From Zero to 42,000 Barrels a Day: Scaling Saturn Oil & Gas with John Jeffrey

People don't like change. There's change on both sides of the border when we're dealing with an acquisition. What's maybe your top piece of advice for anybody looking to acquire a business to ensure that it's a successful integration? As the CEO of a large growing company, how important is knowing your numbers and being able to access that data in the overall growth and success plan of the business?

What people miss is that raising 100 million or 50 million is one way easier than raising 1 or 2. Like to raise 1 or 2 million is it's friends and family. If you need more than that, if you need tens, twenties, thirties, fifties, a million, that's when it starts getting easier.

Good day and welcome to the Wealthy Entrepreneur Podcast. I am your host, Bob Govro. I'm so grateful for you to be here joining us. We're going to be talking about all kinds of great things today. I've got a special guest that I'm going to introduce in just a minute, but I want to remind you that this is the place where we dissect the elements that contribute to entrepreneurial success from mindset and leadership to profits and revenue. We've actually got a special guest today who's the CEO of a public company. In fact, they were ranked by the Globe and mail as the fourth fastest growing company in Canada in 2024 with a whopping 9200% growth over the last three years, which is incredible. They're in the oil and gas industry and they are the fastest growing oil and gas company in Canada. I can tell you after you meet John, who is my guest. He's the CEO of the company. You're going to be inspired to know that this well or this highly successful company that's in Canada that you could invest in is well managed and is is managed by somebody who is definitely a world class leader. So let me introduce you to John. John Jeffrey has been the Chief Executive Officer of Saturn Oil and gas since March 2017. Prior to this role, John was the area finance manager for a Fortune 500 engineering cons firm in Canada as well, and he has a strong background in operations and finance, which you will see throughout this episode that has allowed him to successfully execute large engineering and environmental projects. John was also the founder and Chief Financial Officer of Axiom Group, a geological and engineering consulting company that has drilled over 800 wells within Western Canada. He's a graduate of the University of Saskatchewan with an MBA majoring in finance. Definitely a world class leader leading one of Canada's fastest growing companies. A company in the oil and gas sector. We're going to talk about all things related to how that business operates. Some key insights for him to share. Also, how any of the political uncertainty is going to impact that particular sector, which I think is is a great win to fully understand that. Without further ado, I know you guys are going to enjoy this episode. I want to welcome John Jeffrey to the show. Okay, so I'm really excited, John, to welcome you into the Wealthy Entrepreneur podcast today. First off, thank you so much for your time. I know running a large organization has a lot of time commitments, but would love for you to maybe share and kick it off. Explain maybe how you got into being the CEO of one of Canada's, if not Canada's largest energy company and public company. Love to hear your story.

Yeah, thanks Bob. It's. It's been pretty interesting journey to get here. So we started Saturn back in 2016, 2017, and by starting me, we really took it over. So Saturn itself as an entity has been public since 2004. And back then, you know, they were just a junior Vancouver based mineral exploration company. So when we took over in 2016, it was really just a shell. It had a public listing, which was good. It had some German shareholder, add some shareholders, largely based on the Germany they were exploring for coal in northern Saskatchewan and then they wanted to drill some oil wells. So through our background before this, a couple guys and I were involved in a company called Axiom Exploration. And what we did there is we did well siting and consulting work for oil companies, primarily in Saskatchewan and some in Alberta. So Saturn Minerals at the time had reached out to us and said, listen, they wanted to get into the oil and gas side. We had drilled over 800 wells in the province of Saskatchewan. So we were kind of the experts when it goes, when it came to the consulting and things like that. So they reached out to us and kind of through short conversation, then they just asked, would you guys be interested just stepping over and taking over management? So end of 2016, early 2017 we did. And really when we took over, they had no assets, no cash, but they had a public listing and they had supportive shareholder base which we found useful. So again, our background had never been in the public space before, so we weren't familiar with the process of having to start a new company and to take it public and the cost and expense that went along with that. So this was kind of an easy path to kind of being public. And so we just took that and then we just started developing the company. Off of that platform.

And so maybe share a little bit about what it is that Saturn is doing as far as a service offering. We talked about just briefly before, some of the things that they're doing, how the pipelines potentially work. Can you share a little bit of background on that?

Yeah. So Saturn oil and gas Today we're about 42,000 barrels a day of oil. So when we started again late 2017, we had no production, so we were at zero going into 2020, going into 2021, we had built our way up to three or 400 barrels a day. And then from there we've almost doubled the company every year in 21, 22, 23 and 24 to take us to where we're at today. So it's been a really exciting growth period. But again, our 100% of our focus is we are just oil and gas producers. So that's all we do. We, we find the wells, or rather we find the land, we drill the wells, we produce it. We have 6,000km of pipeline, 100 facilities, we have gas plants. So we get a product, you know, ready to sell to the market. So, so that's our main business, is that we just, we find an explorer for oil and gas and then we get it to market. So, you know, in that context, you know, we don't. The neat thing about this industry, and that's not unique to Saturn, is, is we don't have clients. You know, you always hear people joke, saying business would be great if you didn't have so many employees and clients. Well, we've eliminated half of that in this industry, which we, we do find really helpful. You know, even things like accounts receivable, we get paid on the exact same date every year. There's, every month. There's no risk to it. So it's a unique business in that sense. But the flip side is it's really capital intensive. You can build as big as an oil company as you want if you had unlimited money. So, you know, you need some technical skill, you need to have the right environment, which we do. But with enough capital, you can scale this thing really easy. So the difficult part for us has been finding access to that capital, finding pools of capital, especially in an environment, again largely since 2021, where most companies have struggled with that.

Yeah, so when you say you get a check every month, who's that check coming from? So if you don't have customers, who's writing that?

Yeah, yeah, no, that's a great, a great story. We get asked this all the time. And it sounds kind of crazy. We have no idea where our oil goes. People always say, like, where does our oil go? And, you know, it'd be great to say, like, oh, it goes into private jets and we have no idea. It goes into a pipeline. Most of our oil gets dumped into Bridge Line 3 from there. So we sell to marketing companies or midstream companies. So when we sell or as soon as it crosses into that pipeline, it's sold. So. And then they are the ones, they're the market makers. So they deal with refiners on the other end, they deal with any end users, they deal with other market makers. So as soon as it's sold, as soon as we lose custody, it's considered sold. We got our check the following month. We get paid in US Dollars, which is fantastic as our expenses are all Canadian. But that's. That's kind of the tricky thing of this business is, you know, we get asked all the time, what, where does it go, what refiners? And really, you have no idea. And again, even if, Even if you made a deal with an end refiner, it's all fungible, right? The molecule I'm putting into that pipeline, just because they're taking one out, it's not mine anyways. It's just a fungible, fungible commodity. So, yeah, where our product goes and where it gets consumed, it's not. Is not really, you know, a big part of our business. You know, you do need marketing specialists, which we have here. But yeah, effectively, once it hits the pipeline and it's gone, somebody else's problem.

And now if it's hitting The Enbridge Pipeline 3, is it Enbridge who's writing that check every month? Because it essentially goes into theirs and then they're sort of taking it and.

Going, or they're just a pipeline.

Okay, all right.

You know, it works. So if you want to be a shipper on. So if you want to go to refiners in us, you can make a deal directly with them. And now you have to get it there. So you can put it on rail, you can put it on truck, or you can put it on Enbridge's line and then you pay them a tariff. But there's not really an advantage to that. It is just as economic for me to sell at that pipeline and then the marketing company, whoever buys it, if you think Macquarie, even Shell, bp, they all have marketing arms, so they will buy your product as soon as it hits. As soon as it hits that pipeline. So that's where your checks are actually. Coming from Enbridge is just a toll company. They just get paid for for that product being on their line.

What's fascinating, to be honest, I've learned so much more about how this industry works in two minutes. Now, I do want to congratulate you. We reached out because you guys were recognized in the Global Mail fastest growing companies list. In fact, you were number four in 2024 in Canada, but the fastest growing oil and gas company in the country. So first and foremost, congratulations on that. You know, we were just sort of talking about this beforehand. All of our listeners or business owners or someone involved in driving the growth of a business, and I've had some people in the past say it's really your ego that asks for these awards and these recognitions. And, and we were just sort of talking about this, that, you know, being recognized isn't about us as the leader. It's about the contribution of all the people that we have working with us and recognizing their success and what they're doing. And you know, 9200% growth that was recognized over a three year period. That's something certainly to be proud of for you. Now you talked about jumping into being the leader of a public company and you got to avoid some of maybe the headaches of how that came together and some of the challenges. But we do know that there are challenges of managing and reporting and jumping into that. So what are some of the things that you maybe learned from going from maybe private enterprise to operating and delivering in a public environment?

So my background is I've been really lucky in kind of the series of jobs I had leading into this. So before this, you know, I was Canadian cfo, very large engineering company. And then from there I went into, you know, Axiom Oil, Axiom Exploration, which is a very small private company that we had started. So there's definitely pros and cons of each. Couple of the things that I learned from being at the large engineering company was they did just a fantastic job of measuring data. Data was key. They captured every inch of data, they warehoused it, and they made it accessible to such a degree that, you know, as a finance guy there it was very easy to pull data. You could see utilization per employee, you could see project margin erosion. Every inch of data and what you learn from that. And one of the key parts of our kind of managing philosophy today is what gets measured gets managed. So if you can see data, you can get your hands around it, you can measure it. So we apply that today. So for that example, when you look forward to our business today, it's not uncommon when you go to. So our fields are spread across Saskatchewan and Alberta. So you go to rural Saskatchewan, you go into some of these fields and when we were looking at buying these different asset packages, I was shocked. I'd walk around the field with the foreman, so he's in charge of that field. And you'd see this great big facility in this plant and pipelines and wells. And you'd say, this is incredible. And you'd walk into a room and there'd be 1500 horsepower motors in there pushing water around the field. And you say, wow, those things must take a huge amount of power. What's your power bill here? And they said, we have no idea. And you'd say okay, well how much water do you move here? We don't know. What do you mean you don't know? How much oil does this facility process? And they're just looking at me like, why would I know that? And they said, but this is your, like this. You're like, yeah, it's our job to keep it running. But they said, calgary doesn't tell us these things. We don't know this. And I said, but you control the purse. You're the one that can decide how these facilities run. You're the one that like, you can spend the money here and you're not aware of, you don't know what the budget is, you don't know what's expected of you. And they said, no, we don't. That's all done in Calgary. And I, and I found something really wrong with that. Say, well, you know, you're paying these guys a lot of money for their experience, for their expertise. And I said, how can their, how can their goals possibly align with yours as a company if they have no idea? Ultimately, you know, we, you know, I always ask people like, what business are we in? They said, oh, we're in oil and gas, but we're in the profit making business. We do that by selling oil and gas. Like that's, you know, nobody, nobody needs a barrel of oil. Our shareholders don't care about barrels of oil. They care about dollars of profit. So, so that, that's the focus here. So that's our goal. Our goal is obviously, you know, you, you drill good wells, you beat type curve, you do all these things, you reduce your cost, you increase your, your netbacks, you do all these things but ultimately leads to make more money like that. That's why shareholders invest. And so if that's my goal, how come we can't push that down to the people that can make these decisions. So that's kind of been our guiding philosophy there is what gets measured, gets managed. So we've rolled out different technologies now where not only do we budget down to that level, but thanks to the technology we have, any foreman can stand in front of a facility on a cell phone and bring up the profit and loss statement on that facility. They can see their budget, they can see how they're doing every month. We have our accountants working with them. But what that allows for really is that now what we can do is we can look across, you know, we have 20 foremen, so we can look across the foreman and the leads and see who's the outliers here. How come this guy is performing better in these areas? Does he have a practice that we can apply a company? Why? To save us money? And can these other guys learn and do they do things better than these guys? So you can take a really good foreman who operates wells very well, take their learnings and apply it company wide. And since we bought our assets, we've been able to reduce our costs by over 36%. And again, it's by doing these little things again. You know, these apps, they're easy. Power BI is a relatively. It's not a new app, but just it's training your guys to, to look at these numbers, training our accountants to work with these guys, appreciating the hard work that gets done in the field, like all these little things. So if you look at simple things like let's take overtime, you know, what's the optimum amount of overtime? Is it 5%? Is it 10%? Is it 0? If it's zero, do you have too many steps? So our guys came up with a calculation says this is the right amount of overtime. And now I can look through the organization, say, okay, these fields have a higher percentage. Are they understaffed? These fields have a lower. Are they understaffed? And we can move resources around. And again, you know, you're not talking about big dollars, a couple hundred grand a month here and there. And you know, we have an operating budget this year of 290 million, but if you're able to shave, you know, a couple cents per barrel, all of a sudden all these things add up. And again, over the last five years, we've reduced cost 36%. But, but that's kind of how you do it. And that's been one of the lessons that I've taken away from that job and brought it forward to this one. That if you can get that data, you can apply it in such a way. That's been a major differentiation for us and a lot of the other companies in town.

John, you are preaching to the choir, my friend. What great insights. And, you know, you expect that to more with smaller businesses, right? Where people come in into a smaller business and you find, oh, there's no insights here. You know, let's start bringing those in. But to actually look at the profitability, the utilization, the staffing requirements in a large business and the fact that they weren't there, huge opportunities and, you know, as you're talking about it, I'm going, wow. Yeah. You know, the foreman is maybe managing the resources like the water usage, the staffing, consumption. How are they supposed to be held accountable to their performance if they don't actually know what's happening from a financial standpoint? And I preach financial oversight. That is, you know, one of the things that we continue to do. So thank you for sharing that because I think that's a huge lesson for everybody. The more information you can have on the. The key financial metrics and profitability of divisions or of the business overall, that's how you can start making positive change and realizing greater overall success in the business. So huge insight there. Thank you. Now, are you. Are you a CPA or are you just playing one on tv? It sounds like, you know, from a financial analysis standpoint, you're pretty deep into that.

No, I just pretend to be one. It's just. It's more of a hobby of mine. I went to school for accounting. I ended up doing an undergrad in economics. And my intent was at the University of Saskatchewan was do a master's in accounting. You know, we have several. We have fantastic CPAs that work here. We have several great accountants that work here. At the time, it was just not a career path that I wanted to walk down. So I had pivoted and I ended up doing an MBA instead. I like that. The master's program, the master's in accounting program, because it gave you a specialty and it gave you a job. The problem I always in my head had had with an MBA is, sure, you understand business. You're not qualified to do anything, you know, like just.

I have one of those, too.

Yeah, well, exactly. But you come out of university and you're like, perfect, who's going to hire me to be CEO? Nobody. Nobody's the answer. You don't. You don't know anything. So the MBA is funny because it helps me immensely now, but, you know, your first couple of jobs out of, out of university. It does not, it does not apply that much. It, I mean, it signals that you can learn and there are some skills there, but really you've got to learn how a lot of things work before that knowledge is applicable. But now I'm very grateful for it.

Yeah. And I'm with you. I feel like, you know, that background, it just gives us the opportunity to be aware of things that we need to know and need to learn. Right. And the MBA gives you enough of a high level understanding of the things that we need to be able to understand to be successful. And it's the same, you know, going through the accounting school and focusing specifically on that, getting that job. It doesn't teach anybody how to run a business. Right. It teaches them how to do the business of accounting, but not how to run an accounting business, which is, which is fascinating too.

Yeah, I couldn't agree more on that front. But I'll tell you where it's been really handy is when it comes to raising money. So I think what, what a lot of people don't understand about raising money is, and I have friends from high school because, you know, even last summer, like last summer we raised 1.1 billion. You know, I think we raised close to 2 billion.

Just a little, just a little raise.

Yeah. So I mean, that's, that's debt and equity and we've raised close to 2 billion. You know, and I've got some buddies from, from high school that'll say, oh, I've got this idea for business, like, how do I, I think I need a million dollars or $2 million. And I'd say, go ask your friends and family, I can't help you. And they're like, well, what do you mean you've raised all this money? I said, like, if you want to buy a mechanic, shop for a million bucks. Borrowed, go borrow it from your friends. I can't help you. You want to buy a national chain of them for, for 100 million, I'm your guy, you know, because, because what people miss is that raising 100 million or 50 million is way easier than raising 1 or 2. Like to raise 1 or 2 million is. It's just, it's friends and family money. If you need more than that, you, that's when, if you need tens, twenties, thirties, and fifties, a million, that's, that's when it starts getting easier because people just don't understand why that is the case because they don't really understand how the flip side of this works. Is if you're in, if you are a fund manager. And so let's say you've got $100 million to dole out. So you're in charge of 100 million dollar fund, and that's great. So you have to, I'm going to come to you, I'm going to ask you for money and I'm going to say, listen, this is Great. You've got 100 million to deploy and you think I'm a great guy. I've got this great tire shop, whatever it is I'm doing. And you said, perfect. I got to get to know John and his team, I got to know his industry, I got to know everything about it. Great. How much money do you need? A million dollars. You do not have time to keep up with 100 of me because if you had it on $1 million increments, there's got 100 guys like me. You got to follow their business, their industry, how they're doing all these. Now you'd rather have 10 guys like me borrow 10 million or more from you? Because you can get to know me better, you can get to know my industry. 10 to 20 million dollar chunk, that's, that's what you want. But also, you got to keep in mind that guy that is put in charge of that money, he's not a geologist, he's not a mechanic, he's not a scientist. If you're the world's best scientist, he doesn't know that he speaks finance. So if you speak finance, you guys can get together on the same language and then, you know, hopefully, if you have a good business plan. But I see a lot of entrepreneurs get in this mix when they get so mad, because, you know, they're brilliant scientists, they're brilliant engineers, and, and they've, they've built a better mousetrap. And why can't you see that this mousetrap is just better? And they're missing. The point is that that guy does not recognize your brilliance in engineering. He's trying to make a return. So you need those guys, you need the finance guys that speak business, that understand what he wants to hear, understand how he wants to hear it, and that bridges that gap between, you know, brilliance and capital that is missing because so many times you see these guys walk into these rooms and they just assume that, you know, that the guy on the other stand is also an engineering expert or geology expert, whatever he is, and that he should just inherently see the brilliance in what I've created here. But really, it's just a guy that's, he's got a job, he's got to dole out money and try not to lose it and hopefully get a return. So, you know, and that's where I think, I think that's where a lot of people stumble when trying to raise capital is, it's the size and it's just the understanding of what, what the counterparty is looking for.

Absolutely. So let's. On a similar sort of theme as the CEO of a large growing company, how important is it? And I know we sort of talked about it from a project management standpoint, but how important is knowing your numbers and being able to access that data in the overall growth and success plan of the business?

Yeah, I mean, it's, I always joke, you know, if I was the best engineer, best oil and gas engineer there was, I would not add any value to this company because I can't. You just, I don't have time for it. I don't have time to sit down and do engineering. You know, I, People always joke like, oh, what's, what's your job like? I'm a spokesman, glorified spokesman. That's all I am. So when, when you look at how most companies are ran, you have a CEO and a CEO and really they stand back to back. And CEOs are outward facing and COOs are inward facing. So if you have a, you know, if you're a brilliant engineer, you're brilliant technical person, you should not strive to be CEO, you should be, strive to be coo. You can run your business, you can streamline operations, you can build that better mousetrap. That is your forte. But the CEO is take that, translate it into what the street wants to hear. And that's my whole job is, you know, it's this, it's stakeholders, it's bondholders, it's, it's, it's every external person. So again, if I was, if I was a fantastic engineer, and I'm not, not an engineer at all, but my time is consumed talking to people and, and being outward facing and doing strategy. Like there's just not enough hours in a day to have this job and to design things, you just couldn't do it. So, so that's what I think a lot of people get wrong is my, so my whole job is, is communicating the story. And the story is told in numbers. So how as important is it to know your numbers? It's, it's everything. You know, you have to understand the business and, and you have to understand 10 variations of the same numbers because if you're, if your shareholders are from different backgrounds or different countries or differently, they all view numbers a little differently. So you need to understand not only what they're asking, but in what format that they want to hear it so that it's relevant to them. Because if you're an oil and gas guy, then you understand things like netbacks and PDP reserves and adjusted funds flow. These numbers mean something to you. If you are a generalist and you're only looking at things like earnings per share and earnings that is not. Those measurements aren't applicable really in oil and gas. So you have to give them a number and then walk them to, to what that number means to them. So again, it's understanding the numbers well enough and then understanding the other side is why is that person asking me this? What are they trying to get to? And making those numbers relevant to them.

Awesome. And again, once great insights, I think for any CEO, I think the more that you can understand like you're talking about and you started rhyming off some acronyms that I have no idea what you're talking about. And I think that's the importance of, of knowing your particular business and that those metrics have value in understanding how you make your business better. And when you start talking about that, I'm like, oh, look at John. He's like, he knows his shit, this guy, right? He's, he's got these dialed in. And I think, you know, as a, presenting outwards as a CEO, not only to stakeholders and potential investors, but to your team, knowing that they can have the confidence in, knowing that you, you really truly know your numbers and how to tweak them in the best way. I think is a strong trait for leaders.

Yeah, you have to be confident, but you have to be genuine. Just in the sense that, you know, if you ask me a number, I'm not, I'm not that proud if I don't know it, I will say I will get back to, in that. Because these investors, stakeholders, bondholders, whoever it is, you know, most people don't get to that level of managing those types of funds. Like if you're asking somebody for, for debt or for equity or if they're an important stakeholder or an analyst, though you're dealing with smart guys and girls on the other side, you know, they are generally good at catching bullshit. So you know, if you were just, if you just start making up numbers, like they might be polite enough to keep going, but is they'll switch off, they'll just be done talking to you, because the minute you lose that trust or you don't know what you like, you know, it's fine to say, yep, I'm, you know what, I have these other steps out of numbers. I don't have that one. I'm going to come back to you and leave it at that. And then. But make sure you come back to them, you know, shows that you're genuine about it. You want to give them the information. But I've seen a lot of guys in other situations when they just kind of, they start to scramble, they don't want to appear dumb, and then they make up numbers. And all of a sudden, a few more numbers later, the guy realizes this doesn't tie. That can't be right if these things are right. And then before you know it, like, you've just, you've wasted everyone's time and now there's a bad impression there. So you have to be confident, but you have to be genuine about what you know and don't know.

Absolutely. So moving from, from numbers into teams, obviously with 9200% growth over the last three years, noting too that, you know, some of your growth is coming from adding new land positions, increasing your productivity volumes, obviously adding more people, building stronger teams. What are some of the keys that you found as you've added and scaled people and resources? What are some of the attributes to success on building strong teams that you found as the CEO?

And this is where my experience at a smaller shop really has come into. Because one of the things is, you know, if you have taken, if you took 10 years or 20 years to build this business, then you're adding, you know, you can create a culture and then you can introduce people into it. And now they're part of your culture. So that's an easy way to do it. Then it becomes a melting pot. The problem with growing as quickly as we have is that we bought some large companies. When we bought Ridgeback Resources, they were significantly bigger than us. They had three times the staff that we did. But we had a really great culture. And what made matters worse is we moved into their office building. So although we, it was our name on the door and we had bought them, the mentality was very much, we were just sliding into their organization. So how do you reset that culture? How do you make sure that your culture, you know, you know, for us, we work. We work a lot. You know, we try and be in by seven. And normally me and my executive team, we leave here between six and seven at night. We work weekends like that's, anyone that wants to become an entrepreneur for days off is insane. That just doesn't happen. So, so how do you set the culture? How do you make sure that, that you have the infectious culture that other people want to join and that it doesn't get diluted down by, by somebody else? So, so that's been a big part of it. And it's, it's, it's really leading by example in a lot of these cases. And you know, everybody hates change. Everybody in this world hates change. That's just, I don't care if it's change for the definitive better. If it is changed, people resist it. So, you know, people are going to be resistant. So how do you, how do you make people amenable to change? And how do you make, how do you make it so that they want to join? Because again, everyone's going to resist any form of change. And you know, when we said, okay, well, we, we, you know, it's not a country club here. We don't work six, seven hours a day. We work 11, 12 hours a day on average. And for working on deals and other things will be here all night long. And, and I had this boss at the engineering company, Marcel. Like, he was fantastic in the sense that he would politely rip on me if I got there later or left earlier than him. It was never a big deal, but he always noticed. And by him noticing, I noticed. So I would just make, so I would always make sure I got there before him and I stayed later. And I don't care what he was doing. I would just make. No, like, I would just make myself busy. But what I found with that is by being there later, all of a sudden I would be drug into meetings. It'd be six, seven at night. You know, senior executives would be meeting. And I was a little more junior this time, and I just, well, hey, let's bring John. And now I can get involved in projects. Now I got involved in these other things. So putting in the hours. So, you know, you really do appreciate the hour. So for us, it's kind of the same thing. We, we want to lead by, so we want to be here first, you guys in the door, last one's out. We want to be. And that's, and it's not that we're telling everyone you have to work 11, 12 hours a day, but the guys that work directly underneath you, they see that and they, and they get that. If they send you an email at 10 at night, at 10, 15, you've answered again, you know, it's, it's not mandatory, but that's just how we act. But even little things like, I like, I like our, you know, we have a number of kitchens throughout the floors. We like to keep those clean. I've never yelled at anyone for cleaning a kitchen, but if it's dirty, I'll just clean it. The dishwasher is full. I'll just unload the dishwasher and then people will come and go and they'll see you unloading the dishwasher. Like some guys will think, oh, well, you know, senior engineers or whoever it is will say, oh, that's, that's beneath me. As soon as they see you doing it, they're like, oh yeah, it's not beneath us. So, you know, and so just leading bikes of just doing the things you want done. And most of the time your good teammates will catch up on that and they'll see that and they'll, they'll understand that, you know, we work, work hard, play hard. If there's work to do, you get it done. If you want to take off golfing on a Friday afternoon, there's no time that we don't keep time here. There's no time clocks come and go as you please, but get your work done. But generally, if you've set that baseline that, that you are 12 hours a day or whatever it is, then, then that's the, that's, that's what you've set for the team. So if you need a day off or whatever it is, your guys get it there, guys get it. And it's echoes throughout the organization. I, I think, I think that's been a big driver to our success here.

How many team members do you have now, John?

So company wide would be about 340 and would be probably 120 here in Calgary. Again, a lot of those are field staff. So we have offices in, in Drayton, which is Alberta, Kinsley, Estevan and Carlisle, Saskatchewan. So again, because we have, you know, so many of our staff, about 250 out in the field that, so we do have some centralized field offices out there.

Awesome. And sort of a side note to, as someone who's done a few acquisitions myself, knowing that cultural integration can be a challenge. Right. As you mentioned, people don't like change. There's change on both sides of the border. Right. When we're dealing with an acquisition. What's maybe your top piece of advice for anybody looking to acquire a business to ensure that it's a successful integration?

You know, I think people hate change and Love, honesty. So when we did that big acquisition, Ridgeback, we had a town. As soon as the deal was announced the next day, I said, I want to be in front of this team as soon as I can. So I think it was the very next day or over the weekend. So we had a town hall and love it or hate it, you know, I stood in front of them, I said, this is, this is how we operate. You know, this is just how it's going to be. And this is how we operate. And like, you know, some silly examples, but there's a few here. As I'm looking out the door of my office, all of the offices here were frosted from the very top of the door to the very bottom. So double glass doors. It's very nice. You couldn't see anybody. Everyone had their door shut. It was frosted. Top, bottom, you couldn't see. You walk around this place, you didn't know if every one of those offices were full or empty, what was happening. And I hated that because at our old office, everything was open. You could see everyone, you could talk to everyone. It was, you know, open door, open glass, like it was, it was great. So I just, I made it known that, you know, that's not how the culture works, you know, and then there's rooms going around. Oh, John, John's doing this so he can, he can do bed checks and peer in over your shoulder and see what you're working on. Then you're like, you're working on a computer. The IT these days. You could check every keystroke you've ever made. That's not the point. You know, we're doing this to create a team, you know, to create a culture, to create these things. So day one, we remove the frosting. You know, we, we open it up. It's open door policy. I, I sit, everyone that can walk by my office can see all of my screens. Door, door shut. Now 90% of the time it's open. And I encourage everyone to walk in, I walk in other people's offices. I'm not going to schedule a team meeting with you just because I want to have a two minute chat. Like, let's, let's, let's chat about something quickly, let's work it out. And you see the collaboration start to sink in and you see these little things, these little trades start to sink in with teams and, and we love it. But, but I was just, I was very upfront with, with the group right off the beginning. Like, listen, you know, this is how we are. This is the, you know, the Saturn culture that, that we have and that, that we have distilled down so well. It is airy, it is open, it is collaborative. These are the things that we value. And we've got the pushback saying that's not the culture here. And as politely as possible, the answer was, that's great, but for 550 million, we didn't buy your culture, we bought your assets. We're bringing our culture so that, you know, and you're trying not to be a jerk about it. But same time, this is, this is what we're doing and this is, it's part of the recipe that's made us successful. So if you guys embrace it, I think you'll love it. And then now it took some time, but, but now they do. Now it's just a great place to work.

Well, and I was going to say, you know, the transparency for sure is, I think, one of the key elements of success as you've sort of outlined it. You know, this is, we're not going to bullshit you. We're not going to tell you that this isn't going to be how it is. No, it's going to be. And yes, you know, it's the fear of the unknown of what this change is or what could possibly happen. And it takes time to build trust. But transparency and being open and honest, I feel is a huge attribute to success in this. And like, like you were talking about with the financial numbers and sharing insights. If you're bullshitting, people will catch on to it and you won't have the trust or respect of people and people will end up leaving. So I admire, you know, that transparency and I think that's probably a key element to success. And, and then following what you said and taking the footsteps and the actions that support that I think is, is the developing that trust.

And to your point, it's uncertainty. As much as people hate change, they hate uncertainty. And then there's, you know, you hear all these rumors. Oh, you know, they, they're, they're trying to do this. So you just up front, we will do the following and then, and then do it. And there's good and there's bad. Listen, and, but we do other things. You know, we, every quarter we do a corporate event. We have a very, you know, we have a great RSU program which is, you know, basically kind of like a stock option, restricted share units, and we have this bonus program. And as quick as we rolled out the negative changes, we rolled out the positive changes. So then people Just got to understand that if we said this was going to happen, it happened like, are you really going to take the frosting off the door? Yes, we are. In fact, it happened within 24 hours, but just, you know, not as quickly, but, you know, within the first month. And we had our option program and our bonus program and we had new contracts that guaranteed people all these things that they were excited about. Just so you know, building that trust is key. And then just trusting, like, listen, we're not just here to, you know, take things away from employees. This business is built on employees. But this is a unique industry in that employee cost is not the major driver here. Like, in theory, I could triple everyone's wage and our margins are hit, but not by as much as you think. Oil price, foreign exchange, that, that's the big drivers here. So, you know, the win here, it's not. If I can cut salaries by 5%, my margins go up 5%. It doesn't quite work like that. But at the same time, you have to be disciplined because so many companies in the past have gotten themselves offside because if oil is 100 bucks, you can be as stupid with money as you want. You know, we, we've heard of guys or companies out there that they would spend a million dollars on a Christmas party, and you're just like, that's, that's. I don't understand that. But if you grew up at $100.

It compounds for sure.

Yeah. But again, it's, it's the same thing. Like over time, if we can reduce overtime by 3 or 4%, that adds up. If you can save GNA by a couple percent, all these things add up. And that's, and that's one thing that we're trying to do is, is the problem is when you get bigger, you lose track of the small things. So one of the things that we try and do a lot here is we push responsibility down the organization as far as we can. So for me, you know, I can't, I can't watch. Every expense that goes out of this company will spend $310 million drilling wells again, 290 on operating costs. Our expected profit this year is about 700 million. So you start talking really large dollars and it's easy to lose track of the small ones. But it's also, it's not my job. So if I centralize everything around me and I don't trust my team, then you lose track of all that. But I'd like to think I've hired really great guys, which is which is step one, find a good staff and hire them, but then entrust them. Because if you hire smart guys, don't let them do their job. Why'd you hire smart guys? So we, we push all the responsibility as low to the organizations we can. Again, with our foreman, we said, here's your budget, here's your expectations. But if you're spending money in your budget, you don't need to prove for that. Our managers, our group leads, our VPs, our division leads. First thing, here's your budget. I'm giving you all the trust to run your budget. If it's budgeted for. You don't need my approval to do that. We work together, we establish a budget, that budget aligns with corporate goals. So long as you're hitting it. And there'll be check in points with that, you don't need my approval for things. And that's the whole idea. So if you think it's, it's a good idea that you want to take your team for, for their own, you know, division Christmas party, sure, you have a budget, spend it as you will. You know, there's so much goes for morale and so much ROBERT and so if that's part of your budget, give them, you know, give them the responsibility and then, and then give them the trust and accountability to execute on it. So that's where a lot of small business guys I think go wrong, is, is they're so used to being the, the centerpin of every decision that when they grow, their company becomes stagnant because they can't make the decisions as quickly in a big organization. And you've just got to let that go. You can't micromanage. There's a reason that communists and centralized economies don't work. You cannot plan for every detail. You have to push it down the organization and you have to entrust it with the smart guys that you have around you.

And so when you talk about pushing down, which I completely agree with everything you've just said, when you push down that responsibility and say, here's your sort of expense allocation, you don't have to ask us for any approval. At the same token, there's an expectation for those top line results based on those expense allocations. How often do you check in to see that they're on target? Maybe not you, but maybe your CEO, how is your organization helping support those people, ensuring that they're successful with those resource allocations?

So I mean, and again, this is what I learned at the engineering company is we check in every month. So our Accounting. I heard a great saying like, you know, if you ever want to learn what company to invest in, you can go ask the CEO, you know, take you around the factory floor and he can. But they're truly good companies. If you ask the CFO to take you around the factory floor and walk through operations, if they're able to do that, then that's a great company. And that's basically what we're trying to instill here, is we want our accounting group to work hand in hand with the op. So as we try and structure it, I take our ops guys and I give them their own miniature cfo. You know, we have ops accountants that work with our ops guys. So they do the budgeting together, they do the planning. Every month they check in on the budget. So what I get is I get a rolled up budget to me for the whole company. And I could see how each of our four divisions are doing. But then I can break it down by, into operations, into operating areas, and the foreman into batteries in the fields. So we can see how that all looks. And it, but all of that just rolls into one. So I, I check the numbers every month. Obviously we have, we have monthlies, we're public. So we put our quarterly financials and we do look backs, we do projections. So you're constantly in the numbers, but that again, what gets measured gets managed. So if you're constantly measuring these things, you're constantly managing these things and giving our accounting support to foreman. Again, we don't hire foremen because they're MBAs. We hire them because they're good at running field ops and they know how to do things efficiently. So stick them with a smart accountant that can see the numbers, I can work and sit down and work with them. And it was a pain because they're not used to seeing numbers. Our accountants aren't used to dealing with them. But you know, we tell our accountants like, if you're an accountant here, you should own steel toe boots. Because I want you to go to the field, you know, periodically and jump in a truck with these guys, you know, so, you know, what do you mean you're, you know, you missed your production, this or something froze off. Why would that happen? And, and I think a lot of guys, you know, in head office just have this idea about the, about the, the operations. Like, oh, you're just operating a Walmart parking lot. Just drive over there and check that well, and you're like, no, there's a six foot snow drift, it's minus 30 and there's blowing winds. I can't just walk over there and check a gauge that easily. You know, there are resolutions that come. And I had these frustrations when I was in college. And before college I used to build communication towers and I, you know, I built thousand foot towers in northern B.C. and all over the territories and everywhere else. And we always noted when we were building something, there were some really good engineers that came from the field and some that have never been in the field. And by reading their drawings, you could tell which was which because, you know, you know, why use, why use 6 bolts if you could use 20 smaller ones that you can't use with gloves? You can't get a nut on your, you know, you're high up in the air and just all these little things. And we'd get so frustrated with head office just not understanding the realities of the field and not appreciating that, you know, you're not in a heated warehouse just assembling something. You are out in the cold, in the wind, in the elements. Things happen. And that is one appreciation that we have around here, is that the field is not just a given. That every day you show up and you go to your wells and everything's fine. Is there are real elements you face. There are real difficulties in that field. And it's great that we recognize it. But again, we want our whole team to operate. We want the accountants to appreciate it so that if, you know, if we had to spend more on snowplows or if we had to spend more on whatever it is, that quarter. It's not that they're saying, oh yeah, operations blew the budget here. It's like, no, no, we, like, you know, we had to because, because we had, you know, have you seen the weather in, you know, in Carlisle, it's been minus 40. We had this big, you know, there's power outage, nothing we could do about it. You know, because it's their part of the business, they take ownership over it because they're, again, if you're this, the CFO of that, but you're representing your own business internally to us and saying these are the, these are the things we faced and here's the outcome of that. So that's, that's what makes me, you know, take a lot of pride is when I see these guys take ownership over the successes of their pieces of the business.

I love that. We talked about, you know, when we were talking about acquisitions, we talked about people fearing change and the fear of the unknown. And that's maybe a big concern For a lot of us around Canada, maybe the United States, right now, we've got tariffs. Certainly the energy sector is being hit with tariffs. Can you just speak to how some of these policies or any of these tariffs may or may not impact the energy sector in a, in a business like Saturn?

Yeah. So, you know, I feel a little guilty because the energy industry is by and large protected by a lot of this. Tariffs are a horrible thing. I think it's going to impact a lot of Canadian families and I hate that. These auto tariffs, who knows whether they're going to be here, what's going to be exempt or what isn't. But on the surface it seems like it's going to hurt a lot of families and that's awful. Now as it pertains to us and the oil industry, where we have a bit of a built in hedge is that we sell in US Dollars and I mean generally most exporters, Canada's an export country, so most of our exporters are generally traded in US Dollars. That's where most commodities trade. So everybody has that advantage. Our, our product is priced, you know, our costs are in Canadian. So people can say, oh yeah, well, oil's down, you know, quite a bit from last year, you know, down almost 10%. And that is true. You know, last year, you know, oil was $75 a barrel. The Canadian dollar was 74 and a half to 75 cents. So I was getting $100 Canadian and round numbers per barrel of oil. That's what we were getting today. Oil's down to 68, $69, but so is the dollar. So effectively I'm still getting $100 CAD per barrel. So I'm really no better off or worse off because of it. The US markets can't survive without Canadian oil. You want to talk? You know, people are always looking for these little arbitrage opportunities in the stock market and other places where the US has discovered the best arbitrage opportunity in the world. They buy our oil at a 3 or $4 discount as WTI, as, as Canadian barrels trade to WTI. They import our oil and then they turn around, they sell Brent barrels that are worth $5 more. So in some cases, lots, lots of our oil gets shipped to the States. Especially our light oil gets shipped to the States and then on a tanker truck and sold around the world for five to seven dollars higher per barrel. And we sell them four million barrels a day of oil. So it is the greatest arbitrage you could ever hope for if you're an American. Also their Refiners are only set up to handle our heavy oil. They cannot process their own oil. So even if, if Canada said, or us said no, we'd never buy another barrel of Canadian oil. They have no choice because there's, there's Venezuela infrastructure. Yeah, well there's Venezuela, there's Iran and there's Canada for heavy oil. That's where it's coming from. But even if you said okay, no, we're mad at Canada, we're going to go to Venezuela, we're going to buy their oil and we're going to tanker it up to the States K grade. So now you have a tanker full of oil off pick a coast. There is no infrastructure to then offload it and get it into central US where those refiners can use it. So you said, well let's just, let's change the refiners. Well, I think there was an estimate that it'd be up to a trillion dollars to change the refiners over to process their light oil. But again, why would you process your own light oil if you can sell it for five to ten dollars more than you can buy it from Canada? So even if you could, you just wouldn't. So you know, for them to put tariffs on our oil or anything else, sure you are just hurting yourself. It is the most short sighted thing you could do. So you know, again, I hate the idea of tariffs, I hate what it'll do to most Canadian families. But we are in a unique position here in this industry that we are relatively well protected from that just given the realities of what that looks like, which is great.

I love to hear that, especially western Canada, such a big portion of the revenue generation and jobs is in that industry. Glad to hear the insulation is there to somewhat naturally respond to some of these challenges, which is good. You know we as, as you mentioned the tariffs are going to hurt a lot of families. We are looking at this auto tariff which I think could be fairly challenging for a lot of the dealerships, obviously the manufacturing. But oil and gas seems to be insulated which is at least, you know, some element of safety I feel, which is great to close off. One last piece I wanted to ask you was, you know, we obviously focus on supporting entrepreneurs who are looking to grow their business whether it's going from a 10 million to 100 million, 100 million to a billion, maybe going public. What would one piece of advice be from you to an entrepreneur who's looking to grow to help themselves elevate to getting to the next level?

Yeah, I mean it's tough because every industry is so tight, different, like they all have their challenges. But again, it's really understanding, understanding your audience. Like you, I've seen it with my own guys and my own experiences. When you're sitting in the room and somebody asks you a question and you say, okay, that's the answer. And he said, well, hold on. Understand why he's asking that question. Yeah. Does he? Technically that's, you know, if the answer is. But, but let's understand the context and why he's asking this. You know, 20.2 million might, might be the answer. Sure, but, but let's put this in context. So if you said, you know, we'll say, how much do you have to spend on abandoning? Or for example, what's, what is your retirement obligation? So when we have wells that are no longer active, how much do we have to spend to clean that up? Or what's the aggregate amount of that? You know, what do you have for asset retirement or something like that? And you'd say, okay, and the answer, you give me the answer. But you say, but here's where I think it matters. We care about inactive wells and we have to clean up a certain percentage of it. So, for example, for us, you know, we're going to spend $12 million a year cleaning up wells. And in context to the rest of the market, we are actually in the top 20% or 25% of the cleanest companies in Canada. And yes, we spend 12 million, but given the context that we're going to make 700, it is a relatively small amount of our free cash flow that goes towards cleaning us up. And then, then you can see the investor like, oh, that's right. You could just give them the answer. You know, we carry another balance sheet of 60 million. Sure, but what is that scary, right?

Like, that's a big number, but without context, it doesn't make sense.

Yeah, yeah, but then say, okay, but we clean up 6% of our inactive. That equates to 12 million. And that, you know, we are the top 25 cleanest companies. And by the way, you know, that is, that is $12 million we spend a year against cash flow of 700. So, so the answer is 60. But, but the context that he wanted was, does he know enough or he or she know enough about the industry to know, you know, does it matter what, what's the rating? Is there rankings? How does it work on cash flow? So give them that missing piece. And I think understanding your audience, be it debt, be it equity, be it Any state, be your employees. If they're asking, you know, what are we, what are we doing for hedging or are these tariffs bad? Because you know, when the tariff thing came out, we had lots of employees that were nervous and you said are the tariffs bad? The answer is no. Move on. Well, here's why. And just, but just giving that fulsome, giving that experience and understanding why that person's asking you this and, and you can build that trust, you can build that, that kind of reputation with people, you can help them understand your question. Because at the end of the day, people are trying to understand you, they're trying to understand your business. So give that fulsome response, understand the context and what they're asking. And if people doing this, if people can understand and see what you're doing, they might not agree with that. It. But if they can understand and you're transparent and honest, there's a better chance that they buy into your vision. Be that employees, be it stakeholders, be it debt holders. So being transparent, being honest and, and understanding why they're asking these things, it gets them comfortable with your business. And then that's the first step, then buying in and really understanding what you're doing. And that's, that's going to go a long ways from all stakeholders across your business. So that's, that's the. But about the best piece of advice I could give.

I love that guys. John Jeffrey, CEO of the 4th fastest growing company in Canada. The fastest growing oil and gas company in Canada, which is Saturn Oil and Gas. John, thank you so much for your insights, your wisdom, sharing your experience today. I know our audience will absolutely love it and bring so much value away from this.

Bob, this would be great.

Thank you guys. This has been the Wealthy Entrepreneur podcast. I'm your host, Bob Govreau. We are here to help empower entrepreneurs with the financial information and the financial confidence they need to successfully grow and make a positive impact globally. There's been a lot of insights shared today. If you feel like there's any insights that someone would be able to value or would get benefit from, make sure that you're grabbing this and sharing it. Make sure you give us a like so that you're following these insights. We continue to have great guests like John come in and share their insights and their experience on how they've been successful in their careers and how they're successfully leading their companies through innovation, through change and through global impact. Make sure if there's a comment, if you have a question, leave it in here. We'll be happy to answer that. Ultimately, we're here to help support you guys become more successful once again. Thanks, everybody, for joining me today. John, thank you one more time. And I look forward to seeing you all again next week.