College gift gears grads for oil's ups, downs
The petroleum industry has historically been a cyclical one, with swings in prices periodically spelling boom and bust for companies and their workforces.
But the current slump, which has seen prices fall by more than 60% since June 2014, is one of the worst ever for the sector, making job prospects that much less certain, especially for those just entering the field.
With that in mind, the co-founders of a Houston oil and gas management-services company recently announced a donation of $12 million to their alma mater, Texas A&M University, to help students in petroleum engineering better understand the business side of oil and gas production.
“I think it’s really timely and gives our A&M engineers an advantage coming out of school at this time and in this environment,” said Jay Graham, who with his partner, Anthony Bahr, started WildHorse Resources Management Co. after graduating from the university with petroleum engineering degrees in 1992 and 1991, respectively.
Thanks to their generosity, Texas A&M will launch a Petroleum Ventures Program as a collaboration between the school’s Harold Vance Department of Petroleum Engineering and its Mays Business School.
Starting in the fall, the program will provide certificates to undergraduate and graduate students in petroleum engineering and business who are interested in working in energy finance, petroleum acquisitions, divestitures and related fields.
While timely, given the downturn in the industry, the donation has been in the works for a while, Graham said in an interview.
His and Bahr’s inspiration was a well-known professor at Texas A&M, Billy “Pete” Huddleston, who became a mentor to them as well as an initial investor in their company.
“He felt our engineers don’t come out (of school) with the right business foundation,” Graham said of Huddleston. “He’s been trying to get this done for years, and never was able to get it done,” until now.
Graham and Bahr learned through experience after graduating how to navigate the world of business and finance, beyond the engineering education they received from Texas A&M in extracting oil and gas from the ground.
They also saw quickly how an industry that is particularly lucrative for petroleum engineers — the median pay for such professionals was $130,000 in 2014, according the U.S. Bureau of Labor Statistics — can prove punishing, as well.
“It seems like no one was hiring after I got out of school,” Graham recalled of the early 1990s, when he was fortunate enough to be among half the graduates in the school’s petroleum engineering program who got jobs then. “We’re a cyclical industry, and I think it’s important for our engineers to know what kind of industry they’re getting into and figure out how to prepare.”
The job outlook looks similar today at Texas A&M, with one of the largest petroleum engineering schools in the country. A poll conducted at the university in January found that about 45% of petroleum engineering seniors had permanent jobs lined up when they graduate in May, with about 30% planning on graduate or professional school.
Graham need look no further than his own business to see today’s challenges. Recently, WildHorse Resources cut its staff by 20%.
That said, he remains optimistic about the outlook for young petroleum engineers, especially those who receive a little business seasoning.
“A petroleum engineer in an oil and gas company is really the steward of that company’s assets,” he said. “If I can get them a better business foundation, in a market with fewer jobs, I think that will set them apart.”
Bill Loveless — @bill_loveless on Twitter — is a veteran energy journalist and television commentator in Washington. He is a former host of the TV program Platts Energy Week.