With this issue of Oil & Gas Financial Journal, PennWell Corp. has joined forces with John S. Herold Inc. to provide our subscribers with news and information regarding a long-overlooked sector in the energy industry - privately-held E&P companies. John S. Herold, a highly regarded research firm with headquarters in Greenwich, Conn., will furnish production data and other information for the OGFJ100P reports, which will be published six times annually.
Information is readily available about public companies because they are highly regulated and public disclosure is a requirement, but private companies tend to keep their business confidential and out of the public domain.
As a service to our readers, OGFJ will gather and publish as much relevant information as we are able to obtain about privately-held oil and gas companies. Our intent is not to invade the privacy of these firms, but rather to make it easier for them to grow their business and continue the search for much-needed hydrocarbons to fuel the economy by connecting with the investment community. We hope our reports will help facilitate these connections.
This edition of the OGFJ100P includes year-end 2004 production data and other information about 122 private oil and gas companies. Over time, we expect to expand the information offered as well as the number of companies included in the report.
The top-ranked company on the July list is Aera Energy LLC of Bakersfield, Calif. Aera was far and away the leader in total production (boe) for 2004, topping the nearest competitor by almost 44.5 MMboe. In fact, Aera’s total of more than 83.6 MMboe more than doubled production from the second-ranked company on the list - Merit Energy Co. of Dallas. Merit had a little more than 39.2 MMboe in 2004.
Aera Energy, which began operating on June 1, 1997, is one of the largest oil and gas producers in California, accounting for roughly 30 percent of the state’s production. The company’s production is centered in the San Joaquin Valley with additional operations in the LA basin and in Ventura and Monterey counties. Aera produces nearly 210,000 b/d of oil and 75 MMcf of natural gas daily and has proved oil and gas reserves equivalent to more than 900 million barrels of oil.
Aera Energy LLC is a limited liability company that is jointly owned by affiliates of Shell Oil Co. and Exxon Mobil Corp. However, Aera is operated as a stand-alone company with its own board of managers (directors) and is a private company by most definitions.
Still, it is quite large for a private company, employing more than 1,100 people and hundreds of contractor companies. Annual revenues for 2003 (the last for which we have financial information) are estimated to total $2.23 billion, an increase of 23.5 percent over the previous year.
Merit Energy, founded in 1989, produced nearly 14 MMboe more than the third-ranked private E&P, Houston-based Hilcorp Energy Co. The Dallas firm has producing oil and gas properties in 13 states, Canada, and the Gulf of Mexico. The company claims to have “in excess of $4.0 billion in committed equity capital” under management and approximately $2.9 billion in total assets. Proved reserves total 411 MMboe, according to the company, and operated oil production is in excess of 100,000 b/d. The company employs about 430 people and has 14 field offices.
No. 3-ranked Hilcorp Energy is a private Texas corporation formed in 1988 that operates more than 90 percent of its properties. Since its inception, Hilcorp claims to have consummated more than 260 acquisitions. The company’s producing properties are concentrated in the Gulf Coast areas of Texas and Louisiana. In 2004, Hilcorp’s total production stood at nearly 25.3 MMboe. Although the company’s financials were not available to OGFJ, it reduced debt from $487 million at year-end 2003 to $275 million as of Dec. 31, 2004. Hilcorp has a staff of about 350 employees.
Yates Petroleum Corp. of Artesia, NM, is the fourth-ranked private E&P with just under 20 MMboe in production during 2004. One of the oldest continuously operating oil and gas firms in the US, Yates was founded in 1935 and has about 425 employees today. Financial figures are hard to come by, but one source estimated the family-run company had $230 million in revenues in fiscal 2003. An Associated Press story in 2004 said that Yates Petroleum is “by far the biggest owner of oil and gas leases on public lands in the United States.” The Yates family fortune has been variously estimated at between $350 million and $600 million.
The fifth-ranked private E&P is Walter Oil & Gas Corp., headquartered in Houston. The company reported just over 19.3 MMboe in production in 2004. Founded in 1986, Walter Oil & Gas has an estimated 50 employees and is an active producer in the Gulf of Mexico, although two of the company’s gas pipelines were badly damaged by Hurricane Ivan in 2004, resulting in a lengthy shut-in of production. Sources estimate that Walter Oil & Gas had total revenues of approximately $41 million in 2004.
Rounding out the top 10 private producers in 2004, in descending order, are Hunt Oil Co. of Dallas (18.5 MMboe); Samson Lone Star LP of Tulsa (17.3 MMboe); Samson Resources Co., Tulsa (12.6 MMboe); Kaiser-Francis Oil Co., Tulsa (10.8 MMboe); and Fort Worth-based Bass Enterprises Production Co. (10.7 MMboe). OGFJ
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John S. Herold Inc. provides data for report
