Texoil, Inc.
Corporate Profile – August
2000
Contact Information:
Mr. Frank A. Lodzinski, Chief Executive Officer
Mr. Jerry M. Crews, Executive Vice President
110 Cypress Station Dr., Suite
#220, Houston, Texas 77090
Phone (281) 537-9920 - Fax (281) 537-8324
Website: www.texoil.com
TEXOIL, INC., (NASDAQ Small Cap: “TXLI”), is an independent energy company that acquires, develops and explores for oil and gas reserves through an active and diversified program in South Louisiana and the Texas and Louisiana Gulf Coast. A comprehensive change in the Board of Directors, management and capitalization occurred on December 31, 1997, as a result of a reverse merger with Cliffwood Oil & Gas Corp. (“Cliffwood”).
Business Strategy
The Company’s business strategy is to achieve profitable growth through its core business activities which include the purchase, re-engineering and development of proved oil and gas properties, along with an active exploration and drilling program. Typically, the Company has been able to acquire proved producing fields from major and larger independent oil and gas companies, increase production and lower recurring operating costs. The Company conducts comprehensive field studies to isolate development opportunities. In addition, Texoil utilizes its geological and geophysical expertise to conduct an exploration program on acquired properties and separately generated prospects. Management believes this strategy will continue to provide a solid foundation for growth and expose shareholders to significant upside.
Corporate Focus
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Statistics ($ Millions, except as otherwise indicated) |
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Six
Months June
2000 |
|
1999 |
|
1998 |
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Revenues.................................................................. |
$ 22.7 |
|
$ 23.7 |
|
$ 10.4 |
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EBITDDA................................................................ |
$ 13.9 |
|
$ 12.1 |
|
$ 3.1 |
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Cash
flow (EBITDDA less interest)........................... |
$ 13.2 |
|
$ 9.6 |
|
$ 2.2 |
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Net
income............................................................... |
$ 6.5 |
|
$ 2.9 |
|
$
(.9) |
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Common
shares........................................................ |
6.7 |
|
6.6 |
|
6.6 |
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Production: |
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Natural
Gas (Bcf)............................................. |
2.7 |
|
4.2 |
|
1.5 |
|
|
|
Oil
and liquids (MMBbls).................................. |
.6 |
|
.8 |
|
.5 |
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Average price: |
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Natural
gas....................................................... |
$ 2.99 |
|
$ 2.39 |
|
$ 1.90 |
|
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|
Oil.................................................................... |
$ 23.43 |
|
$ 16.32 |
|
$ 12.29 |
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Per share: |
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EBITDDA........................................................ |
$ 2.09 |
|
$ 1.84 |
|
$ .77 |
|
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Cash
flow......................................................... |
$ 1.98 |
|
$ 1.46 |
|
$ .34 |
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Earnings............................................................ |
$ .79 |
|
$ .44 |
|
$ (.14) |
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Proved reserves: |
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Natural
gas (Bcf).............................................. |
71.4 |
|
63.0 |
|
37.6 |
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|
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Oil
& liquids..................................................... |
12.6 |
|
13.6 |
|
9.2 |
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PV
10%........................................................... |
$ 187.0 |
|
$ 152.1 |
|
$ 46.2 |
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Capitalization: |
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Debt................................................................. |
$ 19.0 |
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$ 22.0 |
|
$ 35.5 |
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Equity
(book)................................................... |
$ 41.3 |
|
$ 34.7 |
|
$ 11.3 |
|
Management and Key Technical Personnel
The Company has developed an expert management and technical staff with significant experience including engineers, geologists and geophysicists, accounting, land and related support staffing. Management intends to retain and expand its core staffing consistent with continued growth, but also expects to develop strategic alliances and/or joint ventures to expand its capabilities.
Officers
Frank A. Lodzinski has been Chairman of the Board, Chief Executive Officer and President and a Director of the Company since December 31, 1997. He has been President and a Director of Cliffwood since its founding. From 1992 to 1995, he served as President and a Director of Hampton Resources Corporation, a public corporation which he also founded. From 1995, when Hampton was sold to Bellwether Exploration Company, to 1996, he was self-employed and was a consultant to Bellwether Exploration Company. From 1984 to 1992 Mr. Lodzinski was engaged in the oil and natural gas business through Energy Resource Associates, Inc., a closely-held Texas corporation which he owned and controlled. Prior to 1984 he was employed in public accounting with Arthur Andersen LLP and in various capacities with independent oil and gas companies. He is a Certified Public Accountant and holds a BSBA degree from Wayne State University.
Jerry M. Crews has been an Officer and Director of the Company since December 31, 1997, and was an Officer and Director of Cliffwood since 1996. For the preceding 12 years he was an Officer of Citation Oil & Gas Corp., and was responsible for all production operations. His experience includes acquisitions, drilling and development operations in most of the producing basins of the United States. Prior experience was with Conoco and Lear Petroleum. He is a registered Professional Engineer in the state of Texas and holds a B.S. in petroleum engineering from Texas A&M University.
Francis M. Mury has been employed in the oil and gas industry since 1974. Mr. Mury began his career with Texaco, Inc., and has also worked for Wainoco Oil and Gas Company. He joined Energy Resource Associates in 1989 and assisted Mr. Lodzinski in the formation of Hampton Resources Corporation, where he served as Vice-President, Operations. His experience extends to all facets of reservoir, drilling and production operations. Geographical areas of experience include the Gulf Coast (land and state waters), east and west Texas, Florida, New Mexico, Oklahoma, Wyoming, Pennsylvania and Michigan. Mr. Mury is a 1974 graduate of Nicholls State University, Thibodeaux, Louisiana.
Peggy C. Simpson is a Vice President and Controller of the Company and is responsible for all accounting and reporting activities. Ms. Simpson has substantive direct experience in joint interest accounting, billing and revenue/royalty distribution, along with all related general ledger operations, management and financial reporting. In addition, her experience includes partnership administration and tax, budgets and forecasts and cash management. Prior to joining Energy Resource Associates in 1989 and assisting Mr. Lodzinski in the formation of Hampton Resources, she served in various accounting capacities leading to Controller for a major division of a $400 million company and was an accounting instructor at North Harris Community College. She is a CPA and holds a MBA and BBA from Lamar University.
Mandel C. Selber is Vice President of Land with 20 years experience in land, title, contracts, marketing and related operational and legal matters. Prior to becoming an independent land man, his corporate experience was with the superior Oil Company and Mobil Exploration and Producing, Inc. Mr. Selber attended Babson College and the University of Texas.
Technical Staff
William A. Stirling is Manager of Exploration and Development. He has served in his present capacity since 1997. Mr. Stirling previously worked with members of management at Hampton Resources Corporation. He has 25 years of major and independent oil and gas experience in most aspects of exploration and development geophysics and geology. He has extensive knowledge of and has worked in most of the United States basins, as well as selected international basins. Mr. Stirling has an A.B. in geology from Rutgers University and a M.S. in geophysics from Saint Louis University.
Steve C. Collins, Manager of Drilling and Production, joined Cliffwood in 1996. He is responsible for oil and gas field operations including drilling, workovers, recompletions and field development. Mr. Collins started his career as a field engineer for Pacific Enterprises Oil Company in 1988, where he was responsible for the West Texas and North Texas areas. After the purchase of Pacific Enterprises Oil by Hunt Oil Company, he transferred to Lafayette, Louisiana, where he was an operations engineer responsible for both onshore and offshore drilling and production operations in South Louisiana, East Texas and South Texas. He has a B.S. in petroleum engineering from the University of Texas.
Thomas S. Campbell is Acquisitions Manager, serving in his present capacity since 1998. He joined the staff from Huddleston & Company, Inc. His experience includes acquisitions, investment analysis, reservoir performance, reservoir analysis, production operations and development operations in the United States and West Africa. Prior to Huddleston & Company, Mr. Campbell worked for Conoco. Mr. Campbell is a professional engineer, is a member of SPEE and holds a B.S. degree in petroleum engineering from Texas A&M University.
Robert W. Young is Senior Reservoir Engineer. He is responsible for property evaluations , reserve studies, reporting, and directly involved in acquisitions and dispositions. Mr. Young previously worked with certain members of management at Hampton Resources Corporation. He is a degreed petroleum engineer from Texas Tech University and has been employed in the oil and gas industry since 1981. He has both domestic and international reservoir engineering experience with concentrations in Texas and Louisiana, both onshore and offshore. Mr. Young has held positions with Phillips Petroleum Company and Marathon Oil Company.
Directors
Frank A. Lodzinski – See resume under “Officers”.
Jerry M. Crews – See resume under “Officers”.
Michael A. Vlasic has been a Director of the Company since 1997 and was a Director of Cliffwood since 1996. For more than the past five years, he has been a principal with Vlasic Investments L.L.C. He is a graduate of Brown University.
T. W. Hoehn, III has been a Director of the Company since 1984. He is President and General Manager of Hoehn Motors, Inc., a multi-line automobile agency located in Carlsbad, California, where he has been employed since 1975. He is a graduate of Stanford University.
Robert E. LaJoie has been a Director of the Company since 1997 and was a Director of Cliffwood since 1996. Mr. LaJoie retired in 1977 and is a private investor with almost 50 years experience in the oil and natural gas, real estate and food services industries. He is a graduate of the University of Michigan.
Thomas A. Reiser has been a Director the Company since 1997 and was a Director of Cliffwood since 1996. For more than the past five years he has served as Chairman and President of Technical Risks, Inc., a private insurance brokerage firm which he founded. He is a graduate of the College of William and Mary.
S. Wil VanLoh, Jr. has been a Director of the Company since November 1999. He is a co-founder and principal of Quantum Energy Partners, L.P., a Houston-based private equity fund focused on making corporate equity investments in North American exploration, acquisition and exploitation companies. Mr. VanLoh is also a Director of Windrock Capital, Ltd., an energy investment banking firm he co-founded in 1994. He is a former investment banker with Kidder, Peabody & Co. and NCNB/NationsBank. Mr. VanLoh also currently serves on the board of directors of several private companies engaged in various oil and gas activities. He holds a Finance degree from New York University.
Toby R. Neugebauer has been a Director of the Company since November 1999. He is a co-founder and principal of Quantum Energy Partners, L.P., and is also a co-founder and Director of Windrock Capital, Ltd. Mr. Neugebauer is a former investment banker with Kidder, Peabody & Co., and also currently serves on a board of directors of several private companies engaged in various oil and gas activities. He holds a Finance degree from New York University.
Jeffrey A. Jones has been a Director of the Company since November 1999. He is a co-founder and principal of Quantum Energy Partners, L.P., and has been the lead geologist/geophysicist of the West Texas based energy companies, Jones Company Ltd. and JHJ Exploration, Ltd. since 1978. Mr. Jones is a graduate of West Texas State University with a degree in Geology.
|
Major Common
Shareholders |
|
|
|
Shares (Thousands) |
|
Frank A. Lodzinski........................................................................................ |
300 |
|
V & C Energy L.P......................................................................................... |
1,058 |
|
Other Officers and Directors.......................................................................... |
742 |
|
RIMCO........................................................................................................ |
804 |
|
EnCap........................................................................................................... |
428 |
|
First Union Securities, Inc.............................................................................. |
375 |
|
Lincoln National Life Insurance Company....................................................... |
587 |
|
Other............................................................................................................. |
2,366 |
|
Total.............................................................................................................. |
6,660 |
Oil & Gas
Properties
Property Acquisitions, Re-Engineering and Development Drilling
Purchases of proved reserves, re-engineering fields to enhance production and lower operating costs, and development drilling are a significant part of the Company’s strategy for growth. Re-engineering and development projects are based on detailed engineering and geological studies compiled by the Company’s internal staff. With respect to field development, the Company utilizes computer aided engineering systems and 3-D seismic technology, where applicable, as significant development tools, used with other engineering production and sub-surface data to maximize reserve additions and production.
Prospect Generation and Drilling
An important adjunct acquisition and development are opportunities associated with acquired properties. The Company has assembled and intends to maintain a diversified inventory of exploratory and development prospects through its acquisition separately generated prospecting activities. The current portfolio includes lower risk development and exploratory prospects, as well as higher risk deep exploratory prospects with significant upside potential. The Company actively solicits and promotes industry partners to maximize economics and reduce risk. The exploration approach is to fully define prospect leads with 3-D seismic and comprehensive integration of sub-surface and engineering data. Depending on the prospect, the Company will retain a direct working interest, plus any carried or reversionary interest retained as part of sales to industry partners.
Acquisitions
Following is a summary of major acquisitions (net of divestitures) made
by the Company since commencement of operations in February 1996.
|
1996 Acquisitions |
County |
|
Working Interest |
|
Revenue Interest |
|
Texas |
|
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|
Day Dome........................................... |
Madison |
|
47% |
|
38% |
|
Northeast Madisonville......................... |
Madison |
|
50% |
|
43% |
|
Fort Stockton....................................... |
Pecos |
|
40% |
|
32% |
|
Goldsmith-Landreth.............................. |
Ector |
|
34% |
|
30% |
|
New Diana.......................................... |
Upshur |
|
100% |
|
82% |
|
1997 Acquisitions |
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Texas |
|
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|
Huff-McFaddin.................................... |
Victoria |
|
60% |
|
45% |
|
Magnet Withers................................... |
Wharton |
|
60% |
|
50% |
|
Fort Stockton (1)................................... |
Pecos |
|
20% |
|
16% |
|
Goldsmith-Landreth(1)........................... |
Ector |
|
16% |
|
14% |
|
Loma Alta........................................... |
McMullen |
|
57% |
|
43% |
|
N.E. Madisonville................................. |
Madison |
|
71% |
|
57% |
|
Fall City............................................... |
Karnes |
|
100% |
|
89% |
|
1998 Acquisitions |
|
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Louisiana |
|
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|
Garrison Gas Unit................................. |
Cameron |
|
75% |
|
50% |
|
North Crowley..................................... |
Acadia |
|
41%-60% |
|
35%-54% |
|
Neale.................................................. |
Beauregard |
|
100% |
|
83% |
|
Texas |
|
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|
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|
Guerra Field......................................... |
Webb & Duval |
|
52%-99% |
|
39%-70% |
|
Goldsmith Landreth (1).......................... |
Ector |
|
33% |
|
29% |
|
Fort Stockton (1)................................... |
Pecos |
|
40% |
|
32% |
|
Huff-McFaddin (1)................................ |
Victoria |
|
40% |
|
30% |
|
Magnet Withers (1)............................... |
Wharton |
|
40% |
|
33% |
|
Loma Alta (1)....................................... |
McMullen |
|
38% |
|
30% |
|
DCRC (2)............................................ |
Duval |
|
100% |
|
71%-75% |