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Three Allen Center  333 Clay Street, Suite 1000  Houston, Texas 77002  (281) 774-2000  FAX (281) 774-2199  Jack Schanck Chief.

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Presentation on theme: "Three Allen Center  333 Clay Street, Suite 1000  Houston, Texas 77002  (281) 774-2000  FAX (281) 774-2199  Jack Schanck Chief."— Presentation transcript:

1 Three Allen Center  333 Clay Street, Suite 1000  Houston, Texas 77002  (281) 774-2000  FAX (281) 774-2199  Jack Schanck Chief Executive Officer David Bole President

2 1 Overview  SouthView Energy overview  Who we are  How we got started  Value creation experience  Public company  Private company  Cash return focus  What are we looking for?  Investment return focus  Emphasis on sound technical and financial evaluations  Develop long-term relationships  Complementary relationships with other capital sources  Opportunity for cross-referrals  Separate entities with similar objectives/share market insights  Non-competing products A new company formed in 2005 1

3 2 Who We Are  North American Upstream Investment Fund targeting drilling deals in the $2MM to $20MM investment range  Low to moderate technical risk  Project specific deals (e.g., multi-well drilling program)  Incubation deals – Invest in growing new companies  Prospect generation teams  Capitalization  $50MM initial funding provided by Jefferies Capital Partners  Potentially scaleable with easy access to funding  Option to add additional $50MM  Our concept is a technical lead approach to drilling investment participation  Deep industry knowledge  Willing to share a drilling risk  Participate with people we know  Target areas and plays that we know  Create value via the drill bit Focus on domestic drilling deals

4 3 How We Got Started Climbing the ladder to head a large company; running a big private company; starting an independent E&P company Growing number of independent and start-up E&P companies Public and private independents Major companies and large independents SouthView Energy LLC Samson Resources Company Unocal Corporation 5

5 4 Primary Target Areas East Texas/ North Louisiana Mid-Continent Permian Basin Upper Texas Gulf Coast Focus on active areas with high quality deal flow – leverage our existing knowledge

6 5 Investment Focus  Exclusively domestic upstream opportunities  Lower risk, close-in drilling deals (development and small “e”)  Types of investments:  Project specific, e.g., a multi-well drilling program; leverage with portfolio debt as appropriate  Incubate a company  Hybrids: could encounter some projects that have the ability to leverage into optionality Land investments Technology investments Prospect generation  End Game  Project Specific deals (30% to 40% of capital) expected to result in leveragable streams of cash flow  Incubation deals (60% to 70% of capital) expected to grow companies for continued growth for future financial gain A-2 We are a non- operating industry partner

7 6 General screens  North America upstream only with a bias toward natural gas  Less future price volatility expected due to supply bottlenecks  Small “e” and development  Multiple pay areas  Not interested in single zone objectives  Known/proven oil and gas finder – we want to see track records  “Known by one of us, or by someone we trust”  Project specific deals are stand alone events with good returns that are leveragable  Providing cash flow streams to grow company  Could become hybrids with sufficient critical mass  Incubation/hybrid deals have sustainable growth – plan for 36 to 40 months  Land  Technology application  Data  Specific expertise  Repeatability to build critical mass  Land and combination of land and technology applications are the critical concepts We will work in areas we know with people we know

8 7 Technical Screens  Known technical risk – no technically difficult projects  No mechanical innovations  No heavy oil, California steam, deepwater, international, CO 2 floods  Scalability  Size  Multiple pay zones  Technology Applications  Under-balanced drilling  Drilling with casing  Re-frac A proven technical approach to deal screening

9 8 Deal Structure  In general, looking for direct participation  Willing to invest up to 100% of required capital for drilling projects  Each deal will be a separate transaction  Participation agreement  Joint operating agreement  Keep it simple  Industry deals with people we know in plays that we know  Continue to build long-term relationships  Contract terms will include performance standards  Goal is not to be operators  Contract terms may include a discussion of pre-determined exit points, e.g.  Target exits at defined levels of production  Leave sufficient upside to attract purchasers We want to keep it simple – full alignment with the operator

10 9 Current Projects  Field development in Los Angeles Basin  Well known reservoir  Participation with capital provider  Minority equity position/scalable  Acquire/develop/monetize strategy  Potential for 15-20 well workover and drilling program  Multi-well drilling program in the Ark-La-Tex area  Close-in and development drilling/analogous production  Well-defined structure/confirmed hydrocarbon presence  One-well promote (25% BIAPO)  Heads-up on all subsequent wells (20+ wells over 2-3 years)  One-well drilling commitment in Upper Texas Gulf Coast  Yegua development/Wilcox potential  25% carry to casing point for first well  Establish relationship with excellent prospect generator  Like the trend/looking for greater exposure With one exception, all current projects are in Texas or the Ark-La-Tex area

11 10  One-well drilling commitment – multi-well development  Yegua potential updip from show well  25% carry to casing point  Known operator with excellent track record  Exploration joint venture  Participate in LGG – for 15% WI  Upper Texas Gulf Coast Yegua/Hackberry  Seismically driven  Multi-well exploitation program in East Texas  Shale oil requires special stimulation  Funding leasing and multi-well drilling  1/3 for 1/4 for 50% WI Current Projects With one exception, all current projects are in Texas or the Ark-La-Tex area

12 11 Prospective Client Overview  A demonstrated record of drilling success in the target area  Committed your funds to a drilling program and are looking for a partner to share lower to moderate drilling risks  A drilling investment opportunity in the $2 million to $20 million range with growth potential  A well developed technical premise for our review  A desire for a long-term relationship to help grow your company We will participate in your domestic onshore drilling program if you have: Focus on domestic drilling deals

13 12  Jack W. Schanck Chief Executive Officer (281) 774-2140  David L. Bole President (281) 774-2023 We want to hear from you Contact Information

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