EnerCom traveled with Lonestar Resources, Ltd. (ticker: LNREF, LNR) to meet with institutional investors on a non-deal roadshow in Dallas and Houston during June 2014.
Lonestar Resources is a leading independent oil and gas company involved in exploration, production, and acquisition of unconventional oil and gas reserves. The company’s growth is focused on the crude oil window of the Eagle Ford Shale, where management anticipates spending 95% of its capital for the next several years growing production and expanding its footprint on its current 23,000 net acres. Additionally, Lonestar is also evaluating the resource potential of its 50,000 acre (65% WI) block in the Williston Basin.
On June 2, 2014, Lonestar announced that in addition to its established ASX listing, they were now trading on the U.S. based OTCQX under the ticker LNREF. This listing enables Lonestar to provide new and existing U.S. investors with immediate access to trading their ordinary shares in U.S. dollars. Since this announcement, shares of Lonestar appreciated 46% and trading volumes have increased significantly.
Click here for OAG360’s introduction to the story posted June 2, 2014: Lonestar Resources: An Introduction to this New U.S. Listed Eagle Ford Shale Operator.
On the Road
Below are a series of questions management fielded from investors during the trip:
- What strategies have you employed to put together more than 23,000 net acres in the crude oil window of the Eagle Ford Shale in such a short period of time?
- With an estimated capital budget of $125 million and associated EBITDAX in 2014 of $105 – $125 million, is your plan to continue to grow out of cash flow?
- You have a goal of growing your Eagle Ford position to 40,000 to 50,000 net acres. How long will this take you and are there still affordable acres plots available?
- What is your criteria for making acquisitions?
- As a part of the shell you came into for your ASX listing, you assumed producing conventional oil assets in Texas. What is your plan for these assets going forward?
- What is your philosophy on hedging and what percentage of your PDP production is hedge for this year?
- What are you doing that is unique with your drilling and completions that are keeping your costs down and your EURs high?
- Why are your IP rates lower than some of the offset operators?
- What percentage of your acreage are you operating and what is your average working interest?
- Who are you using on the service side and how do you bid out your work?
- What kind of sand are you using on your frac jobs?
- What have you learned from the 30+ wells that you have producing in the Eagle Ford that can help you on your future wells?
- Is there are plan to do a reverse stock split and/or up list to a bigger exchange in the U.S.?
- You are going to drill some wells for Halcón in the El Halcón Area. How much have they shared with you on how they are drilling wells?
- What is going on in the Bakken that has you excited that there might be some real value to your position there?
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