Hope for Royalty Owners in Wake of Meltdown

Jerry Simmons was a self-employed consultant, based in Bartlesville, when the message came.
Simmons has been executive director of the Tulsa-based National Association of Royalty Owners for two years. Since being hired, he’s re-energized the organization, launched by Oklahoman Jim Stafford in 1980.
Membership has grown an average 20 percent a year following a slump earlier this decade.
Simmons was not looking for a job when he first read a tip about the opening.
“I had been running my own consulting company successfully for seven years,” he said of the time during 2006.
A friend had just interviewed for the executive director’s job. While the friend did not get an offer, he figured Simmons might be a good fit.
Simmons chuckled as he recalled the moment.
“He said in the e-mail that ‘these folks are nice. I am not the guy but think you might be.’
“When you are a consultant, your friends always think you are looking for work,” Simmons said, who was not interested. But, he decided to interview anyway.
“Well, I did because I felt it was good practice — to go through a job interview every now and then,” he said.
After a couple of invitations back for more talks, the NARO board offered Simmons the job.
The booming oil and natural gas market has kept everyone busy in the NARO offices at the Bank of America Building, Sixth Street and Boulder Avenue.
“These are good times because of the activity,” Simmons said.
For one thing, Simmons expects NARO, which has state chapters in Oklahoma, Texas, Colorado and Arkansas, to add another chapter — the Appalachian region – in September.
“New York, Pennsylvania and West Virginia are all excited,” Simmons said.
NARO is branching out in states like Arkansas because of the great shale plays.
Simmons declined to state how many members there are nationwide, simply because the number “changes daily.” But, the state has more than 200,000 royalty owners according to estimates.
“Many of whom are living on a fixed retirement income and highly dependent upon royalty income for survival,” Simmons said. “There are thousands. We have members in 49 states — only Delaware is without any members.”
In July many Oklahoma royalty owners were urged to file liens against Tulsa-based SemGroup LP to ensure they receive payments for their royalty interests. An Oklahoma statute provides such security of interest and lien on oil or gas sold from wells.
In the wake of the SemGroup meltdown, Oklahoma royalty interests must act within 90 days of a missed royalty payment from a SemGroup first-purchaser affiliate, Simmons said.
Oklahoma statute, 52-548.4, provides for an automatic security interest and lien against oil or gas sold from a well, for unpaid royalty interest owners.
The catch is, they must file a verified notice in the courthouse of the county where the well is located, Simmons said.
“Otherwise, the security interest isn’t perfected and the interest owner does not have priority over any perfected interest in the same proceeds,” he said. “It is paramount that our members know of this statute and proactively work to protect their interests. This supercedes other creditors and will ensure that royalty owners are first in line to recoup any payments in the SemGroup bankruptcy filing.”
Engineering Their
Own Salary, Bonus
Demand for engineers remains higher than ever and people with engineering degrees are commanding top dollar salaries, said the principals of Tulsa’s Addison Group Staffing.
The Addison Group, 9216 S. Toledo Ave., specializes in three primary disciplines — technology, support and finance services.
“Demand is strong from energy service companies plus manufacturing in both Oklahoma City and Tulsa markets,” said David Moore, Addison principal and co-founder. “Demand for geologists, mappers, drafters and designers is real strong. Also, demand is up for petroleum geologists. They can virtually name their salary.”
Co-founder Rob Zumwalt agreed.
“Engineers from several disciplines — structural, mechanical and civil engineering,” he said.
The company, which opened offices in Oklahoma City and Houston this year, has placed more than 500 engineers this year alone. Addison has grown more than 50 percent this year, adding staff to support the consistent growth.
The Tulsa economy remains dominated by the energy sector. With a skills shortage in engineering, many companies are forced to take a close look at what positions they need to fill now, the staffing executive said.
“We are hearing that large companies are locking down their engineers and paying them well,” Moore said.
One Tulsa energy company, stung by engineers leaving for higher wages at a competitor, raised engineering salaries 20 percent immediately across the board to stop the hemorrhaging, Moore said.
“That is a great thing for Tulsa, for the economy. It is good for those employees,” Moore said.
A salary survey released this spring reveals that the median income for civil engineers is $78,000 a year, a $1,000 increase from 2007. The median income for all fields of engineering combined is $85,000, a 7.6 percent increase from 2007. The yearlong survey, held from April 1, 2007, to March 31, yielded nearly 15,000 responses from engineers across the country.
Not only are salaries rising with the demand, but also bonuses are common.
“We are seeing signing bonuses of between $10,000 to $25,000,” Moore said. Engineers in larger markets are seeing even bigger bonuses.
And not just engineering, other hot job sectors include accounting services, IT and HR. Human resource departments need managers, assistant managers and generalists, said Moore.
“What that says to me is these small- to medium-sized companies are needing HR departments,” Moore said. “They are growing those as the company grows.”
The market up tick began in 2003. Drafters, who had been laid off following the energy downturn the previous two years were finding jobs again, Zumwalt said.
Next, designers were in demand through the 2003-04 period.
“A lot of people were back in the workforce and glad to get their salary back,” Moore said.
The demand today is in the pipeline sector as well, Zumwalt said.
“One pipeline company we know of, for the next 2 to 4 years has business already booked and planned,” he said.
Local companies are benefiting from the worldwide energy demand.
“Companies in Tulsa, Oklahoma City and Houston are doing business on a global scale,” Zumwalt said. “There is a great demand for talent at these companies.”
Although economic conditions in Oklahoma have slowed from the torrid pace of the previous three years, the state’s job market remains strong relative to the nation and most non-energy states, according to Mark Snead, director of the Center for Applied Economic Research at Oklahoma State University. Snead released a market report on Aug. 6.
The state’s job growth was 1.4 percent — sixth highest in the nation. The state still added 22,500 jobs, according to Snead. The Tulsa market has slowed, however. Zumwalt and Moore have seen the trend.
“Tulsa has less diversity than Oklahoma City’s,” Moore said. “We are seeing more job growth there.”
There remain plenty of jobs, and the key today is trying to find people to fill them.
“Seems like the job boards, classifieds, things we might have used yesterday are not as effective as they were,” Moore said. “We are finding now that, No.1, referrals are priceless.”
Social networks are growing more significant in placing people with the right job. Also, community involvement makes a difference.
“We find people through these networks,” Moore said. “It is a matter of helping people find people.”

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