Investment Strategy

Capitalize on opportunities created by historic dislocations in the energy industry

The energy markets are undergoing historic and transformational dislocations. Energence was created to identify and capitalize on these opportunities, including making acquisitions of, and investing in, under-developed reservoirs and companies. Energence is also focused on niche opportunities that require a level of on-the-ground knowledge and relationships that many conventional investment firms do not possess. Energence is particularly focused on deploying cutting edge technology to under-developed conventional reservoirs where significant amounts of known hydrocarbons are in place.

Focus on investments requiring technical and operational expertise

Energence focuses in particular on investment opportunities that require, or may be augmented by, deep technical and operational expertise. These opportunities include acquiring assets that are under-developed, that are owned by larger players that consider the targeted properties non-core or fully exploited or financial owners lacking operating the expertise to maximize value, and from companies concerned about end-of-life liabilities of older asset (e.g., abandonment costs).

Target assets and companies with strong underpinning of value

Energence aims to acquire and invest in conventional reservoirs that are under-developed, where significant hydrocarbons are in place that can be extracted utilizing state-of-the-art technology and operational practices, and that offer attractive risk-adjusted rates of return and short investment payback periods. Our team has the relationships and expertise to identify and execute on investments of this nature.

oPERATIONS STRATEGY

Maximize the value of existing assets through operational best practices and technology

The Energence approach to maximizing value includes well construction optimization, production maximization, and operational efficiencies. Well construction is optimized through several factors drawing on the team’s deep experience, which includes optimum well bore spacing, drilling 100% of the horizontal wellbore in the geologic target, and the fracture design. Optimum wellbore spacing is determined by regional drainage and the effect of infield drilling (parent / child production profiles). Drilling 100% of the horizontal wellbore in the geologic target results in minimal near wellbore tortuosity and higher hydrocarbon recovery. The fracture design is based on the mechanical properties of the formation and effective area drainage, which is intended to generate the best economics for each well. Another focus area is production maximization through items including artificial lift, which employs the optimum lift mechanism throughout the life of the well and facilities that are sized correctly for safety, production, and economics. Our team also draws on its long operating history to extract operational efficiencies and cost savings and to implement best practices across all aspects of its operations.

Emphasize consistently strong regulatory and environmental compliance

Our team has a track record of 100% compliance with state and federal health, safety, and environmental regulations. Our team has experience with a wide variety of regulatory agencies such as the Texas Railroad Commission, Texas Commission on Environmental Quality, West Virginia Department of Environmental Protection, U.S. Army Corps of Engineers, New York Department of Environmental Conservation - Division of Mineral Resources, Bureau of Oil and Gas Regulation, Pennsylvania Department of Mines and Mineral Industries Oil & Gas Division, Oklahoma Commission Corporation, Bureau of Indian Affairs, Bureau of Land Management, Susquehanna River Basin Commission, and Delaware River Basin Commission.

Seek to prevent avoidable losses through active risk management

Our team has years of experience with the administration and management of lease and legal issues. Our team emphasizes liability management through the appropriate use of insurance, thorough vetting of all counterparties, requirement that all contractors execute a master service agreement that includes additional insured insurance and indemnification protections, and focus on lease management and property owner relations. Our team has years of operational history with no litigation with mineral owners over royalties or operations. Our team also employs a network of best-in-class accounting and legal professionals to complement its internal resources. We also have experience with implementing significant upfront hedging to de-risk commodity exposure and utilizing appropriate depletion and other deductions and incentives to maximize returns.