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COPYRIGHT 2005 Hart Publications, Inc.
Oil and Gas Investor: Describe the strategy that drives your company.
Heinemann: Historically, our company has been a heavy oil company in California. Up until 2003, we basically had 100 million barrels of heavy oil reserves in the San Joaquin Valley in California. About five years ago, we recommitted ourselves to growing the company, and because we thought opportunities for acquisitions were limited in California, we embarked on a strategy to make acquisitions outside our home state. When we made those acquisitions, we had a few other goals in mind. One, obviously, was to lighten our production mix with natural gas or light oil, either one. We decided when we were going to go into new basins, we would likely be doing that with joint ventures. That was going to be our preference. We embarked on a number of acquisitions, beginning in September 2003 when we purchased the Brundage Canyon Field in the Uinta Basin in Utah. We purchased that field because we thought it was an undercapitalized oilfield; it was owned by Williams Co. at the time. When we took over operations, that field was producing about 1,200 barrels of oil equivalent (BOE) per day. Today, it's producing over 5,000 BOE per day, and it's been that success which has given us the confidence to make a number of other...
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