Jordan Blum, editorial director, Hart Energy: We are here at Hart Energy's DUG GAS+ Conference and Expo in Shreveport, Louisiana. I'm joined by Chris Widell, the president and CEO of Sponte Operating. Thank you so much for joining us. So just to recap, you've partnered with PetroCap in 2018, you're focused on the Texas side of the Haynesville in and around Pinola County. I just wanted to get your take on just how things are going and how you’re [the company] is growing.

Chris Widell, president and CEO, Sponte Operating: How things are going. That's an interesting question. So six years ago, we've seen a lot of value creation through the natural gas price runup, drilling wells that make money growing. It’s just amazing. Like I said, I pinch myself every day, but we've got a great position, we have a growth trajectory. We are an upstream E&P company, but we have midstream assets as well that we've built, and so we're built for the long haul. I'm thinking about how this company can exist in 15 [years], 20 years and how do you do that when private equity has their obligations to their investors? And so that's something that's on my mind. The team is the most important part, keeping everybody together and motivated and happy and inspired. But we've got a great asset, we've got great partners, we really have fun at work and gas prices will get better. That's the 800-pound gorilla that I've avoided, but we're doing OK. We've pinched back production to just sell gas, but not give away gas at terrible prices, and we will be ready to react when the market dictates and prices come back up.

JB: Very good. So like you mentioned low gas prices now, activity pinched back. How are you strategizing with DUCs in terms of keeping things going in the meantime?

CW: Just to be honest, I would say if we knew that gas prices were going to come down again, like severely where they are right now, we probably would've kept some of our wells that we brought online as DUCs. In lieu of that, we've pinched back the production, which is something you can do in shared resources, especially gas. Yeah, I mean, it would be smart to build DUCs right now. I think that's what a lot of companies in Haynesville are doing right now. A DUC strategy is not something you invest in, it's something you kind of have to do.

JB: I understand. You were talking too about how you all focus on tight spacing and that the child wells are doing really well, if you want to elaborate on that. But also, are we largely past a lot of the parent/child [well] interference issues from a few years ago.

CW: Now that we know what they are, it's not a surprise. We've had some luck. Our most recent pair of child wells has been our best yet. The number one mitigation to that is just not letting that much time pass between coming back and drilling that child well off the parent. But there are some things you can do on the completion side. We actually have a presentation that my partner and our Vice President of Operations Sean Horgan is going to give in New Mexico: An SPE talk on how exactly our parent/child [wells] have gone.

JB: And just obviously with the pricing now, can I get you to talk about just that timing and how you feel about the bullishness going forward?

CW: We're going to drill two wells this year. We've got cost down, and it's a multiwell pad, which really helps. Owning midstream helps, but we're going to drill those wells and we're forecasting good returns. I think the risk is the forward curve of gas. Is that really going to be what happens? I've been operating in projects supported by natural gas for a while, and sometimes that strip just gets knocked out a little further. I was talking a little bit about how private equity is a little slower because you have to build a track record.  I'm not talking about us, I'm talking about the private equity funds themselves that have to reestablish trust with their investors and get them excited, and investors have to see something in oil and gas. So that kind of takes some time.

When gas comes back, given that the Haynesville is so largely held by privates, I could see it taking some time for us to build production back up again. I hate to say this because it probably means it's not going to come true, we drill ourselves in the foot every time. Hopefully we can come back to a point where production, expected supply and expected demand are a little bit better understood. All that information makes for a more efficient market and hopefully one that's more well-informed and we can actually put projects online that we need to. Is that too long of an answer?

JB: No, no and just to, close things out, obviously you said there is a lot of consolidation going on. Do you see that continuing and are y'all on the lookout or how do you want to explain that?

CW: There are companies, bigger companies, that need to grow, and they have specific targets out there for where their investors want to be production wise, and they're going to have to make some acquisitions to get there. I think we've got some great assets. The trick with private equity is to develop just enough and then leave some meat on the bone, that's proven up that people believe in that they can say, ‘Yeah, I'm going to buy that. I'm going to drill the wells that I think exist there and that's going to be true.’ And then everybody is going to be happy. We're not here to get in and get out and go retire. We really love this industry.

It's very similar to my background in the military where you've got high horsepower equipment and hardworking people working together and doing great projects. I want to do this for a long time. Our deal, I want it to be one where both sides are really happy and it answered the question I just proposed. I think the definition of a good deal is where both parties would do a deal again with each party again, and so we want to be an entity that keeps on going and providing value to investors and buyers in the future.

JB: Great. Makes a lot of sense, just don't rush it. Thank you so much for joining us here at DUG GAS+. I really appreciate it. To read and watch more, please visit online at