Burleson: Rockcliff Energy III Builds on Past Successes

Rockcliff Energy III is building on past experiences as it explores deeper in the Haynesville, CEO Sheldon Burleson told Hart Energy at DUG Gas.

Nissa Darbonne Oil and Gas Investor Tue, 04/08/2025 hartenergy.com

Nissa Darbonne, executive editor-at-large, Hart Energy: Hi, thank you for joining us. I'm Nissa Darbonne, executive editor-at-large for Hart Energy, and we're visiting today at Hart Energy's DUG Gas Haynesville conference in Shreveport with Sheldon Burleson. Sheldon is the CEO of Rockcliff Energy III. This is following on to previous very successful build and divest Rockcliff Energy E&Ps. Sheldon, thank you for joining us.

Sheldon Burleson, president and CEO, Rockcliff Energy: Thank you for having me.

ND: So for Rockcliff III, you're looking Haynesville gas, Eagle Ford gas, Eagle Ford oil. Where do you think you're going to land?

SB: Yeah, so as you said, those are the core areas we've been looking at and so we've done a lot of work on both basins—ground up analysis, and so I think we're seeing a lot of momentum right now in the Haynesville. And so it's all dependent on what kind of deals we can get or what partnerships we can create. But if I had to make the prediction right now, I would say we feel like there's a lot of momentum in the Haynesville Basin. You've had commodity prices strengthened and we still think there's a lot of inventory left, especially in more of the southern Louisiana or in the East Texas side where most of the activity has been in that core. Things are starting to move kind of southwest. And so that to me is an area that we think we got a lot of different opportunities. So when you get more shots on the goal there, then I think it's a lot more likely that we could end up there and then we'd look to see if we could pair that with something else later in Eagle Ford or another basin.

ND: Before Sheldon was with Rockcliff, he spent many years with Chesapeake Energy, including part of the group in the Eagle Ford that introduced U-turn laterals there. That was the first in the Eagle Ford. It's actually the second U-turn lateral in the Lower 48. It follows the first one that was by Shell. The application of U-turn laterals has now just gotten to the Haynesville and there are reasons for the delay, but also too now that they have been problem-free in the Haynesville… I understand there's potential for much improved economics and increased inventory, in effect organically.

SB: Yeah. Yes. I think as you've said, the U-turn that we did in the Eagle Ford was back in 2020 and really been impressed and pleased to see how industry just takes a new idea and then runs with it. And so it really expanded across the Eagle Ford and the Permian and then now we're seeing it in Haynesville. So as you mentioned, Haynesville is deeper and hotter, so more challenging drilling environment. And so it took a bit longer to get there, but I think we've seen the first few come in the Haynesville now and they were successful. You can get about a 25% reduction in your cost versus drilling two individual wells. And really what you're doing is the vertical part is one of the most expensive parts. Once you get down there, the lateral goes pretty quick. So if you can do that U-turn and make a 10,000-foot lateral instead of a 5,000-foot, if you've got limitations from your lease or where existing wells were, then you improved the economics.

And so I think it's going to continue to be a big growth in Haynesville now that you've seen it successfully demonstrated there. And so for us, part of that learning that you do for U-turns is really using what machine learning tools to see what's working as far as bit selection, drilling type, mud weight, all those pieces. So that's something that Rockcliff has focused on in the past. And we've also incorporated a lot of machine learning on really looking at well productivity. And so what we've seen is as the wells get drilled tighter and there's more and more parent-child interaction, it creates some what can be lower results. And so you really have to tailor your design of your drilling and your completion to account for that offset.

ND: And actually bringing machine learning into your comments here, the Eagle Ford and the Haynesville, both the early days, those were one section, one-mile laterals. You talked about the potential for reentering sections and adding another well by adding an economic well by making a U-turn around that stick, if you will. If you could explain to those listening how further to how that improves the economics, where would you use a U-turn lateral?

SB: Yeah, so I think that you make a key point when you have those previous wells that were developed. One of the key things we want to understand is what's been the depletion of the reservoir to that point? And so U-turn is one tool, a refrac is another tool, but any of those things you're going to do to go drill where there's an existing well. A key point that we want to know is we talk about it being like a 4D look at the well. So you used to look at 3D and say, “well, how do you design the well, where do you land it? How far apart is it from the other well and what completion you put on there?” But we also need to introduce time because the more of those old wells have produced, then the more you need to tailor your design for that.

And so that machine learning model helps you incorporate time as well to say, “how much do we think those wells would produce?” And then that tells you how far do I need to space off of that? Well, so there's an element of it that is just designing the actual well trajectory. But I think the more critical one that we've seen is factoring in when the wells are bounded by other wells, what spacing you need and then what's the UR there so you can put really the right completion on it. So traditionally people would go and just put the same and just mow down an area with the same completion. Well, now you may need to go larger or you may need to go smaller depending on what you've seen from that offset depletion. So taking all that data, running it through our models helps us to tailor that for that specific situation. And so each well can be a little bit different versus the historical drilling, the factory mode because you got to account for that depletion.

ND: Rockcliff III is looking at the Haynesville and the Eagle Ford—one or both possibly to focus in on for its next iteration of portfolio. Is there any reason why you're not potentially interested in anywhere else in the Lower 48, how you've kind of come around to just those two?

SB: Yeah. Okay. Yeah, so there are actually other areas that we've looked at. So my background, I've worked a lot of different plays including Marcellus and Utica, the Rockies, … Powder River Basin in a lot of those areas. So we have looked at other areas. We've done some work in the Permian and we've looked at some things in the Rockies as well. And so when I talk about Eagle Ford, Haynesville being our core, that’s because we have done the most work and the most background, but anytime you work multiple basins and you have a team that's been across all those unconventional plays, and then we have some that have even done a lot of international, including myself, you kind of learn on how to analyze the play, how to develop it. And so I think that does open up potentially Rockies or other areas. One thing we always look at is we're backed by Quantum Energy Partners and they have some existing teams in the Northeast and some places already, but there's a lot of areas that are open.

So Eagle Ford, Haynesville, Delaware Basin, and then even up in, like I said, some of the Rockies areas, Powder River, other of those areas. So we have done some work on those. I think ultimately need to find something that's got scale and it's got quality economics. And so as those things come to market or we figure out is there a partner that we can do join up there, that's what we've been working is how do we find that right entry. A lot of those areas have been pretty consolidated as well. And so we're looking at some creative ways to say, “Hey, do we go partner up with somebody that's already got a position and bring our capability?” So it's back to not just marketed deals or inorganic, but also some organic ways to get in to the basin.

ND: Actually, it just occurred to me, I can't think of a single basin Lower 48 east of California that Chesapeake has not touched in its history. A lot of history there.

SB: Yeah, and my background, I've worked in Marcellus and Utica—two great basins. I think one of the reasons we just haven't been as focused on Marcellus is instill a lot of more uncertainty around getting gas out of the basin. And so that makes it challenging for a new entrant to come in and have to deal with that uncertainty versus those that already have a big foothold. Utica is an interesting place as well, and some of it's even shifted more towards the liquids developments, but we feel like while there's some of the team that's worked there, myself included, we just don't have as much core advantage that we can bring to the table. So we haven't focused on that one as much as the other areas where we think we've got more competitive advantage and got more track record that we can bring to the table there.

ND: And actually, I was writing a Utica article recently and I realized coming back full circle, Chesapeake by way of the Southwestern merger is back in Ohio.

SB: That's right. That's right. Lots of history. So it's divested to Encino and then now kind of back again with the Southwestern merger. And so I think that just really shows the resilience of the industry and it's always one of those things that like to say, “Hey, be a good neighbor.” It's why we want to, I've talked about one of the core principles of Rockcliff is win-win partnerships and then integrity with our stakeholders. Because even though it's a very large industry, it's still a small neighborhood. And so you never know you might be working with those people again. So you want to make sure that you leave things better than you found them and you may be back again.

ND: Yes, and I have observed that about the success of Rockcliff I and II and look forward to great news from Rockcliff III. Thank you, Sheldon.

SB: Thank you.

ND: Appreciate it. And thank you for joining us. Stay tuned here for more actionable energy intelligence on hartenergy.com.