Who’s Who in E&P A&D: Peter J. Pampalone, Beech Resources

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Peter J. Pampalone’s career in oil and gas spans nearly a decade and four separate seats in the CFO position, including his current job at Beech Resources LLC.

To that title, Pampalone also adds dealmaker.

Beech, a small Marcellus Shale operator, founded by former Markwest Energy Partners president, CEO and chairman John Fox, holds 8,500 leasehold acres in Lycoming County, Pa. Beech began its acquisition stage in 2016 and has since pursued a continuous leasing program.

“We leased that up organically,” he said. “So we continue to acquire acreage.”

Despite its size and modest drilling program, the company continues to scout for assets as it builds a fledging operation into what the company intends to be a first-class operator.

“We are always talking to people in the area and in the neighborhood to try to see if there might be some, some interest to work together,” Pampalone said.

Even with price volatility, Pampalone said the A&D market has loosened up at least a bit, and buyers are beginning to again place value on undeveloped locations.

“You’re not going to get 50% or more value valuation on PUDs [proven undeveloped reserves], but what you are kind of seeing is a maybe a PV30 on your undeveloped locations, regardless of whether it’s a probable possible [reserves] or a PUD, and then they’re applying kind of a discount on, in addition [of] maybe a 30% to 50% discount,” he said. “So you’re getting some value. You’re not getting a real robust value for those undeveloped locations, but, you know, you’re getting something.”

Beech Resources’ goal is to develop a company that eventually either attracts a potential acquirer or finds an opportunity to merge with one of its neighbors and gain enough scale to potentially enter the public markets through an IPO.

“That opportunity as an exit strategy is definitely on our radar screen,” he said, “although right now what we're trying to do is develop through the drill bit and increase our production, increase our cash flow.”

For a road map to the A&D point person for oil companies, big private players and newer upstream companies check out Who’s Who in E&P A&D 2021.

As of April, the company was producing about 15,000 Mcf/d with expectations to grow that year-over-year by 50,000 Mcf/d. The company is in the midst of a four-year, $40 million drilling program.

And, as CFO, Pampalone orchestrated the financing to make the drilling program possible in 2021, as the world was still shaking off the mothballs from the pandemic.

“It was a very difficult time to be the market raising capital,” he said. “We raised it through multiple sources” including an RBL as well as more than $20 million in equity capital.

Beech Resources is now in operational mode, drilling wells. In April, the company was about halfway through its drilling program.

“We’re all pretty excited for how they could come out,” he said. And, as the results come in, “we are always talking to people in the area ... to see if there might be some interest in working together.”