CFO Blog: 10-25-2011

All,

We're well into our drilling program now which is keeping me really busy. I just wanted to give everyone a quick update and share an interview that I think will help everyone better understand our strategy.

We finished drilling our Leonard #4 well yesterday. The log looks good so we cased and cemented late last night. It will probably be a couple of weeks before we have a good potential test, but I'll let you know as soon as we have hard info. (I can go into the precise reasons why testing takes time if anyone is interested - just put it in the comments).

The good people at OilVoice were kind enough to do an interview with me earlier this month. No, we didn't pay them for the piece or for placement. No, we didn't solicit them to do the interview - they came to us. And finally, no, we don't advertise with OilVoice. Given all of that, I take their interest in our story as a good sign.

OilVoice Interview

I'll keep everyone updated as we progress. Check back often and in the mean time feel free to comment or email me questions directly.

Best,

Shannon McAdams
Santa Anna, TX

CFO Blog: 10-19-11

All,

This is just a quick note to clarify something in our press release. When I say that we expect the wells to average 5,000-6,000 barrels of oil over five years, I mean that each well is expected to produce 5,000-6,000 barrels of oil. That's 25,000-30,000 barrels for the program over five years.

The reason I refer to average numbers is that there is likely to be significant variation from well to well. Some could be significantly above that range, others far below (or even the occasional dry hole). That's part of the reason for a multi-well drilling program: diversification of risk.

I'm in West Texas coordinating the drilling program now. We spudded in the Leonard #4 well today and expect to TD (reach total depth) over the weekend. Things are moving fast now, so check back regularly - I'll keep you updated on progress.

-Shannon McAdams
 Santa Anna, TX

CFO Blog: 10-18-2011

All,

By now you've probably read the press release for our 4Q11 drilling program. I'm heading to West Texas today to manage the drilling and completion, so I'll keep this post brief.

The take-away from the drilling program is that it could more than double our current production levels. This assumes we make our baseline estimates of average performance for the five wells, which we believe are conservative. Keep in mind that there is likely to be significant variation in performance for individual wells, so I recommend that everyone reserve judgement on the program until we finish testing.

The more important item announced today is the partnership with BlueRock Energy Capital. I worked with these guys during my previous life as an investment banker. Their team is made up of professionals with direct experience in oil & gas development. They spend most of their time evaluating management teams and the assets that they've assembled. The fact that they not only gave us verbal encouragement, but also put their money behind us means a lot. We'll do everything we can to make sure that bet pays off for them and for Adino's shareholders.

I'd like to point out one more thing about our new financial partners. Their primary funding comes from Tudor, Pickering, Holt & Co through its private equity arm, TPH Partners. TPH is probably the premier independent investment bank in the energy industry. In addition to evaluation by BlueRock's team, Adino had to gain support from TPH to close funding for our new drilling program. It's hard to overstate the importance of validation of our plan by these two groups of seasoned energy professionals. You can learn more about BlueRock here and TPH here.

I'm off to West Texas. I'll keep everyone updated on our progress so check back regularly. You can also sign up for email alerts at the top right of this page. I'll never share your email address or use it for any purpose other than to update you on posts from this blog.

Let's go make some oil!

-Shannon McAdams
 Houston, TX

The Weekend Interview with Harold Hamm: How North Dakota Became Saudi Arabia - WSJ.com

This is a great interview with a true oil & gas entrepreneur. He's a great example of what's possible in the industry with hard work, discipline and a little luck. It's disgusting that the EPA is using selective enforcement to slow the development of industries of which the current administration does not approve.

The Weekend Interview with Harold Hamm: How North Dakota Became Saudi Arabia - WSJ.com:

CFO Blog: 10-7-11

All,

It's been quite some time since my last post. We've been busy in the intervening months streamlining and improving our field operations as well as preparing for another leg of growth in our E&P business. There's a lot to discuss, so let's jump right in.

We have completed and tested the Leonard #2 and #3 wells with good results. The two wells tested at a combined 14 barrels of oil per day, which is well above our targeted average for the area. The economics on these wells are excellent, mainly because of the low drilling and production costs. We intend to continue to deploy capital on this program which should significantly improve our cash flow.

   

As I mentioned above, we've made improvements to our field operations, primarily in the area of personnel. We've upgraded the quality of the team and reduced headcount. Additionally, we have tweaked our production methods which has improved lease productivity, especially for the more mature wells. This consumed quite a bit of time over the summer, but I am very happy with our new field team and have confidence that we will continue to see measurable improvements in the coming weeks and months.

Some of you may be wondering why I haven't been posting recently. Frankly, I wasn't certain anyone was listening. Of course we continued our SEC reporting, but I wasn't sure the color that I try to provide through the blog was adding value for anyone. After hearing from some of you and reading some of the feedback on various sites, I can see that I was wrong. So from here on out I'll provide regular updates through this blog. We'll continue to do press releases for big items, but if you want to keep up with our progress in more detail then check back here regularly.

Speaking of communication, you may have noticed from our filings that we've retained RKM Capital to increase awareness of our Company and the progress we're making. You can find their latest promotional materials here. 

I hope this has been helpful. As I mentioned above, we're moving into a new growth phase. Keep an eye out for updates and make sure to check back here on a regular basis. Have a good weekend and Roll Tide!   

Best,

-Shannon