Avid naturalist George Easterly’s oil and gas career was sparked by the earth sciences courses he took at Vanderbilt University, where he majored in economics, minored in finance and took courses in petroleum geology. His goal was to work in finance in an environment he would love.

During a summer internship at investment bank Parkman Whaling, Easterly observed that financial disclosures and other public filings were the main inputs for valuations. “I realized that if I wanted to differentiate what I could bring to a valuation-focused finance role in oil and gas, one of the best things I could do was to become comfortable with accounting—to know when things are at risk, when numbers are a bit noisy,” he said.

Easterly returned to Vanderbilt to obtain his masters in accountancy and CPA before joining EY’s oil and gas audit practice in Houston. Going through a full audit cycle, he gained insight into how operations ultimately become financial disclosures that then drive valuation by an external party doing advisory work. He focused on how he could eventually bring that level of support to a team at an E&P.

He joined Apache Corp.’s strategic planning group in November 2011 and spent the next three years working on the annual capital budget cycle and strategic planning. As his role evolved, he provided strategic support to the office of the CEO as Apache divested international and offshore assets and refocused on the North American onshore.

He was slated to move to Midland when then-chairman, president and CEO Steve Farris and current president and CEO John Christmann asked him to start up and manage a new group at Apache that would support executive management and Apache’s regional teams in analyzing North American onshore activity.

Easterly loves outdoor activities and music and is on the board of Friends of Big Bend National Park. Recently, he discussed his work, the current downcycle and E&P trends.

George Easterly

Investor: What does this new group do?

Easterly: We stay on top of what’s going on in the North American onshore business. Our work is really about connecting the dots, synthesizing information to elevate our game. Our team includes expertise in land, subsurface, finance, data architecture, and systems analysis.

Our charge is to make sure we are constantly getting better and that we’re not missing anything. That’s a big charge, and it is broad and touches every discipline.

Investor: Clearly, you enjoy your work.

Easterly: My initial interest in this business was the subsurface, and having been in a transactional advisory and valuation role, this role takes advantage of that experience but also gives me the opportunity to think critically about the parts of the business that really make it tick. It’s a multidisciplinary exposure that many people don’t get at this age.

Investor: With all the data, how do you decide what to focus on?

Easterly: It’s a practice of managing the imperfect to get something useful. Big data isn’t news. It’s more about how we set up routine flows of information into the company, into the right team, so that data gets into the hands of the right group. We turn the process of identifying important changes into a more passive experience to liberate people and let the things they need to look for come to them.

Investor: An example?

Easterly: In completion design, we have set up ways to notice if a rate or an emerging cumulative production profile seems higher than expected—passive ways to identify anomalies that we can do something with. The solutions are bespoke. A lot of what we’re doing is being done for the first time. We’re identifying places where no one had thought earlier to build support.

Investor: What has been the biggest surprise?

Easterly: How much fun it is. For a science nerd like me, working on the valuations side, the technical depth was meaningful but limited. The need to dig into the minutiae of operations is a privilege for me personally, as is working with senior management on what are essential elements of an E&P company.

Investor: Does the team’s role change in a downcycle?

Easterly: In the downcycle, our work becomes even more important. Even more emphasis is put on ensuring that every turn of the drillbit is done the best way, that every grain of sand used is the right kind. All parts of the equation get the flashlight put on them.

Investor: Lessons learned?

Easterly: Mentors have always told me that a downcycle is an outstanding opportunity to learn, that there is good information all around us. They have said, don’t miss the lessons.

Investor: What could have the biggest impact on the industry in the future?

Easterly: Recovery factor. When I ask myself where the industry-changing yield is and what’s next—it’s not as much about the next play anymore, it’s how to go from recovery factors in the low- to mid-single digits to 20% to 30% or beyond. Most of these unconventional wells in recent years that have blown everyone away have had recoveries in the single digits.

I’m excited about watching people innovate to try to get to that question. To get costs down and recoveries up—thousands of people are pushing on that door.

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