In June 2014, Anthony Bahr ’91 and Jay Graham ’92 became acutely aware of what they didn’t know. They were both highly accomplished petroleum engineers. They’d worked at top energy firms and started their own business, WildHorse Resources, seven years earlier. But as they prepared to take the company public, which involved many discussions with bankers and investors, they found themselves out of their comfort zone.
“I remember having a conference call with 30 people and being the only engineer,” said Graham. “That’s when I thought, `Fluids lab isn’t helping me a whole lot right now. But a finance class would have been nice.’”
It wasn’t just a passing thought. It was confirmation of an idea he and Bahr already had: that in the world’s oil fields, petroleum engineering students could benefit from business training. So as soon as they were financially able, thanks to WildHorse’s spectacular success, Graham and his wife April along with Bahr and his wife Gina got busy responding to the need. Each couple gave $6 million to create a new Petroleum Ventures Program at Texas A&M University, an unprecedented collaboration between Mays Business School and the Harold Vance Department of Petroleum Engineering. The program, set to launch this fall, will not only serve petroleum engineers who want to delve into income statements and private equity, but also business majors who aspire to jobs as oil industry analysts or energy bankers.
Gina and Anthony Bahr '91
April and Jay Graham '92
Interdisciplinary study, synergy and real-world experience are buzzwords in higher education, yet rarely a reality. But the Petroleum Ventures Program, combining two of Texas A&M’s well-known strengths, will train students with real-world data and benefit both the industry and the Texas economy. Understandably, the deans of both colleges are enthusiastic. “Providing entrepreneurial opportunities for our students is critical in better preparing them for our changing workforce requirements,” said M. Katherine Banks, vice chancellor and dean of the College of Engineering. Eli Jones, dean of Mays Business School, said the school "is honored to connect its curriculum with industry needs and give students a competitive advantage in an interdisciplinary way.”
Bahr, Graham and others involved with the program are unaware of any other universities offering a framework for such intricate collaboration. “This is
way ahead of the curve,” said Cathy Sliva, director of the Petroleum Ventures Program for the engineering school. Added Graham, “It’s a combination of keeping Texas A&M and Aggie petroleum engineers the best in the business as well as adapting to the environment and the industry as it evolves.”
The seeds for the Petroleum Ventures Program were sown in the early 1990s when Bahr and Graham took two undergraduate engineering courses (one in management economics, the other in petroleum evaluation) taught by Billy Pete Huddleston ’57, a petroleum engineering professor of practice who headed his own consulting firm, Huddleston & Co. They said his courses were some of the few that gave them a broader, real-world look at the industry. “Much of the driving force behind why we’re creating this program is to build upon the spark he ignited in a generation of petroleum engineering students,” said Bahr. “His influence is interwoven throughout the program.”
One of the legendary Junction Boys during his time at Texas A&M, Huddleston said that in his classes, he tried to bridge the gap between two different worlds—engineering and finance. “One speaks English and the other speaks Swahili,” he explained. “I was teaching them the same language.”
Huddleston, who retired in 1998, would influence Graham and Bahr in other ways. Graham worked for Huddleston for four years. An original investor in WildHorse, he also helped the partners create a business plan and obtain private equity.
“I don’t think many engineers graduate knowing what a business plan is,” said Bahr, who earned an MBA at California State University, Bakersfield. “That will change. Students just have to create one business plan in college to learn what it involves: What’s my overhead budget? What’s my strategy? What type of properties am I going to buy? What’s my organizational structure?”
The school of hard knocks—for the most part, that’s where Aggie engineers and business majors have been learning the intricacies of the energy sector, according to Bahr and Graham. The Petroleum Ventures Program curriculum is designed to save students from “stumbling blindly off of the edge of a cliff,” at some point in their career, as Bahr termed it.
“The problem is that you don’t know what you don’t know. That’s where you make a lot of mistakes and spend a lot of money correcting them,” said Bahr, who along with Graham is intimately involved in the startup of the program. “In our world, we learned by trial and error, by exposing ourselves to sometimes unnecessary risks. Now students will understand more about what it takes to run a company.”
The concept is designed not to make engineers experts in accounting or finance majors authorities on calculating reserves. Rather, each major will be exposed to operations on the other side to make them stronger, wiser practitioners who can more confidently start their own firm or offer more to their employer.
Anthony Bahr '91 and Jay Graham '92 lecture to a group of students at Mays Business School. With gifts of $6 million each, the pair established the interdisciplinary Petroleum Ventures Program to link the colleges of engineering and business in unprecedented ways.
With an extra semester of classes starting their sophomore year, business and engineering undergraduates can earn a certificate from the program. Beginning fall 2016, the goal is to enroll 25 business majors, who will take courses in petroleum project evaluation and reservoir management, and 25 petroleum engineering students, who will have an opportunity to study investment analysis and corporate finance, among other business subjects.
For petroleum engineering students who want to become even more proficient in the business field, there are avenues to pursue a master’s degree in financial management, which will offer in-depth exposure to energy economics, acquisition evaluation, business and petroleum law, and commodity risk management. In turn, business majors will have options for a master’s degree in petroleum engineering. Curricula for these master’s programs were undergoing finalization at press time.
The centerpiece of the program—for both undergraduates and graduate students—will be the Business Impact Lab, which will collect real data on assets for sale and companies that have been sold. Student engineering and business teams will create business plans and compete against each other as if they were going to buy the asset or company, based on the collected data. The teams will have to decide how to evaluate and structure the deal, finance the new company and work their way through the due diligence process.
“We really want them going from soup to nuts,” Graham said. Since the data used will be from real-world acquisitions, the teams can compare their plans with what actually happened. “It’s powerful,” Graham said.
“We want engineers and business people talking to each other,” explained Detlef Hallermann, the director of the program at Mays. “But what’s more, we want them networking with each other so that 10 or 15 years from now, if someone has an idea for a business, they’ll know whom to contact.”
Future deal making is only one positive implication of the program. The alliance between petroleum engineering and business also prepares graduates for a changing industry. Today, more graduates than ever are heading to small companies rather than the major league corporate names. “Because of the number of private equity sponsors, there are many smaller companies doing the work and drilling the wells that the Exxons, Chevrons and BPs of the world used to do 20 years ago,” Bahr said.
Smaller companies demand more versatility from engineering and business graduates. “In small companies, employees are tasked with making more business and risk management decisions early in their careers,” said Bahr. “This is an effort to accelerate that ability to match today’s market.”
At a company of any size, advanced training will help graduates rise higher and faster. “I know of vice presidents with 20 years of experience who still don’t fully understand what other departments in the company do,” said Bahr. “We want to help graduates understand the responsibilities and capabilities of their peers within a company, because it takes an entire company of diverse disciplines to be successful.”
Huddleston noted that many CEOs at large corporations come from the business side, not from engineering. With the Petroleum Ventures Program, he said, “That will change.”