Coachman & the Bakken’s Changing Development Landscape

Collaborating with its technical team that averages 35 years of experience developing and managing multi-billion-dollar exploration and development projects across the globe, Coachman Energy’s principals identified the potential of the Bakken Shale in 2006, and were among the early investors to acquire mineral acreage in the play.

Coachman Energy – Early Years

When the Bakken Shale first made headlines in 2006 for oil exploration and development, there were vast amounts of undeveloped acreage and it was easy (and relatively inexpensive) to get in on the action. Drilling activity was driven by the need to hold acreage by production (HBP), with operators moving drilling rigs one mile at a time to secure their holdings. Cash calls to minority working interest owners were few and far between.

From 2007 through 2010, Coachman Energy capitalized on this early environment, pursuing minority ownership positions in relatively undeveloped acreage. Using a combination of leverage and cash flow from existing wells, we partnered with major operators to prove up the acreage and monetize reserves.

As drilling activities accelerated, additional minority positions were purchased from small working interest owners unable to keep up with growing capital requirements. Following this strategy, Coachman Energy amassed ownership in over 15,000 net mineral acres, participated in drilling approximately 100 wells ultimately netting 800 barrels of oil per day (BOPD) on average, and increased net present value (NPV) significantly in a short period of time. By aggregating small minority interests into larger blocks, multiple exit opportunities were created. In January 2012, a majority of our original asset portfolio including daily production was sold to a Fortune 100 company.

Coachman Energy – Today

Today, Coachman manages and/or operates assets located throughout North Dakota, Colorado, and the Mid-Continent Region, with over $160 Million of capital deployed since 2006. Our portfolio has been built using our Hybrid Development Strategy, which is designed to efficiently deploy capital into potentially profitable projects, regardless of price cycle phase. From 2011 to 2014, our focus was securing non-operated ownership positions in the heart of the Bakken Shale, delivering value gains through the development of proved resources through the drill bit. In the past five years alone, we have participated in drilling over 325 gross Bakken and Three Forks wells.

With oil now on the lower end of the pricing spectrum, our Hybrid Development Strategy has allowed a seamless shift in focus to take advantage of opportunities afforded in today’s down cycle. We are currently acquiring large operated blocks in conventional fields that feature lower costs of entry and favorable drilling and completion cost structures. Since mid-2014, we have made multiple acquisitions totaling a combined ~220,000 net mineral acres in the Central Kansas Uplift.

Moving forward, Coachman will continue to utilize our strategy, proactively adjusting our acquisition focus in our core areas of activity to take advantage of whatever market we find ourselves in.

Today, Coachman Energy is taking advantage of opportunities created by a soft oil pricing environment––acquiring large operated blocks in conventional fields with lower costs of entry and favorable drilling and completion cost structures.

Acreage Acquisitions By Year