Author Archives: Andrew Jowett

About Andrew Jowett

Andrew Jowett is a Chartered Accountant who qualified with PricewaterhouseCoopers in the UK. He has worked for 20 years in the US, primarily in the Oilfield Services sector for companies large and small, public and private-equity backed. One thing most of them had in common was a lack of controls and procedures. Andrew is currently the CFO of a PE-backed manufacturing company in Houston. He is also the chair of the Houston chapter of the Financial Executives Network Group (FENG) which is a voluntary networking organization for CFO’s, Controllers, Treasurers and other senior finance executives. The FENG has over 50,000 members with chapters in every major US city and some internationally too.

ExxonMobil officially moves its head office to Spring, TX

Gary Coronado/Houston Chronicle

ExxonMobil has officially changed the location of its headquarters from Irving to Spring with an 8-K filing with the SEC on July 5. Exxon has a market capitalization of $417 billion and therefore becomes the largest company in the Houston-area, as measured by market cap. Its market cap is over three times the next largest (ConocoPhillips at $125 billion).

The company announced back in January 2022 that it would be relocating its corporate offices to its campus in Spring sometime in 2023.

Exxon moved its head office from Manhattan to Irving in 1989. The campus in Irving, built in 1996, was 365,000 square feet and housed 250 employees, who were offered relocation packages. In December 2022, the company sold the offices and 290 acres of land (of which 200 were undeveloped) to an Austin-based developer, Capital Commercial Investments.

Jones Lang LaSalle, who brokered the sale, have been hired to market the office building to companies looking to relocate to the Dallas-Fort Worth area. The development plans of Capital Commercial for the rest of the property are not yet known.

Construction on the campus in Spring began in 2011 when oil was over $100 a barrel. It was completed in 2015, when oil was below $60. It is based on 385 acres and officially houses 10,000 employees. The campus is currently appraised at $990 million.

As a side note, when a company changes its corporate office, it doesn’t have to file a document with the SEC. It just starts using the new address with its next filing. The Exxon filing happened to be a Regulation FD disclosure on upcoming earnings considerations.

Kodiak Gas completes IPO below expected price range

Kodiak Gas Services, based in Montgomery, TX, has completed its $256 million Initial Public Offering (IPO). Its stock is now listed on the NYSE under the symbol ‘KGS’. It offered 16 million shares at $16 per share, well below the proposed range of $19-$22.

The company operates gas compression services, mostly in the Permian and Eagle Ford basins in Texas. In 2022 it had revenues of $708 million, adjusted EBITDA of $399 million and net income of $106 million. The business is capital-intensive business and spent $48 million on maintenance capex and $211 million on growth capex last year.

Kodiak was founded in 2011 and backed by the Stephens Group, an Arkansas-based PE firm until 2019 when EQT Partners, a Swedish-based investment firm, acquired a majority stake in the business.


David Marrs and Mickey McKee co-founded Kodiak in 2011. Mr. Marrs served as the CEO until shortly after the investment by EQT. Mr. McKee has been the CEO since then.

John Griggs has been the CFO at Kodiak since January 2023.  Previously, he held various CFO roles at PE-backed companies.  He also worked at CSL Capital Management, a Houston-based PE firm, for three years. Ewan Hamilton, who was the CFO for nearly seven years prior to the appointment of Mr. Griggs, remains at the company as Chief Accounting Officer.

High Debt

It was intended that the monies raised in the IPO would be used to repay $314 million of a term loan that carries interest of almost 12%. Given that the IPO price was well below the proposed price, the amount of debt repayment will be lower

Prior to the IPO, the company had borrowings of $2.75 billion. In addition to the repayment,  $700 million (the remaining balance of the term loan) was to be transferred to Kodiak’s parent, leaving $1.75 billion of debt on the books post-IPO. The $700 million was based on the proposed IPO range and may change given the lower IPO price.

In case you feel sorry for the parent having to take back $700 million of debt, don’t. In 2022, the  company paid a $838 million distribution to its parent that was mostly funded by increasing the balance on the term loan.

SEC filing – S-1 Kodiak

W&T Offshore appoints new CFO

W&T Offshore has appointed Sameer Parasnis as its new CFO, replacing Janet Yang, who left last month as she was relocating to another city for family reasons.

The company has its head office in the Galleria area of Houston. It holds working interests in 47 offshore fields in the Gulf of Mexico. It has a market capitalization of $540 million.

Mr. Parasnis joins from Stifel investment bank where he was Managing Director of the Energy and Natural Resources team. He joined Stifel in 2016, then spent a year at Texas Pacific Land Trust, before rejoining Stifel in the same role in 2020. He started his career at Reliance Industries in India before joining Citigroup in consumer banking. He transitioned to investment banking with Credit Suisse in Houston.

Mr. Parasnis will receive a base salary of $450,000. Target annual cash bonus will be 85% of base and target long-term incentive compensation will be 300% of base.

SEC filing – W&T Offshore new CFO



Coterra hires CFO from another Houston company

Coterra Energy (market cap $19 billion) has appointed Shane Young as its new CFO. He replaces Scott Schroeder, who is retiring, effective September 30, 2023. Mr. Young joins from another Houston-based E&P company, Talos Energy (market cap $2 billion). In turn, Talos has promoted Sergio Maiworm from VP Finance, Investor relations and Treasurer to be its new CFO.

Coterra was formed from the merger of Cabot Oil and Gas and Cimarex in October 2021. Mr. Schroeder joined Cabot in 1995 as Assistant Treasurer and became CFO in 2014.

Mr. Young will a base salary of $620,000. He also receives a cash bonus of $100,000, a one-time long-term restricted stock grant valued at $2 million and a one-time long-term performance grant of $2 million.

Mr. Young had been CFO at Talos since May 2019, though he also had a spell as CFO between December 2014 and September 2015. He left after his first stint to join Cobalt International Energy and then Sheridan Production. He started his career as an investment banker with Morgan Stanley and Goldman Sachs.

Mr. Maiworm joined Talos in April 2018 as its Director of Finance and Investor Relations and added the Treasurer role when Mr. Young rejoined in May 2019. Mr. Maiworm has also worked as an investment banker (with Deutsche Bank). He has also worked at Shell, Transocean and ION Geophysical. He started his career at Deloitte and Touche.

Mr. Maiworm will receive a base salary of $425,000. He will also receive restricted stock and performance stock worth a total of $350,000 that will vest over the next three years.

Coterra Energy – 8-K filing – new CFO

Talos Energy – 8-K filing – new CFO



Former McDermott CEO and CFO settle with the SEC

David Dickson and Stuart Spence, former CEO and CFO of McDermott International respectively, have settled charges with the Securities and Exchange Commission without admitting or denying responsibility.

The charges pertain to the project cost overruns on the Cameron LNG project in 2018. In short, the SEC alleges that Dickson and Spence issued misleadingly optimistic information in its Q2 2018 earnings release regarding the project cost and schedule.

Dickson and Spence approved a $490 million loss estimate at completion to be used in its Q2 2018 financial results, even though the initial draft estimated loss was $1.1 billion.

The Cameron LNG project was actually awarded to Chicago Bridge and Iron (‘CB&I’) and Chiyoda, its joint venture partner, in 2014 as a $6 billion fixed price contract  In December 2017, McDermott and CB&I agreed to combine in a $6 billion transaction. The deal closed in May 2018.

According to the SEC, in Q1 2018, prior to the merger being completed, the project cost team within CB&I initially forecast a loss of $438 million on the project. However this was challenged by CB&I management and the loss was reduced to $160 million, which was the number used in CB&I’s Q1 results, its last quarterly results as a public company.

In late June 2018, the project cost team in CB&I emailed Dickson and Spence a new forecast on the project that showed projected losses of $1.25 billion, an increase of over $1 billion in two months.

Dickson and Spence expressed skepticism with the loss forecast as they sought to use a less costly execution by reducing the number of employees and contractors on the project from 11,400 to around 9,000 or so. In addition, the JV partner also expressed doubts about the size of the forecast loss.

An executive at CB&I came up with an alternative loss forecast of $490 million that was developed outside the normal project cost controls and procedures. The company also prepared various scenarios that should losses would range from $702 million to $1.7 billion. Despite this, Dickson and Spence signed off on the $490 million loss to be used in its Q2 numbers. In the earnings release, they didn’t disclose that their revised execution plan increased the risk that the project would be delayed.

Dickson agreed to pay a penalty of $100,000 and Spence $40,000.

McDermott ended up booking losses of $1 billion on the project in 2018 and 2019. The company filed for bankruptcy in February 2020. Spence resigned as CFO in November 2019 while Dickson stepped down as CEO in June 2021.

McDermott, Dickson and Spence, along with former CB&I CEO Patrick Mullen, are still being sued in the Southern District of Texas in a class action lawsuit by investors (led by the Public Employees’ Retirement System of Mississippi). That case appears to be in the discovery stage.

Houston oilfield companies to merge in $5.4 billion transaction


Patterson-UTI Energy (‘PTEN’) and Nextier Oilfield Solutions have agreed to merge in an all-stock deal that values the combined business at $5.4 billion. Both companies have their headquarters in Houston.

PTEN shareholders will hold 55% of the combined business, which will retain the Patterson-UTI name. Senior executives at PTEN (Curtis Huff – Chair, Andy Hendricks – CEO and Andrew Smith – CFO) will hold the same roles in the combined business. Robert Drummond, CEO of Nextier, will become Vice Chair of the Board. Kenneth Puchei, the CFO of Nextier, will become the Chief Integration Officer.

PTEN is historically known for its land-based contract drilling. It is also the number 7 player in the North American pressure pumping market. Nextier is number 5 in that market, and the combined business will jump to number 2, behind only Halliburton in frac horspower. Nextier also has wireline and well construction services in its portfolio of operations.

There has been an increasing trend in recent years for customers who buy PTEN’s contract drilling services to also buy pressure pumping services from then. This acquisition will help reinforce that trend.

The companies expect to generate annualized savings of $200 million in cost savings and operational synergies within 18 months of the close, which is expected in Q4 of 2023.

Patterson was formed in 1978 and went public in a $5 million IPO in 1992. It merged with UTI Energy in 2001.

Nextier was formed from the merger of Keane Energy and C&J Energy Services in 2019. Keane started in Pennsylvania in 1973 and went public in 2017. C&J founded in 1997 in Robstown, TX and went public in 2011.

SEC filing – PTEN Nextier merger

Advertising firm announces CFO change

Direct Digital Holdings has announced that CFO Susan Echard has been let go. Diana Diaz has been appointed interim CFO while the Board searches for a permanent replacement.

Direct Digital is based in the Galleria and provides digital advertising solutions to small and middle market clients. The company went public in February 2022 through a $15 million IPO. The company now has a market capitalization of $45 million.

Ms. Echard was appointed CFO in May 2021. She had a salary of $272,500 and will receive severance equal to twelve months of base salary.

Ms. Diaz previously worked at Sharps Compliance for a total of 13 years. She was CFO for over 10 years before becoming Chief Accounting Officer. Sharps was taken private in August 2022 by Aurora Capital and Ms. Diaz left earlier this year.

Direct Digital originally went public to dig itself out of a hole caused by a disastrous acquisition in 2020. It paid $26 million for a business in Austin using a combination of equity, bridging loans at 15% interest and effectively deferred consideration. Immediately after the sale, one of the biggest customers of the acquired business took their spend in-house and revenues plunged. The company used the IPO proceeds to pay the deferred consideration to the seller and refinance some of the debt.

The company has done well to grow revenues since then and revenues are now $100 million. However, one customer accounts for over half their revenues. The company still has $25 million of debt with interest rates north of 10%.

During the course of preparing its annual report for 2022, the company found that, effective August 1, 2022, billing practices on one customer had been modified. As a result, $394,000 of invoices were not sent to the customer when they should have been. That resulted in a revision of the third quarter report for 2022 and a material weakness disclosure in the annual report. There was no word from the company whether this issue contributed to the departure of the CFO.

SEC filing – 8-K – Digital Direct CFO

Small E&P company adds CFO

US Energy (market cap $37 million) has appointed Mark Zajac as its new CFO. Ryan Smith, who had been CFO since May 2017, was appointed CEO in December 2019. He had been combining the two roles since then.

The company has its head office just west of the Galleria area. Historically it had interests in the Williston Basin, North Dakota and South Texas. However, in 2022 it completed a deal for about $100 million where the sellers sold their properties in the Permian and the Mid-Continent in return for an 80% equity stake in US Energy. The company has since made a couple of smaller bolt-on acquisitions.

Mr. Zajac retired from KPMG in February 2021 where he was a Partner and National Audit Industry Leader for Oil and Gas. He will receive a base salary of $255,000.

SEC filing – 8-K US Energy CFO

NRG replaces CFO as it faces pressure from activist investor again

NRG Energy, which has its head office in downtown Houston, has announced that Bruce Chung will replace Alberto Fornaro as its CFO. Mr. Chung is currently the VP of Strategy and M&A and is based in New York. Mr. Fornaro will stay on in an advisory capacity until September 1, 2023.

NRG is an integrated power company that has most of its retail customers in Texas. For a long time it had dual headquarters in New Jersey and Houston. This arose after NRG bought the retail electricity business of Houston-based Reliant Energy in 2009.  The company also bought Houston-based Direct Energy from BG in January 2021 for $3.7 billion. It currently has a market capitalization of $7.5 billion.

In December 2022, NRG agreed to buy Vivint, a smart home platform company, for $2.8 billion in cash. Investors didn’t understand the strategy, the stock plunged 15% and hasn’t recovered.

That attracted the attention of activist investor, Elliott Investment Management, who took a 13% stake and sent a letter to the directors last month, demanding that they make changes. This isn’t the first time that Elliott has taken an interest in NRG. In 2017,  Elliott took a stake in NRG after a similar diversification strategy had left the company with high debt. Elliott worked with NRG to refocus the company.

Mr. Fornaro joined as CFO exactly two years ago. Prior to joining NRG he was CFO at Coupang, a Korean e-commerce company. He joined in February 2020 and left by December for reasons unknown. Coupang went on to complete its IPO in March 2021 with a $60 billion valuation.

Mr. Fornaro had a base salary of $737,760 and a received a $1 million sign-on bonus (half paid when he joined, half in June 2022).

The current filing doesn’t explicitly state his severance but according to the recent proxy statement, he will receive 18 months of severance ($1.1 million).

Mr Chung has been with the company since 2008, except for a 7 month stint in 2016 with an investment firm. He has worked in both Houston and New Jersey. He will receive a base salary of $700,000.

SEC filing – NRG Energy Chung CFO

Tellurian appoints Investment Banker as its new CFO

Tellurian has appointed Simon Oxley as its new CFO. He replaces Kian Granmayeh, who resigned in March to become the CFO at Carriage Services, another Houston company. Khaled Sharafeldin, who was interim CFO, reverts back to previous role of Chief Accounting Officer.

Tellurian is trying to build an LNG export plant in Driftwood, Louisiana and needs about $13 billion in financing to do so. It had agreements in place last year with Shell and Vitol for each to buy 3 million metric tons a year. Those deals fell apart.  It’s only deal currently is a similar-sized deal with Gunvor. However, Gunvor can walk away anytime as Tellurian missed a February deadline to secure financing.

It seems that higher interest rates and the tightening credit markets are causing the banks to push for more equity funding in the project. Tellurian has said it is seeking equity partners willing to invest about $2 billion to $2.5 billion.

Mr. Oxley is based in London and is the Managing Director and Co-Head of Oil & Gas Investment Banking for Europe, Middle East and Africa at Barclays Investment Bank. In that role, he led a number of liquified natural gas (LNG) related transactions. That experience will be invaluable for Tellurian. Mr. Oxley has a Chemical Engineering degree from Edinburgh University.

Mr. Oxley will receive a base salary of $525,000. He also receives 200,000 shares of common stock (current trading price $1.32). He will also receive a grant of 200,000 shares of restricted stock that will vest upon a final investment decision for Driftwood.

It’s not clear whether Mr. Oxley will relocate to Houston. I guess he will remain in London in the short term as the company has upcoming deadlines. Last month, Tellurian said it entered into a binding letter of intent (sounds like an oxymoron) with an unnamed institutional investor for the sale and leaseback of 800 acres at Driftwood for $1 billion.  However, the deal is contingent on Tellurian securing financing commitments for Phase 1 by July 14.

The land at Driftwood was bought for $52 million and construction-in-progress was $351 million at March 31, 2023. So it’s understanding that the sale-leaseback is contingent on the project getting financed.

SEC filing – 8-K Oxley appointment