DAVID DEWHURST OF FALCON SEABOARD | INTERVIEW
Our goal is to acquire Tier I attractively priced deep acreage
that’s large enough to drill longer laterals, but not large enough
to merit some of the high prices we are currently seeing. We’re
also willing to purchase current production and stripper wells
with predictable declines.
Falcon Seaboard Resources was launched to cap-
italize on opportunities in the Permian that “are not being
pursued by larger investment and strategic players.” Is
that due to price point? Asset size?
Dewhurst: Most of our competitors are larger than we will
be. Even private equity firms are often heavily capitalized with
$500 million to $1 billion in capital. While that capitalization
has advantages, it also makes it harder to turn the needle to
generate higher returns. I’ve watched over the last seven months
the business model of two small companies rolling up all or
parts of 20 plus small companies, their acreage, production,
and stripper wells. Some of it they will sell to create liquidity,
but it’s a model that many larger companies can’t afford to
Are there current partnerships with E&P companies
that you can talk to us about?
Dewhurst: Falcon Seaboard recently signed a Purchase and
Sale Agreement with two successful companies, but I prefer to
talk specifics later this Fall.
The US drilling industry may be prepared for an-
other investment cycle, but infrastructure—especially in
the Permian—could be a limiting factor. Do you see this
impacting the investment cycle?
Dewhurst: I also see Permian Basin infrastructure as a limiting
factor, that will have to be addressed, particularly in the mid-stream sector.
Speaking of infrastructure, the desire for properties
in the Permian is spreading into the infrastructure and
services sectors, is that something Falcon Seaboard is
Dewhurst: Falcon Seaboard has owned and operated mid-stream pipelines in different parts of the country. Building a
cogeneration plant in Big Spring, Texas, Falcon Seaboard joint
ventured several pipelines with then Petrofina. Building a cogeneration plant in upstate New York, Falcon Seaboard spent
years permitting natural gas firm capacity on Trans-Canada
Pipeline. Then, without Eminent Domain, Falcon Seaboard had
to lease acreage from Quebec Province to Plattsburg, New York,
from hundreds of land owners, plus bore under streams, to
connect our pipeline with our cogeneration plant. Although
Falcon Seaboard was not the operator, our partner, SG Interests,
did an excellent job in building a 25-mile pipeline that, with
compression, will carry up to 300 MMcfd, connecting our
Piceance Basin field to interstate carriers.
What about plays outside the Permian? Is the com-
pany looking at deals in other areas?
Dewhurst: Two of the advantages of the Permian Basin are
being a low-cost producer, and having multiple benches. That
same characteristic is present in the better parts of the Powder
Thank you for your time, Governor Dewhurst.
“Most of our competitors are larger than we will
be. Even private equity firms are often heavily
capitalized with $500 million to $1 billion in capital.
While that capitalization has advantages, it also
makes it harder to turn the needle to generate