The oil and gas business is the world’s largest industry, as it represents the unique development point of civilization. Its relevance is an essential component that involves each person’s life, from petrochemicals to transport, heating, and power fuels. Surge Energy has been rapidly expanding and has had a fascinating past since May 2015 when its parent company, Shandong, inked a deal to obtain its first oil-producing asset- and on boarded a team of experienced professionals to begin operations on about 5,000 acres of property in Crosby County, Texas, known as Hoople Field located in the Texas Permian Basin. Shandong is Shandong Xinchao Energy Corporation Limited, a publicly traded company on the Shanghai Stock Exchange to develop a sustainable American oil and gas operation. Only months after acquiring Hoople, Surge Energy closed on a much larger acquisition of about 80,000 leasehold acres known as Moss Creek, which included a large drilling and development inventory in the prolific Permian Basin of Texas.
Embarking on the Journey
The upstart of Surge Energy was no easy feat. While the company is incorporated as a Delaware limited liability company operating in Texas’s private oil & gas sector, the initial funding from China had its challenges. Aside from the expected regulatory hurdles of creating an oil & gas company with foreign funding, the language & cultural barriers, distance, and time zone differences were all hurdles that had to be cleared to get Surge Energy off the ground.
Two oil & gas business attributes in the U.S stood out as peculiar to the Chinese investors in 2015. First was the culture around attracting and retaining talent. In the U.S., compensation for any given skill with any experience is transparent in the industry. Resources are readily available through publication, the internet, and headhunters to provide this information to interested parties. Consequently, employers in the U.S have to constantly stay on top of these data points to attract and keep talented employees. Second is the concept of individual mineral ownership and legal structure in the U.S. Unlike China, in the U.S., land and the attached mineral rights are held mainly outright by individual citizens, corporations, or trusts. As such, a company must stay abreast of the activity and market conditions in the areas of interest and be prepared to negotiate with each owner, not the state, for the right to drill on their land.
With the ongoing practice of professionalism and patience on both sides, the company continued to progress in the early days to become a viable operating entity in which its leaders and employees (again, on both sides) gained exposure to a new culture and a different style of work.
Transforming the Right Way
Its strength resides in its greatest asset, a highly skilled and experienced staff who represents Surge Energy. Safety, integrity, teamwork, excellence, and transparency are reflected in the company’s culture and daily activities. These values were established early by Surge Energy’s original executive leadership team comprised of Dexter Burleigh (CEO), Phil Webb (COO), and James Welch (CFO). These men came to Surge Energy with a combined 75 years of experience in oil & gas and sought to build a company that encourages innovation and provides a more modern work experience than traditional oil & gas companies. Surge Energy’s current CEO, Linhua Guan, took the reins in early 2020 upon Burleigh’s retirement and continues to uphold these values and attributes of the company. Guan would like to change the way oil & gas companies are generally perceived. “Surge Energy has proven that a company can operate efficiently and generate positive returns while also being a responsible steward of the environment.”
Game-changers in the Oil & Gas Industry
Surge Energy is proud to lead the energy industry, which contributes to economic prosperity and the quality of life of Americans. The beneficial economic effect in the U.S. has been demonstrated in the previous five years. Since its inception, Surge Energy has acquired an additional 28,000 acres and deployed over $2.5 billion in capital to develop the properties, including drilling, fracking, waterand electrical infrastructure. Surge Energy plans the development of the acreage with a long-term view, and therefore significant investment in infrastructure has been made, that resulted in an optimized development from a cost, operational and environmental perspective.
The resulting production from Surge Energy’s acreage development translates into royalties for landowners and value-related taxes paid to the State of Texas and several counties within Texas. Surge Energy has paid over $900 million in royalty payments and over $165 million in state and local taxes in the past five years.
Surge Energy’s activity also means job creation. The company has continually provided the Houston and Permian Basin area with over 130 combined jobs through direct employment and far more jobs through contractors and indirect opportunities within the oil field services industry. When including drilling rig and completion crews, along with truck drivers and many other service company occupations, Surge Energy’s activities in the Permian Basin result in hundreds of oil field workers earning pay on any given day.
Surge Energy’s employees are split between the corporate office in Houston, TX, and Surge Energy’s two field offices (Ackerly, TX, and Lorenzo, TX). Approximately 70% of employees live and work in the Houston area, and 30% live in the Permian Basin area and work in the field offices.
Hard work Leads to Success
By the end of 2019, Surge Energy had surpassed 50,000 BOE/D in net output. Surge Energy Energy’s expansion was temporarily slowed in 2020 due to pull-back inactivity, but by 2021, the company had resumed its upward trajectory.
In June 2021, Surge Energy reached a company milestone of producing 100 million gross barrels of oil equivalent, reaffirming the company’s goal of building a long-term, sustainable oil & gas company. The milestone was celebrated by hosting a food truck event in the parking lot and giving each employee a commemorative gift. Surge Energy routinely commemorates production and revenue milestones, as its leadership believes success should be celebrated and relished. Specifically motto says, “We Deliver on Our Commitments and Celebrate Our Successes” That formula has worked for well as Surge Energy as it continues to grow as a player in the Permian Basin.
