Breitling Energy: A Land Royalty Company Moves Into Operations (OilandGas360.com)

By: EnerCom Incorporated
Breitling Energy Corporation (ticker: BECC) is focused on the acquisition, exploration and development of lower risk onshore plays in the United States. The Dallas, Texas-based company primarily targets the Permian Basin and Mississippi oil window through its properties in Texas, North Dakota, Oklahoma and Mississippi.

Breitling Snapshot

Breitling ended fiscal 2013 with 710 MBOE in reserves (70% oil) and is in the process of increasing its operations in the Permian and Mississippi Lime. In its Q1’14 conference call on May 16, 2014, management said a well in Taylor County, Texas, had been completed and additional wells will be drilled within the year in the same region. A well in southern Kansas was also being completed using a multi-stage horizontal fracturing method and is nearing the production phase.BECC STOCK INFO

Operations include 3,680 acres in Sterling County, Texas. BECC entered the region as part of a farmout agreement with privately held Steller Energy, which had previously gained working interest in the area from Clayton Williams (ticker: CWEI). According to the Oil & Gas Financial Journal, wells drilled on or adjacent to the blocks have targeted the Lower Wolfcamp Lime, the Canyon Sand, the Mississippian Chert and Lime, the Fusselman Lime, the Montoya Lime, and the Ellenburger Dolomite. CWEI drilled 22 vertical Wolfberry wellsin northern Sterling County in 2012 before entering into its current farmout agreement.

Breitling CEO Chris Faulkner said: “As part of our deal, Breitling expects to earn a 100% working interest in each well that we drill and we expect to gain the rights to the balance of the surrounding acreage as we complete the wells in a specified timeframe. More specifically, if we drill a well at each of the properties’ eight sections, we will retain with 100% interest in the entire 3,680 acres.”

Breitling has identified 57 drilling locations and its first Sterling County Permian well was fracing the final stages of completion at the time of its Q1’14 conference call. The current agreement requires one well to be drilled every 180 days and Breitling’s management is comfortable it can meet the expectations.

The New Breitling

The initial public offering has boosted Breitling’s balance sheet to handle upcoming expenses. Its revenues for Q1’14 more than doubled on a year over year basis to total $16.9 million and net income reached $6.7 million – up from $0.3 million in Q1’13.

The company believes it has found a niche in the market and will use its size and versatility to embark on its first full year as a publicly traded company.

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