Ex­plor­ing the Merge

Ok­la­homa City oil­man Jack Raw­don leads Ven­tana Ex­plo­ration and Pro­duc­tion’s ef­forts in the Merge area of the Anadarko Basin.

The Oklahoman - - BUSINESS - BY ADAM WILMOTH En­ergy Editor aw­ilmoth@oklahoman.com

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.”

[PHOTO BY CHRIS LANDSBERGER, THE OKLAHOMAN]

Ven­tana Ex­plo­ration and Pro­duc­tion CEO Jack Raw­don is shown in his com­pany’s Ok­la­homa City of­fice.

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