Our business strategy is to provide long-term growth in net asset value per share, through the growth and expansion of our natural gas and crude oil reserves and production. At December 31, 2015, we had estimated proved reserves of approximately 54.6 Bcfe, comprised of 31.9 Bcf of natural gas, and 3.8 MMBbls of crude oil and condensate.
Several key elements of our business strategy include the following:
- Develop our core acreage position in the Haynesville. We seek to maximize the value of our existing assets by developing and exploiting our properties with the lowest risk and the highest potential rate of return. In the current commodity price environment, we intend to focus on the development of our core acreage position by drilling in the Haynesville, which has gone through a renaissance due to exceptional returns driven by longer laterals and higher proppant concentrations.
- Maintain optionality on our other acreage positions. As of September 30, 2016, we held approximately 235,000 gross (167,000 net) acres in the TMS in Southeastern Louisiana and Southwestern Mississippi and 25,000 gross (17,000 net) acres in the Eagle Ford trend of South Texas. We concentrate our efforts in areas where we can apply our technical expertise and where we have significant experience.
- Focus on maximizing cash flow margins. We intend to maximize operating cash flow by focusing on our higher-margin plays, which currently is our core Haynesville position in North Louisiana. In December 2016, we announced a 2017 preliminary capital expenditure budget of $35 – 40 million.
Maintain a Conservative Capital Structure. As of December, 2016, we had approximately $16.7 million of net debt, comprised of approximately $40 million of cash and $56.7 million of debt. $16.7 million is in the form of a 1st lien term loan and $40 million is associated with 2nd lien notes. The maturity date of the 1st lien term loan is September 30, 2019, subject to certain terms and conditions, and the maturity date of the 2nd lien notes is March 30, 2020. The 2nd lien notes are convertible into the Company's common stock at $21.33 per share, subject to adjustments.