Casing / Tubing. Bought a few strings of 4.5" last year for $5.50/FT but quotes now go north of $12.00/FT.BlackGoldAg2011 said:casing/tubing or line pipe? Because I just locked down some decent prices on some line pipe from trident steel. haven't bid out casing or tubing in a while thoughAustinAg008 said:
The steel market is absolutely bonkers right now. If anyone knows of any 4.5" or 5.5" for a "DECENT" price I'm all ears on this one.
Houston..we have a problem....
7,315,946 Views |
28750 Replies |
Last: 1 day ago by Bibendum 86
prices will probably continue to rise through the end of the summer for seamless. ERW prices might retreat earlier.
What do you boys want for breakfast BBQ ?.....OK Chili.
Are they trying to target Bone Spring sandstone intervals in particular?
Looking for channels?
Looking for channels?
topher06 said:Same with gas, curve is backwardated as hell. Can't really hedge into a drilling program beyond 1 or maybe 2 years.Birdbear said:Premium said:Joseph Parrish said:I know this opinion got **** on last time, but I think it's entirely reasonable for companies to gradually increase capital spend at these prices. I don't think anybody should open the flood gates and ramp up to the crazy annual budgets we saw previously.BlackGoldAg2011 said:my question though is how long of >$80-$90 oil does it take before dumb money returns to O&G investing. my guess is that it happens faster than any of us would expect. because once the dumb money returns, we (as an industry) can go right back to drilling fringe acreage. Sure the smart ones drilling within cash flow wont, but dumb money makes dumb choices.Cyp0111 said:
Game is different. No money to drill fringe acreage. Best remaining wells now
But can't you basically lock in these prices through hedging at least a few years out? Should make it easy to budget.
Can't really lock in current prices when the futures curve is backwardated to the $60s
I've heard capital is drying up and frankly I can see that happening. However, I think PE is going to eventually flood back into the space with the returns being offered. Anyone know what the market for management team carries are these days? Have to imagine they're down from the a few years ago (I think that was 20% escalating to 30% or so). Wonder if the PE shops are also getting their carries cut.
The "waterfalls" are lower. PE shops can be extremely selective. Lots of great names and teams aren't getting funding. Especially without an asset. Very few sponsorship deals. I'd say only repeat teams with great track records are getting traditional PE right now. New teams have had to go to alternate groups for funding.
I truly do not see PE flooding back into the market quickly. Most asset classes (traditional PE, Direct Lending/Special Situations etc) all got smoked at the big shops. You have your focused funds (Carnelian, NGP , Pearl etc. all) but fundraising is hard and everyone is really scrubbing everything.
Commercial banks continue to be selective and really restrict lending against aged wells etc starving capital.
You are seeing the private guys continue to scale for an exit but that's just to get cash flow for a viable sale.
Higher prices change things but I see this stuff daily and the dry powder is limited an extremely focused .
Commercial banks continue to be selective and really restrict lending against aged wells etc starving capital.
You are seeing the private guys continue to scale for an exit but that's just to get cash flow for a viable sale.
Higher prices change things but I see this stuff daily and the dry powder is limited an extremely focused .
JP_Losman said:
Are the shale companies replacing these higher quality reserves fast enough?
I see a map full of sticks in the best zones in most counties in the Permian. I wonder what
actual inventory of high return locations realistically looks like.
Multiple other zones may be prospective, but so far most haven't been as good as Wolfcamp A and B
If you are EOG, Pioneer, Mewbourne, XTO, Conoco etc. I'll even throw on Devon (with WPX in the mix), Oxy, Chevron. There's a ton of inventory. I mean we're talking decades of tier 1 inventory in some cases in my opinion.
I mean it depends on commodity pricing. Bone Spring has some fantastic locations to go drill, but you can't really do the Wolfxamp megadevelopments. If natural gas stays at these levels Lower Wolfcamp has very high returns and the inventory is bigger than even all of the undeveloped and developed Upper Wolfcamp combined. It's just you need 12-15 BCF and ~600MBO to work and it never really did at negative natural gas prices. But the shale is thicker and I think you can drill an extra two wells or so per section out of it for optimal economic recovery as a result.
Outside of that there are some other targets that are prospective and I imagine you can chase very economic wells for even longer with all all of mud logs across the Delaware Mountain group... Throw in the Avalon and some deeper natural gas potential and the Permian is far from dead. But it needs good commodity pricing and a lot of companies are definitely running into walls from a tier 1 development perspective (if they had any to begin with).
Cyp0111 said:
I truly do not see PE flooding back into the market quickly. Most asset classes (traditional PE, Direct Lending/Special Situations etc) all got smoked at the big shops. You have your focused funds (Carnelian, NGP , Pearl etc. all) but fundraising is hard and everyone is really scrubbing everything.
Commercial banks continue to be selective and really restrict lending against aged wells etc starving capital.
You are seeing the private guys continue to scale for an exit but that's just to get cash flow for a viable sale.
Higher prices change things but I see this stuff daily and the dry powder is limited an extremely focused .
The crazies are returning to this thread. Institutional money is returning to the large cap E&Ps.
My opinion: I think LP money will return to PE. $800mm-$1B fund sizes focused on 5-8 teams will be the next norm. Fundraising is "hard" compared to 2012-2015. Money is still there, just in 2010 terms instead of 2015.
it is on debt notes to an extent, I think you can get good paper there. However, that space is still pretty limited. You're unlikely to see upsized equity offerings outside of the better pure plays.
I spend most my time in this space. The investment environment is still very very frigid.
I spend most my time in this space. The investment environment is still very very frigid.
Getting debt is still very hard. And given the performance of other sectors over the past decade, why would a bank light money on fire like that? I still think the information asymmetry is too great for even an energy focused bank to make consistently good debt offerings. Decline curve BS, generous OG cut estimations, highlighting your best performing well while trying to play it off as average, underestimating P&A obligations, new constraints on waste water disposal wells, overly tight spacing, rock quality.
The banks have gotten smarter, but you basically need all the resources of small energy company to verify the claims of the company across the table asking for money.
The banks have gotten smarter, but you basically need all the resources of small energy company to verify the claims of the company across the table asking for money.
I just think the global oil market is very tight and there's a very real chance price starts to run out of control this summer. Refined products are at record low inventories, Cushing is basically at tank bottoms, Europe keeps bidding the export arb open every time I think we can't afford to see crude leave because Cushing is tight. Throw in the fact that OPEC+ can't seem to keep up with their own production quotas, Russia threatening to invade Ukraine and major crude production distuptions seemingly happening every other day (Iraq pipeline, Kazakhstan, Ecuador). At some point we really need investment to come back to the oil production space. I find it concerning that price signals seem to br having a limited effect on capital deployment. I get why it's happening, but there is a ton of upside risk - largely will be determined by Asia's demand in the face of Omicron...
The decline curve games were absolutely ridiculous, but it goes both ways. Neither the private operators or the banks want to downgrade the forecasts, so they lie to themselves with extremely flat declines to make each other happy. I don't think things would have gotten as out of hand if there was more transparency or honesty in that process.
It was decline curves, spacing and PUD location math. You then took on debt dollars and drilled bad wells and you see the problem.
A lot of good recent posts about the current situation.
Just a couple other things I'd add.
First, in regards to the last quote, the private equity funds and their companies are involved in a very similar way. They are constantly trying to raise more money based on the success of their current/previous funds. Thus, there is extreme motivation to make sure that the value of their current investments are kept high (regardless of what the actual market value is) and reserve auditors are all too happy to oblige in the lies because they don't like looking bad either (they were the ones who supported overpaying for the asset based on poor PDP forecasts, drilling assumptions, models, spacing, etc.).
And second, money continues to want ESG-friendly industry. I've seen it personally and several heads of large private equity groups have said this publically. I know I may get ridiculed for this because it is bizarre as it sounds but there are large, institutional investors who simply won't invest if there are ESG rating concerns or if there is any planned investment of the fund into "fossil fuels" regardless of the economics. The investors are literally telling them they don't (or even won't) invest in funds with allocations to "fossil fuels;" accordingly, many of the large private equity companies have continued to shrink their allocation to hydrocarbons when raising funds (one that I work with closely has gone from 25% to 10% to <5% in their recent raising efforts).
Cyp0111 said:
it is on debt notes to an extent, I think you can get good paper there. However, that space is still pretty limited. You're unlikely to see upsized equity offerings outside of the better pure plays.
The investment environment is still very very frigid.
The banks have gotten smarter, but you basically need all the resources of small energy company to verify the claims of the company across the table asking for money.
The decline curve games were absolutely ridiculous, but it goes both ways. Neither the private operators or the banks want to downgrade the forecasts, so they lie to themselves with extremely flat declines to make each other happy.
.
Just a couple other things I'd add.
First, in regards to the last quote, the private equity funds and their companies are involved in a very similar way. They are constantly trying to raise more money based on the success of their current/previous funds. Thus, there is extreme motivation to make sure that the value of their current investments are kept high (regardless of what the actual market value is) and reserve auditors are all too happy to oblige in the lies because they don't like looking bad either (they were the ones who supported overpaying for the asset based on poor PDP forecasts, drilling assumptions, models, spacing, etc.).
And second, money continues to want ESG-friendly industry. I've seen it personally and several heads of large private equity groups have said this publically. I know I may get ridiculed for this because it is bizarre as it sounds but there are large, institutional investors who simply won't invest if there are ESG rating concerns or if there is any planned investment of the fund into "fossil fuels" regardless of the economics. The investors are literally telling them they don't (or even won't) invest in funds with allocations to "fossil fuels;" accordingly, many of the large private equity companies have continued to shrink their allocation to hydrocarbons when raising funds (one that I work with closely has gone from 25% to 10% to <5% in their recent raising efforts).
I think you're going to see some finagling of ESG scores in a few years. I know its not the same, but the EU just changed their definition of renewables to include natural gas and nuclear.Marsh said:
The investors are literally telling them they don't (or even won't) invest in funds with allocations to "fossil fuels;" accordingly, many of the large private equity companies have continued to shrink their allocation to hydrocarbons when raising funds (one that I work with closely has gone from 25% to 10% to <5% in their recent raising efforts).
In the 5-10 horizon I think super ESG focused funds get smoked when their underlying investments can't exist without government subsidies.
Not to mention, a key learning of this Russia-Ukraine situation is just how important energy security is. Turns out the pitch for the importance of developing our energy resources wasn't bull**** all along (shocker I know).
Putin read Dune, Biden did not.Gordo14 said:
Not to mention, a key learning of this Russia-Ukraine situation is just how important energy security is. Turns out the pitch for the importance of developing our energy resources wasn't bull**** all along (shocker I know).
Gordo14 said:JP_Losman said:
Are the shale companies replacing these higher quality reserves fast enough?
I see a map full of sticks in the best zones in most counties in the Permian. I wonder what
actual inventory of high return locations realistically looks like.
Multiple other zones may be prospective, but so far most haven't been as good as Wolfcamp A and B
If you are EOG, Pioneer, Mewbourne, XTO, Conoco etc. I'll even throw on Devon (with WPX in the mix), Oxy, Chevron. There's a ton of inventory. I mean we're talking decades of tier 1 inventory in some cases in my opinion.
I mean it depends on commodity pricing. Bone Spring has some fantastic locations to go drill, but you can't really do the Wolfxamp megadevelopments. If natural gas stays at these levels Lower Wolfcamp has very high returns and the inventory is bigger than even all of the undeveloped and developed Upper Wolfcamp combined. It's just you need 12-15 BCF and ~600MBO to work and it never really did at negative natural gas prices. But the shale is thicker and I think you can drill an extra two wells or so per section out of it for optimal economic recovery as a result.
Outside of that there are some other targets that are prospective and I imagine you can chase very economic wells for even longer with all all of mud logs across the Delaware Mountain group... Throw in the Avalon and some deeper natural gas potential and the Permian is far from dead. But it needs good commodity pricing and a lot of companies are definitely running into walls from a tier 1 development perspective (if they had any to begin with).
What about all the water associated with deep wolfcamp? Isn't it higher WOR than the higher 3-1 WCA?
Fredd said:Gordo14 said:JP_Losman said:
Are the shale companies replacing these higher quality reserves fast enough?
I see a map full of sticks in the best zones in most counties in the Permian. I wonder what
actual inventory of high return locations realistically looks like.
Multiple other zones may be prospective, but so far most haven't been as good as Wolfcamp A and B
If you are EOG, Pioneer, Mewbourne, XTO, Conoco etc. I'll even throw on Devon (with WPX in the mix), Oxy, Chevron. There's a ton of inventory. I mean we're talking decades of tier 1 inventory in some cases in my opinion.
I mean it depends on commodity pricing. Bone Spring has some fantastic locations to go drill, but you can't really do the Wolfxamp megadevelopments. If natural gas stays at these levels Lower Wolfcamp has very high returns and the inventory is bigger than even all of the undeveloped and developed Upper Wolfcamp combined. It's just you need 12-15 BCF and ~600MBO to work and it never really did at negative natural gas prices. But the shale is thicker and I think you can drill an extra two wells or so per section out of it for optimal economic recovery as a result.
Outside of that there are some other targets that are prospective and I imagine you can chase very economic wells for even longer with all all of mud logs across the Delaware Mountain group... Throw in the Avalon and some deeper natural gas potential and the Permian is far from dead. But it needs good commodity pricing and a lot of companies are definitely running into walls from a tier 1 development perspective (if they had any to begin with).
What about all the water associated with deep wolfcamp? Isn't it higher WOR than the higher 3-1 WCA?
Yes, but those wells make a **** ton of gas. The WOR is high because they are gas wells more than anything. If gas is worth $2-3 an M the economics are really good. The problem is that is a huge if - or it was when everybody drilling in the pre-COVID times.
Anyone know how EOG is coming with the new play over in Dawson, Gaines? I see they have some really good production in the Gin sand but that is about it so far.
I'm sure it's a good play just guessing the water disposal will be a huge challenge
I'm sure it's a good play just guessing the water disposal will be a huge challenge
Very high water cuts from what I hear. I think EOG can handle it but I don't think this will turn into a premium play for them.
With all the seismic events happening in the Midland Basin now a days I fear water disposal is going to rear it's ugly head and cause a lot of heartburn for operators who can't recycle water in large quantities.
With all the seismic events happening in the Midland Basin now a days I fear water disposal is going to rear it's ugly head and cause a lot of heartburn for operators who can't recycle water in large quantities.
Anyone work for PXD or other Midland Basin operator that can comment on what the quakes mean for water disposal in the short to medium term?
I can see PXD stock price taking a big hit if RRC says no more disposal in X,Y,Z locations within Martin/Midland counties
I can see PXD stock price taking a big hit if RRC says no more disposal in X,Y,Z locations within Martin/Midland counties
They've already said that. SWDs in that area are severely curtailed with some completely shut in. My company has the ability to move water out of the area and/or reuse it. Now if that area expands then a whole lot of people are in trouble. There are pilot projects in the works for treatment and reuse outside of O&G (think desal). As usual, the regulatory framework for that type of scaled project is 30 years behind so a lot of conversations are taking place for stop gap solutions. The agencies though remain bureaucratic and unwilling to think outside their cave but they are quick to respond to public pressure for shut ins. We don't get that same level of action for sustainable solutions.
That's the story of oil and gas in general. Obviously, there is huge ESG pressure (at least outside of Texas) to deal with CO2. Couple of companies are trying to get CO2 injection in New Mexico permitted, which you would think would be fast-tracked given the ability to permanently sequester substantial CO2 volumes. It hasn't been. At all.
It's irritating as hell. And unfortunately there's a few individuals at the agencies that dig their heals in and stall the entire process. Some of them being no more than a technical manager of some sort that couldn't hack it in industry. Power trips to the max.
We were looking at precisely that area and that zone for water flooding. It's spotty though so you really need to know what you're doing. Now, the Dean, I can get my head around that for horiz development. I completed the highest EUR Dean well in Dawson .
Biggest Horizontal or vertical Dean well?
Did you ever nail down a the exponents to accurately calculate water saturation in the Dean?
Did you ever nail down a the exponents to accurately calculate water saturation in the Dean?
in my previous career I worked a project cleaning frac water for pioneer. Add peroxide to react with the iron. Add floculent to float and coagulant to group. Then skim off the iron oxide. Run the water through a Mycelx media to remove HCs and put the clear water in a tank ready to use for a frac.Maverick06 said:
They've already said that. SWDs in that area are severely curtailed with some completely shut in. My company has the ability to move water out of the area and/or reuse it. Now if that area expands then a whole lot of people are in trouble. There are pilot projects in the works for treatment and reuse outside of O&G (think desal). As usual, the regulatory framework for that type of scaled project is 30 years behind so a lot of conversations are taking place for stop gap solutions. The agencies though remain bureaucratic and unwilling to think outside their cave but they are quick to respond to public pressure for shut ins. We don't get that same level of action for sustainable solutions.
JP_Losman said:
Biggest Horizontal or vertical Dean well?
Did you ever nail down a the exponents to accurately calculate water saturation in the Dean?
Vertical. We had some cores in the area we tied to petrophysics. I don't have that data right anymore but I can tell you it was a pretty minimal water maker.
Ragoo said:in my previous career I worked a project cleaning frac water for pioneer. Add peroxide to react with the iron. Add floculent to float and coagulant to group. Then skim off the iron oxide. Run the water through a Mycelx media to remove HCs and put the clear water in a tank ready to use for a frac.Maverick06 said:
They've already said that. SWDs in that area are severely curtailed with some completely shut in. My company has the ability to move water out of the area and/or reuse it. Now if that area expands then a whole lot of people are in trouble. There are pilot projects in the works for treatment and reuse outside of O&G (think desal). As usual, the regulatory framework for that type of scaled project is 30 years behind so a lot of conversations are taking place for stop gap solutions. The agencies though remain bureaucratic and unwilling to think outside their cave but they are quick to respond to public pressure for shut ins. We don't get that same level of action for sustainable solutions.
Saving this in my notes.
i was at big blue at the time. Mycelx is a company based in Georgia. Reach out to Lance Rodeman on linked in. Looks like he is no longer with Mycelx but he is sharp as a tack and knows water treatment. Heck, he may be someone to join a team on the owner side.Comeby! said:Ragoo said:in my previous career I worked a project cleaning frac water for pioneer. Add peroxide to react with the iron. Add floculent to float and coagulant to group. Then skim off the iron oxide. Run the water through a Mycelx media to remove HCs and put the clear water in a tank ready to use for a frac.Maverick06 said:
They've already said that. SWDs in that area are severely curtailed with some completely shut in. My company has the ability to move water out of the area and/or reuse it. Now if that area expands then a whole lot of people are in trouble. There are pilot projects in the works for treatment and reuse outside of O&G (think desal). As usual, the regulatory framework for that type of scaled project is 30 years behind so a lot of conversations are taking place for stop gap solutions. The agencies though remain bureaucratic and unwilling to think outside their cave but they are quick to respond to public pressure for shut ins. We don't get that same level of action for sustainable solutions.
Saving this in my notes.
I just got off a call with a supplier and their solution to the supply chain issues is to buy more and buy it earlier. And this isn't a small company, it was a top 5 frac company in the US.
I understand real world is different than textbooks we read in college, but a lot of this across the industry and it's not hard to fathom the other side of these supply chain shortages holding a lot of surpluses and companies in trouble because of too much inventory.
I understand real world is different than textbooks we read in college, but a lot of this across the industry and it's not hard to fathom the other side of these supply chain shortages holding a lot of surpluses and companies in trouble because of too much inventory.
Also extends the supply chain issues as everyone buys more than they need.htxag09 said:
I just got off a call with a supplier and their solution to the supply chain issues is to buy more and buy it earlier. And this isn't a small company, it was a top 5 frac company in the US.
I understand real world is different than textbooks we read in college, but a lot of this across the industry and it's not hard to fathom the other side of these supply chain shortages holding a lot of surpluses and companies in trouble because of too much inventory.
Certainly take good management to transition from that strategy to a more normal strategy. Although, I would guess we see businesses (in all sectors) shy away from just-in-time for a while even after the supply chain issues are resolved.
This.BiochemAg97 said:Also extends the supply chain issues as everyone buys more than they need.htxag09 said:
I just got off a call with a supplier and their solution to the supply chain issues is to buy more and buy it earlier. And this isn't a small company, it was a top 5 frac company in the US.
I understand real world is different than textbooks we read in college, but a lot of this across the industry and it's not hard to fathom the other side of these supply chain shortages holding a lot of surpluses and companies in trouble because of too much inventory.
Certainly take good management to transition from that strategy to a more normal strategy. Although, I would guess we see businesses (in all sectors) shy away from just-in-time for a while even after the supply chain issues are resolved.
Bullwhip effect. Every level through the supply chain buys just a little more and by the time you get to the end of it we end up with entirely too much *****
Yeah, Bullwhip effect was precisely what I was talking about when I said studying in school is different than real world. But it's getting bad. Buying more than you need and buying more often is a ****ty ass plan, no matter how you look at it.Farmer1906 said:This.BiochemAg97 said:Also extends the supply chain issues as everyone buys more than they need.htxag09 said:
I just got off a call with a supplier and their solution to the supply chain issues is to buy more and buy it earlier. And this isn't a small company, it was a top 5 frac company in the US.
I understand real world is different than textbooks we read in college, but a lot of this across the industry and it's not hard to fathom the other side of these supply chain shortages holding a lot of surpluses and companies in trouble because of too much inventory.
Certainly take good management to transition from that strategy to a more normal strategy. Although, I would guess we see businesses (in all sectors) shy away from just-in-time for a while even after the supply chain issues are resolved.
Bullwhip effect. Every level through the supply chain buys just a little more and by the time you get to the end of it we end up with entirely too much *****
QBCade
Could we win with 5 OL, QB (MR), 2 TE, 1 RB, 1 WR, & 1 hybrid RB/WR(TB)?
in Billy Liucci's TexAgs Premium
79