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Houston..we have a problem....

7,326,015 Views | 28760 Replies | Last: 13 hrs ago by Caliber
Aggie Oilman
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These two Range positions are being offered because they way underpaid on their offers when they bought MRD and several engineers left so heads up.
Furlock Bones
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AG
Parsley makes another acreage play. $400 million for 11,000 plus acres in Glasscock.

http://www.streetinsider.com/Corporate+News/Parsley+Energy+(PE)+Announces+$400M+Midland+Basin+Acquisition/11941356.html

quote:
cquisition Highlights
  • 11,672 gross (9,140 net) leasehold acres near existing Parsley leasehold in Glasscock County, Texas
  • Mineral and overriding royalty interests boost net revenue interest by approximately 5% on average
  • Estimated current net production of approximately 270 Boe per day from 67 gross (60 net) vertical wells
  • 240 gross (215 net) horizontal drilling locations in the Lower Spraberry, Wolfcamp A, and Wolfcamp B formations, based on 660' between-well spacing, with an estimated average lateral length of approximately 7,500'
  • Additional horizontal drilling locations in the Middle Spraberry, Wolfcamp C, and Cline formations
  • High average working interest of approximately 92% on identified drilling locations
  • 99% held by production
  • Pre-existing facilities and infrastructure, including five saltwater disposal wells, facilitate ongoing development
  • Scheduled to close on or before October 4, 2016, subject to the satisfaction of customary closing conditions

TxAg20
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Concho acquiring Reliance for $1.625B.


quote:
CXO expanding Midland footprint with acquisition of private E&P Reliance Energy ($136.44 B) We estimate CXO is paying ~$28k/acre (TPHe ~$35k/acre excl. net acres with only deeper rights) for 40k net acres (99% WI) in the Midland Basin spread ~evenly across Andrews, Martin and Ector counties, net of $500mm for 10mboepd (67% oil) of low-decline PDP production. Deal worth a total of $1.625B ($1.1B cash, 3.96mm shares of common stock).
jetch17
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beat me to it. Concho is blowin & goin in the Midland Basin
End Of Message
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Hilcorp to acquire Samson
Legal Custodian
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quote:
Hilcorp to acquire Samson
Where are you seeing this? I haven't been able to find any sources. Thanks.
Maverick06
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AG
Who did Parsley buy that acreage from?
Furlock Bones
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quote:
Who did Parsley buy that acreage from?
trying to find out. none of news articles i've seen say who the seller was.
Jdrexgman
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quote:
quote:
Hilcorp to acquire Samson
Where are you seeing this? I haven't been able to find any sources. Thanks.

They're only buying their East TX and West LA assets.
smokeythebear
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So what exactly does the end of this downturn look like?

A) OPEC slows down production and price of oil goes back up to $70-$80 range.

B) Market consolidation and advances in technology lower production costs to the point that companies can make a profit at $50 a barrel.
IrishTxAggie
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Looking like B is more viable than A right now. Think you may be about 10% high on the "profitable" number though.
GEA89
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quote:
So what exactly does the end of this downturn look like?

A) OPEC slows down production and price of oil goes back up to $70-$80 range.

B) Market consolidation and advances in technology lower production costs to the point that companies can make a profit at $50 a barrel.
Somewhere in between
PeekingDuck
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AG
B
Skillet Shot
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quote:
These two Range positions are being offered because they way underpaid on their offers when they bought MRD and several engineers left so heads up.


Can you expand on this? 10% haircut from previous salary? Maybe the MRD guys had above average salaries that would be considered overpaid in today's market. A lot of the larger companies have standard salary structures across the company that are actively looking at what competitors are offering and matching accordingly.
TxAg20
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I haven't confirmed, but I think it's BTA and possibly others. Primarily BTA. It's close to the stuff the bought off Riverbend a few months ago and BTA's the only operator with that much acreage and that many stripper wells in the area.
WooWoo
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Correct. This deal is separate from the Samson Resources assets.
Scientific
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quote:
So what exactly does the end of this downturn look like?

A) OPEC slows down production and price of oil goes back up to $70-$80 range.

B) Market consolidation and advances in technology lower production costs to the point that companies can make a profit at $50 a barrel.
Ive wondered how much market share SA has taken back since this started. If that was really their goal, while US oil looks down but not out, how much have they gained?
smokeythebear
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I'm not sure it was ever to GAIN more market share, but just to not lose market share. They would have had to sacrifice market share to prop up the price, but they chose not to sacrifice market share so the price continued to drop.

That being said, I'm interested as well to see where world market share sits now in comparison to 2 years ago.
aggie028
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I've heard BTA from multiple sources
Spaceship
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Holy cow, Comstock Resources stock up 33% today and another 9% after hours. What the heck happened today? I don't see any news.
toastercombo
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Goose06
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Can someone explain why Saudi cares so much about market share?
BlackGoldAg2011
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quote:
Can someone explain why Saudi cares so much about market share?

Goose06
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The only way that makes sense is if you are claiming they would get a lower price on their crude if they lost market share. I'm not sure I believe that.
smokeythebear
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It's about revenue, not operating income. Their cost of goods sold basically runs their economy. So if Aramco takes a loss, it isn't THAT bad because they are still paying living wages to their citizens. Now, obviously back-to-back-to-back losses isn't exactly sustainable, but they don't have as much flexibility to shrink operations at the snap of a finger because so much of their economy is based on getting a steady paycheck.

The flip-side is that there is very little long-term benefit to holding onto their reserves. With the newer technology, we're discovering way more resources all over the world so it no longer looks like they would be able to dictate a higher price down the road. You might as well pump it out and sell it now while you can than to wait 60 years for some other technology to make your oil fields worthless.
Furlock Bones
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quote:
It's about revenue, not operating income. Their cost of goods sold basically runs their economy. So if Aramco takes a loss, it isn't THAT bad because they are still paying living wages to their citizens. Now, obviously back-to-back-to-back losses isn't exactly sustainable, but they don't have as much flexibility to shrink operations at the snap of a finger because so much of their economy is based on getting a steady paycheck.

The flip-side is that there is very little long-term benefit to holding onto their reserves. With the newer technology, we're discovering way more resources all over the world so it no longer looks like they would be able to dictate a higher price down the road. You might as well pump it out and sell it now while you can than to wait 60 years for some other technology to make your oil fields worthless.
boom. this guy gets it.
smokeythebear
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Any losses they are taking are just going to their local economy. If it costs $80 a barrel to take it out of the ground and $50 to sell it, then that $30 difference is going to their local workers, not outside their country. That isn't a bad thing for them. Basically, the more cash they can bring into SA (aka revenue), the better for their country. They don't have to think like a regular business because of how integrated in the government they are.
Duncan Idaho
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quote:
Can someone explain why Saudi cares so much about market share?


They don't. Like others have said, their market share is the result, not the objective.

They have a revenue target they need to hit in order to fund thier domestic spending. If they are are able to hit that with X number of barrels at $120/bbl they will happily do that and more, If they have to sell 5x number of barrels at $50/bbl, they will do what it takes but they arent going to sell off their entire reserve to keep X% of the market

But they don't care if they have 20% or 90% of market share.
Goose06
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Makes sense. I just have noticed people throughout this thread throw out the idea that Saudi is protecting its market share which doesn't make any sense to me.
smokeythebear
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Correct me if I'm wrong, but in the 90's OPEC tried to lower production so as to prop up the price. It worked, but only because SA lowered their production and the rest of the OPEC countries (who were hurting the most) didn't really lower their production. The end result was that the price bounced back, but SA was the only one who materially lowered their production. Meaning SA sacrificed their market share to keep the price afloat.

This time around, OPEC wanted to do the same thing, but now SA knows better than to trust the rest of the group so they wouldn't play ball and refused to lower production. That's why you hear that SA is protecting their market share. If there's any consolation to this downturn, it is that OPEC can't do anything without SA and SA doesn't trust the rest of OPEC.
Duncan Idaho
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Keep in mind that this time, supply increased so much, so fast due to a major technological advancement while demand was tapering off.

So the issues impacting the cartel related to game theory like self interest, quota cheating, etc were all compounded.
Furlock Bones
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Continental Resources selling more assets.

http://www.rbcrichardsonbarr.com/IndustryResearch/News.aspx?a=news&ticker=a&w=&story=201608201608180715PR_NEWS_USPR_____DA71557

quote:
OKLAHOMA CITY, Aug. 18, 2016 /PRNewswire/ -- Continental announced today that it has signed a definitive purchase and sale agreement with an undisclosed buyer to sell non-strategic properties in North Dakota and Montana for $222 million. The sale includes 68,000 net acres of leasehold primarily in western Williams County, North Dakota, and 12,000 net acres of leasehold in Roosevelt County, Montana. The sale also includes net production of approximately 2,800 barrels of oil equivalent (Boe) per day. The agreement provides for customary closing conditions and adjustments.


"This is our third sale of non-strategic assets this year, with total expected proceeds of more than $600 million. We plan to apply proceeds to reduce debt and strengthen our balance sheet," said Harold Hamm, Chairman and Chief Executive Officer.

In May 2016, the Company announced the sale of approximately 132,000 net acres of leasehold in the Washakie Basin in Wyoming for $110 million. On August 3, 2016, Continental announced it had signed a definitive purchase and sale agreement with an undisclosed buyer to sell approximately 29,500 net acres of non-strategic leasehold in the eastern SCOOP play in Oklahoma for $281 million.
"Our guidance for the year has not changed. The combination of Continental's high quality drilling inventory, strong balance sheet and $560 million investment in drilled but uncompleted wells (DUCs) provides the Company with a robust platform for high-value future growth," Mr. Hamm said. The $560 million investment includes both operated and non-operated DUCs, approximately 80% of which are in North Dakota.

Continental currently has approximately 215 gross operated DUCs in inventory, of which approximately 165 are in the Bakken. The Company expects the total to grow to approximately 240 gross operated DUCs at year-end 2016, with approximately 190 in the Bakken. The Company said its Bakken DUCs have an average estimated ultimate recovery (EUR) of 850,000 Boe per well and can be completed at an average cost of between $3.0 million to $3.5 million per well.
Pasquale Liucci
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Hey guys, I know stuff is tight out there, but if you know of any reqs for inexperienced/entry level PETE's out there, shoot me a PM. Passing this along for a good Ag who isn't on the boards. C/o '15 and has a year experience managing production and leases in the Eagleford. Can provide resume upon request.

Thanks in advance y'all.
nu awlins ag
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quote:
Keep in mind that this time, supply increased so much, so fast due to a major technological advancement while demand was tapering off.

So the issues impacting the cartel related to game theory like self interest, quota cheating, etc were all compounded.
Demand was and is not really tapering off, it is just not growing at the rate it once was. Daily global demand is still around 93.5 million barrels a day and expected to increase but just marginally. you are very correct on the tech advances over the last 5-8 years though. You could see them in 2006 or so before the bubble in 2008-2009. A lot of companies can make money at these prices today, but it is the ones who are in debt up to their eyeballs that are struggling. Companies that have reeled in their costs are the ones doing ok today. Saudi can make money at $10 bucks or so but remember, they write a lot of checks as do some of the other countries in that part of the world. It is one way they stay and keep the power...
Furlock Bones
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quote:
Hey guys, I know stuff is tight out there, but if you know of any reqs for inexperienced/entry level PETE's out there, shoot me a PM. Passing this along for a good Ag who isn't on the boards. C/o '15 and has a year experience managing production and leases in the Eagleford. Can provide resume upon request.

Thanks in advance y'all.
pm sent
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