A junior independent working in Appalachia, backed by private equity, has rebranded to reflect the next era of shale development in the basin, one in which management believes the company can prosper despite an array of challenges facing the industry.
Huntley & Huntley Energy Exploration LLC, a partnership formed in 2012 between Blackstone Group Inc. and long-time shallow operator Huntley & Huntley Inc., is now Olympus Energy LLC. The company was formed to aggregate a land position in Southwest Pennsylvania, and for the following three years, it did just that.
However, with Pittsburgh-based Huntley & Huntley, a more than 100 year-old company that’s worked in Appalachia and other basins across the country, lacking experience in the unconventional space, Blackstone built a revamped management team that includes former executives of CNX Resources Corp, Chesapeake Energy Corp., EQT Corp., Pioneer Natural Resources Co. and the defunct Anadarko Petroleum Corp., now part of Occidental Petroleum Corp.
At a time when activity is slowing in the basin and as public companies are facing increasing pressure for better returns, Olympus CEO Chris Doyle thinks there’s room to grow and take on a bigger role in the nation’s largest gas-producing basin.
“We're at a junction within the industry, and certainly within this basin, where companies that were leading at one time are going to find themselves behind the eight ball a little bit,” he told NGI’s Shale Daily during an interview on the sidelines of a recent industry conference in Pittsburgh. “And there are going to be emerging companies, like the one we have, that can actually be leaders in the basin.”
Doyle took the helm at Olympus in 2016 after a stint overseeing Chesapeake’s Appalachian and Powder River Basin operations. Prior to that, he spent 18 years at Anadarko in various roles, including as vice president of operations for the Southern and Appalachian region.
When he joined Olympus, the company had about 60,000 net acres. Today it holds 100,000 net acres, cobbled together in acquisitions and swaps as the basin was being consolidated by larger public operators.
I, too, have been watching H&H grow around Allegheny & Westmoreland counties the past several years. They represent a very promising future in our region. But what about further expansion into Indiana, Jefferson & Armstrong counties? Could they become a leader in the Marcellus field and let the bigger companies handle the Utica field? Could they be a candidate to purchase some of the non-core areas from the major companies? Could they be a candidate to buy-out a struggling major? Just some interesting ideas to think about for the next phase of our gas development.
Nobody will be buying non-producing, non-core for quite some time. Expansion is quite the opposite of what you will be seeing for the foreseeable future.
Aside from consolidation, PDP deals will be about the only deal flow you will see in 2020-21.