Dorothy Nobis, The Durango Herald | July 16th, 2022Sean Dugan wanted to be the next great filmmaker. Ryan Merrion wanted to invent a vacuum cleaner to clean rooms faster than the speed of light.
Neither got their wish.
Today, Dugan, 38, runs Dugan Production Corp., and Merrion, 34, runs Merrion Oil and Gas Corp., two energy companies that have served San Juan County and beyond for more than 60 years.
Merrion: ‘Big shoes to fill’
Merrion worked as a summer field hand for Merrion Oil and Gas when he was in high school. The work sparked his interest in the oil and gas industry, and he went on to get his bachelor’s degree in petroleum engineering from Colorado School of Mines. After graduating, he joined the company, focusing on operations of the company’s oil and gas assets.
“As I started my career, the notion of taking over the company became more apparent,” Merrion said. “About a year ago, I transitioned into the role of vice president of Merrion Oil and Gas. As part of the new role, my dad (T. Greg Merrion) involved me in the larger company decisions, which exposed me to administrative decisions, investment decisions and partnership decisions.”
In March 2021, T. Greg Merrion, who had taken over the family business in 1992, said he would retire at 2:22 p.m. Feb. 22 and turn the company over to his son.
“To be honest, my first thoughts were a bit overwhelming,” the younger Merrion said. “I tried not to think about it too much and focus on tasks at hand. I knew I had a huge responsibility and huge shoes to fill, so I tried to get as much experience as I could while I was still training. My dad has been my mentor since as long as I can remember, and I’ve had the luxury of having ‘on-the-job training’ both in and out of the office.”
While his grandfather was an icon in the community, Merrion said he only knew J. Greg Merrion as “Papa.”
“My sister and I would come to the office and race each other to see who would get to hug Papa first,” he said.
Merrion’s elders left an inspiring legacy of community involvement.
“My dad and grandpa were involved in the community and were impactful. I hope I can continue that legacy into the next generation.”
“My family, co-workers and friends have all supported me through the transition,” Merrion said. My family’s support has definitely given me the confidence to lead the company through the next generation and having the support of the staff at Merrion has been critical to a smooth transition. Having my dad remain on board as senior adviser and having a well-experienced staff to support along the way has been crucial as I get my feet under me.”
Merrion Oil and Gas were fortunate to not having to layoff people during the pandemic, Merrion said.
“Merrion Oil and Gas operates with a ‘lean and mean’ staff as a way to handle the volatility of the market prices,” he said “Alternatively, during higher prices, Merrion contracts work to offset the additional workload of excess projects. It’s been a good strategy throughout the years.”
The future of oil and gas in the San Juan Basin looks “very bright,” Merrion said. “The recent increase in prices has spurred opportunity and projects that otherwise would be foregone. We have some fun projects we’re excited to work on in the upcoming years.”
Dugan: ‘Everything changed’
While Sean Dugan, who graduated from Full Sail University, thought he would take over the family business, he didn’t think it would happen in his early 30s.
“Most of our family conversations centered around the business,” Dugan said. “Our family vacations were based around industry conventions or policy. The trips to the field, the weekends spent in the conference room doing my homework while my family reviewed paperwork were a given. I attended conferences with my grandfather (Tom Dugan) and, as a kid, having folks ask when I would be taking over the business.”
The reality of taking over Dugan Production hit Sean when his father, Sherman, became deathly ill.
When Tom Dugan passed away in 2017, Sean and his sister, Megan, became owners of Dugan Production.
“Grieving the loss of your father while at the same time realizing that our family business would be skipping the second generation and going straight to the third was difficult,” Dugan said. “Everything changed.”
Sean took over the leadership of the company, facing the daunting job of running a company that has a history of strong leadership and loyal employees.
“I thought it was way too soon,” Dugan said. “It wasn’t supposed to be like this. I was supposed to have more time to prepare.”
He feared being the generation “that comes in and messes up a good thing.”
“How am I going to live up to the enormous shadow that our founder, Tom Dugan, has cast?” he said. “What if I fail? What happens to all the employees and their families? What will my children think of me? Can I do this? Should I do this?”
“When you have an organization that is so firmly rooted in its history and ways for 63-plus years, change becomes a challenge. Not changing the fundamentals and the foundations that got us to where we are, but evolving into what comes next,” he added.
First the pandemic, then the Russian embargo brought new challenges to Dugan Production and Merrion Oil and Gas.
“Companies who were heavily leveraged heading into the pandemic were greatly affected,” said Dugan. “We saw bankruptcies and layoffs across the country. With the price rebound, it’s been beneficial to our company because we can proceed with some of the projects we’ve been holding off on for the past several years.”
“Supply chain and equipment prices have doubled or even tripled in some areas,” he added. “On one hand, we’re doing great, but it’s costing a lot more to do business. Companies have come out of the pandemic licking their wounds. They are paying their debts down and strategizing for a very volatile future.”
Hard times brought hard lessons.
“The global pandemic, the price of crude oil dropping into the negative for the first time in history taught me more than I’d ever want to know about making the hard decisions that this position requires,” he said.
In the end, his trial by fire gave him the discipline and confidence he needed.
“In hindsight, I’m grateful I took over at a time of a downturn,” he said. “It forced me to deep-dive into our operations and our balance sheet. You really get a feel for a company’s strengths and weaknesses when you must count every dollar that goes out and rely on every dollar that comes in.”
While continuing the build on the reputation and the success of Merrion Oil and Gas and Dugan Production is exciting and challenging to the next generation of leadership, the opportunities the future offers is equally exciting and challenging Merrion and Dugan said.
“There will be challenges as new industry comes into play,” Merrion said. “However, as technology advances, I have no doubt there will be new creative and innovative ways to continue producing oil and gas in a safe and responsible fashion. Another noteworthy topic is how the integration of renewables will impact the fossil fuel industry. I see energy generation from natural gas complementing renewables for decades to come. Natural gas is a clean, reliable, and good source of energy that we’re lucky to enjoy here in the United States.”
The opportunities in the San Juan Basin are plentiful, not only meeting our own country’s need for energy, but also the rest of the developing world as well, Dugan said. “Whether it be exporting liquefied natural gas to foreign nations, using natural gas to create hydrogen fuels or bridging the gap between fossil fuels and renewables, the San Juan Basin and the Four Corners will have an important role in these massive undertakings,” Dugan added.
‘In good hands’
Merrion’s and Dugan’s work has not gone unnoticed.
“I’ve known Ryan his whole life,” said George Sharpe, the investment manager at Merrion Oil and Gas. “While Ryan likes to have fun, he is a serious and conscientious engineer and businessman. He shares T. Greg’s low-key, inclusive management style. Everybody likes him and everybody absolutely loves working for him. I have no doubt he will do an outstanding job leading the company through the next generation.”
“Third-generation family businesses are truly a rarity in this day and age,” said T. Greg Merrion, “and our family feels fortunate and blessed that Ryan has the aptitude and the interest to run Merrion Oil and Gas. Like me, he worked outside the company after he first graduated from college, which provided some good training, as well as a different perspective of how other companies do business. He is very smart and capable, and I have no doubt he will do a wonderful job guiding Merrion Oil and Gas into the future. The entire Merrion clan is very proud of him.”
At Dugan Production, Dugan has proven his value and his leadership to be great assets, said John Alexander, the vice president of Dugan Production.
“Sean did not attempt to redesign or remake the company into anything other than what it was under Tom Dugan’s direction, said Alexander. “That doesn’t mean that nothing changed. In fact, a lot of things changed to bring the company into a rapidly changing world of oil and gas exploration and production. Sean is making a diligent effort to keep the company doing what it does best “to legally, morally and ethically produce oil and gas.” To do this is quite the challenge today due to the policies of both state and federal governments, but Tom Dugan would be proud.”
John Dean, a longtime friend of the Dugan family, said, “I believe Dugan Production is in good hands with Sean. He is intelligent, loyal, honest, hardworking, compassionate and a great listener, and he is a real people person. Dugan Production has lots of great people for employees, and they and the business will thrive under Sean’s leadership now and into the future.”