dbeard@dominionpost.com
MORGANTOWN – An oil and gas company that got a modest start in Cranberry Square by Cheat Lake in 2017 was recently valued at $1.3 billion, and became the only West Virginia-based company listed on the New York Stock Exchange.
Infinity Natural Resources is based in Morgantown and operates in Ohio and Pennsylvania. On January 30, it announced an initial public offering of 13,250,000 shares to begin trading on the NYSE. THE IPO closed on Feb. 3.
A week later, on Feb. 6, the underwriters of the initial IPO bought an additional 1,987,500 shares. And on Feb. 11, Infinity President and CEO Zack Arnold and Executive Vice President and Chief Financial Officer David Sproule, with other members of the leadership team, were able to celebrate by ringing the NYSE closing bell.
Arnold tells the story of the company.
“So this all began back in 2017 when a few of us really just wanted to make sure that we were able to continue to grow our careers and keep our families here and stay living where we wanted to in North Central West Virginia.”
They decided to seek private equity funding to help support their dream of acquiring and developing assets here, in Appalachia. Their vision took in the mineral areas of the tri-state region: northern West Virginia, eastern Ohio and southwestern Pennsylvania.
Two Texas companies, Pearl Energy Investments and NGP Energy Capital got behind them.
When they moved into their Cranberry Square space, he said, they were just borrowing some space, “while we were figuring out kind of what we were going to be when we grew up. And slowly over a series of two or three different transactions, we took over the entire floor.”
They remodeled the floor in 2021. “And now we’ve expanded to the building next door and we’re going to expand again across the parking lot here as we just continue to grow.”
Their holdings give them a flexible, two-prong approach to extracting resources, he said: oil in Ohio, dry gas in Pennsylvania.
“So we get real pure exposure to both commodities,” he said. “So for us, that’s given us the ability to pivot where we develop based on commodities.” In 2024, when gas prices weren’t favorable, they drilled for oil. Moving into 2025, the prices call for more balance.
“So now we get to go back and forth between our two fields. So we can complement the growth on our gas side with the growth on our oil side. Because today, that’s what commodities dictate.”
When they went on the road for their IPO, he said, “investors were very excited to know that they didn’t have to bet on gas or bet on oil, that they could just bet on a company that had both of those commodities in their inventory and could pivot back and forth between them. Because the rig that we use to drill both horizons, or both plays, is the same. The casing is the same. The employees are the same. So we have the ability to make very quick decisions to pivot from gas to oil, should the commodity price say to do that.”
Infinity has about 140 producing wells, he said, with 120 of them Ohio oil wells. And they drill about 20 new wells a year.
SUBHEAD Moving forward
Trying to stay apolitical, we talked about the changing views toward drilling going into 2025.
“I think the days of drill baby drill are now no longer governed by regulation in the government, so much as capital stewardship and investment thesis by the operators,” he said. “I don’t see anybody who’s like, now that there’s been a change in administration, I want to add more rigs.:
He continued, “I think it’s more of just a confidence with which they continue to develop knowing that they won’t have new regulations that are applied upon their business that make it difficult to understand profit margins or make it difficult to get their products to market. So I think that’s where the benefit will come.
“I do think, non-politically,” he said, “it’s about having comfort in the regulations in which we’re going to operate, and knowing that there aren’t any new wrinkles that we’re going to have to deal with, gives people the confidence to maintain the pace that they have, and be confident that they can deliver these products.”
Infinity has about 85 employees, he said, with about 60 from West Virginia, some that commute to Morgantown from Pittsburgh and Canonsburg, some in eastern Ohio that take care of their wells, and a small office in Houston where some of their corporate development and legal and accounting staff are located.
Community involvement is important to Infinity and its employees, he said – here in Morgantown and in the areas they operate. A few examples from the long list of its partners include WVU Medicine Children’s, Scott’s Run Settlement House and Mon Valley Habitat for Humanity.
“It’s really kind of been an organic story for us where we haven’t had a top-level push,” he said. “It’s really been, employees have said, ‘Hey, this is something I believe in.’ … So I think the company should support that.”
What’s, what’s on the horizon?
“In the upcoming year we’re going to continue to do what we’ve done, which is execute on our development plan. We have world-class assets in the vault oil window and the dry gas window. We’re going to continue to develop those with our drilling rig, growing our production organically through the drill bit. We’re also going to be on the market looking to buy opportunities.
“And we have a clean balance sheet,” he said, because the IPO allowed us to pay down all of our debt. So we have no debt left on the company, and now that gives us more dry powder to be acquisitive should assets come available that we’d be interested in.”
SUBHEAD Staying home
Wrapping up, Arnold wanted to be sure to thank Pearl and NGP and all of its banking partners who helped Infinity go public when the industry at large hasn’t.
“And had they not been involved early on and just helped us position the business for this, we wouldn’t be here today. So all the cool opportunities that are going to come are because we’ve had good guidance from them from early on, I think that’s, that’s an important part of the story to understand.”
And one last thought.
“I think the other important part of the story to understand is this company exists because people wanted to be in northern West Virginia for their entire careers. We could have all had other opportunities if we were willing to move to Pittsburgh or move to Texas or Denver. But this company exists because five of us said we never want to have to leave this part of the country and build our business and raise our families.”
“And I think that draw of that, that’s why we did this, kind of ripples through the company. Yes, we have offices in other places and we’ll have other offices, but this is, this is home and it’s important for us that we’ve been able to let this company grow so close to home for so many people.”
