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Powering Up

America needs energy.

The United States consumes roughly 25 percent of the world’s energy supply. The cars we drive, the houses we heat and cool, and the gadgets we enjoy all consume energy, and the vast majority of energy in this country is produced by fossil fuels—oil, coal and natural gas. Oil powers most of our vehicles, and most power plants burn coal. But natural gas is catching up to coal; it is cleaner-burning and, with the last half-century’s great strides in drilling technology, increasingly abundant. Natural gas may be the fuel of the future.

DJ Simmons, Inc., an oil and gas company based in New Mexico, recognizes this. Recently, said the company’s president and CEO John Byrom, “We’ve seen more electricity generation from gas. [Plants are] moving away from coal fires because natural gas is cleaner. The market share growth potential is tremendous.”

DJ Simmons is a family-owned company that was founded in Texas in the 1930s by David Jack Simmons of Fort Worth. The company had fields in Oklahoma and Texas and drilled its first well in the San Juan Basin of northwestern New Mexico in 1952. Ashton B. Geren, Jr., Simmons’s nephew, took over in the 1970s and moved the company headquarters to Farmington. In 1991 a second division, Twin Stars Ltd., was set up to capitalize on the growing demand for wellhead compression and equipment maintenance in the San Juan Basin.

A mechanical engineer by trade, Byrom joined the company in 1994 as an operations engineer. In 2001, he became president and CEO. Geren, who now serves as chairman of the board, is also Byrom’s godfather and has been a close friend of the Byrom family for decades.

So Byrom truly grew up around the company, and his mission now is to keep the business going strong into the future. “My role has been to formalize the organization of the company and move it forward,” he said. His duties include strategic planning, corporate oversight, partner relations and leadership of the 60-employee DJ Simmons and Twin Stars organization.

Instrumental to his success as a manager, says Byrom, has been his use of the Malcolm Baldrige framework. Malcolm Baldrige was Ronald Reagan’s secretary of commerce, and his commission examined the top companies in the world to see what they were doing right. The framework defines criteria for seven areas of management: leadership, strategic planning, human resources, information and analysis, customer and market focus, process management and business results. “It lays out the key things your company should be doing to be exceptional,” said Byrom.

Byrom thinks it is the corporate culture that ultimately sets DJ Simmons apart from its competitors. “We are a long-term-minded, family-owned company,” he said, noting that many other energy exploration companies are more short-term focused. “The competition is often externally funded and on the fast track, trying to grow quickly and sell out or go public.”

DJ Simmons operates mainly in the Four Corners area, where the states of Colorado, Utah, New Mexico and Arizona meet. Its focus is in the San Juan and Paradox basins. “We like the Rockies,” said Byrom. “This is where we live; we know it. We feel we our hard-earned knowledge and expertise in the geology, operations and regulatory environment of the area give us a real advantage here.”

New, more stringent environmental regulations mean new opportunities for DJ Simmons, especially its Twin Stars division. The company has now expanded into southeastern New Mexico, where hot new oil plays are booming. In the past it has been the practice to let the gas vapors that bubble out from the oil in storage tanks simply evaporate to the atmosphere. Now, increasingly stringent emissions regulations combined with the economics of capturing those valuable gases are motivating companies to install vapor recovery units, which Twin Stars sells and maintains.

Despite the Twin Stars division’s recent expansion, DJ Simmons has been dealing with a rather tepid natural gas market. One might think that an increase in natural gas consumption (between 2001 and 2010, the United States increased its natural gas consumption by 1.85 trillion cubic feet) would make life easier on the company, but breakthroughs in natural gas production have changed the game. New technologies in horizontal drilling and hydraulic fracturing have produced a glut of gas on the open market, which has driven prices down. “It’s been great for the American economy but hard on smaller companies like us,” said Byrom.

DJ Simmons was forced to enact hiring and wage freezes for a while, but Byrom thinks the company has gotten through the toughest times. He believes that challenges force a company to grow, adapt, and ultimately become stronger. “When you go through difficult times,” he says, “it enhances your focus on what’s really important, makes you pay more attention to what you’re doing, and makes you look at…getting processes fine-tuned to make money with less.”

Though every new project brings a sense of uncertainty, “There’s always a lot of suspense and excitement when drilling a new well,” said Byrom, who likens the practice to gambling in Vegas—it’s all about playing the odds. “Our goal is to be the premier oil and gas company in the Rockies. We know we’re a long way from that, but it’s still a vision that inspires us.”

For more information please visit: www.djsimmons.com

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