Hi, this is Chris Mathews, senior editor of shale and A&D for Hart Energy and Oil and Gas Investor, and I'm joined by Travis Guidry, who is vice president of business development and investor relations for Surge Energy. And we'll be taking over as CFO starting early next year. Surge has grown from less than 4,000 boe/d to more than 62,000 boe/d in the Northern Midland Basin, a part of the Permian Basin that for a long time was not thought to be particularly economic, but this company has found a way to make it work. So we're lucky to have Travis here to explain a bit more about that part of the Northern Midland. Travis, thanks so much for your time.
Travis Guidry: Yeah, thank you, Chris. We appreciate it. Yeah, I mean, the area that we're in, in Howard and Borden counties in the Northern Midland Basin, we've got a position over 105,000 acres. Really, when we took over about almost 10 years ago, about nine and a half years ago, it was believed that there was not a lot of strong economic development really, even in northern Howard County. That quickly changed as a lot of operators, both us and around us started drilling Howard pretty heavily and we saw really good success from the Wolfcamp A and Lower Spraberry. And then we had a big acreage position in Borden County, so we started pushing the development north, and really we saw some really good results from the Wolfcamp A. And so we started really doing that late 2016, 2017 doing the testing in Borden County. And then we proved really good success in the southeastern portion of our Borden position.
And more recently, the last couple of years, we've been pushing that on the eastern side further north, and we've actually seen some strong economic results from that. We pride ourselves in organic inventory growth, and the Borden County has been a part of that as well as the middle Spraberry in our Howard position, which we're now testing further north. We're testing the Spraberry in the Borden County as well. So not only is it used to be a single bench play now, it is a multi-bench play. So we're proud to have been a pioneer in proving economic development in the county.
CM: That's great. So you've talked about having about $1.3 billion in liquidity to go out on the hunt for some new M&A opportunities in that part of the Midland Basin. Talk to me about the opportunities you see out that way.
TG: So we're in a really good financial position to be able to look in the M&Amarket. As you mentioned, we have liquidity of about $1.3 billion, which is over 400 million of cash and an undrawn revolver of $900 million. So really we are actively looking to grow our company, both our inventory as well as our production. So we see that there has been consolidation in the area, but there are additional opportunities we think that could be after corporate consolidations close and they digest the assets and do portfolio rationalization that that could bring some deals to market. There's some other opportunities from a private side that we think will come to market in the future as well. And really we need to also be looking at things other than just the large acquisitions. We want to look at opportunities to continue to bolt on, continue to do grassroots leasing, testing new concepts, as well as farm-in opportunities for other operators as well.
CM: So on the grassroots ground game, organic leasing activity, what have you seen? I know that Dean sands has been an active target for operators in the area. I don't know if you have any Dean exposure in your current asset, but talk to me about what it's been like going out and finding new organic lease opportunities.
TG: Yeah, I mean there's been a lot of competition just in our area in general as obviously the economics are strong in the Midland Basin. There's been a lot of headlines around the Dean farther west of our position, and so there's been a lot of leasing in those areas as people are trying to find where the bounds of that play extend to just shallow zone potential across the basin is kind of a topic that a lot of people are investigating geological resources to try to delineate and figure out. So the Permian Basin continues to deliver and we think there is going to be opportunity in shallower sands in our acreage as well. But that's kind of something that we'll continue to test and study.
CM: Got it. Well, it sounds like that part of the Permian still has a lot of runway yet to go.
GM: Yes, it does.
CM: Awesome. Well, thanks so much for your time, Travis. We really appreciate it today. That's all the time we have today. For more head to HartEnergy.com.
Recommended Reading
Baker Hughes: US Drillers Keep Oil and NatGas Rigs Unchanged for Third Week
2024-12-27 - U.S. energy firms this week operated the same number of oil and natural gas rigs for third week in a row.
Baytex Completes Sale of Kerrobert Thermal Asset for $42MM
2024-12-23 - Baytex Energy’s divested Kerrobert non-core thermal asset can produce approximately 2,000 bbl/d of heavy oil.
Tracking Frac Equipment Conditions to Prevent Failures
2024-12-23 - A novel direct drive system and remote pump monitoring capability boosts efficiencies from inside and out.
Baker Hughes: US Drillers Keep Oil, NatGas Rigs Unchanged for Second Week
2024-12-20 - U.S. energy firms this week kept the number of oil and natural gas rigs unchanged for the second week in a row.
ProPetro Agrees to Provide Electric Fracking Services to Permian Operator
2024-12-19 - ProPetro Holding Corp. now has four electric fleets on contract.
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.