What Matters Most?

Everyone says that in the Bakken, relationships matter, that the human element is often as crucial to forming a joint venture or developing a large-scale project as the geological location of a well is to an operator.
By Luke Geiver | May 14, 2014

Everyone says that in the Bakken, relationships matter, that the human element is often as crucial to forming a joint venture or developing a large-scale project as the geological location of a well is to an operator. After eating lunch with a group of local land men, ranchers and major Bakken transload developers at Hotel Albert in Fairview, Mont., on a windy April day, I would argue in favor of the power of the face-to-face meeting in making a Bakken deal happen. I was at the hotel  with Neil Amondson, the transload developer, to learn about the process he has undertaken to develop a new Bakken rail and logistics hub on the North Dakota-Montana border. As Amondson and the others sat at a high-top table joking and laughing about topics completely unrelated to oil  and gas or the role each had played in helping him acquire land for the facility on the outskirts of  Fairview, it was clear that knowing the people behind the impressive numbers of the Bakken is as important as knowing the numbers themselves.

For this month’s issue, we have compiled several stories that highlight the important role of the person in the project. In “The Spyglass Project,” we cover the rise of a Denver-based exploration and production team, American Eagle Energy, whose core acreage is located in Divide County, N.D. Investors have been taking notice of this small operator because of the low well costs its team has been able to reach, and they are drawn to the people who make up the American Eagle Energy Team, according to Marty Beskow, vice president of capital markets. After spending a morning speaking with Beskow, Brad Colby, president, and Tom Lantz, chief operations officer, I have to agree with Beskow: the people are amazing, especially  Lantz. How could anyone not be fascinated listening to  one of the original members of the Halliburton team that fracked the first Bakken wells in the ElmCoulee field?

Ross Kovach, a lifelong crane enthusiast and owner of a Minot-based crane service, is also someone who, once you meet, you’ll never forget. To help explain how changes in the Bakken impact nearly every segment of the industry, we toured Kovach’s facility and drank a pitcher of coffee with him and his executive team. Kovach’s is a story of adaptation and it epitomizes how change has and will impact the service providers who work with operators. Kovach and company are now positioned to service nearly any type of heavy equipment-moving need that arises.

For investors trying to understand how to capitalize on change in the Bakken, the story “Forward-Looking Investors,” offers perspectives of two different investment entities that have found success in the play. Mike Morey of Integrity Viking Funds has helped his portfolio management team beat Wall Street and the rest of the U.S. in energy-based mutual funds for the past three years. The team did so by picking Bakken-based companies for the Williston Basin Fund, but as Morey notes, a company’s valuation on paper doesn’t tell the whole story.

With this issue’s theme of pipelines, rail and trucking, the stories on the proposed transloader complex and a trucker-owned and operated firm allowed us to highlight some important transportation issues in the Bakken. And while these stories are not intentionally linked to that human element of the Bakken––the kind you would see at lunch with the local land men and ranchers, or you could feel when Lantz talks about the early days of the Bakken and how he applies lessons learned then to operations of today––understanding these folks offers a glimpse into how the Bakken is working today, and will in the future. And, it’s safe to say that we should never forget that in the Bakken, relationships matter.