Well the comment periods for the Lesser Prairie Chicken (“LPC”) 4d rule and Oil & Gas Industry CCAA are now closed. Who is tired of comment periods? This process requires a lot of stamina and tremendous focus! Now we all await the outcome of the listing decision in March. Lets hope these last two months enable the states/WAFWA and the USFWS to achieve further improvements in the Range Wide Plan and companion 4(d) Rule so that the currently elusive “certainty” that so many parties desire can be obtained. As far as the outcome, the smart money is still on “Threatened” in late March.
I’ve spent a lot of time providing constructive feedback on the the conservation/mitigation side of the LPC challenge through the comment periods and meetings over the past almost two years, but today I’m going to talk about the industry side of this; something that I know all to well from developing renewable energy and infrastructure projects over my extended career. I’ve also have family that has been in oil & gas for three generations and many friends in the industry as well; working for both large corporations and small independents so I hear their perspective frequently.
So what is a “Board Moment”? Well if you haven’t had one before, and trust me it’s something that no aspiring industry person who has ever forgets, its the moment that a mid-level manager, Director, or even a new Vice President gets his or her moment in front of the Board of Directors to address a large issue of concern that poses risk to or opportunity for the Corporation. It’s intense and very exciting-you spend weeks preparing for this moment! The Board seeks succinct answers to questions, clear direction on the way forward to complex challenges that could affect the bottom line, is usually insensitive to things beyond your control and has a dislike for long and wordy power point presentations. Also, there is usually always one Board member or a member of the Executive Team who is in the room who fires off a question that you may not have an answer too, despite days of preparation time to make sure that you are on your A game. The take away is that all of the time, money and effort that have gone into whatever you, as this budding executive, thinks your “Prairie Chicken Solution” is all comes to head during the Board Moment and you better be ready for it with a solid plan that mitigates this risk for the Corporation.
Well, the Lesser Prairie Chicken situation is everything an aspiring executive does NOT want as the subject for a Board Moment. In fact it has got to be one of the toughest challenges to provide a path forward to the Board on. It’s messy: lots of politics, complicated jargon, 300+ page documents with multiple revisions, significant press coverage, competing permit options, a large Federal and five state wildlife agencies who know virtually nothing about the for profit/free market world of business, and many, mostly ill informed stakeholders, some of whom may have already given Board Members their advice. Scary? Damn straight! I’m really glad I did not have to brief my former employers’ Boards or Executive Teams on something this complicated with such wide geographic implications with potentially large impacts to my company’s operating or exploration activities with such a short remaining fuse.
So all you industry folks, what will you tell your Board of Directors and/or Executive teams when you are asked “how is this bird is going to affect our development efforts and/or operations and earnings” at the end of March? “What specifically have you done to make sure the company can continue operating as normal in April, the rest of 2014 and beyond”? Your consultants and outside counsel will likely not be in the room to answer for you. Your ideology will not matter. Your lobbyist in Washington will be minimal help in a dysfunctional Congress. Q1 earnings calls are just around the corner as well and you can be sure your accounting folks will be asking you to review 10Q reports disclosing the risk around this issue to the investment community as well. If you don’t know what these things are, I suggest you start learning about them now. Its all about to get very real and personal.
I wish you the best of luck. If you have your answers, great! If you would like my perspective shoot me an email at email@example.com and I’ll be happy to discuss what I believe the path to certainty looks like in the near term. Good luck!