I agree. Will likely see rig count and frac spread count drop. At sub $3 gas, a lot of these new drills ecos push out quite a bit. I received some AFE's for some HV horiz whose ecos ran at a 2 year payout when gas prices were $4-4.5/mcf. With prices where they are I don't see how that's within 3 years. That being said, I'll still participate because the JOA's are brutal. I need to rerun ecos on it to see how it looks.
Houston..we have a problem....
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3 years seems unlikely sub $3/mcf. I've seen costs on some stuff in the Haynesville and it is crazy, $20MM + D&C.
There's a small operator name starts with a C and rhymes with block that had told one of our guys their Robertson County stuff was $20-25MM so I buy that
Yes- heard that. That D&C in this price environment will light some capital on fire.
Dan Scott said:
They mad.
Swimming in cash, Chevron plans a $75 billion slap in the face to drivers | CNN BusinessQuote:
To be clear: It's not that Chevron, or any of its peers, did anything special to earn their windfall profits last year. There was no big innovation or breakthrough they just got rich off the price of oil shooting up.Quote:
Buybacks are increasingly common, and controversial (in fact, they were flat-out illegal until 1982).
On one hand it's an easy way for a company to reward shareholders and signal confidence in its own value (after all, what moron would buy shares in a company whose stock is about to go down?). But critics say the practice artificially inflates the stock's value by creating fake demand. Conveniently, it also gooses executive compensation, the vast majority of which comes from stock options.
See here: Chevron, which is expected to report Friday that profits for 2022 doubled to more than $37 billion, is essentially balking at calls from investors and the White House to funnel its extra cash into more drilling capacity to help reduce prices for inflation-weary customers.
Instead, Chevron is buying $75 billion worth of its own shares, and jacking up its quarterly shareholder dividend. That decision prompted rebuke from the Biden administration.
"For a company that claimed not too long ago that it was 'working hard' to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it," said White House spokesperson Abdullah Hasan.
For a White House that has said they want an end to the oil industry, wanting them to drill more is an odd way to show it.
Seems like share buybacks instead of investing in more wells is exactly what the White House and the green team want, winding down the oil and gas industry.
It's every bit of $25MM right now. 15k laterals in the Haynesville (LA side) are $22MM and they're shallower and not as hot.Captain Charles Vane said:
There's a small operator name starts with a C and rhymes with block that had told one of our guys their Robertson County stuff was $20-25MM so I buy that
Is anyone going to NAPE next week?
I'll be there and would love to tag up with other Ags.
I am an independent generator in the conventional space and our prospects are still getting a ton of interest because we chase stacked pay. It leaves some things behind pipe when prices are good which lowers the pricing risk even when including discounted cash flow models. We only do +/-100 BCF type stuff.
I'll be there and would love to tag up with other Ags.
I am an independent generator in the conventional space and our prospects are still getting a ton of interest because we chase stacked pay. It leaves some things behind pipe when prices are good which lowers the pricing risk even when including discounted cash flow models. We only do +/-100 BCF type stuff.
I'll be there. Let's catch up.
Yeah they have burnt up our high temp (200C) tools every time they get into the laterals. We've been all over Haynesville with Aethon and some others basically since WFT walked out of North America and I've never seen this many tools get ran way out of spec in such short order.
If you were in a commodity business and knew that someone would use your product to fix prices, what amount of kicker would you need to sell to them?Comeby! said:FHKChE07 said:
Morons.
https://oilprice.com/Energy/Crude-Oil/Washington-Has-Trouble-Refilling-The-SPR-After-220-Million-Barrel-Draw.html
They are trying to get it as cheap as possible. And likely don't have enough money to spend to get it. What happened to sell high buy low? Where did all that money go?
Interesting enough, I was just in a meeting with a director at the SPR. We discussed the buy back process. Essentially what happened here, that wasn't communicated in the press, was they got nothing but non-market 'stink bids'. The impression I got was that bidders thought they could take advantage of a government contract. Just relaying that over.
Wiggletrace said:
Is anyone going to NAPE next week?
I'll be there and would love to tag up with other Ags.
I am an independent generator in the conventional space and our prospects are still getting a ton of interest because we chase stacked pay. It leaves some things behind pipe when prices are good which lowers the pricing risk even when including discounted cash flow models. We only do +/-100 BCF type stuff.
Yep. Let's catchup, been a while!
Sounds like a plan!
Comeby, I think you have my number. Jetch, let me know where your booth is or shoot me a DM if anything is going on.
Comeby, I think you have my number. Jetch, let me know where your booth is or shoot me a DM if anything is going on.
no booth this year, just walking the floor, but ill reach out
At current strip with diffs, I see no way that papers or even gets close to an IRR that would be acceptable to most corporate boards
are you saying this is the cost to drill and complete one well? Just trying to understand the conversation and economicsThreeFive said:It's every bit of $25MM right now. 15k laterals in the Haynesville (LA side) are $22MM and they're shallower and not as hot.Captain Charles Vane said:
There's a small operator name starts with a C and rhymes with block that had told one of our guys their Robertson County stuff was $20-25MM so I buy that
What do you boys want for breakfast BBQ ?.....OK Chili.
I don't have insight into Comstock's or Aethon's econs in Robertson or Leon, but I agree, it's hard for me to imagine their EUR's are greater than a Louisiana HV, and LA HV is cheaper to drill and still borderline economic right now at $3 flat.
Yes. Drill, complete, and put online.
Borderline at non corporate level. Also, running negative FCF to drill isn't an option for most.
Yup, that's why I'm interested to see what they do with all of this acreage they've leased up. We'll see how much they believe in the "Waynesville" and their restricted 30 MMcfd rate for 6 months.
this is some level of guestimate but think they need closer to $3.5-3.75 for a average/below average return. I'm of the opinion at a corporate level return they really need $4.50
From my perspective, I'm just waiting for electricity plans to lock in new deals at 2.50 gas prices and then put something competitive on the retail market. I got locked in at 16 cents a kilowatt hour all in for 3 years at the peak prices. I was paying 24 cents a kilowatt hour for a month because my contract expired and the whole market was going crazy.
I'm seeing 12.3 cents average on powertochoose.com. Will probably wait another week or two to see if some provider locks in a great deal and wants to undercut the market.
I'm seeing 12.3 cents average on powertochoose.com. Will probably wait another week or two to see if some provider locks in a great deal and wants to undercut the market.
ThreeFive said:
Yup, that's why I'm interested to see what they do with all of this acreage they've leased up. We'll see how much they believe in the "Waynesville" and their restricted 30 MMcfd rate for 6 months.
Waynesville?
I'm making fun of Enverus. They dubbed the area the HaynesFord one day, then the Waynesville (Western Haynesville) the following. And I'm pretty sure it's Mid-Bossier anyway…
every play needs a nickname to catch that top bid. Let's be honest, bros spending $25MM on D&C in a high pressure play with heavy decline into a cratering gas market with $2.00ish realized prices deserves it's own name.
I know there's some $20-25MM D&C costs out there especially in Robertson county, but that is not the norm especially in Panola, Desoto, etc. Those are running $8-$13MM depending on the lateral and operator.
while we're at it - what about Permian wells?
I'm asking because we have clients who tell us "we will drill and complete X wells next year". I'm always trying to get my head around CAPEX needed to do that and where the heck is the $ coming from - especially for the private guys in gas plays now that we are entering what looks to be a different pricing environment from the past two years.
I'm asking because we have clients who tell us "we will drill and complete X wells next year". I'm always trying to get my head around CAPEX needed to do that and where the heck is the $ coming from - especially for the private guys in gas plays now that we are entering what looks to be a different pricing environment from the past two years.
What do you boys want for breakfast BBQ ?.....OK Chili.
They're going to have to do a combo of laying down rig and slowing frac cadence. If people go negative cash flow they get smoked.
For a Haynesville or Mid-Bossier? Guessing those $13MM are for 5k laterals. I've seen AFE's from three different operators in DeSoto Parish in the past six months and all have been above $17MM for 9,500'+ laterals.
We could see $100/bbl and $2/mmbtu in 2023.
Gas/oil economic equivalency of 50/1
Gas/oil economic equivalency of 50/1
Delaware Basin is $11-$12MM D,C&E and Midland Basin is probably around 10ish. Just like the Haynesville though there is a ton of variability depending on depth, target zone, number of strings, frac size, water availability and just general operator to operator differences.
Service pricing is also coming down, and overall softening so those well costs are also coming down every day.
Service pricing is also coming down, and overall softening so those well costs are also coming down every day.
Westicles said:
Delaware Basin is $11-$12MM D,C&E and Midland Basin is probably around 10ish. Just like the Haynesville though there is a ton of variability depending on depth, target zone, number of strings, frac size, water availability and just general operator to operator differences.
Service pricing is also coming down, and overall softening so those well costs are also coming down every day.
Ive yet to see service costs come down in STX.
Westicles said:
Delaware Basin is $11-$12MM D,C&E and Midland Basin is probably around 10ish. Just like the Haynesville though there is a ton of variability depending on depth, target zone, number of strings, frac size, water availability and just general operator to operator differences.
Service pricing is also coming down, and overall softening so those well costs are also coming down every day.
Correct. I have two 9500' lateral AFE's in Dawson county in hand at $9MM. Now they'll likely blow the afe but my point it there aren't many $20-25MM horiz out there, comparatively speaking.
JP_Losman said:
We could see $100/bbl and $2/mmbtu in 2023.
Gas/oil economic equivalency of 50/1
As a former LNG guy, I wonder if those contacts based upon oil price are still in effect.
Would make a killing if you can buy in the market at HH prices, but sell it on Brent pricing!
~egon
Most of the newer US LNG deals are priced based on TTF or JKM. But I think the Qataris still sell % of Brent.
For Robertson that seems about double what I've seen.Comeby! said:
I know there's some $20-25MM D&C costs out there especially in Robertson county, but that is not the norm especially in Panola, Desoto, etc. Those are running $8-$13MM depending on the lateral and operator.
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