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How to Become a Successful E&P Independent In Three Simple Steps
Step One•Be Smart
Step One•Be Smart
Step Two•Work really, really, really hard
Step One•Be Smart
Step Two•Work really, really, really hard
Step Three•Don’t go broke
My BackgroundB.Sc. Geophysical Eng., Colo. School of MinesMBA, Univ. of Houston
My BackgroundThe Superior Oil Company• Prospect Generation, Gulf Coast offshore
My Background The Superior Oil Company• Prospect Generation, Gulf Coast offshore
Mobil Oil• Prospect Generation, Indonesia & Nigeria• Invested in stock market• Made decision to be an independent E&P
My Background The Superior Oil Company• Prospect Generation, Gulf Coast offshore
Mobil Oil• Prospect Generation, Indonesia & Nigeria• Invested in stock market• Made decision to be an independent E&P
Edge Petroleum• Prospect Generation, TX/LA onshore• Learned the independent game• Invested in stock market to create seed
capital
My Background The Superior Oil Company• Prospect Generation, Gulf Coast offshore
Mobil Oil• Prospect Generation, Indonesia & Nigeria• Invested in stock market• Made decision to be an independent E&P
Edge Petroleum• Prospect Generation, TX/LA onshore• Learned the independent game• Invested in stock market to create seed
capital Founded KiwiEnergy in 2000
Process for getting Kiwi Up and RunningEntity - Legal and Tax Issues• Limited Partnership with LLC as General
Partner Accounting• Outside accountant for bookkeeping, tax and
audit work
Opening Strategy for KiwiEnergyTake promoted deals off the street• Focus on TX/LA onshore Tertiary
2000-2003 – Getting startedNetworked like mad
2000-2003 – Getting startedNetworked like mad Screened hundreds of prospects
2000-2003 – Getting startedNetworked like mad Screened hundreds of prospectsTook small working interests in good deals• Invested nearly entire savings• Drilled 54 wells, 31 commercial successes
2000-2003 – Getting startedNetworked like mad Screened hundreds of prospects Took small interests in good deals• Invested nearly entire savings• Drilled 54 wells, 31 commercial successes
Created a prospect inventory and cash flow spreadsheet (Excel)
2000-2003 – Getting startedNetworked like mad Screened hundreds of prospects Took small interests in good deals• Invested nearly entire savings• Drilled 54 wells, 31 commercial successes
Created a prospect inventory and cash flow spreadsheet (Excel)
Established a cash flow stream• Reinvested 100+% of cash flow
2000-2003 – Getting startedNetworked like mad Screened hundreds of prospects Took small interests in good deals• Invested nearly entire savings• Drilled 54 wells, 31 commercial successes
Created a prospect inventory and cash flow spreadsheet (Excel)
Established a cash flow stream• Reinvested 100+% of cash flow
Established a reserve-based line of credit with Amegy Bank
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a
3D survey in Jefferson County
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a 3D
survey in Jefferson County Started generating prospects – onshore Tertiary
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a 3D
survey in Jefferson County Started generating prospects – onshore Tertiary Sold down to manage risk
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a 3D
survey in Jefferson County Started generating prospects – onshore Tertiary Sold down to manage risk Expanded 3D data base through purchase and
trade
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a 3D
survey in Jefferson County Started generating prospects – onshore Tertiary Sold down to manage riskExpanded 3D data base through purchase and
tradeHired generators, landmen, engineer, admin
2004-2007 - GrowthPartnered with Square Mile Energy to shoot a 3D
survey in Jefferson County Started generating prospects – onshore Tertiary Sold down to manage riskExpanded 3D data base through purchase and
tradeHired generators, landmen, engineer, adminDrilled 146 wells, 82 commercial successes
2008-2010 – Diversification and Oops Significant investment in Marcellus shale
2008-2010 – Diversification and Oops Significant investment in Marcellus shale Larger per-well investments
2008-2010 – Diversification and Oops Significant investment in Marcellus shale Larger per-well investmentsBorrowed heavily in 2009 to service cash calls
on commitments made in 2008 - Oops.
2008-2010 – Diversification and Oops Significant investment in Marcellus shale Larger per-well investmentsBorrowed heavily in 2009 to service cash calls on
commitments made in 2008 - Oops. Drilled 85 wells, 61 commercial successes
Mistakes Letting emotions affect investment decisions
Mistakes Letting emotions affect investment decisionsNot hedging to ensure revenue for committed
capital requirements
Mistakes Letting emotions affect investment decisionsNot hedging to ensure revenue for committed
capital requirements Straying from my sandbox without a trusted,
proven partner
Lessons Learned Look back each year• What worked, what didn’t?
Lessons Learned Look back each year• What worked, what didn’t?
Establish technical, economic and people thresholds and don’t relax criteria
Lessons Learned Look back each year• What worked, what didn’t?
Establish technical and economic thresholds and don’t relax criteria
Develop and use a cash flow forecasting tool to help manage cash and risk with an eye on capital commitments
Lessons Learned Look back each year• What worked, what didn’t?
Establish technical and economic thresholds and don’t relax criteria
Develop and use a cash flow forecasting tool to help manage cash and risk with an eye on capital commitments
Trust your instincts
KiwiEnergy is your partner of choice for high-quality, onshore, Gulf Coast
Tertiary prospects.
www.kiwienergy.com
