Governance

Hilcorp’s Governance centers on a culture of transparency, alignment, and autonomy. With an open book management approach, asset team model, and fully aligned accountability and incentives system, Hilcorp promotes employee engagement and ownership.

Two-thirds of Hilcorp employees are field employees—well beyond industry averages. Every employee has a direct stake in the company’s performance and goals. Our model aims to have all 2,800+ Hilcorp employees focused on acting like an owner which fosters strong corporate governance every day.

Open Book Management

Our open book management model provides unparalleled consistency, clarity, and transparency. Everyone in the company receives the same information on financials, production metrics, safety, and environmental performance. Each employee knows the goals, is aligned on how we intend to meet them, and is given the information and autonomy necessary to meet those goals. Because employees are expected and empowered to make sound decisions in alignment with the objectives of the company, information is critical.

Asset Team Model

There will never be more than five layers between a front-line employee and the CEO. Our flat organization removes barriers in the decision-making process and grants greater autonomy to those who know the assets best. Innovation and Urgency—two of Hilcorp’s Core Values—come from the intimate understanding of the assets. Hilcorp’s asset teams are multidisciplinary teams that have the necessary autonomy and accountability for creating value from our assets. The asset teams drive goal-setting for production, cost management, capital investment, environmental protection, safety, and local community engagement. Team transparency through monthly reporting to management and the entire workforce ensures adherence to our values and a focus on objectives. With the information, skills, and authority to act, every employee is aligned and is expected to “Be an Owner”.

Accountability and Incentives

Alignment is an essential element of the “Hilcorp Magic”. The open book management and asset team model drive a bottom-up approach to goal-setting that promotes sustainable practices and result in long-term value creation. This alignment gives clarity, focus, and motivation to all employees to act like owners and work together toward our common goals, including delivering on our agreed upon environmental and safety goals, including emission reduction targets.

Our commitment to transparency ensures that every employee knows the company’s values and objectives. They will hold themselves and others accountable, and everyone is rewarded equitably when goals are reached. From the CEO to the pumper, our performance-based pay is based on the same company metrics. Everyone receives the same bonus percentage. This alignment is critical to our collective success.

Hilcorp’s Buy-In program gives every employee a stake in the company. Our employees act like owners because they truly are owners. The long-term value creation generated by both employees and the company builds engagement and immersion with the communities in which we operate.

ESG Oversight

Hilcorp’s ESG oversight committee is composed of the CEO, a cross-functional executive team, and employees with diverse perspectives. The oversight committee, operations, and employees at-large are in a continuous information and execution loop.

Hilcorp’s unique asset-based structure empowers teams to establish the goals and priorities that suit the assets under their management. Ownership and alignment with ESG objectives are pushed down to the field level enabling Hilcorp to achieve ESG goals, including tangible emissions reductions. Hilcorp’s business model is to acquire mature late-life properties and then optimize those properties. Assets vary in terms of the production type (natural gas or oil), conventional or non-conventional, age of infrastructure, and operating conditions. Every asset requires a unique approach with dedicated professionals who can find the right solutions to optimize production while reducing environmental impact.

Oversight’s Use of Open Book Management

Emissions and financial data are broken down and distributed to each asset team. Every member of the asset team has access to and is expected to have a comprehensive understanding of the data. By sharing data with every member of the company, each employee is empowered to identify and execute improvement opportunities.

Meaningful Goal-Setting

During each annual planning cycle, each asset team sets production, investment, costs, value creation, and emissions reduction targets. Everyone is included in this process—both field and office employees. The bottom-up approach to goal setting ensures full ownership, understanding, and alignment of our goals. Teams are assessed on their progress toward reaching goals on a daily, monthly and quarterly basis. Employees are measured on their performance and their compensation is directly tied to reaching the targets.