American Oil and Gas Reporter - October 2017 - 41

SpecialReport: Producer/Operator Startups
640-acre tracts, running economics on vertical wells, and
deciding that it would be better to sell the acreage to someone
as long as they can get a reasonable price," Still says.
Finding those deals takes hard work, he acknowledges. "For
a company with a huge portfolio, they might not be worth
chasing. But for a small, agile company like ours, the acquisitions
add up," he comments.
Still compares asset acquisition to a game of marbles. "The
marbles are hard to buy, but if you get the right ones, they are
easy to trade," he assesses. "Sometimes, we have to look three
or four deals ahead to see if we can trade the marble we could
buy for one we can trade to yet another company for acreage
near our core assets.
"The name of the game in the Permian Basin is to block
acreage to all depths so it can be efficiently developed," Still
says. "We have been successful at doing that. On all of our
acreage, we can drill 7,500-10,000 foot laterals."
Still calls Guidon's acreage the core of the core. "Some of
the best wells in the Midland Basin are drilled around us," he
enthuses. "Our acreage is next to the Sales Ranch, where
Pioneer is developing. To the east, we have Encana, Diamondback
Energy Inc., QEP Resources Inc., and Energen."
To determine where to land its horizontals and how to
complete them, Still says Guidon is investing in data. "We
started our program with three vertical wells, taking full cores
and doing a lot of science to understand the details of the rock,"
he illustrates. "We ran external pressure monitors in one of the
verticals and drilled four horizontal wells within 200 feet of it
in three zones, to see where our completions were going, tailor
them to the formation, and optimize our vertical and horizontal
spacing."
To put that data to use, Still says he has assembled a team of
people who are smarter than him and remain open to new ideas
despite numerous past successes. "We measure everything,
because if you can measure it, you can improve it," he adds.

Marcellus Magnate
For William Dressel, founder and managing partner of S.T.L.
Resources, which was formed with funding from its management
team and a family office investor, the global downturn in commodity prices presented an opportunity. "I own two service
companies, and as we transitioned into a tough market I began
to see opportunities from clients to buy strong assets," he
recalls. "Many came from companies that were looking to
divest noncore assets."
In evaluating possible acquisitions, Dressel says S.T.L. takes
a conservative approach. "We are trying to step into producing
assets that generate positive cash flow at today's prices and
have immediate development potential," he outlines. "These
opportunities are few and far between, but they are out there.
"With so many companies looking for similar opportunities,

it takes patience and deal creativity to identify the right
acquisition or drilling partnership," Dressel allows. "This still
is a relationship game, and several stars need to align to get in
front of a good transaction."
So far, the company has acquired 100 percent working
interest in 8,000 acres in north-central Pennsylvania. According
to Dressel, the acreage combines strong infrastructure and
modest production with exploration and development prospects
in the Marcellus, Utica and Upper Devonian formations.
"The acreage that we bought already had water impoundment
pits, drill pads and nice roads in place and was set up for immediate
development," Dressel reports. "However, with it only being 8,000
acres, we are on a path to pair it with another acquisition that has
production as well as additional drilling locations."
S.T.L. will focus its search on the Appalachian Basin, Dressel
says. He points out that members of the company's management
team average 27 years of experience in the basin and have a
strong track record identifying, exploiting, drilling and completing
unconventional wells in the Marcellus and Utica.
Dressel's past accomplishments include negotiating land contracts for 350,000 acres in the Appalachian Basin and elsewhere.
S.T.L. Chairman and Senior Geological Adviser William Hayward
previously founded Hayward Natural Resources, which was involved in more than 2,000 wells across Pennsylvania, Ohio,
West Virginia and Texas. According to Dressel, Hayward
discovered the mammoth Marshlands Field and drilled what
many believe was the first Utica well in Pennsylvania. CEO
Clinton Coldren helped launch three other independents as CEO
or COO that, he reports, created more than $2 billion in value.
Dressel describes the Appalachian Basin as a fantastic place
to operate. "It's a world-class basin with great geology and sustainable production," he says. "With take-away capacity coming
on line and new technologies continuing to push the efficiency
envelope, there is a lot of potential upside."
Dressel adds that after the Permian Basin, for the past two
years the Appalachian Basin has been the second-most active
merger and acquisition area. "There are a lot of quality assets
out there," he judges.
In negotiating deals, Dressel says S.T.L. tries to be a good
steward of capital as well as the industry. "We are not looking
to find our success on the broken backs of others," he says. "We
may compete with our peers, but at the end of the day we are all
part of the same team, and we all want to create American independence from foreign energy. We try to be flexible, so we can
craft transactions and agreements that are mutually beneficial."
In most good deals, Dressel says neither group comes away
completely happy. "To push a transaction over the hump, each
side must both give and take," he says.
Dressel adds that he sees S.T.L. as a long-term company.
"We want to do more than hold an asset until it is time to flip
it," he stresses. "We would love to have our conservative
business model come to fruition by giving us the asset base to
be a meaningful company that can stand the test of time." ❒
OCTOBER 2017 41

American Oil and Gas Reporter - October 2017

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