This is a story about how landmen are made.
Back when I was in college/just out of college, we watched True Blood on HBO. It came on after Entourage. I guess vampires and werewolves were all the rage back then. Anyways, sometime in the first or second season there was a scene where a new vampire is created. I remember the conversation bit “only a vampire can create a vampire.” That’s pretty true to landmen too. The circle of landman life from birth until death involves other landmen. We all learned the trade from somebody else, they weren’t always older but they were (hopefully) more experienced. How else would we learn that the most important part of being a landman is to only work 10 to 2 Tuesday through Thursday?
How Landmen Are Made
The problem that we are, and have been, running into, is that even if you have young men or women willing to become landmen, nobody is willing to educate them. In my post yesterday The Last Landman – A Career Dead End I brought up the fact that squeezing budgets has been the trend for a decade now. The only end in sight is the inevitable “oh shit” moment when there are no longer experienced landmen to teach a new generation. E&Ps will put “junior landman” on a rate sheet attached to an MSA, but let’s be real…nobody wants to pay for a landman with less than 10 years experience. You’ll also have to be paying for a senior landman to hold their hand. Nobody is going to do that.
Learning from Experience
Last year I was in Houston and happened to have a few hours between my next meeting, so I called up Jack Womack over at Crew Land Research. I have never worked for them, but Jack has always been willing to help me out since I first started working as a landman. He told me to swing by the office to catch up. While we were sitting there visiting (after he got over how badass the Texas Oil Gusher hat I gave him was), we got down to business. He asked where I wanted to work. I told him I wasn’t in town looking for work for another broker. That got us on the topic of how hard it is to find good landmen. Jack said he spends some time each week going through his rolodex (he’s been in the business long enough to still have one) trying to call up retired landmen to come teach his “young guys” about due diligence and other nuanced land projects. His “young guys” were my age or older.
“The Next Generation”
I think I can count on one hand how many landmen I know that are younger than me. The next generation that was supposed to come after us either got in and then quickly got out of the business when things went to shit, or they never bothered to even try because…things went to shit. I’m not trying to be pessimistic at all, this situation makes me extremely optimistic for my (and our company/contract landmen)’s future prospects…but it’s a topic that I have been talking about with more and more people over the past 5 years. The Shale Boom created too many warm bodies. Most of them washed out. Some of them became landmen. Most did not. The ones that have stuck through it are looking at day rates lower than what we all made with 1-2 years experience back in the day. But we’ve got 10, 15, 20 years more experience now. The cost of living hasn’t exactly gone down either.
Trying to Change Directions
So if nobody is going to pay to bring new landmen into the profession, how are we going to get all the work done? Give us another boom and we promise not to piss it all away…or whatever. Most independent landmen these days have 3-4 different brokers they are doing work for, off and on, sure, but still. That’s a lot of juggling. A couple of the old names have some veteran soldiers they keep around because…they can’t afford to lose them. We pay our guys more than most other shops, because we know that they have other work. When things went to shit last year and we ended up with a client that…wouldn’t declare bankruptcy, but couldn’t pay anyone…we ate that cost and made our guys whole. That wasn’t an easy decision, and it wasn’t an easy price tag to swallow, but it was the right thing to do. We’re trying to do things different because somebody has to try. Otherwise we’re just going to keep losing more and more landmen until there’s nobody else left.