The Conversation (0)
Quattro Exploration is playing the conservative game when it comes to drilling its oil resources in Canada.
Based in Calgary, the Canadian company has made a conscious decision to only drill oil to help its cash flow, not to help flood the market with more oil.
President and CEO Leonard Van Betuw spoke with Oil Investing News to explain his company’s ideology and how it fits into the oil market.
A homegrown solution
Speaking from Calgary, Van Betuw said his experience growing up in Southeast Saskatchewan is key to his reason for limiting production.
“I’ve always been around oil, grain and farms, so you can’t help but appreciate it after being immersed in that economy,” he said. “We’re just building out our business and making sure we have a sustainable business model so that we can handle those ebbs and flows in supply and demand.”
Van Betuw said this plan helps ensure a variety of costs are kept under control and saves his company money. ”We don’t find ourselves relying on cash flow to the extent it upsets the business model,” he said, adding that cash flow is the lifeblood of any junior company.
Going it alone
What helps Quattro stick to that plan is the fact that it holds 100-percent interests in its properties. That allows the company greater flexibility as it does not have to consult outside parties.
“Everybody says if you have a partner you can move faster,” said Van Betuw. “Ultimately, it drags on your ability to do things. We’re a diverse company and people say, ‘how are you managing that?’ How we’re managing that is by not having to be too sensitive to partnerships. If we see one project breaking out in front, we can run with it a bit harder.”
The company operates properties in East-Central Alberta, Northwest Alberta as well as Southern Saskatchewan and Northeast British Columbia. Its larger properties are the McMullen property in Northwest Alberta and the Wood Mountain property in Saskatchewan.
Van Betuw estimates that McMullen has 300 million barrels of oil in it, while an evaluation well was completed at Wood Mountain on Tuesday — Quattro announced the intersection of four prospective horizons with 60 meters of prospective oil and gas, with the evaluation well drilled, cored, logged and cased to a total depth of 1,950 meters intersecting the Bakken, Torquay and Birdbear zones for an aggregate cost of $1.2 million.
Van Betuw said the plan for the Wood Mountain project is to hit production by the third quarter of 2015.
What’s next?
The goal, Van Betuw said, is for Quattro to become recognized as an intermediate producer by developing its projects and expanding an international project.
“We want to have a sustainable, investment-grade company,” he said. “It’s a little bit painful at times for our investors, but they know what the long, steady road is for the company.”
With the price of oil slumping to a 27-month low of US$80.49, Van Betuw admitted he doesn’t see a change in the short-term price for oil.
“I’m not a doom-and-gloom guy, but I run myself on macroeconomics. On a world scale I still see a struggle as people try to redefine their market share, with pressure on commodities prices for the next 12 to 18 months,” he said.
Securities Disclosure: I, Nick Wells, hold no direct or indirect investment of any of the companies mentioned.