Article, page-2

Great catch, thank you! The company is being built to be sold over the next 3-4 years. With 65% insiders ownership, I expected it of course. They are businessmen and they do not want to become the next Exxon.

A few more points that I also enjoyed much:

- The company is going to increase its Eagle Ford position with additional acquisitions, thanks to its ample liquidity and its growing CF:

Bracken: Our primary mission is to build an asset of consequence in the Eagle Ford. In my view, optimally, there would be a 40,000-50,000 acre position.

Bracken: That type of organic growth has always been a part of our strategy, but also there are some smaller players that either don't have enough capital to prosecute everything they've got to drill, or they're flippers. There are companies who will drill five to 10 wells and then seek to monetize. What's good about our company today is that with an undrawn line of credit we're in a position to attempt to consolidate some of those smaller players.

- The CEO is quite confident and repeats once again that their CapEx for 2015 will be funded 100% out of cash flow. This implies that the drilling results from the new wells over the last 3 months continue meeting their expectations:

Bracken: From a capital standpoint, our intentions are that with our current asset base, that our capital program for 2015 and beyond would be 100% funded out of cash flow. We don't need external capital to prosecute development of our existing base, and frankly, we don't even have to spend a multiple of our cash flow which, I think, puts us ahead of the game in terms of our peers. Our capital ware withal beyond our cash flow is really reserved for additional opportunities in the Eagle Ford.


- They are quick in developing their properties, while controlling the costs without overspending:

Bracken: In our minds, we're always at the drill and development stage because time is the enemy of IRR. We're not in the business of becoming a land bank. Each time we bring a property into ownership we need to quickly convert it to cash flow with the drill bit.

Bracken: When we can bring reserves on-stream at capital costs of $15 to $25 of BOE, drilling new wells in the Eagle Ford makes our shareholders a lot of money. That's a recipe for success. It was the economics of this play over others that was important to our focus here, particularly if we could control costs. Equally important for us was our belief that the leasehold environment within the Eagle Ford—and more specifically the crude oil window—was conducive to acquiring additional properties. It's one thing to be able to drill a well and make excellent returns, but you've also got to be able to aggregate a position of consequence and our view was that both of those conditions were in place when we started to focus on the play in earnest.


-  They will make JVs with HK and APA to reduce their costs, increase the IRR of the wells and get the most out of their El Halcon acreage. They own 5,000 net acres at the "sweet spot" of the play (according to the map) right next to HK and APA:

Bracken: In the eastern Eagle Ford where Halcon and Apache are extremely active, most of what we've learned in the western portion of the play can be applied. We have met with some of the leading operators in Brazos County and have gone to school on some of the nuances of this area before we put the bit in the ground. We believe that we've gotten up the curve without the onus of having spent a lot of capital in what is a very new area in the history of the play. The plan is to have one or more of those operators as partners in wells that we'll operate. They'll then have a vested interest in transmitting their learning curve to us. We're hopeful that we'll get out of the chute in Brazos County with a high degree of knowledge about what it takes to make best wells there.