Hart Energy: Let’s start off by having you talk about the company and really targeting the Eagle Ford. If you can discuss that history there with us.
Branden Kennedy: Venado was formed in late 2016, acquired the first assets in late 2017. So on the face it appears to be only two to two-and-a-half years old though when you look around the management team and the experience we have, they have 15, 20 and 30 years experience by person in the Eagle Ford. This is really a continuation of all the efforts, learnings, career work all these professionals have had over their entire working adult lives. So yes, Venado is young but they're not new to the Eagle Ford.
Hart Energy: Can you talk to us about how pricing and fast cycle times really factor into focusing and targeting the Eagle Ford?
Branden Kennedy: Everybody wants to talk about in the public domain, the Permian and “Permania” and for us there the returns that were able to realize in the Eagle Ford compete with and sometimes exceed those of the Permian. One the reservoir is fantastic. I am not a subsurface technical person but what I've seen on the productivity of the wells is phenomenal. The ample pipeline capacity out of the basin. We're not dealing with basin differentials for crude or gas on the negative side. WTI in the Permian, sometimes blows out to $15 to $17 dollars a barrel. We get premium pricing above WTI. On the natural gas side, we're not dealing with Waha as well. We get Houston Ship Channel pricing. Additionally, the experience we talked about previously. The Eagle Ford was one of the first Shale basins developed as such it has the most experience, the most history. So our operations folkd, their ability to compress those cycle times, continue to do more with less and drives itself right out of the bottom line.
Hart Energy: Are there any industry trends that concern or motivate the company? Can you speak to any of that?
Branden Kennedy: The biggest industry trend that we see and feel somewhat like we are leading is the transition on the business model. There have been so many on the private equity portfolio companies. They were built for a three, four or five your exit and that just hasn’t happened. We're hearing about the various capital providers pulling assets out from underneath teams. They're having to combine teams to get synergies and scale instead. Venado, they pride themselves on being ahead of that. We took the fork in the road years ago. We decided we wanted to build a real business. Cash-flow based and paying out distributions.
Related videos:
DUG Eagle Ford: Well Interference, Focus On Drilling Inventories
DUG Eagle Ford: SilverBow Rebranded, Diversifying
DUG Eagle Ford: Returning To The Play, Lessons Learned
Recommended Reading
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
Crescent Energy: Bigger Uinta Frac Now Making 60% More Boe
2024-05-10 - Crescent Energy also reported companywide growth in D&C speeds, while well costs have declined 10%.
US Drillers Cut Most Oil Rigs in a Week Since November
2024-04-26 - The number of oil rigs fell by five to 506 this week, while gas rigs fell by one to 105, their lowest since December 2021.
US Drillers Add Most Oil, Gas Rigs in a Week Since September
2024-03-15 - The oil and gas rig count, an early indicator of future output, rose by seven to 629 in the week to March 15.
US Drillers Add Most Oil Rigs in a Week Since November
2024-02-23 - The oil and gas rig count rose by five to 626 in the week to Feb. 23