Fred Wehr: A career in oil and gas, defining moments, luck and a great ride 6 Feb 2014

Fred Wehr was born and raised in Baltimore, a blue-collar town on the east coast of the US, which is a long way from the oil patch in the US. As a result, he had no knowledge or interest in the industry or in geology until university. Many of Fred's colleagues, across the various regions of the oil and gas industry that he has worked, would agree that the industry has benefited from him being part of it. And his career in oil and gas was the consequence of a chance event.

He was an English major for his first 1-½ years at University and took a year of introductory geology to satisfy a science requirement. It was to be one of those defining moments, which resulted in Fred changing majors after realising that English probably wasn’t his best career choice.

“Once I switched majors and began to do some real fieldwork there was no turning back. Field mapping and deciphering the puzzle of complex 3D relationships is addictive, and I loved stumping around in the woods,” recalled Fred.

“Since then, I have been extraordinarily lucky at key points in my career, especially with the individuals who have helped me along.

“I went onto graduate school in 1978 in part through the support of a wonderful professor named David Wones, who took me under his wing after I spent a summer carrying large chunks of granite through the fly-infested north woods of Maine with his field team.

“Nearing the end of my PhD in 1982 I had pretty much decided to go into an academic role, when Exxon came recruiting and I had an opportunity to visit their research lab in Houston. At that time the staff there were an extraordinary mix of top-flight scientists - some big names in industry and academia - and the job was just too good to turn down.”

At his interview dinner, the first night in Houston, was a young, rather scruffy geologist recently recruited from NASA named Dave Phelps. For the next 15 years Dave and Fred followed one another around the world in various technical assignments. When he was ready to leave Exxon in 2001, Dave helped him get a job at Apache and currently is working in the E&D group in Perth.

Fred's advice to those new to the industry: “Be nice to people in this industry. It’s a small world!”

When I asked Fred what he felt it takes for an individual to succeed in the industry today, he was certain that first and foremost you need to have some real passion for the work. “You’ve got to be a bit of a geo-geek to build up the expertise and technical credibility that is necessary for success.

“Good communication skills and the ability to work effectively in teams are essential these days. The industry is a lot more culturally diverse than it was when I was starting out - which is a great thing - and I think working across cultures, being willing to relocate internationally, etc. will become even more important than it is today. Nothing opens your eyes like living in another culture for a while, and this industry offers some pretty unique opportunities for relocation.

Career

Fred's career includes 17 years with energy major ExxonMobil before joining Apache, who he has been with for more than 12 years. While they are very different companies, both have provided him with challenging career prospects. So what was the reason for him to change direction?

“I had a good run at ExxonMobil, purely in a technical and technical/team lead role in a variety of disciplines: stratigraphy, clastic sedimentology, fault seal, visualisation, geological modelling. Like other major IOCs the depth of talent there is extraordinary, and the hardest part about leaving was the people. My best years with EM were working in foreign affiliates where the challenge was to use technology to solve asset-specific problems. With the increased centralisation within ExxonMobil during the 90s I didn't see these opportunities in my future, particularly combined with an expat assignment.”

The opportunity for Fred to join Apache was too good to turn down: they had just acquired the Khalda concessions in the Western Desert from Repsol in 2001 and were building a technical team to drive exploration and development. A big draw for him was to work for a decentralised, asset-based company. He was hired as the sedimentologist/stratigrapher assigned to work through the mature fields and identify infill opportunities in the KPC Joint Venture with the Egyptian government.

“It was the best job I have ever had – very active drilling with tremendous upside. I got to use all of the skills I had developed over the years in ExxonMobil in a very practical, rig-driven environment. I loved it. In nine years we were able to double production - twice - while continuing to grow the reserve base.

“A lot of Apache’s current management - including myself, my boss Faron Thibodeaux and our former region RVP Tom Maher - came out of that environment.”

Fred said he was pretty long in the tooth when he moved into management, and took over as Development Manager at KPC in 2005 when he was 50 years old. He became KPC Exploration Manager a year later and moved into his current job, Director-Exploration & Development, Australia, in the beginning of 2010.

Fred believes that as the industry wont be going away for some time, it will continue to offer the same long-term growth and career prospects for today's youth, that it has for him.

“This industry is changing so the opportunities will be different. The centre of gravity is shifting away from dominance by large western-controlled IOCs and towards an environment where IOCs, NOCs and service companies work more in a partnership.

“Also the increasing emphasis on unconventional resources (UCR) is changing the role of subsurface experts: the 'rock stars' in this world are the drillers and engineers who can increase efficiency and drive down costs. This may change the role of a geologist but from what I can tell within Apache, there is still tremendous demand for them – just this year we’ve sent two geoscientists to North America to work UCR plays.”

Although the industry will still provide plenty of opportunities for individuals, Fred doesn't think that today's youth want or expect that level of career prospect, or security, from one company.

“The generation prior to me was extremely loyal to their organisation and generally expected to stay their entire careers. I remember the class photos at Exxon’s research lab from the late 50s - early 60s, and everyone looked like someone out of 'The Right Stuff': identical short hair, white shirt, dark tie! By the 70s and 80s it was a much more heterogeneous lot, and the relationship between the company and employees was beginning to change. That change has continued to the present, and expectations on both sides are different.

“Having said that and from what I see among our younger staff, there are some pretty good careers on offer these days, including opportunities to work globally.”

One of Fred's greatest rewards from pursuing a career in the resources sector he said is meeting his wife Nikki on an Exxon Basin Analysis school in the western US in 1985.

“That has to take first place in the rewards department - she was a delegate from London working as a geophysicist with Norsk Hydro. We’ve been married 28 years with three nearly grown daughters.”

“The opportunities to live and work overseas have been tremendous, both with Exxon Mobil and Apache. My oldest daughter was born in Sydney in 1990 when we were working the Cooper-Eromanga basins with Exxon, and subsequently spent 2 ½ years in the UK in the early 90s. Since I joined Apache I have been overseas my entire career: in Egypt from 2001-10 and here in Perth since then. A great run.”

In terms of achievements, Fred sees the series of successful exploration and development wells that they drilled in the Western Desert from 2002-2010 as one of the best.

“These had a major impact on the production profile for the region and the company. I was fortunate to work with a great team of expatriates and Egyptians, managing a ridiculously active drilling program.

“For some reason, all the best wells came in when I was out of the country. I recall a phone call while riding a gondola up a ski slope in France in 2008 with an excited voice on the other end telling me they had encountered a 350 ft oil column in the Phiops-1 exploration well. This was a small, four-way structure that had been on the inventory but overlooked for years because of its small areal extent. But it was filled to spill, went on to produce 40,000 bopd and enable us to reach the '2X' production target -- doubling production in five years.

“Obviously I should travel more.”

His career had its challenging moments too, and he recalled that leaving ExxonMobil after 17 ½ years was terrifying for him.

“I had a few very good friends who saw my situation perhaps more clearly than I did and gave me good counsel. Joining Apache in 2001 was by far the best move of my career.”

From a technical point of view, he sees the company's current set of challenges in Australia ranking near the top in the 'challenge' stakes.

After all these years he is still loving the challenges Apache is providing him with.

“Apache has always been a growth company, and my role is to provide opportunities for profitable growth to the region and the shareholders. At the same time, the region is in the midst of executing three very large development projects (Julimar-Brunello, Balnaves and Coniston) and there is a significant subsurface operations component to these.

“So we have a balance between execution and longer-term strategy, both of which need to be successful to lock in the future of the region for Apache. Fortunately we have a world-class group of geoscientists in this department who understand this business and are empowered to do what needs to be done. You only have to look at our acreage acquisitions over the last 3 ½ years to see this.

Technology

It's Fred's opinion 3D seismic has been, without a doubt, the most significant technological advancement in G&G. For the industry he sees probably a combination of the move to deep water (driven by 3D seismic and drilling technology) and more recently the move to unconventional resource plays, as providing significant technological advancements – and underpinning all of these is the incredible growth in power and sophistication of computing.

“I feel very lucky to have seen these changes during my career - you have to be of a certain age to recall the wonder of scrolling through a 3D seismic volume for the first time. 3D seismic data has profoundly changed how we understand the subsurface.”

Looking at current technology and the trends emerging from it, Fred believes the move to broadband 3D seismic has the potential to drive reacquisition of a lot of the industry's existing 3D.

“We’ve just finished acquisition over a large part of the Exmouth acreage and the uplift is stunning. But it’s early days.”

As to emerging technology, he sees some of the remote sensing tools, particularly when combined with nanotechnology, could change the way the industry measures and monitors reservoir performance – and provide the next step change for the industry.

Australian O&G Sector

On asking him to compare Australia on the global stage in exploration and production Fred's first comment was, “Obviously the Northwest Shelf is a world-class gas province with the current scale of LNG and FLNG investments staggering”.

“Liquids are more of a challenge - the hundred-plus million barrel oil fields are either not there or well hidden - and the cost of offshore operations makes developing the remaining smaller fields very tough. Onshore there is tremendous room for long-term growth particularly in UCRs, but these plays are strongly driven by rate-of-return economics, and given the lack of infrastructure and cost pressures I think it will be a while before we see commercial operations of any scale (in Western Australia).”

As the industry is part of a global market, he sees the costs of doing business in Australia due to material and labour putting us at a bit of a disadvantage. However, every part of the world is facing similar issues: the remaining resources are more expensive to extract, in tougher physical and political environments, and he doesn't believe the regulatory/environmental pressures are going to get any easier.

“UCRs are great in terms of resource adds but are a low-margin business and subject to a great deal of scepticism in terms of their impact on the environment.”

Fred said he appreciates and respects the passion and conviction of environmentalists, and Australia is a magnificent and unspoiled continent. But he believes the industry needs to do a better job of making the case to its customers - e.g., everyone on the planet - that we can have our cake and eat it too.

“Threats from oil and gas extraction to the environment are real but manageable, and they are often exaggerated and distorted in the press. The alternative in the short term of (taxpayer-subsidised) renewables will place an unacceptable drag on the global economy.

“I recently read a great book on this and related topics by Matt Ridley called 'The Rational Optimist'. Ridley paints an encouraging picture of the planet, our history and future as a species.”

Being an 'early mover' and able to recognise and acquire suitable acreage is an important factor for any E&P company, and Fred believes that Apache, being a relatively decentralised company relative to others of the same size, enables them to move more quickly in making decisions about farmins and other acreage acquisitions. Having been in Australia for a significant amount of time also helps.

“Apache has been in Australia for a long time (22 years) and has well-established production and infrastructure in liquids, domgas and in the future LNG. This gives us diverse access to markets as well as significant tax advantages for our exploration efforts.”

Fred gets the sense that the current Australian government is already moving in the right direction in its efforts to encourage healthy and sustainable oil and gas exploration and development, while remaining open and competitive in a global market.

“A more streamlined regulatory environment, appropriate tax incentives for upstream activity and a transparent acreage management process are in place or in progress,” he commented.

“Australia really is a lucky country,” Fred said. “We are already well on the way to becoming a world-class LNG exporter with years of projects in the pipeline. The huge volume of stranded gas resources offshore is a headache for the operators (including us) but a good problem to have for the government. On top of that Australia is truly under-explored by global standards: just look at the exciting new activity in the Bight from BP and other players, plus the onshore basins with very little drilling to date.”

Industry Future

Commenting on what the industry can do to make itself more socially acceptable, and in particular ensure that it is seen as an attractive career choice for today’s youth, Fred thinks it is important that we resist the temptation to hire people from a small subset of universities and as an industry become a bit inbred over time.

“There is a lot of value to diversity in the workplace: not only in gender and ethnicity, but in overall demographics and technical background. Particularly here in Australia, Apache has a great mix of people with different outlooks – some straight from university, some from the majors, some from smaller oil and gas companies. It keeps things lively and challenging for everyone.

“In the 70s in the US, the majors made an attempt to hire from a broad range of schools and disciplines: many of my contemporaries in the early 80s were not from typical 'oil patch' schools. Many of these men and women are now in senior executive positions within ExxonMobil. You get a much broader range of skills and perspectives by selecting from a broad pool. Unfortunately when times are tight and the recruiting budgets get cut, it is a lot easier to go to a few 'safe' schools.

In an industry which is driven by technology and R&D, Fred thinks the work environment dictates soft skills to a large degree:

“If a young person comes to work in a top-down, blame-ridden work environment, he or she will either leave or learn a set of nasty soft skills that will not serve them or their co-workers well in the long run. On the other hand, a positive, respectful and collaborative environment where people work hard but have fun is a great place for a new hire to grow.”

Fred explained how Apache is committed to its people through recently introducing a number of internal courses and resources aimed at providing more formal support in time management, presentation skills, etc. “But I put a high priority on trying to create a work environment as described above that brings out the best in people. I am very fortunate in having some world-class mentors among our senior staff and very strong technical staff overall. They are a real pleasure to work with.”

For young professionals embarking on a career in resources, Fred has the following advice: “Study hard and like what you do. When you get your first job, hang out with one of the old guys. Listen, don’t talk.”

Personal

Trying to manage a work/home balance is not easy according to Fred, but he tries to get some regular exercise (not as much as some of his more extreme colleagues) and tries to get out of the office at a reasonable hour.

“These days work follows you everywhere and with our headquarters in Houston there are many opportunities for late evening / early morning phone calls / video conferences.

Fred is pretty passionate about music and used to play guitar in various rock bands, both in Houston and in Cairo, and has found it's a great pastime to wind down and relax when away from the office.

“Turning a valve amp up loud works for me, although I do miss playing with other people – haven’t made that work in Perth yet. I still dabble in recording and play when I can.

And are the any changes he would make to his career if he could do it all again?

“Absolutely none. It’s been a great ride.”

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