With almost four decades in the industry, Joseph A. Mills has been through his share of boom and bust cycles. Now president and CEO of Samson Resources II, LLC, and a member of the University of Houston Energy Advisory Board, he remains bullish on oil and gas.

“We're not at the zombie apocalypse yet,” he said. “We will recover.”

Mills, president and chief executive officer of Samson Resources II, LLC, which he joined in March of 2017 as the company emerged from Bankruptcy. Prior to that role, he founded and served as CEO of Montierra Management LLC, of Montierra Minerals & Production, L.P., a privately held limited partnership that acquires, invests in and actively manages oil and gas mineral and royalty interests in the United States.

He also was the senior vice president of operations for Black Stone Minerals Company, LP, a privately held company and formerly of vice president and senior vice president of El Paso Production Company, a wholly owned subsidiary of El Paso Corporation.

Mills holds a BBA in petroleum land management from the University of Texas at Austin and a MBA in finance from the University of Houston. His professional affiliations include American Association of Professional Landmen, Houston Association of Professional Landmen, ADAM Houston Energy Network, Texas Independent Producers and Royalty Owners Association, Independent Petroleum Association of America, and Texas Alliance of Energy Producers.

The following conversation has been edited for clarity.

UH Energy: How did you get involved with the Energy Advisory Board?

Joseph Mills: I've been on the advisory board four about seven years now. This is my 39th year in the business. I started out as a land man in 1982 after I earned my Bachelor’s degree in petroleum land management, which is a non-technical degree. It's not engineering or geology; however, land men play an important role in our industry. We're the negotiators for the industry, handling transactions and oil and gas leases. I was very excited about getting into this business.

When I finished school, things were good, but not great. Things were starting to turn over and heading into the crash of 1986, which was the worst oil bust to date. Hundreds of thousands of people lost their jobs, very similar to what we're going through now.  I realized I was lucky to have a job but that was tenuous because I was not a technical person.

I also recognized that my job was easy to replace, and I made a deliberate decision to go back to school. I went to the University of Houston for my MBA, and it was the best decision I ever made. It was a turning point in my career and enabled me to eventually become what I am today, which is a CEO who has run many companies over my career.

I was proud to join the Energy Advisory Board as an alumnus, especially because the board tends to be dominated by big players in the energy world. I provide another side of the coin as the voice of a smaller, privately-owned company. That's not to take away from anybody at the advisory board, but having started in big companies, started my own company and now running Samson, I think I bring a unique perspective.

Independents make up the bulk of the employers in our industry. ExxonMobil, Chevron, and Schlumberger are big employers but when you look at really who employs the most energy professionals, it tends to be the small independents. I bring that voice to the advisory board.

JM: It has been dramatic. Sampson is doing very well. We are not going to be a casualty, like so many companies that are unfortunately going to go through bankruptcy. I should probably give you a little history about Samson.

The company was started in the 1970s by a Tulsa, Oklahoma businessman. It started as a private company and it has remained so, even though it had public debt. They built it up to become one of the largest privately held oil and gas companies in the United States.

Samson has been through a very painful bankruptcy, with $4 billion of debt wiped out. At the time, we were one of the largest bankruptcies ever. A lot of people lost a lot of money.

Quite frankly, when I took over in March 2017, I was very concerned that we could default. I realized that we had to do a lot in a very short period. And so, I had to let a lot of people go, I had to restructure some of our debt, but more importantly, I ended up selling off a lot of assets in order to pay down debt and ultimately turn the company around.

Today, we are very healthy. I realized early that we were very much a gas company. We were dependent on natural gas prices. And of course, natural gas prices have been very low. I realized very quickly that we needed to convert ourselves into an oil company.

We sold our East Texas assets for a large sum of money that helped elevate our standing with banks and equity owners who were concerned about whether they were going to get their money back.  If we did not set the course early, odds were that we would have just dismantled the company.

These actions allowed us to get back to drilling and give our employees purpose while showing our investors that there was a path forward. I knew the Powder River Basin was one of our most undervalued assets. Quite frankly, the shale revolution kind of bypassed it. About the time it was starting to get on people's radar screen, the 2015 bust happened. But we realized that there was a lot of upside and a lot of geological potential, and so we said this was going to be our future. We have always protected our downside by really aggressively hedging our products.

If prices go to $100 a barrel, I don't get that benefit, but I protect the downside, so think of it as an insurance policy. This year we hedged 90% of our product at over $60 a barrel, so while prices have crashed, we're fine. We're well-hedged next year at $55 a barrel. That's going to buy the company a lot of time.

JM: Leadership is really about the people you surround yourself with. I always like to say, my employees are smarter than I am. A key part of being a leader is recognizing that no leader knows everything. If you surround yourself with smart people who know their business and know the details, that makes your job easier.

One of the things that I did was upgrade Samson’s IT systems to move things into the cloud. The company had not invested in technology in terms of the cloud environment and mobility.

So, as the pandemic hit, we didn't miss a beat. We've been able to work from home and keep morale up. We haven't had a single layoff. I'm proud of that.

But as I've said to my employees every day, I can't promise that won't happen. If this thing goes on, for the next two or three years, f we don't go back to drilling, we must start thinking differently about how you protect the company, how you protect the balance sheet.

Another thing I really believe in is in being an effective communicator. Since the shutdown occurred, we kept our employees informed. We have weekly newsletters, so we keep them abreast about what's going on and what we are doing. We've also posted employee town halls, where we encourage employees to dial in and answer their questions about what what's going on in the company.

UHE: How do you think this unprecedented time will affect the oil and gas industry and the energy transition?

JM: We're not at the zombie apocalypse yet. The world has not come to an end. I think the punchline is that you must be a low-cost operator. Low cost means efficient, it does not mean the cheapest. I think $30 oil is the new $40, and $40 is the new $50. We're going to live in a $30 to $40 oil world for maybe the next two to three years. I think demand is going to be slow to recover. I don't think we'll see 100 million barrels a day in demand. There's no doubt this pandemic has changed the way we all think and work.

Think about travel. It was not uncommon for me to jump on a plane and fly to New York for a two-hour meeting. That’s over. It doesn't mean I'll never go to New York again. But I'm only going if I if I know I've got enough meetings to justify a two or three-day trip. Business travel is going to change because we have become comfortable with video conferencing.

And so, oil prices will remain low for a while longer Unfortunately for a lot of our industry players, they need $45 to $50 to survive. Some will not make it.

It's going to affect the job outlook for recent college graduates. I think the next couple of years are going to be difficult.

It doesn't change the fact that the world needs energy and in places such as China and India and the Middle East, demand continues to grow. We in the United States probably have started to plateau (for demand). Oil is still going to be necessary, and there's still going to be a place for young people coming into the industry. It is a very technical, very manpower-intensive industry. AI (artificial intelligence) is helping. But machines can't do everything. We still need technical ingenuity. We still need human ingenuity.

I'm 60 years old. I will be retiring in the next five years. Maybe sooner, maybe later. We have booms and busts, that's part of the commodity business. I learned that hard lesson in 1986. When I went back and got my MBA at UH, I realized I was in a very cyclical business.

I think the industry is going to be fine. It'll be different than it was, and we won't need as many people as we have historically. But a lot of people my age, the 55 to 65 group, are going to retire. That's going to be where the opportunity comes for young people. Ultimately, they need to take over.

There's a real place for young people and recent graduates, but you must be patient. It's not going to be fun, but don't lose hope. We need young people in our industry.

JM: First off patience. I know that's not easy, because (many new graduates) have student debt. I would also say to be creative in terms of how you approach the job search. Some people would say don’t apply to companies going through restructurings, bankruptcy. That's the wrong answer Those companies are going to restructure, and part of that will be they are going to have to let people go. But that also means that they're probably going to bring in new talent.

It will probably take a little longer than you expect. There's not a lot of job openings but be persistent. Don't give up hope. Our industry is not dead.