Chesapeake empire marches on

[PhiAlpha]

General question because I am too stupid to understand: Aubrey openly stated he wanted to build out the campus to employ 10,000 people. Back in 2014, GAR was $23 billion. Now, with the merger, they will employ 800 people. Was Aubrey over employing or has technology changed enough in ten years to where you don't need as many employees as much?

Again, not trolling, not knocking Aubrey, genuinely asking...

1) Technology has made it possible to operate large assets with much fewer people. Especially on the operations side. Things have changed a ton since 2004-2013 (when CHK experienced most of its growth). CHK was on the cutting edge of a lot of new tech so they actively helped spur the development of some of the tech that’s made life easier in the industry.
2) They were over employing to an extent but also…
3) They are no longer trying to lease up every square inch of the mineral rights in every play in the US. That has stopped for a multitude of reasons but primarily because there is a finite amount of drillable acreage, most of which is leased currently (tier 1 acreage at least), and commodities prices combined with some prospects not panning out has shrunk that the amount of desirable acreage (ending the massive land grabs of the 2005-2016 time frame) and to state the obvious, commodity pricing and the resulting financial disaster for CHK put an end to their leasing boom. Huge leasing plays take a huge support staff in addition to the personnel who primarily work on developing the assets so with the company’s shift to primarily focusing on development of its asset base over the last decade, they’ve needed fewer and fewer people. As an example, they had and maintained a massive title plant that housed the complete records for hundreds of courthouses across the country and hundreds of lawyers and Landman researching title there, that mostly went away after **** hit the fan and they slowed down their leasing efforts.
4) Aubrey vertically integrated CHK which was part of the reason for the 10,000 employee campus and after around 2010-2011, CHK started spinning off anything that wasn’t part of the upstream E&P company. Access Midstream, several of the drilling and completion service companies and other components were spun off, further reducing headcount.

[irishtate]

1) Technology has made it possible to operate large assets with much fewer people. Especially on the operations side. Things have changed a ton since 2004-2013 (when CHK experienced most of its growth). CHK was on the cutting edge of a lot of new tech so they actively helped spur the development of some of the tech that’s made life easier in the industry.
2) They were over employing to an extent but also…
3) They are no longer trying to lease up every square inch of the mineral rights in every play in the US. That has stopped for a multitude of reasons but primarily because there is a finite amount of drillable acreage, most of which is leased currently (tier 1 acreage at least), and commodities prices combined with some prospects not panning out has shrunk that the amount of desirable acreage (ending the massive land grabs of the 2005-2016 time frame) and to state the obvious, commodity pricing and the resulting financial disaster for CHK put an end to their leasing boom. Huge leasing plays take a huge support staff in addition to the personnel who primarily work on developing the assets so with the company’s shift to primarily focusing on development of its asset base over the last decade, they’ve needed fewer and fewer people. As an example, they had and maintained a massive title plant that housed the complete records for hundreds of courthouses across the country and hundreds of lawyers and Landman researching title there, that mostly went away after **** hit the fan and they slowed down their leasing efforts.
4) Aubrey vertically integrated CHK which was part of the reason for the 10,000 employee campus and after around 2010-2011, CHK started spinning off anything that wasn’t part of the upstream E&P company. Access Midstream, several of the drilling and completion service companies and other components were spun off, further reducing headcount.

As an employee for ~4 years during that time, another thing that they were known for during that period was hiring more than they needed and paying less than they should. A lot of entry level position headcounts were probably twice what they should have been, because they were paying very low salaries (essentially coming out in the wash, G&A-wse). Don't get me wrong, I loved my time there, but sad/true.

[PhiAlpha]

As an employee for ~4 years during that time, another thing that they were known for during that period was hiring more than they needed and paying less than they should. A lot of entry level position headcounts were probably twice what they should have been, because they were paying very low salaries (essentially coming out in the wash, G&A-wse). Don't get me wrong, I loved my time there, but sad/true.

What disciplines are you talking about?

That's pretty wild because land personnel-wise during that timeframe they almost always exceeded the market in salary for fulltime positions. People I knew in the energy management program at OU who accepted offers from CHK had some of the best offers of anyone in the program and they were throwing out a ton of money to recruit landmen and other land related positions with 5-15+ years experience. That dropped off in 2013 but they are still close to the top of the market in compensation based on my conversation with my friends who are landmen there.

[Rover]

What disciplines are you talking about?

That's pretty wild because land personnel-wise during that timeframe they almost always exceeded the market in salary for fulltime positions. People I knew in the energy management program at OU who accepted offers from CHK had some of the best offers of anyone in the program and they were throwing out a ton of money to recruit landmen and other land related positions with 5-15+ years experience. That dropped off in 2013 but they are still close to the top of the market in compensation based on my conversation with my friends who are landmen there.

Yes, that was the case with everyone I knew there. They were well paid, but they worked hard for it.

[Teo9969]

I feel like the main campus will eventually get bought up by a relatively big employer. It's such a great location. I know American Fidelity has offices all over, Paycom has the offices off Reno, I believe Love's is in several buildings outside of their headquarters. I feel like it would be a great land for American Fidelity especially owing to the short distance between here and their HQ. They could use the soccer field and some of the other amenities for sure. This site would sure beat some of the ho hum offices they have some divisions in off of Portland.

[bison34]

I keep hoping a large company will move to OKC and take them. Doesn't have to be Fortune 500, just a large company bring a lot of Jobs. But who knows.

[PhiAlpha]

I keep hoping a large company will move to OKC and take them. Doesn't have to be Fortune 500, just a large company bring a lot of Jobs. But who knows.

There's always an outside chance that Diamondback may move their HQ here from Midland and take up more space than they are currently but it wouldn't be enough to take up more than a building or two at most.

[CitySooner]

There's always an outside chance that Diamondback may move their HQ here from Midland and take up more space than they are currently but it wouldn't be enough to take up more than a building or two at most.

I remember you mentioning this in the past, and it's certainly an interesting thought given Diamondback's problems with the City of Midland as of late. That being said, do you have any other evidence that this may be a possibility, or just a hunch you have?

[jn1780]

I feel like the main campus will eventually get bought up by a relatively big employer. It's such a great location. I know American Fidelity has offices all over, Paycom has the offices off Reno, I believe Love's is in several buildings outside of their headquarters. I feel like it would be a great land for American Fidelity especially owing to the short distance between here and their HQ. They could use the soccer field and some of the other amenities for sure. This site would sure beat some of the ho hum offices they have some divisions in off of Portland.

I don't think American Fidelity is interested in buying any properties. They have a lot of land they could build on at their current campus if they really wanted to.

[PhiAlpha]

I remember you mentioning this in the past, and it's certainly an interesting thought given Diamondback's problems with the City of Midland as of late. That being said, do you have any other evidence that this may be a possibility, or just a hunch you have?

Pretty much what you said: Just posturing from Diamondback, issues in Midland, rumors among those who work there and the fact that OKC is just an easier place to recruit talent and have an HQ. Nothing concrete but it would make a ton of sense.

[CitySooner]

Pretty much what you said: Just posturing from Diamondback, issues in Midland, rumors among those who work there and the fact that OKC is just an easier place to recruit talent and have an HQ. Nothing concrete but it would make a ton of sense.

Would be awesome for the city, no doubt about that.

[PhiAlpha]

Would be awesome for the city, no doubt about that.

That it would. Regardless, It's great that they took some space on the campus for the offices that they already had here. Just a better location for them in general and helps bring some life to the area.