Yeah.

Welcome to the Aaron Harbor show.

Today we are in Houston, Texas at Ceraweek by S&P global.

Welcome to the Aaron Harber Show.

This is part two of our special program with William Armstrong, the principal and founder of Armstrong Oil and Gas.

And we're talking about all kinds of subjects, often unrelated to oil and gas.

Bill, thanks for joining me again.

I can't believe you got me for a part two.

Yeah, I know I can't either.

And you came cheap, which I appreciate.

Free as always.

That's about as cheap as it gets.

That's right.

Well, you know you can jump on your feet.

Yeah.

We've been talking about, you know, the whole concept of wild caddying and the fact that wildcatters in this, these are the big risk takers.

And obviously, you know, if you're risk averse, you're in trouble.

This isn't a place for you.

You got to be someone who can tolerate risk.

We were talking about, we left off of, you know, where you were.

You had, one of the team members telling you.

Hey, take a look at the North Slope.

Tell me what you know what happened after that.

So I started looking on the North Slope, my team sort of looking at it, and I was just astonished at how little it was drilled.

I mean, you'd heard all this, you know, you'd heard that it was big and a whole lot.

So the first time I started looking at it was in 2001.

And, I was astonished that i how wide open it looked to me.

Totally contrary to what my opinions I thought it was.

And I went up to I was like, wow, this is hardly even been looked at.

It just crazy.

I think that the industry in general was dominated by those three majors that I talked about earlier.

And so therefore, there jus wasn't a lot of people up there.

I brought a company called pioneer.

Up there, and we had a nice discovery, a little field called a field.

It was 2 or 300 million barrels, a nice field, really nice field.

Now, what was your relationship with pioneer?

I was just I just knew him, and I called him up and introduced him to an opportunity.

And they liked it, like my idea.

And then the next year, I, had another idea.

I brought in a company called Kerr-McGee.

You remember the old Kerr-McGee guys?

Dean McGe was one of my all time heroes.

He was unbelievably smart, man.

Especially every with Kerr-McGee.

And then, those two projects went to development and I get overwhelmed by AFIs.

I mean, my my build net to me was $1 billion with me.

You got overwhelmed by bills, you know, and, you know, it's a, authority for expenditure if he stands for.

So they send a, you know, like, hey, here's our new project.

You have 25% of it.

This is your cost.

My share was 1 billion.

So I said I said, you know what?

I'm goin to have to find a home for this.

So I sold it to an a, a great company out of Italy named, you know, so national, National Oil Company, Italy, they're huge.

Yeah.

And they took my position, paid me a little bi of walking around money for it.

They could afford, by the way, to pay those bills.

They could totally afford it.

Yeah, they could totally afford it.

And, they're very happy, and they're making a lot of money up there.

I went back to Alaska and, came up with this.

What?

A whole series of new ideas I learned from my first two big projects came all these new ideas, and I actually went and found a awesome partner out of Spain company called Repsol.

If you notice what I just said, I went to Italy to sell my one position, and I went to Spain to get my next partner.

You know why?

Because everybody in the lower 48 in America was doing shale at that point.

They didn't want any part of Wildcat.

They didn't want any part of you know, just give me let me go lose my money.

Well, buy well, if you buy 1000.

They wante they wanted the safety of ship.

They wanted the safety of not having to drill a dry hole.

And so anyway, so I brought Repsol to the North Slope, and we started this, this drilling program.

And you had like a 5050 partnership.

There were 70.

There were 70, I was 30.

Oh yeah.

I brought to all the technology land, geophysics, geology.

But they they brought some of them.

Me.

So let me describe drilling a well, the North Slope.

Because it's har to believe you have to do this.

There's a limited network of roads on the North Slope.

It's the roads that connect up the the oil fields that are up there, but they're pretty far apart.

And when you're rolling Wildcat, like I said earlier, you're usually far way away from.

Right everybody else.

So how do you get there?

So you wait until things get really cold.

And that doesn't happen until like mid-December.

And what you have to do is you have to pour fresh water on the tundra and it freezes.

It freezes.

That's your road.

That's your road.

Holy cow.

We had to.

You have to build like a 30ft wide road of ice.

Of ice.

It's like an ice rink that's 25 miles long.

And it cost you a lot of money.

My ice road expense is $20 million.

You drive all your equipment out there, you drive your man camp, you drive your rig, you drive all of the support vehicles, places for the guys to live, places to eat.

And, you go drill your well and you have to be off of the ice by the 1st of May, and then you pull your rig off of the ice, or else you're waiting until next winter.

Yeah.

And that's cost you a lot.

And again, it damages the tundra.

So you have to get off by May, and then your ice road melts and you never, never knew you were there.

That crazy absolutely unbelievable talk about.

So so the cost of poker on the North Slope is large.

So every well is what does it cost to drill.

Well 50 to 75 million.

Million for one.

Well one.

Well that's during the Wildcat season.

Once you find a field and it's worthy of being developed you can then build a gravel road and then you have a permanent gravel pad.

The costs come down by 80%.

How many wells can you drill from one pad up the.

So I think the pad that we'r developing on our pickle field is, I think we have 60 wells from that pad 55 to 60.

Well that's amazing.

Yeah, yeah, you drill out, you know, fo miles in all directions, right?

You go dow vertically and horizontally out you go horizontally, and you go how far out you are, 4 or 5 miles.

Are you going to try to go for 6 or 7 eventually?

Yeah, I think we'll probably be probably over six, I imagine.

I think Conoco is going over six on their on their wells up there.

So the footprint, your environmental footprint on the North Slope is tiny by the way.

Nobody ever goes to the North Slope.

It is like the most inhospitable place you've ever seen in the winter.

Time is dark all the time.

It's average temperatures well below zero all the time, and there's no reason to go up there.

And you know, sometime you hear environmentalist say, oh, is this place, blah, blah, blah, blah.

You know I mean, it's flat as a pancake.

It's frozen solid nine months out of the year and the other three months, it's just a swamp with mosquitoes so bi it'll just take your face off.

I mean, it's just very little, wildlife in the wildlife that is up there.

Caribou, a few polar bears here and there, some Arctic foxes, some birds.

Occasionally, they're flourishing up there.

I mean, the the environmentalist, when they were developing Prudhoe Bay said, you're going to destroy the caribou herd.

Well, the caribou her to 700% bigger now than it was before they found it.

So that's just a myth that they like to propagate.

I mean, the people did when you people did talk about the North Slope for Alaska, they've never been there.

You know, if you're inside the Beltway in Washington, DC or you're on Manhattan Island and they say, oh my God, you're hurting the tundra and never been there.

They've never employed a bunch of native, native Eskimos.

Like, I have great people, by the way, hard working.

And you know what?

If they weren't working for me, what they'd be doing, they'd be harvesting bowhead whales.

So I'm saving the whales.

It is a very, very inhospitable place.

I mean, it's really cold, really cool, dark.

Six months out of the year, flat as a pancake.

You can't tell from the sky and the ground.

It's white ground and white skies.

And when it does have light, and in wintertime, it's frozen solid.

In the summertime, three, three months out of the year, it's just, you know, essentially just a swamp.

And with mosquitoes that are just gigantic and we fly away with them.

So, so people inside the, the DC Beltway or the, let's say, Island of Manhattan say Hollywood, they have no idea what they're talking about when you're talking about it.

Let's put it this way.

More people see a really big oil field every single Monda in Dallas, Texas before 10 a.m.. Then it will in an entire year on the North Slope, because the Barnett Shale as you know, is right underneath Dallas-Fort Worth Airport.

And I would challenge you that the vast majority of people to fly in DFW couldn't pick out a well, yeah.

And there's thousands and thousands of them.

I don't know either.

So the environmental footprint we make up there is tiny, and we do this in suc an environmentally friendly way.

It is by far and away the most environmentally friendly way that they do anywhere in the world.

How so?

Because I already told you about our footprint, right?

You know, you go out 4 to 5 miles from one area.

So, you know, you have this a little, let's say ten acre pad, gravel pad, but yet you're producing from 25 miles around, there's no methane flaring.

When you're drilling your wells, everything is a closed system there.

There's nothing exposed to the atmosphere.

And, so therefore is like a pristine environmental footprint, particularly when you talk about the Third World that's not underneath these environmental restrictions.

If you want to go to Russia or you want to go to Iran or Iraq or whatever, I mean, it's just it's completely different thing for all the parts of Africa.

And certainl it makes a lot of sense to have that kind of environmental regulation, because these are places that you want.

Even from an industry industry perspective, it makes sense financially because these are places you want to have to send crews up to.

No, absolutely not.

You know, it's just as expensive to take a crew out there to fix a problem, you know?

So the last thing you want to do is have a problem and nobody wants to make i make an environmental problem, you know?

S tell me about the pick up pick.

It was a discovery that we made a while ago.

And, we were drilling this wildcat well, very near t where one of the nice fields in Alaska is a little field called alpine fields.

Big billion barrel field.

And, we had this idea, all kind of on the flanks of alpine, and, it had been looked at by every other oil company, and nobody liked it.

We looked at it and said, okay, there could be some really good here.

So we drill this well and, it was it's really shallow.

We ha we had our zone in about 4000ft.

Well, vertical will way better than seven, way better than the vas majority of all the shale plays.

And unusual actually.

And, we thought it was going to be one thickness, and it turned out to be three times thicker than we thought it would be on our best case scenario.

All right.

And when you're talking about thickness, you're talking about pays on pays.

So you can get those resources, get those resources.

We knew immediatel it was going to be a big deal.

And it was such a big deal that we got very aggressive and we, stepped out the next year, three miles away.

Found it again the next year after we stepped out three miles away from that.

Found it again the year after that.

I convinced my partner Repsol to step out 22 miles, and we found the same field 22 miles away.

That's an incredible fact.

I think in the history of the oil and gas industry, I have never heard of somebody stepping out 22 miles.

Your point is, what you do is your increments are a lot smaller.

Typically people step out a mile all the time, and we went out 21 miles and found the same, accumulation, the same pool.

So this fields ends up it' going to be 40 miles long, by, ten miles wide.

It's going to probably produce three, 3 billion barrels.

It's going to be the third largest field ever found in the United States.

Other than the great Prudhoe Bay field and then the famous East Texas field.

So big deal.

So why did you sell your interests?

Well, again, it, to develop that.

Yeah.

That's going to cost you about I think the initial AFI, the initial bill.

Yeah.

5 billion.

I had 50%.

So when a guy hits you with a $2.5 billion bill, I sold it to a reall great company out of Australia, a company called Oil Search.

And they were essentially merged into a company or merged into a company called Santos.

So they're my partner.

Yeah.

So, did you keep a piece?

Yep.

Okay.

Smart.

Smart man.

You got a big check?

I don't talk about that, but, yeah, I went back.

No, it's nothing to be ashamed of.

No, it's good to me.

It's proof in the pudding.

Yeah.

No, it's.

That's.

So that's what we were doing this for you know, at the end of the day.

All right.

So what happened after suspect was found?

I, I laid off my position to, Like I said, oil search.

We've now gone back to Alaska, and we now have a 1.4 million acres, and we're doing it again.

This is West Castle.

One of them is West Castle.

That's in the onto into the.

That's what, to the west of picker, which, by the way, i the National Petroleum Reserve.

Everybody reads about and hour.

Right.

And you read about the Emperor.

If I had a map, I show you.

But.

And we will put a map on.

This is to the east of the north Slope.

That's the that's the Arctic National Wildlife Refuge.

That's the one that everybody talks about all the time.

Trump loves talking about it.

And then to the Wes there is the National Petroleum Reserve of Alaska Petroleum Reserve, emphasizing, right.

It's the size of Indiana.

It's a big area.

There's been virtually no wells drilled in the infra.

And, there's a lot more to find in the Emperor.

So, it's been under political, hot water recently to the emperor and, All right I'll just tell you the story.

I. I wasn' going to tell you a story, but in one of my claims to fame in my life is I've been on my own since I was 25.

I'm now 65, 40 years.

And I have found on the oilfields.

I've done deals with hundreds of companies.

I have never, not once, ever been in a lawsuit.

That's impressive.

I've never sued anybody.

I've never been sued because if I have a problem, I can always find a way to work it out because nobody wants really good in that game.

So I always find a way.

I work it out.

I had to sue my own government for nationalizatio of my position in the Emperor.

Isn't that unbelievable?

Can you believe that happene in the United States of America?

So, so what was your claim?

I made a deal with the federal government when I bought all these lands on federal lands, won 1. million acres, bought or leased.

Leased.

And and you have a contract, right.

And, you have the right to ingress, egress, drill your wells, build your facilities, build your pipeline if you have success, blah, blah.

And, give government change all the rules saying what?

And, you got to do more polar bear studies.

You got to do more regulation.

No, you can't do this.

You can't do that.

That wasn't part of the deal.

And, so it was me.

And then 5 or 6 other people separately.

ConocoPhillips, all the Eskimos of Alaska, the state of Alaska, all had to sue the federal government.

You know what?

I have been all over the world looking for oil and gas.

I've been to Russia, I've been to Kazakhstan, I've been to Turkey.

I've been to places you can't even pronounce.

And at the end of the day, I almost always pulled back because I thought if I could do this deal in Mexico, right, I do this deal in Argentina, they're eventually going to nationalize me.

Never in my wildest dream that I think that would happen in my own country.

I'm surprised.

Well, I gues I'm not surprised to hear about entities, agencies adding another layer of regulation and seeing if they can get away with it.

And I think that's the excuse.

They say, well, I just, you know, I know what I didn't take away your your rights.

You can still drill.

There's a lot of way to nationalize somebody without.

Right, formally nationalized.

Right.

I mean, you can change the tax laws.

You can you go, you know, whatever.

This is bad.

This is no bueno.

And the thing about it is, it's like the overwhelming support from all the Alaskan, all the Eskimos, everybody lives up there.

The overwhelming support for to drill.

It's unfortunate in the sens that what is happened, you know, that instance in your case isn't isolated.

It should be like, hey, you make a deal, keep the deal, keep the deal.

Yeah, well, hopefully we're going to see some overtime, some changes and maybe a little more reasonability.

And my attitude is, if you're a government and you want to make a tough deal, make a tough deal, but whatever deal you make, stick to that.

And the real challenge I think a lot of people don't understand about the industry is that, you know, when you do a project like that this is in a six month project or a one year project, you know, these are multi-decade, multiple decades.

And when you've made commitments, you've lined up investments and everything else you need.

The stability that here's the contract we have.

We expect people that honor it.

Yeah.

Well, you know, one of the challenges i in government that I found in, not all agencies, but there are certainly times when there are people i government who who believe that what they're doing, which may be wrong, is it's okay because they feel I'm doing this in the public interest and because I'm doing this for our country or whatever they believe to, to a number of people, tha justifies really bad behavior.

I think for the most part, they're misinformed.

I think they're mostly goo people, but there's misinformed.

I don' I don't think it's misinformed.

I think they know what they're doing is inconsistent with an original commitment.

So I think I agree with that.

I agree with that.

But I think I think there's this sense for not all elected or appointed officials, but with some certain people, I think there's a sense that if I think it's in the public's interes to do something to make a change or to to, you know impose an additional regulation that justifies doing it I think there's a real belief.

It's, you know, it's sincere and all that.

It's wrong.

And they know what they're doing is contradicting an original commitment.

But I think they feel this concept of, well, if it's if it's in the best interests of the public I can override this commitment.

And I think that I just think that's a an unfortunate perspective.

But I see that all the time.

I kno you've had some great success.

You're modest about it.

You and Liz, you know, support a lot of great organizations.

You know, a lot of great, yo know, people doing great things.

You're very charitable.

You've been known certainl in Denver and Colorado for, for, you know, supporting some, some wonderful causes and, you know, from individuals to and to significant organizations, you know, obviously the same in Texas.

I mean, I've Ksmu loves you guys, to put it mildly, grad school.

But you left Denver.

Yeah, we did, and I'd be really interested in why you left.

When Colorado passed the legalization of marijuana, my wife looked at me and she goes, we're out of here.

She goes, what's going to happen here?

Is this going to it's going to really, really affect Colorado negatively.

And it has.

You been in Denver.

You know exactly what I'm talking about.

Denver is not the same town it was 12 years ago.

There's way more homeless, a lot more vagrants, a lot more, just graffiti crime.

And you all in Denver are a little bit like you're in frog soup.

You don't realize how much it's changed.

When I go back there.

Now, coming from Dallas is shocking because I go back there quite a bit.

And it is shocking how much that town has gone downhill.

It needs a a new overhaul of of the government.

And, and you're mainly talked about downtown, downtown, downtown.

Yes.

Not not the whole city or suburbs.

No, I'm talking about downtown.

I'm not talking about Vail or Aspen or, you know, but I'm talking about downtown Denver.

Yeah.

And, you know, of course it's gotten body blows from Covid.

And, you know, there's there's all kind of issues, but it ain't what it used to be.

And, a couple of I had a couple of reasons to leave.

I've got nine grandkids, six of them live in Dallas.

That's the reason enough.

And my wife wants to be around them all the time.

Yeah.

The attitude of Texas i a very much a can do attitude.

Really like it in Texas.

They just like, what are you doing man.

That's awesome.

There for you.

They're pulling for you.

They're not hoping you're going to fail.

It's a really, really upbeat, very entrepreneurial.

And also no state income tax.

No state income tax for that matter.

Yeah.

I mean, it's, what, a quarter?

Four and a half.

Yeah.

Yeah.

Roughly.

Yeah.

Yeah, yeah.

So that one reason I left one because of state tax because I want to go to.

No, no taxes go to North Slope or no go to Alaska.

No.

No sales tax.

No no income tax.

In fact they give you money.

Yeah.

To live there and all that is because of oil 8,585% of their, of their general fund comes from oil and gas.

They have a $75 billion sovereign wealth fund boat.

And they have a rainy day fund that most countries, most countries don't have.

And a lot of people there i Alaska really need that money.

So let's say it's this year, I think it was $1,700 per person.

So you get a family of five, you know, you're getting almost $10,000 a year.

It's a it's going to go up too, by the way.

The, the distribution.

Yeah.

Yeah.

I want to ask you some question.

You know, you you've been a wildcat or both.

Now that I pissed off everybody in Denver.

Yeah.

You know, just, you know, taxes.

Are there a lot of people agree with your management style?

You know, you don't have a giant organization, but you have a different management style.

And I think being an entrepreneur, being a wildcat or, you know, you have a different mindset.

It's give me your sense of, you know what what makes any kind of great leadership.

You know, that's such a great question.

Just off the top of my head everybody has a different style.

Everybody has their own style.

I mean, look at the difference between Donald Trump style versus Barack Obama's is night is there?

But they're both awesome leaders.

I never have been attracted to a big organization.

To me, peopl that talk about their headcount as four people now working for them.

So what, I do sounds like a bunch of mouths to feed.

I don't think you can ever replace, true passion.

Good leader has to be passionate.

A good leader has to really, really be compassionate.

And I think they have to be truly have to love the people that work with them and what they're what they're trying to accomplish.

You just can tell that from a leader, you know, you're not just doing it for the money or you're not doing it for, you know, accolades.

But you're doing it for the love of the game.

I mean, that's what I do.

That's why I do what I do for SMU, you know, and all these other philanthropies that we give to you, which we're a lot, you know, bu it's for the love of what we do.

And my wife and are really passionate about it.

I mean, there's that old saying, which I'm sure you've heard, where they say, hey, you know, if you want to be a success in life, you know, find out what you're passionate about.

Well, I think that's wrong.

I because they don't say, the just say, what's your passion?

Well, I think it's your passions because I'm really passionate about the oil business.

I'm very passionate about my family and my wife and my kids, my grandkids, my friends, you know, my country.

So I've got a lot of passions.

And, you can't fake that.

So to me, that's what the leader's all about.

Do you think that's changed when you look at society and, you know, you mentioned social media, do you think being a a leader today?

Is different than it was 20 or 30 years ago?

And you think it's those those core principles?

I mean, you want to go talk about dynamic leadership, go see Hamilton, and you can see that Alexander Hamilton was fighting with Thomas Jefferson 250 years ago almost the same way that Kamala Harris and Donald Trump were fighting.

You know, if you think there's anything new under the sun, just pick up the Bible and read the verses.

Not much has changed.

So I think man is man and we're all flawed.

And, so does the flavor of the day change?

Hell yeah, it did, but it's deep down the issues are the same.

They have been for thousands of years.

Who would you say in your mind, whether historically or currently, contemporarily, are great leaders and why?

Who would you pick?

One or 2 or 3?

Probably my favorite U.S. president was George Washington.

And, just because, you know, he had it all and gave it up, he walked away from he could have been king if you wanted to.

And very humble man.

And, he did what he did.

I mean, I do think he would be very difficult to say there's a better president than that.

In my lifetime, m favorite has been Ronald Reagan.

Because, you could tell he loved our country.

And he was really, as spectacular getting tha message across for talking about how bad the oil business messages.

Reagan was always really good at messaging.

You know he was really, really good.

So, you know every industry has its leaders that are just, you know, like, what's your favorite football coach?

You know, is it Bill Belichick just made everybody but you New Englan Patriots fans mad by saying that or is it Mike just Yankee in basketball.

You know we all have various leaders that are really good.

You can see that in every industry as well.

What do you wish most American knew that they don't know today?

If you had you know, somethin you would like everybody to know that you think a lot of people have missed or just simply aren't aware of that?

A tough question.

No, it's not a tough question.

A lot of you, the easiest answer, the most obvious answer is most people that lost sight of the fact that most people are really good and not near enough of us love our neighbor.

And to me, when you get right dow to a rich or poor, male, female, gay or straight, I mean, the vast majority of people are really great, and somehow we've lost that.

We're we're too busy defending our tribe as opposed to looking at everything.

There was one thing you could change about our country.

What would it be?

The elimination of social media completely.

All right.

I'm.

I'm with you.

Okay.

As your show goes off the air.

Yeah, I'm with you on that.

That was Bill Armstrong.

This is part two of our special two part series with William Armstrong of Armstrong Oil and Gas.

And obviously, a man of opinions on a number of issues who is not shy about expressing them and who will probably get a lot of hate mail after these two.

So I'm really sorry, Aaron.

You're going to get all this hate mail.

Don't hate me for that.

And if you're a hater out there, you just don't know me yet.

All right.

Anyway, I want to thank Bill for joining me and for joining me for two programs.

This is Aaron Harbor.

Make sure you watch part one.

Thanks for watching.

And.

Hi, I'm Aaron host of the Aaron Harbor show.

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