We are an independent oil and gas company engaged in development, production,
acquisition and exploration activities primarily in the Rocky Mountains region
of the United States. We were incorporated in the state of Delaware in 2003 in
connection with our initial public offering.
Since our inception, we have built a strong asset base through a combination
of property acquisitions, development of proved reserves and exploration activities.
Our current operations and capital programs are focused on organic drilling
opportunities and on the development of previously acquired properties, specifically
on projects that we believe provide the greatest potential for repeatable success
and production growth, while selectively pursuing acquisitions that complement
our existing core properties, such as the acquisition of Kodiak Oil & Gas
Corp. (the “Kodiak Acquisition”) discussed in the “Acquisitions
and Divestitures” footnote in the notes to the consolidated financial
statements.
Our goal is to generate meaningful growth in shareholder value through the
development, acquisition and exploration of oil and gas projects with attractive
rates of return on capital. Specifically, we have focused, and plan to continue
to focus, on the following:
Developing Existing Properties. The development of large resource plays such
as our Williston Basin and Denver Julesburg Basin (“DJ Basin”) projects
has become one of our central objectives. As of December 31, 2016, we have assembled
approximately 736,000 gross (443,800 net) developed and undeveloped acres in
the Williston Basin located in North Dakota and Montana. As of December 31,
2016, we had four drilling rigs operating in this area. During 2016, we entered
into two separate wellbore participation agreements related to wells drilled
in the Williston Basin, which helped allow us to continue completion activity
in this area.
At our Redtail field in the DJ Basin in Weld County, Colorado, we have assembled
approximately 157,200 gross (132,200 net) developed and undeveloped acres. As
of December 31, 2016, we had one drilling rig operating in the DJ Basin. We
suspended completion operations in this area beginning in the second quarter
of 2016; however, we plan to resume completion activity in early 2017. Our Redtail
gas plant processes the associated gas produced from our wells in this area,
and has a current inlet capacity of 50 MMcf/d.
Disciplined Financial Approach. Our goal is to remain financially strong, yet
flexible, through the prudent management of our balance sheet and active management
of our exposure to commodity price volatility. We have historically funded our
acquisition and growth activity through a combination of equity and debt issuances,
bank borrowings, internally generated cash flows and certain oil and gas property
divestitures, as appropriate, to maintain our financial position. As a result
of sustained lower crude oil prices in 2015 and 2016, we significantly reduced
our level of capital spending to more closely align with our cash flows generated
from operations, and have focused our drilling activity on projects that provide
the highest rate of return. From time to time, we monetize non-core properties
and use the net proceeds from these asset sales to repay debt under our credit
agreement or fund our E&D expenditures. For example, during 2015 and 2016
we sold a large number of non-core oil and gas properties that no longer matched
the profile of properties we desire to own. In addition, to support cash flow
generation on our existing properties and help ensure expected cash flows from
newly acquired properties, we periodically enter into derivative contracts.
Typically, we use costless collars, swaps and crude oil sales and delivery contracts
to provide an attractive base commodity price level. As of January 3, 2017,
we had derivative contracts covering the sale of approximately 49% of our forecasted
2017 oil production.
We believe that our key competitive strengths lie in our focused asset portfolio,
our experienced management and technical teams and our commitment to the effective
application of new technologies.
Focused, Long-Lived Asset Base. As of December 31, 2016, we had interests in
4,687 gross (1,917 net) productive wells on approximately 849,300 gross (517,200
net) developed acres across our geographical areas. We believe the concentration
of our operated assets presents us with multiple opportunities to successfully
execute our business strategy by enabling us to leverage our technical expertise
and take advantage of operational efficiencies. Our proved reserve life is approximately
12.9 years based on year-end 2016 proved reserves and 2016 production.
Experienced Management and Technical Teams. Our management team averages 30
years of experience in the oil and gas industry. Our personnel have extensive
experience in each of our core geographical areas and in all of our operational
disciplines. In addition, our team of acquisition professionals has an average
of 33 years of experience in the evaluation, acquisition and operational assimilation
of oil and gas properties.
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1.9%