ALTERNATIVE STRATEGIES

• Self Employment
• Keeping Your Options Open

SELF EMPLOYMENT

Perhaps by this point in your job search you've already worn out a couple of pairs of shoes and a set of knuckles walking the streets and knocking on doors for interviews. You may have been to many companies but seldom made it past the receptionist's desk. On the occasions you have been able to talk with someone higher up in the company you've found he couldn't offer you much besides a few minutes' time and a suggestion that you look elsewhere. You may be thinking about chucking geology as a career, and are planning to talk with the nice folks at Sears tomorrow about work in the garden department.

Before you do, consider the possibility of working for yourself. Is there anyone, working in any position for any company, who hasn't thought about quitting his job and becoming his own boss?

It's not for everyone. The hours are long; the pay, at least initially, is peanuts; the boss, you'll learn, is usually a tyrant; vacations, bonuses, benefits, auto-allowances, and stock options are non-existent. Yet many geologists leave wellpaying and secure jobs each year to start companies or to work as independent operators or consultants. They do so knowing that the risks of failure are high but the possible rewards are great. Only a few who become independents achieve more than modest financial success, but the freedom to make their own decisions and the allure of possible profits can make the gamble worthwhile.

It may be that the failure to find a job at this time in your life provides an opportunity you wouldn't consider otherwise. With nothing to lose, why not take the risk?

Most of the people who become independent do so after working for someone else for a time, perhaps many years. During their period of employment they gain knowledge and experience, and maybe a substantial cash reserve. When they leave their old job they will probably work in a related field, bringing to their new situation a confidence developed from years of experience.

You don't have that advantage. You will have to learn to operate on your own, make mistakes, learn from them and go on. I wouldn't advise most beginning geologists to select this option, but a surprising number of successful geologists started their careers in this manner. If you are determined to succeed as a geologist, and can afford some irregular paydays, you should at least consider the opportunity.

Self-employed geologists generally follow one of two career tracks, and describe themselves as either consultants or independents.

Someone once remarked that an independent was simply a consultant without clients. In that sense, you are already an independent, and can start functioning as one immediately. Actually, there's more to the choice than that.

A consultant usually has knowledge and experience in a particular regional area or specialty, and is available to work with clients on an hourly, daily, or job basis. In any active petroleum province there is a group of geological consultants who do wellsite evaluations, mapping projects, evaluations of drilling prospects, and appraisals of producing properties. These tasks are of time-immediacy and limited duration. Clients who hire consultants for such jobs may not have need of full-time geologists, and satisfy their occasional requirements with a consultant.

Independent geologists work on their own, usually not under contract to a client. The products of their time are maps, reports, drilling proposals and the like, and are sold to individuals or companies who buy those services when the work is completed.

It is possible for a geologist to function as both consultant and independent, working on maps and drilling proposals on his own time, but being available to do consulting work when the opportunity arises. Often a geologist begins his career doing both, and later decides to work exclusively as one or the other.

It may be useful to outline briefly how an independent operator works. Once you understand what he does you may begin to perceive how you can integrate yourself into the business.

To drill a well, three components are required: an idea, usually based on geologic considerations; land (or contractual rights) on which to drill; and funds to pay for the work.

It is possible for one individual, an independent operator, to provide all requirements; he may create the geologic and/ or engineering concept regarding the existence and location of oil in an underground trap, negotiate an oil and gas lease to secure rights to drill a well, then use his own capital or find investors willing to take the risks to test his idea. He may even contract the drilling services, evaluate the hole, complete the well, and market any oil or gas produced. In short, he performs all the primary functions of exploration that a major oil company does, to the point of transporting, refining and marketing the products. Some independent operators enjoy all the required activities, and want never to grow beyond their ability to handle all the activities of drilling and operating a limited number of wells each year.

Of all professional degrees, perhaps geology better than any other prepares an individual to become an independent operator. The relative availability in the industry of the three necessary ingredients to drill a well fluctuates over time in response to changing economic and political conditions. The one most critical however, is the geologic idea, born in the mind of a geologist. Without it, otherwise prospective acreage remains undrilled, and capital which could be invested in exploration goes elsewhere. Who better than a geologist has the skills to conceive of an exploration idea, or to evaluate a geologic proposal brought to him by others?

This suggests that the closer you get to becoming a prospect generator, and the more proficient you become in applying new exploration concepts and skills, the more valuable you become to yourself and the industry. The fastest route to financial success for any geologist is to establish a record and reputation for generating good exploration prospects.

Capital can usually be found to drill the better prospects. Sooner or later most prospective acreage becomes available to lease (unless it effectively has been removed from exploration by governmental agencies). Only the lack of geologically sound prospects can inhibit and stall the ongoing search for petroleum.

Some geologists, blessed with an ability to communicate effectively, find they most enjoy representing prospects to investors. They may work cooperatively with other geologists who provide them with drilling submittals, for which they procure the necessary drilling funds. If you develop the ability to sell prospect ideas to investors you become a valued and integral part of the exploration process. The industry has a tremendous requirement for capital each year, much of it gathered from outside sources, and well rewards those who can help get it into exploration projects.

The goal of most independent operators is to build up a revenue stream that comes to them month after month without additional work. The nice thing about oil and gas production revenue is that it can continue for many years. Even though production rates will decline through time, the prices paid for oil and gas may rise. An income source from mature, paid out wells provides a basis of real security, and traditionally has been a good hedge against inflation.

An independent geologist may acquire working interests or overriding royalty interests in wells as a result of his work. Being active in a producing area also provides the opportunity to evaluate and purchase producing royalty or working interests in wells. Often such purchases can be bankfinanced and paid out over time. As soon as properties do pay out, the income can be used for financing additional producing interests.

KEEP YOUR OPTIONS OPEN

For those who simply have not been able to find geologic work anywhere and can't afford the time or funds to consider self-employment, all is not lost. If you are dedicated to the goal of becoming a geologist, there are still possibilities open to you.