More than 560 attendees crowded into the Hotel ZaZa for the inaugural Houston Energy Financial Forum, Nov. 13-15, in what one speaker called, “a long overdue event for Houston and Texas.”
Designed along the lines of an IPAA oil and gas investment symposium, the Oil & Gas Financial Journal event showcased presentations of more than 50 exploration and production companies, drilling companies, and oil service providers to an audience composed primarily of industry analysts and investors. CEOs, CFOs and other top-ranking executives presented operational information and financial updates about their organization during the three-day event.
Individual delegates hailed from throughout the United States and Canada as well as the United Kingdom, Brazil, Ecuador, Peru, Nigeria, South Korea, and Switzerland.
In addition to breakout sessions following their presentations, presenting companies had an opportunity to meet individually with investors and analysts in special one-on-one rooms during the conference.
As of this writing, more than 800 people have logged on to the webcast, which is still available for viewing online at http://heff07.events.pennnet.com/fl/index.cfm.
The conference was produced by PennWell Corp. and Oil & Gas Financial Journal and was hosted by CIT. Other event sponsors included the American Stock Exchange, Cameron, Canaccord Adams, Enertia Software, Flotek, Gardere Wynne Sewell, Texas Capital Bank, and Weaver and Tidwell. Participating sponsors were Energy Capital Solutions, Oil & Gas Business Solutions Inc., and TC Technologies.
Next year’s Houston Energy Financial Forum is scheduled for Nov. 11-13 at The Houstonian Resort Hotel and Spa in order to accommodate a larger gathering of delegates, said OGFJ Associate Publisher Nicole Durham. “We are overwhelmed by the success of this first-year event,” she said.
Host sponsor CIT kicked off the event with an overview of the current economy and specifically the oil and gas industry.
“Conditions are fluid,” said Larry Derrett, CIT managing director. “There are approximately $45 billion of write-offs tied to mortgages this year and more to come. The market has become more conservative as investors tread cautiously in 2008.”
The value of institutional leveraged loans has fallen from $204 billion in the second quarter of 2007 to just $68 billion in the third quarter, said Derrett. “However, E&P companies still have a lot of capital available to them, and they’re not feeling the pinch the ways other areas of the economy are. Hedge funds and non-traditional investors are willing to hold large positions in oil and gas companies.”
Derrett added, “There are fewer underwritings and more ‘clubbed’ deals. All of you can rest assured that good deals will get done at reasonable pricing and covenant levels.
Here are excerpts from just a few of this year’s HEFF presentations:
New Frontier Energy
Paul Laird, president of Colorado-based New Frontier Energy, said that this year his company will “double or triple” its reserves. New Frontier focuses on coalbed methane production in the Slater Dome field and adjacent areas near the Colorado-Wyoming border. Laird believes the opening of the Rockies Express Pipeline “will create a whole new takeaway for us as far as gas prices are concerned.” Gas prices in much of the Rockies have been depressed due in part to the inability to move gas to major markets in the East and Midwest.
Basic Energy Services
Midland, Tex.-based Basic Energy Services offers a variety of energy services designed to help its customers maintain production. The company focuses on the central part of the US from the Canadian border to Mexico and has 4,500 employees. “We also operate a [contract] drilling business and a production company,” said Ken Huseman, Basic’s president and CEO. “We have the third-largest fleet of workover rigs in the US. Our fluid services business operates over 600 trucks involved in transferring fluid to wellsites around the country.”
Max Petroleum
Formed in April 2005, Max Petroleum operates in Kazakhstan, which CEO Jim Jeffs calls “the most attractive country [for investment] in the former Soviet Union. “Our corporate strategy is a portfolio approach to explore and develop shallow, intermediate, and deep targets across three license areas,” said Jeffs. “We have a very strong relationship with the government and good local partners. We export about 80% of our production and are the most liquid stock on the AIM exchange.”
Cimarex Energy
“We’re primarily a drilling and production company with about a $3.3 billion market cap and like to carry a healthy balance sheet,” said Tom Jorden, executive vice president of Denver-based Cimarex Energy. Cimarex has typically not been an unconventional player, but this year the company is looking at several plays, including the deep Wofford shale play. The Permian Basin has become Cimarex’s single biggest operating arena, said Jorden.
ATP Oil & Gas
“Last year we tripled production that took us 15 years to build,” said Paul Buhlman, chairman and president of ATP. “Next year, we will double this year’s production.” He added that the company has a deep inventory of domestic deepwater projects and that opportunities are “exceedingly robust.” Forty-three percent of ATP’s reserves are in the North Sea and the rest are in the Gulf of Mexico. “We maintain a consistent operating margin, even in a drastically changing price environment,” said Buhlman. “We are very hedged.”
Endeavor International
“Endeavor has grown from an idea on a napkin to a company with $120 million in cash flow per year that produces 10,000 bbl of oil per day,” said Michael Kirksey, executive vice president and CFO. Kirksey said that Endeavor is only about three years old will be a 15,000 to 20,000 bbl company in three to four years. “We’ll spend about $75 million in capex this year,” said Kirksey, who adds that the company will be listed on the London Stock Exchange by the end of the year.
Boots & Coots
With more than 400 employees, Houston-based Boots & Coots maintains offices in the US, Venezuela, Algeria, Egypt, Congo, and Dubai. The company provides an integrated suite of pressure control and related services to onshore and offshore production and development companies. CEO Jerry Winchester pointed out that Boots & Coots is much more than a company that puts out well fires. “We are in the pressure control and prevention business,” he said. “Our old business model was sitting around waiting for the phone to ring and getting calls from people who didn’t want to call us. Well, we liked the margins, but we didn’t like the volatility. Today, emergency response service represents about 10% of our business. The rest is prevention and risk management.”
