We pursue a value-driven growth strategy focused on projects that we believe will generate strong and predictable rates of return and increases in stockholder value. We believe that we should be the operator of the majority of our properties in order to control costs and direct the efficient development of such properties in an effort to optimize investment returns and profitability. We also believe that a reasonable level of diversification in our asset base is preferable to that of a single basin focused company as it may provide us the ability to take advantage of regional changes in realized prices, service costs, service availability and numerous other factors that may affect the most cost-efficient and economic development of our assets. Management concentrates on building production, reserves and cash flows while continually seeking to expand our undeveloped acreage and drilling inventory in select targeted areas. Further expansion of our asset base will be achieved through cost efficient development, exploitation and operation of our current assets and acreage and through additional leasing, acquisitions, development drilling and exploration activities, currently directed toward oil-weighted projects. Finally, management intends to pursue corporate and asset acquisition opportunities.
Our business strategy includes the following:
- continuing the cost-effective development and exploitation of existing acreage positions with a particular attention to properties located in the Wolfcamp, Eagle Ford, Bakken, and Three Forks formations;
- expanding our acreage positions and drilling inventory in our areas of primary interest through acquisitions and farm-in opportunities, with an emphasis on operated positions and selective non-operated participations with capable operators;
- generating additional exploration and development projects in our areas of primary interest;
- pursuing value-accretive corporate merger and acquisition opportunities;
- selectively divesting non-core assets in order to streamline operations and utilize capital and human resources most effectively; and
- obtaining additional capital, as needed, through the issuance of equity and debt securities or by soliciting industry or financial participants to jointly develop and/or acquire assets.
Our fundamental operating and technical strategy is complemented by our focus on increasing stockholder value by:
- maximizing profit margins;
- controlling capital expenditures and operating and administrative costs;
- promoting industry or institutional participants into projects to manage risk, enhance rates of return and lower net finding and development costs; and
- maintaining a sound capital structure.
Management believes its strategy is appropriate because it:
- addresses multiple risks of oil and gas operations while providing equity holders with upside potential; and
- results in “staying power,” which management believes is essential to mitigate the adverse impacts of historically volatile commodity prices and financial markets.