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Whittier Energy Corporation (WHIT) |
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CEOCFO Current
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This is a printer friendly page! Whittier
Energy Corporation – an oil and gas company with strong management and an aggressive
growth strategy BIO: Mr. Rhodes has
served on the Company’s Board of Directors and as the Company’s President and
Chief Executive Officer since September 2003. Mr. Rhodes was a Vice President of Whittier
Energy Company since its incorporation in 1991 through September 2003. In that capacity he
managed all aspects of its acquisition and exploration investments and its day today
activities. Since April 1999, he has served on the Board of Directors of PYR Energy
Corporation, a public oil and gas exploration company. Mr. Rhodes also served as an
investment analyst for the M. H. Whittier Corporation, an independent oil company, from
1985 until 1991. Mr. Rhodes received undergraduate degrees in geology and biology from the
University of California at Santa Cruz and an MBA degree from Stanford University. Whittier currently operates four properties in Texas
and Louisiana that produce a combined 600 barrels of oil per day ("Bopd") and
1.5 million cubic feet of gas per day ("Mmcfd") (400 Bopd and 440 Mcfd net). We
also own non-operated interests in fields located in the Gulf Coast, Oklahoma, Wyoming,
California, Colorado, New Mexico, Utah, and Pennsylvania that have a
combined net daily production of 75 Bopd and 1.3 Mmcfd. Whittier has assembled a
highly qualified management team and maintains a low overhead structure by outsourcing
certain operational accounting functions and drilling activities. As a result, the Company
is able to use "best of industry" expertise, while minimizing overhead costs.
Also, through its ownership interest in Rincon Partners LLC, a geologic and geophysical
consulting group, the Company has gained access to high levels of technical expertise and
advanced seismic processing and interpretation – a critical advantage in assessing
viable drilling prospects and acquisitions. Whittier is a publicly traded
company, headquartered in Houston, Texas, whose Common Stock is listed on the OTC Bulletin
Board under the symbol WHIT. For additional information, visit: www.whittierenergy.com. CEOCFOinterviews: Mr.
Rhodes, your company recently became a public company; please give us a little background
on that and how things are changing for Whittier? Mr. Rhodes: “The
Whittier family has been active in the oil industry since the late 1800’s
particularly in California. Over the years they have owned or created several different
energy companies. Whittier Energy Corporation, the company that I am now running is the
latest energy company that the Whittier family has been involved in. Since the mid
1980’s, Whittier Energy and its predecessors had been growing organically by
re-investing cash flow generated from royalties and non-operated working interests, back
into oil and gas investments. It grew to about $6.6 million in assets by the end of 2001.
There was no new equity or leverage involved, only reinvestment to participate in
non-operated acquisitions and exploration projects. In 2002, we decided to step things up
a bit and see if we could accelerate our growth in order to provide more value to our
shareholders. CEOCFOinterviews: What do you look for in your properties? Mr. Rhodes: “In all of our property acquisitions, we look for opportunities to add value through additional drilling, producing behind pipe reserves and creating operating efficiencies, whether through reducing overhead or making mechanical changes in our production facilities such as resizing compressors and changing out pumps. Our ideal operated property candidate is located in the Gulf Coast region of Texas or Louisiana, has a stable production history, and simple ownership leases with no material environmental issues." CEOCFOinterviews: What is it that you can see in a property that others don’t? What goes into your evaluation? Mr. Rhodes: “I think our evaluation process succeeds because it is thorough and disciplined. We look at the geology and engineering and arrive at a value through our economic model and stick with that value. We are not willing to chase a property because a seller won’t meet our terms; if we can’t see eye-to-eye, then we will pass on it. In several instances sellers have come back to us to negotiate after failing to close with higher bidders.” CEOCFOinterviews: Are there a certain number of properties you would like to have; what is your strategy? Mr. Rhodes: “We are trying to grow aggressively. So, we are constantly looking for new opportunities. Our ability to grow is driven by number and quality of deals we see in our core area and by the equity that we have to invest in opportunities we like. In all cases, our bank has required that we invest some equity and we want to keep our balance sheet conservative, so that is a constraint. At present, most of our reserves are proved developed. Our 12/31/03 reserve report shows that our oil reserves are down a little from last year, but we have more than doubled our gas reserves. We want to keep a good mix of oil and natural gas in our reserve base, which we accomplished through the acquisition of additional gas reserves in 2003. Longer term, the kinds of properties we would like to acquire will have larger undeveloped potential with long reserve lives, that we can develop methodically, add value to, and apply the consistent cash flow to reinvest for additional growth. In addition to our acquisition strategy, we have consistently participated in exploration deals brought to us by industry partners most of whom we have known and worked with previously.” CEOCFOinterviews: Do you own the fields outright or are there partnerships involved? Mr. Rhodes: “In the fields that we operate, we own our working interest outright. In all but one case there are other working interest owners, but we are not in partnership. We own our non-operated working interests as well. The company owns minor interests in several partnerships, which own royalty and non operated working interests.” CEOCFOinterviews: What do you do with the oil and gas once you take it out? Mr. Rhodes: “Our oil goes from the wellheads to the tank farms from which it is transported by trucks to refineries. Our natural gas is measured, processed and transported off the leases via pipelines. We sell our oil and gas to a variety of companies, including major integrated oil companies such as Shell and ConocoPhillips, as well as various marketing companies, pipelines, industrial consumers, and other users of petroleum and natural gas products." CEOCFOinterviews: How does the macro energy situation play a part in what you do on a day-to-day basis? Mr. Rhodes: “In terms of its influence on our day-to-day business, we are a small player; in a large, competitive world market. The pricing for our products, which are commodities, is driven by demand across the world, so there is nothing we can really do to affect it. We can work to achieve the highest pricing in the areas we are in, by working with our buyers, but that is somewhat limited. On a macro basis, I believe with a growing economy and particularly in China, there is going to be continued high demand, and we are going to have high prices for both oil and gas for the foreseeable future. Gas, particularly domestically, is a clean fuel and highly sought after. As long as the price doesn’t get out of line with oil and the other fuels it competes with, I think we will see strong gas prices for some time.” CEOCFOinterviews: Where are you looking to expand geographically? Mr. Rhodes: “California is a place we have been historically and we still have some exposure there and may add to it. Our operated properties are located in our core area around the Gulf Coast of Texas and Louisiana. We plan to acquire more properties within the Gulf Coast region. Other parts of the country where we have significant assets and would consider additions include: Wyoming and Oklahoma; in both cases they are non-operated working interests. In Wyoming, we own an interest in an oil property discovered by one of the exploration ventures that we participated in. In Oklahoma, in what was initially an exploration venture, we now have interests in nine wells drilling for and producing deep gas. It has been very successful and we have been able to add a lot of value to the company.” CEOCFOinterviews: Will you tell us about your properties you acquired and what you did with them to make them work better? Mr. Rhodes: “Let’s start with the Beaver Dam Creek Field, which we bought from a large independent. For them, it was a non-core property and expensive to operate. We were able to make some mechanical and equipment changes to improve the way things were operating. We added some larger surface pumping units and changed some of the down-hole pumps. We replaced an old oversized compressor, which allowed us to sell gas that was otherwise used for running the inefficient compressor or being flared. In that particular field, we believe there is exploration potential in an untapped fault block (A section of rock separated from other rock by one or more faults.), and we are pursuing that opportunity. In the Big Wells Field, we have fracture treated non- producing formations in three wells and as a result, we were able to add a significant amount of new production. We slowed the natural decline rate significantly. In the Rayne Field, which is a mature old gas field, we have been able to re-complete one of the existing wells and add some new gas and oil production. We believe there is a deeper zone drilling opportunity, which one of the other working interest partners has proposed to test. If this project goes forward, we plan to re-enter an existing well bore and realize significant savings over the cost of a new well. In the Bonnie View Field, we have been able to increase gas sales by installing a more efficient compressor and we successfully converted a small gas well to an oil producer, which has enhanced our daily oil production. We also plan to drill a well that should be structurally high to the rest of the wells in the field. In each case, I think the common thread is improving operational efficiency and identifying behind pipe reserves, and additional drilling opportunities.” CEOCFOinterviews: You recently launched a new corporate website; what do you hope to have people see there? Mr. Rhodes: “I think in this electronic age that a website is, in many cases, where people go first when they want to do some research on a company. I think our website gives a good overview of the company’s immediate past and some insight as to what may be coming in the future. Our website does a good job of describing our properties and our strategy and giving information on our management team and board of directors.” CEOCFOinterviews: As CEO, what are your functions throughout the day? Mr. Rhodes: “I am
involved in all aspects of the company, including operations, acquisitions and
divestitures, finance, and investor relations, working very closely with our management
team on a day to day basis. I directly manage our non-operated investments, particularly
on the exploration side, act as the company’s Chief Investor Relations Officer, and
as the liaison with our executive committee and board of directors as needed. The entire
management team, including the board of directors, works incredibly well together.
Everyone is willing to do whatever it takes to keep things up and running and get the job
done the right way. This is extremely important when you are running a small company
– you need a talented, dedicated team if you are ever going to succeed and take the
company to the next level.” Mr. Rhodes: “I think investors should look at our recent history and our growth. When considering making an investment, they should look carefully at the management team. In our case, we have a small team of dedicated, experienced professionals who are committed to putting in the time and effort to make our company a success. We have already demonstrated our ability to grow the company over the last two years, and have every expectation of continuing down this path. We have been able to add new reserves to the company and add value for the shareholders. The company has a unique pedigree in terms of its relationship to the Whittier family, with its distinguished history in the oil and gas industry, especially in California. Whittier has an excellent reputation and we expect to maintain it going forward.” CEOCFOinterviews: What gets you that good reputation? Mr. Rhodes: “Certainly honesty and integrity would be at the top of the list, fair dealing, paying bills in a timely fashion, and doing what you say you are going to do. Historically, the oil and gas business operated on a handshake in many cases, so reputation was and is very important. The Whittier family has had a good reputation in the industry for many decades and we intend to preserve it and build on it.” disclaimers |
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To view Releases highlight & left click on the company name! Whittier Energy Corporation announces the
acquisition of Cut Off Field in Lafourche Parish, Louisiana HOUSTON – May 13, 2004 – Whittier Energy (OTCBB: WHIT) today announced the acquisition of an operated working interest in the Cut Off Field located in Lafourche Parish, Louisiana for $1.65 million dollars from an undisclosed private company. Whittier acquired an average working interest of 73% in four producing oil wells, one salt water disposal well and two shut-in wells, with an effective date of March 1, 2004. Gross production from the field is approximately 210 Bopd (barrels of oil per day) and 150 Mcfd (thousand cubic feet per day). Net production to Whittier is approximately 105 Bopd and 35 Mcfd. Whittier paid for the property using $650,000 from working capital and $1.0 million from its revolving line of credit with Compass Bank. The Company has estimated net proved reserves in the field to be in excess of 350,000 barrels of oil equivalent. Posted: 5/17/04 - CEOCFOinterviews.com
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