Steve Beckley built a treasury function from scratch at Superior Energy Services, an oil field service company. He shares how he navigated capital access and treasury management challenges in the oil and gas industry while learning on the job.
Great opportunity opened up at Superior Energy Services, which was another again, oil field service company, but one that had a little more international exposure and one that did not have a Treasury group. It was one that basically had grown through a series of acquisitions like a lot of oil field service companies. So they'd grown to the point where they were well over a billion dollars in revenue and needed a formal treasury function there. So I was hired by the CFO to build one from scratch. So it was really a fantastic opportunity because you don't really get that opportunity very often to build something from scratch. So I really jumped at that chance. It was a very decentralized company at the time when I joined. So we had cash sitting all over the place and we were borrowing money corporate. So first order of business was to basically streamline cash, implement a cash pooling structure there, at least domestically in the US and consolidate bank accounts, strengthen our bank relationship management and put better processes and controls in place there.
And when you did that just again, superior, you're relatively early in your career to then here you go, here's a startup. Is that not the right way? But it was a listed PLC and suddenly you're the VP of Treasury. So you know, what was that like for you being that early in your career and you're the boss so thing and here you go, start it all up.
It was kind of a sink or swim situation. My boss said you're going to be in charge of this and you're not going to have any help for the first year. So I kind of had to figure out a lot of it on my own. I guess I've seen this advice from other people, but it's like if you don't think you're quite ready for the challenge, accept it anyway and figure it out on the way. And for me that, that worked out because it left me no choice but to figure out a way to do it and make it happen. So I had a lot of experience from Halliburton and Key, but I definitely did a lot of on the job learning there, I'd have to say. The first order of the pick list was to find out where the cash was, how much we had. We didn't have very good reporting, especially from an international perspective. We had controllers in different countries sending in a cash report at best once a week. So and that was if you could get that. There wasn't any cash flow forecasting, so we had to build out a process to do that and then ultimately to get a better handle on where the cash was I implemented a Treasury workstation for the company so that we could get better visibility of the cash. And I implemented Kariba as a Treasury workstation there for the company. And that really streamlined touch of a few buttons to get the daily cash report out to executive management and also do debt reporting for the company. And it was really neat experience. Got to, you know, work with it and learn more about it than I ever really planned to or wanted to. I would say the key challenges right now for oil and gas are really access to capital. Wall street is particularly leery of oil and gas and from not having seen the returns that they would like to see over the years. So especially from raising capital through an equity basis or especially through lending basis has changed dramatically since I started. A lot of things were on a cash flow lending basis. Most service companies, at least on the service side have gone to ass based lending credit facilities. That's been a big shift in change. So the banks take on less risk and only lend off of the whether it be the accounts receivable inventory and if you're lucky you can get a little bit of fixed assets, but that's pretty rare. And then a lot of companies have unfortunately had to restructure because they just the earnings have fallen off so much that they couldn't support the credit metrics required by the credit facilities and lenders.
