Tall City Exploration
Oil and gas exploration and production is a complex business, and it can be tempting to rely on tried-and-true methods to get the job done. But Tall City Exploration keeps an open mind and looks at ways it can do things differently, President Joseph E. Magoto says.
As it explores the Permian Basin, Tall City has looked at the number of frac stages it uses and how closely it drills its wells together to yield better results. “We’re certainly trying to push the envelope to make the best completions we can,” he says.
Magoto co-founded the Midland, Texas-based company in 2012 with his partner, CEO Michael A. Oestmann. Both are longtime veterans of the industry who began their careers at Exxon USA.
In 2010, Magoto and Oestmann reconnected as they worked for separate firms in Midland. “We had some common hobbies and common passions about oil and gas,” Magoto recalls.
Two years later, the two started Tall City with a capital commitment from Henry Resources and $200 million from Denham Capital Management LP, an energy and resources private equity firm. Magoto and Oestmann chose to pursue drilling in the Wolfcamp Shale area of the Permian Basin. “It’s a hot basin,” Oestmann says.
Tall City has assembled 100,000 acres of property to explore, Magoto says. “I’m proud of that,” he says. “We [managed to do that] against some very tough competition.”
So far, Oestmann says, the company has drilled 10 wells, and is working in Howard and Reagan counties, Texas. “We’re very cautious about the costs,” he adds. “We’re slightly under our [authority for expenditures] amount for those 10 wells, but it’s a challenge to keep that trend going.”
Getting the Best
When Tall City was formed, it minimized its start-up time and moved quickly thanks to the efforts of its skilled staff, Oestmann says. “We participated in our first horizontal well within our first 12 months,” he recalls.
Magoto explains that Denham Capital has encouraged Tall City to hire the best staff members it can, as opposed to the most economical.
“Instead of focusing on how cheaply you can do this, they focused on getting the best people,” he says.
Oestmann is proud of the management team Tall City has assembled. The team members include Vice President of Drilling Dennis Kruse, whose experience includes Gulf Oil Co. and Chevron USA; Vice President of Reservoir Engineering Edward J. Gibbon, who has more than 40 years in oil and gas exploration and production; Vice President of Operations Gary Womack; and Vice President of Geology Darryl James.
Magoto highlights James. “He’s helped us unlock the geologic secret to the most valuable piece of acreage that Tall City owns,” he says.
Oestmann also names Vice President of Land and Legal Angela Staples, who has 10 years in the industry. “[They are] all long-term oil and gas folks that bring the experience to bear that we need to move quickly,” he says.