Resolute Energy (NYSE:REN) is a small capitalization exploration and production company with a timeline of high growth in production over the next few years, despite having operations concentrated in mature oil fields in the United States. (Before jumping into this hot sector, learn how these companies make their money. Read Oil And Gas Industry Primer.)

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A Resolute Energy investment allows the investor to gain exposure to various aspects of the energy industry, as the company is weighted heavily towards oil in both reserves and production.

Resolute Energy was founded in 2004 as a private company, but went public in September 2009 through the acquisition of Hicks Acquisition Company, a special purpose acquisition company (SPAC).

Resolute Energy built its portfolio through acquisitions of legacy properties from larger companies. This includes an acquisition from Chevron (NYSE:CVX) in 2004 and Exxon Mobil (NYSE:XOM) in 2006.

In addition, the company's management has a previous track record of building and selling public companies in the energy sector. The latest was HS Resources, which was sold to Kerr McGee in 2001 for $1.8 billion.

Oil-Based Company
Currently producing about 7,500 barrels of oil equivalent (BOE) per day, Resolute Energy aims to increase production 50% by 2013. Resolute Energy has proved resource reserves of 49.3 million BOE as of December 31, 2008, and 91% of these reserves are oil.

Paradox Basin
The company's most developed property is the Aneth Field located in the Paradox Basin in Utah. A mature field first discovered in the 1950s, Aneth represents most of Resolute Energy's proved reserves. The company has 43,000 net acres here and has spent $175 million in capital to get more production out of the wells.

Having completed three phases of carbon dioxide flooding here, Resolute Energy has seen a strong response in many of the wells. The company has several other phases planned over the next three years.

Resolute Energy believes that its carbon dioxide flooding program in the Aneth Field will increase production by a 16.3% compound annual growth rate over the next five years.

Hilight Field
Resolute Energy also has 5.5 million BOE of proved reserves in the Hilight Field in Wyoming. The company purchased its acreage here in 2008, and averaged production of 2,100 BOE per day through December 2009.

Resolute Energy has several formations to choose from here and also may use carbon dioxide flooding, as Anadarko Petroleum (NYSE:APC) has a carbon dioxide injection project located nearby in the Salt Creek Field.

The company also has exposure to the Mowry Shale, as EOG Resources (NYSE:EOG) and several other operators have drilled vertical or horizontal test wells to this formation.

Resolute Energy lost money through the first nine months of 2009. The company saw a decline in production, as a response from wells that undergo carbon dioxide flooding can take up to a year. The company also shut in many of its coal bed methane wells because they became economically unfeasible during the year when energy prices declined. (Changes in the price of oil aren't arbitrary. To find out what moves them and why, read What Determines Oil Prices?)

Bottom Line
Resolute Energy is a focused exploration and production company with a well-planned trajectory to increase production over the medium term. The company's oil focus may also provide comfort to those investors worried about the fundamentals in the natural gas markets. (The drillers are just one aspect of the oil and gas industry. By knowing some details about their role, you'll be better suited to make investment decisions. To learn more, check out Understanding Oil Industry Terminology.)

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