Throughout his 51-year career, John R. Butler Jr. has been on the cutting edge, leading public and private companies that pioneered software for production databases and seismic processing. Yet he is not jaded in the least. In fact, he is thrilled with recent advances in horizontal drilling and fracturing in resource plays.
Today, Butler is nonexecutive chairman of BreitBurn GP, the general partner of BreitBurn Energy Partners LP, a fast-growing master limited partnership, based in Los Angeles.
At Stanford, he played rugby and football, graduating in 1962 with a BS in chemical engineering. Soon after, Butler worked at Humble Oil's Baytown Refinery near Houston. Later he designed and operated natural gas plants. In the early 1970s, while at JR Butler & Co., the reservoir engineering firm started by his father in the 1940s, he was involved with a project to build computer databases for production data. Long story short, that morphed into seismic modeling as a firm called GeoQuest International Holdings, with 400 employees, including seismic crews. It was an early user of bright-spot technology and it managed seismic libraries. Butler was chairman and CEO.
He was also senior chairman of Petroleum Information Corp. and vice chairman of Petroleum Information/Dwights LLC, suppliers of commercial petroleum data and information services, until December 1997, when it was sold to IHS, bringing with it data on some 2.9 million wells worldwide.
Today he is still chairman of JR Butler. After completing courses at Harvard, Columbia and the National Association of Corporate Directors, he has served on numerous other technical and E&P company boards, including the board of the Houston Advanced Research Center, the think tank started by the late George Mitchell, a dear friend and mentor. Butler chaired HARC for at least 15 years, enjoying its focus on sustainability, environmental issues and energy efficiency.
He was chairman of the Society of Exploration Geophysicists Foundation until December 2001.
Investor You've always been fascinated by technology, haven't you?
Butler You know, people talk about the growth of the high-tech industry all the time, but the oil and gas industry is just as exciting. When I went on the board of Anadarko Petroleum Corp., it did about $500 million a year in gross revenues and today it does $15 billion a year. That's spectacular growth. BreitBurn's IPO was about $112 million and now we have a market cap of $2 billion, and that's a lot of growth since October 2006. These are exciting times. I tell young people, this is where you want to be for many years to come.
Investor You've gone from the rig floor to the Cray computer.
Butler As a member of Anadarko's board from 1996 through 2011, I visited one of the company's pad-drilling sites in the Marcellus. Those wells took about 12 days to drill, as opposed to when I roughnecked back in high school, when an 8,500-foot vertical hole took six weeks.
I think there are still lots of improvements to be made in terms of how we exploit shale drilling, but it is mindboggling what's happened. And when you think about deep water...it's akin to what America has done in the space program.
Investor You, and the industry, owe so much to computing technology.
Butler I first worked with computers in the 1970s to design gas plants, and later, used them for production databases. Datec evolved into seismic modeling, and I realized if we sold software apps, we had a chance to survive in the software market. We changed the name to GeoQuest, and we were leaders in bright-spot technology. We developed a process … because I thought you could use geophysical data to discern the lateral extent of the reservoir away from the wellbore. We were the first to publish software for depth migration and that was run on a Cray. We were the first to come out with a seismic workstation. We sold it to Raytheon, which sold it to Schlumberger in the mid-1980s.
We then determined to be a data services company and we allied ourselves with PI in Denver ... in the early 1990s we had 100 employees and PI had 1,200, but we bought PI.
Investor If time and money were no object, what does the energy industry need to develop next?
Butler Trying to get better PR out in the public marketplace. That's a battle the industry has tried to take on for 50 years. On the technology side, continuing to drive efficiencies. Frankly, it's always surprised me that we have always worried about whether we have sufficient energy to get by as a country [instead of focusing on energy efficiency]. We have enough supply, but I would say it's about the price. We're short natural gas at $2, but we're long at $8 or $10.
Investor What advice would you give young people?
Butler I have a couple of grandkids going into the industry, one in engineering and one in geology, and my granddaughter's boyfriend is going into engineering. I tell all three they need to get really grounded. Go out and get your hands dirty at the lowest rungs and really understand how the industry works. Be a roustabout; sit a well. Whether you go to work for a service company or a producer, or even if you go on the financial or management side, it will serve you well over time.
—Leslie Haines
For archives of interviews with industry legends, see OilandGasInvestor.com.
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