The best deals aren’t necessarily the ones with the greatest amount of acreage. Rather, at least two industry executives prefer deals that fit best with their company’s business plan.

“Ideally, your efforts are going to be part and parcel of a business plan that your company’s following,” said Dalton Smith, senior vice president at PetroQuest Energy Inc. “We’ll look at an opportunity and try to determine, does it fit with our current growth plans? What are we trying to do as a company? Does the opportunity fit with our current operational, technical, commercial strengths?”

Smith spoke as part of a panel discussion on deal screening at Hart Energy’s A&D Strategies Workshop on Sept. 5 in Dallas. His remarks echoed those of his fellow panelist, Mark Castiglione, vice president of business development at QR Energy LP.

“Before we do a full-scale evaluation and start commandeering resources internally, we try to make sure it’s going to be a good fit,” Castiglione said.

Castiglione and Smith said they also take into account factors such as whether a play is conventional or unconventional, and whether it is oil and gas while screening deals.

The methods appear to have paid off. Smith’s PetroQuest made a successful move from offshore Gulf of Mexico to onshore, and has racked up a 54,000-acre parcel in the Mississippi Lime.

“Our approach to valuation had to change,” Smith said. “We had to get a lot more comfortable valuing undeveloped acreage and large developments. We felt pretty adept at valuing assets in the Gulf Coast, and had to change our mode of thinking there. Second, land ownership is different in the Gulf of Mexico. You have only one landowner, either it’s the Fed or it’s the state. Moving onshore, particularly moving into Oklahoma and into East Texas, there were vastly larger numbers of leases and owners. We had to get very good at prioritizing leasehold value in order to make an efficient deal.”

Both executives warned against falling in love with a deal to the point of needing to have it at any price.

“Deals will come and deals will go,” Smith said. “You lament the ones you lose ... but the worst thing in the world is to do a bad deal.”