Simple example - your proved producing properties are worth $50MM. The bank allows you to borrow $25MM and has your properties as collateral should you default. Of course the bank is going to tell you what the properties are worth and base their lending on their valuation. It seems to me the loan business has been very competitive so they try to be as aggressive as they can and as liberal as they can with the covenants.

For those employed in Houston:

Are there any openings for financial analyst or similar type positions at y'all's companies?

I've got 3 years experience of finance/accounting in a large E&P in Houston suburbs, but am looking to make a move in the downtown or Galleria area.

BBA in corporate finance from a top tier business school.

Thanks guys.

Thanks!

Meanwhile, in crunchy hippie wonderland...

http://www.geologypage.com/2018/03/radar-images-show-large-swath-of-texas-oil-patch-is-heaving-and-sinking-at-alarming-rates.html#ixzz5AfvQvyXF

Talon2DSO said:

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Meanwhile, in crunchy hippie wonderland...

http://www.geologypage.com/2018/03/radar-images-show-large-swath-of-texas-oil-patch-is-heaving-and-sinking-at-alarming-rates.html#ixzz5AfvQvyXF

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You think they faked their data?

SpreadsheetAg said:

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GarlandAg2012 said:

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Talon2DSO said:

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Meanwhile, in crunchy hippie wonderland...

http://www.geologypage.com/2018/03/radar-images-show-large-swath-of-texas-oil-patch-is-heaving-and-sinking-at-alarming-rates.html#ixzz5AfvQvyXF

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You think they faked their data?

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I think they don't understand how drilling works.

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What leads you to draw that conclusion? While typically i take a pretty skeptical approach, i don't see a whole lot of the typical anti-oil ridiculousness in this article.

BlackGoldAg2011 said:

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SpreadsheetAg said:

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GarlandAg2012 said:

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Talon2DSO said:

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Meanwhile, in crunchy hippie wonderland...

http://www.geologypage.com/2018/03/radar-images-show-large-swath-of-texas-oil-patch-is-heaving-and-sinking-at-alarming-rates.html#ixzz5AfvQvyXF

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You think they faked their data?

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I think they don't understand how drilling works.

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What leads you to draw that conclusion? While typically i take a pretty skeptical approach, i don't see a whole lot of the typical anti-oil ridiculousness in this article.

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I agree. They actually seem to understand how these oilfields work:

Quote:

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The SMU researchers found a significant relationship between ground movement and oil activities that include pressurized fluid injection into the region's geologically unstable rock formations.

Fluid injection includes waste saltwater injection into nearby wells, and carbon dioxide flooding of depleting reservoirs to stimulate oil recovery.

Injected fluids increase the pore pressure in the rocks, and the release of the stress is followed by ground uplift. The researchers found that ground movement coincided with nearby sequences of wastewater injection rates and volume and CO2 injection in nearby wells.

Also related to the ground's sinking and upheaval are dissolving salt formations due to freshwater leaking into abandoned underground oil facilities, as well as the extraction of oil.


Read more : http://www.geologypage.com/2018/03/radar-images-show-large-swath-of-texas-oil-patch-is-heaving-and-sinking-at-alarming-rates.html#ixzz5ArvHsojE
Follow us: @geologypage on Twitter | geologypage on Facebook

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[url=http://ec.tynt.com/b/rf?id=cgat_a3Ber4OiSacwqm_6l&u=geologypage][/url]None of that seems totally farfetched to me.

also it's not exactly a shocking revelation, subsidence and uplift has been attributed to oil and gas activity as far back as the 1920's. Goose Creek Oil Field

Midland should be 100 feet under ground by now....

I meant the whole area, since it has been producing since 1930 or so. One might think that the whole area would be lower if these studies are correct. I'm sure there is some true to their study...

perhaps. and maybe it is lower, their study never said it wasn't. but even if it's not, for surface subsidence to happen you have to have the geologic environment be just right and then combine it with large volumes of extraction (or injection to get uplift). it may just be that the midland area is just not prone to this behavior. the areas they are looking at towards Pecos in the Delaware basin are significantly different geologically than the Midland basin.

looks like Shell leadership is changing

https://www.chron.com/business/energy/article/Shell-Oil-names-new-president-from-Maersk-Oil-12784244.php

news got out before it was announced internally...

Interesting...I always assumed Culpepper was a placeholder

Also, continues the push for women in leadership positions we're seeing

Ag2012 said:

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An obscure/irrelevant website posted a predictably dumb, ill-informed article. It's so logically flawed it's almost like they were trying their hand at satire. O&G exploration and production is an extremely capital intensive business so by nature it's going to be heavy on debt financing. As long as you can service the debt though, you can create tremendous shareholder value and accelerate returns to the business. An independent E&P probably isn't going to be paying dividends but they're creating plenty of value in terms of capital gains.

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Agreed. That was written by a person who doesn't understand what he was talking about and simply wanted to sound smug.

AgRebel08 said:

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Cxo and rspp are merging.

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now that's a big dawg deal and surely a sign of things to come.

Allen Gamble said:

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For those employed in Houston:

Are there any openings for financial analyst or similar type positions at y'all's companies?

I've got 3 years experience of finance/accounting in a large E&P in Houston suburbs, but am looking to make a move in the downtown or Galleria area.

BBA in corporate finance from a top tier business school.

Thanks guys.

---

There was a FA position posted by Oxy on March 12. They are slow to move and I believe just hired someone recently...but if you have time you should apply online.

Discuss...

https://www.cnbc.com/2018/03/28/opec-saudi-arabia-and-russias-unparalleled-oil-deal-wins-approval.html

Not shocking at all....

jbanda said:

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Discuss...

https://www.cnbc.com/2018/03/28/opec-saudi-arabia-and-russias-unparalleled-oil-deal-wins-approval.html

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1) I don't trust Russia
2) Price stability over the long term is probably very good for US Shale Oil
3) I don't see how a long term deal will be functionally very different than the annual agreements they have now. They will still have to meet periodically and respond to the changing global demand and non-OPEC supply variables. It's not like they can say "XX Million bbls in 2024 will keep the price at $65".

In their eyes price stability means keeping them in a range. Rest assured if prices get much over $70/bbl, they will open the chokes. Based on what I've read, their preferred range is $60-65 "to keep shale production in check." The problem with that logic is that Permian and Eagleford breakevens are below that. That may keep San Andres ROZ horizontals down, but that's about it.

Many experts don't think Russia has actually cut anything, they just don't have the ability to increase or sustain their brief high rates of production that they hit a couple of years ago. If they can get some street cred and boost oil prices by agreeing to things that they were going to do anyway, that's great.


CXO-RSPP deal has implied value of $75,000/acre. That's by far the highest acreage price paid in the Permian. Hopefully the public companies follow Concho's lead and continue to acquire and consolidate. There's been a big push for public oil cos. to live within cashflow for the past year or so. At some point, institutional investors have to realize living within cash flow means depleting reserves for most public companies. Concho was one of the first companies to start living within cashflow and that effort started in the summer of '16, 2 or 3 quarters before investors were calling for it. Hopefully they're a frontrunner in a new phase of consolidation.

Going off of the 92,000 net acres quoted in World Oil, wouldn't that imply $103,260 per acre?

dallasag12 said:

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Going off of the 92,000 net acres quoted in World Oil, wouldn't that imply $103,260 per acre?

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You're not accounting for value attributable to current production, facilities, etc. I think the price tag per acre was actually closer to $62,500

txaggie_08 said:

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dallasag12 said:

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Going off of the 92,000 net acres quoted in World Oil, wouldn't that imply $103,260 per acre?

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You're not accounting for value attributable to current production, facilities, etc. I think the price tag per acre was actually closer to $62,500

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How did you value the production to get there? Everything I've read says $75 or $76K/acre after backing out PDP. At $40,000/boe it's $79K/acre.

Do you think this was a good deal for CXO? I understand how they think it was accretive but it is a finance man's analysis and a dangerous one IMO. Everything needs to be apples to apples and I don't think it was. Ironically, the Delaware position they gain from RSP is the one they sold to Sikverhill for $19,000/acre back in 2014.

I don't know. I think Concho is very well run and their President is actually one of the more conservative finance guys I've been around. He told me about a year ago that they shoot for a fully-baked 20% IRR on acquisitions. They've also been selling off some lower IRR assets to fund development of higher IRR assets. I'm not sure why they would change their strategy now. I'm guessing they believe they got a fair price for good acreage from RSPP. Their stock has been punished for this acquisition, but the same thing happened when the bought acreage from Oxy a few quarters back. Their share price rebounded quickly after the Oxy purchase and I bet they make it all back in the next month or two.

It's not really ironic when you dig into it and realize it's probably what started the deal moving forward.....

https://www.msn.com/en-us/news/us/texas-sinkholes-oil-and-gas-drilling-increases-threat-scientists-warn/ar-BBKLFPn


Caption: A sinkhole in Rosenberg. There were nearly 297,000 oil wells in Texas as of last month, according to the state regulator.


While there is probably some truth to the article...typical MSN painting with a broad brush...Love the picture of a road washout with a caption calling it a sinkhole.

The link to the page shows this picture:


The media is so full of chit.

Isn't that picture from Rosenberg a bridge that got washed out from heavy storms??

Yep that's the Harvey washout on 762. My neighborhood is in the background of that picture, so we had to deal with that thing for a while.