Cardinal Energy Group, Inc.
A Culture of Excellence and Responsibility
Cardinal Energy Group, Inc. is an environmentally responsible oil and gas company. We are reclaiming the vast, remaining reserves from our Nation’s producing oil fields. We focus on acquiring fields with existing production that are underdeveloped and located within formations that have demonstrated good historical production.
Cardinal is a long term asset play, in a traditional energy sector that continues to grow globally. We are managed by public company and energy industry professionals that are admired and dedicated to their craft. We are a resourceful player suited to take advantage of the industry downturn.
Our management brings the depth of experience and diversity to steer Cardinal’s future. Our team has an average of over 25 years’ experience, with some of our individuals approaching 40 years’ of know-how in their respective fields of expertise.
Our finding and lifting cost of production is significantly lower than the national average because we pursue shallow oil, within know formations that have good historical production. Consequently we will be profitable in the $30.00 range should the price of oil ever reach that low. Furthermore, we are not over leveraged like many of our competition; we have a small staff of executives and professionals, which keeps our overhead low. And we outsource all well drilling and completing operations. However, we maintain pumping operations and administration once a well is complete.
We anticipated this price decline during the formation of our company. Our research indicated that America was emerging as the number one producer of oil and gas in the world due to new technology that has unlocked its vast shale reserves. We also understood that the Russian, Mid-Eastern and South American oil companies were producing at record levels. These unfolding events coupled with waning global demand for oil indicated to us that the energy sector would naturally decline. Therefore we developed Cardinal to take full advantage of the next upswing by positioning our company to exploit the emerging opportunities in this downturn. Many of our competitors are suffering from the price collapse of oil, making them unprofitable. As new assets become available from financially strapped companies, we can selectively choose the best of their distressed prospects as they become available at deep discounts.
Hence we view this industry downturn as a great opportunity to continue building Cardinal into a very profitable company. Our access to capital allows us to act quickly when a distressed asset becomes available. Numerous competitors are shedding their assets in an effort to meet their overhead or debt obligations. As many of them are in disarray due to the nature of their financings, Cardinal on the other hand is capitalized with senior secured debt by investors that are in for the long haul. Therefore we can be patient, methodical and opportunistic about the oil and gas fields that we acquire and exploit in this depressed market.
Our acquisition strategy follow some basic rules. The prospect fields that we target must have existing wells that are producing minimally or not at all. We seek formations that have multiple shallow zones that can also produce. We assess the compliance issues and plugging liabilities before the acquisition to determine if its liabilities make the field cost prohibitive to develop. We also do an overall prospect assessment to determine if the wells can become commercially viable if reworked. If the field meets our criterion, we take ownership and do what is required to maintain or bring the filed into compliance as we plot the formation’s in-field development or the development of its other up-hole or down-hole pay zones.
In many cases the mechanical integrity of older wells on mature fields is compromised and not worth repairing or reworking. Many of these wells are over 30 to 35 years old. Therefore we will do the minimum to keep any existing production going as we develop a plan to further improve the field. Our real interest lies in developing the field with new drilling into its multiple zones.
As we reassess the field’s geology we use the older well records and their locations on the property to help determine the underlying formation. This assessment allows us to make informed decisions about where to drill new wells, which pushes up our success rate. The older wells help us understand if the formation is a meandering fluvial sand or an old lake or sea bed; we may also re-log the wells to determine the viability of its other zones. We consider any adjacent properties, or properties in the proximity of our field based on what we learn from the records and the geology of the field we are drilling.
Cardinal is concentrating its efforts in Texas where we have recently completed numerous prospect acquisitions. We are in various stages of negotiation with other prospects. We have established a field operations office in Albany Texas for our base.
As we move forward we aim to build Cardinal on the solid foundation we established from developing the Company over the past several years. Management plans to continue Cardinal’s growth – with an eye on helping the environment by plugging wells that are no longer viable. Doing so, we contribute to America’s energy independence. And along the way, we contribute to protecting our Country’s groundwater and overall ecological health, as we produce revenue for our shareholders.
If you are a long term investor that understands the natural cycles of this industry and realize the inherent advantages that are presenting themselves in this downturn then an investment in our company is for you.