Louisiana Summers with his Grandparents, Upstream E&P and Midstream Pipelines, and Water Management Innovation: The Incredible Life of John Durand, Part Two

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In Episode 22 of the Oil and Gas Elevate Podcast, hosts Sean McCoy and Eric Johnson interviewed John Durand, President and Chief Sustainability Officer at XRI. In this article, OGGN contributing writer Stephen Forrester got a chance to talk with John about his life and career. In Part II, John discusses his years with Crosstex Energy, his transition to Pioneer Water Management as he helped negotiate landmark deals with Midland and Odessa, and now, his role leading one of the industry’s most innovative water management and produced water midstream companies, XRI.

In the wake of the collapse of the energy industry post-Enron in the early 2000s, John became a principal in a large, international engineering and architecture firm, running private and public sector business development and serving as the national program manager for the company’s wind energy development services portfolio. “We were basically a full-service engineering firm for hire, assisting in the design and build-out of multi-fuel generation facilities from coast to coast,” John says. “I didn’t necessarily have the technical expertise for that job, either, but I also am not one to shy away from a challenge. My role and responsibilities were more about effectively communicating and developing processes with the engineering and technical personnel and then focusing on working together as a cohesive team to manage those processes to bring as many projects to fruition as possible.” 

As the energy industry began to recover in 2004, John embarked on the next journey of his career. It was during this time that what is now known as the conventional midstream business became a true sector unto itself in the oil and gas industry. Assets formerly known as “gathering and processing” or “producer services”, which had previously been built, owned, and operated in-house by E&P operators, were now finding new ownership and asset development opportunities in the form of private equity-backed midstream companies. Operating oil and gas companies began monetizing their midstream assets and outsourcing the transportation, gathering, and processing of crude oil, natural gas, and natural gas liquids (NGLs) to the evolving midstream sector.

Joining Crosstex Energy (now known as EnLink Midstream) in the mid-2000s was what John refers to as a pivotal moment in his career in several ways. “Crosstex had recently become a public company, and the opportunity for personal and professional leadership growth was there for the taking,” he remembers. “Crosstex was the first company I had ever worked for that emphasized such things as the importance of building a healthy corporate culture, with an emphasis on very stringent and disciplined hiring practices and focused professional development of our people resources. We worked extremely hard because initially Crosstex didn’t have a large number of employees, but as we built the company that practice of disciplined hiring paid off, with a company culture and group of professionals that, I believe, was second to none in the industry at that point in time. We established ourselves as a company and had great success, particularly when the shale resource play began to boom, which initially occurred in the Barnett Shale in north Texas.”

As a matter of fact, Crosstex developed and built the first dedicated midstream natural gas pipeline and processing complex dedicated exclusively to Barnett Shale production. Given that shale play horizontal drilling required considerably more water than conventional vertical drilling, it was during this time that John would become aware of an upstart water treatment and recycling company known as Fountain Quail doing work for oil and gas operators in the Barnett Shale. Little did John or anyone else realize at the time, but Fountain Quail would become a significant factor in John’s career some 15 years later.

Crosstex’s growth and reputation for hiring talented and strong leaders became common knowledge within the midstream sector and, as it’s said, success breeds success. As the shale boom expanded in the Barnett, the Marcellus Shale play located in Pennsylvania and West Virginia began development a few years later, and many of Crosstex Energy’s most talented managers ended up leading or becoming a part of management teams at many of Crosstex’s growing list of midstream competitors. As it would turn out, John was recruited to another Dallas-based midstream company to become a member of its management team in 2013. “Leaving Crosstex was an extremely difficult decision given the relationships developed there with so many people throughout the organization, but the opportunity to join PVR Partners was too good to pass up,” he says. “Fortunately, I remain very close with many of the people with whom I developed long-lasting friendships with at Crosstex; again, a testament to the professionalism and the quality of people who helped build the company.”

As there had been and continued to be a considerable amount of industry consolidation among midstream companies, however, another dramatic change happened within just a few months of John joining PVR. “I found myself overseeing the sale of PVR to another Dallas-based midstream company,” John explains. It was, at first, a shocking and surreal development, but the assets of PVR, spread among multiple basins, were too valuable. In the end, the sale of the company would lead to yet another fascinating career path opportunity for John.

Just about the time that PVR was closing its sale of the company, John was approached by a former co-worker at Crosstex, who was now building a management team for a wholly owned subsidiary of Pioneer Natural Resources, the leading E&P company in the Midland basin. The subsidiary company was called Pioneer Water Management (PWM), and John was hired on to round out PWM’s management team and lead the commercial, supply, and logistics functions for the newly formed entity. In a career filled with seminal moments and opportunities for growth into new or developing sectors of the energy industry, John is effusive in his praise for the foresight Pioneer displayed in creating PWM.

“One of the greatest things that has ever occurred in my career was having the opportunity to work for Pioneer,” he says. “I give Pioneer tremendous credit for being such a visionary company when it comes to water management. From an E&P operator’s perspective, Pioneer’s decision to form PWM and declare back in 2014 that they were going to cease using fresh water for hydraulic fracturing within a 5-year time horizon, speaks to the remarkable environmental and corporate stewardship of the company.”  

In his designated role at PWM, John was the commercial lead in negotiating agreements with the cities of Midland and Odessa to purchase their effluent, or secondarily treated wastewater, for the company’s long-term water supply requirements. “Those public private partnerships have and will have, for decades into the future, an incredibly beneficial economic impact for those cities and their citizens,” John explains. “And now, Pioneer has the rights to use that water and not use fresh water anymore in their operations. Working with the cities of Odessa and Midland is truly a highlight of my career for which I will forever be grateful. To be involved with so many different stakeholders and working with municipalities and the entire PWM team in building out the necessary infrastructure to connect literally hundreds of thousands of barrels of ‘drought-proof’ wastewater for resource development is a win-win for both municipalities and Pioneer. The unique experience of working with Pioneer and being part of the company’s plan to fund and construct a wastewater treatment plant in Midland was a truly once-in-a-lifetime opportunity.”

While at Pioneer, John became familiar with a company called XRI, a full-cycle water management and produced water midstream company that was helping kick-start Pioneer’s efforts to move away from the use of fresh water. At this point, XRI was establishing its presence as a singularly unique provider of non-potable water supply, with Pioneer and PWM becoming one of XRI’s first major customers. It was through this collaboration that John met Matt Gabriel, the co-founder and CEO of XRI, and the two worked together as XRI became a trusted partner of Pioneer for its water management needs.

When John eventually left Pioneer to go to a water management startup, Matt was the first person outside of his own family that John called. “Matt and I had developed a strong relationship over the years, so I owed him the courtesy to let him know directly about my leaving Pioneer,” John says.  A couple of years later, John would once again reach out to his old friend. “Matt was, again, the first person I called, just to let him know I was contemplating another move,” John remembers. “The rest is history. I came on board at XRI in 2019 as President and Chief Sustainability Officer, with Matt challenging me to help lead the company—which was already very successful—in what was an evolving and dynamic market. In the new role, I wanted to assist in doing something that would be transformational and quickly grow the influence and capabilities of XRI.”

To accomplish this, John turned his eyes towards expanding the company. “Going back to those Barnett Shale days while with Crosstex, I recalled the company that had pioneered water treatment and recycling called Fountain Quail Water Management, and I’d kept in touch with them over the years and worked with them while at Pioneer,” John says. “I made the introduction between Fountain Quail and XRI’s respective leadership teams and, within a few months, Fountain Quail became the first acquisition XRI ever made. Prior to the acquisition, we had grown entirely organically. We didn’t know then just how transformational the transaction would be, but now, within 2 years, we’ve become the leader in water reuse and recycling in the Permian Basin.”

The transformation of a company – XRI’s acquisition of Fountain Quail

With the push for greater environmental, social and governance (ESG) accountability growing ever stronger, John is confident that demand for produced water reuse and recycling services will continue to thrive, and currently XRI is on pace in 2021 to recycle and reuse approximately 200 million barrels of produced water throughout its considerable footprint in the Midland and Delaware sub-basins of the Permian. By the fourth quarter of 2021, XRI’s recycling volume should expand from its current 500,000 barrels per day to more than 700,000 barrels per day. “Produced water is the preferred source water for completions among our operator customers in the Permian, and I am proud to be a part of a company like XRI, which has had a focus on sustainability, resource conservation, and environmental stewardship from our origins in 2013,” John says.

“XRI’s commitment to sustainability and ESG initiatives and those of our customers will always be our team’s overarching mission.”

While XRI currently operates in the North American market, John says XRI has its sights set on potential international expansion in the future, given the growing need for the kind of technology and service the company offers, and not every project that XRI takes on will necessarily be energy industry related. “Some of these projects will be for the treatment of water in other industries,” John explains. “It’s very gratifying to see that what we’re doing with produced water in the Permian Basin can translate to new opportunities both at home and abroad. With a couple of projects, we could become a multinational company, which is very exciting—especially as it lends itself to working outside of your comfort zone, to begin working in new focus areas outside of energy.”

With the power of making meaningful connections manifesting in John’s life in such huge ways, he wants to ensure that his own children have experiences like he had growing up. “Without a doubt, the best connection I ever made in my life was meeting and marrying my wife, who is not only the mother of our children, but truly the finest and most genuine human being I have ever known,” John says. “She has done such an incredible job raising our daughters, particularly given all the time I have spent away from home during my career. I tell our daughters all the time—one who’s graduated from college and is successfully off on her career, the other who’s a junior in college—you have to network, build relationships, and most importantly take on as many opportunities and challenges as you can, because you never know where the steppingstones and the building blocks of your life and career may be.  Finally, there is no substitute for pushing yourself to do your absolute best at whatever you are doing, because ultimately it will be noticed.”

John continues: “Hopefully, much like I was able to learn so much from my parents and grandparents, they’ll pick up on that and realize that the quality of the relationships you develop is what matters. It may look like there was a master plan for my career, but there really wasn’t. I’ve been blessed with a wonderful life and career, and I really appreciate all the key and incredible people that have educated me and kept me humble along the way.”

Any success I may have had is due to my strong belief in doing things the right way the first time, treating people well, and recognizing that true success comes from working together with a cohesive, dedicated team all working together toward a common goal and set of objectives.

We at OGGN wish John and the entire XRI team continued success, and we deeply appreciate the work he does to make the world a better place.