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My company

Consultant, Blue Ridge, Texas, U.S.

Corresponding author: D. Thompson, dkthomps@flash.net

The first 20% of the full text of this article appears below.

"If I were running this outfit, things would be a lot different around here!" "If I were the boss, I would..."

I'm sure all of us have said something like this during our careers. In the face of what appears to be endless reorganizations, layoffs, mergers, etc., it is easy to imagine that there must be a better way to run an oil and gas company. So let's do it. Let's set up an imaginary company, called MyCompany, to deal with some problems that are unique to our industry. The only catch is that we have to play fair—MyCompany must operate in the real world, not a fantasy world. For example, to imagine a company in a stable price environment or to imagine a company free from Wall Street influences simply isn't realistic.

I am going to address specific issues associated with the oil and gas business in three parts: (1) the cyclic boom and bust nature of the business; (2) problems our industry is facing as a result of the nonrenewable nature of our resources; and (3) organizational styles, outsourcing, and merger mania.

This thought experiment is intended to be provocative, stimulate discussion and criticism, and expand appreciation of challenges associated with running an oil and gas company in today's world.

	Dealing with uncertain prices

 
Without any doubt, market reaction to wildly fluctuating oil and gas prices is the most difficult and wasteful issue for MyCompany. During bust cycles, companies attempt to reduce expenses by layoffs and prematurely terminating projects, and to generate revenue by selling perfectly good assets. During boom cycles, these same companies hire and train a new set of geoscientists and engineers, invest heavily in new projects, and acquire new assets at premium prices. Although many companies would like to be countercyclical, the realities simply won't permit it. Stockholder value . . . [Full Text of this Article]