Upstream Texas - Spring/Summer 2017 - 19
FRANK D. BRACKEN III
Chief Executive Officer of Lonestar Resources, Inc.
AS A NEW HIRE at his first job out of college,
Frank D. Bracken, III was typecast. Arriving at Fidelity
Investments' portfolio management group in Boston, he
was informed that his home state made him a natural
fit for specializing in oil and gas investments.
"It was nothing short of stereotyping," he laughs. "They said,
'you're from Texas, you have to do oil and gas.'"
Had growing up in Dallas supplied him with any personal
connections in the energy industry?
"Absolutely none," remarks Bracken. "My dad was in the apparel
business. No one in my family had any oil and gas minerals, nor was
in the business. I could not have been further detached from it."
Even so, that first job was his gateway into the world of oil
and gas. The fresh-faced Bracken held a position that provided
access to top oil and gas executives, he recalls, and he found
himself falling in love with the industry.
That passion for oil and gas continues to this day. Since 2012,
Bracken has been chief executive officer of Lonestar Resources,
a small, Eagle Ford Shale-focused operator. His mandate for 2017,
he says, is to double the company's size.
Relying on his experience in finance has helped Lonestar
remember that the bottom line is the bottom line, Bracken suggests.
"On occasion, the industry gets lost in non-financial
accomplishments," he says. "My background has led me to be
singularly focused on hiring technical people with an appreciation
and understanding of returns. At the end of the day, I don't care how
much oil and gas we make unless we make good money doing it."
According to Bracken, the company strives to attract top-flight
technical talent. "Our vice president of geology was integrally involved
in Petrohawk's discovery of the Hawkville One field, so she has an
amazingly deep background in the Eagle Ford," he describes. "Our
drilling and completion managers have tremendous experience that
belie a company our size. We have invested a lot in developing
excellence in our technical talent. The people in our operations team
have incredible, worldwide experience. Not necessarily being a
specialist-the Eagle Ford is only 9-10 years old-but having a wealth
of professional life experience is really important to what we do."
The key is enabling the human assets to unlock those in the
portfolio, he considers.
"We have really good assets and have drilled really good wells,"
Bracken says. "We have put a lot of time and money into those
things, but I really have had to learn about developing human capital.
I am exceedingly proud of the people in our organization. I see
"TIPRO IS A WAY FOR US TO STAY
PLUGGED INTO WHAT IS GOING
ON. WE ARE NOT BIG LOBBYERS.
BEING MEMBERS OF TIPRO IS A
WAY FOR US TO LEARN ABOUT
THINGS THAT MIGHT ADVERSELY
AFFECT OUR INDUSTRY OR
THINGS WE NEED TO WATCH
FOR. HAVING THAT CHANNEL OF
COMMUNICATION IS VALUABLE."
companies in our play with leaseholds that have better quality
rock than ours, but it does not mean they are drilling better wells.
Our human capital creates a lot of value. To a large extent, it is the
difference-maker, and it is another one of my jobs to make sure that
all the parts are put together properly and we are getting the most
out of that component of our business, which is hugely value-added."
Bracken reports that Lonestar has navigated the industry's
slump with a combination of fortunate timing and financial
savvy. In 2014, the company financed much of its debt with an
unsecured note that provided a low cost, very stable platform
of semi-permanent capital. The company also had hedged an
inordinate portion of its crude oil production from 2014-16 for
what proved to be favorable prices.
Moreover, Bracken says, the company took advantage of
an extraordinarily weak bond market to repurchase one-third
of Lonestar's outstanding notes at roughly fifty cents on the
dollar, which created meaningful equity value, and the company's
NASDAQ listing helped it raise $79.4 million in new equity.
"I think the quality of what we have done, both financially and
operationally, allowed us to attract new institutional investors
late last year and has positioned us well for $50 oil," he notes.
And when it comes to adding value, Bracken readily acknowledges
the Texas Independent Producers & Royalty Owners Association
does exactly that for Lonestar. "TIPRO is a way for us to stay
plugged into what is going on," he says. "We are not big lobbyers.
Being members of TIPRO is a way for us to learn about things that
might adversely affect our industry or things we need to watch
for. Having that channel of communication is valuable."
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