HOUSTON -- During Goodrich Petroleum Corp.’s (NYSE: GDP) massive acreage buildup in the Tuscaloosa Marine Shale (TMS), Robert C. Turnham Jr., president and chief operating officer, would occasionally get hit with questions or outright disbelief about the play.

“People would walk up to me and say, ‘I can’t believe you’re putting the big acreage block together in the TMS. The clay content is too high,’” Turnham said.

Clay, which varies in absorbency, can hinder the effectiveness of hydraulic fracturing by soaking up fluids.

Still, the Houston company has amassed more than 300,000 net acres in the TMS, largely on the cheap at $185 per acre.

Turnham said what no one bothered to scrutinize was the data. About 1,200 wells have been drilled in the area since 1962 and more recent but ineffective frac jobs produced a landslide of information.

Goodrich’s team learned that the clay they would be burrowing into was far less absorbent.

Heading into 2014, Turnham is clearly confident, comparing the TMS to the Bakken.

“We drilled a 100,000 barrel equivalent marquee well in the field” in the TMS, he said earlier this month at Winter NAPE. “That compares to 10 months before the Bakken wells get (to 100,000 barrels). No question, the resource is there.”

Goodrich makes it a habit to move fast and early, buying acreage cheap and capturing a price advantage on royalty payments.

In 2010, the company was 97% natural gas when prices collapsed and skittered companies across the map. Turnham said the companies could either wait for gas prices to turn around -- which wasn’t an option -- or “go find some oil.”

Sustaining the oil and gas revolution and unconventional plays presents companies with a choice.

“If you’re balance sheet is in very good shape you can afford to wait, let someone else take some risk, come in buy the acreage, pay up a premium but pretty much know what you’re going to get,” Turnham said.

Goodrich isn’t built that way. Its strengths are in engineering and geology.

The company turned to the Eagle Ford, and despite skepticism “that’s worked out quite well for us,” he said.

Now the company is planning to tap the TMS with as many as 60 wells, up from 15 in 2013.

Goodrich Estimated And Preliminary Budget

2013 ($MM)

2014 ($MM)

Tuscaloosa Marine Shale

$75

$300

Eagle Ford

100

30

ART / Haynesville

35

30

Leasehold Acquisition / Extensions

45

15

Total

$255

$375

The TMS has seen its share of selloffs, including the 2013 divestment by Devon Energy Corp. (NYSE: DVN). Goodrich bought Devon’s 185,000 net acres for $26.7 million, with Devon retaining a 33.3% working interest in the properties.

The task remains to improve the economics of the play. Wells cost about $13 million and Turnham said reducing those costs is fundamental. In the Eagle Ford, the company was able to use drilling efficiencies, pad drilling and other cost savings to reduce D&C costs by $3.8 million in two years.

The TMS $13 million well economics are “currently working,” though that’s partly that’s due to the oil’s Light Louisiana Sweet price basis.

Turnham wants to improve.

“The prize for us in the TMS is to prove consistently that the economics are very similar to the Eagle Ford,” Turnham said. “If we can do that in the right commodity price environment, we’ll see acreage values skyrocket.”

Even selling at $5,000 an acre would equate to $35 a share for Goodrich, he said.

Goodrich is an independent exploration and production company that drills for, acquires, develops and produces natural gas and crude oil primarily in the Haynesville and Cotton Valley Trend in East Texas and North Louisiana, the Eagle Ford and the TMS of South Mississippi and Louisiana.