Hart Energy: Let’s start off by having you talk about the company and really targeting the Eagle Ford. If you can discuss that history there with us. 

Branden Kennedy: Venado was formed in late 2016, acquired the first assets in late 2017. So on the face it appears to be only two to two-and-a-half years old though when you look around the management team and the experience we have, they have 15, 20 and 30 years experience by person in the Eagle Ford. This is really a continuation of all the efforts, learnings, career work all these professionals have had over their entire working adult lives. So yes, Venado is young  but they're not new to the Eagle Ford.

kennedy Presentation
See Branden Kennedy's full presentation from DUG Eagle Ford.

Hart Energy: Can you talk to us about how pricing and fast cycle times really factor into focusing and targeting the Eagle Ford?

Branden Kennedy: Everybody wants to talk about in the public domain, the Permian and 
“Permania” and for us there the returns that were able to realize in the Eagle Ford compete with and sometimes exceed those of the Permian. One the reservoir is fantastic. I am not a subsurface technical person but what I've seen on the productivity of the wells is phenomenal. The ample pipeline capacity out of the basin. We're not dealing with basin differentials for crude or gas on the negative side. WTI in the Permian, sometimes blows out to $15 to $17 dollars a barrel. We get premium pricing above WTI. On the natural gas side, we're not dealing with Waha as well. We get Houston Ship Channel pricing. Additionally, the experience we talked about previously. The Eagle Ford was one of the first Shale basins developed as such it has the most experience, the most history. So our operations folkd, their ability to compress those cycle times, continue to do more with less and drives itself right out of the bottom line.

Hart Energy: Are there any industry trends that concern or motivate the company? Can you speak to any of that?

Branden Kennedy: The biggest industry trend that we see and feel somewhat like we are leading is the transition on the business model. There have been so many on the private equity portfolio companies. They were built for a three, four or five your exit and that just hasn’t happened. We're hearing about the various capital providers pulling assets out from underneath teams. They're having to combine teams to get synergies and scale instead. Venado, they pride themselves on being ahead of that. We took the fork in the road years ago. We decided we wanted to build a real business. Cash-flow based and paying out distributions.

Related videos:

DUG Eagle Ford: Well Interference, Focus On Drilling Inventories

DUG Eagle Ford: SilverBow Rebranded, Diversifying

DUG Eagle Ford: Returning To The Play, Lessons Learned

DUG Eagle Ford: Protégé Energy CEO On Next Attractive Trend

DUG Eagle Ford: South Texas Macroeconomics

Comments