Bill Barrett Corporation (BBG)

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Bill Barrett Corp. (BBG)

Bank of America Merrill Lynch Energy Conference Transcript

November 13, 2012 10:30 AM ET


Scot Woodall - Chief Operating Officer



Unidentified Analyst

… almost $1 billion market cap and Scot Woodall, the Chief Operating Officer from Bill Barrett will be presenting. Scot?

Scot Woodall

All right. Thank you. And thank you guys for joining the Bill Barrett presentation. I’ll refer to the last couple of pages of the presentation for normal disclosure statement. And then we’ll jump right in a little bit into who are?

And we’ll start with a couple of things. If you look listed on the left side of this slide here, is the some of the pertinent data of the company. We are 1.4 Tcf company. We have production of about 330 million cubic feet of gas a day and I’m happy to report today that about third of that production is now coming from oil and NGL.

On the right is the map of our areas of focus and you can see we bring a whole lot more commodity down. We worked hard at changing this portfolio to bring more liquids in that portfolio and I think we accomplish that, and I think you’ll see that as we work through the presentation.

A couple of items here listed why you should invest in Bill Barrett and I’ll highlight couple here as well. One, over the last 10 years we’ve done excellent record of transitioning from oil -- from natural gas into oil. We have been able to deliver year-over-year growth in terms of production and in terms of reserves.

We really are bringing a lot balance into our portfolio. We have 100% of our CapEx is now focused on oil related properties. Our development programs which are really focused into two basins we are executing on and delivering very positive financial results.

Over the last several years we have demonstrated that we are low cost operator, delivering top tier cost performance in nearly all categories in terms of funding and development costs, least operating expenses, G&A, and gathering and transportation.

And then lastly, in terms of financial strength, we have ample liquidity to make this transition to oil and to fulfill our plan.

Listed on this slide is what I would really say is the bad moment of the company, when you start talking about proved reserves, production and EBITDAX. And I’m happy to report, if you look over the time period here the last five years, we have delivered double-digit compound annual growth in all three of these metrics. And really as we look forward to the next three years, is really going to be focused on continuing this execution.

Let’s talk a little bit about where the company fits financially, we have strong balance sheet and we have ample liquidity. We recently have done a couple of transactions that improved the liquidity of the company.

First, namely is, we did a least transaction for our mid-stream assets, we announced that in Q2, we suppose see to that, we are about $100 million. Most recently in Q3 we announced the sale of -- some of our assets, which I would put in the natural gas non-core, non-strategic assets.

Really it is an excellent business decision. I think we’ve got great metrics, if you look into the actual metrics on the flowing barrel, on the produced reserve basis. What that does is, it’s going to bring in a little bit more liquidity to fund our existing development programs, as well as paydown debt. We expect this closing to happen by year end.

I want to highlight just a second these two core development programs, I believe in the focus of the company in 2012, and those are namely the Uinta Oil Program and then the program that we have going into DJ Basin.

Production growth in both those areas has been outstanding in 2012. And the production in Uinta Oil play has risen 75% year-to-date and the DJ Basin oil product is up 150%. We have been able to add to our acreage position in of those plays in 2012, adding some 14,000 acres in the Uinta Oil play and nearly doubling our acreage position in DJ Basin by adding some 40,000 acres in 2012.

Each of them have significant amount of undrill locations. The Uinta Oil play being the most mature basin with nearly 1700 undrill locations. The DJ Basin is one of our newer asset. I expect growth out of both of these assets when you think about in terms of 2012 year end booking and year end disclosures in terms of locations to be drilled.

Each one carry significant amount of upside of other horizon down facing and opportunities that will be evaluating in the future. More to come on both of these project areas later in the presentation.

Let’s go back to kind of the theme that we’ve been talking about is, the Bill Barrett transition a little bit more to oil. And if you back up the 2008 and you look at where the company sat, we were 94% natural gas company.

And then you look at pro forma of where we think we are going to be yet 2012 we expect that our oil and NGL makes to be about 73rd, when you think about after the assets sales that we’ve heard to earlier is going to change in the first quarter of 2013 to about 25% oil and total liquids component to be in that 35% to 40% range.

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