I was on a job years ago that Shaw underbid fixed price and no change orders were issued and eventually they just stopped doing the work. Lost so much money they sold off their chemicals division to Technip.
Houston..we have a problem....
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I didn't realize the project has been going on that long. Makes sense that it's a mess now and everyone wants a practical exit to move on.
Hilcorp buying out Eni assets in Alaska (Oooguruk and Nikaitchuq).
Pretty soon they'll be the only ones left.
Pretty soon they'll be the only ones left.
Great pickup. That is a great asset.
I have no major insight into massive construction bidding, but I've never fully understood fixed price + no change orders. From the owner side it looks great right up until the project stalls, you lose all your subs and your opportunity cost lost to commissioning delays dwarfs whatever construction overruns were.
After Ukraine/Russia started going at it metal prices went stupid. I can't imagine how you could A. Plan for that or B. absorb those costs and keep rolling.
Any contracts we enter into that have deliveries outside of 1 year always include escalation clauses. We'll argue with the customer over where the clause kicks in and to what degree we might share in the increase but we've never entered into a long term delivery contract without the escalation clauses included.Nagler said:
After Ukraine/Russia started going at it metal prices went stupid. I can't imagine how you could A. Plan for that or B. absorb those costs and keep rolling.
On the other side, when we get pricing on material, we require our vendors to hold pricing for certain periods of time.
All that being said, copper price increases following Covid just murdered the margin on a few of our contracts. We didn't even anticipate the possibility of the increases that we saw.
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
one MEEN Ag said:And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
His first name wasn't Steve was it?
No, he is not a Steve.nu awlins ag said:one MEEN Ag said:And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
His first name wasn't Steve was it?
one MEEN Ag said:No, he is not a Steve.nu awlins ag said:one MEEN Ag said:And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
His first name wasn't Steve was it?
I knew a Steve from school that worked there….
The market sure didn't like this! SM down 10+% relative to XOP.donkeykick90 said:
SM buying XCL for $2.55 billion
https://www.sm-energy.com/investors/news-events/press-releases/detail/331/sm-energy-announces-highly-accretive-2-0-billion-uinta-basin-acquisition-11-increase-to-fixed-dividend-and-reloaded-500-million-share-repurchase-program
The market probably wants SM to get eaten in consolidation like everyone else. Adding a new basin makes that harder. Kudos to them for running their business in a long-term fashion.
K_P said:The market sure didn't like this! SM down 10+% relative to XOP.donkeykick90 said:
SM buying XCL for $2.55 billion
https://www.sm-energy.com/investors/news-events/press-releases/detail/331/sm-energy-announces-highly-accretive-2-0-billion-uinta-basin-acquisition-11-increase-to-fixed-dividend-and-reloaded-500-million-share-repurchase-program
Just buy the dip and enjoy the ride up
Working at KBR, we lost a few contracts because we ended up being more 'expensive' on some jobs. I always wanted to go back, once they got built, and see how much we were off and if the client really got a good deal or not.one MEEN Ag said:And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
NWEP was one that I helped bid on and we lost. This was back BEFORE Covid and they just started it up. I kind of want to see how they made that one work. That was another fixed price contract with no escalations.
~egon
one MEEN Ag said:And I bet you dimes to donuts that Bechtel is the most 'expensive' upfront option on paper. They look at the three legged stool of project management and say we bid on quality and schedule, lowest cost bids are for other companies to provide.CPDAggie10 said:
Bechtel seems to be the only EPC contractor that has a proven track record of executing these LNG projects on schedule and without major cost overruns.
Source: My neighbor worked for Bechtel for decades. Said he never missed a bonus and they never missed a deadline.
I worked for Bechtel for 7 years from 2011 to 2018 working strictly on LNG projects.
You are right they bid on quality and schedule and were usually one of the higher bidders. They missed out on several bids because they were higher cost than others. But they stuck to their guns and missed a lot of those projects saying it can't be done for that price….while watching a lot of the winners bite the dust during execution (cost/schedule overruns, messy change orders and strained customer relations).
It looks like that track record / strategy is paying off as I see they are winning other LNG projects now outside of the Cheniere Portfolio.
I thought they were a great company. I still keep in touch with a few folks over there and follow their projects on the gulf coast.
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AG
Grayson Mill finally getting bought
https://www.reuters.com/markets/deals/devon-energy-buy-grayson-mills-williston-business-5-bln-2024-07-08/
https://www.reuters.com/markets/deals/devon-energy-buy-grayson-mills-williston-business-5-bln-2024-07-08/
That's a big number imo, paying up per PUD
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AG
In the shareholder presentation the devon ceo put a lot of emphasis on swd capacity and having locations that weren't on the res, so those factors seem to have provided some uplift
Not fully related, but interesting
APCI to sell their LNG business to Honeywell. $1.8 billion
APCI to sell their LNG business to Honeywell. $1.8 billion
Anyone have insight on how the XOM Pioneer integration is going?
Probably smoothly, lol
In what regard? It's going….
Dr. Doctor said:
Not fully related, but interesting
APCI to sell their LNG business to Honeywell. $1.8 billion
Kinda surprising to me because APCI seems to have the market leading process these days. The old adage "if someone is selling, they're selling for a reason" comes to mind. I take it they see the wave of LNG process licensing has crested.
TriAg2010 said:Dr. Doctor said:
Not fully related, but interesting
APCI to sell their LNG business to Honeywell. $1.8 billion
Kinda surprising to me because APCI seems to have the market leading process these days. The old adage "if someone is selling, they're selling for a reason" comes to mind. I take it they see the wave of LNG process licensing has crested.
I mean we're doubling LNG capacity over the next 3 years. We've almost certainly passed peak LNG - at least for a long time. It's hard to see any new LNG get FID in the next decade IMO. We need new international demand first.
Yep- that trade is getting long in the tooth in the interim.
After designing a few plants with their technology, that's my thought as well.
While that technology, i feel, is superior to others, i think the US market is moving to large mid scale (Plaquesmines vs Freeport). So for them, i don't see many large scale plants coming online.
~egon
While that technology, i feel, is superior to others, i think the US market is moving to large mid scale (Plaquesmines vs Freeport). So for them, i don't see many large scale plants coming online.
~egon
Charismatic Megafauna said:
Grayson Mill finally getting bought
https://www.reuters.com/markets/deals/devon-energy-buy-grayson-mills-williston-business-5-bln-2024-07-08/
We own a good amount of WI and minerals under Grayson Mill stuff. Not sure I'm thrilled about this. How does this thread feel about Devon?
GarlandAg2012 said:Charismatic Megafauna said:
Grayson Mill finally getting bought
https://www.reuters.com/markets/deals/devon-energy-buy-grayson-mills-williston-business-5-bln-2024-07-08/
We own a good amount of WI and minerals under Grayson Mill stuff. Not sure I'm thrilled about this. How does this thread feel about Devon?
DVN is a good operator. Top half on costs and efficiencies. They will get the most out of that acreage
Australia's Woodside Energy to buy US LNG developer Tellurian for $1.2 billion | Reuters
Wow! I thought the Tellurian LNG permits were worth something. Woodside pick them up for $1//share.
I'm assuming Woodside will have a better chance to lock-in offtake agreements
Wow! I thought the Tellurian LNG permits were worth something. Woodside pick them up for $1//share.
I'm assuming Woodside will have a better chance to lock-in offtake agreements
Long shot but worth a try. Have a family member who has a unique property in south midland they are looking at renting out. It's a shop with car lift and nice living quarters. Has plenty of parking, may be good for a services company.
Welcome to the China Club
"Here's the pitch...POPPED it up! Oh man, that wouldn't be a home run in a phone booth."
-Harry Carey
"Here's the pitch...POPPED it up! Oh man, that wouldn't be a home run in a phone booth."
-Harry Carey
Looking a bit harder at the deal it's actually a decent deal for both sides. TELL had gone as far as it could and had to get new capital to move forward. They've sold their real estate and leased it back, sold their reserves so their only assets are the permits and EPC contracts. Woodside has a robust LNG sales book and buying the whole thing for $1.3 bn is cheap diversification, and they can attract far more partners and customers than TELL could have ever done.MAROON said:
Australia's Woodside Energy to buy US LNG developer Tellurian for $1.2 billion | Reuters
Wow! I thought the Tellurian LNG permits were worth something. Woodside pick them up for $1//share.
I'm assuming Woodside will have a better chance to lock-in offtake agreements
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