To Mike Vandale, there is no life like it. He is a player in the high-stakes game of the oilpatch, living and dying with the drillbit and the art of the deal.

And you get the idea that the exuberant chief executive officer of Arsenal Energy, one of the 'patch's upstart junior companies, wouldn't trade his hotseat with anyone.

Like many of his peers in the junior oil and gas business, the 45-year-old native of Kamsack, Sask., has attempted early retirement - in his 30s - but missed the action and was soon back in the fold. Ironically, his most notable "dry hole" was an unsuccessful stint as owner of the now-defunct Calgary Storm professional soccer team.

These days, Vandale is champing at the bit - and it's no wonder.

Mike Sturk, Business Edge
Mike Vandale, CEO of junior producer Arsenal Energy, gets a rush from the creative demands of his oilpatch job

Arsenal, the fourth company that Vandale has run during a 21-year career, is appeasing his yen for action, boasting a diverse range of projects spanning the prairies from Edson, Alta., to Lashburn, Sask., to Rennie Lake, N.D.

The company has also ramped up its portfolio of properties with two acquisitions in the past four months that have helped boost a share price that has tripled since last August.

1. What initially drew you to the oilpatch?

"I got into it because a lot of the guys were happy, having a good time and they made money. It was that simple. When you're a kid, you notice those things. That was all I needed to know. While I was attending the University of Guelph, I got started in the business, working in Calgary in the summers as a landman (with PanCanadian Energy)."

2. Where did you get your entrepreneurial spirit?

"It probably came from my grandfather, Stan Clark. I also had an uncle, Bill Clark, in the oil business. My grandfather was a barley buyer and was malting barley years ago and buying on behalf of Canada Malting Co. So, I learned a few things about the ins and outs of that and negotiating skills and so on and so forth. My Uncle Bill was one of those guys who was sort of just good at everything. He had very good powers of concentration, was very successful in the oil business and was successful in curling and other sports. There was a lot to learn from those guys. They got me fired me up."

3. What do you think has contributed to your success in the oilpatch?

"I'm willing to take a risk. I've also had a lot of confidence. Yeah, it's about being confident and taking a chance."

4. Have you had much adversity to deal with along the way?

"Yeah, I had a soccer team (as owner) called the Calgary Storm (A-League). That was adversity. Everything I have done always worked out. So I had to find some challenges. I had it for 21/2 years. And you know what? Nobody else had a (pro or semi-pro) soccer team in Calgary for (that length of time). Of course, it cost me a lot of money to prove that point (he estimates his losses at $1.5 million). After it was all over, I was kind of sensitive about it, but I realized that there was no chance (of it making a profit) in the first place."

5. The oil and gas companies you've been involved in have certainly fared a lot better. Can you update the progress of Arsenal Energy?

"Currently, Arsenal's main production is in North Dakota where production is roughly 450 barrels (of oil equivalent per day) and in the Lloydminster (Sask.) area where we produce about 600 barrels a day. The closing of the deal to take over IC Energy brings our production to 1,900 barrels a day. It's a pretty good acquisition for us and we fully expect to exit this year at about 3,000 barrels a day, barring any new deals along the way."

6. What's your vision for Arsenal?

"As with most junior drilling companies, there is a four-year plan and, at the end of those four years (through 2006), we have to see whether we are going to sell the company or have it made into a (royalty) trust. Right now, the company is starting to go rapidly. There was kind of a slow period but, if you look at the news releases and what's been going on over the last little while, all of a sudden we're fast-tracking it. We're having a lot more deal flow now. We're looking at basically aggregating production, where we have 35 working interests, centralized production facilities and we have a number of drilling locations. So, those are the common denominators within the whole strategy - and then there are the economics, of course. We have right now in our inventory 60 to 70 development locations, which will make (the company) jump again in production. We're in a pretty good situation right now."

7. What do you think sets your company apart from other oil and gas juniors and, from an investor's standpoint, what makes it attractive?

"I don't know if it really stands apart. There seems to be a common thread that runs through all of them.

I think the common thread is centralized production areas. Our primary ones are in North Dakota, Lloydminster and Edson. So we're concentrating on growing those three areas and maintaining high working interest and operatorship. Those projects are attractive if you wish to sell to a trust or you wish to create your own trust, which is certainly the flavour these days."

8. Is it pretty tough to mess up an oil and gas company these days with sky-high commodity prices?

"Yeah, I think so. But you still have to work hard. The only way you get ahead is through hard work.

No matter what it is in life, you have to work hard to be successful."

9. What's been the most valuable lesson that you've learned in the oil and gas industry?

"You're always one well away from being really, really successful. I guess that's a real optimist speaking, but it's true. Even if you go through a bad spell in drilling, the next well can turn things right around, and I think everyone in the oil business knows that. I'm not saying that in a negative sense, but that's just how fast things turn around. I've never been down in the oil business like that. I've always been pretty good at it. I know some other guys that have had a tough go, and as the old saying goes, 'You're only one well away from turning the corner.' And that's absolutely true in the oil business. I think that is why it has such a great allure for many people who continue with it to this day. It's addictive. It's hard to get out of your system because it's so much fun. I think the creative aspect of finding oil and gas and creating deals is something that I have always liked."

10. Do you think the current hot trend of converting oil and gas companies into royalty trusts has gotten a little bit out of control?

"No, not at all. The income trusts themselves are for a market condition that is dictated by the Baby Boomers moving (into) a certain age group. The demand for income trusts is insatiable now and that will not abate for many years.

"You've got the market segment demanding (distribution) payouts and the best way to get them is through income trusts. That is a market condition that will not abate for the next 15 years in any particular segment of the market. The energy sector has tailored itself to meet that demand."

11. Did you ever have any desire to work for a senior company?

"No. I worked with PanCanadian Petroleum and that was enough. I just wasn't into it. You know, I liked doing my own thing and I have read books about how a lot of American independents rose and that wasn't necessarily because they worked for large companies. In fact, it was anything but that. A lot of guys work for some large companies for a while and then leave."

12. What's your outlook for oil prices?

"Oil supply is pretty tight right now so the prices should remain strong. Last year, there was a two-per-cent increase in demand in the United States and worldwide. Yet, prices were not really affected by that demand per se. And further to that, you're seeing a decline of probably about four per cent worldwide in just normal producing field production. Barring a recession in China, I don't see it (demand) abating. It's the old story: If a guy moves from a bicycle to a motorcycle, then he's not going back to a bicycle. And if he can move from a motorcycle into a car, than he's not going back to the motorcycle. That's China in a nutshell."

13. What's the key to retaining and instilling loyalty in employees?

"You have to treat people with respect and share the booty. That's all. If you do that, you'll never have a problem."

14. Are you a workaholic like many of your peers in the oilpatch?

"I go in spurts. When I concentrate on a deal, I'm in the deal and, when I'm not in the deal, I'm doing soccer teams or something like that. When I'm in it, I'm going at it."

15. You have to trade jobs with one other business leader tomorrow. Who would it be with?

"It would be with Mark Cuban (the entrepreneur who owns the Dallas Mavericks). He looks like he has a lot of fun in his work (Cuban can afford to have fun after becoming an instant billionaire in 1999 with the sale of Broadcast.com, the company he founded, to Yahoo for $6 billion US)."

16. God taps you on the shoulder and says you can change one thing in your life. What would it be?

"Nothing. I'm happy. I'm happy the way things are.

I guess I don't really look back. What's done is done and I have always been happy about it. I wouldn't change what I do for a living or anything. I'm completely happy and I think that I have been blessed by God."

17. You've already 'retired' briefly from the oilpatch. When can we expect your next retirement?

"2006 ... well, maybe. Once we figure out what we are doing with Arsenal, then I'll consider again how much time I am taking off at that point."

18. Is there another venture in the cards for you beyond this one?

"Well, you always say that you probably won't do it again. Then, probably six months later, you realize that you aren't really built for planting flowers, so you're back at it. A guy I know just sold out a company, packed up his family and went to Ontario for six months. That was on Jan. 18. He phoned me two days ago and said: 'I bought a house, then I bought a helicopter, then I met these guys that are doing this coalbed methane thing and I think that I'm going to buy a piece of it so what do you think?' I said: 'You know what? It hasn't even been two months and you are already starting to get back into it.'" 19. When you reflect on your career, what's your greatest source of pride?

"I am proud of being an oil and gas man, building companies and making a living on my terms. I'm especially proud of the success my partner (Rob Rowley) and I had with Midwestern Energy, where we took a chance on heavy oil properties nobody else wanted.”

(That company was sold to Cimarron Petroleum for $18 million in 1996).

20. How important is money to you?

"It's not that important. I guess it is a way that guys keep score. It's great when you make money, but you know what? It's all about the hunt. It's not about the kill. It's more fun on the hunt. The hunt is where you get the money, but at the end you feel hollow because you want some time off before you go on the next hunt."

Disclosure: Mike Vandale is a shareholder of Business Edge Inc., which publishes this magazine.)

IN PROFILE: Mike Vandale

* Title: Chairman/president/CEO, Arsenal Energy Inc.

* Born/Raised/Age: Coalinga, Calif.; Kamsack, Sask.; 45.

* Education: University of Guelph, geography major.

* Family: Two children.

* Career: Vandale has been CEO of Arsenal Energy since 2000. He entered the oilpatch as a landman in 1984 with Maverick Land Consultants in Regina. He founded Duck Mountain Resources in 1986. Vandale has also been CEO of Redux Energy (1989-92) and Midwestern Petroleum (1992-96). He has also been a director and major shareholder with Sundance Resources and the company it was acquired by, True Energy.

* Role Models: Grandfather Stan Clark, uncle Bill Clark.

* Moonlighting: Vandale is a part owner of the Exeter soccer club in England.

* Pastimes: Jogging, soccer, reading history, theatre and travelling.

THE COMPANY: Arsenal Energy

* Brass: Mike Vandale, chairman/president/ CEO; Jesse Meidl, chief financial officer; Bernie Dumanowski, vice-president of operations.

* Profile: Arsenal Energy is an oil and gas company with properties in western Saskatchewan, northwestern Alberta and North Dakota. Arsenal's production comprises approximately 50 per cent heavy oil, 40 per cent light oil and 10 per cent natural gas.

The company recently completed a deal to acquire IC Energy. 

* Recent Price (TSXV:AEI): $1.45 (52-week range, $0.40-$1.92).

* Head Office: Eau Claire Place II, Suite 1110, 521 3 Ave. S.W., Calgary, T2P 3T3.

* Phone/Fax: 403-262-4854, 403-265-6877.

* Web site: www.arsenalenergy.com 

(Gyle Konotopetz can be reached at gyle@businessedge.ca)