The Crude Truth Ep. 118 George Whitman Live at the NAPE Expo 2025

Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Rey Treviño [00:00:00] We are here live at the Nape Expo 2025, and there’s no better way to really know what’s going on than to have true energy operating ENP experts to really dive in to 2025 and 2026. We talked to one of those individuals next on this episode of The Crude Truth.

Narrator [00:00:19] In 1901 at Spindletop Hill near Beaumont. The future of Texas changed dramatically as, like a fountain of fortune, thousands of barrels of oil burst from the earth towards the sky. Soon, Detroit would be cranking out Model TS by the millions, and America was on the move thanks to the black gold being produced in Texas. Now, more than a century later, the vehicles are different, but nothing else has truly changed. Sure, there may be many other alternative energy sources like wind and solar and electric, but let’s be honest, America depends on oil and entrepreneurs. And if the USA is truly going to be independent. It has to know The Crude Truth.

Narrator [00:01:02] This episode is brought to you by LFS Chemistry, We are committed to being good stewards of the environment. We are providing the tools so you can be to. Nape Expo, Where deals happen. Air Compressor Solutions, When everything is on the line. Air Compressor Solutions is the dependable choice to keep commercial business powered up. Sandstone Group. Exec Crue, Elevate your network, Elevate your knowledge. Texas Star Alliance. Pecos Country Operating, Fueling our future.

Rey Treviño [00:01:36] Well, make no doubt about it as we continue a successful day here at Nape 2025 this afternoon, I have just the opportunity to visit with somebody that really knows what’s going on and you don’t know what’s going on, lets you sign checks, in my opinion, and you really understand the ins and outs of a PNL statement and what it really means to produce oil and what cost you really make it a barrel. Today my guest is is somebody. Obviously you can see him without any introduction. George Whitman, president of Black Mountains Oil and Gas. How are you?

George Whitman [00:02:08] I’m good. I appreciate you having me on.

Rey Treviño [00:02:11] Oh, my gosh, I cannot thank you enough. When when I had the opportunity, when Allison was like, hey, I love to get George on because we had a chance to meet a couple months ago at a good friend of mine, a connection crew dinners, and our conversation was awesome right there. And I was like, got to have you on. And, you know, as you know, I’m an operator, but definitely not at the level that Black Mountain is. And we always joke about that. But you guys are literally setting the example, paving the way and doing amazing things over there right now. You know, I’ve been doing that now on many different levels. Not just gallon gas, all got sand. Y’all got all these other things it has. I just continue to gush over all y’all. How are you doing?

George Whitman [00:02:49] I think we’re doing good. You know, probably to to give a little background here. Black Mountain not just oil and gas, you know, founded it in 2007 with the idea of being entrepreneurial across the entire energy space. So that’s why we’ve done kind of upstream is probably more of the DNA of the company. But currently we also have a lot of energy transition investments. So energy storage is doing really well. Kind of the grid for batteries.

Rey Treviño [00:03:13] Yes.

George Whitman [00:03:14] We’ve got a big lithium project in East Texas where we’ve been leasing and building a position there to do lithium brine extraction, and then also looking at some of the other emerging technologies where we can use natural gas for power for a lot of different applications. So kind of across the spectrum, I’m focused solely on Black Mountain Oil and Gas three so we’re operating in South Texas and just closed our new fund for northern Delaware. So we’ll be.

Rey Treviño [00:03:39] Oh really.

George Whitman [00:03:40] In there.

Rey Treviño [00:03:40] Okay.

George Whitman [00:03:41] Pretty quickly.

Rey Treviño [00:03:42] Yeah. I’m glad you brought it up that you guys are doing more than just oil and gas. And the reason why is because you said entrepreneurial. You know, oil and gas is always giving back or always doing things to just make our industry better and make others lives better. In different industry spaces. And you know, you guys are working on that East Texas brine. That’s no joke over there. And I know that’s not really you’re where you’re at. But that’s really no joke. What’s going on over there is.

George Whitman [00:04:09] Yeah. You know, well, what we found is really the same skills that we use in oil and gas as far as the business development and the land ground game, that applies across a lot of these different things. So like getting sites for the grid scale batteries or for data centers or any kind of things like that. That’s a similar land game to getting leases. And same thing applies to lithium or extracting any other kind of resource. So, you know, we’ve done some mining and some other things, but you just trying to be nimble, trying to identify emerging trends and get out in front of them and apply that. The skills that we’ve learned through the oil and gas to a lot of different space.

Rey Treviño [00:04:43] Well, as you can tell for our listeners, our listeners out there, as you can tell, George has no idea what else is going on in any other spaces of the new oil and gas. George is definitely one of the guys that’s a leader in this industry. George, for those out there that don’t know you, you know a little bit of background on you and your quick your journey.

George Whitman [00:05:00] Yeah, sure. I can give a little background. So you know, started in 1999 in the business grew up up north. I went to Cornell University, very kind of Antioch Oil and Gas school. So not too many of us in the business, but I was a mechanical engineer and got recruited by Schlumberger and they had really great recruiting. It’s kind of very similar to the Navy Seals recruiting like people jumping out of helicopters and things like that. So I thought that looked cool when I was young and it got into slumber J for a few years and then fired on with the OG in 2005 at the when they were kicking off the Barnett as a drilling engineer. So. So I’ve pretty much start to finish off the Barnett and then move to the eagle bird when our first the one eating man trying to figure out how to get oil out of shale. So spent 5 or 6 years there and then went to Permian working in the Delaware as completions manager for EOG. And then in 2019, got in touch with Brad and he was, you know, at that time had done a lot of mineral stuff, had done some lease and plant type deals, but really wanted to build a competent operating team. So we put together a really good team from pretty much pulled from all the large independent, some really experienced guys. I’ve got 15 people on the technical team and we’re just looking to acquire assets and operate them more long term. We’re not not doing the leasing flip game anymore as much.

Rey Treviño [00:06:15] Well, that legacy could go a long way. And, you know, like when we’re doing stuff and people ask us, well, how long does normal well last we go, well, you know, 25 years because the average oil is 20 and 30 years.

George Whitman [00:06:26] Right.

Rey Treviño [00:06:26] And that can produce oil. We just got done plug in one, George, that was drilled in 1958, produced oil until 1988. And it was an injection well up until last year.

George Whitman [00:06:37] Yeah.

Rey Treviño [00:06:37] And so it still served a purpose for six years. It served a purpose. And the only gas.

George Whitman [00:06:41] That’s amazing. I hope we can get that much out of our wells. I mean, I’m not sure if we will.

Rey Treviño [00:06:46] Well, you know, tell me, you know, because you guys have done very well. The Zion’s as much about y’all are already on Black Mountain three. And y’all been doing this in the Eagles.

George Whitman [00:06:55] Yeah.

Rey Treviño [00:06:55] So the latest iteration,.

George Whitman [00:06:57] We we had the goal of acquiring a decent size asset and optimizing it. It’s pretty typical strategy these days. So we bought the Catarina ranch out of the Mesquite bankruptcy. No Sanchez asset. And then shell had it before them. Most famous for shell paying $1 billion in lease bonus for this 106,000 acre ranch. We think it was the biggest lease bonus ever paid for anything. But anyway, we acquired that. There’s about 400 something Eagle, Ford, Wells and then just, you know, the the basic things you do to an asset. So getting the low down, we got all the midstream go Oceana it. And now we’re starting to develop the asset and Chark. So just got a couple of wells in the ground that will be fracking this spring. And continuing to try to bolt on sort of strategically around that asset as we can. It’s been competitive. It’s.

Rey Treviño [00:07:45] Well yes you’ve been competitive. But again, and it probably goes, you know, again, the team of you in red is amazing. But when you go look at the not your track, but let’s just take the Eagle for track record since 2019. There’s not a lot of winners out there. It’s some disagree if you know right.

George Whitman [00:08:01] Yeah I.

Rey Treviño [00:08:02] You know.

George Whitman [00:08:02] I agree with that.

Rey Treviño [00:08:03] And so you guys are definitely on that opposite side. So it’s like what is what what do you feel like has been the key for you all during that time that you can share, you know on the all that in you know,.

George Whitman [00:08:14] I think I give a ton of production credit to our team there. The production guys have done an awesome job of just stabilizing the decline, you know, being really aggressive in trying to do rigorous interventions everywhere we could that under the previous ownership, there was a tremendous amount of work over cost. And they’ve reduced that almost nothing just by figuring out how to do it more creatively with wireline or gas, like Langer, you know, limiting the, well, just various other strategies. So I’m really good there. And then just trying to be commercial with the midstream. This this was kind of like a strange situation where Sanchez, on the on the upstream, ran the midstream, and they had kind of concentrated all the profit margin on the midstream side. So there were some really onerous contracts. We had to work on some of that to get to where we can develop. And, you know, it’s really just blocking and tackling type stuff. I don’t think there’s anything really like a secret sauce, but just buying the asset right in the first place at a fair price, and then just having a team that knows how to optimize and develop.

Rey Treviño [00:09:14] Right. You know, in 2020 during Covid, we grew three eggs just because, you know, you had so many people that wanted to get out of the industry when, you know, when when it was really when people started to get those $25 checks, meaning that when, you know, because oil dropped to 25 about the monthly average, give or take, and they didn’t really start to receive those checks. So June, July. And so from basically July to the end of the year, we had a good chance to kind of buy some good assets. Then of course, same thing, lower the lease, operating expenses and same thing. You kind of see some of these were operators. And again, I’m not saying, you know, so I was like, why are the operators getting paid so much? And then the employees over here, we get this right. You know, it’s like you bring that down and, you know, because as an operator, we treat it, it’s like a parser. So, you know, let the MP let us make what we’re making over here and then we can do the other, you know. So I just think it’s so cool what you guys were able to do. And then what made you want to jump back into the North Delaware.

George Whitman [00:10:09] Well, that’s been the focus area of the company throughout the years. So the probably the the most famous deal Black Mountains’s done was aggregating a bunch of Lee and Eddie County acreage back in 2015 and 16, and then selling it to marathon for really good returns.

Rey Treviño [00:10:25] Lots and lots of American dollars.

George Whitman [00:10:26] Yeah. And then more recently, it’s been kind of tough to get funding for that type of lease play that the private equity guys just aren’t really doing it. It’s they’re more focused on discount, PDP and maybe trying to get some drilling locations, but they’re not doing too much leasing because there’s a lot of unsuccessful leasing around the fringes of the basins, kind of like 2017 18, and a lot of people got burned. But we understand how to play the game up there in New Mexico. And I think we’ve we know where there’s some good rock that hasn’t really been fully appreciated yet. So the idea there’s just aggregate some positions and start building again for the the third time out there.

Rey Treviño [00:11:03] You know, George, I kind of want to switch it up a little bit and talk about Nape. We’re here at Nape this year. You and your team is here. You know can you just tell me what your thoughts are so far on Nape as we’re kind of getting towards the end of the first day and everything going on?

George Whitman [00:11:16] Yeah. It’s been really just good to connect with a lot of people. I’ve found a bunch of our Eagle Ford neighbors and been able to just talk about some issues that we have around the ranch, you know, trying to share data. A lot of the stuff we try to do now is trying to optimize lateral links. So we may be doing pooling in communities in a different areas to to try to get just a more efficient development pattern. So we’ve been talking to a lot of guys about that. It’s just really efficient to get a bunch of people in one place.

Rey Treviño [00:11:43] Yeah,.

George Whitman [00:11:44] We have had quite a bit of interest in our South Texas assets in maybe a little more from the the international players or some of the integrated energy companies, not so much the traditional oil and gas focused upstream companies. We’ve had some some ones we haven’t seen before coming by. We’re also trying to market our Canning Basin asset, which is a big basin center gas play in Australia that we acquired about five years ago. We got about a million and a half acres over there. So it’s kind of almost on the same scale is like an eagle fern or.

Rey Treviño [00:12:15] Yeah.

George Whitman [00:12:16] So we have all the lease rights and we got an export exemption. We got some of the EPA permit and just kind of move we got seismic permitting done and ready to move to the next kind of phase of appraisal and development there. But it’s it’s probably something that needs to be a major operator or an IOC. It’s not really something that we can do with the resources and the team that we have. So we do have that one on sale and hoping to get some interest here, but anybody that is trying to get LNG into Asia, I think would be interested in that kind of asset.

Rey Treviño [00:12:45] Oh, wow. When I had somebody call me up today and ask me if I wanted to argue, anybody that wanted to buy an LNG exporting permit, and a good friend of mine, I said, hey, man, that you know, anything about that goes. Usually when you sell one of those, you’ve got a whole lot of stuff with gold, okay? And that was above my pay grade. Again, Black Mountain, there’s no doubt about it. You guys are influential. Y’all guys know what’s going on. Y’all have goals here to the ground. What are you seeing out there as far as again, drill, baby drill. And this new Trump administration.

George Whitman [00:13:16] Yeah I think probably what that means to Trump. And I don’t know him personally, of course, but I think he views cheap energy as really stimulating the economy and being necessary for some of his other policy goals, like reshoring manufacturing and industry and trying to build out data centers and be a leader in AI. Those are things that are going to need a lot of power, and the grid isn’t necessarily positioned for that. So we are going to need some decentralized power that most likely comes from natural gas. So I think that’s a part of it. You know, on cheaper oil prices, just overall stimulating the economy. And then on the gas side, you know, ramping up LNG exports and being able to support some more heavy industry here in the United States. I think the issue that he’s going to run into with this agenda is we’re just kind of out of the core inventory that you can drill at cheap prices. So I think in, you know, we we kind of did. During his first term in 2018, we had 75 or $80 oil. And we drove like crazy and we just drilled ourselves into $50 oil very quickly.

Rey Treviño [00:14:18] Yes, we did.

George Whitman [00:14:18] And I don’t think that’s going to happen again, because just the discipline that we’re seeing on the hemp side, they’re not going to outspend cash flow. And they’re focused on dividends and balance sheet and not not just growth for the sake of growth anymore. So I think it’s been really challenging to grow production. The core inventory is has kind of been blocked up by the exons and eog’s and that, you know, the big players and then the fringe and or inventory doesn’t really work under $70 oil. So we can’t really ramp up 3 million barrels like what they have been talking about unless oil prices are higher. So it’ll be interesting to see if maybe Trump can can kind of broadly stimulate the economy through deregulation. And if demand comes up as a result, and maybe the pricing is supportive and we can we can drill aggressively like you want to do.

Rey Treviño [00:15:04] So let’s say hypothetically that they’re having a meeting right now about about that in Washington, D.C.. What do you think they would be talking about, like if Trump were all of a sudden said, hey, I need you to come, need you to come. We need to talk oil and gas. What would you think that’s about?

George Whitman [00:15:19] I mean, I think he’s Trump’s a guy that listens to a lot of different voices, and then he forms his opinion and then he’s pretty opinionated once that’s been formed. And that’s that’s kind of what he’s going to do. I think he wants probably to hear from the operators what the obstacles are to more drilling, and a lot of that is just going to be the price needs to be high enough to incentivize it. And then the other thing I think they’re probably looking to reform pretty aggressively is the the bureaucracy and the regulatory process, because right now, when we go in to New Mexico to get a drilling permit, it’s about a 12 to 14 month process on BLM land, whereas in Texas, we can get that same exact permit in three days. And it’s all just there’s no reason for it to take that long and to be that inefficient. And it’s really it’s holding back development on federal land. So I’m hoping that we get some focus on that out of the Trump administration.

Rey Treviño [00:16:08] You know, I’m glad you brought up the pricing. You know, sometimes when I’m talking to the vigils, you know, prices did go up in, what, 2022? About $100 for a couple of months. Service costs all went up.

George Whitman [00:16:19] Yeah.

Rey Treviño [00:16:20] When prices went down, service costs did not go down.

George Whitman [00:16:22] Yeah. There was definitely a lagging effect of 6 or 7 months I think probably April, May of last year they finally started coming down. Probably casing was the biggest thing because they. They can’t just pick up shifts or lay off shifts at these factories very easily. So casing supply is a little bit inelastic. So the the price goes way up when it’s tight and it goes way down when they got a surplus.

Rey Treviño [00:16:44] Oh I think yeah I think yeah.

George Whitman [00:16:46] Across the board I mean roods rack leads. Everything got pretty crazy for a while. But where we’re seeing it is probably back to like pre-COVID pricing. Now some of the bids were getting.

Rey Treviño [00:16:57] Nice, but y’all got some great projects. Like we kind of just got some he lined up. George, you know, if there’s something that you would like to see in the future from this administration and maybe allow y’all to be a little bit more, you know, loose in your drilling, you know, what is something out there that you would like to see if you could, if you could tell that?

George Whitman [00:17:17] Yeah, I think really the feds probably have limited amount of control over the entire drilling business because we have so much private land in the US. But just yeah, fixing the fed permitting process and then just fast tracking LNG export are probably the two biggest things.

Rey Treviño [00:17:34] When you hit that. Dead on. I mean, if we can do more of the LNG, I mean, it’s like we always talk about we are the Saudi Arabia of LNG.

George Whitman [00:17:42] Yeah, we definitely have a lot. But then there’s also, you know, UAE has a ton that’s untapped. Yes. Are there there’s some discoveries off Africa. More conventional stuff. So that I think if we don’t get it done quickly, we’re going to be too late to where all the other people have taken it over. And, you know, there’s only so much demand. So we had about a 3 or 4 year pause. There are nothing get an approved. And it’s kind of giving some other people the opportunity to jump in front of us, but hopefully we can get back on track with that. And.

Rey Treviño [00:18:11] I hope so.

George Whitman [00:18:12] Still get some things done.

Rey Treviño [00:18:14] I think would be great. So. Well, George, again, I cannot thank you enough for doing this and visiting with us and and sharing a little bit more insight because, you know, I think, you know, again, people like, you know, you are somebody that knows that you are touching every single part of the aspect of what you’re working on, and I do. I just think that is amazing. So there’s a reason why you all are Black Mountain number three.

George Whitman [00:18:34] So, yeah, well, hopefully we’ll get on to some more after that. We’re we’re all kind of long term industry guys and have quite a bit of career left. So we’ll we’ll keep doing it for a while and always open for business. So.

Rey Treviño [00:18:46] Let’s do it. Well George I really appreciate it. All right. And everybody thank you all so much. And we’ll see. You know another episode of The Crude Truth.

George Whitman [00:18:53] Okay. See you guys.

Narrator [00:18:55] Again the crude truth. Would like to thank today’s sponsors LFS Chemistry, Nape Expo, Air Compressor Solutions, Sandstone Group, Exec Crue, Texas Star Alliance, Pecos Country Operating, and Real News Communication Network.

Narrator [00:19:15] The easiest way to start your own podcast and TV show. Real News Communications Network. Stand out from your competition. Produce streams of high quality social media content. Become a thought leader in your industry with RNCN