GeoResources: Making Experience Count
Energy Executive Spotlight
Written by Eric Slack   
Tuesday, 01 April 2008
GeoResources: Making Experience Count - Energy Executive - RedCoat Publishing
Frank Lodzinski describes this oil and gas producer’s ability to successfully merge through experienced leadership.
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Mergers and acquisitions are part of everyday business, but for Frank Lodzinski, president and CEO of Houston-based GeoResources, they are practically a way of life. Lodzinski has worked in the oil and gas production and exploration business for more than three decades. In that time he’s led half a dozen successful independent companies. With his latest undertaking at GeoResources still only about one year old, the company has already seen significant increases in net income.

Frank Lodzinski, President and CEO - GeoResources: Making Experience Count - Energy Executive - RedCoat Publishing
Frank Lodzinski, President and CEO
“We were able to quickly implement our business plan and restructure the company because we kept our focus on operating and acquiring only productive, profitable assets,” said Lodzinski. “We have a talented staff at all levels—technical, operations, and administrative—and everyone has worked hard to ensure profitable growth and an increase in the value of our shares.”

Coming together
GeoResources is a publicly traded owner and operator of US oil and gas properties. The firm’s exploration, development, and production operations are run by subsidiaries Southern Bay Energy and G3 Energy. Without the subsidiaries, GeoResources wouldn’t exist as it does now.

In April 2007, GeoResources finalized a merger with Southern Bay Oil & Gas and Chandler Energy. The management of those two firms became the principal management of the new and improved GeoResources. Prior to the merger, it was a successful yet sleepy firm running oil and gas exploration, production, and drilling operations out of the Williston Basin in North Dakota. Alone, it didn’t have the resources or the connections needed to realize its potential.

With Southern Bay Oil & Gas and Chandler Energy, GeoResources became a national player. Southern Bay was headquartered in the American energy capital of Houston and ran oil and gas properties on the Texas and Louisiana Gulf Coast, as well as the Permian Basin in Texas. Chandler was based out of Denver and its operations were centered in the Rocky Mountains and Michigan.

Today the company operates properties in Montana, North Dakota, Utah, Colorado, New Mexico, Texas, Louisiana, Mississippi, and Alabama. Southern operations are led by Francis Mury, a 34-year veteran who has been with Lodzinski for 19 years. Northern operations are led by Collis Chandler, who had been president and owner of Chandler Energy since July 2000 after serving as VP of The Chandler Company for 12 years.

Leadership is one of the main strengths of the firm. The company was instantly buoyed by experience at the top. Lodzinski has 35 years of experience with companies such as Energy Resource Associates, Hampton Resources Corporation, Cliffwood Oil & Gas, Texoil, AROC, and Southern Bay. He is well known in oil and gas circles and well acquainted with all aspects of the industry. Mury and Chandler’s experience spans exploration and acquisition, prospect generation, contract compliance, and administration. Others, such as CFO Howard Ehler and Robert Anderson, VP of business development, acquisition, and divestiture activities, also have years in the industry under their belts.  

The operating subsidiaries also include technical, land, and administrative personnel with a proven track record for success. Many people throughout all levels of the company worked with him for years through many different organizations. Most have experience with independents and big oil alike and lend their expertise to GeoResources in everything from management and finance to geology and engineering. In a business like oil and gas, where experience and reputation count, the importance of the company’s leadership resources cannot be overstated.

Stick to the plan
GeoResources faces challenges with land acquisition and operating costs as the company continues its growth path. Competition for land is fierce and rising costs of materials, equipment, and labor make it more expensive to do business despite the price of oil. Fortunately for the company and its shareholders, GeoResources’ understanding of the industry puts it in good position to overcome these obstacles.

Land acquisition is a central piece of the company’s growth strategy. It looks for underutilized assets and to maximize a property’s potential for success. Properties larger companies may find unattractive may be the perfect fit for GeoResources. But if a property isn’t realizing its potential, the company immediately looks to sell. This is why the company no longer operates in Michigan.

“We redeployed resources to the Williston Basin to focus on our core areas,” said Lodzinski.

The company also uses partnerships to help with risk management as well as overhead and finders costs. With major investments underway to expand its drilling portfolio, GeoResources can’t afford to waste time and money on underperforming land or on expensive R&D efforts.

“We are expanding drilling and development opportunities by expanding our inventory. Our drilling results show our internal geological and engineering strength,” Lodzinski said. “We believe the diversified approach to our business model allows us to grow.”

This is one reason GeoResources decided to expand its capital budget in 2008/09. The company is banking on the production performance of its current inventory of properties, as well as keeping an eye out for opportunities with new land acquisition and exploration. Lodzinski also said there may be opportunities for the company to engage in future merger proceedings, which could also help to expand its total acreage and profit.

“We could expand projects faster depending on production results and divestitures,” said Lodzinski. “We keep our focus on the Williston Basin, the Rocky Mountains, and the Gulf Coast because of opportunities for long-term production and economic reserves.”
 
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