyond the pandemic. So we were getting people kind of enrolled in, okay, we're not going be able to see each other as much, but we need to intensely collaborate to do anything really in an energy company.

Harrison (24:43.532)
Yep.

Ed (24:55.145)
because you're only one discipline and it takes five disciplines to work the subsurface or to work finance or to work our problems and challenges. So we created this new culture and we also initiated some leadership development training right down to the front lines. And there's a couple of guys on my team that were really pushing this and that was a real carrot for people because I think leadership development training

Harrison (24:55.488)
Uh-huh.

Harrison (25:12.309)
Uh-huh.

Ed (25:21.889)
is one of the key things. remember, you know, people told me back at Amoco in the early days that the changing of the guard is coming in, the changing of, you know, big crew shift is coming because of all these retirements, you've got to be prepared. You'll never be ready for that next job, but you got to be prepared. And then it was kind of a void of.

But you have to be proactive. You have to get the training, do some leadership development. So we focused a lot on culture and we focused a lot on remuneration and we kept people pretty well geared up as owners. We spread around some shares. It was somewhat dilutive at the time because there were more shares that we typically would roll out. But it was a lot of that. It was a lot about people focus.

Harrison (25:53.761)
Mm-hmm.

Harrison (26:08.566)
Uh-huh.

Ed (26:14.089)
And the other thing we did is we signed that exploration deal with a, it was a native group, a First Nations group up in the Peace River area. And we signed up an agreement that became one of the largest discoveries and the hottest new play in Canada called the Clearwater. And that was, that was what we called the Peavine and the Peavine Nation. were a settlement in the area and we signed this deal with them in 2020.

Harrison (26:14.251)
Yeah, right.

Harrison (26:38.954)
huh.

Ed (26:44.199)
you know in the boom times it's hard to sign these deals.

Harrison (26:48.002)
Right, right.

Ed (26:49.289)
Right? You know what I mean? It's a little easier when people need to do things. And this is a real win-win for us and them because we invested in the community as well. This was tough times. We didn't have a lot of cash, but we thought, you know, we're not going anywhere. We've got our balance sheet done. We've done the merger. We also issued some new bonds just before the pandemic hit.

So we had a capital structure that we liked. We didn't have any near-term debt anymore. It was all longer-term pushed out debt. So, you know, we were fine.

Harrison (27:14.668)
Yep.

Harrison (27:22.993)
Well, one of the things you said that stood out to me, you talked about how the changing of the guard in the oil and gas industry at your time. I remember I was on Google probably three or four months ago and I looked up the average age of people in the oil gas industry. And I think the average age was like 55 or something.

And it makes me think about like the U.S. like we're at record production. We're doing we're producing the most oil we ever have with the fewest number of people in the industry we've ever had. But I just.

I keep on having the thought like at some point like who's going to fill this gap when everybody retires who's currently in the industry because you you talk to like your average operator in Oklahoma or Kansas or even in the Permian and like

Ed (28:08.074)
Yeah.

Harrison (28:15.04)
The owners of these companies are all between at the youngest 45 and a lot of them are like mid 70s even in terms of just how often they've stayed and kept playing the industry. And I'm curious like what thoughts you have on like how that

who's going to fill that production. think some of that we've probably seen with lots of the &A activity that's taking place. We have these big, all these big companies merging together. And I think that's probably a part of the equation, but I'm curious your thoughts on that in general as well.

Ed (28:47.221)
Yeah, there's been a lot of consolidation. So that has helped in a sense. It's taken some employment off the market, but it's helped. But it's that old adage, you know, I would say to the youth and I've said it many, many times is, you know, you need to be ready and more than ready. You need to be prepared because nobody ever feels ready. It's a military phrase, I think, you know,

Harrison (29:12.4)
Right.

Right, right.

Ed (29:15.131)
You'll never be ready, but you can always be prepared. And there are a lot of young people. I was never, wait a minute, what am I doing? I'm now sitting at Mark Bly's desk and he's now gone doing something else and I'm going up the ladder. You're never ready, but you can be prepared.

There's a lot of training and development and I would say build your network as broadly and deeply as you possibly can, especially now, whether you're doing some tech aspect of energy or your insight energy, you need to have a strong and robust network you can bounce ideas off of, collaborate with, things like that. you need to be pretty darn resilient.

But I also think the pipeline is broken. The Colorado School of Mines is one place that is still generating really strong engineers and earth science people and others who can support the energy industry. But a lot of the universities have shifted away from things like petroleum engineering, geology and geophysics, land.

Harrison (30:02.448)
Yeah.

Harrison (30:15.463)
Yep.

Ed (30:22.993)
petroleum land used to be a big degree. And now I think many places have shut that down. people are learning kind of more inside the companies and on their own, but it's on their own initiative and through their networks that they're learning. It's those types of things that I think are going to make a difference.

Harrison (30:46.407)
Yeah, no, that makes a lot of sense. It's been, because I don't know anybody else my age who's in the industry. And part of that is because I live in Utah, so I'm not in Texas or Oklahoma or Kansas or...

Ed (30:57.793)
Yeah.

Well, you made a comment to me when we went to Entercom. There were two insights you had on day one. We went to the Entercom conference in Denver, which is a nice conference of energy professionals and CEOs. And Harrison came with me and we had a really good set of meetings and went to some really interesting presentations. But there were two things you said. One is Ed, am I the youngest person in this room by a mile?

Or is it just, don't know myself well enough. And you were, you were the youngest in the room by, wow, was tended to be a senior group of, like you said, 45 was. Yeah, probably the youngest in the room was 45. Some of the investor tended to be a little younger. But the other thing you said, which I think I'd love to provide this feedback to enter commas. The conference.

Harrison (31:32.369)
Yeah, yeah, yeah.

Harrison (31:40.389)
I think by 20 years, yeah.

Harrison (31:46.493)
Yeah.

Yeah.

Ed (31:57.86)
techniques and approach is different in tech than it is in energy, where we would go to a 20 minute presentation, it would shut down, and then maybe you could go to a breakout session and ask a question. But you go to conferences in tech and it's very different. You might want to describe that.

Harrison (32:16.255)
Yeah, well, I think of like the biggest tech conference I've been to was probably Money 2020, which is a financial technology conference that they normally hold in Las Vegas. It's probably more similar to NAEP and kind of what you'll find in terms of like where you have like lots of booths and vendors and networking. So it just depends on what Entercom's goal is. But I do laugh at like...

In tech, it's like you just wear a t-shirt and like whatever to the meetings and then you go to the oil and gas conference and it's all suit and ties. It's just much like it's much more like finance in terms of like what you find with like what people are wearing. So sometimes like I need to like remind myself of that as I'm going into like meetings to talk with. So as I'm working on my tech company for the oil and gas industry, I need to remind myself that I'm not actually in tech when I'm going to sell these people. actually in their industry. And so I need to like act accordingly. So it's just like.

Ed (32:56.278)
Yeah.

Harrison (33:12.756)
I think old garg is kind of the word I would use. It's just kind of like much more like Wall Street-esque in terms of like how it's approached and treated.

Ed (33:15.702)
Yeah.

Ed (33:21.825)
Yeah, and that shift is coming. There are lot of younger CEOs coming into play, but by younger, I mean 45, right? Where they have a decade or two that they can make a run. it's also expectations that the energy corporates, including myself, by the way, when I was presenting at Intercom, trying to get investors wooed into our Baytech story. You know, the thought is that all these investors coming from the East want

Harrison (33:28.456)
Right, right, right.

Harrison (33:44.758)
Yep.

Ed (33:51.643)
know, guys dressed up and, you know, wearing suits and ties. But they're a lot, that profile of investor is a lot younger now and a lot more culturally, you know, into the gen X and gen Z and they are, and they're sending some junior people, but even senior people can be very, very young and very few of them are wearing ties anymore. I think energy.

Harrison (34:00.864)
Yeah.

Harrison (34:16.729)
Yeah, no, that's a big accomplishment for the industry is no ties. One of the other things I wanted to ask you about was the appointment of Chris Wright to Trump's Department of Energy. I know you have said that you've interacted with him several times when you were CEO of Baytechs and...

Ed (34:20.159)
Yeah, right. Yeah, very interesting.

Harrison (34:38.869)
One of the things I think that I appreciate about Chris is as I watched his content, he's just very much a realist. I think his most famous piece of content is when he rips apart North Face for, they wouldn't put an oil and gas logo on one of their jackets, but at the same time, their product is full of petroleum and like they wouldn't have, you wouldn't have your North Face jacket without it.

And kind of the point he's trying to make is like, okay, can we be a realist about the oil and gas industry? Can we stop pretending that it's evil and recognize it's essential to human flourishing and that if we didn't have it, we would suffer as humanity? We need this in order to maintain the quality of lives that we have. And that's one of his approaches. And he's also not a climate denier. He's not saying there is no impact.

Ed (35:21.739)
Yeah.

Harrison (35:27.823)
That's never part of what he says. He's just saying, okay, like we need to be realistic about this. Like sure, does it have side effects? Absolutely. But what's the alternative? And I think that's one of the things that's like pretty smart about his approach. And I just, wanted to get your thoughts on his appointment and maybe what you think he'll do.

Ed (35:28.16)
Right.

Ed (35:43.553)
Yeah. Well, yeah, I agree with you, Harrison. Chris Wright's really a strong choice for Energy Secretary for a lot of reasons. You know, he came into Canada with Liberty Energy and made a big splash. And, you know, he's a passionate speaker. He he's compelling to listen to. He's very smart. He's all these things. But none of those are the reasons that I would give for why he's going to be a great energy secretary. The first one, I would say.

is that when he started his career, just like you, it was back in probably 1990, 92, I think he might've dropped out of grad school at Berkeley or MIT to start Pinnacle Technologies. But he's a technology developer, he's an innovator, and he's an entrepreneur. And he hires people, and he was one of the first guys that I think was a catalyst.

Harrison (36:28.762)
Mm-hmm.

Ed (36:35.115)
for the shale Renaissance or the US energy boom that you described earlier where we're at an all time peak production, way higher than Saudi Arabia in terms of production levels. So he was at the beginning of that. That's reason number one. Reason number two, he is a very strong businessman, but he's a broad business person. So he's been in oil and gas upstream like me. He's run a company like me.

Harrison (36:48.315)
Mm-hmm.

Ed (37:05.393)
He's running Liberty Energy Services now, which is an energy services company to the so to the clients. He's been involved in nuclear, geothermal, mining, renewables. You know, this guy is quite broad and he he's he's very prolific in what he's able to do. That's reason number two. And reason number three, which I think is the single most important one.

Harrison (37:10.853)
Mm-hmm.

Ed (37:33.045)
that Trump looked at is the one you just mentioned where this encapsulates everything he's done in terms of his thinking around energy over the last five to 10 years, this bettering human life. So he's passionate about people and the planet. Like you said, I would say half of the thrust of this book and his philosophy

Harrison (37:49.029)
Yep.

Ed (38:00.897)
is bettering human lives, is pulling people out of poverty. You look at 3 billion people in Africa and India, just those two places combined, 3 billion people. And they're still burning dung, peat, waste inside their homes. And it's women and children who are picking all this stuff. They gather it during the day and they burn it at night. They're living like we were living 50 to 100 years ago.

Harrison (38:11.941)
Mm-hmm.

Harrison (38:29.883)
Yeah, yeah, probably more, probably more like 150.

Ed (38:29.983)
right? 100 years ago. that's one aspect of it, of his philosophy, but the other one is reducing the impact, just like you said, Harrison. think, you know, he has moved his fleet of pumps and engines to natural gas, a natural gas fired system. He's electrified his own fleet.

Harrison (38:43.547)
Yeah.

Harrison (38:55.293)
Mm-hmm.

Ed (38:58.237)
So he's reduced his own company's carbon footprint more than most others. And I think he, in fact, I think I would say he's a leader in reducing his CO2 emissions footprint. So, hey, there are a lot of good reasons here, but it needs to be a pragmatic understanding of yes, the climate is warming, but it is not an existential threat.

Harrison (39:24.285)
Mm-hmm.

Ed (39:24.371)
It is not a climate emergency, but it's one that we're going to take seriously. And we're going to, through technology and innovation, we're going to, you know, mitigate as much as possible while allowing people to flourish.

Harrison (39:39.444)
Yeah, and I think that's the thing that's like, that I think about the most is like...

How are people in Africa, how are they ever going to enjoy the quality of life that we have without having energy? Like energy is like the driving force of all that. like, don't quote, don't quote me on these numbers, but from, I remember correctly, like there's still a billion people in the world who like don't have access to energy and energy poverty is a real thing. And I think that's one of the things that Chris talks about. It's like, like, but like he, he talks about how net zero is the wrong goal. How the right goal in this whole process is how do we

Ed (40:06.911)
Yeah.

Harrison (40:14.017)
improve people's lives. And I think the argument for energy becomes a lot stronger when you recognize how pivotal of a role it has in providing the quality of life that we all enjoy. And so that's...

Ed (40:24.713)
Yeah, for sure. Energy intensity has a direct and linear relationship with wealth, health, longevity, all of these things, and comfort, and ability to do discretionary things. So I think it's more like one to two billion people are like us, where we have the energy intensity that allows us a quality of life that's phenomenal.

There's more like six to seven billion people who don't have it. There's somewhere on that scale between true energy poverty and relative energy poverty that all want to have more of what we have. it's...

Harrison (40:50.152)
Yep.

Harrison (41:01.193)
Yep.

Harrison (41:04.563)
Yeah, it could be. It could be. I need to check the numbers.

Ed (41:07.345)
One of the biggest challenges for the world right now, we've got a lot of people in trouble that need help.

Harrison (41:14.837)
Well, and I think that's what the conversation needs to be like. I don't think the conversation can be from this anti-impact framework of where all impact is bad. When I think in reality, well, okay, maybe we're having impact, but what is the...

result, what does that impact do? And if the result of that is that people have warmer homes or people are able to have the electricity they need or the list goes on and on, then that impact is worth it. And I think that's like the conversation that needs to be had more often rather than this, we can't have an impact or like we're bad and we hate the planet. I just think it's a false argument to be made.

Ed (41:46.326)
Yeah.

Ed (41:59.649)
Yeah, and if you've lived around the world and lots of different places, you know, there are really, really hot places that people can survive and thrive. And they're really, really cold places like Alaska, where people can thrive. It's a little harder. You need more energy in the cold places that you do, but you need air conditioning. And that's what, when I lived in the UAE and in Cairo, Egypt.

they're electrifying to try and get more air conditioning across the places that they live and work. And some pretty harsh environments too, where it's just really tough, requires energy. And a lot of those people in Africa and India, Harrison, to your point, live in coastal areas. And as the globe does get warmer, those coastal areas are impacted more. And what do they need more of? They need

Harrison (42:39.422)
Yep.

Ed (42:49.287)
energy, they need investment in infrastructure like we do. Our coastal areas don't get completely slaughtered when we have events, even normal hurricanes and floods and whatnot. But there are impacts, but less people are dying from those here than are dying from a cyclone coming across India or Africa.

Harrison (43:12.928)
Yep, and it's because of the infrastructure, which makes sense. Well, Ed, this was awesome. I'm glad we were able to kind of chat through this. I think as like a parting remark, I know we touched on this briefly, but I think it would be good to follow up with just kind of like, if you were somebody young thinking about getting into the oil and gas industry, I know you talked about like networking and building connections. Like what other things would you be thinking about not only for...

this generation, but also like, do you feel like, what do you view the future of the oil and gas industry in the United States to be?

Ed (43:47.487)
Yeah. Well, first thing I would say is energy in all forms will be around for a long, long time. So 50 to 100 years, I don't know what the right number is, but it's a lot of decades before anything like fusion or something could or a pure blue and green hydrogen world can take hold. So I think it's a long period of time to think about anybody can have right now, have a very long and successful career in energy.

Harrison (43:56.032)
Yeah.

Ed (44:17.701)
And again, think about climate pragmatically. You have to read both sides of that and not just, you know, and really look at the facts. I do think there's global warming. I do think we're doing a lot about it. And energy from oil and gas will survive the test of emissions reductions that are required to live in a really great or an improved world. So I think that's number two. Number three,

Energy development is going to need all disciplines, entrepreneurs included, to break some of the mindsets and keep the innovation and sustainability moving forward. It's going to require a new generation to do that. But the new generation, whoever comes in, is going to have to.

Harrison (45:04.568)
Mm-hmm.

Ed (45:14.505)
I guess in a similar, I don't want to just impart my own, you know, what worked for me on everybody else, but really embracing change. That's different than adaptability. A lot of people that write college essays, young kids that are, you know, say, I'm an adaptable person, I'm resilient. Embracing change is a little different. That means you're proactive. That means instead of reacting, you're learning. You're immersing yourself. You're creating.

Harrison (45:23.63)
Mm-hmm.

Harrison (45:39.651)
Hmm.

Ed (45:43.029)
When you truly embrace change, those are the things you're doing. It's a little more entrepreneurial than an adaptive person comes into an environment and then reacts. So that's one thing. And I would, I said this before, but I would look at cyclical industries as a place to create incredible value and satisfaction and rewards for yourself and for a lot of people.

Harrison (45:54.042)
Yep. Yep.

Harrison (46:06.598)
Mm-hmm.

Ed (46:11.709)
Cyclical industries are not bad industries and it's impossible to time exactly how the cycles work or to time them. But cyclical industries can be a place where not just traders, traders make a ton of money on cyclical industries, commodity markets, that sort of thing. But so can people starting careers. And your dad did it, I did it, you're going to do it. And lots of people do and there's a change of the guard to benefit you.

Harrison (46:19.998)
Mm-hmm.

Harrison (46:32.837)
Yeah.

Ed (46:42.497)
You know, lastly, this is kind of a tough one to think about when you're young, because I'm not sure where I was on this, because your journey just takes over and moves forward. But truly follow your passion. And it's easier said than done, because sometimes a passion evolves over 10 or 15 years. And if I had to do it over again, my passion would have said, you should have left what you were doing at Amoco and BP 10 years before you did.

Harrison (46:57.307)
Mm-hmm.

Harrison (47:03.076)
Yeah, yep.

Ed (47:11.849)
because your true passion was the full integration of business and building and creating value and, you know, mentoring people across a broad spectrum. You can't do it over again, right? So follow your passion, let it evolve, but be very proactive about it. And the more your passion can be somehow, a lot of people think, well, my passion needs to be different than my business, than my career.

Harrison (47:11.878)
Mm-hmm.

Harrison (47:25.489)
Right, right.

Ed (47:42.099)
Well, it doesn't have to be. you overlap, like I think, you know, Elon Musk certainly does this. Lots of people do this. I did it. If your passion overlaps your career, it's going to create synergies for you. Economies of time. You're to have excess time for family, life, growth, your health, and all these things that are really important. Whereas if you've got a career and you've got a separate passion,

Harrison (47:44.369)
Right.

Harrison (47:56.305)
Right.

Ed (48:11.371)
that don't overlap at all, know, it's so, you know, try to create something you're really passionate about in your career. That's all I would say. And yeah, and then I think attitude, a positive attitude and, you know, things like true teamwork and being a collaborator outwardly showing that, doing that, you don't need to be the smartest person in the room. You certainly can't go into other cultures with a big ego.

Harrison (48:21.244)
No, I love that.

Ed (48:40.427)
You have to listen genuinely and learn and proactively truly collaborate and do all those things. But have a positive outlook while you're doing all that. Have a positive attitude. It really helped me along the way.

Harrison (48:40.552)
Hmm.

Harrison (48:57.746)
No, that's awesome. Well, Ed, I really appreciate you not only for doing this call, but just for being a family friend and being willing to kind of step up to the plate and help us out when we needed mentorship and guidance. And it's been really fun getting to know you better. And I know my dad would be really happy about us doing this call today. So it's really fun.

Ed (49:20.203)
Yeah, I know he would too. And by the way, look, every time I see you, look more and more like your dad. That's a good thing. All right. Okay. Take care. Thanks, Harry. Bye.

Harrison (49:26.706)
All good, all good. Thank you. All right, we'll see you. Thank you so much. Bye.

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