Prospects for this craft oil company focused on small plays in domestic oil fields are discussed in this interview with Maurice Jackson of Proven and Probable.
Maurice Jackson: Today we will highlight a world-class upstream oil and gas company. I’m speaking of Jericho Oil. Joining us today is Brian Williamson. He is the CEO of Jericho Oil Corp. (JCO:TSX.V; JROOF:OTC). I’d like to begin our discussion today at the 10,000 foot level and discuss the different between big oil versus craft oil.
Brian Williamson: Most of the folks in the world that look at oil and gas have heard of all the large majors out there, your Exxon/Mobils, your Gulf Oils, your Anadarkos and most of the big ones around the world. What they haven’t heard about are the smaller players who are focused on specific regions, specific areas, like us, where they know one play, one opportunity, and they drive trend, technology, and development in some of the best plays in the world. It’s just that they focus on that play, that opportunity, just like Jericho does.
Maurice J.: How does Jericho fit into the narrative of craft oil, and the value proposition it presents to the market?
Brian W.: We believe the value is all about understanding and delivering best-in-class results in a particular opportunity in a particular play, and in our world, the ability to find oil gets harder and harder every year. You want to be aligned with a team that knows an asset, knows a region and knows how to develop the hydrocarbons in that area.
At Jericho, that’s exactly what we built: a team geared around developing the stack, a team that understands, lives, and has breathed Oklahoma oil and gas development for the last 40 years. That local knowledge, that rock knowledge, that geology knowledge, that development experience translates very, very well into successful after successful development program.
For Jericho, where the value started was almost on day one in the downturn. It was our ability to take that very deep technical knowledge that we get as being a craft oil company, and executing on it by buying what we believe to be world-class assets in our region, that we understand, at what we believe to be discounts to what would be their normal market value.
How you would see us fitting in is through the migration or the transition from the buying opportunity that existed for two and a half years to now, the development opportunity that exists. It’s using those very specific, very focused technical skills to take, from an acquisition standpoint to a development standpoint, this particular region, this particular play, with this particular team.
You’re starting to see that as we’ve moved into higher prices in 2018. We’ve begun executing on that with the Wardroom well, which was our first, and now our second well, the Swordspear, and then we will move on down the line.
Maurice J.: You referenced the use of optionality and that was one of the virtues that attracted me to Jericho Oil. We discussed plays here briefly. Just for someone new to the Jericho Oil story, please share the name of the plays that you have in Oklahoma.
Brian W.: Sure. The most well-known play that we focus on in Oklahoma is the STACK play, and it’s all about our opportunity to extract hydrocarbons from a known basin and a known field. So, the Anadarko basin has been around for maybe a hundred years, and it was developed vertically. And the field was deemed drained in the 1990s, whenever it was. You know, not much left to do with it.
Along comes the development of horizontal drilling, and low and behold, field after old oil field are now seeing development opportunities transcend generations that were thought done. Now you’re seeing it in the Anadarko basin and the STACK, particularly. So for us, that is our focus, that is our largest play in the portfolio, and it continues to grow and be an area of what we think to be great opportunity, and getting better and better each day as more and more is known about it.
We have two other plays in the portfolio, no less in quality, but they’re all in the same region. The other is considered a Mays play, and the third is Woodford play. Those are all source rocks that are well known to the region. Been there, been developed vertically in various different time periods over history. But to us, they all have consistent themes. High upside, low entry cost, and strong barriers to entry due to the HPV land position we control in each one.
Maurice J.: Catch us up to speed since our last interview. You have updates on a joint venture and an acquisition.
Brian W.: By no means, as a small oil company, do we believe that we have all the answers to how best to develop the STACK. So we thought it best to partner, and do a couple of joint ventures with other deep, experienced teams that we have a lot of respect for, and vice versa, on a couple of our flanks, one being our western flank, and the other being our northern flank.
In each one of those, we had a very specific target in mind. On the western flank, the joint venture was focused on understanding the development of the Meramec, which is the shale portion of the STACK play. The other joint venture, which was our northern joint venture, was focused on the development on the lower Osage, which dominates our portfolio. We have—round numbers—700 feet of lower Osage rock as pervasive from our eastern to our western flank of the 16,000 acres we have now in the play.
The first joint venture was all about developing …read more
From:: The Energy Report