An Ambitious Energy Company with Big Growth Plans

Saturn Oil + Gas, Inc.
Written by Nate Hendley

It’s been a good year so far for Saturn Oil & Gas, Inc., a rising firm in Canada’s energy sector staffed by a young, ambitious management team.

“In the first quarter of this year we drilled nine wells,” stated Saturn CEO and Chairman John Jeffrey, in an interview taped at the UNITI Mineral Oil Technology Congress in Stuttgart, Germany, in April, 2019. “They all went under budget, which is very exciting for us. They are producing more than we hoped. We’ve acquired another 13 sections of land. Our [peak] exit rate for the first quarter is just about 1,400 to 1,500 barrels a day, which is a lot higher than we expected. Some of our wells have come on a lot stronger than we thought. We’re very thrilled with that. Everything from our point of view is exactly where we want it to be.”

The UNITI interview was conducted by Commodity-TV Chief Editor Jochen Staiger. A video of the interview is available on the Saturn website.

Saturn Oil + Gas describes itself as “a public energy company focused on the acquisition and development of undervalued, low-risk assets… De-risked assets and calculated execution will allow Saturn to achieve growth in reserves/production through retained earnings.” While based in Calgary, Alberta, Saturn’s operations are centered in Saskatchewan, the province next door.

A month after the UNITI interview was taped, Saturn released its official Q1 2019 results, which backed up Jeffrey’s rosy review.

The company “achieved record production of 806 barrels of oil per day (bbls/d), an increase of 318 percent compared to the same period in 2018 and an increase of 53 percent over the previous quarter, with a peak production rate in the period that exceeded 1,400 bbls/d,” reads a Saturn press release from May 6.

As for the bottom line: “Revenue of $4.6 million was 31.9 percent higher or $3.5 million greater than the first quarter of 2018, directly related to Saturn’s successful drilling program and production growth over the past 12 months,” continues the press release.

In another interview, conducted in January of this year with SmallCapPower reporter Jim Gordon at the Vancouver Resource Investment Conference (VRIC) 2019, Jeffrey explained that his team liked drilling in the cold-weather months. “We prefer to drill when it’s frozen. Things don’t get stuck in the mud,” he said. At the time of the interview, Saturn was in the midst of drilling operations. Once an initial round of cold-weather drilling was completed, the company planned to tend to its new wells. If all went to plan, the firm hoped to “be in the field again, starting in June if the season allows for it, and then drilling right to the end of the year,” added Jeffrey.

During the same interview, the Saturn CEO offered some insights into the company: “The thing that we really enjoy,” he said, is that, “our whole management team are all U of S grads. So we’re local guys, we’re from the area. We know everyone,” he said.

U of S is the University of Saskatchewan, and Jeffrey himself earned an MBA with a major in Finance from this post-secondary school. His background also includes being a founder and CFO of a geological and engineering consulting firm called Axiom Group. The latter company is based in Saskatchewan and has drilled over 800 wells across Western Canada.

Scott Newman, Saturn’s Chief Operating Officer (COO), was a founding partner and the CEO of Axiom Group and majored in geology at the University of Saskatchewan.

Saturn’s Chief Financial Officer (CFO) Geoff Jones, meanwhile, holds a Bachelor of Commerce degree from the University of Saskatchewan. He is also a Chartered Professional Accountant (CPA).

“We’re all younger guys; our whole team are in our thirties. But a lot of the vendors are the same. Unlike a lot of Calgary-based companies that are kind of a big organization or faceless, the fact we can be there and socialize with these guys I feel gives us a competitive advantage. It’s a lot of fun in that sense,” continued Jeffrey in his interview with Gordon, a video of which is posted on the Saturn website.

Despite the relative youth of the top managers, Saturn is far from reckless. The firm takes a careful, measured approach to growth.

“We are currently evaluating a series of low-risk opportunities with significant upside potential,” states company literature. “Saturn is driven to build a strong portfolio of cash flowing assets with strategic land positions.”

In addition to this, fiscal prudence is the order of the day, the idea being to maintain a solid balance sheet to underpin further expansion. Long-term stability is another major goal for the company, which Saturn hopes to achieve by having a strong and accessible management team and highly skilled technical crews. The company is “very hands-on… our guys are in the field all the time,” added Jeffrey in his SmallCapPower interview.

When it comes to promoting itself, Saturn Oil + Gas has a website and a social media presence, with profiles on Facebook and YouTube. The company also attends trade shows; it plans on exhibiting at the International Precious Metals & Commodities Show scheduled for November in Munich, Germany, for example.

As befits a firm with young managers, Saturn utilizes cutting edge technology to advance and future-proof the business. For instance, company staff can monitor well activity on their smart phones.

The company aims to expand production to 2,000 barrels a day in 2019 and “has another 25 to 30 wells planned for the remainder of this year. We’re still finalizing that capital program, but we’ve got the land and drill targets to go after,” stated Jeffrey in his UNITI interview.

In the interview, Staiger asks if Saturn aims to hit a target of 10,000 barrels a day or even higher.

Jeffrey replied that, “One thing we’re really trying to do [is] we want to aggressively grow, but we want to do it in a controlled fashion where we can keep our operating costs at a reasonable amount. Our long-term projection is that we’re looking at exiting this year at 2000, next year at 3,000, and seeing where it goes from there – hopefully adding 1,000 barrels a day to that. That’s a manageable number with the team we have and the land we have available.”

AUTHOR

CURRENT EDITION

The Economics of Influence

November 2022

PAST EDITIONS

Positive Potential

October 2022

The Ups & Downs of Crypto

September 2022

Bigger, Better (& Safer) Than Ever

August 2022

More Past Editions

Featured Articles