We are an independent energy company engaged in the acquisition, exploration,
development and production of oil and natural gas properties, primarily in the
Bakken and Three Forks formations within the Williston Basin in North Dakota
and Montana. We believe the location, size and concentration of our acreage
position in one of North America’s leading unconventional oil-resource
plays will provide drilling and development opportunities that result in significant
long-term value. Our primary focus is oil exploration and production through
non-operated working interests in wells drilled and completed in spacing units
that include our acreage. As a non-operator, we are able to diversify our investment
exposure by participating in a large number of gross wells, as well as entering
into more project areas by partnering with numerous experienced operating partners.
In addition, because we can elect to participate on a well-by-well basis, we
believe we have increased flexibility in the timing and amount of our capital
expenditures because we are not burdened with various contractual development
agreements or a large operating support staff. Further, we are able to avoid
exploratory costs incurred by many oil and gas producers.
Deploy our Capital in a Conservative and Strategic Manner and Review Opportunities
to Bolster our Liquidity. In the current industry environment, maintaining liquidity
is critical. Therefore, we will be highly selective in the projects that we
fund and will review opportunities to bolster our liquidity and financial position
through various means.
Continue Participation in the Development of Our Existing Properties in the
Williston Basin as a Non-Operator. In the current price environment, we believe
the best way to develop our acreage is to take a long-term approach and develop
our locations with potential for the highest rates of return. We plan to continue
to concentrate our capital expenditures in the Williston Basin, where we believe
our current acreage position can provide an attractive return on the capital
employed on our multi-year drilling inventory of oil-focused properties.
Diversify Our Risk Through Non-Operated Participation in a Large Number of Bakken
and Three Forks Wells. As a non-operator, we seek to diversify our investment
and operational risk through participation in a large number of oil wells and
with multiple operators. As of December 31, 2016, we have participated in 2,914
gross (213.1 net) producing wells in the Williston Basin with an average working
interest of 7.3% in each gross well, with more than 35 experienced operating
partners. We expect to continue partnering with numerous experienced operators
across our leasehold positions.
Evaluate and Pursue Value-Enhancing Acquisitions, Joint Ventures and Divestitures.
We will continue to monitor the market for strategic acquisitions that we believe
could be accretive and enhance shareholder value. We generally seek to acquire
small lease positions at a significant discount to the contiguous acreage positions
typically sought by larger producers. As part of this strategy, we consider
areas that are actively being drilled and permitted and where we have an understanding
of the operators and their drilling plans, capital requirements and well economics.
In addition, we have increasingly taken interest in and will continue to evaluate
the acquisition of non-operated producing properties as a means to grow and/or
bolster our credit metrics.
Maintain a Strong Balance Sheet and Proactively Manage to Limit Downside. We
strive to remain financially strong, yet flexible, through the prudent management
of our balance sheet and active management of commodity price volatility.