From a reader:
It certainly has been a whirlwind couple of weeks recently, no?I just wanted to give you a 'heads up' regarding this small, fascinating outfit that I first learned about a few months ago.DGO is run by a fourth generation West Virginia native working in the energy industry ... Rusty Hutson. (His 73 year old father still works in the field).
They own 8 million productive acres and over 60,000 producing wells in the Appalachian Basin region. (No typos).Yesterday they announced the purchase of ~800 wells in the Cotton Valley area. Purchase price of ~$120 million with annual earnings of ~$40 million.
These guys are ultra smart, ultra 'cheap' "bottom feeders" in that they buy wells that the Big Boys do not want, run them with extreme efficiency, and have an ongoing plug/abandonment program that is second to none (about $25k per well to P&A).Last year they ventured into the horizontal well universe by buying/collaborating with EQT when EQT was making enormous M&A moves. (Almost all DGO's wells are conventional/vertical. Many are coalbed methane producers. These put forth very low volume, but their operational/maintenance costs are miniscule).Just wanted to bring this to your attention as this company seems to be leading the charge into a huge, growing arena of the hydrocarbon world ... the handling of older, lower producing wells.
Their approach seems to be absolutely top notch.
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