Hart Energy: Let’s start off by talking about a real push for E&Ps to generate free cash flow. With Protégé Energy III LLC focusing on that. Walk us through your thoughts there.
Marty Thalken: For us and our industry to be competitive with investment options in general that investors have, we have to be generating free cash and either dividending that to the investors or using it to grow the company. In our case we are doing both. We're growing the company into next year and beyond, 10 to 12% a year. Spending roughly 60% of our EBITDA. Therefore, we have roughly 40% that we plan to distribute back to the investors. That's a good thing for them because in today's environment since we're private equity-backed, typically we look for a sale or monetization of assets. Today it's very difficult to do. So, returning cash to investors is really very attractive to them.
Hart Energy: Can you talk to us about what makes the Eagle Ford play a good focus for Protégé Energy III LLC?
Marty Thalken: It's really good for us, particularly the assets that we own. Because the infrastructure was already there. The prior operator built a system that can handle 40 to 50 thousand barrels of oil a day and a water frac water, fresh water handling system with 1 and 1/2 million barrels of storage. We have our own freshwater wells. We are currently drilling a saltwater disposal well so we can handle the disposal of the produced water. So, infrastructure is critically important to enhancing margins overtime and we have a fabulous infrastructure network that we acquired when we bought these assets. In the future we look for opportunities and situations were that infrastructure is in place.
Hart Energy: Any focus in the upper Eagle Ford?
Marty Thalken: The upper Eagle Ford has significant oil in place. It’s thicker than the lower and the porosity across the section is lower than the lower your Eagle Ford. I would say it requires higher oil prices than today to be really attractive to pursue in the current environment. So I think it's something we'll pursue down the road.
Hart Energy: Are there any industry trends that you are focusing on as a company?
Marty Thalken: I think enhanced oil recovery is the biggest opportunity for us. It’s a fairly simple process and submissible hydrocarbon gas injection where do you inject gas you let it soak for a short period of time. It comes in contact with the oil molecules that are trapped. It reduces the viscosity of those molecules and they begin to flow to the wellbore. With just primary recovery, we’re probably going to recover eight to twelve % of the oil in place. So, that leaves a very large target to attempt to produce. Enhanced oil recovery is going to be the next most economic step to enhance the overall recovery.
Related videos:
DUG Eagle Ford: Well Interference, Focus On Drilling Inventories
DUG Eagle Ford: SilverBow Rebranded, Diversifying
DUG Eagle Ford: Venado Oil & Gas On Fast Cycle Times
Recommended Reading
Utica Oil E&P Infinity Natural Resources Latest to File for IPO
2024-10-05 - Utica Shale E&P Infinity Natural Resources has not yet set a price or disclosed the number of shares it intends to offer.
BP Profit Falls On Weak Oil Prices, May Slow Share Buybacks
2024-10-30 - Despite a drop in profit due to weak oil prices, BP reported strong results from its U.S. shale segment and new momentum in the Gulf of Mexico.
Dividends Declared Weeks of Nov. 25, Dec. 2
2024-12-06 - Here is a compilation of dividends declared from select upstream and midstream companies in fourth-quarter 2024.
NOV Appoints Former Denbury CEO Chris Kendall to Board
2024-12-16 - NOV Inc. appointed former Denbury CEO Chris Kendall to its board, which has expanded to 11 directors.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.