Re - FCF sustainability... it depends on if it stays that way, of course. I haven't looked closely at Pioneer, but I'm suspicious on the surface of their recent trend.VaultingChemist said:
Looking at Pioneer, negative FCF with little to no growth in proven reserves does not seem sustainable.
To make matters worse, daily production added per rig in the Permian Shale play is declining.
Actually, it does. Most companies drill their best prospects first, the "low-hanging fruit". As time goes by, the less-productive shale acreage will be developed. The daily production added per rig is a rough indicator of the quality of the wells being drilled and completed.Quote:
Your second sentence doesn't really mean anything.
VaultingChemist said:
Looking at Pioneer, negative FCF with little to no growth in proven reserves does not seem sustainable.
To make matters worse, daily production added per rig in the Permian Shale play is declining.
VaultingChemist said:
Pioneer's proved reserves declined from 905 MMBOE in 2006 to 726 MMBOE in 2016.
Neither. Just a reservoir engineer.Cyp0111 said:
Are you an oil and gas/financial markets guy or a Seeking Alpha guy? trying to figure out if I'm going to dedicate any more time and a well though out answer.
Yes, I work for an E&P. What I'm saying is that your statement is akin to saying the sky is blue. If it weren't true, I'd be more concerned about the company than if it were.VaultingChemist said:Actually, it does. Most companies drill their best prospects first, the "low-hanging fruit". As time goes by, the less-productive shale acreage will be developed. The daily production added per rig is a rough indicator of the quality of the wells being drilled and completed.Quote:
Your second sentence doesn't really mean anything.
EIA Drilling
since most of that decline was likely written off reserves from falling prices, it's not a sustainable trend unless oil prices continue to fall... which they have not... so no it's not sustainable. at this point their 726 proved reserves should fall only as fast as they produce them... at a far slower rate than the 90 MMBOE per year you seem to be insinuating.VaultingChemist said:
Pioneer had 1086 MMBOE proved reserves in 2012. In 4 years, it has declined to 726. That is a total loss of 360 MMBOE.
I am asking if that is sustainable if prices do not increase soon.
https://en.wikipedia.org/wiki/Proven_reservesVaultingChemist said:
I am just looking for answers. Naturally as oil prices decline, reserves will also decline. I was wondering what parameters are allowed by the SEC in evaluating the value of proved reserves.
Yeah, that's why I edited my post to add the last sentence.GarlandAg2012 said:
The problem is that the productivity per rig was increasing for a while. Basically, any gains in efficiency and completions techniques appear to now be offest by losses due to drilling up the best rock first. However, that doesn't mean you can't have good returns.
Cyp0111 said:
Weren't u the sand ridge pumper??
Cyp0111 said:
Weren't u the sand ridge pumper??
Joseph Parrish said:Cyp0111 said:
Weren't u the sand ridge pumper??
Also, are we using TexAgs terms or Oilfield terms? Either way, I am neither.
Ulrich said:Joseph Parrish said:Cyp0111 said:
Weren't u the sand ridge pumper??
Also, are we using TexAgs terms or Oilfield terms? Either way, I am neither.
Texags term. There was a guy who was really hyping Sandridge Energy for a while maybe 3-5 years ago. I can't remember his username, but I know it wasn't you.
Cyp0111 said:
Weren't u the sand ridge pumper??
That aspect of it is part of the game. The other is the rules for what constitutes a PUD. Basically, my understanding is that they are remnants from a vertical drilling world (at least for onshore, I've never worked anything offshore much less reserves). You can book locations offset by one step of a producing well as a PUD. For verticals this means you get 4 PUDs per individual PDP. Spacing is also an issue with downspacing allowing for more PUDs etc but for simplicity just think of an undeveloped field in which you drill a single, economic vertical well. You can now book 4 PUDs from it.PeekingDuck said:https://en.wikipedia.org/wiki/Proven_reservesVaultingChemist said:
I am just looking for answers. Naturally as oil prices decline, reserves will also decline. I was wondering what parameters are allowed by the SEC in evaluating the value of proved reserves.
It's all a game.
'...provide third party reports as part of Securities and Exchange Commission (SEC) SEC filings. On December 30 2009, recognising advances in exploration and valuation technology, the SEC allowed 2P probable and 3P possible reserves to be reported, along with 1P proved reserves, though oil companies also have to verify the independence of third party consultants. Since investors view 1P reserves with much greater importance than 2P or 3P reserves, oil companies seek to convert 2P and 3P reserves into 1P reserves.[url=https://en.wikipedia.org/wiki/Proven_reserves#cite_note-7][7][/url]'
Do you know any that ever tweak OOIP downwards? I think if the industry was left to geologists, we would be drilling at about 4x the pace we are currently drilling until all companies went bankrupt.Joseph Parrish said:
Just want to throw this out there. Sometimes the E&P companies are surprised when they stumble across even lower hanging fruit. Some of the data used to make these evaluations is quite old, and not as reliable as newer data (example: well logs). I've had areas that were supposed to be bad turn out to be really good. I've also had the opposite. Evaluations are only as good as the quality of data used to make those decisions.
As a side note, I don't know a single Geologist that isn't always tweaking their Original Oil In Place (OOIP) estimate.
We reduced the OGIP on a few wells recently due to water contacts being much higher than we originally thought. Although that was an in-house evaluation to determine economics on a workover.topher06 said:Do you know any that ever tweak OOIP downwards? I think if the industry was left to geologists, we would be drilling at about 4x the pace we are currently drilling until all companies went bankrupt.Joseph Parrish said:
Just want to throw this out there. Sometimes the E&P companies are surprised when they stumble across even lower hanging fruit. Some of the data used to make these evaluations is quite old, and not as reliable as newer data (example: well logs). I've had areas that were supposed to be bad turn out to be really good. I've also had the opposite. Evaluations are only as good as the quality of data used to make those decisions.
As a side note, I don't know a single Geologist that isn't always tweaking their Original Oil In Place (OOIP) estimate.
Do you think the rise in DUCs is due to fleet availability or operators choosing to frac wells when they'll be more economic?Gordo14 said:
This article might explain the drop in oil output per rig, for anybody still interested. If this is actually how the metric works, it seems like output per frac crew is the only useful metric (I.e. the output per rig decline is driven by supply chain issues - like access to frac crews - seen in the rising DUC count in the Permian)
https://www.bloombergquint.com/opinion/2017/07/19/opec-oil-price-hopes-must-face-u-s-shale-ducs
Exactly. Which gets back to the original point that many pure play operators may be running out of A+++ acreage. Which makes total sense and is unavoidable, just something to be aware of.Cyp0111 said:
When more economic
