American Oil and Gas Reporter - October 2017 - 38

SpecialReport: Producer/Operator Startups
Boomtown is the team's third startup. Rozenfeld says its
previous venture, South Texas Reservoir Alliance, leased or
bought 180,000 acres and drilled 50 wells before being sold.
With Boomtown, the team is focusing on the Eagle Ford.
"The well results in the Eagle Ford are as strong as the ones in
the Permian Basin, but the cost to get into the play is lower," he
points out. "If we were a public company that needed to grow
reserves and build a huge inventory, it might make sense to pay
$20,000 or $30,000 an acre in the Permian. But as a small
private company, we need to focus on short-term cash flow, and
for that, the Eagle Ford is better."
Rozenfeld adds that the Eagle Ford has a great infrastructure
network, including access to Mexican markets and liquefied
natural gas export terminals. It is an area the team knows well,
he says. In fact, as part of the team that helped Rosetta Resources
launch its Eagle Ford program in 2008, Rozenfeld has been
working the play since its inception.
As of mid-September, Boomtown had assembled 25,000
acres in the Southeast Texas counties of Lavaca and DeWitt.
"We are excited about our position," Rozenfeld comments. "All
of it is newly-leased acreage. We will be able to drill 7,50010,000 foot laterals, which we view as key to economics. On
our acreage, the Eagle Ford is at a true vertical depth between
10,500 and 14,000 feet, deep enough that it is extremely overpressured and oil rich."
Rozenfeld points out that Penn Virginia has drilled several
wells near Boomtown's acreage, including the Lager 3H, which
reportedly had a 30-day initial production rate of 1,899 barrels
of oil equivalent a day and still made 1,000 boe/d after 95 days
on production. "We are happy to see Penn Virginia confirm our
thesis by getting excellent results," Rozenfeld says.

Eagle Ford Entrepreneur
Rozenfeld reports Boomtown is in the process of building
pads and permitting wells for its project. He predicts the
company will begin drilling in the first half of 2018.
Boomtown is looking for ways to improve on traditional
drilling and completion techniques, Rozenfeld comments. "Although there already have been 15,000 wells drilled in the
Eagle Ford, performance continues to get better," he observes.
Rozenfeld describes analytics as key to Boomtown's optimization strategy. "We have developed in-house systems that
allow us to analyze almost anything that we can get data on,
from land acquisition to drilling and completion technology to
marketing," he reveals. "These systems are our force multiplier,
automating tasks so we can stay on top of what's going on
without a huge time investment.
"We try to be open to new ideas and constantly benchmark
ourselves against other operators," he continues. "That habit
forces us to take an honest look at ourselves and recognize
when someone else is doing something better."
38 THE AMERICAN OIL & GAS REPORTER

The company tries to apply lessons from other basins to its
assets, Rozenfeld says, noting that the team has worked in unconventional plays across the United States, including the
Niobrara, Barnett, Bakken and Bone Springs.
"Everyone on our team likes working in multiple basins, so
in the long run, we would be interested in going back to one of
the basins we have worked or into another area where we feel
we have a way to add value," he remarks.

Permian Powerhouse
Launching or joining a startup takes guts, argues Jay P. Still,
president, chief executive officer and chairman of Guidon
Energy. The Permian-Basin focused producer was formed in
August 2016 with a $500 million commitment from Blackstone
Energy Partners.
Still says private equity companies had suggested he form a
startup since his days at Pioneer Natural Resources, where he
concluded an 18-year career in 2013 as vice president of
domestic operations. After that, he served Laredo Petroleum as
president and chief operating officer. He says that it took that
role for him to feel well-rounded enough to be comfortable
forming a new company.
"Running Laredo taught me a lot, but even so, starting a new
company has been a challenge," he reflects. "At first, much of
my time went into details I never had to consider before, such
as where to get a copy machine, how to handle payroll, and
what insurance to provide. It's been stressful but fun."
Putting a team together can be difficult, Still adds. "Most
people love the idea of being on the ground floor to create a
company, but they also want to know they will be able to put
their kids through college," he says. "It's a big risk to leave a
stable job, and invest money and time into building a company
from scratch. It takes the right breed of people, ones who love
putting projects together and believe in themselves and the rest
of their team."
Failure is a real possibility, especially for the many companies
that form without an asset, Still warns. "I am told a third of
private equity-backed companies never materialize," he says.
"They spend two or three years looking for an asset worth
putting money into, but they do not succeed in acquiring one."
Still says he had the good fortune to start Guidon with
15,000 acres and 140 wells in the Permian Basin. "At the same
time Blackstone and I were negotiating our partnership agreement,
I was helping the firm work through the acquisition," he recalls.
"Starting with great acreage took away some of the risks and
made it easier to recruit my A team."
Since Guidon's formation, the company has expanded its
position. "By closing more than 75 transactions, we have gone
from 15,000 acres to 24,000," Still details.
Many of those transactions involved small acquisitions.
"There are plenty of small companies who are looking at their



American Oil and Gas Reporter - October 2017

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