Since 1995, BXP partnerships have invested more than $250,000,000 targeting primarily conventional oil and gas properties that have stable, long-term production profiles but also possess significant short-term enhancement possibilities. The successful early-stage enhancement of many BXP acquisitions has also helped to accelerate payouts and reduce product price risk. Additionally, significant value additions in the early stages of an enhancement program have created opportunities to sell properties while leaving some additional upside to attract motivated purchasers.
As horizontal drilling and fracture stimulation technology have evolved over the last decade, a majority of large private and public companies have strategically refocused a significant portion of their exploration efforts on capital intensive unconventional resources such as shale and other low permeability formations. Because of the enormous areal extent and multi-zone nature of most unconventional formations, an unprecedented amount of capital is required for their development. Funding for many of these unconventional drilling programs by larger companies has come through a rationalization of their existing asset base, which has driven the divestment of an increasing number of conventional non-shale resources.
While BXP is actively involved in a select number of unconventional plays, our “contrarian” approach has been to focus our acquisition efforts on the exploitation of high quality conventional oil and gas properties. In addition to our customary deal flow, the increased divestment of quality conventional assets by shale-focused companies has added additional deal supply to the market. In this favorable acquisition environment, the exercise of a patient, disciplined approach in evaluating, negotiating, developing and selling oil and gas properties has provided an attractive combination of risk and return for BXP and their partners.