The North American natural gas market’s success is in the handsof the independents, and some of the leaders — private companiesnot driven by the need for outside investment — will be names notwidely recognized.

“These are the financial powerhouses of the industry,” Texasproducer Curtis W. Mewbourne told the Society of PetroleumEngineers in Dallas this week.

“There’s no debt, there’s usually strong cash flow and they cango out and finance what they want when they want.” He said thereare dozens of examples of these companies operating in the UnitedStates. “You can put tape over their names, drop a few zeros offthe cash flow line. It’s still the same. They are making money.They may not have the manpower, but they have the financial power.”

Mewbourne, a petroleum engineer, founded one such company,Tyler, TX-based Mewbourne Oil Co., in 1965, and has spent most ofhis professional life working the Anadarko and Permian Basins.

Everything, said Mewbourne, is evolutionary. “There’s constantchange in this marketplace, constant volatility in prices.” But hesaid that some things never change — especially for the companiesmarked for success.

“It takes strong leadership and great people. You’ll find thatideas and leadership are more valuable than the assets. That’s whatmakes a success.”

Mewbourne also pointed to companies in the public sector, suchas Houston-based Apache Corp., as examples of what it takes to be along-term success. Mewbourne said that what has made it a winneris that it has garnered “tremendous financial expertise” in its 45years in business, and has never forgotten the lessons of what ittook to make it.

The financial expertise in turn has given Apache a lot of cloutto do what it wants to do, and what it needs to do to continue itsgrowth. “This is their secret. It’s not an energy company. It’s amoney company,” he said of Apache.

Houston-based EOG Resources is another example of how to succeed— the “perfect model of an old style exploration and productioncompany,” said Mewbourne. At one time an affiliate of Enron Corp.,but now completely separate, Mewbourne said that EOG has followed aslow and steady path, and knows how make money and to “do it verywell.” He said the company didn’t do anything fancy, and itsucceeded because of it.

The “greatest challenge” facing producers is finding enoughpeople to join the energy industry, Mewbourne said. He urged SPEparticipants to do more than complain about the people shortage,and suggested donating money to their alma maters to make adifference.

Mewbourne himself, a University of Oklahoma graduate, made anendowment gift of $6 million to OU’s State Regents Endowmentprogram this past May. OU in turn renamed its petroleum andengineering school in his honor. Building up engineering programsis one of the only ways to attract a stable workforce, he said.

“We need young people with sharp knives,” said Mewbourne. “Thisis an adventure, not a job.”

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