Meet Alex Eagle

The Permian Basin is booming, and like other smaller independents operating on the eastern shelf, Clear Fork Inc. has watched activity creep closer to its longtime area of focus in Nolan, Fisher and nearby counties. The family-owned and -operated E&P was founded by Alex Eagle’s grandfather and father 30 years ago and in 2010, after working as a landman in the Barnett shale play, Eagle returned to Abilene to join his father in the business.

Eagle grew up near his family’s 10,000-acre-plus Alexander Ranch, and graduated from Abilene Christian University with a degree in business. The Barnett shale was thriving during his time as a landman in Fort Worth, and his interest in working in oil and gas was solidified.

Clear Fork Inc. has grown steadily using the acquire-and-exploit model. Today its 200-some wells are mainly in Nolan, Fisher, Coke, Shackleford and Stonewall counties. Eagle heads up the land department but wears many hats as he learns more about the production and operation side of the business. “It’s a unique opportunity in that because of our size and structure, I’m exposed to nearly every aspect of the industry,” he says.

Today, as oil and gas operations move east across the Permian Basin with the increasing focus on the Cline shale and other pays, Devon Energy Corp., FireWheel Energy LLC, Gunn Oil and other companies have led a land rush that initially caught local companies by surprise. And, it has changed the economics of operations, intensified competition for services and heightened costs. But smaller independents are putting on their thinking caps, being creative, and finding the next opportunity, as they always have.

In a recent interview, Eagle talked about Clear Fork’s business and how it plans to move forward.

Investor How did the acquire-and-exploit model help Clear Fork grow?

Eagle We purchased EVB Field in Nolan County from Hunt Oil Co., and it turned out to be a company-maker for us—we developed it and found a lot of opportunities in the Canyon Sand and Palo Pinto Reef.

In 2009, we bought Sinclair Oil’s Nolan County production and it’s been a great deal for us. We are currently working it over, and on some of the leases we have doubled production by operating more efficiently. This acquisition includes about 30 wells producing from multiple conventional reservoirs.

We’ve had great success after acquisitions, finding behind-pipe opportunities and drilling the PUDs (proved undeveloped reserves). Our goal is to continue to grow the company by this model and we are always looking for deals.

Investor What plays have you been in traditionally?

Eagle We’ve drilled conventional, fairly shallow sands and limestones—Canyon Sand, Palo Pinto Reef, Tannehill sands, Cisco and Strawn sands. We are currently producing about 1,000 barrels per day. We’ve found as an operator, it’s beneficial for us to be close to home. We drilled about eight wells this year. What’s exciting is to see some of these unconventional plays and technology that have been developed in the shales moving east toward us. We’re trying to figure out ways to apply that technology to these conventional reservoirs that have had proven production for years. The Cline shale has been the new exciting thing out here. In late 2011 and 2012, there was a lease land grab. Half of Fisher County was leased in a couple of months. It makes the economics on conventional prospects more challenging, because we’re not putting together nearly the amount of acreage that a resource player does.

Investor How are you responding to these changes?

Eagle We’re just finishing putting together an acreage position. We had to work a lot harder and pay more than in the past. We have found, however, that being a local operator is very helpful and gives us an advantage when buying leases. We’re gathering geophysical data and doing research to get our game plan for the next three to five years in place. We are currently reprocessing 3-D seismic data over our acreage position and are excited about our initial results. We are optimistic that this play will provide us with significant growth through the drillbit.

Investor How is the new activity developing so far?

Eagle There have just been a couple of wells drilled so far—one has been completed in Fisher County—so it’s still early. Laredo and FireWheel are drilling some good wells in Sterling and Mitchell counties. They seem to correlate to the same formation, so people are keying off those results as to what they’ll do in Fisher and Nolan. Our perspective is that it’s going to be years before the potential of the Cline is proven, but it is very exciting to be right in the middle of it.

Investor How have you financed your operations?

Eagle We bring in working-interest partners, and today we have stronger cash flows than when we started, so we can participate at a greater risk level. We’re fortunate to have a group that we’ve done deals with for years. The majority have been investing with us for 10 to 20 years. It’s a great way to do business, through relationships with people we trust.