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Raging River’s Chief Operating Officer is finding ways to keep costs down and production up
A junior oil producer that’s able to grow its production without taking on additional debt in the current commodity environment probably sounds like the oil and gas industry’s version of a unicorn. But that’s what Raging River Exploration has been able to do, and that’s due in large part to Jason Jaskela. He has led the company’s efforts to optimize production from its core Viking play, and he’s done it while decreasing well costs in excess of 25 per cent. That’s greatly improved Raging River’s internal economics and allowed it to continue to grow despite the depressed commodity prices. “Between $45 and $50 is where we can put up marginal growth,” Jaskela says. “We’re one of the very few that can do that. It’s not astronomical, but we can show a bit of growth.”
Raging River’s cost-conscious ways are embedded in the company’s DNA, Jaskela says. “Ultimately, it comes from Neil [Roszell] – it comes from the top down. We’re a pretty basic and humble group, and we’re aligned with shareholders so we’re spending money like it’s our own dollar going into the ground. If you can go to the street with the best capital costs, and ultimately the best economics, you can do more with your business. So we’ve always strived to be the best. Status quo has never been good enough.” Raging River’s Beadle play is a case study in how the company has created value by testing new approaches and ideas. “Three years ago everybody had written that off,” Jaskela says. “Nobody believed that there was an economic resource there, and now today it’s probably our largest area. It was just by continually getting back in there, pushing technology and finding a way to develop that rock and make it productive.”
One of the ways it’s made that rock more productive has been by optimizing the spacing and configuration of its wells. As a result, while it experimented with densities ranging from 16 to 28 wells per section, it settled on 22 as the best fit for its assets. “We realized, looking at our oil in place, that there was opportunity in some of our lands to develop that further,” Jaskela says. “The longer-term plan for this play in a lot of the acreage is in water flooding, so we tied our in-fill spacing back to what was optimal for future water floodability.” But while Raging River is always testing out new ideas, technologies and approaches in an effort to reduce costs, it’s tried to avoid loading all of the pain that’s currently being felt in the market onto the shoulders of its service providers. “There’s no benefit for us in bankrupting our service providers. It’s a relationship, and we’re very aware of that. Our service providers are guys that helped us to develop the play. We’ve done it together. So it’s a continual discussion with them.”
It’s also a continual discussion with the members of Jaskela’s own team, one that’s taken him out of the field more often than he might like. “I cut my teeth in coveralls. Operations is my background, so I kind of like going back to my roots. But I don’t get to do it very often any more.” But, he says, learning to delegate and manage a team of employees is all part of being a first-rate executive. “All of us in this office are very technical, and love to do the work. But it’s a transition that has to happen. Everybody in this office, right from Neil down through all of our execs, are all capable of doing the real technical work, and we all love to do it. But at the same time you have to recognize that you have other staff that you need to guide and empower. That’s a big part of it: you have to give them the rope to make their own decisions.” They’ve made some good ones, lately – and it stands to reason they’ll continue to as long as Jaskela is the one feeding them the rope.
From Junior to Intermediate in Three Short Years
Raging River’s output has turned into a torrent – from 1,000 barrels of oil equivalent per day (boe/d) three years ago to 14,000 boe/d in 2015. And, unlike its rivals, it hasn’t laid off staff during the price slump.
In Q3 2015 it broke yet another quarterly production record, hitting 13,418 boe/d (97 per cent oil), a 26 per cent jump from Q3 2014. Matching its oil output, Raging River’s funds from operations flowed too, generating industry-leading earnings of $8.81/boe.
Raging River’s success comes from finding oil and cutting costs. Its horizontal wells were drilled at a 99 per cent success rate and it drove spud-to-spud time between wells down to 2.75 days. Its on-stream costs averaged $700,000 per well in 2015 – 22 per cent lower than 2014 – slashing operating and transportation costs to $10.51/boe for its ninth consecutive quarter.
The company continues going for growth, buying lands in its core development areas near Kindersley, Saskatchewan, and signing a letter of intent to acquire 13 sections of undeveloped land in its Dodsland, SK operating area.
The intermediate company aims to expand again next year if WTI price holds at or greater than US$40/barrel, investing $180 million to $200 million, with target production growth of five per cent at WTI US$45/barrel and seven to 10 per cent at WTI US$55/barrel.
Q + A with our COO of the Year: Jason Jaskela
What is the most important quality that a senior executive can have?
Leadership, and all aspects that fall under it. That includes identifying key people and their attributes, empowering your staff, making the tough decisions with confidence and identifying strengths and weakness in yourself and others.
What is the least important quality that a senior executive can have?
In a small company every quality is important, because weakness is failure.
What is your greatest fear?
I don’t live that way – I really have no fears. But I’d say my greatest concern at the macro level is time. There is so much more this world has to offer and so much more I can give back. I have big dreams on further career development, supporting charities, coaching my children in sports and enjoying my family. I have no idea where the time is going to come from. Twenty-four hours in a day is not enough for me.
Which living person do you admire most?
I admire different people for different reasons, so it is hard to nail it down to one person. One caveat for me is that in order to admire someone I have to know them. In general I admire all volunteers, because they donate time and in many cases do not even get a thank you. I have a ton of admiration for my colleagues at Raging River, each of them for different reasons. My career has been full of amazing mentors.
What is your greatest extravagance?
Most people would say my farm would be my greatest “extravagance.” Animals have huge family significance, the whole family loves them.
If you could change one thing about yourself, what would it be?
I often get very focused and lose my ability to slow down and enjoy quality time. Multi-tasking is nearly impossible for me.
What do you consider your greatest achievement?
Eight years ago we lost our first son to brain cancer at the age of two and a half. Concurrently, the market collapsed pushing the company I worked for into bankruptcy. It was obviously a very challenging time for our family. But through the help of family and friends and pure resiliency we clawed our way back. We have since had three beautiful children and I have been part of building two very successful companies. It is fundamentally what keeps me humble, and defines for me the difference between success and significance. Our first son was a trooper and never gave up, and a lot of my motivation to this day comes from him.
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