Tulsa World Reports Chairman of Eagle Energy’s Thoughts on Mississippian Lime Horizontal Drillin

By ROD WALTON World Staff Writer
Published: 12/2/2011 1:41 AM
Last Modified: 12/2/2011 5:23 AM

Steve Antry is chairman and CEO of Tulsa-based Eagle Energy Co. of Oklahoma LLC. Before founding Eagle in 2009, he was founder, chairman and CEO of Beta Oil & Gas Inc. In 2004, Antry helped merge Beta with Houston-based PetroHawk Energy LLC. He holds an MBA with an emphasis in finance from Texas Christian University.

1. Eagle is already one of the bigger players in the Mississippian formation of northern Oklahoma, with more than 75,000 acres in leases. What was so attractive that prompted you to bet big on a relatively new horizontal play in only two years?

I minimized our risk by buying a solid property that was steadily producing from another productive zone. We gradually risked about $5 million in capital to test our thesis in the Mississippian, with the blessing of Riverstone Holdings, our New York-based private equity backers. It was an attractive bet, considering the risk-reward ratio.

We were also able to quickly increase our acreage position by another 50 percent before the word really got out on the magnitude of the Mississippi. We knew exactly what kind of deal we were making on those last 25,000 acres. There was no material risk to bet on those.

2. Tell us a little more about Eagle’s other production efforts. Do you handle drilling operations or contract that out?

We’re the named operator of virtually 100 percent of the properties that we drill and produce oil and gas from. However, we do use subcontractors for related services such as conventional drilling, directional drilling, fracking and well-servicing.

3. Some have called this new domestic drilling effort a “revolution.” Oil and gas history shows plenty of manias that tapped out after a while. How long can the limestone and shale plays hold potential for strong production?

Still early stage, the Mississippi trend is now well established with over 500 horizontal-well data points. Ultimately there will be thousands of additional wells drilled. Eagle alone has 500 more locations already identified. Thus, the potential for strong production for a long time in the Mississippi is undisputable. Everyone that has significant acreage in the core Mississippi trend is in a heavy growth phase right now.

On a grander scale, horizontal drilling and large multistage fracking has clearly opened up a lot of new production around the country in the shales.

In the Mississippi trend, we’re just applying that same technology to carbonate reservoirs (limestones) that have much more permeability (several hundred times more permeability than in a shale). Now that the technology is working so well in Oklahoma, the same technology is being tested in other carbonate reservoirs in other states to potentially open up those areas.

4. Before starting Eagle, you founded and led Beta Oil and Gas, selling that to PetroHawk several years ago. What long-term plans do you have for Eagle?

I’ve mentioned our 500 additional identified locations. They alone would provide for five to 10 years of heavy drilling activity for us. And our well performance continues to improve.

Our backers, Riverstone Holdings, are very supportive of management just continuing to increase the value of the company through the drill bit. And I love our current team. I enjoy going to work every day.

That said, the numbers are attracting large potential buyers.

5. U.S. oil seems to be everywhere again, like it’s 1900 all over again. What are the pitfalls or challenges to new companies wanting to strike it rich?

Oil and gas will always be risky to a certain extent. The risk and reward will always be tied, to a certain degree, to timing and commodity prices and all the other well-known industry risks.

Specific to 2011, I would say the biggest obstacle to new entrants that hasn’t always been present is that for even those with a positive track record, it has become increasingly difficult to attract small amounts of capital.

What’s attracting the big money are the bigger resource plays. There are good smaller quality plays out there, but they’re having a hard time attracting capital.

By ROD WALTON World Staff Writer