What The Funk?

0:02 Kurt Rocker ain't no sucker.

0:08 What does that mean, Jeremy? Can't fool this dude. No? He knows too much, man. He knows too much. Well, you know, I was doing my research on Kurt and it turns out he's a geologist. Now when

0:21 I was coming up in the patrol engineering, you know, the first mentor I had, a reservoir engineer took me down to meet the geologist on the asset team and said, all right, this guy's a geologist.

0:34 So whatever he says, divide it by three

0:39 and that's where we start.

0:42 That's awesome. So Kurt, why don't you, why don't you tell the guests a little bit about yourself? You hit my radar. I don't know. Maybe a year, a couple of years ago and started to iterate

0:54 back and forth. You've got a pretty good social media presence I think you're pretty outspoken for somebody who sits on the operator side. where oftentimes the people are fairly muted, but wanted

1:04 to get kind of a sense of who you are, what you're doing, I know you're here in Denver, but kind of give us the lowdown on the last, however many years of life you've had.

1:16 Awesome, well, thanks for having me, guys. I'm

1:21 another Texas kid in oil and gas, I grew up in Dallas. I've heard of that place. Yeah, yeah, so I really, I guess the short version, I got started, kind of got involved with some of the

1:34 interested in science and animals was certain I was gonna be a vet and ended up working on ranches and docks and some weird jobs in the world, trying to figure out what I wanted to do, ended up

1:43 going to Texas and switched from vet to science or geology, 'cause I enjoyed drinking beers with my professors more than I enjoyed studying organic molecules. I'm wearing sanders. Yeah, yeah,

1:54 exactly. So that took me to,

1:58 the professor there, Mark Cluse, who had a big influence on me in structural geology. And I think probably played a pretty big role. And me going to UCLA for a master's degree and kind of

2:08 exploring the academic side. And when I got out, it was 2008. I'd been studying tectonics and earthquake forecasting and kind of built some of the modeling and

2:20 continue mechanics and sort of math side. But didn't want to stay in academics So I watched the world burning around me and kind of went working hard to get recruited into or get a job in oil and gas,

2:34 because I'd seen it when I was at school at Texas.

2:38 Ended up a pioneer. And there, I had a couple of people that played a big role in sort of introducing me to

2:45 ways of thinking about the industry and really taught me a lot about what mattered. Because I came in as an over-educated academic and really didn't know the first thing about oil and gas So some

2:55 people like Skip Rhodes and Chris Modica. uh, scallopier, uh, Caleb Pollack. We used to, uh, had lots of fun, lots of fun conversations outside and inside of oil and gas. Uh, there's an

3:08 interesting group of people there and worked under Andrew Corliss and Kevin Schmidt probably were two big people, played a big role and kind of showing me how this business worked. Um, after I

3:19 worked at Pioneer, it was at a small company and I think working at Silver Creek, I and Dallas was really eye opening. Uh, and I recommend it to anybody, the, uh, getting out from the larger

3:29 companies, you realize how many of the systems that we work in just evolved and haven't really been thought out very well. And so I want to start questioning a lot of the things we were doing and

3:41 sort of redesigning or realizing the process that we were doing and how we made decisions was we knew a lot less than I thought coming out of school, which, uh, that really helped me a lot to start,

3:51 uh, being more comfortable, uh, finding and overturning sacred cows.

3:59 You were a pioneer of behemoth, right? Was big even then, dozen years ago. And then you go to Silver Creek.

4:08 How many people were at Silver Creek? Oh, I think we were about, I don't know, maybe

4:14 30 people with the field. Yeah, so tiny, right? And you mentioned from the technology standpoint, we hadn't really evolved, right? And it sort of started somewhere and just expanded to cater to

4:26 bigger Tell me a little bit about kind of that reality that you came to and what you've taken from that going forward. Yeah, well, I think, you know, it's a little bit, I worked at Incana

4:38 afterwards and now I'm at Verdad, which is a similar kind of big guy, small guy shift. And

4:45 in both cases,

4:48 I've spent a lot of time working on using code and algorithms to replace expensive software or to. kind of get into the weeds of a process or a workflow, that was how to an established way of doing

5:04 things at the larger companies, but really needed a little bit more interrogation and some more attention. And so coming to the smaller side, one of the things I enjoy a lot is, there's a little

5:14 bit of a manual process side because you just have less resources, but you also get to think more about what step, what's important here, what matters, what parts of a petro-physical model do you

5:25 really, really matter, or do you even need to be paying attention to petro-physics at all? And is there something else that's more important in kind of driving value for your drilling program? So

5:35 I'd like to circle back to one thing. It's kind of my pet thing. Going back to your early career, you mentioned, you didn't know what you didn't know coming into the lung gas space, but as a

5:50 structural geologist and doing all those studies, what was the biggest misconception right off the bat that had to kind of. that you came up with or that you had coming into the industry?

6:06 I think really it was that we understood, after having done this for decades, that we understood more about how the systems worked probably helps or doesn't help, whichever way you look at it. I

6:18 started working at Pioneer about the time that the shale revolution was really becoming dominant. I think people had just been discovered by Petra Hoch And so that sort of transition of thinking and

6:31 getting away from permeability and trying to understand what drove value in these fields.

6:38 I didn't know the first thing about logs, so not knowing that you couldn't measure how much oil was in the ground, that was new. There you go. I

6:47 also thought, I think became aware pretty quickly that there's a lot of reservoir engineering math that we do that's really impressive a lot of technology that we use. but it's sort of all focused

6:58 sort of around the drill bit or down hole. Once you get into the office, we're still living in 1980. And that

7:08 seeing that after having a bunch of my friends with Dr. UCLA, they're off at JPL and NASA and doing some working at SpaceX and some other companies. And you start seeing the contrast of how oil and

7:19 gas works compared to some of these other industries or sectors And I think our narrowness of skill set in being very focused on oil and gas, engineering degrees, geology degrees, we are really

7:33 pretty narrow view of the world. And I think that was surprising to me. I kind of thought there'd be more

7:40 broader views and more of a diverse kind of worldview on how to approach the business.

7:47 So from your, I mean, I guess, and then you're fast forward to now what you're doing You're talking about applying maybe a little bit more mathematics in what you're doing to make things work.

7:58 Will you be able to kind of circle back and bring back that work you were doing on earthquakes and modeling those things and start to bring that into your space now? Yeah, I'd say that what I really

8:08 pulled from that was sort of the inverse matrices and building a linear inversion and kind of understanding the mechanics of how you can kind of connect statistics to an inversion to, which is a

8:20 glorified way of talking about just linear extrapolations and to multi-dimensional space But as I think about that, as the world has moved more and more and more, there's a lot of talk. I mean, ML

8:32 and AI are all over the place. And most people have no idea what they're talking about. They're just kind of fancy black boxes. And they're not that complicated. But if you don't understand any of

8:43 the math that's going on, it's easy to construct a model that's really poorly framed to not pay attention to some factors and get outside of the, get yourself in trouble And so that's probably where

8:55 I started. down myself pulling from that academic background and sort of where my research was and trying to apply it to what I'm doing sort of day to day or where I see the industry going. Yeah, I

9:06 think I see when people apply those techniques and they do kind of fit into that black box and they don't understand the mathematics that distrust of what's coming out of them is beginning to develop.

9:18 You know, it didn't predict it this time so that doesn't work so we're gonna move on. Yeah, there's a, so another thing that was happening when I was coming out of school was the financial crisis,

9:30 which kind of put me down. I was reading a whole bunch of finance blogs at the time and that has been a really important part of my growth since school. Was learning more about sort of the

9:45 quantitative financial world and the behavioral psychology of investors and what we know and what we've learned about how the human brain works. There's a guy Daniel Kahneman if you've read him if

9:58 you haven't I recommend anybody listening go study that world a little bit There's a great book by any Duke called thinking in vets, which is a great place to go if you don't know any of that space

10:08 That's the poker lady. Yeah, she's the poker player But she's anyway So that thinking about we like to think that our brains are super rational and that you give us some more information I'll make a

10:19 better decision and that's just not how we're wired One of my favorite or one of the good examples is that I think condiments is his research starts in Israel and the strongest correlation between

10:32 judges severity of sentencing was how long it had been since their last snack and That's that's not unique to them That's a human element and those are the kinds of things in oil and gas We like to

10:46 think we're all engineers and scientists and we're super we think data is important. We think information We think we're smart. That's just not the way the human brain is wired. It's wired to

10:55 survive on the planes, but not to analyze a big reservoir model on your computer. So watching that space and kind of learning from that has played a big role in how I think about what we should be

11:08 doing and how we can apply these

11:11 models.

11:13 I think going back though, you asked a different question that kind of sent me off down a tangent and I just lost track of what the main question was. Well, the lesson I took out of that was to

11:22 make sure that you get to snack in regularly. Yeah, well, it's just understand how your brain works. I think there's a lot of research that we can draw and that can help us, or good writing.

11:34 Research is the wrong word, but good writing for understanding like, what games can I play to help myself make better decisions? And for companies that are, we have these models, we're doing a

11:44 lot of work to predict well logs or to scale up some. Vasquez and bags fluid property. And I think that that's where I get excited about the machine learning side or what we can build with models

11:58 and what I pull from my training is how to rethink these models and tools that we use. So there's a lot of workflows that are published and we're used to using the equations that came out of those

12:12 workflows to understand something like a fluid property. And I think we're at a point now where what we could do is redesign the analysis to take something that was published in 1970 based on 150

12:23 samples from the Middle East and say, why don't I use all 2000 samples that I have from the entire US or something to build a more tailored model that's more useful for my field? And I think that's

12:35 where we're gonna have, there's a lot of room for advancement and sort of different thinking about how we approach oil and gas development.

12:44 A million different ways I could take this right now, but I can't get off of the sentencing. And the last time somebody had a snack, it actually reminds me of a conversation I had with my cousin a

12:56 long time ago. I was a year younger than him in high school and college and all that. And I remember it didn't totally make sense to me why if I applied to two schools that were even sort of across

13:08 the board, one, maybe I get rejected or wait listed at another one I get in, right? It didn't totally make sense to me why that would happen. And I remember feeling perplexed. Like, well, I

13:18 just wanted all the options, right? And I wanted to be accepted by all, like, why would - and my cousin, Josh, made a really good point. He goes, you don't know what the person's day was like.

13:28 That was reading your essay that you wrote. Maybe they were in a rush or their kid had to go to the hospital or they were hungry. And they just glossed over the last five and just three years in a

13:38 pile based on your name or the first five things they read. This is a less of an indictment on you. These are people making this analysis. And I remember really stuck with me like, OK, right We

13:47 don't just live in a vacuum, which you sort of think when you're writing college essays. that it's going to be analyzed by like someone who will really want to sit down and analyze it. Maybe that

13:56 doesn't happen. It's a person on the other side. So really salient stuff right there.

14:02 Love that. As far as oil and gas goes, I want to talk about the truth. Did you know that Tim and Español? The truth. I did know that Verthad is truth at Español, yes sir. Back-to-back Paul

14:17 Pierce references in episodes. There we go. The truth Oh, here we go. Clear of all time. Anyways, the truth. One of the things that stuck out to me when I first met Arthur, who I believe is

14:28 the CEO,

14:30 seven, eight years ago in Dallas, was that for a really small family centric organization, there was an emphasis on technology. And I think seeing you end up there and knowing how you value

14:43 technology, I see why it's a logical fit. Can you talk through some of the tools you guys have tried to make the most of. What have you done sort of in line with what big companies do? And then

14:53 what have you done to counteract the fact that you just simply don't have the same manpower as an incano eventive or pioneer? Yeah, so I think

15:03 the growth here is being, it's probably where we've been able

15:09 to use technology well. We struggle, I mean, first of all, I guess, we've got a, we're

15:16 less than 100 people and we've got 17, 000 barrels of oil a day and we're looking to double it this year. I think we're 85, 000 acres or so and DJ oil window and real happy with how things are

15:31 going, managed to get through COVID without really stressing too hard. It was difficult, but we have found ourselves now with a frat crew and a rig going and within cashflow and looking to pay down

15:45 debt or make distribution So we've. managed to do all that with a pretty small team

15:52 by using technology and managing, going through our information smartly. And the goal there is to try and avoid doing some of the, a lot of the busy work that really absorbs a lot of manpower. So

16:05 one of the things that I've spent a lot of time on, although I guess every six months it seems like a change is what I'm kind of focusing on, but

16:14 once it's not reasonable for a company to be building new geology maps every quarter,

16:23 just the world's not changing that much. So probably doesn't need to be updated as fast or the process for updating should be established, but then you don't need to be restarting from

16:33 the ground up, which I think when I worked at Pioneer, I think we remapped the Permian Basin. I mean, every six months it felt like. And that's just, we don't spend that much time on it. But

16:44 more importantly, so we spend time on it, but once we have a map and once we have things that are a workflow that's functional, we move on to the next thing. And then keeping track of what's

16:53 important, what are the things, what are the knobs that you can turn in your business that drive value is something that we spend, I certainly spend a lot of time on looking at completions metrics

17:06 versus petro-physical resource in place or fluid properties or lift mechanisms and trying to figure out where can

17:34 we

17:37 focus our attention to something that drives value. And then using that also scaling up technology to automate or streamline some of the workflows that are busy work. So there's a lot of data

17:38 pipelines I build to help us commit execute or produce regulatory documents and things that are kind of arduous to put together. But once you understand the workflow, you can kind of streamline them.

17:42 And so those are some things that we do. or I do to try and help Verdad expand more broadly. We have some technology we're using, really some services that are helping us integrate data. So

17:56 connecting accounting systems to field production systems where we can actually look at things in real time and try and understand what's going on. The reality though is that we're like every company

18:07 and we're all kind of dealing with these legacy systems and legacy technology both in the field and in the office and trying to figure out what are the right things to upgrade and what isn't worth

18:21 spending the money on or what systems are we not willing to kind of overturn and start over. Personally, I'm always on the pushing for go faster, do you know, but I think that

18:33 that's the balance that we're always trying to strike. So Verdaad, do

18:40 you see kind of being able Kind of being a fast. Are you guys more of a fast follower of technology? Are you guys on the cutting edge of

18:51 technology innovation? There's some small companies that we've got, there's a company that we've spent some time with that I think are they're a young company or relatively young that we're willing

19:03 to partner with and kind of get things off the ground. But for the most part, we're not looking to go spend a lot of, I mean, frankly, we don't have a lot of bandwidth to do evaluations of really

19:17 advanced cutting edge technology. So we're looking a lot for a lot more practical applications.

19:24 That said, we're doing, I mean, we have like bottom-hole gauges and we're doing some of the pressure transient tests and really kind of trying to use

19:31 low cost tools that are high in information that we can really, that are gonna change something about how we operate. I think that's something we get lost in in the industry often is we'll do get

19:42 involved in science projects. and I love science projects. But we really easily get lost in trying to understand something more and more and more and forget, is this gonna change any decision I

19:55 make in the business? Is this gonna have any effect on my capital allocation? And if it's not, probably shouldn't be doing it. And so we try to - A geologist? Everybody gets angered back to -

20:05 That's not what geologists say. What we're doing. That is so funny. You know what I mean? You just made that statement as if you were a finance guy, right? I don't think I've ever heard a

20:16 geologist say, Are you sure we should be doing this science fair project? Versus like, Shh, they're letting us do a science fair project.

20:23 They're fun. I do, you know, I do like the, you know, for those who are not watching this on YouTube or on video and are, you know, behind Kurt is that it looks like every geologist's office I

20:36 remember ever walking into, you've got, you know, Grid maps up with, I don't know, guess locations. And maybe is that a drilling schedule over your right shoulder? Oh, it's a, it's a Kasuna

20:46 chart of DJ or Colorado.

20:52 So it's different basins with the formations correlated across 'cause the names aren't the same as you. That's even better, even better. That's neat. Yeah, got some great geologic ages stuck in

21:00 there. And you got some rolled up maps at the ready whenever you need to pull those out. This is a classic. Yeah, I'm actually pretty bad on the rolled up maps I tend to live in PDFs, so I don't

21:11 know the last time I ever rolled some of those.

21:14 That's just kind of a fun thing. So I do have a couple of technical questions. I know we got some places that we wanna take this conversation, but DJ

21:25 Basin, you know, Verdad is obviously operating in Colorado, been a lot of changes geopolitically in Colorado over the years, making it, at least from the outside, difficult place to operate and

21:38 it seems like. what's happened now is you develop Colorado's specialist companies that are operating basically the big guys are getting out and turning it over to people who just gonna operate in

21:48 Colorado. Is that what you're seeing? And as Verdad, obviously one of those? So I think that's a great question. Actually, it's a good segue for somewhere I know you guys wanna go or had some

21:59 people on before kind of talking about some of the where the industry's headed from a sort of like an environmental standpoint. Yes. Because as you look at the regulations in Colorado, there's a

22:08 lot of them that are really frustrating and I like to

22:14 point out the contrast of drilling in the LA. basin happen. But, and drilling in Colorado in the plains where there's not many people happens. And then in the suburbs that are expanding into oil

22:32 fields and people are moving in and don't realize it, there's this uncanny valley where there's not enough concentration, and people get upset quickly. And that's like. Barnett had the same

22:40 problem in Texas. But if when that gets built up, when Denver gets built up big enough and you can hide a rig behind a high rise, probably we'd be back assuming things get ever get shut down. But

22:50 right now, the regulators have a

22:55 really kind of, they're in a top spot and the incentives, like political incentives are pretty poor. Nobody wants to stand up and say,

23:04 we can't, legally they have the right to drill here I can't stop them. It's a

23:11 good thing for the planet. We're keeping energy costs down. We're keeping the whole Scott Tinker viewpoint of energy poverty and what it means for quality of life. There's a whole lot of benefits

23:26 of having a local oil and gas community that's active. The alternative is external combustion vehicles where we run off of coal in Wyoming or Colorado for a coal state and people don't know that.

23:39 And there's no political incentive to come in and kind of speak those kinds of truths. And that makes it difficult. So lots of regulations are going in, lots of weird things are happening, but

23:52 also the industry is learning how to interact with a government and communities and higher standards. And as an industry, we're not really used to having very, we have standards. We're not used to

24:05 be, the standards are going up, I guess And so we're not, that feels uncomfortable. But the reality is that's where the world is heading. And frankly, I like to, I know that if I sit in my

24:18 garage with my car running or go stand next to a compressor, that a diesel compressor and a closed space, I come out in a body bag. And so that not happening, that's a good thing. So we're moving

24:30 in a direction that I certainly want my kids to live in. I think it leads makes the world a little bit better if we can, as we learn, how to be a more. effective steward of the environment and the

24:41 communities that we work in. There's definitely conflicts. There's a lot of pain in Colorado about it, but we're figuring it out and moving in a direction that I think is not that crazy. But what

24:53 it means is that the Colorado operators are getting good at dealing with this rising standard. We're gonna be the ones, these are the kind of companies and the kind of places where we're learning

25:03 the rules that are gonna be expanding and going to other states We're gonna see oil fields getting higher levels of regulation. We're also gonna see smarter regulation, I think, over time as

25:14 governments figure out more about how to do it well as opposed to sort of the metrics they think are important versus things that are actually relevant. Sure. There's the politics side as a whole

25:24 sort of other part of it and we'll see where that goes. But

25:29 I feel like there's a

25:31 real pain, there's really annoying steps here. There's a lot of, it's difficult, companies are figuring out ways to operate. And the reality is my perspective on this is rosier than some, partly

25:43 because we don't drill or we don't live in a lot of the higher density areas. So our operations are pretty rural, which makes things a lot easier for us. You know, I think there's something to be

25:57 said, Mike Umbro, we've had on the show a couple of times, talks about, wouldn't you rather be producing here where we have the regulations than bringing in, you know, a scope one or two from

26:10 another place it doesn't. And his example was always Ecuador for California, but you know, Colorado produced a locally where you've got these constraints, but if, you know, who knows what a

26:21 neighboring state necessarily, what their restrictions are, 'cause ultimately, you're gonna share in the pollution, no matter where it was produced. I think that's one of the things that,

26:31 there's a couple of weird things going on. I mean, the,

26:36 I don't know that the world, The incentives are really gonna ever exist where somebody in the middle of a city who doesn't know anything about energy policy but is really focused on air quality. I

26:51 think they're always gonna have a somewhat mythical view of like the plug in their wall. And that's just a challenge and that's probably most voters. So there's some level of just challenge that

27:03 we're always gonna deal with

27:06 and you can look at like, there's a whole number of industries where you can see that we kind of have outsourced the downside of an industry to some other core country and just let them deal with it.

27:16 And hopefully that's not where we're gonna just go with energy, but that's certainly a possibility. I've developed more of a sympathy, or I guess I have evolved in having an understanding or

27:31 sympathy for both sides of this equation. And it was very eye-opening for me I go on, I live here in Colorado. kind of a purple state, I guess, and then go to Texas and Oklahoma, a decent amount

27:41 on business, less since since COVID. And then, you know, for personal, I'll go back to New England to see family. Last November, I went out to retreat in California and whoa, man, that was

27:54 really eye-opening, going to San Francisco and getting on a highway. Holy frickin Tesla, Batman, like, if you lived out there, you'd think that we were way behind. You'd be like, dude, like,

28:05 those guys need to get where we are. We got charging stations. We have Teslas. Like, they're there. You know what I mean? Like, in their mind, like, they've done their part. They've moved on.

28:13 Like, what's taking everybody else so long? And in our world, it's like, oh, the infrastructure's not there. Oil's still going to be around. Like, it's just a, it's a very different mindset.

28:22 So I can see why somebody who lives in Marin County, who drives two Teslas, feels like they've done their part and they don't need oil and gas Right? So it's a little bit, of course, it's

28:33 uneducated and it's mythical, but I see how you get there. if that's your bubble? Yeah, I think that like right now it's like, we're fortunate or the world is fortunate that it hasn't been a cold

28:43 winter this year, but you see what's happening with natural gas prices. You can look at Europe, you can look at frankly, California too, switching on, I think California was switching on natural

28:54 gas plants. England was converting natural gas plants to oil. And that, so from an emission standpoint, natural gas power to oil power is moving in the wrong direction Exactly. And that speaks to

29:08 the lack of investment oil and gas, the terror of our fear of oil and gas companies to expand as prices have gone up. So we've seen less volume reaching the market. But also the regulatory side is

29:21 just keeping holding back a level of energy that can be delivered. And there's people, so long as your power's on, it's easy to keep saying, Yeah, I want more of that. where this winner is gonna

29:33 be interesting as we keep moving through it, to see whether this evolves anybody's thinking or leads to some slightly smarter policy around energy. 'Cause you're up for sure, and California too.

29:44 And frankly, the whole planet, we're all dealing with some realities right now that you just can't quite get enough. The technology isn't there yet for some of these renewables that are getting a

29:55 lot of attention. And if you don't wanna talk about nuclear, then you gotta have natural gas pretty heavily in the equation And that means oil and gas. And that's

30:06 just a challenge that I think a lot of the world is really, even politicians are kind of slowly coming around to. And I'm hopeful that the current situation, just on the planet is gonna help that

30:19 come. I mean, Trisha Curtis is a great person to talk to you better than me about any of this kind of stuff. But it's a really interesting point that we're at 'cause we're basically at a pain point

30:28 and some of the room. the contrast between the world as it is and the worlds we wish it were our coming head to head.

30:38 Gotcha. So we haven't talked about this on the air. I don't know what part of Denver do you live in Kurt? I live out in Golden. Golden, okay. So it's not too far away from it. But we haven't

30:47 talked

30:49 too much about the fires that hit fairly close to you, Jeremy. But now we've got two Coloradans on here I'm curious, we're what, two weeks out, a week out from, at least when I was covering all

31:05 the news, but what's that been like from, you guys are slightly outside of that, read the zone, but what's that been like for you guys to kind of watch and be very part of it, but close to you?

31:20 Yeah, there's been, I know a number of people who, I

31:25 personally don't know anybody that was involved, I know I've got a lot of sort of first order. uh, connections through places I've worked that have been affected. Um, I've seen a lot, there's

31:34 been a lot of outreach and, uh, go fund me's and just support campaigns that have gone off to try and help people. It's a hell of a way to start the year.

31:44 Side. Yeah. Yeah. I mean, it's just, it's a, it's kind of a reality though. Just, it's been extremely dry out here. This, frankly, this whole fall and winter. Um, so just, I guess a

31:58 reminder of you were talking about drilling in communities and the environmental side. You just, we got to pay attention and be careful and put out fires, watch, you know, just a spark from a car.

32:09 It doesn't take much to, to really have a big downside and

32:14 it's rough to watch. So Jerry, I know it's a little bit closer for you and what was your, what was your, uh, experience? Devastating, man. Um, so I live in Lafayette and the fire was in

32:24 Superior and Louisville. So when we lived over in Eldorado Springs, Tim, that's almost like, that main road off of, uh, 93 is where it started basically. So give me this real quick. How, how

32:36 close is Lafayette to Louisville and Superior? And yeah, so you kind of got like boulders right here and then superiors here and then Louisville's here in Lafayette's there, right? So the fire

32:45 sort of started here and then, and started going east, basically and sort of wrapped, wrapped around like that. So was it a concern for you and your family that it was going to get to your house?

32:56 If it had gotten to our house, the amount of damage it would have done would would be unspeakable beyond the thousand structures that are already took out. So I was bracing for the fact that it

33:08 could happen because it got within about two miles, I think two and a half miles, but my God, if it was going to get there, I would have destroyed all of Louisville. I mean, and a lot of

33:19 Lafayette, it's, it's unbelievable to think about it. It hit very close to home for us I think we know about a dozen people who lost their homes. my Friend Marshall Jones who was an executive at

33:30 Sklar energy was back East I think with his family on vacation comes back as almost burned completely to the ground so people who live the same type of lives that we do are now in hotels with two

33:40 three four kids in one hotel room right and trying to figure out what the hell to do with no clothes it's Super Messy and Unfortunate you know very sad I actually a week ago which was about a week

33:55 after the fires I drove out to where it started or close to where it really hit hard near the the Tesla charging station the costco the target because that's those are like the places that we go

34:07 that's our town costco that's our target that's our buffalo wild wings that you know all that shit and an amen like the smell still like seven eight nine days after the fire it still smells like A I

34:19 guess that's the part that really stuck out to me was like Oh My God you Can't be Over It still smells nine days later. So a lot of appreciation for the first responders and obviously a lot of

34:24 sadness and sympathy for everyone who lost their homes. You almost feel

34:31 guilty for being

34:34 like, I'm happy that we're safe and good over here, but certainly a lot of compassion for those who are dealing with a lot of shit right now.

34:44 Yeah, it's always good to get that perspective and how fortunate you feel and you don't wanna be happy about it that we're okay, we dodged a pretty significant problem but 'cause you know what it

34:58 feels like to someone on the other side, it tricky. What do you even say? Yeah, absolutely. So, yeah, thank you for bringing that up, Tim, 'cause there was a point, and I think it started to

35:10 fade at least for me, but just about every morning, you're getting going, you're working, and then I'd have sort of this split second. I'm just like, man, and it would just hit me like, there

35:19 are people in the same exact position that I'm in. working from hotel room with their kids in the room right now. No house. And I assume when when the fire is going, you can walk out on your back

35:28 patio and see smoke and smell it just costs. They're right. Yeah, we could see it ripping it off across the plains. It was windy that day too. 110 miles an hour. So they're like the videos of

35:39 the, the, I mean, it's faster than cars can go, right? Cause it's just yeah. And then of course, it snowed the next day. And there's been snow on the ground for the last week. It's like,

35:50 but man We're a, you know, people are resilient around here. We had the floods too. That was about eight and a half years ago. That sucked. Some people have had to deal with both getting their

36:01 houses messed up with floods and fires. We've been fortunate with both, but they had shitty. I mean, I don't know, because I'm a technology kind of guy. I'm always, I think about how at least

36:12 we were able to get reactions and get going to respond. I mean, I think it was minutes before we were working on it. Just the wind was so bad that it was really hard to get under that kind of

36:23 reaction speed is something that I think is important for thinking about, like, connecting it to the oil and gas side as well as what's the role of technology and there's a lot of people that are

36:32 focused on trying to, like, can I predict the next fire? What can I predict? And there's probably a, there's a lot of value just in trying to reduce reaction times and getting away from, hey,

36:42 somebody, when it's waiting for a firefighter to happen to go by the fire versus we've got sensors, we've got cameras, we've got alarms, we've got all the cell phones and all the people driving by

36:52 And raising that reaction speed and that's probably something I think we should be, or I look for, at least in oil and gas as we can find ways to use technology to really change and accelerate how

37:02 fast we react to things going on in the field, react to markets, reduce spills or emissions and really kind of help make this, that's one of the places I see this industry getting, having a lot of

37:13 room for improvement and get excited about is raising those speeds Yeah, I mean, and I have this conversation, it's very different, if you talk to somebody who is an executive at a big company,

37:24 right? A boxy or a, you know, Chesapeake or somebody like that, a top, a top 10, top 20 operator. In the executive boardroom, they're concerned about ESG strategy. In the field, people are

37:38 still concerned very much about safety, right? Like we don't want any, but people are still falling off for rigs and shit, dying and breaking legs and stuff. We don't hear about it every day,

37:46 but still happen. Like that's where we need to be, that's the most important piece to the companies that are still operating and working every day is that, right? So I don't think the people who

37:55 are actually doing the work lose sight of that. I think in the back office and the boardroom, it's very much about a grandiose ESG plan, but execution is more around safety right now. Yeah, I

38:06 mean, I'll bite on that one pretty hard 'cause I find the ESG discussions are pretty poor as an industry. I mean, so I mentioned technology. I think one of my favorite plot charts is to look You

38:20 can do it for any industry, but sort of data volume involved in in the industry. And so it's basically exponentially growing Year-on-year and yet our return on capital pick your return on capital

38:31 metric is declining year-on-year-on-year Something's broken there And so the first thing you got to do if you're going to be a company that exists in 10 20 years is you got to be profitable So you got

38:43 to figure out some way to use your information to make better capital allocation decisions And then there's the ESG stuff the reason people are upset with us is because we don't we haven't been

38:52 turning a profit and until we can fix that nothing else matters and The ESG metrics it doesn't matter if you're the cleanest company on the planet if you're not profitable You're not going to be

39:02 around to keep making that beneficial impact on the on the world so the The discussion and the way the oil and gas community is looking at

39:13 ESG If you a lot of people even will speak candidly about it and say that oh we just it's really just looking for capital as opposed to that there's something structural they're changing in the way

39:23 they do things. There are companies doing big changes, but a lot of the discussion is really greenwashing your business to try and get some capital. One of my favorite example, or things to look

39:35 at, is how little tobacco and alcohol talk about ESG. And there's been stocks. There are sectors that are not particularly popular, but they're profitable. So they're not worrying about this

39:48 stuff How about fashion keeping their business running? And I think in oil and gas, we're getting a little bit confused. In fact, I basically call bullshit on the whole industry when you've got an

39:58 industry that can't turn, has that a problem turning a profit or getting good capital results for 15 years, getting worse and worse and worse. And now you're gonna add ESG as a new cost center and

40:10 you're just gonna try harder. It's not true that we weren't making up, we weren't working, getting good capital results in the previous 15 years, 20 years, because we were. not trying hard

40:20 enough. So there's something else. You've got to change something structural if you're going to really make this work. But the ESG side, I think it's important, I actually think it was a series

40:28 of ESG components that are really important. But the terms that people are talking about tend to be very environmental focused, like being a net zero oil and gas company, I don't know what the hell

40:40 that means or how that looks like. If you're a net zero oil and gas company, you lost.

40:46 We'll see But the, when companies are talking about this, the ESG metrics that matter are gonna be, we're gonna know what they are in 20 years. One of them is definitely being profitable. And I

40:58 think that we should be focusing a lot more on cash flow and a lot less on ESG side, governance is a huge one. I think, in my mind, I think transparency, cognitive diversity and governance and

41:10 incentive structures are three things that are great ways to raise your ESG score a business that directly tied to. driving you to smarter capital decisions that are not trying to kill your business,

41:23 like or at antithetical to the business that you're running. So doing carbon offsets is kind of a strange way to approach it. Yeah, I don't know how to segue into this, but you know, micro of

41:38 dirty jobs. Yeah. Oh, he did a, he has this interesting lecture on, it's actually a TED talk now, but on safety third And I know that, he says, 'cause you know, is, 'cause he went to a dirty

41:52 job site and there was someone wearing a safety first hard hat or something like that. And he said, really, is it safety first? Because if it's, if safety is first, you don't have a business.

42:03 Yeah. You have to, you have to eventually take a risk in order to drive a profit in whatever business you're in. And I'm butchering the whole point of this thing, but you know, but you have to be

42:15 able, Yes, safety is important, but. so are profits. You have to be a profitable company to put safety at a high level. And sometimes you simply just have to take a risk. There's still farmers

42:26 out, you know, risking themselves to do whatever to, and they want to be safe. And same thing with environmental. I mean, an oil and gas company, we can reduce our scope one, our scope two,

42:38 but if you're going to hang scope three on Verdad, because you produce something that some car is going to burn later on,

42:46 you're never going to get to net zero. Well, or

42:52 if the metric is not aware of the relative options. So if you've got a guy working in a mine, but the alternative was having a hundred guys working in a mine with no regulations, no hard hats or

43:07 anything, or a bunch of kids in the Philippines who are just being sent off into into a terrible work environment, the the alternatives are worse. and the options are you're taking the least

43:19 dangerous of frankly a poor set of options and or an unsafe suite of available to guarantee the best of what you can do and I think that we are in energy policy we were talking about that earlier but

43:33 understanding what the tradeoffs are is the right way to think about decisions as opposed to thinking about each individual choice in a vacuum of is this comparing it to perfect which basically

43:43 nothing ranks very well in comparison to some ideal

43:48 you're you're a you're a geologist but you preach financial responsibility you use words like antithetical to our human certainly when we're down some pretty serious mathematic terms earlier that I

44:02 was at all man I blog if we if he says laplace transform I'm leaving

44:08 but but it leads me to decide I know I know geologists been around a lot of them you're different than a lot of geologists and what What do you see as far as your career path, you know? I mean, do

44:20 you kind of like what you do as a geologist? Do you think, could you see yourself running your own company? Could you see yourself transitioning to the technology side in longer term? Like, what

44:29 do you kind of see for your path? Yeah, I think about that a lot. I have lots of things going on, I guess. I'm

44:40 a, the big one is I look at oil and gas and I see this

44:44 really important industry that has some deep structural problems that are preventing us from taking advantage of technology. I think it's really fun, Jeremy. We've talked about this a little bit.

44:56 Looking at the services that are out there and the gulf between the technological, the level of advancement of some of the services that are out there and then where the operators are. And there's a,

45:08 there's a product market fit that every smart kid who comes out of school smart engineer who goes and builds something and says, I've got a better mouse drive. And the industry says, I'm not sure I

45:20 need it because I don't understand how it fits into my business or the improvement it makes because I can't see the cost of what I'm doing today. And that's just, there's a whole plate number of

45:32 places where that comes up. And in my mind, there's a real need for a new kind of operator. I like to say that the, I've never been more bullish on US. on, like US. onshore oil or hydrocarbons,

45:46 but the actual companies that exist today. I'm pretty humble about whether I think any of them are gonna be the companies that are around in 20, 30 years, just because it's so hard to change the

45:58 internal structure, the way we make decisions, the way we run our companies, the operating model. Because they, once you have the wells, we're so focused on sort of day one, it's keep the wells

46:09 running, make some changes, keep your systems operating, operate, Excellent. Operate and execute the efficient.

46:17 and once you start doing that the behemoth builds on you and it's never worth it no point is worth it for you to invest in changing that over flipping it into a new operating model or changing the

46:28 structure of how you how your information flows how you streamline decisions what you pay attention to and so we keep forming the silos of your land team and your engineering team in your geology team

46:39 and your accounting team or buy assets and those are the two or charts we deal with and that's one example of a place where there's two things we try neither of them works and that's all we keep

46:47 trying maybe keeps switching back and forth the page those are the two options and there's got their other industries accomplish different ways digital transformation is something people talk about

46:58 and there isn't as far as I'm concerned the companies I studied outside of oil and gas it doesn't work unless you change the structure of your company you have to really redesign yourself around

47:09 decision quality and optimizing for the information flow instead of the field execution and until we do that this industries Stock I and So I'm I that's a problem that I'm really fired up this all we

47:22 try and work on that I'm here her dad and but you know I'll live longer than this company I suspect so the I look forward to finding other ways and where I go next and to keeps working on that problem

47:34 but that's the thing that whether I can start something that goes down has a solution working with people to try and figure out how that could happen or we can do with Verdad or I'd join somebody that

47:44 that's really the the future where I see myself going love it I think I'm going to answer the question you asked him and more concisely he's going to have to form his own company and actually just

47:54 prove this up that's that's what he wants if he wants I mean there there's there's something to be said for there's a lot to be said for what he's saying and in this one more quick story before we

48:04 before we jump off here there is a CEO in the space well known publicly traded company and this will just give you sort of an insight into the tech innovation that you're seeing amongst some of the

48:16 bigger operators. And this CEO summoned the head of IT and said, I have a business idea, I have a technology idea. You have developers, I know I'm paying you to have developers, I want you to

48:26 build out this idea. It's an app where if you hear a song, that you feel like you hit a button and then it listens to the song and tells you what that, and it's like, yeah, it's called Shazam,

48:41 and it's been around for 20 years It's like, are you sure is there a competitive opportunity for this? It's like, no.

48:52 Wow. That's just - So we're talking about digital oil field. People are asking you to build Shazam. That's where -

49:01 This is one of the things that we're talking about ESG and ESG metrics that matter, and one of them is diversity. And it's not diversity for the sake of having skin

49:12 color and sex or sexual orientation. I religion and age none of those on their own actually matter what matters for your business is to have cognitive diversity you want people that have them are

49:26 drawing from different areas of expertise and oil and gas is terrible at that we have a whole bunch of engineers and you all his wall went to basically the same a very small number of schools have a

49:35 very tend to have oil and gas only experience

49:40 show me the company was first off show me the company that's got like a chief technology officer or chief data officer those basically the CNC TEOS are based the I T managers for the most part which

49:49 is a misuse of their skills and we should be looking for the company that's got like a google image of somebody that comes out of Google or Facebook who's working on their data analytics leading that

50:01 program that's not what we see we should see somebody with a Who's got a CEO who comes out of Toyota We Don't see that and those are the kinds of things where we can be pulling from by the the planet

50:11 we can deploy from other industries owing from different schools and expanding the awareness so that we're not asking, hey, have you ever thought of inventing Shazam because I've never heard of it?

50:22 Instead, we're thinking, how could I solve some problem in a creative way that really is an advancement as opposed to just looking at each other and trying to kind of the blind, leading the blind

50:31 through a difficult technology trouble? You're right, and it's not just, and like you said, it's not just creed, race, skin color, accent, it's the thought It's what you offer and can come to

50:45 as a group that challenges conventional thought and moves the organization forward, which, I mean, people process technology. Technology is still third, right? So you have to put the people,

50:55 the right people, you know, encourage process, and then reward them with technology. And, you know, of the hundreds of companies that I've been into, you know, a small percentage do that,

51:07 because frankly, the job has always been get oil out of the ground. So they're doing their job, right? as the job has been mandated, like there's always been a disconnect with me like, you know,

51:17 I can make your job easier. You just need this piece of, this piece of sass. Yeah, but you know, one of the things, you mentioned the job is to keep oil out of the ground. And I think that's a

51:25 kind of a place where

51:28 that seems like a reasonable way to describe it. And I think as an industry, I work in, I mean, the teams that I've worked in, very often we interpret that to mean, get as much oil out of the

51:38 ground as possible. Right. That's not actually what our job is Our job is to bring out the most profitable oil that we can. So, off margins. And people get focused on like EURs. EURs really

51:50 aren't that meaningful. What you want is cash flow. And we're paying it like, not paying attention to the right metrics. Or we don't even spend much time, we get kind of lazy and fall back into

51:59 workflows and ways of evaluating fields and wells that are old. And that sort of creativity of sort of overturning some of the old equations

52:12 or KPIs were used to paying attention to and just re-asking a new question. is this really driving value? 'Cause if it's not, let's go find something that does.

52:21 That's brilliant. Well, we're gonna have to cut it off here 'cause now we're hitting on some, well, we're hitting on some topics. We can go on for a long time, but man. Kurt, great having you

52:32 on. Good one. Love getting to know you here a little bit. Jeremy. Yeah, Kurt,

52:38 where can people find you? I know you've got a decent social media following. Maybe find out about you, find out about Verdot, all that fun stuff. Well, Verdot's got their website or our website

52:49 and that we have a little bit of information up there. Like every oil company, it's not terribly informative, but you can see a little bit of where we're operating. The, I'm

53:00 on LinkedIn.

53:04 I'm on Twitter for those of you that are on there. I'm probably a little bit more vocal or I don't know. On LinkedIn, kind of a little careful on Twitter, can be a little bit more costly.

53:14 different worlds, and then we've got Denver data drivers in Denver and kind of try and talk about the ways that technology is changing workflows in Wallingdas, and so there's a community there.

53:28 Reach out to me anywhere you can find me and I'm usually likely to respond unless it's a really terrible marketing pitch. I think we're all tired of those LinkedIn connections that immediately say

53:38 hey help me or buy my product or some other crap but yeah I can only imagine what the hit rate is on those types of emails and I'm sure early on with LinkedIn I probably did a few myself and usually

53:50 just got me blocked. That's yeah I just disconnect and wait for them to throw a little bit. All right on thank you Kerr appreciate you brother. Really really fun to talk to you guys keep