Spindletop Oil & Gas Co. is an independent oil and gas company engaged
in the exploration, development, production and acquisition of oil and natural
gas; the rental of oilfield equipment; and through one of its subsidiaries,
the gathering and marketing of natural gas. The terms the "Company",
"We", "Us" or “Spindletop” are used interchangeably
herein to refer to Spindletop Oil & Gas Co. (“Spindletop”, “SOG”)
and its wholly owned subsidiaries, Spindletop Drilling Company ("SDC"),
and Prairie Pipeline Co. (“PPC”).
The Company has focused its oil and gas operations principally in Texas, although
we operate properties in six states including: Texas, Oklahoma, New Mexico,
Louisiana, Alabama and Arkansas. We operate a majority of our projects through
the drilling and production phases. Our staff has a great deal of experience
in the operations arena. We have traditionally leveraged the risks associated
with drilling by obtaining industry partners to share in the costs.
In addition, the Company, through PPC, owns approximately 20.8 miles of pipelines
located in Texas, which are used for the gathering of natural gas. These gathering
lines are located in the Fort Worth Basin and are being utilized to transport
the Companys natural gas as well as natural gas produced by third parties.
We believe that a major attribute of the Company is its long history with, and
extensive knowledge of, the Fort Worth Basin of Texas. Our technical staff has
an average of over 23 years oil and gas experience, most of it in the Fort Worth
Basin.
One of our strengths has been the ability of the Company to look at cost effective
ways to grow our production. We have traditionally increased our reserve base
in one of two ways. Initially, in the 1970s and 1980s, the Company obtained
its production through an exploration and development drilling program focused
principally in the Fort Worth Basin of North Texas. Today, the Company has retained
many of these wells as producing properties and holds a large amount of acreage
by production in that Basin.
From the 1990s through 2003, the Company took advantage of the lower product
prices by cost effectively adding to its reserve base through value-priced acquisitions.
We found that through selective purchases we could make producing property acquisitions
that were more cost effective than drilling.
During this time period, the Company acquired a large number of operated and
non-operated oil and gas properties in various states.
One of our key strategies is to attempt to maintain shareholder value through
implementation of plans for selective drilling and value priced acquisitions to
the extent the economics of such projects work in this low energy price environment
and development of assets. The Companys long-term focus is to grow its oil and
natural gas production through a strategic combination of selected property acquisitions,
and an exploration and development program primarily based on developing its leasehold
acreage. Additionally, the Company plans to continue to rework existing wells
to increase production and reserves when feasible.
The Companys primary area of operation has been in the State of Texas with
an emphasis in the geological province known as the Fort Worth Basin. We plan
to continue to focus on operations in Texas, and we want to capitalize on our
strengths which include an extensive knowledge of the various reservoirs in
Texas, experience in operations in this geographic area, development of lease
holdings, and utilization of existing infrastructure to minimize costs.
The Company is engaged in the exploration, development, acquisition and production
of oil and natural gas, and the gathering and marketing of natural gas. The Company
is also engaged in commercial real estate leasing through leasing office space
to non-related third party tenants in the Company’s corporate headquarters
office building.
The principal products marketed by the Company are crude oil and natural gas
which are sold to major oil and gas companies, brokers, pipelines and distributors,
and oil and natural gas properties which are acquired and sold to oil and natural
gas development entities. Reserves of oil and natural gas are depleted upon
extraction, and the Company is in competition with other entities for the discovery
of new prospects.
The Company is also engaged in the gathering and marketing of natural gas through
its subsidiary PPC, which owns 20.8 miles of pipelines, and currently gathers
approximately 828 mcfgpd. Natural gas is gathered for a fee. Substantially all
of the natural gas gathered by the Company is produced from wells that the Company
operates and in which it owns a working interest.
The Company owns land and a two story commercial office building in Dallas,
Texas, which it uses as its principal headquarters office. The Company leases
the remainder of the building to non-related third party commercial tenants
at prevailing market rates.
2.27%