This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Energen Resources' CEO Discusses Delaware Basin Joint Exploration Agreement With BHP Bilition (Transcript)

At this time, I will turn the call over to Energen Chairman and CEO, James McManus. James?

James McManus

Thanks, Julie, and good morning to you all. This agreement with the quality industry partner is a great opportunity for Energen. In short, BHP and Energen Resources have the opportunity to co-own and jointly develop 56,549 net acres in the Delaware basin. Almost all the potential JV acreage is in Reeves County, West of the Pecos River, and represents the leasehold we’ve acquired over the last several years. For Energen Resources, this agreement means that any development West of the River, in the Wolf Camp shale, 3rd Bone Springs or the Avalon shale, will be at a faster pace than if we developed the acreage alone. And on multiple levels this agreement means that Energen is minimizing its risk while preserving substantial upside.

Let’s take a look at some of the specifics of the agreement that we signed yesterday. BHP has agreed to purchase three wells that we’ve already drilled, for approximately 18 million. BHP will carry us in horizontal completion operations in two of the wells. In the third well, we will split completion costs.

The map on our website indicates the three wells with a green dot. Once BHP completes the purchase of the three wells and initiates horizontal completions in the two wells, they will have earned a 50% undivided interest in 4,829 net acres.

By May 1, 2012, BHP has the option to purchase from Energen Resources a 50% undivided interest in 51,720 net acres. To earn the right to exercise this option, BHP must begin horizontal completion in one of the wells it has purchased.

Should BHP exercise this option, we would expect to recoup all of our investment to acquire the acreage, and still have a 50% interest in the acreage. On a go-forward basis, the two companies would have rights to the Wolf Camp shale, 3rd Bone Springs and Avalon shale.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs