Zenergy Inc.
Tulsa, Okla.-based oil and gas exploration and production (E&P) firm Zenergy Inc. – formerly Zinke and Trumbo Inc. – has been successful throughout its three decades due to its market adaptability, President Bob Zinke says. Zinke and then-partner David Trumbo met at Hawkins Oil and Gas, and decided to branch out on their own and establish Zinke and Trumbo in 1980 when they saw the need for a quality prospect-generation shop with a strategic focus on the mid-continental region of the United States, Zinke recalls. He changed the company’s name to Zenergy after Trumbo retired in early 2005.“Our business plan when we first started was to utilize our respective skill bases to generate and assemble quality E&P prospects and sell participation in those prospects to entities in the E&P space,” Zinke recalls.
The company was successful in its attempts and soon had numerous discoveries in southwest Kansas, Oklahoma and Texas . Today, the expanse of its operations run from Canada all the way down into the Gulf of New Mexico. “We’ve been very adaptive throughout our 30-year history, which is probably why we are still in existence and why we’ve been successful,” Zinke states. “That is why we survive and why we thrive. If gas prices are on the upswing, you’ll find Zenergy with an established equity position in numerous solid gas plays. Likewise, if oil is in vogue, Zenergy is always there as an early mover.”
He cites its position in the Bakken Shale oil play of the Williston Basin in Montana, North Dakota and Saskatche-wan as an example. “We initially became involved in the Williston Basin in 1998, so we were definitely one of the earliest players, and we are currently one of the most active players,” Zinke says. Today, Zenergy owns and/or controls more than 300,000 net leasehold acres – which was obtained organically rather than by acquisition, Zinke adds – with six drill rigs in operation.
Ahead of the Curve
One of Zenergy’s key competitive advantages is the fact that it is a private company with more flexibility than its public peers. “We want to provide the best possible returns for our capital providers and ourselves, and it’s that simple,” Zinke states. “Our decisions are not driven by a perception we are trying to create. Rather, our decisions are driven by true economics. Public companies are often only interested in the market reflecting the highest possible price for their stock in the short term, which can result in some interesting behavior.”
Rather than attempting to influence the market, Zenergy glides along with its ebbs and flows. “We always have the periscope raised to monitor where the industry is going so we can be ahead of what the trends are,” Zinke says. “Dealing with the cyclical nature of oil and gas has been a challenge since I started the company, so we are constantly trying to be adaptive to the winds of changes relative to commodity prices and all other factors that affect our business.
“If you look at the current forward curves for oil and gas, you see a lot more value on oil in North America,” he points out. “The forward curve for natural gas has been and apparently will be pretty bleak for some time.”
He suggests this is due to E&P companies’ success in the gas resource plays, particularly in the Haynesville, Barnett and Marcellus shale plays. Why the industry hasn’t increased its efforts to educate the public on the economic and environmental benefits of natural gas is a source of dismay to Zinke. “Frankly, I believe the industry has done a horrible job getting that message out to the public and to our leaders,” he says. “Because of the supply of natural gas we have, we should, in my opinion, be directing as much of our energy consumption toward natural gas as we can.”
Gas only will continue to increase in supply, thanks to advances in technology, which make it easier to extract that resource, he says. Staying on the cutting-edge of new applications in drilling and completion techniques has been another success factor for Zenergy. The company was among the first to apply these new technologies and methodologies to the Williston Basin, for instance, and it continues to align itself with best-in-class service providers such as Schlumberger and Halliburton. “Schlumberger logged the very first well that we drilled, and that well is still producing today,” Zinke notes.