Kendall Neukomm (00:00)
Hello everyone and welcome to Whitley Penn Talks, where we give you valuable insights to help you make confident informed decisions and move your business forward. My name is Kendall Neukomm and today we’re back with another episode of A Crude Bit of Humor. So we have Buffie Campbell and Coby Nathanson here on the line. How are you guys doing today? 

Buffie & Coby (00:46)
We’re good.

It’s been a busy week for us.

She, Buffie looks well rested and I look like I just rolled out of bed. So for those of you who are watching on YouTube, I, this, I got the, ⁓ I got the NAPE flu everybody. So we’re, good. Yeah.

Kendall Neukomm (01:06)
Typically it’s like the next week that the flu comes around, but you never know. Sometimes it’s earlier than that. Sometimes it’s both. Yeah, exactly.

Buffie & Coby (01:12)
Right? ⁓ my You know, it’s high risk. It really is. I know.

This year, I think I’ve naped more than I’ve ever naped before. So it was a big week for me. So tell us, what all were the big things? Sorry, Kendall. Did that like steal your thunder? ⁓ Stealing Kendall’s thunder today. It’s early morning. We still don’t have our coffee and caffeine in yet. So ⁓ it was actually really interesting. I feel like there were less people on the floor this year than what I’ve normally seen, but I kind of think that was a positive, right? Because I got to have really good conversations with people. ⁓ I’m trying to sell some North Dakota, some Bakken assets for a client, and so I got to talk to a whole lot of people that were actually interested in doing that, and we got to have detailed discussions on what’s going on. So that was nice. ⁓ And just getting to meet different operators and where they’re located at and what their prospects and their place that they’re interested in moving into, it was just great conversations.

Maybe it was like better quality people there, not just every land man that works in that company. It was like the people that needed to be there is kind of what I was sensing from it. So great conversation, great people to me. It’s like just a really, really good NAPE this year. So TV timeout. ⁓ And I love that you got right down to business because that’s 100 % who Buffie is. We probably have some folks who are listening and or watching who do not know what NAPE is.

That’s true. Yeah. So I’ll let you be the explainer of the things. I think there’s probably a lot of people at NAPE that don’t know what NAPE actually is too. So it is the North American Petroleum Expo.

I’m 90 % sure that’s exactly what it stands for, North American Petroleum Expo. But it’s basically a giant conference of oil and gas professionals that all come together in Houston. There’s one in February, there’s usually one in the summer. And we talk about new technology, emerging trends. ⁓

People will actually sell deals if they’ve got like a large area of minerals that they need to sell or a large ⁓ area leasehold that they need to sell. They may like make some swaps or some trades or some deals in that situation. The theme is this is where deals are made and it’s put on by the American Association of Petroleum Landmen. So there’s also a landman theme as you will a little bit there. So we all got our landman t-shirts and kind of fun.

Kendall Neukomm (03:46)
Love it.

Buffie & Coby (03:48)
Did Billy Bob make an appearance? There was a Billy Bob cutout there, yes, did get a little lamby. So flat Billy Bob. I think that’s kind of what he looks like in person, though, Like he’s pretty like, he’s pretty skinny in person. Cardboard cutout, it all worked out. ⁓ It was like he was there. ⁓

Kendall Neukomm (04:05)
Yeah, yeah. I think they should do a landman episode focused on the NAPE experience because that is such a big experience for a landman in that kind of role. I think that eventually Taylor Sheridan should think about working that into a future landman episode for sure.

Buffie & Coby (04:16)
It really is.

100 % agree if if Taylor Sheridan can make it past the happy hours, that’s right. 

Kendall Neukomm (04:31)
Right. That’s the true test of NAPE.

Well, kind of diving in, because I know this will be a little bit of quicker episode today than we’re used to, but ⁓ what did we walk away with this year? What did y’all hear? What did you see? What was going on at NAPE outside of the classic deal making and happy hour conversations?

Buffie & Coby (05:10)
So I did not have the pleasure of walking the floor this year. That’s probably a good thing. But from what I heard a lot, AI was a big ⁓ topic, especially with document management and digital data farming. ⁓ then, gosh, I feel like there was another, there was a little bit of talk about Houston becoming the big energy leader with Expand and Devon ⁓ saying that they’re moving their headquarters back down to Houston. I think on that one, great for the Houston market, very exciting, a little nerve wracking for some other areas, but it does help centralize Houston as the hub for ⁓ oil and gas and the industry on a go-forward basis.

Kendall Neukomm (06:01)
And Coby, do know where they’re relocating from to Houston? Both of them?

Buffie & Coby (06:07)
Yep, Expand was previously kind of that Chesapeake umbrella previously, ⁓ and then it had a couple of derevisions after that, I think. ⁓ But kind of the same people, natural gas plays is mainly their focus. But yeah, Oklahoma City. So them moving to Houston is kind of a big deal. It was kind of a little bit of a wave in the industry there.

Kendall Neukomm (06:17)
Yeah, definitely.

Buffie & Coby (06:31)
On top of all that, think ⁓ I was over in a particular section where data centers were the hot topic. So I heard a lot about data centers and a lot about Bitcoin mining came back up, which I thought was really interesting. That was kind of a thing a couple of years ago, actually using the gas on site to convert and then power a generator so that you can actually do Bitcoin mining on an oil and gas location.

Interesting that that’s kind of coming back around, that people are really interested in it. Some different aspects for even Bitcoin. So maybe have a non-op interest and you buy an investment share that’s going into Bitcoin for that. So there was new like tech aspects of that whole avenue, but data centers were such a huge topic. It was the buzzword big time all over the place. People were talking about energy.

So I’ll give you a couple of facts. I sat in on SMU had some winners of a recent competition. So they were undergrad and graduate students that came in and did a case study type situation. And what would you do in this situation? And then they had some little flip the scripts and twists that kind of came through with their professors. it was interesting that one of the quotes that they threw out was that data centers currently consume about 1 and 1.5 % of global electricity.

Kendall Neukomm (07:52)
Wow.

Buffie & Coby (07:52)
Currently, 1.5 % of global electricity, and that’s going to double by 2030, if not sooner. Isn’t that crazy?

Kendall Neukomm (07:58)
Yeah. Wow.

What, that’s crazy. I’m actually a little bit taken aback by that. But my brain goes, what, I know that NAPE is focused on the energy industry. I mean, what’s the conversation there around how that power will be created? Is that kind of where they led that conversation or what’d you learn there?

Buffie & Coby (08:07)
Yeah, because the power was one of the biggest aspects. So they were looking at land, right? So how do you get the land to actually secure these data centers? And then the power to get to those data centers to make them function. And now regulation is kind of a big issue that’s going in there. Because you see a lot of, we’ve just seen here in Texas, in like, Dinosaur Valley, there was a big kind of upheaval and blow up in the community where a data center is supposedly going to go in. put in, requested a permit, I believe, and the entire town was just like, no, absolutely not. We do not want a data center here. We’ve got dinosaur tracks here. There’s still people studying the archeological aspects of this area. We don’t want a data center. Yeah, and so there was a petition across the entire state. And I don’t know where that’s at right now. I don’t have the details on if it’s gone anywhere further at this point. But we’re seeing it come closer and closer to the urban areas as well. So it sounds a little if I can make a comparison. It sounds a little like when the Barnett shale started kicking up a little bit a little bit a lot of it. 

Because I remember when when I was at an operator, we had some assets in Barnett and there were some areas that really wanted to be oil and gas operator supportive and helped dropped down, I guess some of their, or made their regulations a little bit more operative friendly and then there were some other ones that said absolutely no we need you to jump through these hoops and they had closed looped drilling rigs they had to box off their compressor sites and so I wonder if we’re gonna start to see something similar that it’s not necessarily going to be just statewide or not necessarily just surface rights it’s also going to be what other regulations can we kind of put on top of that so that it’s more palatable, I guess, probably for the residential areas that it’s going to be closer to. 

Kendall Neukomm (10:20)
Yep, definitely. ⁓

Buffie & Coby (10:24)
We’re here to present the questions, not necessarily the answers.

But I think it does lead into, and this is something we can share later, is I’m not going to remember her name, but the keynote speaker that we had at the Whitley Penn Trisha Curtis I actually saw here at NAPE as well. So shout out to Trisha. one of the things that she talked about at the energy conference was Energy becoming the big superpower probably one of the reasons that other countries are getting ahead a little bit faster is because of the lack of regulation and what is what is that going to mean?

Kendall Neukomm (11:04)
Yeah, I mean, speaking of Whitley Pinn’s energy conference, I know this year too we had an event at NAPE and both of you were able to attend. What did that look like and how was the event at the end of the day?

Buffie & Coby (11:17)
I think we always host a great event. really enjoy it. ⁓ It’s funny, I’m always nervous a little bit going in, so I’m not going to know anybody. But as things are at NAEP, I walk in, like, I know you, I know you, I traded emails with you 10 years ago. But it’s always a very nice event. We’re in the center of all the action and kind of the one of the first nice ones. Wow. Sorry, one of the first ones of the evening like we are a good kickoff to NAPE it is the perfect beginning to the whole event and we have like three, three, 400 people that join us at this event. It’s a big event. It’s not just a small grouping of Whitley Penn employees getting together. It is a very big event and it really does kind of encompass service lines, operators, land professionals, accountants. I mean, it’s everybody involved. You get the true like aspect of the oil and gas industry as a whole, not just one little tidbit. 

Kendall Neukomm (11:59)
Yep. It is.

I think that location, we’re always well placed and ⁓ we partner with Jackson Walker to host that event. So I know that their team and our team work together pretty well. And ⁓ just we’re thankful to everyone that was able to come by for sure. Thank you.

Buffie & Coby (12:38)
Yes. That was well done, Kendall.

So speaking of our event, I got to visit with ⁓ some folks who are at operators because I think talking about the breadth of folks that come out to this event and it was interesting to me because they’re talking about I chatted with someone for a while about first purchaser and first purchaser issues and the real quick backstory to that is when when we operate we sell into the pipeline and that’s typically like DCP planes, ETC, all of that stuff. And for a good chunk of the market, the first purchaser, what they’ll do is they’ll offer division order services to go ahead and disperse the royalties to the owners so that the operator isn’t necessarily ⁓ having to deal with  all it…issues that I was chatting with somebody about is as much as they like that outsourcing experience, ⁓ because it is an outsourcing service that they don’t have to worry about staffing in-house, there is the concern of how do we do this when we have working interest partners in the Wells and we need to net them? ⁓ So from an accounting perspective, the first purchasers, all they have is the revenue. They don’t have any of the accounts receivable.

Kendall Neukomm (13:44)
Mm-hmm.

Buffie & Coby (14:03)
They don’t have any of the LOS reports, sorry, the lease operated statement reports. ⁓ And so it’s really just one facet of ⁓ oil and gas accounting. And I think it’s becoming a bit of a question and or. I don’t think struggle is quite the right word just yet. But I would say it’s a concern for some operators. I some first purchasers have completely gotten out of the division order space.

So ⁓ it is interesting to see how that part of the market is shifting and it’s also interesting to actually be at the floor and talk about an accounting issue.

I will tell you one of the coolest aspects that I did come across was a robot that was walking around NAPE and we’ll throw in some pictures for those of y’all that are watching on YouTube. ⁓ But yeah, I’ve kind of seen this robot around on YouTube stuff or on videos, TikToks, things like that, but I’ve never seen it in real life.

So they had a little robot that was being manned by a controller and he was dancing around and handing out hats. So I have a lovely little hat from a robot. Was the robot Billy Bob or were they separate and distinct? ⁓

Kendall Neukomm (15:15)
Love it.

Buffie showed me a picture, separate and distinct for sure.

Buffie & Coby (15:24)
Also very thin but definitely not human. Taylor Sheridan, your next… Yeah, it was iRobot right there just running amok. ⁓ my gosh,

Kendall Neukomm (15:33)
It’s hardly small. Yeah. Who knows, next year we could have way more. The whole conference could have more robots.

Buffie & Coby (15:46)
I know. This has been a very tech savvy event for me. I was telling Kendall this morning that I came across my first Waymo car without a driver in it today on my way over to the office. It was an interesting aspect of the day. So a little terrifying seeing a car driving without a human being in it, but it’s cool.

That is so funny because I think throughout the course of these podcasts, like we keep coming back around to tech, tech savviness and how industry has to lean into it and is improving. And I won’t say how long collectively we’ve been in the industry, but it’s just, again, like I remember learning up on onion paper because I’m that old and file like paper files and then the stacks that you had to spin the thing to move around to like like a bingo caller like a little bit yes like the like the big stacks at the libraries we don’t have anymore yeah yeah no but I do it is interesting to me like how we keep leaning into it and how we we’re not shying away from it I know there was some document management stuff that I saw going on that more and companies are leaning into digitizing everything. think I saw a couple of folks square up some deals where they were literally driving boxes of files back home to scan and digitize for companies because that’s just the way we’re moving. Everything is moving ⁓ digital. With our little Waymo and Billy Bob.

Kendall Neukomm (17:06)
No, just, they’ll create efficiencies and give us the help that we need to do even more. I think that that’s where we’re, yeah, that’s the positive.

Buffie & Coby (17:30)

Exactly. That’s exactly what we learned from Jeff Chambers in our first two episodes. If you haven’t listened to those. Exactly. Exactly.

Kendall Neukomm (17:47)
We did, yeah. If you haven’t listened to the episode of Jeff, click the link below. Awesome. Well, I know that we have just a few more minutes here. Is there anything, so if you could look back at your experience this week with NAPE and you had to pick one word to summarize the week, what would each of you pick?

Now I’m really putting you on the spot. So for those listening, we did not talk about this previously.

Buffie & Coby (18:15)
You really are. Do we consider hyphenated words one word? Okay, I will take tech savvy. ⁓ that’s a great word. I will take tech savvy from this one. I’m gonna say productive because I really do. because it’s the prospect and productive? No.

Kendall Neukomm (18:21)
I’ll allow, I’ll allow hibernation.

Okay. Love it.

Love it.

Buffie & Coby (18:38)
That’s great point, but no, I just feel like I had deeper conversations with people that were very smart, they knew what they were talking about, and they can lead our clients to what we need in that aspect. So it was just productive in meeting the right people, I think.

Kendall Neukomm (18:39)
It’s like very punny.

Yep,

in the right place at the right time.

Buffie & Coby (18:56)
Exactly.

And some good deals happen. It’s where the deals happen and we got some good swag stuff. I will do a quick shout out to Texas Tech because my son’s going to go there next semester. And so I went to three of their booths and got all the swag that they have. It was very exciting. Yes. Lots of squishy balls and pins and beer can openers for some reason. that was a big, that was a big swag item. interesting choice. Okay. Bottle openers. I didn’t even walk away with a poosie, I am swag-less. Oh. My favorite swag of all time though was the Sinclair dinosaur. that’s, that is an old, old reference. Old, yeah.

Kendall Neukomm (19:22)
Yeah, those are fun. Everyone needs one.

Yeah. Love it. Awesome. Well, now to recovering from the NAPE flu whenever it hits you, you’ll know. until next year, I know that we always look forward to this time of year and getting to connect with so many energy folks all in one space. So thank you both for debriefing with me today on this early Friday morning. ⁓ But I know, I know it’s definitely nap time.

Buffie & Coby (19:38)
It was a fun event, definitely.

I know it’s nap time now, goodnight. You can’t film NAPE without the nap. That’s true. Listen.

Kendall Neukomm (20:08)
That’s so true. Or ape, but I don’t know if that’s if there’s any connection there.

Buffie & Coby (20:15)
This is as clever as it gets, guys. We’re done. I’m tapped out.

Kendall Neukomm (20:19)
We need more coffee. Well, for those of you who are listening today, I know that we really enjoyed our conversation with Buffie and Coby for our Crude Bit of Humor episode, but if you’re new to this series, I definitely encourage you to listen to previous episodes within the Crude Bit of Humor series on our podcast channel, so definitely check those out. All featuring Buffy and Kobe are our guests of honor and our key leads on that series. So thank you both for your time. For those listening again, if you enjoyed today’s episode, be sure to subscribe on YouTube, Spotify, Apple, or listen right on our website at willypenn.com slash podcast. If you’re interested in receiving episodes like this one, write to your inbox, check the link in the description to sign up for our email list. Thank you again for your time and attention and we’ll see you guys on the next episode of A Crude Bit of Humor.