Quantum Resources' Denbury Acquisition
"We think there are a lot of opportunities out there. The shale plays take a lot of capital to drill all those leases…companies generally have to issue equity, structure additional debt, or sell their non-core conventional assets—which are what we want to buy." -Alan Smith, Quantum Resources
In a recent article on OilandGasInvestor.com Leslie Haines interviews Alan Smith of Quantum Resources Management about the recent $900 million acquisition of Denbury assets. It sounds like Quantum has a good investment plan targeting conventional assets (instead of the ultra-hot shale plays) in well established producing basins, and focusing their capital on enhancing existing production through infill drilling and waterfloods.
Its refreshing to hear a company talking about doing business the "old school way"-- buy quality assets in mature basins and focus your efforts (and capital) on developing your assets with low risk drilling and flooding; not to mention the portfolio diversification effect of mixing oil and gas assets in different basins. In the interview Mr. Smith refers to his business philosophy as "contrarian," but I would call it "good business."
