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PetroQuest Interview

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Tue, 16 Dec 2008|

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Welcome to the Houston energy financial forum. I'm -- hours editor -- gas financial journal. I'm here today with Alexander. Chief financial officer for petroquest out of Lafayette Louisiana. Todd tell tell our viewers if you would what message you -- to convey to our audience today and investors and analysts. Well we're obviously in a very. An unprecedented time with the capital markets and economy. I in the state that it's again. -- gas seems to be an industry where we're gonna continue to Tom. -- I was thing I think that we'll have more downturn with the commodity price pullback. But investors should take solace in that. We do -- finite resource and he will. We will continue to base -- resources and make some money and as long as we obviously he's our dollars and spin them wisely. We're gonna continue to make money as an -- What are some of the core areas which are operating -- right now. At that of course we're firmly planted in the Gulf Coast and -- we. Significant -- exposure which is what for jail in Oklahoma. Fayetteville shale in Arkansas. And then we had about 50000 net acres instead. So salsa okay. And that represented change about. What three or four years ago he divested some of your assets and decided to move into these resource plays can explain why. Yes correct in 2003 we really started a functional transformation. As a company. And as a management team we decided to start point capital into the resource friends really to diversify the company into more of -- longer -- company that has the -- to assess that as a few week. But the focus has great rates of return however there's much more exploration risk involved so. We felt like the decision at the time to get into these resource -- because they are the wave of the future and we are going to be burning. Century. And like the cash flow from the gulf it's the capital markets and -- -- state of flux and we like inventory and our shale -- small -- there. -- something he mentioned the economic downturn. Can you explain a little bit how that's affected your company so far and how it might affect your drilling budget cap expenditures in the coming here. We thankfully -- in the negotiations with a very solid group of banks where we clothes that you facility October 2 this year right. Not in the middle but maybe on the front end of the crisis that we find ourselves so from credit facility standpoint we were pretty fortunate to have that -- From the drilling standpoint from a cash flow standpoint. We're gonna commodity business and gas price and -- -- off dramatically. Hue Hannity significant portion of our production. However we see cash flows in camp X budgets being cut pretty dramatically next year. Just because the capital markets are shut down from the standpoint of the cost of capital so great right now. The projects at these prices can't match those that cost of capital center. We're gonna stay within cash flow next year it's a variety strategy that we really lived within from the drilling standpoint for the last few years. So it's not that we're changing our drives we're just gonna be very diligent in making sure we do that okay. Could you elaborate a little bit on some of your goals for next here well we want to grow production wanna grow reserves -- we want to grow liquidity more than me. Because liquidity in this game it seemed like as the most important issue com. We feel like with the cash flow that we're generating in the projects that we -- we can grow -- Hillary. But I would say that liquidity number one but production reserves are closer okay. One final question. Can you explain a little bit about. Your need for. Recruiting new employees and self worth and whether that's difficult -- picked up. What what's the situation petroquest right. We have been somewhat successful in hiring new employees however especially up until about -- months ago. Our wrote our rate of growth was so great that we were we were looking to -- for her stats by twenty and 30% -- which was getting very difficult. It is a integrating industry and there or there's a big -- people hand. -- the history didn't get hot until about five or six years ago goodness that we have a time -- I think as a small cap company that is demonstrated some good returns and have a somewhat of a niche that were able to attract talent. And also we're located in Houston Lafayette and -- The left in Tulsa cities people just like to live there -- -- Houston's city were competing with a lot of larger companies as for the small company aspect comes and play. So. We are gonna continue to be challenged hiring people but. We felt like we got the people we've got a good team and always we've got a good management team plays. And over time will -- people. That -- -- employees you have right. We got just over a hundred maybe under 510 currently holds on its ability thanking -- -- for your time thanks a lot. -- --

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