February 1

THE CRUDE TRUTH Ep. 63 CEO and Founder Alex Ottewell, of One World Petroleum

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03:23 – About One World Petroleum
04:16 – Journey to the oil and gas industry
08:34 – The correlation between real estate and oil and gas
09:36 – Rental properties
11:26 –  Anytime you invest in oil and gas
12:53 – One of the top sponsors for the Nape Expo
17:56 – The kind of deal size

 

 

Please reach out to Alex Ottewell on Linkedin

 

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Highlights of the Podcast

 

THE CRUDE TRUTH Ep. 63 CEO and Founder Alex Ottewell, of One World Petroleum

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

 

Rey Treviño [00:00:00] Nape is right around the corner and oil and gas operators are looking for deals left and right. We talked to one Texas operator on this episode of The Crude Truth.

Rey Treviño [00:00:53] Nape is a proud sponsor of the Crude Truth. Be sure to register for the Nape Expo 2024 for February 7th through the ninth at the George R Brown Convention Center in Houston, Texas. Hurry and register today. Nape where deals happen.

Rey Treviño [00:01:41] Well good morning. Good afternoon, good evening. Whatever the time of day is. Thank you for tuning in for another episode of The Crude Truth. As you know, The Crude Truth has a great sponsor in the Nape Expo, which is February 7th through the ninth at the George R Brown Convention Center in Houston, Texas. I’m sure you’ve all heard me say that once or twice over the last few months. Well, today I have another great guest that is a major sponsor of the Nape Expo and is also going to have probably a record setting size booth at nape. And there’s a reason why my guest today is founder, CEO, president Al, president of One World Petroleum, my good friend Alex Ottewell. Alex, how are you?

Alex Ottewell [00:02:29] I’m great. Happy to be here.

Rey Treviño [00:02:30] Oh, man. Well, thank you so much for coming on. And, you know, what a small world. The, the little, back story. Listeners and viewers know you and I actually met in your state, home state of Florida, just a few weeks, a couple months back at the, family summit office. And, you were there, and I was there, and I was like, wait a minute. We’re both in the you on the gas industry. So we we hit it off.

Alex Ottewell [00:02:55] There you go.

Rey Treviño [00:02:56] And, so we, you and I were there talking. I was like, what are you doing, Nape? You go, am I doing? Nape? You go, I’m probably going to have the biggest booth at Nape. And I was like, what? I said, no way. I said, well, I have to have you on the show. And so thank you. Thank you very much for coming on. How are you doing?

Alex Ottewell [00:03:13] They’re great. They’re great. Another busy day. Another I starts the week. So we’re we’re pretty happy here.

Rey Treviño [00:03:18] Well, well, good. Well, hey, you know, for listeners out there, can you kind of tell us a little bit about One World Petroleum and then dive into your background a little bit? Let’s talk about that.

Alex Ottewell [00:03:29] Okay. Yeah. So, we’re an upstream oil and gas operator, picking up PDP assets specifically. We’re not into the neutral sector. Everything we buy, the existing producing, typically we like mature assets and a more stable decline. We’re open to the whole of Texas. We’re buying oil basins, and we’re kind of attacking it in the sense that we’re looking for upside in kind of unconventional ways. We do buy strictly conventional wells, but we like to find, kind of nuances with different leases that maybe other people aren’t really focused on. Maybe it’s been a long producing asset that the operating was happy with. But maybe we see some further upside, to those deals. And, you know, that’s what we’re diving into.

Rey Treviño [00:04:13] Okay. Well, I don’t you know, one thing is your journey to the oil and gas industry, and I enjoy it because, here at, the company I work for, Pecos Country operating. Every now and then, we bring on, you know, we’re more family office, but every now and then, we do bring on some investors. And, here lately we’ve had some investors that are actually from your sector that you were in previously in a different life. So if you don’t mind, kind of share with us your previous life and what it was about the one gas industry that got you got you hook, line and sinker.

Alex Ottewell [00:04:45] Yeah. Definitely. Interesting story. What a start. I was actually born in England, so, fun fact that I don’t even think Ray knows, but I moved in when I was nine. Parents are very entrepreneurial background. And, right out of high school, I started going to tax deed auctions, the real estate auctions that, you know, people don’t pay their taxes, you know, kind of goes almost similar to a foreclosure auction. So what had happened was kind of stumbled into that, went ahead and built that further, got into more selling, direct marketing, buying real estate from distressed homeowners. Throughout a course of just over ten, 11 years, I bought over 1100 houses and fix and flip them and moved them on. Did a lot of, private financing behind that, too. So we purchased a property. Sell it on the note. But yeah, big, big fix and flip history. I mean, we were probably consistently doing over 100 deals towards the end. And then I saw oil and gas, and I kind of got excited. You know, most people can attest to this. Anytime you’re in an industry for a long period of time, you always kind of feel like, you know, there’s a cap to it. And with fix and flip, it’s it’s a very good business. It’s scalable. I mean, and we were done two properties a week. That’s it’s quite a scale. But operationally it does limit your, potential with growth and, and, just how much you can truly yield a year. During that time, though, too, I had the, call center. So we were generating our own leads, but selling direct marketing, and I launched a call center in the Philippines, and that’s a 250, call callers. So they were reaching out to different people and, basically generating leads not only for myself but also other investors. So it’s a pretty neat thing. Now, the reason for the transition I attended an event called eight Figure Cartel. One of my friends, Nick, Perry, he runs that event. And I was down there and I was kind of sharing my, you know, business and and what we did and our unique strategies. And, he brought up oil and gas and sounded really interesting. Kind of heard about it, for a bit. Spent a little time over there kind of seeing some fields and stuff. And I just decided that, hey, maybe, maybe I’ll jump into it. So we went two foot in, like always. And I launched my own company, January of last year. So 2023, and, we went hard and heavy. I brought in, petroleum engineers and, legal, definitely, some lawyers to help out navigate the title and the finance, the leases. They obviously it was just a learning venture for three months. Pure learning, understanding the industry, understanding the ins and outs of each area of the space. And that’s kind of where we started off.

Rey Treviño [00:07:27] Well, okay. You know, a lot of people that are in the real estate industry. Yeah. Don’t even touch oil and gas. Yeah. I’ve had a couple like I said, and that’s what we’ve had. We’ve had a couple of individuals in the last 18 months, kind of liquidate their, Airbnbs or Vrbo for whatever reason, and a couple rental properties and have dove into the wine and gas, and they love it. But there’s not a lot usually people are like, hey, you know what? I can’t touch oil and gas. And I’m like, yes, you can come on out. But, you know, that’s usually one of the, things I’ve always heard is like, we can’t touch it. It’s not real. So I’m going to stick with brick and mortar. That’s why I like what.

Alex Ottewell [00:08:09] They call tangible asset. So I would say touch it, feel it, see it. Yeah.

Rey Treviño [00:08:13] Right. And you know, every now and then we’ll do some royalties where we’ll do some 1031 exchanges. And I say, look, man, it’s just like real estate and rental properties, except that without the TNT, which is, you know, tenants in toilets. But what was it for you? Because you I know you said that you went visiting a friend and you were like, okay, let’s dive in. But what was it the correlation between real estate and oil and gas that got you excited about it?

Alex Ottewell [00:08:38] Alex. Yeah, I mean, I kind of do this analogy a lot because, part of the reason why we’re heavily capital backed is because I had a really good reputation in my fix and flip career. So I spoke on the stages and instructed people, but also have my own company. And during that time I got a really good network of people. And a lot of them, just like you said, are hesitant getting into oil and gas because they don’t understand it. You know, most people that invest in things, they, they, they need to understand it to a decent level in order to want to put capital into it. So I kind of bridged the gap for my community in the sense that I went deep dive. I left behind my whole, fixing pot career. You know, I sold off portions of the business. But, really having a deep dive, understanding, I’ve been able to convey that message back to a lot of my real estate friends that would do want to get involved on a capital basis. One of the cool parts about oil and gas, I kind of put it like this. Your assets, your, you know, prove producing. Those are kind of like your rental properties. You know, they they come on, they consistently produce. You’re making money. But you have repairs, you know, though, you don’t have tenants, you do have repairs. You’re going back in and changing pumps or, you know, whatever it may be production tubing. But in, in essence, is like a rental property. Whereas I kind of look at neutrals, a bit more like new construction. Know you can have some permit issues along the way, kind of headaches and things. And drilling is kind of the same sort of thing. And maybe when you go build a community, especially if you do large scale say you did a whole subdivision, your first phase of the subdivision may be great. But by phase 3 or 4, you may end up making a little bit less because maybe Aaron doesn’t call for that many homes. I kind of look at drilling in the same regard. You’ve got multiple drills. I say you drill 5 or 6 wells, you’re going to have a few of them do really well and you average few of them do. Okay, maybe you missed one, but it’s kind of a similar analogy. A new construction versus. Having a rental portfolio being the PDP. So that’s not.

Rey Treviño [00:10:35] No, that’s a great analogy. I might have to use that one if that’s okay. That’s a good one. I like the way like look, I look at proven development is, as rental properties in new drills as, as new home, new home construction, I mean, and you’re spot on, Alex. I mean, you can definitely tell you’re an operator that actually knows what’s going on out in the field. It’s like, you know, because you get some wells that, that, that do. Excellent. You got some wells that are going to do. Okay. And then nature of the beast. Yes. You may or may not miss one, you know, I mean, that is part of the game. I mean, you know, it’s just it just it’s nature of the beast, you know? Unfortunately. Good. Better. Different. We don’t hit every single one.

Alex Ottewell [00:11:13] I think a lot of guys that have apprehension to getting the oil and gas, they’ve typically gone in on a guy’s one venture. He’s trying to drill one well. And, you know, I think that’s too much pressure. I think anytime you invest in oil and gas, being diversified is always good. You know, for instance, when we buy the PDP, we’re trying to give, fair upside, but also we we look at it like this. If an asset is worth just PDP value, if we get anything higher, that’s great. But if we still have evaluated it correctly at a PDP level, we know where our returns are roughly going to be, especially with the we try and buy bigger portfolios. So we’re trying to buy, you know, maybe 40, 50, 60 wells or more, in a package. And that way we can kind of do a law of averages play, at least on the PDP side. So.

Rey Treviño [00:12:03] Well, you know, let’s, let’s kind of transition here. You talk about, you know, here we’re talking about what you’re doing, you are producing and, everything here in about the heart of Texas. Is that correct? That were most.

Alex Ottewell [00:12:15] Yeah. So yeah. So what we did was, did it being kind of a new to the space myself, even though I have really good staff and people, I hired the right people. Right. And, we did a couple of test deals because I wanted to figure out what I wanted. Right now we’re focused predominantly on shallow oil. So anything under 7 or 8000ft, we tested some deep gas, and that just really wasn’t my realm. So our initial assets we bought were purely based on the fact that I just wanted to experiment, experiment and small and then open up to to larger and larger things as we go along. That’s where we’ve been focused.

Rey Treviño [00:12:50] Okay. Now let’s switch gears. You are one of the top sponsors for the Nape Expo, February 7th through the ninth at the George RR Brown Convention. So not only are you one of the top sponsors, you are going to have probably the largest booth career. You’re like, the crude truth. We’ve got a crude truth pavilion, so hopefully you’re going to stop by, I hope, research Truth Pavilion. But ours is only 20 by 20. How big and where is your booth? That.

Alex Ottewell [00:13:19] Yeah. So we’re, we’re a 40 by 40, and, the only other 40 by 40 I’ve seen is oxy. They have a 40 by 40, but we’re dead center. So when you walk in the entrance, we’re kind of dead center. Right by the. There’s the main aisle, kind of in the middle. And, we’re dead center. So 40 by 40. It’s been. It’s loud. You guys will see. I definitely I’ve always been known in my career as being a guy that likes to do things big, and I think that’s why oil and gas was entertaining to me in the first place. Because it truly adds another. You can grow at different levels. No matter how good of a fix and flip are, you are. There’s only so big you can make a company. Yeah, but, with oil and gas, I mean, you can definitely do some big story things. And we wanted to come in to Nape, even though we’re one year in. I wanted to come in Nape. Big in the sense that we’re hoping to buy bigger and bigger deals. So we kind of want that to reflect into how we’re looking at things. One of the funny parts is, Rey, when we first started off, I decided to dial all the operators. So we called all the operations, said, hey, we want to buy your PDP and, we want this asset, that asset, whatever it may be. And I remember call specifically, I was on the phone with the operator and, we offered him like $12 million for a portfolio. And he came back to me. He said, well, that sounds like a good offer, but I don’t know you. And that that made it click. And I realized very quickly there I came from an industry that was all about network to an industry that was in a network but very close network. And we want to kind of welcome those people. Because obviously I’m a newer generation of oil and gas, and we want to work together and build those long term relationships. I mean, it’s a small industry in the sense of how many people are in this community. So we want to be able to be fun, but also be a good source for people to bring deals to. You know, we want to close quickly. We don’t want a bunch of headaches as long as you’re not, you know, hiding some ugly stuff underneath the curtains. You know, we’re a good option for you. And by being a big business and being as as loud as we’re going to be, we want people to to identify us as a good source, to bring deals to sell.

Rey Treviño [00:15:31] Well, you know, you talk about identifying source, bringing deals to that is also, first of all, let’s talk about this booth one more time, and it’s going to take you about two days to construct this.

Alex Ottewell [00:15:41] Yeah. Yeah. Well, the actual structure itself is all metal. It’s 30 foot by 30 foot and it’s 18ft high. But it’s the best. The best way I can say it reminds me of, mad Max arena. So that’s that’s that’s the best analogy of what the booth looks like. But I haven’t actually.

Rey Treviño [00:16:01] Mad Max Beyond Thunderdome arena. Is that.

Alex Ottewell [00:16:03] Yes. Yes.

Rey Treviño [00:16:04] Oh my gosh.

Alex Ottewell [00:16:06] Yeah. So we’re also I think we’re going to have the only second floor, option. So we’re going to do kind of a little photo ops up there. I think, I got to figure out what Nape will allow, but, we’re hoping to have a photographer up there because one of the cool things is the vantage point is very high, so it’d be really cool to get a picture, you know, across the whole of nape. So.

Rey Treviño [00:16:24] Okay. Wow, that’ll be real cool. That’s going to be that is going to be awesome. Okay. So you’ve got the booth. You’ve got the funds okay. Yep. The whole point to the booth is to spend the funds. You’re looking for PDP. Like let’s let’s say that again. You know, I wanted to invite you on, you know, to get get this out there to let people know that, hey, Alex, Ottawa is looking to spend money. Is that a fair statement?

Alex Ottewell [00:16:52] Correct.

Rey Treviño [00:16:52] Okay. What kind of deals are you looking for to spend money?

Alex Ottewell [00:16:57] Like I said, shallow oil and it had or 70 500ft. You know. Right. Right now we have stuff just outside of Houston and just outside of Austin, but, base and wise, I would say we’re more east Texas than west. You know, the Permian is great, but the problem is the upside kind of offsets how our capital works. So we’re okay with paying upside? We just we’re not drilling. So if you have a deal that has a whole bunch of odds that you need value on, it’s a little bit more difficult for us. But if you have a traditional field that you’ve had for a while and it produces and maybe it’s not everybody else’s buy box, we’ll buy probably on a lease level, as little as 750 barrels a month. It’s probably the this smaller level of field, all the way up to probably 5 or 7000 barrels a month. That’s probably our by window. We’re not looking to buy just one asset. We want to buy a mixture of assets. And we’re going really more towards the independent guy. Right. Smaller independent. That’s the kind of deal size we’re looking at now. Obviously, price wise, that’s going to vary depending on what the production is doing and expenses and things like that. But we, you know, we definitely on that smaller side, nothing too crazy. We don’t want anything newly drilled. I mean, we’re we’re, we’re trying to be reasonable, but nothing too newly drilled. We want a mature field. We want, like, five years old. Something new. You just want to move on with.

Rey Treviño [00:18:19] Okay, man, I bet you’re going to be several people out there that are just going to be. That’ll have several be like that. And again, for anybody out there that’s listening, they’re going to be in the center of need. So if you’ve got a deal you know can it’s that right there. You know, come by and visit with Alex. How many people are you going to have been in your station or your booth this year?

Alex Ottewell [00:18:38] Yeah, I think it’ll be, between staff and office and other sales staff. Right. Like 14 people. Okay. So many people. You’ll see them. I’ll be. I’m big about branding. Me and Ray. We’re talking about this. My whole office is is green and black. I mean, that’s our logos and colors. You’ll definitely see us. We’re also going to be, fingers crossed. As long as I get the permit back in time, we’re going to be giving away a side by side. So, at there is a free giveaway. So I had to get approval on that.

Rey Treviño [00:19:08] You have to get there. Yeah. I didn’t mean to cut you off, but did you have to get the firefighters and all that?

Alex Ottewell [00:19:16] That is what we’re working on right now. So it was a kind of a last minute thing. We had another alternate idea, which didn’t actually go through. So we decided to go ahead and do a side by side giveaway. And as long as the permit comes back in time, we’ll have a side by side where we’re giving away, free sign up. You know, nothing crazy. You just go up your name and and if you want to call, you get a free side by side. So.

Rey Treviño [00:19:39] Oh, my. Gosh, that is too cool. We, we were going to bring in. We got, one of my sponsors of the crude truth shout out Air Compressor Solutions. They, they have an awesome 1937 Chevrolet pickup. And so we were gonna bust that down there and put it kind of as a a photo op spot. No different than what you’re doing with the second level. And, the amount of people who had to get involved from the George RR Brown Convention Center to the. Yeah, to the firefighters. I keep wanting to say railroad commission, I don’t know what to the firefighters, getting a permanent and then you got to get like the George RR Brown Union people to help bring it in. It’s your people guild. If he brings that in, get over there and register for it. Because, yeah, he had to jump through hoops if that thing is there. Alex literally had to jump through ten hoops, ring the fire to get that side by side in there. Now.

Alex Ottewell [00:20:35] You know, starting it. No starting it. That’s already been, really laid out. Do not try and start the vehicle.

Rey Treviño [00:20:44] So maybe, I’ll do a shout out to, Gunther and Leon. Leon. Cal. Cal had the, you know, the two people that they’ve that have been there forever. Maybe just hand them the keys and give them the responsibility of saying, you know what? If it starts, it’s time you got. I’ll take the keys and just see me and.

Alex Ottewell [00:21:02] Yeah. Another another fun thing. We’re going to be doing a because what you our goal is to meet people. You know, obviously we don’t have a deal today. That’s fine. We still want to meet you because on a long term basis, we’re in this industry. We’re not going anywhere. We want to meet you. So if you come into our booth and we chit chat, and we like you, and you’re cool people, we actually have an after party that we’re doing on Thursday. So it starts at 530 and ends at nine. The big casino in downtown. We’re going to do a two hour open bar, so come drink. And, we’re not doing wells, so you’ll enjoy your drinks. It’s going to be a real open bar. And, we’re doing that deliberately. Now, there will be a cap on how many people. I think it’s going to be about 250. But the goal is, is to have you come in or mingle. We’ll talk. And that’s truly how business is done. Right? And we’re based in Florida. I mean, that’s all you really talked about. I didn’t want to move out of Tampa, Florida, I love Tampa. We frequent Houston and Austin, Midland, all these other places quite often. But at the same point, we’re a little further away than most. So we want to interact with you. Get to know you now. So then when we do business down the road, you know it would be a good relationship to start with it.

Rey Treviño [00:22:15] Well, I tell you what, that Florida area, you know, again, I got to meet you there in Fort Lauderdale, last year, funny to say, last year, good. Last month. And it’s hard. I was I was talking to my father on the phone going, he goes, what are you doing? I said, trying to think of every way to talk myself out of trying to relocate to Fort Lauderdale. Goodness, the weather was gorgeous. You said it was 35 degrees over the weekend. I mean, sunshine, you even got to take the the car out in our pre-production.

Alex Ottewell [00:22:44] It’s 75 on Saturday. Had the top down cruising around water right next to us, and it is tough to leave. I mean, I spent a good deal amount of time in Texas, don’t get me wrong. Oh, we come over there mainly for acquisition. So if I’m going to fly in, take a look at a deal, things like that. You know, we’ll break bread with whoever we’re doing business with. But, yeah, we’re all further away from the community. So we want to I want to get to everybody at Nape.

Rey Treviño [00:23:07] Well, Alex, you know, I am just so excited that you’re going to be in town. And, it also, it’s just very exciting that I’ve been able to get to meet you. Are you just totally random? Are you going to plan on going to that next, family summit thing in March?

Alex Ottewell [00:23:21] I am, I am, yeah, we’re going to a couple of us. So it was a that’s a really good event. Good, good. And, makes of people.

Rey Treviño [00:23:29] Okay. Well, yeah. We’re not here to promote that right now. I know anyone one World Petroleum. So, you know, again, just just to reiterate, Alex, what are you looking for at Nape and where can people find you now? And Nape.

Alex Ottewell [00:23:46] Yeah. So, one more on petroleum.com. You can, numbers on there and you can, submit an entry if you have an asset. Specifically, we have an upload form. So you can literally just type in your information that comes right through to us. But yeah, we’ll be dead center Nape. And when you walk through the entrance, straight back, right where that I list, there’s kind of that middle I’ll run through or right there. You won’t miss us? We’re two story, all metal. big Signs will be loud. And then what we’re buying, you know, PDP, shallow oil. 7 or 8000ft. You know, we do. Every deal is different, right? So I won’t say that we’re you know, if you got a couple of 10,000 foot wells and they’re we’ll definitely take a look at it. We’re just looking for more shallow stuff. If you have a real shallow feel, we’re super excited. Like I said, probably on the 750 barrel month. That’s probably, where our man owns a line. May go a little lower. Maybe you have a combination of a few different leases are making up that we may take a look. But, yeah, I’m up to five, 6000 barrels. Nothing crazy, nothing big. But, we’re fast, were quick. We have everything in place, and we can. We can close properly, and we’re, we’re not relying on bank financing, so it’s there.

Rey Treviño [00:24:56] Okay. Well, Alex, again, I just cannot thank you enough for stopping by and, doing this interview for the crude truth. Again, you know, please be sure to visit, Alex at his booth at the Nape expo one more time, February 7th through the ninth. And, we’ll be sure to, you know, have have your contact info in the show notes. Until next time, thank you to all our listeners. If you have any questions for me or Alex, don’t hesitate to reach out. And, we’ll get those questions answered and we’ll see you again on another episode of The Crude Truth.

 

 

 

 

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Alex Ottewell, One World Petroleum, Rey Trevino, The Crude Truth


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