Jordan Blum, editorial director, Hart Energy: We are here at the SUPER DUG Conference & Expo in Fort Worth, Texas. I'm joined by Zach Fenton, the CEO of UpCurve Energy. Thank you so much for being here, I really appreciate it. So you all are quietly growing in the Texas Delaware Basin, Reeves County. You all are a combination of UpCurve I, UpCurve II. Can I get you to just introduce yourself and give the [company’s] origin story, so to speak?

Zach Fenton, CEO, UpCurve Energy: Yeah, you bet. Thank you for having me. So UpCurve I was founded in 2015, UpCurve II in 2021, both with Post Oak Energy Capital is our private equity sponsor. We've grown the position organically from the ground up. We've done farm-ins, acquisitions, a lot of leasing. We're at about 21,000 acres today. We produce about 13,000 boe/d of oil. We've been running one rig to two rigs just about most of our lifetime. That's a good pace for us. All of the positions that are in Southern Texas, Delaware [Basin], Reeves County in particular. We've drilled over 60 wells down there, which is more than any other existing private out there. So we think we've got a good sense of the basin and how to optimize it. We're developing currently Wolfcamp A, B and C as part of our base development program and always looking across the fence as new benches are being tested. We have significant inventory for multi-year development remaining, and we think we have it pretty dialed in at this point.

JB: Great. More than 60 wells for a smaller operator is a lot. I mean, you all have obviously been very busy. Can I get you to expound maybe a bit on just the growth plans, where you're going from here, [are you all planning on] staying in Reeves County, how do you see it?

ZF: Sure. So we've continued to grow organically for the last couple of years. We've been able to add a few thousand acres per year. We're very familiar with the landowner and the mineral owner situation in the basin and the technical understanding of where we're interested, what's underappreciated. We focus on where the larger operators are, where they're not and where they're diverting their capital. And so we've had a lot of luck and success growing organically that way. I think that's the plan. We will always look at bigger marketed deals. Those tend to be pretty competitive, especially right now. Our plans for this year is we will continue running our current rig. We've had that one rig going for two years and we have plans for a second rig for a few specific projects throughout the year. So [UpCurve will] probably average about one and a half rigs over the course of the year.

JB: Very good. Can you talk about private equity trends? Obviously there are fewer private operators and there has been a lot of consolidation. What y'all are looking at in terms of an eventual exit strategy?

ZF: We've lived through the lifecycle of that. The unconventional private equity model, when we started, it was a build and flip, lease a couple thousand acres, drill a few wells and sell it. Then it was build a business that could produce free cashflow and then it was build a long-term sustainable business that can have liquidity, whether via sale or shareholder distributions, dividends and recapitalizations. And that's where we are. I think every day it's our job along with our sponsor to evaluate what makes sense for the future, whether it's to pivot into distribution mode or to consider a sale. And that's something we always think about. In the meantime, we don't slow down our business development efforts and we spend half of our time looking at new deals, trying to add acreage, trying to add new farms-ins and we think that gives us a good runway and at some point in time if it makes sense to sell, then we'll go that route.

JB: Sounds good. Because y'all have been there for a few years, you've done a bunch of wells, things have evolved over time in terms of the wells. I wanted to get you to maybe elaborate a bit on how things have changed and what you're most excited about in terms of, take it where you want, drilling efficiency, lateral lengths, completion designs.

ZF: Yeah, for sure. For example, on completion design, it's evolved a lot since we started. Initially we're just trying to prove the productive capability of the rock and so we went with pretty aggressive intensive completions back in the 2016, 2017, 2018 timeframe and now it's as we know how productive it can be. Now it's very much focused on optimization: Shrinking our stage spacing, evolving the cluster spacing, trying to cut fluid out of the design. And so that's evolved a lot in each well. We're always tinkering and trying to fine tune and make it better than the last. I’m excited about a lot on the drilling side. Like I said, we've been running this one rig for two years and we're pretty dialed in with that. We just modified our casing design. It saves several days specifically in the intermediate section of the well, so I think our last pad was spud to TD about 16 days, which was the fastest in our company history and among the most competitive in the area. So we’re really just excited about what that team continuing to work together can continue to do and push it on the drilling side.

JB: Great. Well thank you so much for joining us here at Super DUG. We really appreciate it. To read and watch more, please visit online at hartenergy.com.

Comments