With years of experience in some of the toughest plays in the U.S. and often with contrarian foresight, we find opportunity in less than obvious locales or less appreciated assets.” That is how Craig Slawson describes Slawson Energy, the new exploration and production company he formed earlier in the year.
Those years of experience he brings to his new venture came from his tenure in his family’s owned and operated Slawson Exploration Company Inc., SECI, which developed a reputation as an innovative and aggressive exploration company, due in no small part to Slawson’s contribution and accomplishments from the geology side of the business.
Among his accomplishments while at SECI, Slawson developed the Big Sky project, optioning some 80,000 acres in 1991 in what is now the Elm Coulee field in Montana, some 12 years before that area was, as he puts it, “discovered.” But he had a hard time finding investors. Few people at the time “believed the middle Bakken would produce,” he told Petroleum News Bakken, adding that it was then “a multi-billion dollar idea.”
The idea for the Big Sky development came after SECI had drilled some 15 horizontal Bakken wells in the Ash Coulee area of Billings County, North Dakota, between 1989 and 1991. SECI was among the earliest Williston Basin operators to drill a horizontal Bakken well.
Also in North Dakota, Slawson saw significant possibilities in three early EOG Resources wells east of the Nesson Anticline back in 2007, and he began buying leases in what is now known as the Parshall region around the Van Hook Peninsula in Mountrail County. Again, however, he had difficulty finding investors. “Fortunately we did end up with the leases,” he said, adding that those leases have and continue to be the “backbone” of SECI.
In Wyoming, Slawson saw promise in logs from deep in the Powder River Basin and picked up 18,000 acres in that play in 2008. But because he again had difficulty finding investors, SECI sold those assets but at a “decent return,” and those assets have now become part of the “hot geo-pressured deep PBR play,” according to Slawson.
Slawson was also the driver behind SECI’s exploration and development of such challenging formations as the Minnelusa, Forbes, Niobrara, Pronghorn, middle Bakken/Three Forks and the upper Bakken shale in Montana and North Dakota where few operators have ventured (see related story on page 6).
But more recently, Slawson said SECI began shifting its focus. He said his two brothers became more interested in SECI’s production from its past exploration successes rather than in pursuing new exploration. As a geologist he didn’t want to go in that direction and broke from the family business and started his own exploration company, allowing him to continue pursuing the more difficult, less obvious, but often profitable plays using his “contrarian foresight.”
A fresh startSince forming his new company earlier in the year, Slawson has put together four separate projects. One is in his Northern Rockies focus area and involves approximately 23,000 “thoroughly researched” net acres “in a 35-foot thick, thermally mature, overlooked region of the Bakken kitchen” that he brought with him through a negotiated buy back from SECI.
Another project in his Northern Rockies focus area is the SPR project which involves approximately 37,500 acres on a tectonic trend of fractured limestone. That project is also prospective for the Lodgepole and Red River formations.
In Wyoming, Slawson Energy’s PRB Whitetail Minnelusa waterflood project in the Powder River Basin currently involves a single injection and a single producing well. While that project has had only primary production to date, Slawson predicts the secondary waterflood output should double primary production.
And in South Texas he has a project consisting of what he refers to as a “very interesting province of overlooked combo targets” involving Buda, Eagle Ford, Austin Chalk and Pearsall formations. “Like the Bakken,” he said of the South Texas play, “the source rock has expelled into surrounding formations and thus multiple targets.”
Through the rest of 2014, Slawson is looking to drill between four and eight wells across those four projects. He said he has evaluated and understands the risks of the four projects and has “moderated them as much as possible,” adding that “I know what I don’t know” and that, he said, is “important.”
Operator versus non-opSlawson is also looking at operating some assets as well partnering with other operators, depending on circumstances. “I will do both,” he said, “operate if I need to or sell to a qualified like-minded operator as needed.” And both have advantages and disadvantages, he said.
“Control is nice to have, but the desire to remain lean is nice too.” He has already brought in joint venture partners on several of the projects.
Building a teamSlawson has secured office space for his headquarters in the Lodo area of downtown Denver. He has already hired what he calls the “cruise director,” i.e., accounting-business manager. And now he has begun the search for professional staff. “I’m hiring as I go,” he said.
On the engineering side, Slawson has two long-time friends and potential partners to provide professional engineering expertise, although at some point he wants to have a staff engineer. On the geology side, Slawson said he might look for a “sharp junior geologist I can mentor.” And he will also be looking for a landman.
“I hire for ideas, hustle, hard work and/or contacts,” he told Petroleum News Bakken. “I am not selfish and want everyone to share in the fruits of collective labor. Thus this is the small team I want to build to exploit the tired, forgotten or overlooked, but in all cases, very lucrative plays.”