Ronnie Boudreaux, director of acquisitions and divestitures for Noble Royalties Inc., Addison, Texas, grew up in the oil and gas hub of Shreveport, Louisiana. He returned to his birthplace of Baton Rouge for college, attending Louisiana State University with a dual focus on business and environmental science. An early influence in his interest in an oil and gas career was his grandfather, who headed crude allocation in regions of the U.S. and globally during a 44-year career with Exxon.

Boudreaux joined Noble Royalties in 2006 as an internal new-market-development specialist for the acquisition team and is now the team's director. Before joining Noble, he was a national hiring manager for JP Morgan Chase.

Noble Royalties is the largest independent purchaser of royalty, overriding-royalty and mineral interests in the U.S. As a liquidator of royalties, the company provides sellers with an alternative source of capital that is cheaper than other financing options in the energy sector, notes Boudreaux. Recently, the company stepped outside its traditional model of purchasing income-producing assets to buy royalty interests in the Marcellus shale. More shale buys may follow: "We are currently looking at opportunities in the Marcellus, Utica, Eagle Ford, Bakken and Monterey shales."

Boudreaux's search for royalties and overrides takes him throughout the U.S. Oil and Gas Investor caught up with him recently to discuss industry and business trends.

Investor: What does your work with Noble Royalties involve?

Boudreaux: What doesn't it involve! I guess the short answer is, I prospect around the country trying to find individuals or companies who own royalties and/or overrides and who may benefit from selling all or part of their holdings. Most of my business development is done over the phone but I do travel quite a bit.

I attend about 10 trade shows a year looking for opportunities while keeping the Noble name out there. I also travel to meet with potential sellers early in the process as well as during the final stages of negotiations. Fundamentally, I am responsible for developing relationships.

Investor: Your job exposes you to many oil and gas plays and regions.

Boudreaux: In many respects that's the most interesting aspect of my job—getting to learn about the different fields and reservoirs. Because we buy all over the U.S., I am able to work on acquisitions from nearly all of the fields and get to learn the characteristics of each.

Investor: What are the toughest challenges today?

Boudreaux: The biggest daily challenge is trying to reset sellers' expectations about the value of their royalty property. Sellers tend to have inflated expectations that typically don't take into consideration the impact of dynamic commodity prices, coupled with production decline.

We are still seeing lasting effects from the high prices of 2008 before the downturn. Sellers want an offer based off of their checks from that period.

Investor: How are industry trends driving your business?

Boudreaux: Only recently, we began buying royalties in unconventional plays, in front of the bit. Previously, we always bought producing royalties that may have had an associated nonproducing element.

To some degree, this is in response to the shift away from dry-gas plays toward oily and liquids-rich areas. Being part of something that is growing is a better approach than being a part of something that is dependent on significant future price increases during uncertain times, just to achieve acceptable levels of production decline.

Investor: What's the rationale for selling royalties and overrides?

Boudreaux: Depending on the seller's situation, there are many benefits. The first is quick cash. Most sellers have other projects they can spend the money on and this is a way to get the capital they need without having to borrow it and bring on debt.

Investor: You are tuned into A&D activity—what's on the horizon?

Boudreaux: Activity is good. It is a little slow on the natural gas and coalbed-methane side but seems to be picking up. Oil, on the other hand, is above average. With oil prices hanging in around $80 per barrel, we have seen sellers more willing to get a deal done.

We have also seen a run to the market with interests in unconventional leasehold. This has to do with the enormous amount of expiring leases around the country in these plays and the owners' desires to take something off the table before it is too late.

We recently decided to start buying nonproducing royalty and overrides in some of the unconventional plays, but we're keeping an eye on all conventional, unconventional and emerging plays.

Investor: Your advice for young people contemplating a career in the energy sector?

Boudreaux: I encourage young people to get into the oil and gas business every chance I get. There is an entire generation of oil and gas professionals set to retire soon and it will be a tremendous loss to the industry if that knowledge is not passed on.