Exploring the Merge
Oklahoma City oilman Jack Rawdon leads Ventana Exploration and Production’s efforts in the Merge area of the Anadarko Basin.
Oklahoma City oilman Jack Rawdon had many options when his company sold and he was looking for new work.
The former vice president of Oklahoma Citybased RKI Exploration & Production LLC had spent his career in the oil and natural gas industry and was confident he could run his own firm. The timing, however, was not great.
RKI sold to Tulsa-based WPX Energy Inc. for $2.35 billion in July 2015, leaving Rawdon to attract investors for his new venture at the bottom of the deepest industry slowdown in three decades.
Rawdon teamed up with his daughter-in-law, Diana Rawdon, who previously was a senior vice president at Bank of Oklahoma, to help secure meetings with potential investors.
“They said, ‘We love your team, but have you looked at the oil price?’ We said we knew it probably wasn’t good timing, but we wanted to form the relationships,” Rawdon said. “We did that for six to eight months.”
Rawdon then started the company out of his own pocket, leasing a 10,000-square-foot office and buying interests in wells and leases in northwest Oklahoma.
“Then the private equity guys said, ‘You mean what you say.’ That’s when they started investing,” Rawdon said.
Rawdon declined to disclose how many investors he has or how much he has raised, but he said his Ventana Exploration and ProductionLLC is fully funded through 2018. At that point, Rawdon and his investors will discuss whether to sell out and start over or to raise more money and grow.
Ventana has 10 full-time employees, plus contractors. The company has interests in more than 365 wells in 16 Oklahoma counties. The acreage is concentrated in the Merge area of the Anadarko Basin, which is the area between the state’s prolific STACK and SCOOP fields.
A non-operator, Ventana does not control the drilling and completion process of its wells, but the company owns a stake — and receives a share of the profits — from each well it owns. The company also has collected leases in promising areas, where it hopes to partner with larger companies on future drilling projects.
“We knew where we wanted to be, and we did our homework,” Rawdon said. “We’re buying up ownership in core areas, and we’re seeing people drill.
“We know the operators we choose to partner with. We’re not going to pick someone we don’t know.”
Between SCOOP, STACK
Rawdon said he focused on the Merge because he and his other executives are familiar with Oklahoma, because it is a region that can be profitable even with lower oil prices and because Oklahoma’s forced-pooling laws are beneficial to non-operators like Ventana.
“Operators are going into full development mode in the area,” he said. “They’re starting to map it up and test it with wells in multiple layers. Drilling will accelerate, and costs will come down.”
It was important to buy into the area while the STACK, SCOOP and Merge areas while the fields are still relatively young.
“If the prices go up — and they will — there won’t be as many opportunities,” Rawdon said. “We’d get priced out, but we have an opportunity now to make things happen.”
As the company has gained investors and assets, it also has added staff. Rawdon’s daughterin-law now is director of corporate planning.
“It was a no-brainer because of her skill set,” Jack Rawdon said. “I needed a banker, and she’s a good fit here. But it was a big gamble for her to jump ship.”
The concept was developed over Thanksgiving dinner at Diana Rawdon’s house, and she has helped shape the company since.
“With family, you have the opportunity to express what you really think and have open dialogue,” she said.
Ventana’s other executives both have worked with Jack Rawdon earlier in their careers.
Vice President of Land Heather Powell previously was a land manager at RKI and at WPX. Vice President of Geology Greg McMahan has been a geologist at American Energy Partners, Gulfport Energy and SandRidge Energy.
Rawdon said he is confident that the state’s oil and natural gas industry will continue to recover and grow over the next several years.
“If the price of oil goes up, we’ll all do well,” he said. “If the price goes down, we feel like we’re in the right assets and can endure a downturn.”
Ventana Exploration and Production CEO Jack Rawdon is shown in his company’s Oklahoma City office.