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Constellation Energy Partners LLC (CEP) RSS Feed

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Created
02/28/08
Type
Free
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http://www.constellationenergypartners.com/



Welcome to Constellation Energy Partners LLC

Constellation Energy Partners (NYSE Arca: CEP) is a limited liability company focused on the acquisition, development and production of oil and natural gas properties as well as related midstream assets.

Most of our current production is natural gas, which we recover primarily from coalbed methane. Our proved reserves are located in the Black Warrior Basin in Alabama, the Cherokee Basin in Oklahoma and Kansas, the Woodford Shale in the Arkoma Basin in Oklahoma, and the Central Kansas Uplift in Kansas and Nebraska.


Strategy
 

Our primary business objective is to create long-term value and to generate stable cash flows allowing us to resume making quarterly cash distributions to our unitholders. In the long term, we are focused on increasing the amount of our future quarterly distributions over time. We plan to achieve our objective by executing our business strategy, which is to:

  • Organically grow our business by increasing reserves and production through what we believe to be low-risk development drilling that focuses on capital efficient production growth;
  • Reduce the volatility in our revenues resulting from changes in oil and natural gas commodity prices through efficient hedging programs;
  • Make accretive acquisitions of oil and natural gas properties characterized by a high percentage of proved developed reserves with long-lived, stable production and low-risk drilling opportunities, which may include associated midstream assets such as gathering systems, compression, dehydrating and treating facilities and other similar facilities; and
  • Realize value by opportunistically forming partnerships, participating in farm-out arrangements, joint operating agreements or other capital-efficient ventures to take advantage of our significant undeveloped acreage positions in the Cherokee Basin.

Strategy

Our primary business objective is to create long-term value and to generate stable cash flows allowing us to resume making quarterly cash distributions to our unitholders.  In the long term, we are focused on increasing the amount of our future quarterly distributions over time.  We plan to achieve our objective by executing our business strategy, which is to:
•Organically grow our business by increasing reserves and production through what we believe to be low-risk development drilling that focuses on capital efficient production growth;
•Reduce the volatility in our revenues resulting from changes in oil and natural gas commodity prices through efficient hedging programs;
•Make accretive acquisitions of oil and natural gas properties characterized by a high percentage of proved developed reserves with long-lived, stable production and low-risk drilling opportunities, which may include associated midstream assets such as gathering systems, compression, dehydrating and treating facilities and other similar facilities; and
•Realize value by opportunistically forming partnerships, participating in farm-out arrangements, joint operating agreements or other capital-efficient ventures to take advantage of our significant undeveloped acreage positions in the Cherokee Basin.



Overview
 

Our proved reserves are located in the Black Warrior Basin in Alabama, the Cherokee Basin in Oklahoma and Kansas, the Woodford Shale in the Arkoma Basin in Oklahoma, and the Central Kansas Uplift in Kansas and Nebraska.

Our reserves provide long-lived production, low-risk, low-cost drilling opportunities and a high percentage of proved developed reserves.

Our asset base contains over 2,800 low-risk, low-cost drilling opportunities which should provide us the opportunity to organically grow our business over time.


 

Black Warrior Basin

Statistics

As of December 31, 2010
 

 

  • 5th largest coalbed methane basin in the U.S.

  • Estimated Proved Reserves:

    • Based on SEC Required Prices: 76 Bcfe*

    • Based on Forward Prices: 86 Bcfe**

  • Net Acreage: Over 43,000

  • Net Producing Wells: 493

Our legacy assets at the time of our IPO were all located in the Black Warrior basin.

The Black Warrior basin, located in Alabama, is the fifth largest coalbed methane basin in the U.S., with production that has been ongoing since the early 1980s.

The basin's characteristics are well-suited to the E&P MLP structure. It has long-lived, stable production with low-risk drilling opportunities. Additionally, natural gas produced in the basin attracts prices that are typically very near the price of the NYMEX contract for natural gas.

* Estimated by third party reserve engineers based on the price method prescribed by the SEC at December 31, 2010

** Estimated by third party reserve engineers based on forward market prices at December 31, 2010

Central Kansas Uplift

Statistics

As of December 31, 2010
 

 

  • Non-operated working interest in 36 wells

  • Estimated Proved Reserves:

    • Based on SEC Required Prices: 1 Bcfe*

    • Based on Forward Prices: 1 Bcfe**

  • Net Producing Wells: 8

The Central Kansas Uplift is an oil prone region located in Kansas and southern Nebraska. Over 2 billion barrels of oil have been produced in this region from multiple horizons.

In December 2010, we acquired interests in 36 producing oil wells from a private seller.

* Estimated by third party reserve engineers based on the price method prescribed by the SEC at December 31, 2010

** Estimated by third party reserve engineers based on forward market prices at December 31, 2010

Cherokee Basin

Statistics
As of December 31, 2010
 

 

  • 8th largest coalbed methane basin in U.S.

  • Estimated Proved Reserves:

    • Based on SEC Required Prices: 88 Bcfe*

    • Based on Forward Prices: 130 Bcfe**

  • Net Acreage: Approximately 725,000

  • Net Producing Wells: 2,272

The Cherokee Basin, located in Kansas and Oklahoma, is the eighth largest coalbed methane basin in the U.S. Production of coalbed methane gas has been ongoing since the late 1980s. Consistent with our objectives, the basin is mature with stable producing properties and low-risk drilling opportunities.

Our current position in the Cherokee Basin results from three acquisitions executed in 2007.

  • In April 2007, we acquired coalbed methane properties located in the Cherokee Basin in Kansas and Oklahoma from EnergyQuest Resources LP.

  • In August 2007, we acquired additional coalbed methane properties through our acquisition of AMVEST Osage, Inc.

  • In September 2007, we acquired additional coalbed methane properties from Newfield Exploration MidContent, Inc.


* Estimated by third party reserve engineers based on the price method prescribed by the SEC at December 31, 2010

** Estimated by third party reserve engineers based on forward market prices at December 31, 2010


 

Woodford Shale

Statistics
As of December 31, 2010
 

  • 4th largest shale basin in U.S.

  • Non-operated working interest in 83 wells

  • Estimated Proved Reserves:

    • Based on SEC Required Prices: 4 Bcfe*

    • Based on Forward Prices: 5 Bcfe**

  • Net Producing Wells: 10

The Woodford Shale is located in the Arkoma Basin and is the fourth largest shale basin in the U.S. The increasing interest in the Woodford Shale has been driven by much of the experience that operators and exploration companies have gained from working in the Fayetteville Shale and the Barnett Shale along with changes in drilling technology in recent years.

 

In March 2008, we acquired interests in 83 producing wells located in the Woodford Shale in Oklahoma from an affiliate of our then-sponsor, Constellation Energy Group, Inc.

* Estimated by third party reserve engineers based on the price method prescribed by the SEC at December 31, 2010

** Estimated by third party reserve engineers based on forward market prices at December 31, 2010

 

Management
 
Executives   Board of Managers
Stephen R. Brunner   John R. Collins
Charles C. Ward   Richard H. Bachmann
Michael B. Hiney   Richard S. Langdon
Lisa J. Mellencamp   Hugh M. McIntosh
    John N. Seitz

John R. Collins
Chairman of the Board of Managers

  John R. Collins is one of two members of our Board of Managers designated by the owner of our Class A units and is Chairman of our Board of Managers.

Since August 2011, Mr. Collins has served as the Chief Financial Officer of Enduring Hydro LLC, a privately held company which provides strategic advice on and investments in hydro and other clean energy generation. Mr. Collins served as Senior Vice President of Constellation Energy Group, Inc., or Constellation, from October 2008 to December 2010. Prior to that, Mr. Collins was the Chief Financial Officer of Constellation from May 2007 to October 2008 and a member of Constellation's Executive Committee, a Senior Vice President of Constellation from January 2004 to July 2007 and Constellation's Chief Risk Officer from December 2001 to January 2008. Mr. Collins was also Managing Director-Finance and Treasurer of Constellation Power Source Holdings, Inc. from January 2000 to December 2001. From February 1997 to December 2001, Mr. Collins served as the senior financial officer of Constellation Energy Commodities Group, Inc., or CCG.

Mr. Collins is the former Chairman of the Board of the Committee of Chief Risk Officers, an energy industry association of risk management professionals.

Mr. Collins earned a bachelor's degree in business administration from the University of Delaware and a MBA with a concentration in finance and strategic planning from the University of Pittsburgh's Katz School of Business.

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Richard H. Bachmann
Manager

  Richard H. Bachmann is an independent member of our Board of Managers and our Audit, Compensation and Nominating and Corporate Governance Committees and is the Chairman of our Conflicts Committee.

Mr. Bachmann joined the general partner (the "General Partner") of Enterprise Products Partners L.P. ("Enterprise") and Enterprise Products Company, a privately-held affiliate of Enterprise, as Executive Vice President, Chief Legal Officer and Secretary in January, 1999. Mr. Bachmann resigned such positions in November 2010. Also since January 1999, Mr. Bachmann has served as a Director of Enterprise Products Company. He previously served as a Director of the General Partner from June 2000 to January 2004 and was re-elected and continued as a Director of the General Partner from February 2006 until April 2010. Mr. Bachmann was elected Group Vice Chairman, Chief Legal Officer and Secretary of Enterprise Products Company in December 2007. Since April 2010, Mr. Bachmann has been and continues as the President and Chief Executive Officer of Enterprise Products Company.

From August 2005 until April, 2010, Mr. Bachmann served as Executive Vice President, Chief Legal Officer and Secretary of EPE Holdings LLC, the sole general partner of Enterprise GP Holdings L.P., a publicly-traded partnership and an affiliate of Enterprise. Mr. Bachmann was also elected a Director of EPE Holdings in February 2006. In April 2010, Mr. Bachmann resigned his positions as Chief Legal Officer and Secretary of EPE Holdings LLC, but remained as a director and an Executive Vice President of that company until its merger with and into a subsidiary of Enterprise. After the merger in November 2010, Mr. Bachmann was elected a director of the post-merger general partner of Enterprise.

In October 2006, Mr. Bachmann was elected President, Chief Executive Officer and a Director of DEP Holdings LLC, the sole general partner of Duncan Energy Partners L.P., a publicly-traded partnership, but resigned those positions in April 2010 to devote more time to his position at Enterprise Products Company. All of the foregoing entities perform various transportation and other services to the energy and petrochemical industries.

Prior to joining Enterprise Products Company in 1999, Mr. Bachmann served as a Partner in the law firms of Snell & Smith P.C. from 1993 to 1998 and Butler & Binion from 1988 to 1993.

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Richard S. Langdon
Manager

  Richard S. Langdon is an independent member of our Board of Managers and Compensation, Nominating and Corporate Governance and Conflicts Committees and is the Chairman of our Audit Committee.

Mr. Langdon is also currently the President and Chief Executive Officer of Matris Exploration Company L.P. (a position held since July 2004) and Sigma Energy Ventures, LLC (a position held since November 2007), and Executive Vice President of KMD Operating Company, LLC (a position held since August 2009), each of which is a privately held exploration and production company. From 1997 until 2002, Mr. Langdon served as Executive Vice President and Chief Financial Officer of EEX Corporation, a publicly traded exploration and production company that merged with Newfield Exploration Company in 2002.

Prior to that, he held various positions with the Pennzoil Companies from 1991 to 1996, including Executive Vice President - International Marketing - Pennzoil Products Company; Senior Vice President - Business Development - Pennzoil Company; and Senior Vice President - Commercial & Control - Pennzoil Exploration & Production Company. Mr. Langdon also serves as a Director of Gasco Energy, Inc., a publicly traded exploration and production company.

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Hugh M. McIntosh
Manager

  Hugh M. McIntosh is one of two members of our Board of Managers designated by the owner of our Class A units.

Since June 2010, Mr. McIntosh has served as Head of School of Episcopal High School of Baton Rouge, Louisiana. Mr. McIntosh served as Head of School of Keystone School in San Antonio, Texas from January 2004 to June 2010, an educational consultant from 2002 to 2003, and as Chaplain at Punahou School in Honolulu, Hawaii from July 2001 to June 2002.

Mr. McIntosh was formerly a lawyer and partner at the law firm of Vinson & Elkins LLP from 1973 to 1998 in Houston, Texas and Washington, D.C., where he was active in the energy transactions practice for approximately 25 years and had responsibilities for the operation and administration of the firm's Washington D.C. office for approximately 10 years. In 1998, Mr. McIntosh withdrew from Vinson & Elkins LLP to attend Harvard Divinity School and obtained a Master of Divinity in 2001.

Mr. McIntosh has extensive civic and charitable involvement and has served on the boards of several non-profit entities providing arts and services to the community.

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John N. Seitz
Manager

  John N. Seitz is an independent member of our Board of Managers and Audit and Conflicts Committees and is the Chairman of our Compensation and Nominating and Corporate Governance Committees.

Mr. Seitz is also currently Vice Chairman of the Board of Directors of Endeavour International Corporation, a publicly traded oil and gas exploration and production company which he founded in February 2004.

Prior to founding Endeavour International Corporation, Mr. Seitz served as Chief Executive Officer, President and Chief Operating Officer of Anadarko Petroleum Corporation from January 2002 to March 2003, and prior to being named Chief Executive Officer, President and Chief Operating Officer, Mr. Seitz was the Chief Operating Officer and President of Anadarko Petroleum Corporation beginning in 1999. Mr. Seitz also served as Anadarko Petroleum Corporation's Executive Vice President, Exploration and Production and as a member of its Board of Directors from 1997 to 1999.

Mr. Seitz also serves as a Director for ION Geophysical Corporation, f/k/a Input Output, Inc., a publicly traded provider of seismic products and services, and as a Director of Gulf United Energy, Inc., a publicly traded energy company with interests in international oil and natural gas properties.

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Stephen R. Brunner
Chief Executive Officer, Chief Operating Officer and President

  Stephen R. Brunner was appointed President and Chief Executive Officer of Constellation Energy Partners in March 2008 and became an employee of the company in January 2009. He continues to serve in the role of Chief Operating Officer, a role he assumed in February 2008. Mr. Brunner has more than 30 years of experience operating oil and gas properties both domestically and internationally.

Prior to joining Constellation Energy Partners, Mr. Brunner also served as a Vice President for Constellation Energy Commodities Group, Inc., or CCG, where he provided support for Constellation Energy Partners in various operational activities.

Prior to joining CCG in February 2008, Mr. Brunner served as the Executive Vice President of Operations for Pogo Producing Company, where he was responsible for all aspects of exploration, production, acquisition and divestiture activity for seven business units in the United States, Canada, New Zealand and Vietnam.

During his 13-year tenure at Pogo, Mr. Brunner also served as Vice President of Operations, overseeing both domestic and international operations. He served as the Resident Manager of Thaipo Limited, a subsidiary of Pogo, as well as Offshore Operations Manager. Prior to his career with Pogo, he held various positions with Zilkha Energy Company, Chevron Corporation and Tenneco Oil Company.

Mr. Brunner earned a BS in petroleum engineering from Louisiana Tech University in 1981.

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Charles C. Ward
Chief Financial Officer and Treasurer

  Charles C. Ward has served as our Chief Financial Officer and Treasurer since March 2008 and became an employee of the company in January 2009. Mr. Ward has over 15 years of finance and energy industry experience.

Prior to joining Constellation Energy Partners, Mr. Ward also served as a Vice President for Constellation Energy Commodities Group, Inc. from November 2005 until December 2008. During that time, he provided financial expertise and support to Constellation Energy Partners and helped lead the company through its initial public offering in November 2006.

Mr. Ward was a Vice President of Enron North America Corp. from March 2002 to November 2005 and, prior to that, held various finance and asset management positions at Enron, El Paso Energy, and Tenneco.

Mr. Ward earned a MBA from Rice University in 1992 and a BS in accounting from the University of Houston in 1987.

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Michael B. Hiney
Chief Accounting Officer and Controller

  Michael B. Hiney has served as our Chief Accounting Officer and Controller since March 2008 and became an employee of the company in January 2009. Mr. Hiney has over 20 years of energy industry and energy related accounting experience.

Prior to joining Constellation Energy Partners, Mr. Hiney also served as a Vice President for Constellation Energy Commodities Group, Inc., or CCG, from July 2006 until December 2008. During that time, he served as Controller for Constellation Energy Partners, provided support in various accounting activities and helped lead the company through its initial public offering in November 2006.

Prior to joining CCG, Mr. Hiney held various positions at El Paso Exploration & Production Company for 16 years, including Director and Assistant Controller from 2004 to June 2006, Director of Financial Reporting, and Manager of Financial Reporting and General Accounting.

Mr. Hiney earned a MBA from Rice University in 1999 and a BS in business administration from Oklahoma State University in 1990.

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Lisa J. Mellencamp
General Counsel

  Lisa J. Mellencamp has served as our General Counsel and Secretary since January 2009 and has more than 25 years of legal experience with an extensive energy background.

Prior to joining Constellation Energy Partners, Ms. Mellencamp served as Associate General Counsel for Constellation Energy Resources from March 2008 until December 2008 and as Senior Counsel of Constellation Energy Commodities Group, Inc., or CCG, from March 2005 to February 2008. During that time, she assisted Constellation Energy Partners in various legal activities, including the company's initial public offering in November 2006.

Prior to joining CCG, Ms. Mellencamp was Associate General Counsel at Duke Energy Americas from July 2003 to March 2005. Earlier in her career, she was Assistant General Counsel at Enron North America Corp. and served as a Partner in the law firms of Gardere Wynne Sewell LLP from 1998 to 1999 and Hutcheson & Grundy, L.L.P. from 1988 to 1998.

Ms. Mellencamp earned a JD from Boston University Law School in 1982 and a BA from Colgate University in 1977.






 


 





 

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