Robert Norris

When Robert Norris was interviewing for jobs before graduating from the University of Texas at Austin in 2001, he was drawn to the energy industry’s innovation. The economics major joined El Paso Corp. as an analyst, rotating through different groups such as power, LNG and corporate development. But only a year later, with Enron unraveled and the economy in a post-9/11 decline, he, like many others, found himself between opportunities. It seemed like a great time to take a gap year, so he spent the next year traveling in Europe, working on his grandfather’s ranch in Big Bend, Texas, and skiing in Squaw Valley, California.

In 2003, he joined the corporate development department of Oil States International Inc. (NYSE: OIS), Houston. OIS was formed in 2001 from the merger of several portfolio companies held by SCF Partners, Houston, and taken public in 2001.

Today, the company’s four business segments include mobile and semi-permanent accommodations for oilfield workers, primarily in Canada’s oil sands; offshore products, including deepwater drilling and production-infrastructure equipment manufacturing; U.S.-focused oil country tubular goods distribution; and wellsite services comprising 36 land drilling rigs and completion-related rental equipment in North America and internationally.

From the get-go, OIS had an acquisition mentality. Since going public, the company has closed 40 deals for more than $500 million in total value. OIS’s most active acquisition years were 2004 and 2005.

Several years into Norris’ tenure with OIS, he became director of corporate development. Today, his group is charged with sourcing, evaluating, negotiating, and executing acquisition opportunities. It also coordinates due diligence and develops pre-closing integration plans.

At press time, like many observers both inside and outside of the energy industry, Norris was monitoring the BP oil spill in the Gulf of Mexico. He had the video feed of the leak playing in the corner of his computer screen at the time of this interview. And, he had an especially personal interest in efforts to bring the disaster under control: One of his brothers was at work on the rig drilling one of the relief wells, and another brother was managing a part of the clean-up efforts.

Investor: What impact do you anticipate from the Gulf spill on the industry?

Norris: There will be an impact, but it is hard to say at this stage what exactly that impact will be. The one thing that appears to be a focus of the government and industry is the prospect of a more stringent regulatory environment.

Investor: What’s been the trend in A&D in recent years?

Norris: The last few years have been very interesting. We had a run in 2007 where debt capital was very cheap and the private-equity firms had a lot of money in the market. We have historically focused on negotiated transactions, and we were able to close a couple of transactions even in that highly competitive acquisition market.

In 2008 and 2009, when the market crashed, we were expecting to see more distressed opportunities than we actually saw. Many high-quality companies decided not to sell—oilfield investors are eternally optimistic. And the less healthy companies weren’t forced into sales transactions by their banks. We’ve seen a pickup in opportunities in recent months.

Investor: How important are acquisitions to Oil States’ strategy?

Norris: Acquisitions have always been central to our strategy, but our management team has also done a great job of determining organic opportunities and growing the company through those means, as well. When I started at Oil States, it was a $600- to $700-milllion enterprise value company. Now, that is roughly $2 billion.

Investor: What attracted you to OIS? You also considered investment banking.

Norris: I was intrigued by the opportunity to work with a two-person team (in corporate development), with a lot of deal flow and great exposure to the transaction process. I was the sixth person in a small corporate office, working down the hall from the CEO and CFO, and was able to sit in on several board meetings. For a 23-year-old, there aren’t many opportunities like that.

Investor: What do you like best about your job?

Norris: My management team gives me a lot of latitude to figure out what the right deal is and to present it. I have broad access to a very talented management team. Every day the job involves something different.

Investor: What strategies have helped you succeed?

Norris: I found a role where I could work with smart people who could guide me through my job, but who also trusted me enough to throw me into the fire a little bit.

Additionally, I’ve never turned away any work that’s been put in front of me. Some of the assignments that were my least favorite have turned out to be the most beneficial to me in understanding how business works.