Matt Owens

Ac­cord­ing to pres­i­dent and co-founder Matt Owens, the keys to Ex­trac­tion Oil & Gas’ rapid growth have been in­no­va­tion and a clear fo­cus.

CEO Magazine North America - - CONTENTS - BY PAUL IMISON

Pres­i­dent & Co-founder, Ex­trac­tion Oil & Gas

AS RE­CENTLY AS ten years ago, the av­er­age oil and gas com­pany would have had to de­velop at least a square mile of land to drill all the wells it needed for pro­duc­tion. Yet Ex­trac­tion Oil & Gas is cur­rently de­ploy­ing in­no­va­tive tech­nol­ogy to min­i­mize im­pacts tra­di­tion­ally as­so­ci­ated with on­shore oil and gas de­vel­op­ment, of­ten us­ing as few as ten acres of land—a strat­egy that has en­abled the com­pany to de­velop a large amount of re­sources via very small amounts of sur­face. This in turn min­i­mizes dis­tur­bances to the sur­round­ing com­mu­ni­ties and leaves more land avail­able for other pro­duc­tive uses.

“Most peo­ple think oil and gas wells are drilled in the mid­dle of Texas and no­body lives any­where around there,” says pres­i­dent and co-founder Matt Owens. “We’re less than an hour north of Den­ver in long­stand­ing oil fields that have re­cently been en­croached on by Colorado’s pop­u­la­tion boom. Be­cause we’re able to em­ploy such unique and in­tri­cate de­signs with our well bores, we’re still able to reach a large amount of re­sources un­der th­ese ar­eas.

“Back when Ex­trac­tion was founded, com­pa­nies in North­ern Colorado were just start­ing to drill hor­i­zon­tally, which is pretty much all any­body does in the in­dus­try now,” he ex­plained. “We had some ideas and cre­ativ­ity re­gard­ing this and saw it as a way of open­ing up re­serves in the ground that pre­vi­ously were not eas­ily ac­ces­si­ble.”

Ex­trac­tion has proven it­self to be equally in­no­va­tive in find­ing ways to go above and beyond state and fed­eral reg­u­la­tions to up­hold its so­cial li­cense to op­er­ate. The com­pany has re­peat­edly raised the bar on its own safety, en­vi­ron­men­tal, and op­er­a­tional ap­proach, im­ple­ment­ing best man­age­ment prac­tices, noise and emis­sions mit­i­ga­tion, and new meth­ods to help the in­dus­try and the com­mu­nity com­fort­ably co-ex­ist.


Founded in 2012, Ex­trac­tion Oil & Gas, LLC is a Den­ver-based oil and gas com­pany that fo­cuses on the ex­plo­ration and pro­duc­tion of oil and gas re­serves in the Rocky Moun­tains. Its core op­er­at­ing area is in the Greater Wat­ten­berg Field where the com­pany has an ac­tive drilling pro­gram tar­get­ing the hor­i­zon­tal de­vel­op­ment of the Codell and Nio­brara for­ma­tions. In 2017, Ex­trac­tion en­joyed to­tal rev­enue of $604.3 mil­lion.

“Lib­erty is proud to part­ner with Ex­trac­tion to safely drive the high­est ef­fi­ciency op­er­a­tions in the in­dus­try. Co-oper­a­tion in tech­nol­ogy and op­er­a­tions helped pro­pel Ex­trac­tion’s growth even dur­ing the down­turn. Our part­ner­ship has been built on trust and com­mu­ni­ca­tion from the be­gin­ning and for­ever”. CHRIS WRIGHT / CEO, Lib­erty Oil­field Ser­vices Inc.

While Ex­trac­tion re­mains a rel­a­tive new­comer to the en­ergy in­dus­try, its de­vel­op­ment and growth have been im­pres­sive. When the com­pany first started pro­duc­tion in 2014, it was pro­duc­ing ap­prox­i­mately 200 bar­rels of oil per day. To­day, it pro­duces over 80,000 BOE/d, a rate of growth that has set Ex­trac­tion on its way to be­com­ing one of the largest oil and gas pro­duc­ers in Colorado. Un­sur­pris­ingly, Owens is keen to stress the com­pany’s po­ten­tial for the fu­ture.

“En­ergy is some­thing ev­ery­body across the coun­try uses ev­ery hour of ev­ery day,” he ex­plained.

“Tri-Point’s part­ner­ship with Ex­trac­tion be­gan in 2014. We are proud to have sup­ported their growth in the DJ Basin since that time, and look for­ward to con­tin­u­ing to sup­ply them with fab­ri­cated pro­duc­tion equip­ment and so­lu­tions to sup­port their busi­ness.” JOE HEDGES / VP of Sales & Mar­ket­ing, Tri­point

“We have a sub­stan­tial amount of re­serves, twenty or more years of drilling in­ven­tory, thou­sands of lo­ca­tions to de­velop, and ac­cess to mar­kets through both in­trastate and in­ter­state pipeline net­works. We have mar­ket­ing agree­ments to sell our crude oil all the way down to the Louisiana coast, and we also have our own sub­sidiary com­pany which is go­ing to build its own pipeline infrastructure to help trans­port and de­liver th­ese re­sources. That ben­e­fits our com­mu­ni­ties by sharply re­duc­ing truck traf­fic and vir­tu­ally elim­i­nat­ing wa­ter and oil stor­age tanks on our well sites.”

“I think one of the main dif­fer­en­tia­tors for us is that we’re one of the few sin­gle-basin fo­cused en­ergy com­pa­nies when a lot of the other com­pa­nies, es­pe­cially the larger ones, are fo­cused in mul­ti­ple states and re­gions across the coun­try,” Owens stressed. “That al­lows us to re­ally hone our fo­cus sur­round­ing en­gi­neer­ing skills and ef­fi­ciency gains, be­cause we’re al­ways work­ing in the same en­vi­ron­ment and con­tin­u­ally try­ing to make that bet­ter. At the same time, hav­ing a de­fined home com­mu­nity al­lows us to main­tain a sta­ble and ex­pe­ri­enced work­force and to bet­ter part­ner with our com­mu­ni­ties.”

“I think one of the main dif­fer­en­tia­tors for us is that we’re one of the few sin­gle­basin fo­cused en­ergy com­pa­nies when a lot of the other com­pa­nies, es­pe­cially the larger ones, are fo­cused in mul­ti­ple states and re­gions across the coun­try.” MATT OWENS / Pres­i­dent & Co-founder Ex­trac­tion Oil & Gas

“Ob­vi­ously, we won’t be able to keep a 100200% growth rate go­ing year over year as we get larger. What we’re fo­cused on now is be­com­ing self-fund­ing and then try to grow at a steady 1520% pro­duc­tion rate out of the cash flow we are gen­er­at­ing. That is, ul­ti­mately, the sus­tain­able path that is best for our share­hold­ers, our tal­ented em­ploy­ees, and the lo­cal econ­omy.”


Owens be­lieves that both im­prov­ing cy­cle times on drilling through com­ple­tion, and a hand­ful of strate­gic al­liances, are cru­cial to Ex­trac­tion main­tain­ing its early suc­cess. For ex­am­ple, ac­cord­ing to Owens, it used to take the com­pany up to twelve months from be­gin­ning to drill a well to that well pro­duc­ing en­ergy. How­ever, over the past cou­ple of years, Ex­trac­tion has re­duced its drilling times from fif­teen days to roughly three days and is to­day able to start pro­duc­ing in just a few months—an ad­vance­ment that Owens largely at­tributes to the in­no­va­tions de­rived from the com­pany’s drilling and com­ple­tions de­part­ments and the ef­fi­ciency gains of its com­ple­tion part­ner, Lib­erty Oil­field Ser­vices Inc.

“What we’ve been fo­cused on is how fast we can go from putting a dol­lar into the ground to hav­ing that dol­lar pro­duce rev­enue back and we’ve done that through pretty big col­lab­o­ra­tions with our part­ner ser­vice com­pa­nies as well as ef­fi­ciency gains through en­gi­neer­ing in­no­va­tions,” he ex­plained. “For ex­am­ple, in terms of com­ple­tions, Lib­erty has been in­te­gral to our suc­cess, and we have been pretty in­te­gral to theirs. They’re the com­pany that frac­tures, or com­pletes, ev­ery well that we drill and that was typ­i­cally the long­est cy­cle of the op­er­a­tions process.”

“To put it in per­spec­tive, ev­ery day, Ex­trac­tion moves 20 mil­lion pounds of sand, which is a unit train or more that has to be de­liv­ered, put into stor­age fa­cil­i­ties, and then put into boxes and trucked out to our lo­ca­tions,” Owens added. “It’s a very in­tense process with a lot of dif­fer­ent mov­ing pieces. But we’ve been able

to col­lab­o­rate with Lib­erty and build infrastructure the right way to keep up with the pace at which Ex­trac­tion has been mov­ing.”


In terms of the fu­ture, Owens high­lights the com­bi­na­tion of deep­en­ing Ex­trac­tion’s re­la­tion­ships with suppliers and con­tin­u­ing to pur­sue tech­no­log­i­cal in­no­va­tions as the keys to con­tin­ued suc­cess for the com­pany, en­abling it to de­velop fields in ar­eas of Colorado that would have been im­pos­si­ble to de­velop just a few short years ago.

“One thing that’s helped our op­er­a­tions move as quickly and ef­fi­ciently as they do is we haven’t changed the suppliers that we use very of­ten,” he out­lined on the sub­ject of strate­gic part­ner­ships. “In the be­gin­ning, it was very hard to es­tab­lish sup­plier re­la­tion­ships, but we were able to find other small com­pa­nies that were start­ing up at the same time and part­ner with them. To­gether, we’ve all been able to grow, and in fact, Lib­erty IPO’d ear­lier this year and they’re about a two-and-a-half­bil­lion-dol­lar pub­licly traded com­pany now.”

“Servtech is hon­ored and proud to de­sign and man­u­fac­ture our high­est qual­ity LACT fa­cil­i­ties for Ex­trac­tion O&G in our ef­fort to pro­vide them with the high­est up­time for this cru­cial com­po­nent in Ex­trac­tion’s oil pro­duc­tion and its ac­cu­rate mea­sure­ment.” CHRIS BROADFOOT / VP, Servtech Inc.

Mean­while, tech­no­log­i­cal in­no­va­tion has en­abled Ex­trac­tion to re­duce its im­pact on both the en­vi­ron­ment and lo­cal com­mu­ni­ties. For ex­am­ple, with its wholly-owned sub­sidiary El­e­va­tion Mid­stream, LLC, the com­pany is build­ing an ex­ten­sive oil, wa­ter, and gas pipeline net­work that has al­lowed it to re­duce the num­ber of trucks re­quired to carry such ma­te­ri­als from any­where be­tween 4,000-5,000 dur­ing the drilling-to-com­ple­tion process to just a cou­ple of hun­dred per well. “We al­ways have to keep in mind that we are in a more pop­u­lated area and have to op­er­ate in a way that’s dif­fer­ent than most other oil and gas com­pa­nies,” Owens ex­plained. “We were the first com­pany in the Rocky Moun­tains to start plug­ging our drilling rigs into the elec­tri­cal grid and now they’re as close to silent as they can pos­si­bly be. On the com­ple­tion side, with Lib­erty we de­vel­oped what’s called the Quiet Frac Fleet, which is so quiet that it’s un­der the OSHA [U.S. Oc­cu­pa­tional Safety and Health Ad­min­is­tra­tion] thresh­old of re­quir­ing hear­ing pro­tec­tion.”

Re­turn­ing to the sub­ject of Ex­trac­tion’s fi­nances, Owens de­scribes a com­pany work­ing hard to be­come what he calls a “cash­flow-neu­tral, cash­flow-pos­i­tive en­ergy com­pany.”

“This is kind of a new thing in the en­ergy sec­tor,” he in­sisted. “Not a lot of en­ergy com­pa­nies have been able to self-fund their op­er­a­tions and our goal to be able to do that as such a young com­pany was a very steep goal, but it’s some­thing we are very close to achiev­ing right now.”

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