67 WALL STREET, New York - January 9, 2012 - The Wall Street Transcript has just published its Oil & Gas: Refining, Independent and Major Integrated Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Narrower Trading Range for Oil and Gas - Capital Expenditures and Consolidation Activity - Refining Crude Price Differentials - Frontier Exploration and Development
Companies include: Enterprise Products Partners (EPD); Aker (ASKO.OL); Anadarko (APC); Apache (APA); Atlas Energy (ATLS); and many more.
In the following brief excerpt from the Oil & Gas: Refining, Independent and Major Integrated Report , expert analysts discuss the outlook for the sector and for investors.
RAY D. REAVES, Chief Executive Officer and Chairman of the board of FieldPoint Petroleum Corporation since 1989, has 24 years of experience in the oil and gas industry. He began his career in 1986 with North American Oil and Gas Inc. In 1989, Mr. Reaves purchased an interest in 10 of their wells and formed Bass Petroleum, Inc. Under his management in the years that followed, Bass Petroleum gained majority control of the 10 original wells and acquired interests in another 60 wells. In 1998, Bass Petroleum merged with Energy Production Corporation, and as a result, FieldPoint Petroleum was formed. FieldPoint has grown to a $20 million asset base with varying interest in more than 300 wells and complete operating control of 60 wells in five states.
TWST: Please begin with a brief introduction to FieldPoint Petroleum, including some highlights from its history and an overview of its primary business lines.
Mr. Reaves: FieldPoint Petroleum (FPP) is a domestic oil and gas exploration and production company. Our product mix is approximately 70% oil, 30% natural gas, and as you can see, there is an emphasis on oil. We have operations in five states. We are in our ninth consecutive year of profitability and positive cash flow.
TWST: I know it's your goal to continue to expand FieldPoint's reserve base. Please tell us about the characteristics you look for in properties. What geographic areas may you target in 2012 and what level of expansion may we expect to see?
Mr. Reaves: Our goal is to expand our reserves while increasing production. We have a focus on long-life reserves, and that means reserves that have at least 15- to 20-plus years of life remaining. Our focus currently is on southeast New Mexico and west Texas. We plan to drill one or two high-impact wells in that area over the next 12 months.
TWST: Speaking of New Mexico, you mentioned in your Q3 earnings release the drilling of your first horizontal well in that state and you expected it to be completed in late November. What is the latest update on that project?
Mr. Reaves: That release was dated November 14, and we stated that we were down approximately 13,000 feet in total depth. We have now reached total depth on that well, and Cimarex, as you know, is the operator. FieldPoint has approximately 43.75% interest in the well. Cimarex has 37.5% interest in the well, and third parties have the other remaining interest. At this time, we're waiting on completion. The drilling phase is behind us. We are now in the process of setting tanks, laying equipment on location, preparing for the frack. And I believe it would be an eight- to 12-stage frack. Halliburton will handle the fracking. Cimarex will oversee that. Once the fracking is complete, which we think will take between 24 and 48 hours, we will flow back the well and we'll announce the results.
TWST: FieldPoint's continued ability to expand depends on its ability to raise capital. Would you comment on the overall strength of the company's balance sheet at this time?
Mr. Reaves: As I said earlier, we are in our ninth year of profitability and strong cash flow. The fact that we have been able to generate strong positive cash flow, over the last few years in particular, has led to a very strong balance sheet. Our debt levels for the last couple of years have remained flat to stable, and we've increased cash on hand over that time frame. So we've been able to generate enough cash to pay for this first well that we're drilling with Cimarex. We believe that cash flow model is intact and will sustain itself. We believe that we will have sufficient cash flow to meet all of our capex requirements between the next 12 to 24 months without any problems. We have not been big on hitting the equity markets. That is a consideration. We have recently filed a shelf registration statement, which will allow us access to capital markets if we choose to do so. But right now, at this point, cash flow is king for us, and we don't see any problems meeting any of our budget requirements going forward.
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