The midstream sector has taken off in the wake of the shale-play boom in the U.S. and strong crude prices. Eager to participate in emerging opportunities is Jarrett W. Vick, president of Permian Crude Transport LP, a Midland-based company he co-founded in 2007. It transports and markets crude oil in the Bakken and Eagle Ford shales and the Permian Basin.

Vick and his partner, Alex Hale, opted for the entrepreneurial route one night at 2 a.m. as they did due diligence as public accountants. Vick asked, “Did you think you’d be doing this after this many years (about a decade for Vick), because I went into it for the experience.” They decided to come up with some ideas and make a run at the best one.

The market niche they chose was crude-oil transport. Neither had driven an 18-wheeler, let alone owned one, but they talked with industry players in Midland and were told work was available. Vick located seven trucks and trailers and obtained financing from GE Capital and Community National Bank.

The partners started out in the Permian, set up shop the next year in the Denver-Julesburg Basin (they withdrew from the D-J during the downturn), and a year later, entered the hot Bakken oil-shale play. Now they are in the up-and-coming Eagle Ford shale.

Today Permian Crude Transport moves upwards of 20,000 barrels of crude per day and has 60 employees. The partners self-financed the company, with the help of friends and family, and saved up capital for the tough times, which arrived courtesy of the recession. But 2010 found the company climbing back toward $12 million in annual revenues after a fall to $8 million, and Vick expects to finish out 2011 at $16 million or more.

Capital providers are swarming to invest in energy, and the partners are evaluating deals. Vick found a backer for his interest in natural gas as a transportation fuel in Jack Brown, co-founder of Wagner & Brown, which owns Pinnacle CNG Systems. Brown financed Vick’s purchase of a CNG-fueled truck for use in the Permian, and Vick is looking at reentering the D-J by transporting crude for producers in trucks fueled by their natural gas.

Vick graduated from the University of Texas at Arlington and earned his MBA from Texas Christian University. The best career move he made? Accepting a job withPricewaterhouseCoopers out of college, rather than a higher-paying position with Enron.

Midstream Business talked with Vick recently about the midstream sector.

“We were fortunate that we were early in the Bone Spring area in the western Permian.”

MIDSTREAM: What are your thoughts on the Bakken?

VICK: We figured the best way to get in was shipping on a pipeline. You want to be in the Bakken—it’s a major long-term play. It’ll last my career, I’m sure.

MIDSTREAM: How about the Permian and Eagle Ford?

VICK: The Permian is wide open—it has a lot better infrastructure. We were fortunate that we were early in the Bone Spring area in the western Permian. A couple of operators gave us an opportunity, and we have a great market for the crude. We’ve had to build a larger yard and have seen our volumes more than double in the past six months or so. This is going to be a great area to put some pipe in the ground.

MIDSTREAM: Where are the better economics?

VICK The better economics are in the Bakken and South Texas, but the Permian is stable and secure. Everyone’s been in business a long time there. You have to balance stability with the economic benefit.

MIDSTREAM: There’s a lot of money circling the midstream.

VICK: We’re talking to people about raising more capital. You have to, to grow. Midstream is to the oil business what the interstate system was for general commerce—it’s transportation. Where others make widgets, our widgets are cubic feet of gas or barrels of oil. You have to have infrastructure to move them.

We’re looking at acquiring pipelines. Pipelines are more stable than transport. The margins aren’t very different, but there’s more stability.

I ran into a real estate investor from New York one weekend in Corpus Christi, Texas. His group wanted to put capital into energy. His team flew down that weekend to talk to me, and now we’re looking at deals. My wife, who was coming to spend the weekend with me, joined a slightly larger group. But she’s a great girl and a great partner. We all had a good time.

MIDSTREAM: You like your focus areas.

VICK: I do, I feel at home everywhere I go. Alpine, Texas, where I grew up, is a mile high at the airport—it’s the foothills of the Rockies. I work all along the eastern shelf of the Rockies and South Texas, from Mexico to Canada. I’d be happy never to have to leave it—to build my whole career off that strip.

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