Success in the Permian Basin
David Wilson began his career in the oil and gas industry in Texas in 1993. Since then, he has gone on to build a company with an extremely impressive portfolio and win many awards and accolades for entrepreneurial excellence.
Being an entrepreneur is a real challenge. You need determination, knowledge, persistence, enthusiasm, personality and tenacity to name just a few traits. But there is also one key element that is required, an element that is not so easy to come by – funding. As a business grows, the demand for funding grows, and the figures required keep on rising. Even to start a small business, with just the bare bones of what is needed, requires some money and this is especially so in the oil and gas business. You also need a network of contacts. This is vitally important and nowhere more-so than in Texas where there is a vast amount of oil and gas companies operating across the entire spectrum of activities; upstream, midstream and downstream. Then there is knowledge. Like any industry, in the oil and gas sector you need a sound understanding of what you’re doing; you can’t just walk in, set up and start trading; that would be irresponsible and unsafe.
So where do you start? If you are David Wilson, CEO of Unitex Oil & Gas, you start in Texas and you look for opportunities to improve operations and add value to oil and gas properties with upside potential.
Staring his career in oil and gas as what some people might call ‘young’, David Wilson bought his first Texan oil well when he was just 20; an age where most are still studying or finding their feet in the workplace.
He is now over 30 and owns more than 250 wells, producing about 450 bbl per day. One of the keys to his success is the focus of his business. Unitex Oil & Gas has always focussed its activities on the Permian Basin in West Texas, a sedimentary basin that is part of the Mid-Continent Oil Producing Area. Most of the Permian Basin’s oil producing organisations are based in the towns of Midland and Odessa and Unitex Oil & Gas has been there since 2003. Its goal is to: create significant value through the development and acquisition of conventional oil assets in the Permian Basin.
But doing business in Texas is no easy task. There is significant and fierce competition, there is the rising threat of the shale gas industry and oil and gas imports from other parts of the world, and there is the issue of environmental sustainability – people are growing ever-pessimistic about the constant testing, surveying, digging, drilling and producing. None-the-less, with the resurgence of drilling in the Permian Basin and Eagle Ford, Texas is responsible for 34 percent of oil and gas production in the United States and will continue to be at the heart of the energy industry in North America for the foreseeable future. So David has already made his most important strategic decision – to focus on Texas.
After deciding on the company’s focus, Wilson set about arranging funding which, fortunately, was quick and relatively easy and the next step was to grow the business.
He quickly went about purchasing more wells to bolster his portfolio and from 2003-2011 purchased over 250 wells; and he is today still looking to increase this number.
Some might say he was fortunate, and some might say he had a great mind for business as the 2000s were a great time for the oil business with prices rising dramatically. From the mid-1980s to September 2003, the inflation-adjusted price of a barrel of crude oil on NYMEX was generally under $25 per barrel. During 2003, the price rose above $30, reached $60 by 11 August 2005, and peaked at $147.30 in July 2008. Industrycommentators attributed these price increases to many factors, including the falling value of the United States dollar, reports from the United States Department of Energy and others showing a decline in petroleum reserves, worries over peak oil, Middle East tension, and oil price speculation.
According to Oil and Gas Investor magazine, Wilson’s strong suit “is streamlining operations in shallow-oil plays on the Permian Basin’s eastern shelf” and to date, he has certainly proved this to be correct. More recently, his focus has changed slightly; Unitex is now a well-known and well-respected company and Wilson is using his entrepreneurial flair to further grow the business.
In early 2013, the company penned a deal with Ridgemont Equity Partners, a middle market buyout and growth equity firm, which saw the first acquisition of conventional oil assets in Scurry County, Texas.
Wilson said of the arrangement: “I am excited to partner with Ridgemont and grow Unitex’s assets with their financial backing. Ridgemont shares management’s vision for the company. I look forward to continuing to leverage their knowledge and support.”
Of course, throughout his career, Wilson has continually displayed top-class business nous and this was demonstrated in 2007 when he was appointed by Providential Holdings, now PHI Group, as President of its Joint Venture, PhiTex Energy Corp. Wilson said at the time: “My goal, as president of Unitex Oil & Gas, LLC and PhiTex Energy Group, Inc., will continue to be to progressively seek out and identify under explored, under valued, or under developed oil and gas properties in the West Texas region. By coupling a common sense approach with years experience and cutting edge technology, Unitex and PhiTex will be jointly successful as we acquire and develop oil and gas properties.”
Wilson’s work with Unitex has shown that entrepreneurs, especially young entrepreneurs, in the Texan oil and gas industry can most certainly achieve; all they need is the drive and determination and a unique strategy. Wilson has previously been named by Forbes as one of the 30 under 30 to watch in the energy industry, he was named as one of the top ten Young Entrepreneurs in Oil & Gas and Water & Wastewater by Castagra, and he was called one of the top five Young Entrepreneurs in Oil & Gas by Oilpro – all of this from one well in Texas – maybe the saying is true; in Texas, anything is still possible.