third coast.. said:

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I'm the chief mate on the usns Walter s Diehl, a fleet replenishment oiler. Used to work in the GoM before the crash and have been following this thread since then. Ill have my unlimited Masters license here in a couple of months.

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I figured it was more important than just being on a ship

Let's talk pipe.

What is ya'lls pulse on the possible Section 232 implications and how are you seeing it affecting the market? Right some of my pipe distributors said their suppliers have frozen quotes, awaiting direction on how this shakes out.

This will have very far reaching effects on the market with foreign pipe being frozen out. US steel and csg will likely shoot up, significantly impacting supplies and economics for our horizontal development programs.

Your thoughts?

https://www.offshoreenergytoday.com/schlumberger-and-subsea-7-in-talks-to-create-joint-venture

I suppose we'll see OneSubsea 7 in the next few months followed by Subsea 7 straight up becoming part of the Schlumberger portfolio and being rolled into their OneSubsea group in the next year or 2.

Anyone else receive the mandatory price reduction letter from Weatherford yesterday? I was hoping we were done with these things , but I guess it's due to their financial issues. It's almost an insult to us that they think we could reduce their pricing that much and still make money.

What are you selling them?

agdaddy04 said:

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Anyone else receive the mandatory price reduction letter from Weatherford yesterday? I was hoping we were done with these things , but I guess it's due to their financial issues. It's almost an insult to us that they think we could reduce their pricing that much and still make money.

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Be prepared to see a bit more of it, IMO.

Several operators are "ramped up" and are starting to trim the fat wherever they can.

Yep, and they will push it until they start to see a negative impact on their QC or results. Then they will decide the cost savings isn't worth the nickel and diming and service prices will rapidly escalate.

We sell them hydraulic components and systems

I get that, but it starts to form a very adversarial customer/supplier relationship.

What we sell them could be purchased from a wide range of other companies and not much of what we sell them is too terribly special, so that creates a nature where we already don't have large profit margins. Essentially what they're saying is their procurement department didn't do a very good job in negotiations.

Comeby! said:

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Let's talk pipe.

What is ya'lls pulse on the possible Section 232 implications and how are you seeing it affecting the market? Right some of my pipe distributors said their suppliers have frozen quotes, awaiting direction on how this shakes out.

This will have very far reaching effects on the market with foreign pipe being frozen out. US steel and csg will likely shoot up, significantly impacting supplies and economics for our horizontal development programs.

Your thoughts?

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What do you want to discuss? Koreans canceled all orders to all distributors that won't be here prior to April. Or the import flange manufacturers? There's 9 dumping cases up in the air right now and the uncertainty of them all is incredible.

Comeby! said:

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Let's talk pipe.

What is ya'lls pulse on the possible Section 232 implications and how are you seeing it affecting the market? Right some of my pipe distributors said their suppliers have frozen quotes, awaiting direction on how this shakes out.

This will have very far reaching effects on the market with foreign pipe being frozen out. US steel and csg will likely shoot up, significantly impacting supplies and economics for our horizontal development programs.

Your thoughts?

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The steel market's so volatile right now all our steel suppliers quote validities are good for a day.

We're seeing worse. One pipe manufacturer quote actually said their quote was for " informational purposes only". We're not talking about a budgetary quote, we said we need pipe, what's our price, and that was their response.

And to clarify, we're a mill direct customer only - not a broker.

Part of my business is pipe mill consulting and inspection.

In the past 6 weeks the amount of folks not willing to pay for our services previously, have started blowing up the phone asking/begging if we can help them get a spot in US mills.

All for line pipe. 30,000ft to 2,000,000ft

Is this only a problem with steel pipe or is this also causing issues with HDPE? I know in the past we have bought some HDPE from Mexico.

Carbon and stainless steel only (so far). Google section 232 and you'll see the 3 options presented to Trump 10 days ago. He doesn't have to do anything and can ignore it all, but we believe the 12 country option is the most likely but the pipe industry has increased prices to cover the 24% option just in case.

Goose06 said:

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Is this only a problem with steel pipe or is this also causing issues with HDPE? I know in the past we have bought some HDPE from Mexico.

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We sell HDPE pipe and it's unaffected.

Ducks4brkfast said:

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Goose06 said:

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Is this only a problem with steel pipe or is this also causing issues with HDPE? I know in the past we have bought some HDPE from Mexico.

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We sell HDPE pipe and it's unaffected.

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Unaffected by this but demand is keeping prices high and lead times are atrocious. I'm in water and wastewater though not O&G. The anti dumping cases have affected us with fabricated SS flanges on treatment plant projects.

3roc is selling, anyone know who to?

Heard Admiral Permian in Midland, but haven't seen for sure

jetch17 said:

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Heard Admiral Permian in Midland, but haven't seen for sure

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I got someone to basically confirm it. They asked "how'd you know?" Meaning I guessed right

Have heard the same about Admiral. Will be interesting to see how that works out.

PE buying from PE. Always interesting.

Both Riverstone backed as well. 3roc has been for sale for a while. My biggest concern here is it doesn't paint a very pretty picture for western reeves county or Culberson county as far as the Wolfcamp is concerned. You look at some PDC or Carrizo data and It's pretty easy to see this area is much gassier than the heart of the play.

KaneIsAble said:

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Carbon and stainless steel only (so far). Google section 232 and you'll see the 3 options presented to Trump 10 days ago. He doesn't have to do anything and can ignore it all, but we believe the 12 country option is the most likely but the pipe industry has increased prices to cover the 24% option just in case.

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This is exactly what I was talking about in my original post. There are far reaching implications across the industry at stake here. Government intervention could cause a very interesting chain reaction: pipe prices spike, well economics get hammered, capex (and people gets cut) production slows, commodity prices increase, drilling picks up, here we go again....

Goose06 said:

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Both Riverstone backed as well. 3roc has been for sale for a while. My biggest concern here is it doesn't paint a very pretty picture for western reeves county or Culberson county as far as the Wolfcamp is concerned. You look at some PDC or Carrizo data and It's pretty easy to see this area is much gassier than the heart of the play.

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I can't confirm who backs who but PE typical doesn't sell to itself unless it's time for a certain management team to RDMO.

I've seen a lot of Culberson data and I've struggled with the economics and technical story. I know some make it work but there's better (better economics) places to jump into. Something happened here about 4-6 months ago because I got 3 Culberson deals hit me all at once.

Comeby! said:

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Goose06 said:

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Both Riverstone backed as well. 3roc has been for sale for a while. My biggest concern here is it doesn't paint a very pretty picture for western reeves county or Culberson county as far as the Wolfcamp is concerned. You look at some PDC or Carrizo data and It's pretty easy to see this area is much gassier than the heart of the play.

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I can't confirm who backs who but PE typical doesn't sell to itself unless it's time for a certain management team to RDMO.

I've seen a lot of Culberson data and I've struggled with the economics and technical story. I know some make it work but there's better (better economics) places to jump into. Something happened here about 4-6 months ago because I got 3 Culberson deals hit me all at once.

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PDC wrote off their Culberson acreage about that time. Their stuff they wrote off was pretty far west, like 10-15 miles west of Reeves county line.

Riverstone definitely backs 3ROC. I believe Riverstone and Post Oak back Admiral. I'm not sure what Riverstone's role is in the 3ROC acquisition on Admiral's side. I'm not close with Riverstone, but I doubt they're telling 3ROC to RDMO as 3ROC 1 and 3ROC 2 were huge successes. Their marketing effort about a year ago on 3ROC 3 was successful in bringing in good offers, but the top 2 were public companies that couldn't get board approval to issue equity.

I bet 3ROC 3 is selling for $800mm-$1b which is at least a 2x, probably more like 3x.

If anyone wants to do some digging, Riverstone has a public counterpart listed on the London Stock Exchange that usually takes a position in the private equity investments. I'm not familiar with their reporting requirements, but there may be some public info about this transaction out there.

Here's some more background on the 3ROC deal:

https://pipeline.thedeal.com/article/14500916/index.dl

Anyone have thoughts on this?

A: The likelihood of it getting pushed through?

B: Any future impact on Capex projects being approved?

https://www.chron.com/business/energy/article/Interior-Dept-considers-cutting-royalty-rate-for-12709769.php

Admiral is backed by Pine Brook and Riverstone.

I've heard 2.2x FWIW and I agree with your statements. This wasn't a situation where PE backer was looking for a better/different management team IMO. Won't be surprised to see 3ROC announce their next fund if they desire to keep going. Probably didn't have a huge influence but have to think Admiral was getting antsy to get something done.

Ag2012 said:

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Here's some more background on the 3ROC deal:

https://pipeline.thedeal.com/article/14500916/index.dl

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You have to be a subscriber. Can you post the highlights?

Heard from a banker yesterday that 3Roc sold their gas and oil midstream acreage dedication for $150-200mm.

Here is what TPH put out:

"Riverstone Energy Limited announced an agreement has been reached to sell Three Rivers III's 57,000 net acres of contiguous upstream assets on the Culberson-Reeves county line (10mboepd net production). This follows an acreage gas dedication agreement executed in December. While Riverstone did not disclose the specific cash consideration for the upstream assets, the company will realize gross proceeds of approximately $205MM from these transactions. This represents a gross IRR of 49% from an original investment of $94MM (subject to taxes and performance fee upon closing, expected April 2018)."

Don't know if 3ROC had a different return than Riverstone but that is probably where the 2.2X I was told came from now that I'm looking back at it.