Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
While the COVID-19 pandemic forced many U.S. shale producers to batten down the hatches and cut back drilling, Rockcliff Energy LLC has not had to lay down a single rig so far during the current downturn.
In fact, Rockcliff still runs the same number of rigs on its Haynesville Shale position located in East Texas since acquiring the assets in 2017, according to CEO Alan Smith.
In this interview with Hart Energy’s Jessica Morales, Smith explained Rockcliff’s strategy and how maintaining its four-rig model creates the most value still for the privately held producer.
“The big thing that you have to look at is ... we are sitting here at $1.70 gas price, does that make sense to still run that many rigs?” he said. “Well, with the cost reductions that we have had [and] with the continued performance that we continue to experience, we are still seeing quite robust returns right around 50% IRRs on the current strip and that really drove the decision to continue to run these four rigs.”
“We also are blessed with a fairly significant hedge book,” he continued. “We can’t control the commodity price. We know we’re not good at that. So, when we buy an asset and as we see our drilling program, we always like to hedge into that and we’ve hedged a significant amount of our volumes this year, 2021 and 2022.”
Click here for more about Rockcliff Energy’s business model.
Jump to a topic:
- Rockcliff Energy strategy (0:35)
- Plenty of natural gas? (2:11)
- Winter outlook (3:28)
- Lower OFS costs (6:12)
- Haynesville versus Marcellus (7:58)
- Path forward (11:02)
Recommended Reading
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Elk Range Royalties Makes Entry in Appalachia with Three-state Deal
2024-03-28 - NGP-backed Elk Range Royalties signed its first deal for mineral and royalty interests in Appalachia, including locations in Pennsylvania, Ohio and West Virginia.
Baltimore Port Closure Could Dent US Coal Export Volumes, EIA Says
2024-03-28 - Baltimore handled exports of 28 million short tons last year, making up 28% of total U.S. coal exports.
Dallas Fed Energy Survey: Permian Basin Breakeven Costs Moving Up
2024-03-28 - Breakeven costs in America’s hottest oil play continue to rise, but crude producers are still making money, according to the first-quarter Dallas Fed Energy Survey. The situation is more dire for natural gas producers.
Liberty Energy CEO: NatGas is Here to Stay as Energy Transition Lags
2024-03-27 - The energy transition hasn’t really begun given record levels of global demand for oil, natural gas and coal, Liberty Energy Chairman and CEO Chris Wright said during the DUG GAS+ Conference and Expo.